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Highlights
- Healthcare fraud remained a leading source of False Claims Act (FCA) settlements and judgments, with more than $5.7 billion of the $6.8 billion recovered relating to matters involving the healthcare industry.
- Among the government's top enforcement priorities were managed care, prescription drugs, and medically unnecessary services and substandard care.
On Jan. 16, 2026, the U.S. Department of Justice (DOJ) announced False Claims Act (FCA) settlements and judgments exceeded a record-breaking $6.8 billion in the fiscal year (FY) ending Sept. 30, 2025. According to the DOJ, this is the largest amount recovered in a single year in the history of the FCA and a considerable increase from FY 2024, where FCA settlements and judgments exceeded $3.1 billion.
Additionally, the DOJ reports whistleblowers filed 1,297 qui tam lawsuits in FY 2025, another record high, while the government independently filed 401 of its own FCA actions. Recoveries in whistleblower lawsuits totaled over $5.3 billion, or roughly 78%, of all FCA recoveries in FY 2025.
Matters pertaining to the health care industry comprised the largest portion of FCA settlements and judgments in FY 2025. Recoveries for healthcare-related matters totaled more than $5.7 billion, or roughly 83% of all FCA recoveries in FY 2025. This represents a stark increase from prior years and bucks the recent trend where healthcare recoveries declined year-to-year compared to other industries. For example, in 2023 healthcare recoveries accounted for approximately 68% of FCA settlements and judgments, and 58% in 2024.
Enforcement Priorities
The DOJ pursued FCA claims against a variety of healthcare defendants, for diverse issues including kickbacks paid by hospitals and smaller practices, filling fraudulent prescriptions by pharmacies, and billing for unnecessary genetic tests by clinical laboratories. But the DOJ highlighted three major areas which drove its 2025 success above all other years: managed care, prescription drugs, and medically unnecessary services and substandard care. Recent recoveries reflect these priorities:
- Managed Care: A Medicare Advantage provider agreed to pay up to $98 million to resolve allegations that it violated the FCA by submitting unsupported and invalid diagnosis codes for Medicare Advantage Plan enrollees to artificially inflate risk adjustment scores and resulting increase payments from Medicare.
- Prescription Drugs: The largest generic drug manufacturer in the country agreed to pay $450 million to resolve FCA and Anti-Kickback Statute (AKS) from allegedly paying Medicare copays for a prescription drug while steadily increasing its price and conspiring with other generic manufacturers to fix prices, with the benefits of the price-fixing scheme constituting illegal kickbacks.
- Medically Unnecessary and Substandard Care: A wound care physicians management group and its founder agreed to pay $45 million to resolve allegations arising from the submission of false claims to Medicare for overbilled and medically unnecessary wound care services.
The DOJ also reported other notable healthcare fraud enforcement actions from the past year including a $1.6 billion judgment, the largest in FCA history, arising from allegations that an international pharmaceutical company submitted prescription drug claims to federal healthcare programs that were induced by false and misleading claims about the drugs' safety and efficacy. However, that judgment is currently being appealed on numerous grounds including allegations that the FCA's qui tam provisions are unconstitutional, and that the treble damages and other penalties violate the excessive fines and due process clauses of the constitution.
Key Takeaways
Healthcare fraud has returned as a top priority of the DOJ's enforcement agenda, and it is the foundation on which the DOJ's enforcement agenda is based. This increased emphasis compared to years' past reflects the government's commitment to combating fraud across various sectors of the healthcare industry. The record number of qui tam filings confirms that whistleblowers are increasingly willing to pursue FCA claims even without assistance from the government.
Looking ahead, healthcare entities seeking to mitigate FCA risk should review available guidance from the Office of Inspector General for the U.S. Department of Health and Human Services (HHS-OIG) and the DOJ related to compliance, including any Industry Segment-Specific Compliance Program Guidance (ICPG) published by HHS-OIG. Additionally, providers should ensure that they have adequate controls in place to identify billing errors, documentation deficiencies, and substandard care as we expect the government to continue to investigate these issues with intense scrutiny.
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