2026 Health Care Fraud Year In Preview

One year into the second Trump administration, we have seen a continuation of some evergreen enforcement priorities as well as new fonts of potential risk and exposure. As in years past, the investigation and prosecution of health care fraud cases remains at the forefront of the federal government's enforcement activity, though tempered by the government's interest in a variety of non-health care enforcement, some of which we take up in forthcoming entries in our Year in Preview series.

Enforcement Highlights in 2025

As of the date of publication, the U.S. Department of Justice had not yet released judgment and settlement data in False Claims Act cases, including health care cases. Some charged conduct from 2025, however, provides a glimpse at metrics showing another big year for health care fraud enforcement. In particular, on June 30, 2025, the Justice Department announced the results of the National Health Care Fraud Takedown, charging 324 defendants in connection with over $14.6 billion in alleged fraud. This wide spanning enforcement action was a combined effort of 50 federal districts and 12 state Attorney General's Offices across the United States. The charges encompassed a broad range of alleged schemes, including kickbacks and bribery arrangements; telemedicine and durable medical equipment billing; opioid distribution and prescription fraud; pharmacy and compounded drug claims; fraudulent wound care services; home health and hospice billing telemedicine; and laboratory and genetic testing fraud.

As part of this takedown, the government brought Operation Gold Rush, charging members of a transnational organization with over $10 billion in alleged health care fraud under a variety of theories, including kickbacks, medical necessity, and billing practices in telemedicine, laboratories, and durable medical equipment. These individuals have not yet been brought to trial in the United States.

The National Health Care Fraud Takedown is in line with an increased focus on eliminating barriers between different governmental groups that focus on health care fraud enforcement to bring cases more efficiently and with the benefit of pooled resources. We will continue to monitor developments in matters charged as part of this 2025 takedown.

Structural Changes in Federal Health Care Enforcement

2025 saw various structural changes to the health care fraud enforcement landscape at the federal level. Perhaps most significantly, on May 9, 2025, Michael Granston stepped down as Deputy Assistant Attorney General for the Civil Division's Commercial Litigation Branch, a role he had held since 2019 (and before that, various other roles at DOJ). On May 21, 2025, Brenna Jenny, a former partner at Sidley Austin focused on the False Claims Act, was announced as the new Deputy Assistant Attorney for the Commercial Litigation Branch. She is the first political appointee to hold the position.

Pivoting to July of 2025, the Trump administration reestablished the DOJ-HHS False Claims Act Working Group, pledging it is "fully committed to supporting such work" and encouraging whistleblowers to report false claims and potential fraud, waste, abuse, and mismanagement. This coincides with the May 2025 expansion of the Criminal Division's Corporate Whistleblower Awards Pilot Program to include federal health care benefits. Of note, that pilot expressly states that its coverage extends to "health care fraud schemes involving private insurance plans," a sign of the government's continuing efforts to expand the ambit of the alleged fraud on the government purse.

Meanwhile, in Massachusetts, the Justice Department expanded its Health Care Fraud Unit's New England Strike Force to the District of Massachusetts. This increased presence brings more federal enforcement resources to Boston, one of the nation's most significant health care and life sciences hubs.

While not strictly focused on health care, DOJ has also established an Enforcement & Affirmative Litigation Branch to establish proactive enforcement and high-impact affirmative litigation to enforce federal laws and regulations while bringing suit against states, municipalities, and private entities that it contends interfere with or obstruct federal policies. This branch is wide-ranging in scope and jurisdiction, including over FDA-related enforcement.

Still other changes are underway that may impact health care enforcement. On January 8, 2026, the Trump Administration announced the creation of the National Fraud Enforcement within the Department of Justice. In announcing the new division, the Administration cited its efforts "to end Minnesota's fraud epidemic," including with respect to alleged Medicaid fraud, among other forms of alleged fraud. It remains to be seen to what extent this new division concerns itself with health care fraud, given its diffuse focus, and likewise, to what extent other states in political tension with the Trump administration will be the focus of its enforcement activity.

