EV Healthcare: Federal Investigations & Enforcement in 2025

Unprecedented Expansion of Healthcare Fraud Enforcement Resources

• The June 2025 healthcare fraud takedown charged 324 defendants criminally and involved over half of the nation’s 94 U.S. Attorney’s offices plus 12 state attorney general offices, representing the largest coordinated healthcare fraud enforcement action in federal history.
• The administration has established new healthcare fraud strike forces in additional districts including Massachusetts and created standalone healthcare fraud prosecution units within U.S. Attorney’s offices, effectively doubling the number of prosecutors dedicated specifically to investigating healthcare fraud beyond traditional Medicare and Medicaid programs.
• This enforcement expansion encompasses not only physicians and healthcare professionals but also company executives across diverse healthcare sectors, with investigations reaching far beyond traditional government program fraud to include private insurance relationships, cybersecurity failures, and controlled substance regulatory violations.

Private Insurance Disputes Now Face Criminal Exposure

• Healthcare providers now face potential criminal prosecution for billing disputes with private insurers, as insurance company special investigation units increasingly refer contractual disagreements to federal law enforcement rather than resolving them through civil dispute mechanisms.
• What organizations may perceive as routine coding disagreements or reimbursement disputes with private payors can escalate to criminal investigations targeting executives, fundamentally expanding liability exposure beyond Medicare, Medicaid, and other government healthcare programs.
• Compliance programs must address billing integrity and coding accuracy across all payor categories including commercial insurance relationships, implement clear escalation procedures for insurance disputes, and engage experienced healthcare fraud defense counsel early when conflicts with private insurers arise to prevent transformation into criminal matters.

DEA Controlled Substance Compliance Demands Heightened Attention

• Federal enforcement has filed 93 administrative cases in recent months seeking revocation of DEA registration authority for pharmacies, medical practitioners, and healthcare entities, signaling dramatically intensified scrutiny of controlled substance handling and security protocols.
• Healthcare organizations managing hospital systems, physician groups prescribing opioids or other controlled substances, pain management practices, or psychiatric services face multimillion-dollar civil liability for inadequate controls, as demonstrated by major settlements stemming from fentanyl security failures that contributed to healthcare worker overdose deaths.
• Compliance officers should conduct comprehensive assessments of controlled substance management across all organizational touchpoints, implement enhanced monitoring for prescription patterns and inventory controls, and establish clear protocols for identifying potential diversion or security vulnerabilities before they attract DEA enforcement action.

Cybersecurity Controls Over Healthcare Data Create New Liability Pathways

• The federal government secured a $9.8 million settlement with Illumina Inc. for inadequate cybersecurity protections over genomic sequencing data and other sensitive medical information, establishing healthcare cybersecurity as a distinct enforcement priority with significant financial consequences.
• Every healthcare organization functions as a data collection entity with corresponding obligations to implement appropriate cybersecurity controls over protected health information, making information security a core compliance responsibility rather than purely an IT department concern.
• Compliance programs must incorporate cybersecurity components including regular vulnerability assessments, clear governance frameworks linking IT security with regulatory obligations, and incident response plans addressing both operational recovery and mandatory reporting requirements for data breaches affecting patient information.

Proactive Compliance Program Reassessment Provides Best Defense

• Organizations must reorient compliance programs toward current administration enforcement priorities before receiving civil investigative demands, grand jury subpoenas, or other government inquiries, as the best defense involves offensive preparation through systematic vulnerability identification and enhanced control implementation.
• Compliance officers should conduct comprehensive risk assessments mapping business operations against contemporary enforcement priorities, engage external advisors with recent DOJ experience to identify gaps invisible to internal teams, and ensure compliance plans reflect current regulatory expectations rather than outdated frameworks.
• Organizations that wait until government inquiries arrive to evaluate program adequacy forfeit critical opportunities for self-correction, voluntary disclosure consideration, and strategic positioning that can significantly influence investigation outcomes, potential penalties, and organizational reputation impact.

