Every day it seems that another health provider or company is entering into an agreement to resolve health care fraud allegations, or in more egregious cases, being convicted of health care fraud. Here are cases from this past November alone:

• On Nov. 17, 2025, the United States and the State of California announced CVS Pharmacy Inc., paid a total of $18,282,280 in order to resolve allegations that the company violated the Federal False Claims Act and the California False Claims Act. The allegations involved the company knowingly submitting claims for reimbursement for certain prescription medications to the California Medi-Cal program, which were not supported by applicable diagnosis and documentation requirements.^[1]
• On Nov. 18, 2025, the U.S. Department of Justice announced KBWB Operations LLC d/b/a Atrium Health and Senior Living along with its former CEO were sentenced in the U.S. District Court for the Western District of Wisconsin after entering guilty pleas to health care fraud and tax conspiracy related to the operation of skilled nursing facilities, including several in Wisconsin.^[2] The CEO was sentenced to 90 months in prison and ordered to pay $146 million in restitution and $8.4 million in forfeiture. Allegations included that the defendants diverted Medicare funds intended for the operation, management, maintenance and care of the skilled nursing facilities’ residents for personal expenses and other purposes.
• On Nov. 21, 2025, an owner of the Prenatal Care Coordination Company was convicted of 20 federal charges, including health care fraud, for unlawfully using Medicaid recipients’ personal information to submit claims to Medicaid for services that were never provided, and often backdating the claims to months before anyone at the company met or enrolled the recipient in its programs.^[3] The defendant is scheduled to be sentenced on March 17, 2025.

But how does the U.S. Department of Justice (DOJ) become aware of individuals and corporations engaging in nefarious conduct? And how does someone know if they are under a civil or criminal investigation?

Knowingly and Willfully

Under 18 U.S. § 1347(a), whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice (1) to defraud any health care benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control, of any health care benefit program. To violate this section, a person does not need to have actual knowledge of this section or specific intent to commit a violation of this section.^[4] A violation of the Health Care Fraud statute is a crime and is punishable of up to 10 years in prison or fines.^[5]

The False Claims Act statute establishes civil liability for certain acts involving claims and statements made to the federal government. Under 31 U.S.C. § 3729 (a)(1), any person who knowingly presents or causes to be presented, a false or fraudulent claim for payment or approval; or who knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim is liable to the U.S. government for a civil penalty of not less than $5,000 or more than $10,000, plus three times the amount of damages which the government sustains.^[6]

Knowingly under the False Claims Act statute does not require actual knowledge, rather the person only need to act in deliberate ignorance or act in reckless disregard of the truth or falsity of the information.^[7] Furthermore, no proof of specific intent to defraud is required.^[8] Individuals who knowingly make a false claim may also be subject to criminal penalties under 18 U.S.C. § 287.

Tips for Defense Counsel

Upon learning DOJ is conducting an investigation, communication by the health care provider’s legal counsel is important. Understanding DOJ’s investigative tactics also plays a role.

If DOJ has issued a civil investigative demand (CID) for information, initially DOJ does not appear to be pursuing criminal charges (however, this can change). If DOJ issues a subpoena, then most likely it is investigating criminal conduct.

Regardless of the issuance of a CID or a subpoena, the health care provider cannot simply ignore the situation. Engaging early with an experienced health care defense attorney is imperative.

Why the DOJ Initiates an Investigation

The DOJ does not normally randomly investigate health care providers for fraud. Instead, the matters are drawn to their attention in a variety of ways.