Agency and Department Actions

One of the most significant announcements in 2025 came in May, when CMS stated it would be expanding its audit of Medicare Advantage plans as part of the government's intensified focus under the current administration to reduce what the government estimates is billions of dollars in overbilling every year. CMS currently has a backlog of several years' worth of audits it has not completed. Going forward, CMS plans to stay current on these audits by reviewing all Medicare Advantage plans annually. In addition, CMS announced its plan to complete, by early 2026, outstanding audits from payment years 2018 through 2024. CMS's plans include increasing the volume of records reviewed in each audit, from 35 records per health plan per year to as many as 200. To meet this substantial increase in volume, CMS planned to dramatically increase its ranks of medical coders, who manually verify diagnoses to ensure accuracy, by a factor of 50 during 2025 – from 40 coders to 2,000. This intensified scrutiny of Medicare Advantage plans will likely lead to increased referrals to enforcement agencies.

In November 2025, CMS finalized changes to hospital price transparency regulations in CY 2026 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Final Rule (CMS-1834-FC). Among other key changes, the regulations require that hospitals make public certain payment metrics, including 10th percentile, median, and 90th percentile allowed amounts. Further, hospitals are required to attest that they have included all standard charge information required pursuant to § 180.50, and, where applicable, all payer-specific negotiated charges in dollars. These revisions were effective January 1, 2026, but CMS has delayed enforcement until April 1, 2026 to allow hospitals time to implement the changes and systems to do so.

On December 4, 2025, CMS announced the ACCESS (Advancing Chronic Care with Effective, Scalable Solutions) Model, which will model and test a new payment approach marrying technology-supported care for patients with a variety of chronic conditions. Meanwhile, in collaboration with the ACCESS Model, the FDA announced on December 5, 2025 its Technology-Enabled Meaningful Patient Outcomes (TEMPO) for Digital Health Devices Pilot. The pilot was developed by the FDA's Center for Devices and Radiological Health in order to "pilot[] an approach to encourage the use of digital technologies that meet people where they are," per Commissioner Makary. The pilot is intended to establish improvements in outcomes for patients with cardio-kidney-metabolic, musculoskeletal, and behavioral health conditions. How this increased reliance on technology-supported care and digital health technologies is enforced remains to be seen.

And while HHS had dominated headlines for a variety of other reasons, there has yet to be much enforcement-related activity coming out of the department. This includes under the Administrative False Claims Act, which was amended at the end of 2024 as part of the Servicemember Quality of Life Improvement and National Defense Authorization Act (NDAA) for Fiscal Year 2025. While the Administrative False Claims Act promised a more streamlined path to resolve certain claims administratively (where DOJ opts not to prosecute and up to a $1 million threshold), we have yet to see reports of any such enforcement by HHS, CMS, or FDA.

Health Care Fraud in the Courts

We report below on some of the more significant health care fraud cases decided in 2025. We saw a mix of significant appellate decisions, touching on multiple health care fraud issues, and trials, a few of which we highlight below (and will be reviewed in greater detail in our upcoming False Claims Act Year in Preview post).

Reported Decisions

United States v. Clay, Nos. 23-3923 & 24-3038 (6th Cir. Dec. 19, 2025)

In United States v. Clay, the Sixth Circuit delivered a mixed but defense-friendly message for 2026: health care-fraud restitution is limited to actual loss and the enforcement of Mandatory Victims Restitution Action ("MVRA") apportionment.

Kevin Clay co-founded Theramedical, a pharmaceutical sales company that specialized in compounded prescriptions. At the district court, Clay was convicted of health care and tax fraud in connection with pattern of conduct where patients received from the company a portion of the insurance reimbursement on each prescription they filled.