Investigation Timelines Require Strategic Patience and Organizational Confidence

• Healthcare fraud investigations typically span two to three years for civil matters alone, with parallel criminal components potentially extending timelines to three and a half years or longer, requiring organizations to prepare for extended periods of uncertainty with no guaranteed resolution timeline.
• Document production phases alone can consume eight to twelve months before clarity emerges regarding investigation scope and likely outcomes, followed by witness interviews, potential grand jury testimony, and prolonged negotiation periods that test organizational patience and resource allocation.
• Compliance officers serve as organizational lighthouses during investigative uncertainty by providing C-suite leadership with realistic timeline expectations, explaining investigation milestone progressions, and maintaining operational continuity while demonstrating the strategic value of compliance functions beyond immediate crisis management.

Document Production Strategy Requires Speed and Specialized Expertise

• Organizations that attempt to manage document collection as ancillary responsibility for already overburdened employees without legal training risk significant delays, incomplete productions damaging credibility with investigators, and strategic disadvantages compounding throughout multi-year investigation lifecycles.
• Engaging outside counsel with recent DOJ prosecution experience provides critical advantages including accurate document request interpretation, understanding of which materials will be most probative for investigators, and capacity to identify potentially privileged or sensitive information requiring careful handling.
• Organizations should consider dedicating associate-level attorney resources specifically to document collection management, enabling business personnel to maintain operational responsibilities while ensuring efficient, comprehensive production demonstrating good faith cooperation and organizational competence to government investigators.

Business Area Knowledge Enables Strategic Investigation Navigation

• Compliance officers who deeply understand organizational business models, operational processes, regulatory touchpoints, and potential vulnerability areas provide invaluable strategic guidance during investigations that dramatically improves outcomes while reducing overall legal costs and resource expenditures.
• The ability to quickly identify which business units, personnel, and document repositories contain information relevant to specific government inquiries demonstrates organizational competence that builds investigator confidence while enabling more targeted, efficient response strategies.
• Compliance leaders should invest significant time developing comprehensive operational understanding through regular meetings with functional leaders, participation in business planning discussions, and systematic mapping of regulatory requirements against actual practices across all organizational areas to maximize effectiveness when investigations arise.

Parallel Civil and Criminal Investigations Demand Unified Strategy

• Organizations facing simultaneous civil and criminal healthcare fraud investigations must develop comprehensive, coordinated response strategies addressing both proceedings while recognizing that grand jury information cannot be shared between investigation teams absent specific court orders, potentially requiring duplicate document productions and witness interviews.
• Strategic decisions about cooperation extent, privilege assertions, and settlement exploration must account for how actions in one proceeding affect positioning in the other, requiring sophisticated legal guidance from counsel experienced in both False Claims Act civil litigation and criminal healthcare fraud prosecution.
• Compliance officers play pivotal roles in unified strategies by providing business context helping counsel understand investigation implications, identifying organizational vulnerabilities requiring priority attention, and serving as credibility-building liaisons demonstrating genuine organizational commitment to addressing identified issues rather than merely managing legal exposure.

Qui Tam Relator Presence Fundamentally Alters Investigation Dynamics

• False Claims Act qui tam cases can proceed to litigation even after DOJ declines intervention, potentially resulting in years of additional resource expenditure defending against whistleblower allegations, making early case dismissal through government motion a critical strategic objective worth substantial advocacy investment.
• Effective qui tam defense focuses on systematically disproving elements of alleged False Claims Act violations rather than attacking relator credibility through personal criticisms, which federal prosecutors consistently report as ineffective advocacy that damages both counsel and organizational credibility with government decision-makers.
• Any settlements negotiated directly with qui tam relators require government approval to become effective, and DOJ will only approve agreements providing principled recovery reflecting actual alleged damages rather than nuisance value payments, eliminating the possibility of simply buying peace without addressing underlying government concerns.