We kick off our annual Year in Preview series with a comprehensive look at health care fraud enforcement in 2025. This post proceeds in three parts. First, we explore what the second Trump administration might bring, looking at enforcement metrics from Trump's first presidency while examining the priorities we might expect from the current nominees to key health care agencies. Second, we look at the hot spots - enforcement targets that, year after year, receive government scrutiny and fill the pages of DOJ press releases. Third, we look at the courts, recapping significant acquittals and tracking key appeals that may shape health care fraud laws for years to come.
I. Enforcement under the Second Trump Administration
As we close out the Biden presidency and head into the second Trump term, change is expected across the federal government. This includes a host of high-profile nominees to health care departments and agencies. However, it is unclear what their impact will be on areas of traditional health care fraud enforcement - nor should it be assumed that those nominees, if confirmed, are fully aligned on their priorities in this space. If past is prologue, we should expect continued focus on health care fraud, the single largest driver of the federal government's recovery in the first Trump presidency, at levels largely aligned with what we've seen in the intervening four years.
By the Numbers
In terms of dollars recovered by the federal government in health care fraud matters, the data from the first Trump administration is in line with figures seen during the Biden administration.
Based on False Claims Act (FCA) data published annually by the Department of Justice ("DOJ"), the recoveries are roughly comparable. Under Trump, in 2017, the federal government recovered $2.4 billion in settlements and judgments involving the health care industry (of $3.7 billion total); in 2018, $2.5 billion involved the health care industry (of $2.8 billion total); in 2019, $2.6 billion involved the health care industry (of $3.0 billion total); and, in 2020, $1.8 billion involved the health care industry (of $2.2 billion total).
By comparison, under Biden, in 2021, the federal government recovered $5.0 billion in settlements and judgments involving the health care industry, of which $2.8 billion was attributable to one opioid-related settlement (of $5.6 billion total); in 2022, $1.7 billion involved the health care industry (of $2.2 billion total); and in 2023, $1.8 billion involved the health care industry (of $2.68 billion total). As of the date of this publication, 2024 data had not yet been released. Adjusting for the 2021 opioid settlement, these annual recoveries all fall within a range from $1.7 billion to $2.6 billion, and the particular administration does not appear to drive the scale of recovery. We will look to see whether recoveries going forward depart from this range and, if so, what might be driving any changes.
Importantly, FCA settlements are often years in the making and, therefore, are typically less impacted by changes in DOJ leadership. However, the incoming administration has expressed its intent to have more hands-on control from a central DOJ in Washington over the actions of the United States Attorney's Office. In theory, this could extend to more oversight and shaping of FCA resolutions, particularly regarding the settlement figures (as opposed to whether DOJ should pursue particular settlements).
The Nominees Speak (or Spoke)
While the data above indicates a relatively steady state for health care fraud enforcement activity between the Trump administration in 2017-2020 and the subsequent Biden administration, the current slate of nominees may be reason to expect more significant changes. That said, it is not always clear in what direction these individuals would move their respective departments and agencies - and in some instances, tensions among the nominees' positions make the predictive exercise even less certain.
One of the most significant nominees is Dr. Mehmet Oz, the nominated Administrator for the Centers for Medicare and Medicaid Services ("CMS"). Oz has previously called traditional Medicare "highly dysfunctional." In an editorial for Forbes co-authored with the former CEO of Kaiser Permanente, Oz articulated his strong support for the Medicare Advantage program run with commercial insurers, going so far as to title the article "Medicare Advantage For All Can Save Our Health-Care System" and to propose a 20 percent payroll tax (split evenly between employer and employee) to cover the expansion of Medicare Advantage. That Oz now oversees the program he proposed to eliminate would suggest a likely attempt to reduce the import and scope of traditional Medicare. Beyond his support for Medicare Advantage and antipathy for traditional Medicare, Oz's nomination will likely also focus on his investments, many of which were disclosed as part of his 2022 Senate candidacy in Pennsylvania. These include substantial investments in insurer UnitedHealth Group and investments in the pharmaceutical, agricultural, and fast-food industries, potential points of tension with the expressed views of fellow nominee Robert F. Kennedy. Historically, Oz reportedly received more than $1.25 million in fees for serving as a speaker for device manufacturers.