While Clay's conviction survived review, the panel vacated significant restitution awards. The Sixth Circuit found the district court erred when it included medically necessary prescriptions in the restitution award. Because the only goal of the MVRA is to return victims to the status quo, the Sixth Circuit held that medically necessary claims are not a "loss" and cannot be included in the restitution order. The decision also provides guidance on apportionment of restitution among co-defendants, and further bars restitution based on acquitted tax conduct where the conduct is not part of the "scheme, conspiracy, or pattern of criminal activity."

United States v. Mattia, No. 24-2589 (3rd Cir. Oct. 21, 2025)

In October 2025, the Third Circuit joined the Fifth and Eleventh Circuits in holding that implicit misrepresentations in prescription claims can constitute fraud under 18 U.S.C § 1347.

In Mattia, the government alleged that a sales representative collaborated with a doctor, who independently signed off on expensive compounded prescriptions for specific patients without a legitimate doctor-patient relationship and without any examination. The sales representative then submitted these prescriptions to the company's insurance plan, earning commission from any medication prescribed. The district court dismissed the indictment, holding that there were no false statements in the prescriptions or the submitted insurance claims and where the representative was not himself included on the prescriptions or claims.

On appeal, the Third Circuit reversed, validating implicit misrepresentation theories in connection with prescription claims. The panel recognized implicit misrepresentations in both the prescriptions and in insurance claims that incorporated those prescriptions, finding that the indictment adequately alleged falsity. This expansion and acceptance of implicit misrepresentation claims in health care fraud thus continues, with particular implication for those prescribing in less traditional doctor-patient settings, including telehealth.

United States v. Schena, No. 23-2989 (9th Cir. July. 11, 2025)

In July 2025, in Schena, the Ninth Circuit interpreted for the first time the Eliminating Kickback in Recovery Act (EKRA), analyzing the provision criminalizing the payment of "remuneration . . . to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory." 18 U.S.C. § 220(a)(2)(A).

The case stemmed from more than $77 million in claims billed to private and public insurers by a lab alleged to have made payments to marketing intermediaries to induce various referrals for certain unnecessary allergy tests. At trial, the defendant was convicted.

On appeal, the Ninth Circuit affirmed, holding that such payments to third-party marketing intermediaries are proscribed by EKRA and that the evidence at trial supported the defendant's conviction. With respect to the issue of percentage-based compensation, the panel "conclude[d] that a percentage-based compensation structure for marketing agents, without more, does not violate 18 U.S.C. § 220(a)(2)(A)." But the panel went on to conclude that percentage-based compensation will violate EKRA when, as in Schena, the defendant pays the marketing agent "to have him unduly influence doctors' referrals through false or fraudulent representations about the covered medical services."

Omni Healthcare, Inc. v. MD Spine Solutions LLC, d/b/a MD Labs Inc. ("MD Labs"), No. 25-1110 (1st Cir. Dec. 1, 2025)

In December, in Omni Healthcare, Inc. v. Md Spine Solutions LLC, the First Circuit affirmed the district court's grant of summary judgment in favor of defendant. (Our review of the district court decision can be found here). On appeal, the First Circuit agreed that MD Labs did not submit false Medicare claims "knowingly" under the False Claims Act, 31 U.S.C. § 3729(a)(1)(A).

The First Circuit examines in detail the scienter standard and the evidence before it. In relevant part, relator Omni Healthcare alleged that MD Labs submitted claims for more expensive PCR urine tests were not "reasonable and necessary" for tests ordered by Omni Healthcare clinicians. The First Circuit held that "in FCA cases alleging Medicare fraud based on laboratory testing, generally a laboratory can rely on a doctor's order to show that the test is "reasonable and necessary" under 42 U.S.C. § 1395y(a)(1)(A)," after which the burden shifts to the relator to rebut this showing. Or, as the panel put it, "the doctor's order for medical testing will generally offer a safe harbor of medical necessity that, once raised, a relator must rebut, discredit, or undermine to raise a genuine dispute of material fact as to the lab's scienter." Given MD Labs had in-hand test requisition forms from Omni Healthcare providers, the court declined to find that MD Labs acted with the requisite intent.

