With the first half of 2025 in the rearview mirror, the government's continued focus on False Claims Act (FCA) enforcement shows no signs of slowing. In fact, the Department of Justice recently announced the results of a record-setting National Health Care Fraud Takedown, which resulted in criminal charges against 324 defendants for alleged healthcare fraud schemes involving over $14.6 billion.
Below, we summarize the most noteworthy settlements from the first half of 2025, including one that resulted in a Corporate Integrity Agreement (CIA). These resolutions not only highlight focus areas for regulatory enforcement but also offer healthcare companies, government contractors, and other entities doing business with the government valuable lessons for their own compliance efforts.
Healthcare Sector
- On January 23, a medical device supplier and its affiliates agreed to pay $17 million to resolve allegations that they provided free samples and discounts to urology practitioners to illegally induce the use of the supplier's prescription form in prescribing intermittent catheters to their patients.
- On January 24, Pfizer, on behalf of subsidiary Biohaven Pharmaceutical Holding Company Ltd, agreed to pay nearly $60 million to resolve allegations that before acquisition by Pfizer, Biohaven violated the FCA and Anti-Kickback Statute (AKS) by providing remuneration to physicians in the form of speaker honoraria and lavish meals in order to induce prescriptions of its migraine medication.
- On February 14, a New York health system agreed to pay $29 million to resolve allegations that it knowingly retained inflated payments received from the Department of Defense for retired military members and their families. DOJ alleged that the system learned that the fixed rate it was paid by DOD for providing care to military families and retirees was miscalculated, but nevertheless improperly retained and concealed the resulting overpayments.
- On March 26, a Medicare Advantage provider, its subsidiary, its former president and majority owner, and an affiliated radiology group agreed to collectively pay over $62 million to resolve FCA allegations that they fraudulently increased Medicare Advantage reimbursements by submitting inflated claims with severe spinal condition diagnosis codes for patients without these conditions. As part of the settlement, the former president and majority owner agreed to pay $1.76 million, and the affiliated radiology group agreed to pay $2.35 million.
- On April 21, Walgreens and its various subsidiaries agreed to pay $300 million, plus possible future payments contingent on revenue, to resolve FCA and CSA allegations that they illegally filled invalid prescriptions for opioids and other controlled substances and sought payment for many of these illegal prescriptions from federal health care programs. As part of the resolution, the company entered into a parallel Memorandum of Agreement with the DEA and a five-year CIA with HHS-OIG.
- On April 29, Gilead Sciences agreed to pay $202 million to resolve allegations in a partially-intervened action that it funneled kickbacks in the form of speaker fees, costly meals, and travel expenses to physicians to induce them to prescribe its HIV medications.
- On May 7, a health system and its affiliate agreed to pay $31.5 million to settle allegations that it provided improper financial inducements to referring physicians in violation of the AKS, Stark Law, and FCA. DOJ alleged the health system provided referring physicians with expensive meals, alcohol, and cigars provided in a lounge on premises at the health system and other remuneration, including EHR technology subsidies and bonuses for alleged participation in clinical integration activities that were intended to reward referrals. As part of the resolution, the system entered a five-year CIA with HHS-OIG.
- On June 11, Creative Hospice Care, Inc., and its affiliates agreed to pay $9.2 million to resolve allegations that the hospice company violated the FCA by paying kickbacks to medical directors in the form of stipends and sign-on bonuses in exchange for referrals. DOJ alleged that the compensation paid varied with the volume of referrals the physicians made.
- On June 26, a substance use disorder treatment provider agreed to pay $18.5 million to resolve allegations that it violated the FCA by (1) paying patients insured by Medicaid to seek treatment from the provider in violation of the AKS and (2) double billing for treatment services.
COVID-19 Program Fraud
- On January 17, a skilled nursing facilities chain, its affiliates, and its owner agreed to collectively pay $18 million to resolve FCA allegations that they submitted false information on PPP loan applications and loan forgiveness applications. The government alleged that the chain falsely certified that it was a small business with fewer than 500 employees in 2020. Its applications failed to disclose that the entities were part of a larger chain of facilities that all shared common ownership and control.
- On March 24, a clinic and hospital system agreed to pay over $8.8 million to settle FCA allegations that they falsely certified eligibility for four PPP loans totaling $7.2 million. DOJ alleged that Carson Tahoe Health System and its affiliates exceeded the size limitations in the Small Business Administration's (SBA) affiliation rules when they certified eligibility for the loans.
- On April 2, a medical group agreed to pay $2.8 million to resolve FCA allegations that it falsely reported its payroll costs to receive full forgiveness of a $6.7 million PPP loan. DOJ alleged the group represented that its payroll costs were sufficient for a full forgiveness loan, but its actual costs were only sufficient for forgiveness of approximately $4.9 million.
- On July 15, Delta Airlines agreed to pay over $8 million to resolve FCA allegations that it violated the terms of its Payroll Support Program (PSP) funding agreement by failing to impose agreed compensation caps on highly paid executives and falsely certifying compliance with the same.
Cybersecurity Fraud
- On February 18, Health Net Federal Services Inc. and its parent company agreed to pay over $11.2 million to resolve FCA allegations that the company falsely certified compliance with cybersecurity requirements in its contract with the Department of Defense (DOD) to administer TRICARE. The settlement resolved allegations that the company failed to timely scan for and remedy cybersecurity vulnerabilities, ignored reports from auditors about its cybersecurity risks, and falsely attested compliance with at least seven security controls.
- On March 26, defense contractor MORSECORP, Inc., agreed to pay $4.6 million to resolve FCA allegations that it submitted false claims related to alleged noncompliance with cybersecurity requirements in its Army and Air Force contracts. DOJ alleged the company did not implement certain cybersecurity controls, failed to ensure its third-party email host met required security standards, and failed to have a written cybersecurity plan.
- On May 1, defense contractor Raytheon Company and related companies agreed to pay $8.4 million to resolve FCA allegations that they submitted claims that falsely certified compliance with cybersecurity requirements in contracts and subcontracts with DOD. Specifically, DOJ alleged that the company failed to implement the required controls on an internal development system that was used to perform unclassified work on certain DOD contracts.
- On July 14, IT company Hill Associates agreed to $14.75 million, plus possible future payments contingent on revenue, to resolve allegations that it violated the FCA in connection with a General Services Administration (GSA) contract for information technology services, including allegations that Hill Associates billed for highly adaptive cybersecurity services to government customers that it was not qualified to provide and that were outside the scope of the contract.
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