At the Justice Department, Attorney General nominee Pamela Bondi presents a slightly more traditional background, insofar as she was formerly Attorney General for the State of Florida and in that role, oversaw various recoveries by the Medicare and Medicaid fraud units. Bondi's office was also among the first in the country to affirmatively move to dismiss an FCA action after declining to intervene, a practice that was officially embraced by DOJ in the first Trump administration in a memo issued January 10, 2018 (the Granston Memo). As always with the Department of Justice, we will watch closely not only the nomination for Attorney General but the appointment of a Deputy Attorney General, perhaps the individual most likely to impact federal policy and practice for prosecutors across the districts.
The expected impact of other significant health care nominees in the enforcement space is less clear. That includes Robert F. Kennedy Jr., nominated as Secretary of the Department of Health and Human Services ("HHS"). Kennedy is perhaps most associated with vaccine skepticism/denialism, in particular, his belief in a causal link between vaccination and autism. In the weeks since his nomination, however, much of the attention has focused on his views about food safety. Kennedy has commented, "The food industry and big agriculture producers control the FDA, and so they're not worried about public health; they're worried about advancing the mercantile interests of those corporations." He said that "FDA's war on public health is about to end" and that he has been nominated expressly to root out "corruption and conflicts at the agencies," a seeming reference to pharmaceutical industry influence and a perceived revolving door between government and industry. On these issues and others - like stem cells - Kennedy would be expected to adopt a more aggressive approach than past administrations, though details on the actual execution of that approach are still outstanding. Equally unclear is where Kennedy falls on other issues within the purview of HHS - including key legislation like the Affordable Care Act. Likewise, Kennedy's views about the work of CMS, another agency that would report to him, are unknown. In this regard, his impact on that regulatory regime remains to be seen.
Meanwhile, Dr. Marty Makary is nominated as Commissioner for the FDA. Makary, a surgeon and professor at Johns Hopkins, brings to bear some recurring hallmarks of these health care nominees (i.e., a critique of the government's response to COVID-19). Makary has critiqued the FDA for relying on misleading data in connection with certain opioids; what this means for purposes of regulatory approval if he is nominated is the question, with many expecting this to play out in connection with medication abortion.
Rarely are nominees so high-profile and prolific in their public statements before nomination. It will be interesting to see whether these individuals, if confirmed, adopt policy positions in line with what previously were personal position statements, or whether they are ultimately more constrained by their offices and the system of government and rulemaking in which they now operate.
II. The Classics: Priority Areas in Health Care Fraud Enforcement
Even with a new administration and potentially shifting priorities, certain areas have long been - and will remain - hot spots for health care fraud enforcement. Enforcement targets change over time (e.g., patient assistance programs no longer receive the attention they used to), but the areas below are not coming off the government's radar anytime soon.
Labs
Clinical laboratories are a common target for health care fraud enforcement. The government scrutinizes diagnostic and genetic testing labs for allegedly medically unnecessary testing, incorrect or duplicative billing codes, improper referrals from health care providers, and other conduct. New technology that many labs rely on often outpaces regulatory guidance and is not fully understood by federal law enforcement, increasing risks for lab companies.
In the final months of 2024, the government announced (1) a $7.2 million settlement in September by an Indiana hospital, its clinical laboratory, and various individuals to resolve alleged FCA violations based on testing - billed to Medicare, Kentucky Medicaid, and TRICARE - that the government contended was medically unnecessary or done in violation of the AKS because it was not used for medical diagnosis or treatment; and (2) health care fraud and other charges in November against the owner of a Texas laboratory for allegedly causing BioDX Labs...
