The False Claims Act is here to stay; More than $3 billion in healthcare-related settlements and judgments in fiscal year 2025 to date
On July 2, 2025, the U.S. Department of Justice (DOJ) and U.S. Department of Health and Human Services (HHS) announced the formation of the DOJ-HHS False Claims Act Working Group, headed by senior leaders from both agencies committed to combatting healthcare fraud with increased use of the False Claims Act (FCA).
The DOJ-HHS announcement of the Working Group's formation coincided with remarks from DOJ Deputy Assistant Attorney General Brenna E. Jenny, one of the Working Group leaders, at the conclusion of the American Health Law Association's Annual Meeting. The formation and mandate of the Working Group sends a clear message to the healthcare industry — remain alert for any billing or financial arrangements that could be construed as leading to the submission of a false claim for federal healthcare dollars.
Priority Enforcement Areas
The Working Group creates a structure for regular and robust coordination between HHS and DOJ, including providing new opportunities for HHS to refer potential FCA violations to the DOJ. In addition to advancing longstanding FCA enforcement priorities, the Working Group will prioritize potential fraud, waste and abuse in the following areas of the healthcare industry:
- Medicare Advantage, including artificially inflating patient risk adjustment scores;
- Drug and device pricing, particularly involving discounts, service fees and rebate arrangements, as well as improper formulary placement and price reporting;
- Barriers to patient access to care, including violations of network adequacy requirements;
- Kickbacks involving products paid for by federal healthcare programs;
- Medical device defects that impact patient safety; and
- Manipulation of Electronic Health Records (EHRs) systems, resulting in inappropriate utilization of Medicare-covered products and services.
Improved Coordination
Using enhanced data mining techniques and HHS-Office of Inspector General (OIG) report findings, the Working Group will expedite investigations and develop new leads for referral to DOJ. The Working Group will also address matters bearing on whether HHS should suspend provider payments in response to credible fraud allegations, which could result in greater (or earlier) incidents of adverse administrative actions. Increased cross-agency collaboration may also lead to more frequent parallel civil, regulatory and criminal investigations.
While whistleblowers will continue to provide a large source of FCA allegations for DOJ and HHS to investigate, DOJ also made clear that it will scrutinize unfounded qui tam complaints to determine those that may be ripe for dismissal.
Today's State of Play and Key Takeaways
Earlier this year, DOJ announced that it recovered more than $2.92 billion across 558 settlements and judgments under the FCA for the fiscal year ending September 30, 2024 — an increase of nearly $140 million from the prior fiscal year.
Of that, healthcare-related recoveries comprised approximately $1.7 billion (or 60%). Thus far in fiscal year 2025 (Oct. 1, 2024, to July 8, 2025), the government has recovered more than $3 billion in settlements and judgments across the various healthcare industry sectors.
This is a marked increase in healthcare-related recoveries under the FCA compared to last fiscal year, and it is demonstrative of the increasing prioritization of these matters throughout the industry. A breakdown of recoveries by healthcare industry segment is set forth below.
FCA Recoveries in Fiscal Year 2025 to Date
| Industry Sector/Area of Interest | Recoveries | Amount |
|---|---|---|
| COVID-19 | 3 | $19,742,860 |
| Hospitals & Health Systems | 8 | $121,172,361 |
| Pharmaceutical Companies & Pharmacies | 18 | $2,045,641,634 |
| Med Device & DME | 3 | $31,800,000 |
| Individual Providers & Practice Groups | 40 | $72,035,492 |
| Laboratory Services | 11 | $45,931,071 |
| Home Health Services | 3 | $12,561,250 |
| Long-term Care & Nursing | 3 | $15,153,476 |
| Data Privacy | 23 | $31,466,531 |
| Managed Care | 3 | $176,598,695 |
| Other | 144 | $617,788,012 |
| Total | 259 | $3,189,891,384 |
With the announcement of the FCA Working Group, healthcare industry stakeholders should prepare for increased regulatory scrutiny and the greater likelihood of whistleblower claims. Maintaining robust, up-to-date compliance programs, and regularly evaluating whether those programs target the areas providing the highest risk to the organization, can curb the potential for liability should the government or a whistleblower come knocking.
Conducting internal audits and ensuring measures are in place for robust internal self-reporting will prove critical. The government's clear prioritization of FCA cases — despite the Working Group's charge to vet the merits of qui tam complaints — will surely reaffirm whistleblowers' (and their counsel's) interest in pursuing these cases.
Finally, companies should regularly monitor emerging enforcement trends and ever-changing government guidance to ensure they remain current on the latest government priorities.
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