Healthcare Fraud Enforcement Priorities and Defense Strategies for 2026

By: Ashwin J. Ram

Federal healthcare fraud enforcement increasingly relies on data analytics and targets Medicare Advantage risk adjustment, kickbacks, laboratory and telehealth schemes, and everyday billing practices. In fiscal year 2025, the Justice Department reported record False Claims Act (FCA) recoveries above $6.8 billion, including more than $5.7 billion from healthcare. For providers and executives, one billing problem can create civil, criminal and administrative exposure at once, so preparation should start before any subpoena arrives.

New structures, data analytics and five risk areas now drive enforcement

Whistleblowers filed 1,297 new qui tam suits in fiscal year 2025. On April 7, 2026, the Justice Department (DOJ) established a National Fraud Enforcement Division. The Criminal Division’s Health Care Fraud Unit moved into it as a standalone Health Care Fraud Section.

Since July 2, 2025, a joint DOJ-HHS False Claims Act Working Group has targeted Medicare Advantage risk-score inflation, drug and device pricing, and kickbacks. In the data-driven June 23, 2026 National Health Care Fraud Takedown, prosecutors charged 455 defendants, including 90 licensed medical professionals. The cases allege more than $6.5 billion in fraud.

Medicare Advantage risk adjustment is a top civil priority. The government’s theories target unsupported diagnosis codes, chart reviews that only add codes, and in-home assessments that generate diagnoses no treating physician acts on. A plan that keeps a code it knows lacks support risks a reverse false claim under 31 U.S.C. § 3729(a)(1)(G).

Laboratory schemes often disguise kickbacks as processing-and-handling, specimen-collection or advisory fees, and telehealth fraud usually runs through paid marketers. Kickback cases also involve above-market medical directorships, speaker programs and private equity roll-ups. Routine upcoding, unbundling and unsupervised incident-to billing complete the list. In Los Angeles, federal prosecutors and the local Medicare Fraud Strike Force focus on hospice, durable medical equipment, telehealth, laboratory and sober-living schemes.

Escobar and SuperValu set real limits on False Claims Act exposure

Under 31 U.S.C. § 3729(a)(1)(A), liability reaches anyone who knowingly presents a false claim or causes another to present one. A liable defendant faces treble damages plus a penalty for each claim. For penalties assessed after July 3, 2025, 28 C.F.R. § 85.5 sets the range at $14,308 to $28,619 per claim. Because each claim line can count separately, penalties can exceed the government’s actual loss.

In Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016), the Supreme Court called the FCA’s materiality standard “demanding.” The government’s option to refuse payment does not make a violation material by itself. If the government keeps paying with actual knowledge of a violation, that is “very strong evidence” the requirement is not material.

In United States ex rel. Schutte v. SuperValu Inc., 598 U.S. 739 (2023), the Court held that FCA scienter is subjective. An objectively reasonable reading will not help a defendant who believed at the time that its claims were false. A contemporaneous, documented good-faith reading is powerful evidence against knowledge.

After Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024), courts no longer defer to an agency’s reading of an ambiguous statute. That opens FCA theories resting on such readings to direct challenge.

The Anti-Kickback Statute reaches any payment with one improper purpose

Under 42 U.S.C. § 1320a-7b(b), knowingly and willfully paying or receiving anything of value to induce federal program referrals is a felony. United States v. Greber, 760 F.2d 68 (3d Cir. 1985), held a payment violates the statute if even one purpose is to induce referrals. Since 2010, 42 U.S.C. § 1320a-7b(h) has provided that a defendant need not know the statute exists or specifically intend to violate it.

Safe harbors at 42 C.F.R. § 1001.952 are voluntary, but they protect only arrangements that meet every element. The Stark Law, 42 U.S.C. § 1395nn, is a strict-liability statute governing physician referrals for designated health services. Intent is irrelevant, so each financial relationship must fit an exception in full.

In United States v. Sorensen, 134 F.4th 493 (7th Cir. 2025), the Seventh Circuit reversed a kickback conviction. It held that payments to advertisers and a manufacturer were not payments for referrals, because physicians exercised independent judgment.

Under 42 U.S.C. § 1320a-7b(g), a claim that includes items or services resulting from a kickback is a false claim. That provision is why most kickback matters now proceed as FCA cases. The circuits disagree on whether § 1320a-7b(g) requires but-for causation (compare United States v. Regeneron Pharms., Inc., 128 F.4th 324 (1st Cir. 2025), with United States ex rel. Greenfield v. Medco Health Sols., Inc., 880 F.3d 89 (3d Cir. 2018)).

