According to the US Department of Justice (DOJ) Civil Division, many of the Fraud Section’s cases are suits filed under the False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733. The FCA is a federal statute originally enacted in 1863 in response to defense contractor fraud during the American Civil War. The FCA provides that any person who knowingly submits, or causes to submit, false claims to the government is liable for three times the government’s damages plus a penalty that is linked to inflation. The United States DOJ can pursue perpetrators of fraud on its own, but the FCA also allows private citizens to file suits on behalf of the government (called “qui tam” suits. Private citizens who successfully bring qui tam actions may receive a portion of the government’s recovery. The “whistleblower” regulations exist in part because the information needed to prosecute healthcare practitioners is “insider information,” such as telling patients their Medicare copays for CTPs/skin substitutes will be waived. For example, a Minneapolis Dermatologist paid $1.6 million to resolve allegations of FCA violations around, among other accusations, waiving copays for “skin substitutes”.
The problem is that any doctor can get caught up in a high-stakes FCA investigation. Until recently, the time-sucking Medicare audit process was the main thing that a practitioner had to worry about. As frustrating and exhausting as these are, they are “administrative” processes. Practitioners may pay back money – perhaps lots of money – but there are no criminal accusations. However, if the DOJ gets involved, the conversation is different. A new blog post by Knicole Emanuel is worth reading. “Increasingly, providers are finding themselves at the intersection of standard Medicare audits and high-stakes investigations under the federal False Claims Act (FCA), a shift that represents not only a dramatic escalation in government scrutiny but also a disturbing trend of regulatory overreach.” Ms. Emanuel goes on to explain, “FCA penalties are steep. As of 2025, providers can be fined between $13,508 and $27,018 per claim deemed false, with treble (triple) damages added on top. That means a relatively small billing error—multiplied across numerous claims—can become a multi-million-dollar liability overnight. And the stakes go beyond money: reputational harm, exclusion from Medicare and Medicaid, and even criminal charges are on the table.”
Another challenge is the increasing use of Artificial Intelligence (AI) in data analytics. An AI algorithm might flag excessive billing or aberrant patterns, and once this happens, “the presumption of guilt can stick,” says Ms. Emanuel. Check out her blog on the subject.
