The More Things Change, the More They Stay the Same: DOJ Announces Record False Claims Act Healthcare Enforcement Recovery for 2025

As the Department of Justice (DOJ) has established its enforcement priorities over the last year, companies in regulated industries have worked to balance risk and react to the government’s areas of focus. Despite new federal leadership, one constant has remained: DOJ’s aggressive use of the False Claims Act (FCA) to crack down on perceived healthcare fraud. 
 
The DOJ and qui tam relators have, year-over-year, used the FCA to target healthcare providers to combat alleged federal program fraud. With the DOJ announcing that FCA recoveries in fiscal year 2025 reached record highs of $6.8 billion total and $5.7 billion in the healthcare industry alone, all government contractors, but especially healthcare providers, must remain vigilant and committed to compliance with federal laws and regulations.

Staying ahead of the curve is essential to avoid costly settlements and reputational damage, as DOJ shows no signs of taking its foot off the gas.

FCA Settlements Reach Record High

The DOJ’s $6.8 billion recovery easily eclipsed the prior record of $5.3 billion set in 2024, demonstrating that civil fraud enforcement remains a top priority.

The FCA is the mechanism the DOJ uses to recoup funds that were fraudulently obtained from government programs. While the DOJ uses the FCA to recoup funds from government contractors in all areas, it primarily wields its power to combat healthcare fraud. 

Indeed, Deputy Attorney General Todd Blanche referred to the FCA as “one of the government’s most powerful weapons against fraud.”¹ Under the FCA, any person or company who knowingly submits, or causes to submit, false claims to the government is liable for three times the government's damages plus a per-claim penalty that is linked to inflation. To prevail in an FCA matter, the DOJ need not show that a defendant intended to defraud the government, only that the defendant acted recklessly.

Healthcare Fraud Leads Among Key Enforcement Areas

With $5.7 billion of the $6.8 billion in FCA settlements and judgments related to matters involving the healthcare industry, healthcare fraud remained the number one FCA enforcement area in FY2025. This year, the Civil Division focused its healthcare enforcement on three areas: (1) managed care, (2) prescription drugs, and (3) medically unnecessary or substandard care. 

Healthcare fraud enforcement by the DOJ is likely to remain robust, regardless of changing federal priorities in other industries. 

First, the FCA puts money back into the hands of the federal government, and fraud affecting federal programs — specifically Medicare — is a stated priority of the DOJ.

Current DOJ leadership has criticized “overbroad and unchecked corporate and white-collar enforcement” and directed criminal prosecutors to “avoid overreach that punishes risk-taking and hinders innovation.” But leadership has also directed prosecutors to focus on “[c]orporations and individuals [who] defraud important government initiatives, including Medicare[.]”² 

The FCA is a powerful tool to advance this priority, as it permits recovery of treble damages. Settlements often require providers to pay double damages, meaning the government is typically recovering far in excess of its actual loss.³  

Second, many FCA matters start with reports from relators. The FCA also allows private citizens to file qui tam (or whistleblower) lawsuits on behalf of the government against those who allegedly defrauded government programs. These private citizens who successfully bring qui tam actions may receive a portion of the DOJ’s recovery. 

Relators and their counsel are a force multiplier for the DOJ in investigating healthcare and other alleged false claims. In healthcare enforcement actions, relators’ assistance is critical. These investigations are incredibly labor-intensive and often require a claim-by-claim analysis to establish the necessary elements to support FCA allegations. Whistleblowers are frequently in a unique position in the healthcare space to provide significant data at early stages of an investigation. 

Where U.S. Attorney’s Offices have experienced personnel challenges in the past year, relator’s counsel can help fill any gaps. Non-qui tam cases initiated by DOJ slipped slightly from 425 in FY2024 to 401 in FY2025, but relators filed 1,297 new qui tam cases in FY2025, up from 980 in FY2024, and a massive increase from the 712 filed in FY2023.

For these reasons, healthcare fraud enforcement is going to remain a key priority well into the future.

Key Takeaways

The DOJ’s FY2025 results are a clear indication that healthcare providers are going to remain a prime target for aggressive fraud enforcement. As Deputy Attorney General Blanche stated, the DOJ “will continue to aggressively deploy [the FCA] to protect taxpayer dollars and hold all fraudsters accountable.”⁴

Companies in the healthcare and life sciences fields should review, revise, and proactively implement corporate compliance programs. These programs not only help prevent misconduct; they are key mitigation tools that can lessen exposure when negotiating resolutions with the DOJ and federal regulators. Although the upfront costs of creating and implementing a robust proactive compliance program can be daunting, the failure to do so and the resulting costs to defend, and settle, any resulting investigation will vastly eclipse those upfront investments.

All regulated companies, but especially healthcare providers, should develop and regularly update tailored compliance policies and procedures, and should:

• Proactively identify high-risk areas and potential compliance issues before they result in enforcement actions.
• Maintain an ongoing process of auditing, monitoring and improvement, and adapt to changes in laws, regulations, and best practices.
• Demonstrate a commitment to compliance throughout the organization and establish a compliant “tone at the top” which should resonate throughout the organization.
• Allocate resources appropriately to high-risk areas.
• Develop policies and training programs tailored to specific risks and vulnerabilities.
• Conduct regular targeted training and education for employees, management, and relevant stakeholders to keep them informed about legal requirements, ethical standards, and company policies.

Buchanan’s White Collar Defense, Compliance & Investigation and its Healthcare attorneys provide clients with guidance on creating and implementing corporate compliance programs and responding to FCA investigations and litigation.