The decision will be helpful to lab defendants and others who can borrow from the panel's explication of the scienter standard.

Trials

United States ex rel. Bassan v. Omnicare, Inc (CVS/OmniCare), No. 1:15-cv-04179 (S.D.N.Y. July 7, 2025)

CVS/OmniCare is a prime example of the DOJ's promise to continue vigorous health care enforcement under the FCA. After a four-week trial, the jury found Omnicare, the largest long-term care pharmacy in the country, liable for fraudulently dispensing drugs to individuals in assisted-living facilities without valid prescriptions. The jury determined that OmniCare had billed government payors more than $135 million for false claims, yielding trebled damages against the company of more than $400 million – plus another $542 million in statutory penalties for the more than 3.3 million false claims submitted. DOJ touted this as "one of the largest damages verdicts rendered by a jury in a False Claims Act case." Omnicare's parent company, CVS Health Corporation, was also found liable for causing Omnicare to submit some of these false claims. The companies have appealed the verdict.

While the appeals remain pending, the outcome in this case at the district court underscores the government's appetite for pursuing prescription-validity theories under the FCA against long-term care pharmacies and affiliated entities involved in the claims submission process. The case sends a cautionary message to long-term care pharmacies about the importance of evaluating governance, controls, and oversight of billing and dispensing practices.

United States ex rel. Behnke v. CVS Caremark Corp., No. 14-cv-824 (E.D. Pa. June 25, 2025)

In another qui tam action, a relator alleged that CVS Caremark Corp. ("Caremark"), the pharmacy benefits manager (or PBM) of CVS Health Corp., violated the FCA by causing a Medicare Part D plan sponsor, Aetna, to misrepresent in reports to the government the amounts Aetna had paid for prescription drugs on behalf of Medicare beneficiaries. That is because Caremark was allegedly charging Aetna more than other insurers for the same Medicare Part D drugs – and more than what Caremark was required to reimburse for filling Part D drug prescriptions, leading to overbilling of Medicare. Caremark was found liable following a bench trial and was ordered to pay trebled damages of $285,000,000 and civil penalties totaling $4,873,500. Caremark has appealed the decision.

This case is rare instance in which a PBM was not only named a defendant in an FCA case but also found liable. And since the case was filed in 2014, the government has shown increasing hostility toward PBMs and the alleged lack of transparency into their pricing models as reducing drug costs has gained traction as a bipartisan issue. The outcome speaks to the importance of ensuring that reported Part D costs match actual amounts reimbursed to pharmacies with controls that detect and prevent differentiation between plan-sponsor reporting and reimbursements to pharmacies for the covered drugs.

United States ex rel. Devarapally v. Ferncreek Cardiology, P.A, No. 5:17-cv-616-FL (E.D.N.C. Dec. 12, 2025)

In another FCA case, a North Carolina jury returned a verdict for the defendant, who was had been accused by a whistleblower of performing medically unnecessary procedures on cardiac patients. This defense victory, particularly following the government's intervention in the case, was a notable loss for the government but demonstrates that medical necessity cases remain a priority for both federal and state enforcement.

United States ex rel. Taylor v. Healthcare Associates of Texas, LLC, No. 3:19-cv-02486-N (N.D. Tex. Feb. 26, 2025)

A rather significant FCA case came out of the U.S District Court for the Northern District of Texas in Healthcare Associates of Texas. Following a jury trial, the defendants were found liable for overbilling Medicare by submitting claims that violated various Medicare rules and ordered to pay nearly $450 million in (trebled) damages and penalties. The defendants successfully challenged the award as excessive and unconstitutional, convincing the district court to slash the figure to approximately $16 million to avoid a damages figure that, applied under the FCA's per-claim penalty scheme, would have been grossly disproportionate under the Eighth Amendment.

This case shows that although relators can successfully try non-intervened FCA cases, and courts may uphold large claim counts and damages, courts may also limit civil penalties based on the argument that they vastly outweigh harm. This creates more complexities – and opportunities – for addressing damages following a jury verdict.

