Recent health care enforcement trends and risk areas for physicians and their practices

By Alexandra Volpe, JD, and John Kelly, JD, September 1, 2025

DermWorld covers legal issues in “Legally Speaking.” This month’s authors are health care attorneys with Barnes & Thornburg LLP, in Washington, D.C.

The past year reinforced the government’s unwavering commitment to civil and criminal health care fraud enforcement, with regulatory agencies at the federal and state levels prioritizing efforts to combat fraud, waste, and abuse. As the health care industry faces a lot of changes due to a new administration, trends nonetheless suggest continued government oversight and evolving compliance expectations. As a result, physicians need to stay informed on the areas of enforcement focus and compliance expectations now more than ever.

False Claims Act developments

The False Claims Act (FCA) continues to be the government’s most effective tool in its fight against health care fraud and abuse. On Jan. 15, 2025, the U.S. Department of Justice (DOJ) announced it recovered more than $2.92 billion across 558 settlements and judgments under the FCA for the fiscal year (FY) ending September 30, 2024. This represents an increase of approximately $140 million and 15 additional recoveries compared to FY 2023.

Notably, more than $2.4 billion of all recoveries were the result of cases initiated by whistleblowers (known as “relators”) — an increase of more than $240 million from FY 2023. Government-initiated settlements and judgments totaled $502 million in FY 2024, up from $363 million in the prior fiscal year. Since the FCA’s significant amendments in 1986 (which allowed the government to seek tripled damages and increased incentives for relators to come forward with fraud allegations), total recoveries now exceed $78.3 billion.

Post-COVID-19 landscape

From 2021 to April 2024, DOJ’s COVID-19 Fraud Enforcement Task Force (CFETF) achieved substantial results in its efforts to combat COVID-19-related fraud. During this period, the task force charged more than 3,500 criminal defendants, secured more than 400 civil settlements and judgments, and recovered more than $1.4 billion in fraudulently obtained Coronavirus Aid, Relief, and Economic Security Act (CARES) funds. Many of these recoveries were related to the Paycheck Protection Program (PPP) and the Economic Injury and Disaster Loan (EIDL) Program, while a smaller portion addressed traditional health care fraud, such as fraudulent billing for medically unnecessary services.

In 2024, the U.S. government made a notable shift in its approach to COVID-19-related health care fraud. For the first time since the onset of the pandemic, there was no coordinated national enforcement action specifically targeting health care fraud schemes related to COVID-19. This shift marked a significant change in the enforcement landscape.

While the government continues to pursue fraud enforcement against the PPP, the EIDL Program, and other non-health-care-related recovery initiatives, enforcement actions specifically targeting COVID-19-related health care fraud slowed considerably. In fact, 2024 included only a handful of notable settlements and criminal prosecutions in this area.

The rise of artificial intelligence in health care

The rise of artificial intelligence (AI) in health care introduced both opportunities and challenges from a data privacy and cybersecurity perspective. While AI is revolutionizing diagnostics and improving operational efficiencies, it also raises ethical and security concerns, particularly around the handling of sensitive patient data. Organizations found themselves navigating uncharted territory in 2024, which required the establishment of governance frameworks to address legal, ethical, and security implications tied to AI use.

In a first-of-its-kind settlement, claims of deceptive trade practices were resolved against a vendor of generative AI services that summarized clinical documentation and used predictive modeling to manage utilization and increase revenue. The company claimed that its AI products had a severe error rate of 0.001%, indicating a high level of accuracy. Four major hospitals allegedly provided patient health care data to the company to obtain AI treatment plans and summaries of their conditions. Among other things, the settlement requires the company to include clear and conspicuous disclosures in their marketing and advertising for products and services for the next five years.

Enforcement against individual physicians and practice groups

Enforcement against individual physicians and practice groups accounted for more than $170 million across civil enforcement actions and focused heavily on billing fraud, kickback schemes, and misuse of patient information in 2024. Many civil and criminal cases revealed systematic fraud involving false claims for services not rendered, unnecessary treatments, and improper referrals. Common schemes included upcoding services, falsifying medical records, and submitting claims for unlicensed or unsupervised treatments. Kickback arrangements between physicians and third-party companies remained a persistent issue, with physicians paying “marketers” or telemedicine companies to secure patient referrals. Criminal cases demonstrated the government’s focus on large-scale fraud networks that rely on telemedicine and patient identity theft to bill for unnecessary or non-existent services.

Dermatologists and dermatology practices are not immune to such enforcement actions. In late 2023, a dermatologist and his practice agreed to pay $6.6 million to resolve health care fraud allegations. The doctor and his practice allegedly improperly billed federal health programs — including Medicare and Medicaid — for Mohs micrographic surgeries and other dermatologic services. The government alleged that the practice submitted claims indicating the dermatologist personally performed both the surgical and pathology portions of procedures, when in fact one part was often completed by others, and that the practice habitually circumvented Medicare’s multiple procedure reduction rule.

In September 2023, a dermatology management company agreed to pay $8.9 million to resolve self-reported allegations of Stark Law and Anti-Kickback Statute violations. According to the self-reports, when the company acquired several dermatology practices across the United States, the senior executives proposed raising the purchase price of some acquired practices in exchange for the physicians agreeing to refer patients to the company’s affiliated entities following the acquisitions. Some of the services resulting from the referrals were later billed to Medicare.

In December 2024, a dermatology practice agreed to a settlement focused on improving its compliance with Title III of the American Disabilities Act (ADA) and training employees about disability-based discrimination. The practice also agreed to pay a civil penalty of $15,000. The settlement addressed allegations that a doctor at the practice violated Title III of the ADA by declining to perform a scheduled procedure on a patient with HIV until the end of the day — after all other patients had been seen — or by offering to reschedule the appointment to a day when no other patients would be present.

For a robust analysis of the most notable FCA developments of 2024, please reference Barnes & Thornburg’s 2024 Healthcare Enforcement and Compliance Report.

This article is provided for informational and educational purposes and is not intended to provide legal advice and should not be relied upon as such. Readers should consult with their personal attorneys for legal advice regarding the subject matter of this article.

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