July 21, 2025
By Edgar Bueno, Mills Fleming, and Matt Wilmot
The Department of Justice (DOJ) has made several recent announcements about its intended focus on False Claims Act (FCA) enforcement. This messaging confirms that the DOJ will be aggressively using the FCA as its primary tool in its battle against fraud, waste, and abuse in government programs. The financial return on FCA settlements and judgments has been tremendous for the government. In the first half of 2025, the DOJ has already recovered $3.8 billion, a significant increase compared to the same period in previous years.
Therefore, any organization receiving federal funds or contracting with the government should note the enforcement areas identified by the government as priorities. While some of the overarching categories of enforcement remain the same, there is a noticeable focus on discrete, new areas that signify novel theories of liability in non-traditional areas of fraud enforcement.
Health Care
One of the more interesting and potentially impactful announcements is the revival of the False Claims Act Working Group amongst the DOJ, the Department of Health and Human Services, the Centers for Medicare & Medicaid Services, and the Office of Inspector General. The Working Group will leverage its joint resources to collaborate on investigations, data mine to identify billing outliers, and institute payment suspensions more quickly to stop the flow of federal dollars going to fraudsters.
Unsurprisingly, the Working Group will still rely upon whistleblowers to bring cases to the government’s attention with qui tam filings. Those who successfully report misconduct can receive between 15% to 30% of any money that the government recovers. While FCA investigations have traditionally relied on whistleblowers, this is beginning to shift. With the rise of Artificial Intelligence and its adoption by the government, companies should expect an increase in FCA investigations generated through the government’s own data mining efforts.
In terms of the types of health care fraud, the DOJ and the Working Group will focus on new enforcement areas and novel theories, as well as “traditional areas of fraud.” It specifically identified the following as priority areas:
- Schemes involving the Medicare Advantage program and risk-adjustment payments,
- Anti-Kickback violations and other improper referral arrangements,
- Fraudulent pricing by specialty pharmacies and pharmacy benefit managers,
- Harmful or abusive marketing of medical devices and biologics,
- Misuse of electronic health records to drive utilization, and
- Miscoding and mislabeling of health care items (e.g., drugs) or services, relating to gender affirming care.
While there may have been an enforcement lull as the Administration reset its priorities, it now seems clear that providers, suppliers, grant recipients, contractors, and manufacturers in the health care sector should expect increased scrutiny and FCA actions.
Diversity, Equity, and Inclusion
There are clear indications that the FCA will be utilized to advance the Trump Administration’s priorities and policies. One example of this is the DOJ’s focus on pursuing organizations and contractors who knowingly violate federal civil rights laws through racist preferences, mandates, and other activities – including diversity, equity, and inclusion (DEI) programs. The DOJ has already identified several universities and research institutions as targets.
Companies that appear to institute, promote or even support policies and programs based in whole or in part on race or gender may find themselves having to respond to civil investigative demands and risk losing federal funding, grants, and other financial support from the government. For these organizations, FCA liability could cripple — or even shut down — operations.
DEI-focused FCA enforcement actions are without substantial precedent, which injects an enhanced degree of uncertainty both in how the government will pursue such investigations as well as how receptive courts will be to such actions. This uncertainty may also provide subjects and targets of such investigations with significant opportunities to defend themselves, depending on the underlying facts.
One result of this enforcement focus will be a likely increase of whistleblowers and corporate insiders who may report or even file an FCA qui tam complaint for alleged violations involving DEI programs. Several large, national FCA investigations in this space have been initiated as a result of whistleblower activity.
A number of federal agencies have already re-prioritized staff to accommodate and support this uptick in enforcement activity. The DOJ recently announced the establishment of the Civil Rights Fraud Initiative. Each of the 93 U.S. Attorney’s Offices has been directed to appoint Assistant U.S. Attorneys and other staff to investigate and bring FCA claims for violations of federal civil rights laws.
Tariffs and Trade
As part of the Administration’s focus on trade policy, the DOJ has made several announcements that it would aggressively use the FCA to pursue tariff and trade violations.
Much of this misconduct involves deliberate attempts to avoid paying tariffs or antidumping duties to the U.S. government. One recently filed FCA action accused a California uniform supplier of engaging in a fraudulent scheme to underpay millions of dollars in customs duties for Chinese-made uniforms “at the expense of the American public.”
Other trade violations involve knowingly undervaluing products, misclassifying goods, or misrepresenting country of origin. The latter would not only give rise to FCA liability but also implicate other laws like the Trade Agreements Act and the Buy American Act.
While this enforcement priority is receiving widespread coverage —largely due to the frequent announcement of new tariffs and trade restrictions by the White House—it is also an area where the DOJ has previously achieved significant success against importers, recovering hundreds of millions of dollars. The DOJ has a well-established enforcement playbook in this area. Given the Administration’s aggressive trade policy and the DOJ’s proven enforcement record, recoveries in this area are likely to increase substantially.
Takeaway
Considering the DOJ’s recent declarations to enforce FCA violations aggressively, government contractors and any company that receives federal funds should take steps to ensure compliance across the organization. Companies should proactively prepare by reviewing compliance plans, auditing policies and procedures, and educating key staff. Further, companies should prepare compliance staff on how to respond appropriately when whistleblower complaints or government inquiries arise.
For more information, contact the authors at HunterMaclean—Edgar Bueno, Mills Fleming, or Matt Wilmot—at 912.236.0261, or visit the firm’s Health Care Practice Group online.
