Expected Developments in Civil Healthcare Fraud Enforcement

Written by attorney Amy Crafts

Published: New Hampshire Bar News (p28)

At this time last year, it was unclear whether healthcare fraud would continue to be a Department of Justice (“DOJ”) priority or whether DOJ resources would be allocated to other areas of enforcement, including immigration and diversity, equity & inclusion (“DEI”). A year into the new administration, DOJ has reaffirmed its commitment to healthcare fraud in several announcements involving the False Claims Act, a powerful civil enforcement tool. A close look, however, suggests that False Claims Act enforcement is evolving and may operate differently for the next several years.

Expanded False Claims Act Enforcement Priorities

Last summer, the Trump Administration reaffirmed the federal government’s longstanding focus on healthcare fraud by establishing a working group comprised of leaders from DOJ and the U.S. Department of Health and Human Services (“HHS”). A press release noted the Administration is “fully committed” to combating healthcare fraud, noting it “depletes taxpayer funds, corrodes public health and safety, and undermines the integrity of the federal healthcare system.”[1]

Strengthening collaboration between the two agencies, the “DOJ-HHS False Claims Act Working Group” (the “Working Group”) focuses on Medicare Advantage; pricing of drugs, devices and biologics; barriers to patient care; kickbacks; defective medical devices and manipulation of electronic records. The Working Group is instructed to expedite ongoing investigations, identify new leads through enhanced data mining, and implement payment suspensions for “credible allegations of fraud.”[2]

At around the same time, DOJ announced the False Claims Act will be utilized to address a number of additional areas to advance the Administration’s priorities, including pursuing “entities that receive federal funds but knowingly violate civil rights laws.”[3] These alleged civil rights violations include having programs related to DEI; participating in or allowing antisemitism; and billing federal healthcare programs for non-covered services related to gender affirming care.[4]

While the scope of False Claims Act enforcement appears to be expanding, it is well documented that DOJ resources have been significantly depleted.[5] Accordingly, expect False Claims Act enforcement to continue largely in the form of whistleblower – otherwise known as qui tam – lawsuits that may be pursued without federal involvement.

Anticipated Changes in Qui Tam Litigation

The qui tam provisions in the False Claims Act encourage private citizens to file complaints under seal, enabling the government to investigate the alleged fraud and decide whether to negotiate a settlement or pursue litigation before the defendant is served with the complaint. In fact, private citizens, or whistleblowers, are financially incentivized to file qui tam complaints; if a case is successful, either by judgment or settlement, the whistleblower is entitled to 15-30% of the recovery, depending on the circumstances. While qui tam complaints will continue to be filed, the nature of qui tam litigation is likely to shift for the remainder of this administration.

First, the Working Group is instructed to consider whether DOJ should move to dismiss qui tam complaints pursuant to 31 U.S.C. § 3730(c)(2)(A). While the federal government has infrequently invoked its dismissal authority in the past, it could be an effective way to ferret out complaints that are not meritorious or that do not advance the Administration’s priorities. This is particularly true following the U.S. Supreme Court’s decision U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (June 16, 2023) which articulated the government’s broad dismissal authority under the False Claims Act. Entities facing qui tam litigation should take advantage of this changed landscape to advocate for dismissal.

Second, as demonstrated by a few recent cases in Massachusetts, the federal government may elect not to participate in certain qui tam actions, allowing state enforcement to proceed instead. Many qui tam complaints involving healthcare fraud include both federal and state government as plaintiffs – the federal government is named for any false claims related to the Medicare program and states are named for any false claims related to the Medicaid program. In a scenario where both federal and state governments are named, it has been typical for DOJ to take the lead. In the past few months, however, the Medicaid Fraud Division in Massachusetts has resolved three qui tam complaints without federal participation. The most recent matter resolved via settlement with CVS for failure to comply with prescription drug pricing regulations, and other cases involved upcoding and billing for transportation not provided. These cases demonstrate that False Claims Act enforcement may continue without DOJ participation.

Finally, and as an alternative to the above scenario, the qui tam provisions of the False Claims Act also allow a whistleblower’s attorney to pursue the matter on behalf of the government if the government declines to intervene. This is another mechanism available to allow for continued False Claims Act enforcement despite potentially fewer available resources at the federal level.

Impact on New Hampshire Healthcare Businesses

In light of these developments, healthcare entities should be cautious whenever receiving requests for information from the federal government, even if those requests appear to be routine audit-related questions from HHS or other federal agencies. With increased collaboration between HHS and DOJ, including instructions that “HHS make referrals to DOJ of potential violations of the [False Claims Act] that reflect Working Group priorities,”[6] information produced to federal agencies could be transmitted to DOJ, potentially resulting in enforcement actions.

In addition, healthcare entities should take steps to learn of any internal issues that could be raised by a whistleblower in a qui tam complaint – including clearly communicating with employees about compliance efforts and enabling employees to anonymously report concerns to management. This increased transparency will mitigate risk that an employee or former employee will pursue filing a qui tam complaint.

[1] https://www.justice.gov/opa/pr/doj-hhs-false-claims-act-working-group, July 2, 2025.

[2] Id.

[3] https://www.justice.gov/opa/pr/justice-department-establishes-civil-rights-fraud-initiative, May 19, 2025.

[4] Id.

[5] See, e.g., New York Times, “Untangling a Year of Upheaval Inside the Justice Department”, December 23, 2025.

[6] https://www.justice.gov/opa/pr/doj-hhs-false-claims-act-working-group