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Home | BakerHostetler

DOJ Expands Health Care Fraud Strike Force to Philadelphia: What Providers, Life Sciences Companies and Investors Should Do Now

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On August 4, 2026, DOJ announced a significant expansion of its Northeast Health Care Fraud Strike Force to Philadelphia, pairing the National Fraud Enforcement Division with the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

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The announcement was made in connection with criminal charges against 19 defendants, including home care company owners, employees, home health aides, and Medicaid recipients, in alleged fraud schemes involving more than $4 million in claims to Medicare and Medicaid.

DOJ described the Strike Force model as a major enforcement tool, citing more than 6,200 defendants prosecuted nationally and more than $45 billion in alleged billings to federal health care programs and private insurers.

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DOJ Brings the Health Care Fraud Strike Force Model to Philadelphia

The Department of Justice (DOJ) has announced a significant expansion of the Northeast Health Care Fraud Strike Force to Philadelphia. The initiative joins DOJ’s National Fraud Enforcement Division with the U.S. Attorney’s Office for the Eastern District of Pennsylvania to expand health care fraud enforcement resources in the region.

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The announcement of the Strike Force’s expansion coincided with federal and state charges alleging that defendants billed for services not provided, submitted claims for impossible or overlapping hours, and sought reimbursement for care allegedly provided while caregivers or recipients were incarcerated, hospitalized, traveling, working other jobs, or otherwise not available.

Although the initial cases focus heavily on home care and Medicaid billing, the initiative is not limited to that sector, and the early prosecutions should not be mistaken for the outer limits of the Strike Force’s enforcement priorities. Health Care Fraud Strike Forces have pursued a wide range of fraud and abuse matters across many provider types, reimbursement models, and segments of the health care industry. DOJ also emphasized corporate accountability and its intent to pursue actors who “hide behind corporations” to conceal fraud. Organizations participating in federal or state health care reimbursement programs – including Medicare, Medicaid and TRICARE – should expect heightened scrutiny.

Why Philadelphia and EDPA Matter

The Eastern District of Pennsylvania is a natural fit for this expansion. DOJ noted that the region is home to “vibrant and cutting-edge health care technology and insurance industries,” and has long been a venue for private lawsuits that can bring alleged health care misconduct to law enforcement’s attention.

More importantly, the expansion brings to the Philadelphia region a proven enforcement model that combines not only additional prosecutors and agents, but integrated prosecutorial support and investigative expertise, including increasingly sophisticated data analytics. Historically, Health Care Fraud Strike Forces have used claims data, prescribing information, tax records, corporate records, communications and whistleblower allegations to identify potential fraud schemes and build investigations from the data outward. As a result, providers and other health care companies should not assume that a subpoena or civil investigative demand represents the government’s first indication of a concern. In many cases, investigators may identify potential issues through their own analysis well before a company becomes aware of any inquiry.

The initiative also reflects increasing coordination among federal and state enforcement authorities. DOJ announced the expansion alongside multiple enforcement partners, including the U.S. Attorney’s Office, the Pennsylvania Attorney General, CMS, HHS-OIG, FBI Philadelphia, DEA Philadelphia, and IRS Criminal Investigation. By pooling resources and data, these agencies can pursue parallel criminal, civil, administrative and licensing theories arising from the same underlying conduct.

For health care companies in the Philadelphia region, the practical consequence is that conduct once treated as a billing dispute, overpayment issue, or contractor problem may now attract greater law enforcement attention, particularly where the government believes the conduct reflects a pattern, involves vulnerable patients, implicates owners or executives, or suggests systemic compliance failures.

The Initiative Fits a Broader DOJ Enforcement Pattern

The Philadelphia expansion follows DOJ’s recent health care fraud declination involving Campus Eye Management Holdings LLC and Campus Eye Management LLC (Campus Eye), a billing and management services company serving optometry practices and ambulatory surgery centers. DOJ declined to prosecute Campus Eye for alleged health care fraud, kickback, bribery and conspiracy violations after the company self-disclosed the misconduct, remediated the wrongdoing, and paid approximately $1 million to victims, while separately charging its founder in connection with alleged unnecessary testing and kickback conduct.

Together, the Campus Eye declination and Health Care Fraud Strike Force expansion highlight DOJ’s dual-track approach: rewarding voluntary self-disclosure and remediation while expanding health care fraud enforcement resources.

Companies that identify and address issues early, preserve evidence, conduct credible internal reviews, and make informed disclosure decisions are often better positioned to mitigate enforcement risk.

The Philadelphia expansion and recent DOJ actions highlight several areas that may warrant heightened compliance attention:

Home health and personal care services, including services allegedly not provided, overlapping claims, impossible hours, and inaccurate time records

Medical necessity and utilization patterns, particularly where services or testing may be viewed as unnecessary or duplicative

Kickbacks, referral arrangements, and sham contracts, including consulting or marketing agreements and compensation tied to reimbursable business

Corporate accountability and owner conduct, including conduct attributed to owners, executives, management companies, and investor-backed platforms

Data anomalies and outlier billing, particularly patterns identifiable through claims analytics

What Companies Should Do Now

Companies operating in the Philadelphia region should reassess key fraud and abuse risks and the effectiveness of their compliance programs. At a minimum, organizations should consider the following steps:

Conduct a targeted billing and claims review, including high-risk billing areas, such as unusually high service hours, overlapping provider schedules, duplicate claims, services billed during travel or hospitalization, and claims involving high-utilization patients or employees.

Reevaluate referral and compensation arrangements for Anti-Kickback Statute and other fraud-related risks. Companies should review medical director agreements, consulting and marketing arrangements, referral-source relationships, and productivity-based compensation structures. DOJ’s recent actions show continued attention to arrangements that may be characterized as disguised remuneration for referrals.

Strengthen compliance reporting channels. Companies should ensure that employees, contractors, clinicians, and billing personnel have accessible reporting channels and that reports are promptly investigated and documented.

Preserve evidence and privilege when red flags arise. When concerns are identified, companies should move quickly to preserve relevant documents, claims data, communications, contracts and audit trails. Internal investigation protocols should support informed decisions regarding remediation, repayment and potential disclosure.

Update disclosure decision-making protocols. The Campus Eye declination demonstrates the benefits of voluntary self-disclosure, full cooperation, timely remediation, and restitution. Companies should have a disciplined process for evaluating whether misconduct is isolated or systemic, whether government payors were affected, and whether disclosure may mitigate enforcement exposure.

Integrate compliance into transactions and growth initiatives. Investors, buyers and management companies should ensure diligence extends beyond licensure and reimbursement issues to include claims practices, referral relationships, compensation structures, referral source review, overpayment history, excluded-party screening, and prior compliance concerns.

Key Takeaways for Companies

DOJ’s expansion of the Northeast Health Care Fraud Strike Force to Philadelphia reflects both increased enforcement resources and a continued emphasis on voluntary self-disclosure, cooperation and remediation. Companies operating in the region should use this moment to pressure-test billing practices, referral relationships, compliance reporting systems, internal investigation protocols, and disclosure decision-making. Organizations that proactively identify and address concerns will be better positioned if DOJ, HHS-OIG, CMS, the Pennsylvania Attorney General, or a whistleblower comes knocking.

BakerHostelter’s White Collar, Investigations and Securities Enforcement and Litigation team comprises seasoned attorneys and former Department of Justice officials, including former unit chiefs, former U.S. Attorneys and lawyers with extensive experience in regulatory investigations, complex litigation and enterprise compliance counseling.

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