The U.S. Department of Justice (DOJ) has stepped up its focus on enforcing the False Claims Act (FCA) Enforcement making healthcare organizations and medical providers, and medical billing companies take notice. But how does this new emphasis on FCA Enforcement affect providers working with complicated billing systems such as Durable Medical Equipment (DME) or Orthotics and Prosthetics (O&P), such as many of our customers? This blog breaks down the DOJ FCA Enforcement efforts so you and your team can stay ahead of the curve!
False Claims Act (FCA) History
The False Claims Act has a deep and interesting background. It first came into play back in 1863 during the American Civil War. The goal at the time was to stop defense contractors from committing fraud. Fraudulent billing in healthcare drains billions every year. , Reuters shared that the DOJ healthcare investigations has expanded its focus. Along with fighting classic fraud, they are now tackling modern challenges, like AI abuse and private equity meddling in healthcare choices.
The False Claims Act (FCA) has a long and evolving history rooted in protecting public funds. Originally enacted in 1863 during the Civil War, its primary goal was to curb fraud by defense contractors supplying the Union Army. The government needed a way to hold vendors accountable for overcharging, delivering substandard goods, or fabricating services — and the FCA became that enforcement tool.
Today, the scope of the False Claims Act has expanded far beyond the battlefield. In the modern era, the FCA has grown to include every aspect of the medical industry.
How FCA Enforcement Is Important: Operation Brace Yourself And Durable Medical Equipment (DME)
One of the most striking examples of why the False Claims Act (FCA) enforcement remains a critical tool in protecting public health dollars is the Operation Brace Yourself takedown — a massive federal investigation that broke in 2019.
At the heart of this $1.2 billion Medicare fraud scheme were dozens of DME suppliers, telemedicine companies, and marketing firms who coordinated a vast operation to bill Medicare for orthotic braces—including back, knee, wrist, and shoulder braces—that many patients did not need and never requested.
Operation Brace Yourself highlighted a widespread mail-order brace scam that started in Florida. The scheme involved mailing unnecessary braces for backs, shoulders, and knees to Medicare patients. Many O&P providers found themselves caught up—sometimes without realizing it—in this web of fraud.
How Operation Brace Yourself Happened
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Call centers reached out to elderly Medicare beneficiaries, often using misleading tactics to offer “free” or “medically approved” braces.
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These centers paid telemedicine doctors to sign off on prescriptions after little to no interaction with the patients—sometimes just a brief phone call or no call at all.
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DME suppliers, often created solely for this purpose, would then bill Medicare for the maximum allowable reimbursement—sometimes for multiple braces per patient.
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The profits were then laundered through shell companies and split among marketers, doctors, and suppliers.
The FCA allowed the Department of Justice (DoJ) and Office of Inspector General (OIG) to recover hundreds of millions of dollars, prosecute the individuals involved, and shut down fraudulent billing channels.
Thank goodness Operation Brace Yourself and the rampant Durable Medical Equipment fraud was overcome – so, know that FCA enforcement has been a force for good in the past. However, as a modern medical provider or medical biller, we’ve now got to understand how we can work with and around the DOJ’s 2025 FCA enforcement emphasis.
False Claims Act And Medical Billing
One of its most heavily scrutinized areas is healthcare billing. The Department of Justice (DOJ) has increasingly used the FCA to combat fraudulent claims to Medicare, Medicaid, and other federal healthcare programs — an issue that, according to estimates, costs taxpayers tens of billions of dollars each year.
In 2025, this scrutiny is intensifying. As Reuters recently reported, DOJ healthcare investigations are entering a new phase. In addition to targeting traditional forms of fraud — such as billing for services never rendered or inflating codes — the DOJ is now focusing on emerging risks like AI-powered billing errors and questionable practices by private equity-owned medical groups. These newer concerns reflect the changing landscape of healthcare delivery, where automation and profit-driven models can sometimes compromise compliance.
For medical providers, the message is clear: accountability is no longer optional. As the DOJ continues to widen its net, practices must not only avoid intentional fraud but also ensure that evolving technologies and ownership models don’t unintentionally trigger FCA violations.
What the DOJ Will Prioritize With 2025 FCA Enforcement
To understand the Department of Justice’s key priorities, medical professionals and healthcare administrators need to stay informed. Here’s where the DOJ healthcare investigation is focusing its attention:
Ongoing Areas of Concern
- Charging For Services That Weren’t Provided: This issue continues to be significant. Fraud like fake patients or exaggerated treatments drains millions from Medicare and Medicaid.