United States v. Gary Cox (DMERx CEO), No. 1:23-cr-20271 (S.D. Fla. June 6, 2025)

In Cox, the government alleged that Gary Cox, the CEO of the internet platform DMERx – together with certain pharmacies, telemedicine companies, and durable medical equipment suppliers – carried out a kickback-driven scheme to generate physician's orders for DME and to cause the submission of false and fraudulent claims to federal health care programs. A jury convicted the CEO of conspiracy to commit health care fraud and wire fraud (of over $1 billion) and other charges related to fraud and kickbacks. This case drives home the importance of ensuring compliance in vendor and partner relationships, using controls and oversight for automation tools involved in health care billing, and having bona fide physician-patient interactions, including in the telehealth context.

United States v. Brody et al., No. 3:24-cr-329 (N.D. Cal. Nov. 18, 2025)

In Brody, the CEO and clinical president of a California-based digital health company were charged with conspiracy to commit health fraud for the submission of false and fraudulent claims for reimbursement of internet-based Adderall sales. The defendants allegedly charged individuals a monthly subscription fee in exchange for providing them easy access to Adderall and other stimulants. The defendants were convicted by a jury in November 2025, which conviction they have appealed. This case emphasizes DOJ's eagerness to pursue telehealth companies for platform-enabled drug distribution without adequate medical necessity or proper screening.

2026 Enforcement Priorities

We review areas of focus in 2025 that we expect will maintain or increase in focus in 2026.

Artificial Intelligence

The increasing prevalence and sophistication of AI tools will likely increase health care fraud risk for companies that adopt them and supercharge enforcement activities by the government that leverage similar technology.

Businesses across the country are rapidly adopting AI tools, and health care companies are no exception. But while these tools offer increased efficiency and improvements to service delivery, their use by health care providers may draw additional scrutiny from the government. For example, on August 20, 2025, DOJ announced that it had entered into a non-prosecution agreement with a provider in North Carolina to resolve a criminal investigation into an alleged health care fraud and identify theft scheme involving AI. Troy Health, Inc., according to the non-prosecution agreement, used an AI-powered health care management platform it developed to help obtain new Medicare Advantage enrollments, offering kickbacks to pharmacies that submitted enrollment referrals through the platform.

Use of AI, even by well-intentioned health care companies, could increase the risk of errors within the care delivery process that may implicate health care fraud laws. For instance, an AI tool used to determine the medical services or devices needed by a patient, if it generates errors, could lead to fraud allegations based on lack of medical necessity. AI-enhanced software used to apply diagnostic or procedural codes could generate erroneous coding, triggering improper billing to government payors and False Claims Act enforcement risks. Healthcare companies using AI may opt to implement certain human reviews and controls, given the risk that blind reliance on an AI tool known to hallucinate or make other kinds of mistakes could constitute "reckless disregard" and satisfy the FCA's scienter requirement.

The government is also using AI to streamline and enhance its work on the enforcement side. In announcing its 2025 National Health Care Fraud Takedown, DOJ boasted its creation of a Health Care Fraud Data Fusion Center, gathering expertise from across various federal agencies "to leverage cloud computing, artificial intelligence, and advanced analytics to identify emerging health care fraud schemes." Around the same time, the House Oversight Committee shared in a press release similar comments by Cybersecurity, Information Technology, and Government Innovation Subcommittee Chairwoman Nancy Mace (R-S.C.) regarding the government's adoption of AI tools to increase enforcement: "Federal agencies are using AI to detect fraud before it happens — by using the technology to identify patterns of fraudulent behavior and working proactively to prevent improper payments."

Wound Care

The wound care sector can expect intensified scrutiny in 2026. Federal reimbursement of wound care products has exploded in recent years, which the government has attributed to how these products have been priced. In an October 31, 2025 press release, CMS reported that "Medicare spending on wound care products known as 'skin substitutes' has had unprecedented growth, rising from $256 million in 2019 to over $10 billion in 2024," and asserted that "[t]his dramatic spending increase is largely attributed to abusive pricing practices in the sector, including the use of products with limited evidence of clinical value."

