Civil Law

Two announcements in the span of nine days reflect a significant expansion of federal healthcare fraud enforcement resources. On August 4, DOJ announced expansion of its Northeast Health Care Fraud Strike Force to Philadelphia, marking the fourth geographic expansion in less than a year. Nine days later, on August 13, Assistant Attorney General Colin M. McDonald issued a priorities memorandum for the National Fraud Enforcement Division (the Fraud Division), a new DOJ division announced by President Trump in January 2026 and formally established in April 2026, that places healthcare fraud second on a list of five enforcement priorities and describes plans to enhance the Strike Force model with additional resources, data analytics, and technology.

Together, these developments indicate that DOJ intends to devote substantial resources to healthcare fraud enforcement in the coming years.

The Philadelphia Expansion: Strike Forces Go National

The August 4 announcement brought the Strike Force model to Philadelphia, creating a partnership between the Fraud Division’s Health Care Fraud Section and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. The expansion follows recent deployments to Massachusetts (September 2025); the West Coast, including Arizona, Nevada, and Northern California (2026); and Minnesota (2026).

The Philadelphia announcement included criminal charges against 19 defendants accused of defrauding Medicaid of over $ 4 million through home health aide schemes. According to court documents, the alleged schemes involved billing for services while defendants were incarcerated, traveling internationally, working other jobs, or claiming physically impossible hours, including over 1,100 instances in which one defendant allegedly billed for more than 24 hours of care in a single day.

Since its inception in 2007, the Strike Force program has prosecuted over 6,200 defendants who collectively billed federal healthcare programs and private insurers more than $ 45 billion. A third-party analysis found that the program generates a return on investment of $ 106.76 per dollar spent by year 10, with over $ 4.5 billion in projected savings.

The Strike Force model relies on multi-agency coordination, bringing together specialized federal prosecutors with FBI, HHS Office of Inspector General, DEA, FDA, IRS Criminal Investigation, and state agency investigators under a unified prosecutorial strategy.

The Priorities Memo: Healthcare Fraud as Core Mission

The August 13 memorandum from Assistant Attorney General McDonald provides the strategic framework for the newly created National Fraud Enforcement Division. The Division was created in 2026 to consolidate and expand DOJ’s fraud enforcement efforts across federal programs, with McDonald sworn in as the first Assistant Attorney General for the Division on April 1, 2026. The memo identifies five enforcement priorities, with healthcare fraud listed second—immediately after “Public Trust and Financial Integrity” and ahead of tax enforcement, trade fraud, and corporate misconduct.

The healthcare fraud section of the memo emphasizes several enforcement focuses:

• Home Health and Hospice Schemes: The memo specifically identifies “home health aide and hospice scams” that “directly impact vulnerable elderly Americans and erode patient care”—precisely the type of fraud charged in the Philadelphia cases.
• Telemedicine Fraud: The memo lists telemedicine programs as a priority target, reflecting the growth of virtual care and associated fraud risks.
• Controlled Substance Diversion: The memo highlights “illegal prescribing and dispensing of opioids and other controlled substances” that “results in addiction and devastates American families and communities.”
• Corporate Accountability: The memo emphasizes prosecuting “companies and individuals that deceptively market unsafe products and services” and “profiteers [who] put corporate profits above patient care.”
• Data-Driven Enforcement: The memo commits to using “cutting-edge data analysis to target exploitative health care fraud schemes,” consistent with the Philadelphia cases’ use of data analytics to identify impossible billing patterns.

The memo also commits to “supercharging the historically successful Health Care Fraud Strike Force model with greater resources, data analytics support, and best-in-class technology” to “prosecute the most significant cases involving health care in the United States.”

Resource Commitment and Division Growth

The priorities memo describes the scope of DOJ’s planned investment in fraud enforcement. According to the memo, the Fraud Division will increase headcount to approximately 500 attorneys and staff by August 24, 2026, just 11 days after the memo’s issuance. The Division will continue to grow rapidly for the next two years.

