The DOJ-HHS False Claims Act Working Group: What Founders and Healthcare Businesses Need to Know

In 2025, the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced the creation of a new False Claims Act (FCA) Working Group (https://www.justice.gov/opa/pr/doj-hhs-false-claims-act-working-group). This collaborative initiative brings together prosecutors, regulators, and investigators from across the federal government to aggressively pursue fraud, waste, and abuse in federal healthcare programs. For founders, entrepreneurs, and executives in healthcare and life sciences, this development marks a significant escalation in enforcement priorities.

Here’s what you need to know about the DOJ-HHS False Claims Act Working Group, and why it matters for your business.

1. What Is the DOJ-HHS False Claims Act Working Group?

The Working Group is designed to strengthen and streamline FCA enforcement. It unites DOJ’s Civil Division, U.S. Attorneys’ Offices, and HHS components like HHS-OIG, CMS, and the Office for Civil Rights (OCR). Its objectives include:

• Enhancing coordination between DOJ and HHS to identify and prosecute FCA violations more efficiently.

• Leveraging data analytics to flag suspicious billing and payment patterns.

• Focusing enforcement on cases that most significantly impact patient care and federal healthcare spending.

• Building stronger partnerships with whistleblowers and qui tam relators who bring cases under the FCA.

  
  

The message is clear: healthcare fraud enforcement is becoming more integrated, data-driven, and aggressive.

2. What Types of Conduct Are in the Crosshairs?

The FCA Working Group is expected to focus on a wide range of misconduct, including:

• False or fraudulent billing to Medicare, Medicaid, or TRICARE.

• Kickbacks and Stark Law violations tied to improper financial relationships.

• Managed care fraud such as upcoding or inflating risk scores in Medicare Advantage.

• Telehealth fraud and misuse of digital health tools.

• Clinical trial misconduct involving falsified data or improper billing of government-funded studies.

• Opioid and prescription fraud related to unnecessary or dangerous prescribing.

3. Why Founders and Entrepreneurs Should Pay Attention

Startups and SMBs in healthcare and life sciences often believe enforcement is aimed at large hospitals or pharmaceutical giants. The reality is different. The FCA Working Group is:

• Targeting emerging healthcare sectors like digital health, healthtech, and biotech startups.

• Using advanced data analytics to detect anomalies in claims data—flagging both small and large providers.

• Encouraging whistleblowers, including employees and contractors, to report misconduct. Whistleblowers can receive up to 30% of recovered funds.

• Holding executives personally accountable for corporate misconduct.

  
  

For healthcare entrepreneurs, this means compliance must be treated as a core business function, not an afterthought.

4. The Consequences of Noncompliance

The risks of being caught in an FCA investigation are severe:

• Treble damages and civil penalties under the FCA.

• Exclusion from Medicare and Medicaid, which can end a healthcare business overnight.

• Criminal liability in cases involving intentional fraud.

• Reputational harm that deters investors, partners, and patients.

  
  

Even unproven allegations can derail funding rounds, acquisitions, or partnerships.

5. Practical Steps for Healthcare and Life Sciences Businesses

Build Compliance Into Your DNA

• Adopt written compliance programs, even at the startup stage.

• Appoint a compliance officer or outsource compliance oversight.

• Provide clear reporting mechanisms for employees.

  
  

Audit and Monitor Regularly

• Review billing, coding, and claims practices.

• Use data tools to spot anomalies before regulators do.

• Correct errors proactively.

  
  

Train Your Team

• Conduct training on FCA, Anti-Kickback Statute, and Stark Law.

• Educate marketing and sales teams on compliance limits.

  
  

Manage Partnerships Carefully

• Review financial arrangements with physicians, vendors, and labs.

• Build compliance obligations into contracts.

  
  

Address Whistleblower Risk

• Encourage employees to raise concerns internally.

• Investigate complaints promptly and fairly.

• Demonstrate responsiveness to reduce the likelihood of external reporting.

6. Real-World Lessons

FCA enforcement has yielded record-breaking recoveries—over $2.6 billion in 2023 alone, much of it from healthcare cases. Recent actions have targeted:

• Medicare Advantage insurers accused of inflating risk scores.

• Telehealth companies billing for services not provided.

• Pharmaceutical companies accused of paying kickbacks to doctors.

  
  

These examples show that the FCA remains the government’s most powerful tool against healthcare fraud.

7. The Bottom Line for Founders and SMBs

The DOJ-HHS False Claims Act Working Group signals a new era of coordinated enforcement. With agencies sharing data, pooling expertise, and leaning on whistleblowers, healthcare and life sciences businesses are under more scrutiny than ever.

But proactive compliance can be a competitive advantage. Companies that embrace compliance as part of their culture will be better positioned to attract investors, secure partnerships, and avoid costly enforcement.

Final Thought

For healthcare founders and entrepreneurs, the message from DOJ and HHS is clear: compliance is not optional. The False Claims Act is one of the government’s sharpest tools, and the new Working Group ensures it will be wielded more effectively than ever. Building compliance into your company today can mean the difference between sustainable growth and devastating enforcement tomorrow.

This blog is for informational purposes only and not legal advice. For specific guidance, consult with counsel experienced in healthcare fraud and FCA compliance.