To further emphasize healthcare fraud as an area of enforcement priority under the Trump Administration, the U.S. Department of Justice (DOJ) and U.S. Department of Health and Human Services (HHS) announced the creation of a joint working group earlier this month.  The DOJ-HHS False Claims Act Working Group will use the False Claims Act (FCA)—one of the government’s most powerful civil enforcement tools—to tackle healthcare fraud within the following areas:

• Medicare Advantage;
• Drug, device or biologics pricing, including arrangements for discounts, rebates, service fees, and formulary placement and price reporting;
• Barriers to patient access to care, including violations of network adequacy requirements;
• Kickbacks related to drugs, medical devices, durable medical equipment, and other products paid for by federal healthcare programs;
• Materially defective medical devices that impact patient safety; and
• Manipulation of Electronic Health Records (EHR) systems to drive inappropriate utilization of Medicare-covered products and services.

The government’s announcement of the Working Group touted cross-agency collaboration and stated that membership in the group would be comprised of the HHS Office of General Counsel, the Centers for Medicare & Medicaid Services Center for Program Integrity, the Office of Counsel to the HHS Office of Inspector General (HHS-OIG), and DOJ’s Civil Division, with designees representing U.S. Attorneys’ Offices. The group will be jointly led by the HHS General Counsel, Chief Counsel to HHS-OIG, and the Deputy Assistant Attorney General of the Commercial Litigation Branch, according to the announcement.

We previously have posted that the DOJ often reports more than $2 billion annually in federal FCA settlements and judgments and totaled $2.9 billion during fiscal year 2024.  During the 2024 fiscal year, the DOJ focused its enforcement activity on its long-established area of healthcare industry fraud, amassing more than $1.67 billion in cases centered on managed care providers, hospitals, pharmacies, laboratories and other medical facilities.

While some of the priority areas listed above as part of the new Working Group’s enforcement focus—specifically pricing abuses and improper referral arrangements—are traditional priority categories, it is notable that the announcement also mentioned the “manipulation of Electronic Health Records (EHR) systems to drive inappropriate utilization of Medicare covered products and services.” The inclusion of this category serves as an important clue that non-traditional entities such as healthcare technology providers, data analytics companies and other technology-related vendors could be targeted as third parties involved in an FCA investigation.

The takeaway here for health care organizations—especially those that submit claims for payment to the government—is the Trump Administration is committed to forceful health care enforcement and to combating potential fraud. When the government broadcasts a heightened focus on a particular enforcement area—as it has done so here—grantees and companies should remain cognizant of the government’s approach and update compliance systems accordingly to mitigate the risk of a burdensome and expensive FCA investigation. Specifically, the government’s announcement signals that additional diligence, from a compliance perspective, is needed around EHR functionality, design, and implementation—especially as it relates to enhanced scrutiny of the systems employed by third-party technology vendors.

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If you have any questions regarding False Claims Act investigations or litigation, or any type of administrative agency enforcement, please contact Feldesman partner and Enforcement Insider Editor Mindy B. Pava (mpava@feldesman.com) or call 202.466.8960.

Be sure to also check out our Enforcement Insider blog to stay up to date on the latest enforcement actions and court decisions of interest to federal grantees, federal contractors, and other recipients of federal funding.