DOJ and HHS Launch New False Claims Act Working Group to Target Healthcare Fraud

The U.S. Department of Health and Human Services (HHS) and the Department of Justice (DOJ) have jointly announced the launch of a reinvigorated DOJ-HHS False Claims Act Working Group aimed at enhancing interagency coordination around key fraud enforcement priorities in the healthcare space. This initiative underscores the federal government’s ongoing reliance on the False Claims Act (FCA) as its most powerful civil enforcement mechanism to address fraud involving federal healthcare programs.

The FCA imposes liability on individuals and entities that knowingly submit, or cause the submission of, false or fraudulent claims for payment to the United States. It also includes qui tam provisions that empower whistleblowers to bring actions on the government’s behalf and share in any recovery.

The Working Group will consist of leadership from the HHS Office of General Counsel, the CMS Center for Program Integrity, the Office of Counsel to the HHS Office of Inspector General (HHS-OIG), and DOJ’s Civil Division, with representation from U.S. Attorneys’ Offices nationwide. It is co-led by the HHS General Counsel, the Chief Counsel to HHS-OIG, and DOJ’s Deputy Assistant Attorney General for the Commercial Litigation Branch.

As part of its work, the Working Group will prioritize:

  • Medicare Advantage risk adjustment fraud and upcoding
  • Improper manufacturer arrangements involving pricing, rebates, formulary placement, and reporting obligations
  • Violations impacting network adequacy and patient access
  • Anti-kickback violations involving drugs, medical devices, and other federally reimbursed products
  • Use of defective medical devices that compromise patient safety
  • Electronic Health Records (EHR) manipulation to generate inflated utilization or misrepresent clinical documentation

In addition to coordinating referrals and investigative resources, the Working Group aims to enhance the use of data analytics, leverage HHS-OIG report findings, and accelerate parallel civil enforcement efforts. It will also evaluate use of CMS payment suspensions and DOJ dismissals of qui tam complaints where appropriate, consistent with policy guidance in the Justice Manual.

For healthcare organizations, this announcement signals increased scrutiny in high-risk reimbursement categories, particularly risk-bearing arrangements, digital health platforms, and third-party vendor relationships. Providers, compliance officers, legal counsel, and billing professionals should ensure that internal audit protocols and vendor oversight mechanisms are robust and defensible.

Read the full DOJ-HHS Press Release here.

New CMS Model Targets Inefficient Medicare Spending Through AI and Clinical Oversight

The Centers for Medicare & Medicaid Services (CMS) has launched the WISeR Model (Wasteful and Inappropriate Service Reduction) to modernize and streamline Medicare’s prior authorization process. By partnering with tech companies, CMS will test the use of modern tools, such as artificial intelligence, to reduce unnecessary or low-value services that drive up costs and pose risks to patients. The model is limited and focused on certain procedures that are prone to waste or abuse, providing rewards for participants who lower inappropriate utilization and improve decision speed as well as patient experiences. The goal of the WISeR Model is to reduce costs while protecting patient safety, all without changing coverage or restricting provider choice.

To read the CMS Press Release, click here.

To read the CMS Fact Sheet on the WISeR Model, click here.

DOJ Announces Largest Health Care Fraud Takedown in U.S. History

In the largest health care fraud takedown in U.S. history, the Justice Department announced charges against 324 individuals—including 96 licensed medical professionals—in connection with schemes involving over $14.6 billion in intended losses across 50 federal districts and 12 State Attorneys General Offices. The coordinated enforcement action led to the seizure of more than $245 million in assets and prevented an additional $4 billion in fraudulent claims through CMS oversight. Charges span a range of schemes, including transnational organized fraud, illegal opioid distribution, fraudulent telemedicine and genetic testing, and abuse of vulnerable populations in addiction and wound care services. The operation reflects a sweeping whole-of-government effort involving the DOJ, FBI, HHS-OIG, DEA, and CMS, with an emphasis on data analytics and cross-agency collaboration to safeguard public funds and patient care. Read the full DOJ press brief here.

Oregon Legislature Passes Nation’s Strictest Restrictions on the Corporate Practice of Medicine

Oregon is on the verge of passing a bill that would block private-equity ownership in healthcare practices. If passed, this measure would be the strictest ban on the corporate practice of medicine in the nation (read press release here). The bill would prohibit Management Services Organizations (MSOs) and their affiliates from owning or controlling shares in, serving as directors or officers of, being employees of, or otherwise managing professional medical entities with which they have Management Services Agreements (MSAs). The bill would void restrictive covenants such as non-compete, non-disclosure, and non-disparagement agreements between MSOs and medical professionals, with certain exceptions.

The bill was passed by the Oregan State Senate on May 29th, and as of June 5th, the bill remains awaiting signature with Governor Tina Kotek. To view the bill in its entirety, click here.

Oracle, Cleveland Clinic, and G42 Announce Strategic Partnership to Launch AI-Based Global Healthcare Delivery Platform

In attempt to deliver more effective and affordable care, Oracle, Cleveland Clinic, and G42 have announced a strategic partnership that will build a global AI-powered healthcare platform (see news release here).

