Trump Administration Bolsters FCA Health Care Fraud Enforcement with New DOJ-HHS Working Group

Emphasizing its commitment to enforcing the False Claims Act (FCA) and combating health care fraud, the Trump Administration recently instituted a DOJ-HHS False Claims Act Working Group dedicated to “combating health care fraud and safeguarding the integrity of the federal health care system.” The U.S. Department of Health and Human Services (HHS) and the U.S. Department of Justice (DOJ) have collaborated for many years in using the FCA to combat health care fraud. Forming the DOJ-HHS FCA working group marks a significant evolution in these efforts.

The DOJ-HHS False Claims Act Working Group will be composed of leaders from the HHS Office of General Counsel, the Centers for Medicare & Medicaid Services Center for Program Integrity, the Office of Counsel to the HHS Office of Inspector General (HHS-OIG), and DOJ’s Civil Division along with designees from U.S. Attorney’s Offices.  The group’s aim is to “maximize cross-agency collaboration to expedite ongoing investigations” in the following priority enforcement areas:

• Medicare Advantage programs
• 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 healthcare programs
• Materially defective medical devices that impact patient safety
• Manipulation of Electronic Health Records (EHR) systems to drive inappropriate utilization of Medicare covered products and services

Medicare Advantage programs, kickbacks relating to all variety of health care products and services and manipulating EHR systems have been longstanding enforcement priorities for DOJ.

The group reportedly seeks to “identify new leads . . .by leveraging HHS . . . enhanced data mining and assessment of HHS and HHS-OIG reporting findings.”  These methods for obtaining investigative leads have been employed in previous HHS enforcement initiatives such as the HHS-US Attorney Medicare Fraud Strike Forces.  Using these leads reflects that the group intends to initiate more of its own “direct file” health care fraud investigations and rely less on relator-generated qui tams.

As part of the group’s mission, DOJ’s press release highlights that the group “shall discuss” whether HHS should implement payment suspensions of HHS reimbursement for services covered by Medicare or Medicaid, though it does not say against who or in what circumstances such a suspension would be imposed. Up to now, HHS provider payment suspensions are infrequent and usually imposed only for the most egregious violations.  Ramping up payment suspensions of Medicare providers would be a significant enforcement escalation. 

Another “discussion” topic highlighted by DOJ’s press release is “whether DOJ shall move to dismiss” qui tam complaints as permitted by the “Granston” factors found in DOJ’s Justice Manual.  To date, DOJ has rarely exercised its power to dismiss qui tam actions, and defense attorneys frequently complain that DOJ should exercise its dismissal discretion more frequently.  How this DOJ will exercise its discretion in this area is unknown.

Not surprisingly, the group continues to “encourage” whistleblowers to identify and report FCA violations in “priority enforcement areas.”  At the same time, the group encourages “health care companies” to self-report violations consistent with the DOJ’s cooperation program outlined in the Justice Manual. As we previously wrote, self-reporting FCA violations can afford providers significant benefits.

Health care providers who fall within the target zones of the group’s areas focus should continue to pay close attention to any further guidance or enforcement actions from DOJ or HHS and adjust their compliance and internal audit plans as needed. By maintaining robust compliance programs and staying informed about regulatory changes, providers can better mitigate FCA violation risks and protect against potential liabilities through participation in self-reporting programs.

Please contact A. Brian Albritton, Raquel Ramirez Jefferson or any member of the Phelps Health Care or White Collar Defense and Investigations teams if you have questions or need advice or guidance.