Anti-Kickback Statute August 13, 2025

Marketing, Misconduct and Healthcare: Ninth Circuit Issues First EKRA Appellate Ruling

On July 11, 2025, in United States v. Schena, the U.S. Court of Appeals for the Ninth Circuit issued the first appellate decision interpreting the Eliminating Kickbacks in Recovery Act (“EKRA”). The decision marks a significant development in EKRA’s enforcement, as it represents the first time a federal appeals court has addressed EKRA’s reach and moved toward some clarity in its application to marketing arrangements within the healthcare industry, particularly in the often-discussed lab context.

Anti-Kickback Statute August 12, 2025

Seventh Circuit Allows Percentage-Based Marketing Relationship

By Timothy Fry, Brett Barnett and Amber McGraw Walsh

On April 14th, 2025, the U.S. Court of Appeals for the Seventh Circuit reversed the Anti-Kickback Statute (AKS) conviction of Mark Sorensen, the owner and operator of a Medicare-registered durable medical equipment distributor in United States v. Sorensen, 134 F.4th 493, 496 (7th Cir. 2025). The lower court had found that Sorensen’s practice of hiring advertising and marketing companies based on a percentage-based fee to sell orthopedic braces to Medicare patients violated the AKS at 42 U.S.C. § 1320a-7b(b)(2)(A). In reversing the district court, the Seventh Circuit followed the Fifth Circuit’s United States v. Marchetti, holding that the central question was whether the defendant intended to “induce ‘referrals,’ which is illegal” or whether he intended to “compensate advertisers, which is permissible.” Finding that there was no evidence of this improper intent, particularly as the marketers were not in a position to influence patients, the Seventh Circuit reversed.

Anti-Kickback Statute August 7, 2025

$18.5 Million DOJ Settlement On Free Housing For Substance Abuse Patients

By Timothy Fry and Brett Barnett

On June 26, the Department of Justice announced an $18,500,000 settlement agreement with NUWAY Alliance (NUWAY), a substance use disorder treatment clinic, arising out of medical necessity and kickback allegations. The complaint, filed first in 2021 by a whistleblower and unsealed last month, alleges that NUWAY and its CEO, David Vennes, engaged in a scheme to induce Medicaid patients to participate in NUWAY’s intensive outpatient treatment.

DOJ, FCA Litigation August 4, 2025

Defense Contractor, Private Equity Firm to Pay $1.75M to Settle FCA Allegations Regarding Cybersecurity Violations

By Todd R. Steggerda, Edwin O. Childs, Michael J. Podberesky, Abram J. Pafford, Brett Barnett, Jack White, Andrew Konia, Jason M. Vespoli and John Sullivan

On July 31, 2025, the U.S. Department of Justice announced a $1.75 million False Claims Act (FCA) settlement with Aero Turbine, a California-based defense contractor, and private equity firm Gallant Capital Partners. The settlement arises out of allegations that Aero Turbine failed to comply with cybersecurity requirements under a U.S. Air Force contract and provided impermissible foreign third-party access to sensitive defense information.

Read on to learn how this settlement highlights an example of the DOJ’s increased scrutiny of cybersecurity requirements under the Cyber Fraud Task Force under the FCA and its focus on pursuing private equity investors and rewarding entities that self-disclose and remediate wrongdoing.

FCA Litigation July 23, 2025

DOJ Targets Remote Patient Monitoring Company in $1.29M FCA Settlement

By Timothy Fry

Remote patient monitoring (“RPM”) continues to see increased growth and evolution. With that industry growth, the government has begun to examine whether certain RPM models may have fraud and abuse concerns when others will not. To that end, on June 26, 2025, the Department of Justice (“DOJ”) announced that Health Wealth Safe, Inc. (“Health Wealth Safe”) and owner, Dr. Subodh Agrawal, paid $1.29 million to settle allegations of submitting false claims to Medicare under the False Claims Act (“FCA”). Health Wealth Safe allegedly failed to refund the government for 2.5 years of claims for improperly provided RPM services in violation of the FCA’s “reverse false claims” provision. Additionally, the United States alleged that Health Wealth Safe paid physician practice groups illegal kickbacks in exchange for patient referrals, and billed Medicare for RPM services that DOJ alleged were not reimbursable.

