Authors: Janelle Abel, HCMBA, CLCS, Shaunt Mangioglu
The Department of Justice recovered more than $2.9 billion under the False Claims Act (FCA) in fiscal year (FY) 2024. Notably, over 80% of those recoveries originated from whistleblower-initiated suits, reflecting the enduring power of qui tam litigation as a regulatory enforcement tool. Last year marked a record high, with 979 new FCA cases filed by whistleblowers, underscoring the continued scrutiny of billing practices in healthcare.
For healthcare organizations, particularly physician groups, senior living facilities and post-acute care providers, these trends warrant a measured reassessment of billing compliance and the potential role of Billing Errors & Omissions (E&O) insurance in risk financing strategy.
A New Layer of Oversight: DOGE
2025 brings a layer of uncertainty stemming from the establishment of the Department of Government Efficiency (DOGE), a federal task force created by the new administration with a stated goal of recouping $150 billion in fraud, waste and abuse across government programs.
While DOGE does not itself have enforcement authority, it has reportedly begun evaluating CMS payment activity, particularly in Medicare and Medicaid, using AI and data analytics. The extent to which DOGE will influence enforcement remains to be seen, but its coordination with the DOJ and other federal oversight bodies has drawn the attention of legal and compliance professionals.
Organizations may begin to see enforcement signals originating less from patient complaints or whistleblower tips and more from data anomalies flagged in systemic reviews. This shift, coupled with the volume of whistleblower actions already in motion, suggests a changing enforcement posture which could spill over into routine billing operations.
Enforcement Trends Worth Watching
In FY 2024, the healthcare sector accounted for approximately 60% of all FCA recoveries. Settlements and active litigation reflected a broad enforcement approach across:
- Medicare Advantage risk coding (including provider-level cases)
- Telehealth and SNF therapy documentation
- Stark Law and Anti-Kickback Statute violations
- Substandard or medically unnecessary care
A notable example involves a recent settlement exceeding $58 million involving a provider accused of submitting inflated spinal condition diagnoses to increase Medicare Advantage reimbursement. A related radiology group settled separately for its role in allegedly creating reports to support those diagnoses.
The enforcement environment has also seen increased use of AI by relators who now employ data mining and pattern recognition tools to identify outlier billing behavior, suggesting that whistleblower risk is evolving beyond internal reporting.
Proactive Compliance: A Critical First Line of Defense
As billing risk becomes increasingly data-driven, healthcare organizations are reevaluating how well their compliance programs can detect and respond to patterns that may trigger external scrutiny. While most organizations maintain policies on documentation and coding, enforcement trends suggest a need for more active, integrated compliance infrastructure. Recommended practices include:
- Routine internal audits and monitoring of high-risk billing areas such as skilled nursing facility (SNF) therapy, telehealth and Medicare Advantage risk adjustment.
- Timely updates to coding practices and references, including consistent use of the current CPT manual.
- Designated compliance oversight supported by clear internal reporting protocols and responsive corrective action plans.
- Targeted education and training to ensure billing and clinical staff stay aligned on compliance expectations.
- Well-documented communication and escalation pathways to surface potential billing issues before they lead to formal reviews.
Compliance programs that are both preventive and adaptive, particularly those supported by real-time claims analytics and vendor oversight, are better positioned to identify potential risks early and mitigate the financial and reputational costs of external investigations.
Insurance Considerations: Billing E&O as a Response Tool
The financial exposure associated with billing investigations, particularly those tied to FCA allegations, can be substantial. Legal fees, external audits, overpayment disputes and settlements often accumulate well before a case reaches resolution.
Billing Errors & Omissions (E&O) insurance is designed to address these exposures. Unlike General Liability or Malpractice coverage, which frequently excludes billing-related investigations, Billing E&O policies may offer:
- Defense costs for regulatory audits, subpoenas, and FCA investigations
- Coverage for settlements or overpayment demands
- Support for vendor-related billing issues that implicate the insured entity
- Access to specialized counsel and compliance experts
While coverage terms vary, this form of insurance may be especially relevant to:
- Organizations with Medicare Advantage or managed care contracts
- Providers using automated billing or coding technologies
- Entities operating in multi-state regulatory environments
Key Considerations for 2025
In the current environment, it is critical for healthcare organizations to:
- Evaluate the defensibility of billing practices in high-risk areas such as Medicare Advantage and SNF therapy.
- Review current insurance programs to confirm whether billing-related exposures are adequately addressed.
- Monitor DOGE developments for insight into future audit activity or federal enforcement strategy.
As FCA enforcement continues to evolve and oversight becomes increasingly data-driven, organizations should consider whether their current risk financing strategy aligns with the regulatory realities of 2025.
Reach Out to an Advisor
Ensuring compliance in healthcare billing is a complex but essential task. Contact an advisor for guidance on developing or enhancing your compliance program and discover how we can support your organization in maintaining the highest standards of billing integrity and regulatory compliance.