DOJ-HHS False Claims Act Working Group will pursue healthcare, life sciences enforcement priorities

HHS General Counsel, Chief Counsel to HHS-OIG, and the Deputy Assistant Attorney General of the DOJ Commercial Litigation Branch will lead the working group. The group will meet monthly and “maximize cross-agency collaboration,” with HHS facilitating enforcement priority referrals of potential False Claims Act (FCA) violations to the DOJ.

At the American Health Law Association (AHLA) Annual Meeting, Deputy Assistant Attorney General for the Commercial Litigation Branch of the Civil Division Brenna Jenny stated that part of the working group’s mission will be streamlining investigations, including assessing early whether novel legal theories are viable and supported by leadership.

The working group announcement details many healthcare-related enforcement priority areas, supplementing a June 2025 memorandum from the DOJ Assistant Attorney General of DOJ’s Civil Division outlining the division’s enforcement priorities. Some priorities, such as the Anti-Kickback Statute (AKS) and Medicare Advantage, have long been areas of significant FCA activity. Predictably, the enforcement priorities have an outsized impact on healthcare and life sciences organizations. These organizations should prepare for continued scrutiny and an increase in qui tam and DOJ-initiated actions advancing both conventional (e.g., Medicare Advantage and AKS) and potentially novel (e.g., barriers to patient access and gender-affirming care) theories.

Enforcement priorities

The DOJ articulated its enforcement priorities in a June 11, 2025, enforcement memorandum and the July 2, 2025, working group announcement:

• The Medicare Advantage industry, including plans and vendors, has experienced FCA investigations concerning risk adjustment data and marketing practices, which likely will continue. The working group mentioned a new priority area related to Medicare Advantage organizations: “barriers to patient access to care, including violations of network adequacy requirements.” CMS also recently announced an aggressive new strategy related to Medicare Advantage audits. CMS will audit all eligible Medicare Advantage contracts for each year and will use additional resources to finish all audits for 2018 – 2024 by early 2026. CMS will work with HHS-OIG to recover overpayments found during these audits. Companies involved with Medicare Advantage, either as a plan, provider, or vendor, can expect increasing government scrutiny and investigative and audit activity.
• Another priority relates to US President Donald Trump’s political positions set out in Executive Order (EO) 14,168, “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” 90 Fed. Reg. 8615 (Jan. 30, 2025), and EO 14,187, “Protecting Children from Chemical and Surgical Mutilation,” 90 Fed. Reg. 8771 (Feb. 3, 2025). The DOJ stated it will prioritize investigations of providers, hospitals, pharmaceutical companies, and other entities for possible violations of the Food, Drug, and Cosmetic Act, which could lead to FCA exposure, and will pursue claims under the FCA related to billing for what it considers to be impermissible services, such as knowingly submitting claims with incorrect diagnosis codes to evade bans on certain medical treatments. The DOJ has already been active in this space, issuing more than 20 subpoenas to doctors and clinics related to gender-affirming medical procedures performed on minors. Other participants in the healthcare and life sciences sectors may receive subpoenas related to such care.
• The AKS is prominently featured in the working group’s priority list, which specifically mentions kickbacks related to drugs, medical devices, durable medical equipment, and other products, as well as discounts, rebates, and service fees. At the AHLA Annual Meeting, Jenny mentioned examining the pricing practices of group purchasing organizations, wholesalers, and physician practices, and investigating medical device manufacturer’s financial relationships with large physician practices.
• Other priorities likely to impact the life sciences and healthcare sectors include drug, device, or biologics formulary placement and price reporting; claims concerning materially defective medical devices impacting patient safety; and alleged manipulation of electronic health record (EHR) systems to promote inappropriate use of Medicare-covered products and services.
• The DOJ articulated other priorities that, although not specific to the healthcare and life sciences sectors, will still have an impact on those organizations:
  • Citing to President Trump’s January 2025 EO regarding diversity, equity, and inclusion (DEI) and “restoring” purported “merit-based opportunity,” the DOJ’s June 2025 memorandum states that the Civil Division will pursue litigation aimed at combatting allegedly discriminatory practices. The memorandum specifically references FCA cases against entities that receive federal funds but knowingly violate civil rights law. This priority appeared earlier in the National Institutes of Health (NIH) Notice NOT-OD-25-090, released in April 2025 but rescinded in June 2025. The notice announced a new term and condition for all NIH grants, other transaction awards, and cooperative agreements related to eliminating DEI programs and following “all applicable Federal anti-discrimination laws material to the government’s payment decisions for purposes of 31 U.S.C. § 3729(b)(4).” While the notice was rescinded, organizations should watch for similar terms in agreements with or grants from the government and expect the DOJ (and whistleblowers) to strictly enforce them. Organizations should also internally review their hiring practices and any DEI programming to assess potential enforcement or investigation risk based on the administration’s new interpretations and priorities.
  • The DOJ will prioritize investigations and enforcement actions where entities claim federal funds but “knowingly violate federal civil rights laws by participating in or allowing antisemitism.” Organizations should be aware of actions the DOJ could perceive as encouraging antisemitism or failing to protect Jewish employees or clients, which the DOJ has identified as potentially leading to FCA liability.
  • The DOJ’s priorities include increased immigration enforcement as well as “denaturalization” or revoking a person’s US citizenship. The June 2025 memorandum lists various circumstances in which the DOJ would consider a denaturalization proceeding, including cases against individuals who engaged in various forms of financial fraud against the United States, such as Paycheck Protection Program loan fraud and Medicaid/Medicare fraud. Cases also can be referred by a US Attorney’s Office or in connection with pending criminal charges if those charges do not fit within one of the other priorities, or in any other case referred to the Civil Division that the division determines to be sufficiently important to pursue.

