FCA Defenses, Investigations, Regulatory August 12, 2026

First Healthcare Company Avoids Criminal Charges Under DOJ’s New Self-Disclosure Policy

By Brett Barnett, David Pivnick and Kelby Roth

On July 29, 2026, the Department of Justice (“DOJ”) announced that it declined to bring criminal charges against Campus Eye Management Holdings LLC and its subsidiary, Campus Eye Management LLC (collectively “Campus Eye”), a New Jersey-based management services organization. Campus Eye is the first healthcare company to avoid criminal prosecution under the DOJ’s new corporate enforcement policy.

The declination was issued by the DOJ’s National Fraud Enforcement Division. It resolved a criminal investigation into Campus Eye’s role providing billing and administrative services to an optometry practice and ambulatory surgery center (“ASC”). The investigation centered on healthcare fraud, illegal kickbacks, and conspiracy.

At the same time, the DOJ unveiled a seven-count indictment against E. Bruce DiDonato, the founder of the optometry practice and ASC. DiDonato is accused of running a years-long scheme to bill Medicare and private insurers for unnecessary diagnostic eye tests and to pay illegal kickbacks to referring surgeons. According to the DOJ, the scheme ran from at least 2015 through March 2023 and generated approximately $3.4 million in allegedly fraudulent Medicare claims, about $1 million of which Medicare actually paid.

CMS Guidance July 22, 2026

CMS Proposes Provider Enrollment Changes to Strengthen Program Integrity

By Amber McGraw Walsh, Varsha Gadani, Brett Barnett and Timothy Fry

On July 6, 2026, the Centers for Medicare & Medicaid Services (CMS) published its Calendar Year 2027 Home Health Prospective Payment System Proposed Rule (the “Proposed Rule”) in the Federal Register, which includes several provider enrollment changes that would be applicable to all provider and supplier types. In its efforts to strengthen program integrity, CMS has proposed changes to the grounds for, and consequences of, provider enrollment denials and revocations.

Key proposed provider enrollment changes are described below. Comments to the Proposed Rule are due by 5pm ET on August 31, 2026.

Regulatory July 14, 2026

DoW Suspends CMMC Phase II Requirements – Launches 60-Day Review

By Edwin O. Childs, Andrew Konia, Abram J. Pafford, Jack White, Jason M. Vespoli, Léa Dickinson, Sophie Marsh and John Sullivan

On July 13, 2026, the Department of War (DoW) announced the immediate suspension of all Cybersecurity Maturity Model Certification (CMMC) Phase II requirements, which had originally been scheduled to take effect Nov. 10, 2026, including the transition to mandatory third-party assessments by CMMC Third-Party Assessment Organizations for contractors handling Controlled Unclassified Information. The DoW simultaneously established a CMMC Reform Task Force charged with delivering a comprehensive report within 60 days recommending “realistic, scalable security measures” for the Defense Industrial Base.

The suspension aligns with Secretary of War Pete Hegseth’s Acquisition Transformation System directives and the broader “Arsenal of Freedom” initiative. Critically, the action does not relieve contractors of their underlying obligations to protect federal data, which includes the current DFARS 252.204-7012 (Safeguarding Covered Defense Information and Cyber Incident Reporting) and the NIST SP 800-171 Rev. 2 security controls upon which the CMMC Phase II requirements are based.

Read on to learn more about the announcement and what government contractors need to know to maintain compliance.

Regulatory June 23, 2026

OIG Clears Pathway for Free Supplemental Cancer Screening Report

By Timothy Fry, Kayla McCann Marty and Brenna M. Molinare

On May 15, 2026, the Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services issued Advisory Opinion No. 26-11 (the “Opinion”), a favorable opinion for a proposed arrangement that involved providing patients a free supplemental cancer screening report (the “Proposed Arrangement”). The Opinion provides guidance for healthcare companies navigating the intersection of innovative diagnostic offerings and federal fraud and abuse laws.

FCA Defenses, FCA Litigation, Regulatory June 16, 2026

AI-Assisted Billing Could Create FCA Pitfalls: How Healthcare Companies Can Get Ahead of Risk

By Garen S. Marshall, Justin Givens, Mindy Sauter, Brett Barnett, Rhea Shahane and Katherine Richardson

Across the healthcare industry, providers are increasingly relying on AI-assisted billing tools to automate medical coding, prior authorization workflows, and the submission of claims to Medicare, Medicaid and other federal payors. The efficiency gains can be substantial, as can the heightened False Claims Act (FCA) exposure these systems can create. As AI continues to develop and becomes more widely integrated into healthcare billing, relators and prosecutors are likely to explore new avenues for evaluating, and litigating, how these tools are deployed, monitored and overseen.

Like every billing system, AI-assisted billing tools can make mistakes. However, AI-assisted systems can scale those mistakes across thousands of claims, and the records those systems generate may make it easier for the government or relators to argue that a provider’s submission of those claims violated the FCA.

