The DOJ FY2025 False Claims Act Report, health care sector highlights

As this week began with Martin Luther King, Jr. Day, a quote that is equally relevant to the False Claims Act, 31 U.S.C. §§ 3729-3733 (FCA) is "[w]e shall overcome because the arc of the moral universe is long, but it bends toward justice.”

For anyone involved in a FCA case, the path is often a long one. While one cannot control how a judge will rule or a jury will render a verdict, even if incorrect, often times, justice does prevail.

On January 16, 2026, the U.S. Department of Justice (DOJ) released its annual report with the headline, False Claims Act Settlements and Judgements Exceed $6.8B in Fiscal Year 2025. What makes FY 2025 notable is that FCA settlements eclipsed FY 2024 by nearly $4 billion, 1,297 qui tam (whistleblower) lawsuits were filed – the highest in the FCA’s history and an emphasis on “combating fraud in the federal health care system and in the government’s procurement, loan, and grant programs and redressing the improper avoidance or tariffs and customs duties that are owed.” Notably, “[t]he 1,297 qui tam suits filed in fiscal year 2025 breaks the prior record set in 2024 of 980 such cases. This past year, the Justice Department reported settlements and judgments exceeding $5.3 billion in these and earlier-filed qui tam suits.”

Health care remained the top sector accounting for $5.7 billion in recoveries from federal losses alone – Medicare, federal portion of Medicaid and TRICARE - and led to States recovering additional amounts for Medicaid programs. Even more important than the monies recovered is the fact that the FCA protects patients “from medically unnecessary or potentially harmful conduct.” (emphasis added). Three health care related areas that the DOJ continued to enforce were: managed care; prescription drugs; and medically unnecessary care. The Anti-Kickback Statute, Stark Law and cybersecurity remained consistent viable theories of alleged FCA violations and recoveries. As stated in the fact sheet, here a representative examples that contributed to the $6.8 billion in recoveries:

• Unnecessary Services and Substandard Care -The United States filed a complaint against Vohra Wound Physicians Management LLC (Vohra) and its founder and majority owner, Dr. Ameet Vohra, for allegedly causing the submission of false claims to Medicare for overbilled and medically unnecessary wound care services. The United States alleged that the defendants engaged in a nationwide scheme to falsely bill Medicare for surgical debridement – procedures to remove dead or unhealthy tissue that could impede wound healing – to maximize revenue. The defendants subsequently agreed to pay $45 million to settle this matter.
• Managed Care (Medicare Part C) - Independent Health Association and its affiliate, Independent Health Corporation (collectively, Independent Health) agreed to pay up to $98 million to resolve false claims allegations of unsupported and invalid diagnosis codes submitted for Medicare Advantage Plan enrollees to increase payments that Independent Health received from Medicare. The United States alleged that an Independent Health subsidiary retrospectively searched medical records and queried physicians for information to add improper diagnoses for enrollees.
• Anti-Kickback Statute – Two settlements involving different types of kickbacks:
  • Biohaven Pharmaceutical Holding Company, a Pfizer subsidiary, agreed to pay $59.7 million to resolve allegations that, prior to Pfizer’s acquisition of the company, Biohaven paid kickbacks to health care providers to induce prescriptions. The government alleged that Biohaven selected and paid certain health care providers with the intent that the speaker honoraria and meals would induce them to prescribe its drug. The government further alleged that certain prescribers who attended multiple programs on the same topic received no educational benefit from attending repeat programs and that certain Biohaven speaker programs were attended by individuals with no educational need to attend, such as the speakers’ spouses, family members, friends, or colleagues.
  • QOL Medical LLC and its co-owner and CEO, Frederick Cooper, agreed to pay $47 million to resolve allegations that they offered kickbacks in the form of free breath testing services to induce claims for QOL’s drug Sucraid. QOL, with the CEO’s approval, distributed free breath test kits to health care providers and asked providers to give the kits to patients with common gastrointestinal symptoms, claiming that the test could “rule in or rule out” the condition for which it was approved. In fact, the test did not specifically diagnose the condition and other conditions could cause a patient to test “positive.”

As Deputy Assistant Attorney General Brenna Jenny stated, “[t]he False Claims Act is at its best when it protects taxpayers and the Americans who rely on government programs.” Like any law, it should and is often used responsibly, remains the Government’s number one fraud fighting statute and returns billions annually to the United States Treasury.

These significant statistics, both in the amount of the settlements and the number of qui tam cases filed in FY 2025 should lead health care sector participants to review their compliance programs to ensure that they are adequate and effective, as well as ensure that anti-retaliation language is present in both the Employee Handbook and policies and procedures. Additionally, taking good faith concerns raised by employees seriously is critical to potentially reducing settlement amounts or avoiding the filing of a FCA case.

Much like poor bedside manner leading a patient to file a complaint with the state medical board, medical staff committee and/or medical malpractice suit (even when there is no basis under the universal common law tort of negligence and no damages have been sustained), when individuals raise genuine issues of concern and they are dismissed, retaliated against and/or not provided a reasonable explanation of an outcome, they are more likely to seek counsel and potentially file a FCA case. Most whistleblowers do not file cases with a potential recovery or “bounty hunter” mentality because statistically speaking, the large cases which result in tens of millions of dollars to whistleblowers are not the norm and often, there is more than one whistleblower that files a case, so proportionately, the share is decreased. In sum, the best way to avoid or mitigate a FCA case is to have knowledgeable counsel guiding compliance efforts and not to retaliate against an employee or contractor when good faith concerns are raised.

Rachel V. Rose, J.D., MBA, advises clients on compliance, transactions, government administrative actions, and litigation involving health care, cybersecurity, corporate and securities law, as well as False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rose can be reached through her website, www.rvrose.com.