The United States Department of Justice (DOJ) has ratcheted up its efforts to pursue actions against corporations, healthcare entities, and individuals, including physicians, for false Medicare or Medicaid billing and COVID-19-related loans. Billing claims that are deemed misleading may result in a DOJ investigation. DOJ touted a record $6.8 billion in False Claims Act (FCA), 31 U.S.C. §§3729-3733, recoveries in fiscal year 2025. On June 23, 2026, DOJ announced 455 arrests, including a number of physicians, for allegations of healthcare fraud and opioid abuse. This aggressive enforcement appears to be a top priority of the current administration.

As part of this announcement, the Centers for Medicare and Medicaid Services (CMS) suspended 1,079 providers and revoked billing privileges for 1,403 providers. There were 48 civil monetary payment settlements amounting to more than $73 million; over 1,400 provider exclusions; 25 Department of Health and Human Services Office of Inspector General (OIG) actions under the Civil Monetary Penalties Law seeking more than $10 billion in payments to the Medicare Trust Fund from payments that CMS caught and suspended before the funds were paid to the providers; civil charges against 13 defendants for $14.8 million in healthcare fraud schemes, as well as civil settlements with 31 defendants totaling $23 million. The Drug Enforcement Administration has sought the revocation of authority to handle and/or prescribe controlled substances for almost a thousand providers since October 2025 because of these types of actions.

Congress enacted the FCA in 1863 with the objective of pursuing defense contractors who fraudulently billed the United States. The FCA has evolved to include any false claims submitted to the government. FCA liability can arise in other situations, such as when someone knowingly uses a false record material to a false claim or improperly avoids an obligation to pay the government. The FCA allows the government to recover treble damages, which may be up to three times the fraudulent claim amount. The government can also collect civil penalty fines, which may exceed $25,000 per false claim. Any entity or individual found liable under the FCA may be excluded from Medicare and Medicaid. For willful and intentional Medicare billing fraud or COVID-19 relief loan fraud, criminal prosecution can result in up to 10 years of incarceration per offense under 18 U.S.C. 1347.

In addition to allowing the United States to pursue perpetrators of fraud on its own, the FCA allows private citizens to file suits on behalf of the government (called “qui tam” suits) against those who have defrauded the government. In the healthcare realm, these suits are often filed by disgruntled employees and patients, but can also be brought by competitors. There is also a group of lawyers who actively pursue these types of claims. If they are successful, they may receive a significant portion of the government’s recovery. Given the recent publicity surrounding these fraudulent claims, one could expect more people to pursue them through qui tam suits.

Recently, the United States Attorney’s Office in the Southern District of West Virginia prosecuted owners of a company in Beckley, West Virginia, for defrauding the Small Business Administration relating to COVID-19 relief loans. The federal district judge sentenced two of the owners to prison. They also paid more than $1 million in civil penalties under the FCA. In July 2024, that office joined another qui tam suit against the owners of an addiction recovery center and others based in Huntington, West Virginia, which alleged millions in fraudulent billing that was initiated by a former employee. In June 2026, that office announced a federal indictment against the owners. The risk cannot be overstated, especially when considering officials across the administration tout their efforts to pursue healthcare or COVID-19 fraud by businesses, healthcare entities, physicians, and individuals. 

Given the current administration’s focus on this type of litigation, healthcare providers must focus on ensuring that they do not become the subject of an FCA claim. Because treble damages can be awarded, these claims can have an immediate, catastrophic impact on a provider’s continued operations. This is a critical time to review all billing practices to make certain they are lawful under federal law. A comprehensive review should include ensuring that physician compensation is not tied to the volume or value of referrals to your facility, that there is no upcoding or unbundling of services, that services provided by mid-level providers are reviewed properly, and that all billed services are structurally supported by medical necessity. Healthcare providers should consider retaining qualified healthcare legal counsel with deep Department of Justice experience and a background in federal qui tam suits to guide their internal billing reviews and proactively protect against future claims.