In a move that may signal increased scrutiny of the health care and life sciences industries, the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS) have launched a new joint working group focused on False Claims Act (FCA) enforcement. Previously, many speculated that the Trump administration might use the FCA in different areas than prior administrations, particularly in trade and tariff enforcement. While that may still be the case, the formation of this group indicates that bringing FCA claims related to health care will remain a major priority for the DOJ.

The formation of this new working group, announced on July 2, reflects a strategic shift toward more proactive, data-driven investigations – particularly in high-spend areas like Medicare Advantage and drug pricing – while also aiming to streamline enforcement by assessing early in an investigation whether novel legal theories are viable and whether they have support from DOJ leadership before cases are allowed to move forward.

The new working group will be led by DOJ Deputy Assistant Attorney General for the Civil Division’s Commercial Litigation Branch, Brenna Jenny – who helped launch a similar initiative during the first Trump administration – alongside senior legal officials from HHS and the HHS Office of Inspector General. While traditional FCA targets like kickbacks and upcoding remain a focus, the group is broadening the scope of DOJ FCA enforcement to include a variety of new areas. The principal areas of FCA enforcement announced by the DOJ include: 

• Medicare Advantage
• Drug, device, or biologics pricing, including arrangements for discounts, rebates, service fees, and formulary placement and price reporting
• Barriers to patient access to care, including violations of network adequacy requirements
• Kickbacks related to drugs, medical devices, durable medical equipment, and other products paid for by federal health care programs
• Materially defective medical devices that impact patient safety
• Manipulation of electronic health records (EHRs) systems to drive inappropriate utilization of Medicare-covered products and services

In a notable shift, the task force will also proactively analyze regulatory data gathered by HHS to identify potential fraud, rather than waiting for qui tam complaints to come through the door. Importantly for Medicare providers, the group also intends to consider whether HHS should suspend payments to Medicare providers early in an investigation, when credible allegations of fraud emerge, rather than waiting until an investigation is concluded. As one factor of the materiality analysis required for a successful FCA claim is whether the government has refused to pay a claim, this approach may limit potential defenses that providers can raise. 

For companies in the health care and life sciences space, this development is a clear signal that FCA enforcement by the DOJ under this administration is likely to be aggressive. In the past, new theories of FCA liability have generally been developed by the representatives of relators or whistleblowers, but this development indicates that the DOJ will be devising such theories on its own initiative. With the task force set to begin monthly meetings in July, now is the time to reassess compliance across all areas of potential exposure. Companies should expect increased oversight and more creative legal theories from enforcers. Our team is actively tracking these developments and helping clients prepare. If you have questions about what the new task force may mean for your business, we’re here to help.

Additional authors: Anthony Todd, A. Scott Bolden, Scott Marrah, Adria Perez