As government spending on skin substitutes has increased, so has its fraud enforcement. DOJ announced on December 12, 2025 that, in what DOJ hailed as "the first prosecution of its kind," a married couple owning several wound graft companies in Arizona was sentenced to lengthy prison terms for causing a staggering $1.2 billion of fraudulent claims to be submitted to Medicare and other payors for grafts that were not medically necessary. According to DOJ, Alexandra Gehrke and Jeffrey King owned and operated companies that paid purported sales representatives to locate elderly Medicare beneficiaries in Arizona with any type of wound, many of whom were in hospice. Gehrke and King then allegedly directed these sales representatives to order "expensive bioengineered skin substitutes – amniotic membrane allografts made from human placental tissue," in the largest sizes available (regardless of the wound size) to be applied to the wounds, to maximize reimbursement. In doing so, the defendants allegedly directed nurse practitioners to suspend their own medical judgment and apply all skin grafts ordered by the sales representatives, even where such grafts were not medically necessary, resulting in grafts being applied in problematic scenarios (e.g., multiple grafts on the same wound, grafts applied where there was no wound, and grafts applied to terminally ill patients on palliative care).

Gehrke and King allegedly collected more than $600 million from federal and commercial payors on fraudulent claims. Additionally, Gehrke allegedly received over $279 million in illegal kickbacks from a wholesale graft distributor, in exchange for ordering the grafts, much of which she used to pay illegal kickbacks to sales representatives. In addition to their criminal sentences and restitution obligations for hundreds of millions of dollars, the owners agreed to pay $309 million to resolve civil False Claims Act cases brought by whistleblowers. These FCA cases remain under seal while the government continues to investigate other parties allegedly involved.

Leading up to the sentencing of Gehrke and King, there had been other enforcement activity in the wound care space. CMS announced in the October 31 press release that in 2025, its Fraud Defense Operations Center (FDOC) blocked nearly $185 million in payments to "suspect providers" billing for wound care products. Among those providers was one medical practice group that, as identified by CMS in September 2025, billed more than $4.3 million almost entirely for wound care treatment supposedly provided to one individual for whom there was no evidence of prior wound treatment. On November 21, 2025, DOJ announced a $45 million settlement with Vohra Wound Physicians Management LLC, one of the largest wound care providers for patients in nursing homes and skilled nursing facilities, and others based on allegations that they violated the FCA by billing Medicare for medically unnecessary surgeries and other procedures. One of the government's allegations was that Vohra "programmed its electronic health record and billing software to ensure that Medicare was always billed for the higher-reimbursed surgical excisional procedure and to create false medical record documentation to support the scheme." This settlement shows that wound care practices, physician groups, and affiliated management entities can expect scrutiny not only of medical necessity but also the integrity of their billing models.

This year also brought monumental changes to federal reimbursement for skin substitutes. Beginning January 1, 2026, CMS shifted away from using the complex average sales price (ASP) reimbursement system to a dramatically lower, standardized rate for skin substitutes. CMS predicts that this change will reduce Medicare spending on skin substitutes by around 90%. It may also influence fraud enforcement activity. Previously submitted claims under the ASP system may undergo further review, particularly where the size, product used, or wastage had a material impact on the reimbursement. The new, simplified reimbursement regime will focus inquiries on more basic questions of medical necessity, product selection, and coding, rather than the accuracy of ASP calculations. Following years of high federal spending on reimbursements and headline-grabbing takedowns, pre- and post-2026 wound care claims will remain a hot spot for health care fraud enforcement.

