What the DOJ looks for to spot healthcare fraud
The U.S. Department of Justice (DOJ) has dramatically expanded its efforts to investigate and prosecute healthcare fraud under the Trump Administration, supported by advanced data analytics, stronger interagency collaboration, and growing attention to new areas such as Medicare Advantage upcoding and access-to-care violations.
Lisa Miller, JD, a former principal assistant deputy chief of the department’s Healthcare Fraud Unit, said today’s DOJ is better equipped than ever to identify fraud schemes and hold both individuals and corporations accountable. Miller, now a partner at Sidley Austin LLP, spent more than a decade overseeing major healthcare fraud and financial crime cases.
“The Healthcare Fraud Unit has evolved into a nationwide and even international force,” Miller said. “When I joined in 2014, there were only about 40 lawyers. Today, there are more than 70 just in Washington, D.C. alone.”
Sustained focus on Medicare fraud
Healthcare fraud enforcement, Miller emphasized, is a long-term DOJ priority that transcends administrations. The department’s rationale is simple: healthcare affects every American, and fraud in Medicare and Medicaid wastes taxpayer money while putting patients at risk.
She noted that prosecutors increasingly weigh patient harm when determining whether a case should be pursued criminally or civilly.
"If it involves taxpayer money being wasted, if there's fraud, waste and abuse in the Medicare and Medicaid systems, and even in private pay, there is an argument the government makes that private insurance fraud increases the cost of care for others. There is also the issue of patient harm, and that's top of mind sometimes for prosecutors when they're thinking about should a case be criminal or should it be civil, and how seriously should something be taken?" Miller explained.
Data analytics drive modern enforcement
One of the DOJ’s most effective tools, Miller said, is its expanding use of data analytics to uncover suspicious billing patterns and identify potential fraud hot spots.
“Data enables prosecutors to see trends and red flags — whether it’s a spike in billing from a durable medical equipment company or unusual patterns across a region,” she explained.
Most cases are very data driven, enabling prosecutors to see trends and identify red flags that they can then focus their resources on. This can be done to identify schemes such as a spike in billing by a certain durable medical equipment company that may draw prosecutors' eye, but it can also mean where in the country regionally should resources be focused.
"That's how data is used, and it's been very successful at identifying case leads, both civilly and criminally as well as in finding evidence to support specific prosecutions," Miller said.
She noted that while the government has a strong data-driven approach, defense attorneys play an important role in ensuring that prosecutors do not overreach. She said this adversarial system keeps enforcement balanced.
The DOJ is now consolidating its data resources across agencies, including the HHS Office of Inspector General (OIG), and the FBI, to further enhance its analytic power. Artificial intelligence (AI) is expected to play a growing role in this process.
"For a long time, DOJ has tried to develop algorithms to comb through datasets to identify red flags and then focus resources on the worst offenders from their perspective. AI could help generate leads for cases, but it's definitely a proceed with caution. It's not going to generate a fully baked matter ready for indictment. There still have to be interviews and there still have to be traditional law enforcement techniques used to develop a case that would withstand constitutional scrutiny," Miller said.
Coordination across agencies
Miller said collaboration has also deepened between DOJ divisions and other federal agencies. The DOJ–Health and Human Services (HHS) False Claims Working Group, recently reactivated, brings together prosecutors, centers for Medicare and Medicaid Services (CMS), and U.S. Attorneys’ Offices to coordinate investigations and enforcement priorities.
This coordination, she noted, extends to even routine decisions, such as the timing of provider suspensions or search warrants. “It’s bearing fruit,” she said.
Key DOJ enforcement priorities
Miller said DOJ’s attention is currently focused on several areas, including Medicare Advantage (Part C) upcoding schemes, where patients are allegedly coded as sicker than they are to inflate reimbursement. She said telemedicine cases involving durable medical equipment fraud, including cancer, genetic and cardiac testing schemes are another area of focus.
Private equity ownership in healthcare is also an area of interest because there are concerns over the level of compliance investment and profit-driven decision-making by these companies.
"I think that we'll see a lot of scrutiny of private equity companies. That was something that prosecutors and folks at CMS, HHS and OIG were concerned about because of their influence on the market and the concern by law enforcement that there wasn't the necessary investment in compliance," Miller explained.
The Trump administration may also have interest in prosecuting those who violate executive orders against gender-affirming care and diversity, equity and inclusion (DEI) programs. This may include cases involving pharmaceutical manufacturers that produce drugs related to gender affirming care and hospitals treating minors for gender dysphoria.
"DEI and gender affirming care priorities that have been announced by DOJ, and how this manifests is to be determined, but there certainly will be investigations opened on these types of cases," she said.
Another trend Miller sees is cases involving wound care, which was a focal point in the enforcement action announced earlier this summer and enforcement activities last year.
Compliance is the best defense
Miller’s advice to healthcare organizations is straightforward: invest in compliance early and often. That means investigating internal complaints thoroughly and quickly, remediating issues, and monitoring your own claims data for red flags.
"If a company wants to stay out of DOJ's crosshairs, the best bet is investing in compliance and making sure to avoid pitfalls," she said.
She cautioned that companies often stumble by moving too slowly on internal investigations, or failing to follow up on employee reports. Emerging companies, in particular, can be vulnerable if compliance is treated as an afterthought.
"There can be a temptation to focus on just getting the business on the ground up and running, rather than focusing on compliance from day one. And maybe attention wouldn't necessarily be paid to red flags in the billing data. The DOJ very much expects a company to mind its own store, and if they can easily look at claims data, it really is best practice for the company to make sure that there aren't any red flags from its own perspective, even if they haven't gotten to a point of hiring a compliance officer. That's an easy thing, even small and emerging companies can do," Miller said.
The DOJ does rely on whistleblowers to report cases of noncompliance and continues to actively solicit those tips through the criminal division's Corporate Whistleblower Awards Pilot Program, which was rolled out in 2024. So addressing internal complains early on can help avoid going to court over legal action later.
"Even if a company shouldn't face liability, they'll continue to have to beat back cases, or at least invest time in responding to a civil investigative demand because odds are there will continue to be a lot of relators and relators' counsel interested in filing these cases," she concluded.
Dave Fornell has covered healthcare for more than 17 years, with a focus in cardiology and radiology. Fornell is a 5-time winner of a Jesse H. Neal Award, the most prestigious editorial honors in the field of specialized journalism. The wins included best technical content, best use of social media and best COVID-19 coverage. Fornell was also a three-time Neal finalist for best range of work by a single author. He produces more than 100 editorial videos each year, most of them interviews with key opinion leaders in medicine. He also writes technical articles, covers key trends, conducts video hospital site visits, and is very involved with social media. E-mail: [email protected]