Most investigations start with a sealed qui tam or a data flag

Most healthcare fraud investigations begin with a whistleblower, while others start with contractor audits, hotline tips or data analytics. A relator files a qui tam complaint under seal and serves only the government. The seal lasts at least 60 days under 31 U.S.C. § 3730(b)(2), and courts often extend it for years. Many defendants first learn of a case through a civil investigative demand, a subpoena or an agent’s interview request.

A civil investigative demand under 31 U.S.C. § 3733 can compel documents, written answers and oral testimony before any complaint exists. Criminal cases add grand-jury subpoenas, search warrants and health care fraud charges under 18 U.S.C. § 1347. Aggravated identity theft under 18 U.S.C. § 1028A adds a mandatory two-year consecutive sentence.

The HHS Office of Inspector General (HHS-OIG) can exclude a provider from all federal health care programs under 42 U.S.C. § 1320a-7. Exclusion can end a practice. The Centers for Medicare & Medicaid Services (CMS) can suspend payments on a credible allegation of fraud under 42 C.F.R. § 405.371. Justice Manual § 9-28.210 also directs prosecutors to focus on individual wrongdoers, and employees with personal exposure often need separate counsel.

Defense strategy should cover all three tracks from the first day

Counsel who engage DOJ during the seal can present exculpatory facts and influence the intervention decision before the case becomes public. A relator may continue after a declination, yet the case then proceeds without the government’s investigative weight. DOJ can seek dismissal over a relator’s objection under 31 U.S.C. § 3730(c)(2)(A), weighing the Granston factors in Justice Manual § 4-4.111. Build a record that fits those factors.

Demands and subpoenas are negotiable in scope and timing, so meet and confer early. Altering records or giving misleading answers can turn a civil matter into an obstruction or false-statement case. Each employee interview should open with an Upjohn warning that counsel represents the company, which controls the privilege. Upjohn Co. v. United States, 449 U.S. 383 (1981).

In settlement, the damages multiplier moves with credit for disclosure, cooperation and remediation under Justice Manual § 4-4.112. Insist on offsets for services actually rendered, and challenge unreliable sampling and extrapolation. HHS-OIG’s exclusion authority runs independently of DOJ, so bring HHS-OIG and CMS into talks before agreeing on the FCA number. Permissive exclusion under 42 U.S.C. § 1320a-7(b) is negotiable, and the usual trade is a Corporate Integrity Agreement (CIA) that commonly runs five years.

HHS-OIG’s Health Care Fraud Self-Disclosure Protocol offers a lower multiplier and a presumption against a CIA for cooperating disclosers. The Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy, revised May 12, 2025, offers a path to declination for qualifying self-disclosures absent aggravating factors. Disclosure also starts a clock and can give the government a roadmap, so learn the facts first.

Compliance programs earn credit only when they show their work

HHS-OIG’s November 2023 General Compliance Program Guidance sets the baseline for all providers. The agency has since issued segment guidance for nursing facilities in November 2024 and for Medicare Advantage in February 2026. The seven elements of an effective program track U.S.S.G. § 8B2.1, and prosecutors test them.

Run periodic risk assessments, track every referral-source arrangement against Stark and Anti-Kickback requirements, and give the board real oversight. A program that cannot show its work at the time of an arrangement will not earn credit later.

What providers and executives should do now

• Issue a written litigation hold and suspend auto-deletion as soon as a subpoena, civil investigative demand or agent contact arrives.
• Test every referral-source arrangement against each element of the applicable safe harbor or Stark exception, and document fair market value.
• Record good-faith interpretations of ambiguous billing rules when you adopt them, because SuperValu makes contemporaneous belief the test.
• Medicare Advantage plans and vendors should audit chart reviews and in-home assessments and delete unsupported codes.
• Route employee complaints to compliance quickly, because DOJ’s Corporate Whistleblower Awards Pilot Program raises the odds an insider reports first.
• Engage counsel at the first sign of an investigation, while any qui tam may remain under seal.

Adapted from Ashwin J. Ram’s CLE program “The Billion-Dollar Problem: Healthcare Fraud Enforcement and Compliance Strategies,” presented Aug. 28, 2026.