Escalating Healthcare Fraud Crackdown Initiatives by the Department of Justice

New and Tightened Healthcare Fraud Enforcement on the Rise

The U.S. Department of Justice (DOJ) is stepping up its war against healthcare fraud, and it's not letting up any time soon. With increasing enforcement actions, doctors need to tread carefully when assessing their business connections and legal consultations before entering into any financially-tied agreements.

The 2025 National Health Care Fraud Enforcement Action put 193 individuals, including 76 medical professionals, in the hot seat. The fraudsters aimed to rake in a staggering $2.75 billion in bogus claims, with actual losses totaling $1.6 billion. The tricks up their sleeves ranged from wound grafts swindles, unlawful Adderall prescriptions, to questionable telemedicine and lab practices. Snagged doctors were not exempt, as healthcare-related cases topped the charts in False Claims Act settlements and judgments for that fiscal year.

U.S. federal prosecutors have made no secret of their plans to clamp down on a variety of fraudulent activities. These include unnecessary prescription of painkillers, shoddy medical services, Medicare Advantage overbilling, illegal kickbacks, Stark Law violations, and COVID-19-related fraud. These areas will continue to be enforcement priorities moving forward.

Political shifts might stir doubts about whether investigations will persist, but fraud cases under the False Claims Act and anti-kickback statutes usually take years to build, meaning they're less likely to be derailed by changes in office. Furthermore, the government secures considerable funds through healthcare fraud enforcement, cementing its spot as a top priority. However, minor policy freezes, rollbacks of previous administration policies, and slowdowns in hiring could impact how aggressively cases are pursued. Modernizing government technology systems could also streamline the identification of fraud through improved tracking and analysis of claims data.

With the Trump administration's new DOJ appointees, there's speculation that the approach to settlements and negotiations may change. A key appointment in question is Mehmet Oz, slated to lead the Centers for Medicare and Medicaid Services. Oz has suggested expanding Medicare Advantage, where costs could be shared by employers and employees. Some democratic lawmakers, however, argue that Medicare Advantage providers overcharged the agency by $83 billion in 2024 through inflated billing practices. It remains to be seen how Oz's approach to Medicare policy will affect fraud enforcement.

Fraudsters will find some favourite hunting grounds regardless of political tides. Key areas of focus include clinical lab arrangements, medical equipment supplier contracts, telemedicine services, pharmacy benefit managers, and financial relationships between pharmaceutical companies and healthcare providers.

Many doctors may believe they're untouchable, but they can get ensnared in fraud investigations without warning, especially considering the upsurge in enforcement actions. Reps, vendors, and even executives at companies can lead unsuspecting medical professionals into risky deals. Shady cases in recent times included telemedicine firms pushing genetic tests for cancer and heart disease. These tests were unrelated to patient treatment, making them illegal under federal law. Some doctors see advantage in prescribing remotely or approving certain lab tests, but these actions can land them in legal hot water they didn't foresee.

Physicians who accept federal insurance plans must carefully evaluate their business deals. If an agreement exists primarily to generate revenue, direct referrals, or move lab work to a provider with a stake in the arrangement, it could be legally questionable. Payments tied to referrals or ownership interests can bring severe penalties, including hefty fines and prison time. Legal counsel should scrutinize any business arrangements, confirm payment sources are legitimate, and determine whether deals fall within legal protections.

Avoiding compliance issues and enforcement actions calls for caution, staying clear of suspicious business deals, and seeking legal guidance when needed. The government keeps a close eye on fraud, so staying informed is the best way to stay out of trouble. Those sticking with the traditional system must keep robust compliance programs in place, while those opting for direct-pay or membership-based models need to comply with state regulations, protect patient privacy, navigate employment rules, and run their practices like businesses in order to eliminate exposure to federal fraud enforcement.

Sources:

DOJ Health-Care Fraud Enforcement Demands Physicians’ Diligence
National Health Care Fraud Enforcement Action Results in 193 Defendants Charged and Over $2.75 Billion in False Claims
Focus Areas: Antitrust, Healthcare, and Financial Fraud
The Future of Healthcare Law and Compliance
Fighting Fraud in Federal Healthcare Programs

Enrichment Data:Increased healthcare fraud enforcement in 2025 demonstrates a strong commitment by the U.S. Department of Justice (DOJ) to address fraudulent activities in federal healthcare programs, with a clear focus on kickback violations, Medicare, Medicaid, and TRICARE fraud, waste, fraud, and abuse in healthcare, pandemic relief and cybersecurity fraud, and patient safety-related fraud. The DOJ’s criminal enforcement priorities explicitly list healthcare fraud related to waste and abuse as a major area, encompassing fraud threatening patients’ health and safety, including counterfeit drug manufacturing and unlawful opioid distribution. Rigorous compliance, documentation, and careful management of third-party relationships are essential for medical professionals to avoid exposure to enforcement actions. The substantial recoveries in False Claims Act cases signal significant financial consequences for medical professionals and their practices.

The increased focus on medical-conditions and science within the realm of policy-and-legislation, particularly in regards to healthcare fraud, highlights the ongoing need for doctors to be aware of medical-condition-related policies when evaluating their business connections and legal consultations.
Amidst the general-news of tightened healthcare fraud enforcement, the significance of federal prosecutors' clamp down on various medical-condition-related fraudulent activities cannot be underscored enough, as it directly impacts the allocation of taxpayer funds and the integrity of the U.S. healthcare system.