There’s no question the second Trump administration is prioritizing the elimination of fraud, waste, and abuse in federal healthcare programs. In addition to pursuing legislative and regulatory changes, the administration intends to fight fraud through more aggressive enforcement activities. Consider the following:
- During his first Cabinet meeting on February 26, President Trump emphasized that “we are going to look for fraud” in federal healthcare programs. Later that day, Speaker Mike Johnson added, “The White House has made a commitment. The president said over and over and over, ‘We’re not going to touch Social Security, Medicare or Medicaid.’ We’ve made the same commitment. Now that said, what we are going to do is go into those programs and carve out the fraud, waste and abuse, and find efficiencies.”
- In March, the Centers for Medicare & Medicaid Services (CMS) launched the Fraud Detection Operation Center (FDOC) pilot (also known as the Fraud War Room) to leverage CMS’ current fraud prevention system that uses artificial intelligence and machine learning models to flag potentially fraudulent behavior by providers. In its first month, the FDOC suspended payment to 50 providers due to suspected fraud and implemented pre-payment reviews on 40 providers.
- At an industry conference in late April, CMS Deputy Administrator and Chief Operating Officer Kim Brandt warned that the agency will take a more “aggressive posture” toward recovering Medicare and Medicaid overpayments. CMS wants to stop improper payments by moving “from pay and chase to prevent and detect.”
- Also in late April, the Department of Health and Human Services (HHS) announced that CMS and the Department of Government Efficiency (DOGE) “are working on a number of program integrity rules, process improvements, and audit tools that have the potential to save over $40 billion per year.”
By way of comparison, HHS-OIG reported $7 billion in healthcare fraud and abuse recoveries in 2024, with the Department of Justice adding about $2 billion in healthcare False Claims Act settlements. Thus, the federal government would need to more than quadruple its enforcement efforts to meet the stated goal of $40 billion.
- In support of the agency’s FY2026 budget request to Congress, the HHS Acting Inspector General highlighted that “[t]he return on the investment in our work is $11 in expected recoveries and receivables to the Government for every $1 invested in OIG.” While the Trump administration proposes to cut HHS’ total budget by 25% for FY 2026, funding for the OIG would remain the same as the current year.
- On May 12, the Department of Justice’s (DOJ) Criminal Division released a major policy memorandum outlining its enforcement priorities for the upcoming year. Unsurprisingly, the No. 1 priority for the division was investigating and prosecuting white-collar crimes related to waste, fraud, and abuse—and particularly healthcare fraud.
- Also on May 12, the DOJ announced a revised Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) to provide clearer incentives for self-disclosure of corporate misconduct by offering a more direct path to declinations and reduced penalties. Having created a clearer path to declination, it is likely the DOJ will aggressively prosecute provider organizations that fail to disclose identified potential criminal violations. While the revised CEP focuses on criminal enforcement, civil False Claims Act prosecutors typically follow the spirit of the Criminal Division’s self-disclosure policies.
So Now What? Super-Charge Your Compliance Program
As legendary artist Joan Baez famously said, “Action is the antidote of despair.” Rather than simply worrying whether your organization will end up in the fraud enforcement crosshairs, now is the time to super-charge your compliance program.
Start with the tone at the top, i.e., a demonstrable commitment by your organization’s governance and senior leadership to full participation in compliance-related activities. Federal enforcement agencies have been unequivocal in their statements regarding boards’ fiduciary responsibility to oversee compliance program operations; the criteria they use to decide whether to investigate and prosecute an organization include the adequacy of such oversight.
Next, assess your program. Leadership’s commitment to and oversight of compliance efforts should include support for a full-scale compliance program effectiveness assessment involving an independent evaluation of your program’s ability to prevent, identify, and address the risk of illegal or improper actions. Such assessment goes beyond a review of policies and procedures and meeting minutes; it critically examines how well the program is implemented in practice and its overall impact within the organization.
A program assessment starts with process measures focusing on the well-known seven elements of an effective compliance program: written policies and procedures, oversight and leadership, training and education, effective communication, monitoring and auditing, enforcement, and a system for responding to detected offenses.
This critical review of program infrastructure is not a check-the-box exercise. For example, a meaningful assessment requires more than simply identifying the individual designated as the compliance officer and those listed as compliance committee members. Instead, it will assess these individuals’ qualifications for, commitment to, and effectiveness in these roles to identify opportunities for improvement.
In healthcare, outcome measures are the gold standard for evaluating quality of care. Measuring compliance program outcomes also is critical. Such an assessment, however, involves more than inquiring whether the organization has been subject to government enforcement actions. Instead, it requires targeted, confidential conversations with people in key positions to determine the lived experience within the organization:
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Is compliance a priority or an afterthought?
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Does the compliance team feel supported by leadership?
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Is there fear of retaliation?
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Is good behavior rewarded? Are there consequences for those who behave inappropriately?
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Does the organization walk the walk or just talk the talk?
With the threat of increasing enforcement activities, it is time to reinforce the ramparts by completing a thorough and objective compliance program effectiveness assessment and developing and executing on a corrective action plan. PYA consultants have the experience and expertise to provide an objective evaluation of your program and chart a clear path forward.
