First Health Care Declination Under DOJ’s New Corporate Enforcement And Voluntary Self-Disclosure Policy

On July 29, 2026, the Department of Justice’s (“DOJ”) National Fraud Enforcement Division and the U.S. Attorney’s Office for the District of New Jersey announced the first healthcare sector declination under DOJ’s new Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEVSDP”), declining to prosecute Campus Eye Management Holdings, LLC and its wholly owned subsidiary, Campus Eye Management, LLC (jointly referred to as “Campus Eye”) for alleged health care fraud violations, kickbacks, and conspiracy. That same day, DOJ indicted the company’s founder, Dr. E. Bruce DiDonato, alleging conspiracy to commit health care fraud, health care fraud, conspiracy to violate the anti-kickback statute, and violations of the anti-kickback statute. The two entities avoided criminal charges by voluntarily self-disclosing and fully cooperating with DOJ’s investigation.

The CEVSDP, issued March 10, 2026, supersedes the 2023 Corporate Enforcement Policy (“CEP”), which applied to matters handled by the Criminal Division. Rather than confining the voluntary self-disclosure framework to a single division, the new CEVSDP reaches all corporate criminal matters handled within the Department, with the exception of antitrust. Now, each DOJ division can offer the declination protections to a company that comes forward voluntarily. Until now, only the DOJ’s National Security Division had announced a declination under the new department-wide framework. The Campus Eye resolution marks the second such declination under the new framework. We anticipate seeing additional declinations under the new CEVSDP. Entities should take heed of the Campus Eye resolution and ensure they understand the CEVSDP and the incentives of voluntary disclosure.

Background

Campus Eye was a management services organization that provided billing and other services to an optometry practice and ambulatory surgery center (“ASC”). DiDonato founded and ran the optometry practice and the ASC. Alongside a planned sale of the company, DiDonato created the two Campus Eye entities to sell a stake in the company to private equity. The Beekman Group acquired approximately 65% of Campus Eye Management Holdings, LLC for $15.3 million, while DiDonato retained roughly 35% of the company and continued as a manager. The relationship soon soured. DiDonato initially overcame an attempt by Beekman-appointed managers to remove him as a manager, before Beekman was able to remove DiDonato in August of 2024 through a merger mechanism.

The Charged Scheme and DOJ’s Corporate Declination

In the indictment, the DOJ charges that from approximately 2015 through March 2023, DiDonato submitted medically unnecessary diagnostic eye tests and paid kickbacks to referring physicians. According to the indictment, DiDonato concealed these kickbacks by creating sham agreements that described the payments as consulting fees and structured compensation as “flat fees” when in reality the fees were based on the percentage of the optometry practice’s Medicare reimbursement for diagnostic tests performed on patients that the providers had referred in the prior year. The scheme is alleged to have generated approximately $3.4 million in billings tied to the referral arrangement, with approximately $1 million paid out in kickbacks.

While DiDonato was indicted, both Campus Eye companies avoided prosecution altogether in exchange for their voluntary self-disclosure and cooperation, disgorgement of $1 million, and their continued cooperation with the government’s ongoing prosecution of DiDonato. The company declinations reflect application of the new framework in the CEVSDP and bears further discussion.

What’s New Under the CEVSDP

Under the new CEVSDP, DOJ endeavors to provide more transparency and predictability to companies, stating that DOJ “will decline to prosecute a company for criminal conduct when” the company (1) voluntarily self-discloses misconduct, (2) fully cooperates with the ensuing investigation, (3) undertakes timely and appropriate remediation, and (4) presents no aggravating circumstances. Prosecutors retain discretion to decline to prosecute even with aggravating circumstances.

For companies that self-disclose, this new framework for declination is more forgiving than the Criminal Division’s earlier policy, which, as summarized by then-Assistant Attorney General Kenneth A. Polite, Jr., required that (1) the voluntary self-disclosure be made immediately upon discovery; (2) at the time of the misconduct and disclosure, the company had an effective compliance program and a system of internal accounting controls, which could identify the misconduct and lead to voluntary self-disclosure; and (3) the company provides extraordinary cooperation with the DOJ’s investigation.

The new CEVSDP also creates a “near miss” tier for companies that self-report, fully cooperate, and remediate, but fall short of a full declination because their disclosures, though made in good faith, do not meet the CEVSDP’s definition of “voluntary” self-disclosure or because aggravating factors are present. A self-disclosure is deemed “voluntary” only if: (1) it is a good faith disclosure to the appropriate DOJ component; (2) the misconduct was not previously known to DOJ; (3) the company had no preexisting obligations to disclose the misconduct; (4) it is made prior to an imminent threat of disclosure or government investigation; and (5) it is made within a reasonably prompt time after the company becomes aware of the misconduct, with the company having the burden of showing timeliness. Absent egregious or multiple aggravating circumstances, a company whose disclosure is deemed a “near miss” will (1) receive a non-prosecution agreement with a term of under three years, (2) not be required to retain an independent compliance monitor, and (3) pay a fine 50% to 75% below the bottom of the applicable U.S. Sentencing Guidelines fine range.

These and other key takeaways include:

• Expanded scope beyond the Criminal Division: the new policy applies to all “corporate criminal matters handled by the Department,” whereas the prior policy extended only to matters handled by the Criminal Division.
• A new three-part structure with a firmer declination standard: the new policy is organized into Part I (Declination), Part II (“Near Miss” resolutions), and Part III (Resolutions in other cases). In matters under Part I, DOJ states that it “will decline to prosecute” when the criteria are met, rather than the 2023 policy’s rebuttable “presumption” of declination.
• Redefined and narrowed aggravating circumstances: Part I, factor 4 of the new CEVSDP defines aggravating factors as those bearing on the “nature and seriousness of the offense, egregiousness or pervasiveness, severity of harm, or corporate recidivism” (with recidivism capped at a five-year lookback or similar misconduct), dropping the separate factors of “executive management involvement” and “significant profit” that appeared in Section 2 of the 2023 policy.
• A new Corporate Whistleblower Awards Pilot Program exception: the new policy preserves declination eligibility even if a whistleblower reports to the Department first, provided the company self-reports within 120 days of receiving the whistleblower’s internal report and meets the other requirements. See Appendix B.

Implications for Entities and Individuals

The Campus Eye resolution identifies additional considerations for entities contemplating a merger and/or acquisition. In particular, potential health care fraud exposure identified during diligence or after merger should be considered for possible voluntary self-disclosure. And compared to incentives under the prior CEP, a company’s incentive to self-disclose and cooperate may now increase after a change in ownership to protect company interests – in part what appears to have occurred in Campus Eye.