Labs

Recent enforcement actions underscore the government's sustained focus on laboratories, a trend that likely continues in 2026. In 2025, the government resolved several matters involving genetic testing and drug testing in which laboratories and related actors allegedly submitted or caused the submission of false claims for testing without legitimate medical necessity or proper physician orders. In addition to these negotiated resolutions, the United States and the states of Georgia, Colorado, and South Carolina obtained a $114.5 million judgment arising from a cancer genetic testing laboratory scheme. The government alleged that marketers and lab operators orchestrated a nationwide operation to enroll beneficiaries in genetic cancer screening that was not medically necessary, often utilizing telemarketing pipelines and referral arrangements to generate test volume. The judgment highlights the significant financial exposure that can result when laboratories and their affiliates engage in mass-marketing models without individualized medical decision-making.

Telemedicine and Digital Health

Telemedicine and digital health likewise will remain a top DOJ enforcement priority. In the National Health Care Fraud Takedown described above, 49 defendants were charged in connection with the submission of over $1.17 billion in allegedly fraudulent claims to Medicare resulting from telemedicine and genetic testing. For example, in the Southern District of Florida, prosecutors charged an owner of telemedicine and durable medical equipment companies for allegedly targeting Medicare beneficiaries through deceptive telemarketing campaigns and fraudulently submitting claims to Medicare for durable medical equipment and genetic tests. As part of its takedown, DOJ announced that it is working closely with HHS-OIG, FBI, and other agencies to create a Health Care Fraud Data Fusion Center to leverage cloud computing, artificial intelligence, and advanced analytics to identify emerging health care fraud schemes. This portends potentially even more involved prosecutions in this space.

Cyber Fraud by Health Care Companies

Recent settlements underscore the Civil Cyber-Fraud Initiative's focus on False Claims Act liability for alleged deficient or misrepresented cybersecurity in health care and federal health contracting. In July 2025, the DOJ announced that Illumina Inc. agreed to pay $9.8 million to resolve allegations under the False Claims Act arising from the company's cybersecurity practices. According to the government, Illumina made claims to federal programs and entities while allegedly misrepresenting or failing to meet certain cybersecurity requirements tied to its products and services. The settlement, in which Illumina did not admit liability, reflects DOJ's growing use of the FCA to police cybersecurity-related representations in the health care and life sciences sector.

Separately, in February 2025, Health Net Federal Services LLC and its parent, Centene Corporation, agreed to pay more than $11 million to resolve FCA allegations related to cybersecurity compliance under their TRICARE contract with the Defense Health Agency. The government alleged the companies misrepresented or failed to meet required security obligations for safeguarding sensitive health information and overseeing subcontractor compliance. Like Illumina, the matter was resolved without an admission of liability and brought under DOJ's Civil Cyber-Fraud Initiative, signaling heightened scrutiny of cybersecurity representations by federal health contractors.

This focus on health care cyber fraud is likely to be evergreen in the years ahead.

Medicare Advantage

DOJ activity in 2025 also signaled continuing focus on both civil and criminal enforcement in Medicare Advantage. In May, the United States intervened in a FCA suit against three major Medicare Advantage insurers and three large brokers alleging that the insurers paid hundreds of millions in alleged kickbacks in the form of marketing payments to steer Medicare beneficiaries into specific plans. The complaint alleges broker organizations were incentivized to sell plans based on the size of the insurers' payments and, at times, refused to sell plans from insurers that did not pay sufficient sums. The government further alleges that two of the insurers conspired with brokers to discriminate against Medicare beneficiaries with disabilities whom they perceived to be less profitable, including by threatening to withhold payments to pressure brokers to enroll fewer disabled individuals. The DOJ's decision to intervene in the case underscores the government's scrutiny of payment models tied to enrollment volume in the context of the "administrative fee" safe harbor. And as reported above, Troy Health, Inc.'s non-prosecution agreement resolved claims involving the use of AI in connection with beneficiary enrollment in Medicare Advantage plans without consent.

2025 was a busy year in and out of the courts for legal developments impacting health care fraud enforcement. These trends and decisions have broad impact both on conduct and on the crafting and company oversight of compliance programs and training. We will continue to monitor these and other subjects in 2026 and share our findings.

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.