The memo describes building “the most sophisticated, innovative, and data-driven white-collar law enforcement component in the world,” supported by asset recovery attorneys and investigators, appellate counsel, privilege review teams, corporate enforcement experts, automated litigation support, and “a cross-disciplinary team of experts in data science.”

The organizational structure attached to the memo shows a dedicated Health Care Fraud Section as one of multiple specialized litigating sections, alongside sections focused on public trust and financial integrity, tax enforcement, global trade and commerce, and corporate enforcement. Supporting these litigating sections are specialized units for appellate work, asset recovery, strategic analysis, litigation support, and a “National Fraud Detection Center.”

The memo notes that the Government Accountability Office estimates the federal government loses between $ 233 billion and $ 521 billion annually to fraud, with healthcare representing a substantial portion. National healthcare expenditures are expected to grow from over $ 3 trillion annually to over $ 7 trillion, with estimates that 3-10% is lost to fraud.

Implications for Healthcare Providers and Companies

The combination of Strike Force geographic expansion and formal prioritization of healthcare fraud in the Division’s mission has several practical implications for healthcare providers and companies:

Dedicated Enforcement Teams in Major Markets: The deployment of Strike Forces to Boston, Philadelphia, the West Coast, and Minnesota—with commitments to continued expansion—means that major healthcare markets now have dedicated federal enforcement teams with specialized expertise and multi-agency coordination.

Data Analytics as Standard Tool: Both the Philadelphia cases and the priorities memo emphasize sophisticated data analytics. Providers should expect that billing patterns inconsistent with physical possibility (overlapping services, impossible hours, services during documented absences) will be systematically identified and investigated.

Home Health and Hospice Under Scrutiny: The explicit identification of home health and hospice fraud in the priorities memo, combined with the Philadelphia charges and recent administrative suspensions affecting 1,400 home health and hospice providers nationwide, indicates sustained enforcement focus on this sector.

Corporate Accountability Emphasis: The priorities memo’s focus on corporate misconduct and companies that “put corporate profits above patient care” suggests that enforcement will extend beyond individual providers to corporate entities and executives.

Telemedicine as Continued Priority: The specific identification of telemedicine programs as an enforcement target reflects DOJ’s attention to fraud risks in virtual care delivery models that expanded during and after the COVID-19 pandemic.

Documented Return on Investment: The documented ROI of $ 106.76 per dollar spent, combined with GAO estimates of hundreds of billions in annual fraud losses, provides a basis for continued budgetary support for the Fraud Division.

Key Takeaways

• DOJ announced Strike Force expansion to Philadelphia on August 4 and issued a priorities memo on August 13 placing healthcare fraud second among five enforcement priorities.
• The Fraud Division will grow to approximately 500 attorneys and staff by August 24, 2026, with continued rapid growth planned for two years, supported by data science experts, automated litigation support, and cutting-edge technology.
• Healthcare fraud enforcement will focus on home health and hospice schemes, telemedicine fraud, controlled substance diversion, and corporate misconduct, using “cutting-edge data analysis” to identify fraud patterns.
• Strike Forces now operate in Boston, Philadelphia, the West Coast, and Minnesota, creating permanent federal enforcement infrastructure in major healthcare markets with multi-agency coordination.
• The priorities memo commits to “supercharging” the Strike Force model with greater resources, data analytics support, and technology to prosecute the most significant healthcare fraud cases.
• Data analytics is a central enforcement tool, used to detect billing anomalies such as overlapping services, impossible hours, and services during documented absences, particularly in home health, hospice, and telemedicine sectors.
• DOJ’s Corporate Enforcement Policy and the priorities memo’s emphasis on corporate misconduct may be relevant considerations for corporate healthcare entities evaluating their compliance programs and voluntary disclosure practices.

If you have questions about DOJ healthcare fraud enforcement, Strike Force investigations, or compliance strategies in light of these developments, please contact Jody Rudman, Jonathan Porter, Kip Randall, or your Husch Blackwell attorney.

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