- Breaking Anti-Kickback Statute Rules: When providers accept payments to influence patient referrals or purchase decisions, this raises alarms. Such actions go against federal laws and compromise medical choices.
Fresh FCA Enforcement Areas in 2025
- Private Equity and Healthcare: The DOJ is looking into whether PE firms owning medical practices are putting profits over honest claims and proper patient care.
- AI in Medical Billing: Tools powered by AI now help with coding and diagnostics. If handled though, they might create billing patterns that mislead or are false.
- Enforcement Through Data: The DOJ uses its own AI and advanced tools to detect unusual billing patterns within claim databases.
Attorney General Merrick Garland said in March 2025 that when financial motives in PE-backed practices or careless AI use take over, it harms trust and puts patients at risk.
What Will Medical Billing Look Like in 2025 With Extra FCA Enforcement?
Billing experts, whether working internally at a medical practice or for an outsourced medical billing company like CBS, need to stay alert like never before. Even honest mistakes in billing can trigger serious investigations. The DOJ no longer relies on whistleblowers—advanced algorithms now detect suspicious billing patterns .
Keep In Mind:
- AI Tools Don’t Remove Accountability: Platforms using AI to manage billing still need to follow CMS coding rules. Mistakes from automation don’t erase responsibility; they actually increase it.
- Focus On Risky Contracts: Check referral deals, vendor partnerships, and ownership models backed by private equity to maintain FCA and AKS compliance.
- Solid Documentation Matters Most: Keep billing practices clear coding precise, and patient records strong to stay compliant.
Who Should Stay Vigilant?
Medicare and Medicaid Providers
These providers work with federal programs tied to the FCA. Anyone billing them could end up under DOJ scrutiny.
Practices Relying on AI and Automation
From using AI chatbots during patient check-ins to programs recommending CPT codes—if you rely on it, you must evaluate it .
Clinics Bought by Investment Firms
Ownership changes can introduce pushy billing strategies. Clinics owned by private equity groups should assess compliance systems right away.
Many Vendors and Heavy Billing Operations
Involving more parties in your revenue process increases risk. This includes external billing teams referral networks, and tools for tele-health communication.
Steps to Ensure Compliance for Providers
Acting is the only way to adapt to changing regulations. CBS Medical Billing helps practice follow these simple steps:
- Conduct Regular Internal Audits: We assist in spotting errors frequent denials, or trends that DOJ algorithms may highlight as problematic.
- Examine Your Vendor Agreements: CBS consultants check agreements to detect terms that could trigger AKS scrutiny or conflict with patient-focused care.
- Evaluate Your AI Systems: We make sure your billing or diagnostic tools operate within CMS rules and avoid any ethical or legal conflicts.
- Educate Your Team About FCA Rules: Our training sessions keep administrators informed about important changes to AKS, HIPAA, and CMS regulations so they can safeguard their organization .
- Focus on Clear Documentation: CBS promotes a culture that prioritizes documentation. Every claim you send includes solid detailed records that can handle any review process.
How CBS Medical Billing & Consulting Supports Your Practice
CBS has helped partner practices recover over $200 million dollars in revenues over 15 years. On average, our partners claims are paid out in only 17 days on average, less than half of the industry average. This success has made CBS a reliable leader in medical billing services across the US We’re counted on by medical practices with especially sensitive billing protocols, like our friends in the O&P sector, radiologist, cardiologists, and more.
Here’s how we strengthen your compliance approach, especially with the DOJs 2025 FCA Enforcement in mind:
- Expert Auditing: Our team conducts detailed reviews of billing and claims history. We spot potential issues before the DOJ identifies them.
- Denial Management: Our tools reduce claim denials and respond to rejections. This protects both your revenue and your reputation.
- Executive Guidance: To assist PE-owned practices or clinics with multiple vendors, our executive team provides governance and strategies to reduce risks.
- Training That Works: We teach entire staff teams to grasp compliance covering every step from patient intake to reimbursement.
Conclusion
In 2025 and the foreseeable future, healthcare compliance isn’t a choice, it’s a core necessity. The DOJ’s expanded reach under FCA enforcement makes even small billing mistakes or weak vendor partnerships carry serious legal risks.
The good news is your practice can stay secure and profitable with a solid plan effective training, and a dependable billing partner like CBS Medical Billing & Consulting. This way, you can keep your attention on what counts providing great care to your patients.
If you want to learn more about how you can self-assess or work with a billing company that can audit your medical billing systems, then this blog (linked left) breaks it down.
Worried about keeping up with new enforcement risks? Get in touch with CBS Medical Billing & Consulting now to claim your free compliance consultation and make your billing process your best line of defense.
