DOJ Tightens Health‑Care Fraud Rules and Encourages Self‑Disclosure

The Department of Justice has expanded its health‑care fraud program, adding a new policy that makes it easier for companies to file voluntary self‑disclosures. The policy consolidates the process under the DOJ’s health‑care fraud division, replacing a separate procedure at the Department of Health and Human Services. It also offers a limited cap on financial damages for companies that report potential misconduct, and the agency will use data analytics and artificial intelligence to spot billing abuse and other fraud. The DOJ also issued a warning to health‑care executives: don’t be another Theranos.

Under the new policy, companies that report potential criminal misconduct can reap the benefits — such as a limited cap on financial damages — from both agencies at once. The health‑care fraud section at the DOJ brings a range of expertise under one roof to handle issues like the emerging field of digital health technology. DOJ will make use of data analytics and artificial intelligence algorithms to try and suss out instances of corporate wrongdoing, like providers billing for unneeded services, companies fabricating patient records, or health tech companies adding redundant diagnoses. The department will also design new programs that appropriately incentivize whistleblowers to report fraud. Health care investigators also look at social media, news reports, and other sources of information to learn about companies possibly breaking the law. Prosecutors will place extra emphasis on schemes involving health care, controlled substances, and violations of the federal Food, Drug, and Cosmetic Act. They will also place great weight on factors like whether corporate executives knew about or tried to conceal fraud, ran a scheme for over three years or across various states, or affected taxpayer‑funded programs.