DOJ July 11, 2025

DOJ and HHS Reestablish False Claims Act Working Group, Delineate Healthcare Enforcement Priorities

By Michael J. Podberesky, Brett Barnett, Timothy Fry and Edwin O. Childs

On July 2, 2025, the U.S. Department of Justice (DOJ) and U.S. Department of Health and Human Services (HHS) announced the reestablishment of the DOJ-HHS False Claims Act Working Group. Originally formed in December 2020 at the tail end of the first Trump Administration, this partnership focuses on advancing enforcement of the False Claims Act (FCA) as a primary tool to combat healthcare fraud. While some may view the announcement as merely formalizing long-existing cooperation between DOJ and HHS, the announcement is still significant in that it signals the Administration’s commitment to investigating and prosecuting individuals and entities that commit healthcare fraud. This reinvigoration of the FCA Working Group aligns with President Trump’s plans to “aggressively” enforce the FCA, as detailed in our earlier February 24, 2025 alert.

OIG, Regulatory July 10, 2025

OIG Approves Multi-MSO Telehealth Arrangement That Meets AKS Safe Harbor

By Brenna M. Molinare, Jennifer Shanley and Timothy Fry

On June 6, 2025, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a favorable advisory opinion concerning a proposed telehealth staffing and services arrangement involving a management services organization (MSO), a physician-owned practice and third-party telehealth platforms. The proposed arrangement involved a situation in which the platforms would not have access to all commercial insurers, therefore the parties would bill the platforms’ patients through the requestor PC’s commercial contracts. The OIG concluded that the proposed arrangement would not generate prohibited remuneration under the federal anti-kickback statute (AKS), and the OIG would not impose administrative sanctions, as the proposed arrangement could meet the personal services and management contracts safe harbor.

The proposed arrangement is one of many ways national parties have sought to innovate with entity structures and relationships to expand telehealth offerings. When new providers seek to offer telehealth services, they can struggle to add commercial insurer plans. Third parties have offered to assist by managing those providers and offering commercial contracting relationships. The OIG’s advisory opinion suggests that such novel relationships can still meet a safe harbor for the AKS and provides an avenue for two or more MSOs to work together in offering telehealth or other healthcare services while still meeting a safe harbor.

Read on to learn more about the OIG’s opinion and what it means for providers that want to expand telehealth.

DOJ May 30, 2025

Healthcare Fraud Enforcement in a Second Trump Administration: Trends, Priorities, and Implications

By Mindy Sauter, Clint Narver, Michael Elliott, Garen S. Marshall, Justin Givens, Michael J. Podberesky and Rhea Shahane

On May 12, 2025, the U.S. Department of Justice’s Criminal Division released a policy memorandum outlining its enforcement priorities for the upcoming year. The top priority for the division will be investigating and prosecuting white collar crimes related to waste, fraud and abuse — particularly healthcare fraud. This emphasis on prosecuting healthcare fraud reflects the administration’s broader goals of eliminating waste in federal programs, such as Medicare, Medicaid and TRICARE, and ensuring that taxpayer dollars are used efficiently and effectively.

Read on to learn more about the DOJ’s enforcement priorities and what proactive measures healthcare companies and providers should consider.

DOJ May 20, 2025

DOJ Announces Initiative to Use False Claims Act to Investigate DEI Practices

By Edwin O. Childs, Farnaz Farkish Thompson, Jack White, Michael J. Podberesky, Brett Barnett, John S. Moran, Steven McCool, John Sullivan, Jason M. Vespoli and McGuireWoods LLP

On May 19, 2025, the U.S. Department of Justice announced its new Civil Rights Fraud Initiative, which aims to use the False Claims Act (FCA) to investigate and pursue claims against entities that tolerate antisemitism, allow men to enter women’s spaces or compete in female athletic competitions, or engage in unlawful diversity, equity and inclusion practices. A central focus of the initiative appears to be pursuing claims against entities that certify compliance with civil rights laws while “knowingly” engaging in what the memorandum calls “racist preferences, mandates, policies, programs, and activities, including thorough [DEI] programs” that provide benefits based on race, ethnicity or national origin. The DOJ encourages private parties to engage as part of this process by filing lawsuits and litigating claims under the FCA as qui tam relators.

Read on to learn more about the initiative and how it could impact federal contractors, educational institutions and other entities that received federal funding.

DOJ April 28, 2025

DOJ Targets Neurofeedback Billing in $15 Million Behavioral Health Fraud Case

By Anna Timmerman and Allyson M. Maur

On March 6, 2025, federal prosecutors charged a Minnesota couple with orchestrating a $15 million healthcare fraud scheme involving overbilling and submission of false claims for neurofeedback and other behavioral health services performed by a network of behavioral health clinics. This newly unsealed federal indictment underscores the Department of Justice’s increasing focus on fraud involving neurofeedback and other emerging behavioral health treatments.

Read on to learn more about the federal indictment and what it portends for behavioral health practices and potential investors.

The FCA Insider

Insights and updates on False Claims Act Litigation