Per the news release published by Cleveland Clinic, the platform will: (i) deliver an AI-driven healthcare infrastructure rooted in data privacy, clinical quality, and operational efficiency; (ii) establish a scalable and cost-effective care model that positions the U.S. and UAE as co-leaders in supporting next-generation healthcare solutions; (iii) use AI to enhance diagnostics, personalize treatments, optimize outcomes, and reduce costs at scale; and (iv) deliver high-quality, affordable care worldwide, addressing the rising pressures of aging populations and chronic diseases.

The news release did not provide a potential timeline for the partnership’s development or the platform’s integration.

Virtual Healthcare Law Presentation: Understanding Restrictive Covenants and Key Contract Terms

On Thursday, May 22, from 6:00 – 7:00 PM, attorneys Michael Cassidy and Adam Appleberry will present a virtual program focused on the legal framework surrounding restrictive covenants in healthcare employment contracts.

The presentation will cover recent developments in the law, including the Fair Contracting for Health Care Practitioners Act, and other regulatory changes that may affect physician agreements and practice arrangements.

This session is intended for healthcare professionals interested in better understanding the legal terms that shape employment relationships.

Details:

  • Date: Thursday, May 22
  • Time: 6:00 PM (virtual)
  • CME credit available
  • Cost: Free for Allegheny County Medical Society members; $50 for non-members
  • Open to all healthcare professionals

Topics to be discussed:

  • Employment contracts
  • Compensation
  • Term and termination
  • Schedule
  • Benefits
  • Professional liability insurance
  • Restrictive covenants

This program is offered in partnership with the Allegheny County Medical Society. Click here to register.

2025 Medicare Final Rule Highlights

Attorneys Mike Cassidy and Adam Appleberry co-authored an insightful article, 2025 Medicare Final Rule Highlights, featured in the December 2024 issue of the Allegheny County Medical Society (ACMS) Bulletin. The article explores the key updates to Medicare regulations and their implications for healthcare providers.

Click here to access the ACMS Bulletin to read the full article and stay informed on the latest developments impacting the healthcare industry.

Federal and Pennsylvania Corporate Reporting Requirements: Subject to Nationwide Injunction

This is a last in a series of client alerts and blog posts we’ve issued over the last year designed to inform you of the new Federal and Pennsylvania corporate reporting obligations. 

ALERT:  The U.S. District Court E.D. Texas has issued a nationwide preliminary injunction against enforcement of the reporting rules below.

Federal

The financial crimes enforcement network (FinCEN) issued a final rule implementing the Corporate Transparency Act passed in 2022.  This is designed to identify the owners of corporation and limit the ability to engage in illegal financial conduct. 

This is a fairly simple process, much like registering with the TSA to obtain a known traveler number.  You log on to the website, identify yourself via scanning your driver’s license, and fill in the blanks asking for ownership information for your corporation.  Click here for access to that information.

Contact us if you need assistance. 

Pennsylvania Law

Act 122, passed in 2022, requires annual reports from all organizations, i.e. corporation, limited liability companies, and most partnerships.  This is merely a change to make the reporting requirements annual rather than biennial.  Click here for Pennsylvania reporting. 

The filing deadlines are as follows:

  • Corporations – July 1st of each year
  • Limited Liability Companies – October 1st of each year
  • All other entities – December 31st of each year

You will be required to report the entity name, jurisdiction of formation, address, a name of at least one director, manager, member or partner, the names and titles of the principal officers, the address of the principal office, and the entity number issues by the Pennsylvania Department of State.

As with the federal reporting requirements, please contact us if you need further assistance.

Medicare Telehealth Reimbursement Update

Our Introduction to Telehealth, Technology and Federal Enforcement chapter was published in the Thomson Reuters 2025 Health Law Handbook.  It reviewed a number of telehealth Medicare revisions, both permanent and temporary, enacted by a series of consolidated appropriation acts and physician fee schedule amendments arising out of the 2020 COVID pandemic.

The temporary telehealth provisions currently due to expire after December 31, 2024 are:

  • Waiver of geographic and originating site requirements
  • Coverage of audio only services
  • Expansion of the eligible distance site telehealth providers
  • Waiver of in-person visit requirements for behavioral telehealth

The Telehealth Modernization Act of 2024 has been introduced to permanently extend the following flexibilities:

  • Rural health clinics and federally qualified health centers serving as distant sites
  • The home of a beneficiary serving as an originating site
  • The authorization of any type of practitioners to furnish telehealth services as determined by CMS

We will keep you advised of developments in that area. In the meantime, please contact Mike Cassidy or Adam Appleberry with questions.

Medicare Decreases Physician Fee Schedule by 2.93%

The final Medicare Physician Fee Schedule was issued on November 1st for calendar year 2025.  Attached is a link to both the Press Release describing all of the Medicare changes and the link to the entire Final Rule.

The Medicare Conversion Factor for the Physician Fee Schedule was decreased from $33.29 from 2024 to $32.35 for 2025, i.e. 2.93%.

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