On August 13, 2026, the U.S. Department of Justice (“DOJ”) released a memorandum (the “Memo”) outlining the enforcement priorities of its new National Fraud Enforcement Division (the “Fraud Division”).Healthcare is one of five priority areas, and the Memo emphasizes that DOJ will be working with data from across agencies to build cases, rather than wait for whistleblowers. We expect more investigations of physicians, healthcare practices, management services organizations (“MSOs”), and manufacturers, and we are already seeing DOJ pair claims and payment data in ways that turn routine reporting obligations into investigative leads.
DOJ expects roughly five hundred attorneys and staff by August 2026 and plans to keep hiring for two more years. The Division’s goal is to have prosecutors stationed nationwide and working alongside U.S. Attorneys’ Offices, and DOJ says it is organizing the Division to be “lean, flat, and agile,” reducing excessive bureaucratic oversight so prosecutors can focus on following the facts and charging violations of law. DOJ also intends to “supercharge” the Health Care Fraud Strike Force with additional resources, data analytics support, and new technology. The Strike Force has produced coordinated, multi-district takedowns for years and will now fall under the purview of the new Fraud Division. The combination of additional resources, analytics, and technology is intended to strengthen DOJ’s ability to identify and prosecute significant healthcare fraud cases.
DOJ’s 2026 Health Care Fraud Enforcement Priorities
The Memo cites estimated annual federal fraud losses of $233 billion to $521 billion, and national health expenditures are expected to grow from more than $3 trillion annually to over $7 trillion, with an estimated 3–10% lost to fraud, so it’s no surprise that the Fraud Division will be spending a vast majority of its resources looking at healthcare.
The memo names the following healthcare conduct for heightened scrutiny:
- Kickback arrangements
- Telemedicine fraud
- Medicare and Medicaid fraud
- Controlled substance diversion (including illegal prescribing and dispensing of opioids)
- Home health and hospice schemes
- Deceptive marketing of unsafe products and services
- Companies and individuals that put corporate profits above patient care
What DOJ’s New Fraud Division Means for Physicians, Practices, and MSOs
1. DOJ Will Use Data Analytics to Identify Healthcare Fraud
The Memo leads with an emphasis on using “cutting-edge data analysis” to target exploitative healthcare fraud schemes. Given this language, we expect billing anomalies, outlier prescribing, and unusual referral patterns to surface sooner and be worked harder. Providers should no longer assume that a whistleblower or complaint will necessarily be the catalyst for an investigation; DOJ is expressly investing in data science, technology, and cross-government data sharing to improve fraud detection. Practically, this means that providers should be running the same analyses DOJ runs to ensure they are ahead of the findings and preparing justifications in advance for anomalies and outlier data points. Compare utilization and coding against specialty benchmarks, find the outliers, and document the clinical reasons for them before someone else asks.
The recent Veloxis Pharmaceuticals, Inc. (“Veloxis”) settlement announced by DOJ on August 10, 2026 is a great example of this new “whole government” data-driven approach in action. Using the Sunshine Act public and searchable database, where manufacturers must report all payments and transfers of value to covered healthcare professionals and teaching hospitals, the DOJ was able to map value transfers to prescribing habits and uncover underlying referral relationships to create a detailed roadmap of every manufacturer’s financial relationships with prescribers. By mining that map to find outlier payment relationships, the DOJ was able to secure an admission by Veloxis that it paid various forms of kickbacks and secure a $34.45 million False Claims Act settlement.
This data-driven approach is only expected to accelerate. A March 20, 2025 executive order on “Stopping Waste, Fraud, and Abuse by Eliminating Information Silos” directed agencies to remove unnecessary data barriers between them, and the Fraud Division’s memorandum commits to cross-disciplinary data science team and enhanced analytics support for the Strike Force. Healthcare Providers and companies should expect the architecture used to bring the Veloxis case to be replicated, and assume that a single data anomaly can pull in the resources of every federal agency and the newly formed Fraud Division.
