The House Energy And Commerce Committee’s Fraud Report And The Direction Of Health Care Enforcement

On September 29, 2026, majority staff of the House Committee on Energy and Commerce issued an 87-page report on Medicare and Medicaid fraud. Although the report is a staff product and carries no legal force, its central proposition is that federal health care programs should move from a “pay and chase” model, in which claims are paid, and recovery is pursued afterward, to a “detect and prevent” model that verifies the legitimacy of a provider prior to payment. The report cites HHS-OIG’s recovery of $12.70 for every dollar spent on investigative activity in fiscal year 2025.

The report identifies several service lines with elevated fraud activity. In Medicare, these are hospice, home health, durable medical equipment, and genetic testing. In Medicaid, they are applied behavior analysis, non-emergency medical transportation, home and community-based services, adult day care, and substance use disorder treatment. It also observes that schemes increasingly cross state and national lines, citing Operation Gold Rush, in which transnational criminal organizations allegedly acquired enrolled medical supply companies and billed more than $10.6 billion in urinary catheter claims.

Pharmacies are not among the service lines the report identifies as high risk, but they appear in several of its case examples, generally as participants in broader referral networks rather than as isolated dispensers. The Committee describes a May 2026 conviction in the Southern District of Florida of an individual who, through a software platform and in coordination with pharmacies, telemedicine providers, and DME suppliers accepting kickbacks, generated falsified physician orders and prescriptions resulting in more than $1 billion in false Medicare claims. It also describes charges against two Queens men who owned adult day care centers and a pharmacy, alleged to have paid cash kickbacks to Medicaid recipients to fill prescriptions at their pharmacies and enroll in their day care center. Finally, it notes that New York’s July 2026 enrollment moratorium extends to pharmacies, among other provider types.

The term health care fraud, however, does not always mean billing for services not rendered. The report acknowledges that improper payments include documentation failures, administrative error, and other conduct that is not fraud. Where fraud or false claims liability is alleged, the applicable theories vary. A claim may be false because the service was medically unnecessary, because it was “upcoded” or unbundled, because it was tainted by a kickback, or because the provider failed to disclose noncompliance with a condition material to payment. These theories differ meaningfully in the culpability they require and the remedies they carry. Conduct that is technically actionable may bear little resemblance to a scheme to bill for care never delivered, and the financial and reputational consequences for a provider should be assessed with that distinction in mind.

The report notes that the Secretary of Health and Human Services delegated exclusion authority, previously delegated only to HHS-OIG, to CMS. As described, this authority would permit CMS to suspend or permanently remove providers from federal programs on the basis of certain prohibited conduct and criminal convictions. For many providers, exclusion is a more severe sanction than a monetary penalty. The Committee also recommends that states enact their own false claims statutes, expand whistleblower protections, and increase independent oversight of Medicaid, together with a national provider ownership database and broader use of automated tools in enrollment and revalidation. If adopted, these measures would likely increase false claims litigation, including through qui tam relators with inside knowledge.

Given the existing landscape and continual indicators that health care enforcement is a top priority, providers would be prudent to review compliance programs, confirm that ownership and exclusion screening is current, examine arrangements with referral sources and technology vendors, and test whether documentation supports the claims submitted. A payment suspension, audit request, civil investigative demand, or subpoena warrants prompt consultation with counsel, since early decisions about production, disclosure, and communication frequently determine the course of the matter.