Civil legal actions for penalties and damages under the False Claims Act may be brought under a qui tam suit, which allows a “whistleblower” to file complaint in federal court under seal. The DOJ usually initiates an investigation without alerting the target​^[9]

These qui tam cases can be brought by employees or competitors of the health care provider, alleging they are submitting false claims to the government. If the whistleblower’s suit is successful, this private person may be entitled to a percentage of the government’s recovery.^[10] The CVS Pharmacy, Inc., investigation and settlement agreement with the government was the result of a qui tam case. As a part of the settlement agreement, the whistleblower will receive approximately $3.3 million of the recovery proceeds.^[11]

Sometimes audits and investigations by other regulatory agencies may result in a referral to DOJ. For instance, a tax audit may catch the eye of their fraud department. Or the Wisconsin Department of Health Services, or the Centers for Medicare & Medicaid Services (CMS) may do an audit, which triggers additional scrutiny.

The CEO sentenced to prison for his health care fraud and tax conspiracy charges was investigated by multiple agencies, including the IRS and the Wisconsin Medicaid Fraud Control and Elder Abuse Unit (MFCU).^[12] It is not uncommon for a skilled nursing home to undergo a routine audit by Medicaid, only to have red flags surface, leading to a larger investigation and a referral to MFCU, and subsequently DOJ. A routine audit by the IRS can also result in a referral to DOJ.

The PNCC owner convicted of health care fraud in Wisconsin first came to MFCU’s attention supposedly after a 2022 Milwaukee Journal Sentinel investigation that revealed massive fraud in the industry.^[13] The PNCC owner, convicted on Nov. 21, 2025, was the second PNCC owner convicted in 2025, with at least two additional trials scheduled.

And while Medicaid is a state-run program, 65% of its funding in Wisconsin comes from the federal government. As a result, those believed to be financially abusing the Medicaid program may find themselves in federal court.

Conclusion

First and foremost, it is important for any health care provider, facility, and company to understand the rules and regulations that govern Medicare and Medicaid.

Health care attorneys should work with their clients to ensure they have a strong compliance program, which can prevent issues down the road. If billing practices catch the eye of the government, then it is important for experienced legal counsel to provide guidance on DOJ’s investigation, as well as review the health care provider’s own business model.

Both proactive and responsive actions by a health care attorney can make a tremendous difference in how a matter is resolved.

This article was originally published on the State Bar of Wisconsin’s Health Law Blog. Visit the State Bar sections or the Health Law Section webpages to learn more about the benefits of section membership.

Endnotes

[1] "CVS Pharmacy Inc. Pays $18.2 Million to Resolve Alleged False Claims Act Violations," United States Department of Justice, Eastern District of California, Nov. 17, 2025. ↩

[2] "Corporation and Former Chief Executive Officer Sentenced for Health Care Fraud and Tax Conspiracy," United States Department of Justice Office of Public Affairs, Nov. 18, 2025. ↩

[3] “Federal Jury Finds Markita Barnes Guilty of Healthcare Fraud, Aggravated Identity Theft, Providing Unlawful Kickback, Obstruction, and Money Laundering,” United States Department of Justice Eastern District of Wisconsin, Nov. 21, 2025. ↩

[4] 18 U.S.C. § 1347(b). ↩

[5] 18 U.S.C. § 1347(a)(2). ↩

[6] 31 U.S.C. § 3729(A -B), (G). ↩

[7] 31 U.S.C. § 3729(1)(b)(1)(A). ↩

[8] 31 U.S.C. § 3729(1)(b)(1)(B). ↩

[9] Understanding the Basics of Qui Tam Law, Federal Bar Association, Nov. 26, 2024. ↩

[10] Fraud & Abuse Laws, U.S. Department of Health and Human Services Office of Inspector General (last visited Nov. 29, 2025). ↩

[11] “CVS Pharmacy Inc. Pays $18.2 Million to Resolve Alleged False Claims Act Violations.” ↩

[12] “Corporation and Former Chief Executive Officer Sentenced for Health Care Fraud and Tax Conspiracy.” ↩

[13] Mary Spicuzza and Cary Spivak, “Two More Milwaukee Area Prenatal Care Companies Under State Fraud Investigation,” Milwaukee Journal Sentinel, May 22, 2025. ↩