Other working group activities

The DOJ-HHS working group announcement emphasizes efforts to develop affirmative FCA actions rather than relying on relators to bring claims. The announcement states that the working group “shall maximize cross-agency collaboration to expedite ongoing investigations in these priority areas and identify new leads, including by leveraging HHS resources through enhanced data mining and assessment of HHS and HHS-OIG report findings.”

The working group will also discuss considerations bearing on whether HHS should implement a payment suspension pursuant to 42 C.F.R. § 405.370 et seq. or whether the DOJ should move to dismiss a qui tam complaint under 31 U.S.C.§3730(c)(2)(A), consistent with Justice Manual Section 4-4.111. This suggests that the DOJ may be putting more priority on, and possibly increasing its frequency in requesting, payment suspensions.

In the context of FCA investigations or cases, payment suspensions can occur when “a credible allegation of fraud exists against a provider or supplier.” 42 C.F.R. § 405.371(a)(2). These regulations provide very little ability for providers and suppliers to contest payment suspensions, which can have a catastrophic effect, particularly when the government imposes them based on incomplete or inaccurate information early in an investigation. We have seen a notable increase in payment suspensions imposed in 2025 compared to prior years. The working group announcement suggests that this trend may continue.

One potential bright spot for organizations facing the burden of defending FCA cases after the DOJ declines to intervene is that the working group announcement suggests the DOJ may be more interested in affirmatively dismissing qui tam complaints after declination. A 2018 memorandum from Michael Granston, then-Director of the Commercial Litigation Branch, Fraud Section, articulated seven factors that the DOJ would consider in affirmatively moving to dismiss a relator’s complaint. The DOJ also has pursued affirmative dismissals in a small number of cases. At the AHLA conference, Jenny described evaluating whether to dismiss unmeritorious cases as something she is “passionate about.” Considering when and how to request that the DOJ affirmatively dismiss a declined case will be an important part of an overall FCA defense strategy.

Key takeaways

The working group announcement indicates a continued and potentially increased emphasis on FCA enforcement involving healthcare and life sciences organizations. This activity includes enforcement in traditional areas of focus, such as Medicare Advantage and the AKS, but also new priorities such as drug pricing and artificial intelligence use in EHRs. Some of the DOJ’s priorities are more political in nature, including the focus on DEI programs and gender-based care. We expect to see an increase in government action surrounding these priority areas.

The government’s increased use of payment suspensions merits special focus, given the risk for healthcare organizations. Providers facing an investigation should carefully evaluate the risk and likelihood of a payment suspension and seek advice from counsel experienced in addressing payment suspension risk and, when necessary, challenging it in court.

Lastly, organizations involved in an FCA action that has been declined should consider ways to appeal to the DOJ to affirmatively dismiss the case.