Read on to learn what healthcare companies should know when deploying AI-assisted billing, and best practices for getting ahead of FCA risk.

Regulatory June 8, 2026

How Federally Funded Organizations Should Prepare for OMB Proposed Overhaul of Grants Oversight, DEI Bans, Easier Terminations

By John S. Moran, Sarah Wake, Edwin O. Childs, Jack White, Jason M. Vespoli, John Sullivan and Sophie Marsh

As part of the Trump administration’s efforts to implement a broad range of executive orders targeting diversity programs and other policy priorities in federal grantmaking, OMB published a proposed rule on May 29, 2026, that would substantially revise the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (2 C.F.R. part 200). Organizations that receive federal funds should start considering a host of actions to prepare for these changes if implemented, including determining whether any current programs and policies that exhibit DEI characteristics should continue and, if so, documenting their business rationale and legal basis. Organizations will also be required to ensure that they, subrecipients, and downstream contractors update and maintain policies that follow the new requirements, especially as agencies may have broader powers to terminate funding deemed no longer to advance “the national interest.” Finally, organizations should consider submitting public comments to alert the government of provisions that would benefit from more clarity or may cause undue burdens.

Read on to learn more about the background and implementation of these policies.

FCA Litigation, Settlements May 28, 2026

Canadian Steel Companies and Owner to Pay $19M to Settle False Claims Act Allegations Relating to Evaded Customs Duties

By Patrick Rowan, Alex J. Brackett, John Padgett, Edwin O. Childs, Brett Barnett, Michael J. Podberesky, Abram J. Pafford, Jack White, Jason M. Vespoli, Sophie Marsh and John Sullivan

On May 20, 2026, the DOJ announced a settlement under the False Claims Act (FCA) with two Canada-based steel companies, Farjess Inc. and Royal Canadian Steel Inc., and their part-owner and president, Feroz Jessani. They agreed to pay $19 million to resolve allegations that they knowingly and improperly misrepresented the country of origin and failed to pay duties owed on flat-rolled steel manufactured in Europe and Asia. The settlement underscores the government’s continued and aggressive use of the FCA to pursue Trump administration policy priorities, including the active implementation of tariffs and customs duties, and reinforces the importance of accurate country-of-origin declarations when importing foreign materials and products.

Read on to learn more about the settlement and its implications for companies engaged in importing goods into the United States.

DOJ May 7, 2026

DOJ’s New West Coast Strike Force Puts Health Care Providers on Notice

By Justin Givens, Mindy Sauter and Rhea Shahane

The DOJ’s National Fraud Enforcement Division announced on April 30, 2026, the formation of the West Coast Health Care Fraud Strike Force, a multi-district enforcement initiative spanning Arizona, Nevada and the Northern District of California. Announced by Assistant Attorney General Colin McDonald, the new Strike Force signals a significant escalation of federal healthcare fraud enforcement in the broader West Coast region and warrants close attention from healthcare providers, technology companies and other industry participants operating in the area.

Read on to learn more about the Strike Force and what industry participants should do to prepare.

OIG, Regulatory May 6, 2026

HHS Inspector General Reminder: Kickback Liability Turns on Intent, Not Market Value or Stark Law Compliance

By Timothy Fry and Kristen H. Chang

The U.S. Department of Health and Human Services Office of Inspector General (OIG) updated its FAQs on Fraud and Abuse Authorities to add a new answer on fair market value (FMV) in FAQ 17 and revise the answer on how the physician self-referral law (Stark Law) overlaps with the federal Anti-Kickback Statute (AKS) in FAQ 4. The takeaway from FAQ 4 and FAQ 17 is clear: An arrangement can violate the AKS even if the compensation is FMV or the arrangement fits within a Stark Law exception.

This update is not new law, but it is a strong reminder that AKS liability turns on intent, not on FMV or Stark Law compliance alone.

Regulatory April 14, 2026

GSA AI Procurement Rules Would Introduce New Disclosure and Use-Rights Requirements for Federal Contractors

By Jason M. Vespoli, Edwin O. Childs, Andrew Konia, Abram J. Pafford, John Sullivan and Sophie Marsh

The General Services Administration Federal Acquisition Service has released draft contract terms and conditions related to AI-related procurements through a new proposed GSAR clause 552.239-7001, “Basic Safeguarding of Artificial Intelligence Systems” (February 2026), that would impose material new requirements on contractors and service providers supplying AI capabilities to the federal government. If adopted, the clause would be inserted into all solicitations and contracts for AI capabilities and would govern data rights, disclosure obligations, security protocols and performance standards for AI systems used in federal operations. Federal contractors, technology vendors, and their in-house operations and counsel teams should closely review the proposed terms, as they represent one of the most comprehensive efforts to date to regulate the procurement and use of AI systems across the federal enterprise.

The proposed clause would significantly alter the landscape for companies providing AI capabilities to the federal government. Read on to learn more about the proposed rule and its implications.

The FCA Insider

Insights and updates on False Claims Act Litigation