OIG & DOJ Doubling Down on Health Care Fraud 

The Office of Inspector General (OIG) announced a work plan being initiated for ‘bad actor’ pharmacies (previously identified by CMS or Part D Plan Sponsors) that continue to bill and receive payment for Part D drugs. OIG has concerns that existing CMS enforcement tools, such as revocation, preclusion, and payment suspension, may not effectively deter fraudulent pharmacies from billing Part D plans. The review aims to assess whether pharmacies identified as bad actors continue to bill and receive Part D payments and to identify opportunities for CMS and Part D plan sponsors to strengthen fraud detection and prevention efforts.

Not long after the OIG’s announcement, the U.S. Department of Justice (DOJ) released a report revealing a record-setting $6.8 billion in False Claims Act recoveries in fiscal year 2025. This is the highest annual recovery in the statute’s history, reflecting the intensified enforcement efforts for fighting fraud against the federal government. Health care fraud continues to yield the most recovery in these efforts.

Prescription drugs remained a major focal point, with allegations leading to a nearly $1 billion judgment against a pharmacy. Pharmaceutical manufacturers also faced significant scrutiny, resulting in more than $660 million in settlements tied to alleged copay kickbacks and speaker programs. Additional takeaways from the report include:

  • 1,297 qui tam lawsuits filed by whistleblowers (32% increase from fiscal year 2024 to 2025)
  • 401 investigations opened by the government, 183 involving the health care industry
  • $5.7 billion resulted from health care matters
  • $4.5 billion of the $5.7 billion was recovered through qui tam cases (nearly 79%)
  • Roughly half ($2.27 billion) was recovered in whistleblower health care cases where the government declined to intervene

Notably, self-disclosure and cooperation resulted in several settlements reflecting credits (resulting in reduced payments) for parties who self-reported misconduct, assisted in investigations, and/or implemented remedial measures. The DOJ emphasized its commitment to incentivizing good behavior.

PAAS Tips:

Lindsay Doebert, CPhT
Latest posts by Lindsay Doebert, CPhT (see all)