Five Governance Essentials To Reduce False Claims Act Risk

Federal False Claims Act (FCA) enforcement continues to be a top risk for healthcare and life sciences organizations, with settlements reaching a record high in 2025. In this environment, an effective compliance governance program is not static—it must evolve, taking into consideration enforcement trends, Corporate Integrity Agreements (CIAs) requirements, published guidance, and organizational growth.

To help reduce the risk of FCA violations, compliance departments should consider implementing the following five governance essentials into their overall Compliance Program.

1. Stay informed on enforcement actions and settlements

Recent enforcement actions provide some of the clearest insight into how regulators interpret and apply the FCA. Organizations should routinely review public settlements to understand the underlying conduct that triggered enforcement and the compliance breakdowns regulators identified.

Equally important is reviewing Corporate Integrity Agreements associated with settlements. CIAs often include detailed compliance requirements and outline activities subject to oversight by an Independent Review Organization (IRO). These provisions offer valuable guidance on areas regulators view as high risk and can inform proactive enhancements to internal controls, monitoring activities, and governance structures.

2. Actively monitor industry guidance

Regulatory agencies regularly publish guidance that shapes expectations for compliance programs, particularly in healthcare and life sciences. Compliance teams should register with relevant government agencies—such as the Department of Health and Human Services Office of Inspector General (HHS‑OIG), the Food and Drug Administration (FDA), and the Department of Justice (DOJ)—to receive timely updates.

Key guidance to monitor includes:

• The HHS‑OIG Annual Work Plan, which highlights enforcement and oversight priorities
• FDA guidance documents relevant to regulated products and activities
• DOJ's Evaluation of Corporate Compliance Programs (ECCP)
• HHS‑OIG's General Compliance Program Guidance (GCPG) and, when issued, Industry Segment‑Specific Program Guidance (ICPG)
• HHS‑OIG Advisory Opinions and Special Fraud Alerts

While much of this guidance is characterized as voluntary, regulators routinely reference it when assessing the adequacy of compliance programs. Organizations that choose not to adopt certain recommendations should thoughtfully discuss and document their rationale, demonstrating that decisions were risk‑based and deliberate.

3. Perform periodic compliance effectiveness reviews

Every two to three years, organizations should consider conducting an independent compliance effectiveness review. These reviews evaluate how well the compliance program is designed, implemented, and operating in practice, often through the lens of the "seven" elements of an effective compliance program.

A compliance effectiveness review helps identify governance gaps, clarify roles and responsibilities, and assess whether policies, training, monitoring, and reporting mechanisms are keeping pace with organizational changes. As companies expand into new markets, products, or business models, these reviews play a critical role in ensuring the compliance program evolves accordingly.

4. Conduct an annual healthcare risk assessment

An annual healthcare risk assessment is a cornerstone of an effective governance program. The identification of relevant risks should be informed by multiple inputs, including recent enforcement settlements, regulatory guidance, and findings from compliance effectiveness reviews.

Risk assessments should also incorporate lessons learned from prior audits, investigations, and independent assessments. By evaluating the likelihood, vulnerability, and potential impact of risk events, organizations can quantify areas of concern and prioritize mitigation efforts. This structured approach enables compliance teams to focus resources on the risks most likely to result in FCA exposure.

5. Align auditing and monitoring with risk

The results of the annual healthcare risk assessment should directly inform the organization's auditing and monitoring plan. Not all risks require the same level of response—some may be addressed through targeted training or policy updates, while others warrant more comprehensive reviews.

Higher‑risk areas may require stakeholder interviews, transactional testing, or deep‑dive assessments to evaluate the effectiveness of controls in practice. Importantly, audit and monitoring findings should not exist in isolation. They should be used to continuously refine governance structures, enhance controls, and strengthen the overall compliance program.

Strengthening governance to stay ahead of FCA risk

Regulators increasingly expect compliance programs to be dynamic, data-driven, and aligned with real-world enforcement trends. By embedding these practical components into the compliance program governance framework, organizations can better anticipate risk, build and reinforce a strong compliance culture, and reduce the likelihood of False Claims Act violations.

An effective compliance governance program is not just about avoiding penalties; it is a critical component of sustainable growth, reputational protection, and long‑term operational resilience.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.