Three enforcement trends to watch

1. Escalated fraud and abuse enforcement activity: US Department of Justice (DOJ) and the US Department of Health and Human Services re-launched their joint False Claims Act Working Group, signaling a heightened focus on artificial intelligence (AI)-enabled billing, Medicare Advantage risk adjustment, and kickback theories tied to digital health and pharmaceutical and medical device manufacturers, among others.
2. State-level expansion and private equity scrutiny: States (e.g., California, Colorado, New York, and Washington) are moving aggressively with “mini-Hart-Scott-Rodino” and other transaction notice laws. They’re also heightening review of private equity ownership and Corporate Practice of Medicine compliance in physician platforms.
3. Political and social enforcement drivers: Enforcement priorities increasingly intersect with policy issues such as diversity, equity, and inclusion; reproductive health; and gender-affirming care. Hospitals and health systems face new risks and challenges while navigating conflicting federal and state mandates.

Three action items before year-end

1. Refresh fraud and abuse risk mapping: Coordinate with your compliance and internal audit teams to ensure relevant risk areas are included in the internal compliance work plan. Consider including compensation, marketing, and technology-use arrangements in light of DOJ’s evolving theories and data-driven analytics. Also evaluate whether particular compliance reviews should be performed under attorney-client privilege.
2. Develop informed transactional planning: Integrate regulatory and ownership-disclosure reviews early in deals in anticipation of DOJ and state attorney-general scrutiny. Identify associated timelines early in deal processes so all stakeholders are aligned.
3. Prepare for multi-front investigations: To best position the organization for a nimble, consistent, and coordinated response to a government investigation or other request for information, create alignment among your organization’s legal, compliance, and government-relations functions under a government investigation and communications initiative, and provide a training for personnel regarding the updated policy requirements.

For questions about or to discuss these trends, contact your regular McDermott Will & Schulte lawyer or the authors below.