2. Telemedicine Fraud Remain a DOJ Enforcement Priority
Groups running hybrid or fully virtual models should confirm that services are medically necessary and documented as such that clinicians keep real discretion over what they order, and that patient acquisition and marketing arrangements do not operate as inducements. Per-lead and per-order compensation to marketers can create significant fraud-and-abuse risk and should be carefully reviewed.
3. MSO and Physician Compensation Arrangements Face Kickback Scrutiny
The Memo also targets “kickbacks and companies that cut corners to deceive regulators about the nature of healthcare services.” MSOs should read that as a warning. Management fees, physician compensation formulas, and referral relationships between an MSO and its affiliated practices need fair market value support and compliance with the Anti-Kickback Statute and applicable safe harbors. Compensation that moves with the volume or value of referrals will be more easily spotted and draw attention to the MSO-practice arrangement. We expect that DOJ will continue to look past labels and use these advanced data tools to analyze how the money actually moves.
4. DOJ Will Pursue Individual, Tax, and Disclosure Exposure
Corporate misconduct is a separate priority area, and MSOs and practice platforms built on layered entities should not assume the structure limits individual exposure. Prosecutors will trace decisions back to the people who made them, so owners, officers, and medical directors should know where their signatures and approvals appear. DOJ is also pairing healthcare enforcement with criminal tax and money laundering tools, which compounds exposure for providers who underreport income or run personal expenses through the practice. A billing dispute can become a tax case worked by the same team. Cutting the other way, DOJ says it will credit organizations that “voluntarily self-disclose, cooperate, and remediate.” The value of disclosure drops sharply once the government is already looking, so that call should be made quickly, with counsel, and in a way that preserves privilege while the facts are still being developed.
What Healthcare Providers and MSOs Should Do Now
A standalone division with hundreds of prosecutors, dedicated data-science and analytics resources, and a mandate to pursue healthcare fraud is a different enforcement environment than the one providers worked in a year ago. We recommend that physicians, practices, MSOs, and manufacturers take the following steps now:
Test your compliance program against your own data.
Run frequent outlier analyses on billing, referrals, and telehealth to discover potentially problematic data and document justifications early and often.
Review MSO and physician arrangements that have drifted.
Confirm fair market value support and that no compensation term tracks referral volume or value.
Review Physician Compensation Structures.
Ensure that payments and bonuses to employees and independent contractors are not referral based and fit the Fair Market Value standard that the DOJ expects.
Review prescribing and dispensing data.
Pay particular attention to controlled substances and any pattern that could be read as diversion.
Document medical necessity contemporaneously.
Do it for all services, and especially for anything billed to Medicare, Medicaid, TRICARE, or the VA.
Frequently Asked Questions About DOJ’s National Fraud Enforcement Division
What is DOJ’s National Fraud Enforcement Division?
The National Fraud Enforcement Division is a DOJ division dedicated to prosecuting fraud nationwide. The August 13, 2026, Memo describes a growing national workforce supported by data science, technology, asset recovery, corporate enforcement, and other specialized resources.
What healthcare fraud is DOJ prioritizing in 2026?
The Memo identifies telemedicine fraud, Medicare and Medicaid fraud, controlled substance diversion, home health and hospice schemes, deceptive marketing of unsafe products and services, kickbacks, and conduct that puts corporate profits above patient care.
How will DOJ use data analytics to investigate healthcare fraud?
The Memo says the Fraud Division will use cutting-edge data analysis to target exploitative healthcare fraud schemes and will provide the Health Care Fraud Strike Force with greater resources, data analytics support, and best-in-class technology.
What should healthcare providers and MSOs review now?
Providers and MSOs should consider reviewing billing and coding outliers, management and compensation arrangements, referral relationships, prescribing and dispensing patterns, telehealth practices, medical-necessity documentation, and required government disclosures.
Healthcare providers, physician practices, MSOs, and manufacturers should not wait for a subpoena, audit letter, or civil investigative demand to find out whether their arrangements can withstand government scrutiny. Frier Levitt advises healthcare organizations on fraud-and-abuse compliance, physician compensation, MSO and management structures, vendor and referral relationships, telehealth arrangements, and government investigations. Contact us to schedule a confidential consultation.
