Healthcare enforcement in 2025 is defined by focus and coordination. In July 2025, the Department of Justice and the Department of Health and Human Services announced the DOJ-HHS False Claims Act Working Group, a renewed interagency effort now concentrating on Medicare Advantage and Medicaid Advantage programs. While this working group is not entirely new, its revived mandate reflects a sharper emphasis on how these plans and their downstream providers submit risk-adjusted claims, structure referral and compensation arrangements, and manage utilization data that drive federal reimbursements.

Given that Medicare Advantage now covers more than half of all Medicare beneficiaries, this development has immediate implications for physicians, durable medical equipment suppliers, laboratories, and other healthcare businesses operating within or adjacent to these programs.

The government’s enforcement focus centers on three main areas of concern.

First, inflated risk adjustment data continue to be a major issue. Medicare Advantage plans are reimbursed based on the relative acuity of their enrolled populations, meaning the overall illness severity or clinical complexity of the patients they serve. The higher the documented acuity, the higher the patient’s risk score and, in turn, the plan’s reimbursement from Medicare. Federal investigators have identified instances where diagnoses were exaggerated or unsupported by medical records, leading to inflated risk scores and improper payments. Enforcement agencies are now closely examining whether provider documentation accurately reflects each patient’s true clinical condition and whether plans or vendors encouraged coding practices that overstated disease severity.

Second, improper financial relationships continue to attract attention. Arrangements between plans, provider groups, and management services organizations are under scrutiny for possible violations of the Anti-Kickback Statute and the Stark Law. Compensation models tied to utilization or plan profitability, particularly those that reward referral volume, are high-risk. State laws add another layer of complexity. In Florida, the Patient Brokering Act prohibits any form of remuneration for patient referrals unless a statutory exception applies. In New York, fee-splitting and anti-kickback provisions under state law and professional conduct rules restrict licensed professionals from sharing revenue or paying for referrals, and violations can also implicate the state’s corporate practice of medicine restrictions.

Third, delegation and oversight failures are a growing concern. Many Medicare Advantage plans rely on outside vendors for risk coding, chart reviews, and data analytics. While delegation can improve efficiency, regulators have made clear that plans and providers remain responsible for the accuracy of all claims and data submitted to the government. The DOJ-HHS working group is examining whether organizations have exercised proper oversight of these vendors, including whether compliance duties were clearly defined, documented, and monitored. Investigators are focusing on whether vendors were given incentives that encouraged overcoding or unsupported diagnoses and whether plans maintained adequate audit rights and review processes. To mitigate risk, plans and providers should maintain written oversight policies, verify vendor compliance through periodic audits, and document all monitoring activities. Delegating a compliance function does not transfer accountability, and regulators expect clear evidence that organizations are actively supervising their vendors.

Even if an organization is not a Medicare Advantage plan, it is often part of the downstream compliance chain. Physicians, DME suppliers, laboratories, and technology vendors that touch Medicare Advantage claims data may face exposure if documentation, billing, or referral patterns raise compliance concerns. Common areas of risk include unsupported diagnoses used in risk-adjusted submissions, compensation models that vary with referral volume or utilization, telehealth or remote monitoring arrangements with inconsistent documentation, vendor contracts lacking compliance oversight, and marketing or patient steering practices that could be interpreted as inducements.

Healthcare organizations can reduce enforcement exposure by taking several practical steps. Organizations should review all Medicare Advantage-related contracts to confirm compliance with federal and state fraud and abuse laws. Agreements with management companies, billing vendors, and network partners should reflect commercially reasonable terms and avoid any link between payment and referrals or plan revenue. Internal audits should verify that diagnosis coding and medical necessity documentation support all risk-adjusted claims. Providers should also evaluate oversight of third-party vendors that perform coding or chart reviews, confirming their compliance qualifications and maintaining clear audit rights. Compliance programs should be updated to address Medicare Advantage-specific risks, with focused training for billing, clinical, and compliance staff. Finally, organizations should have a defined process for responding to government information requests, ensuring that documentation can be produced quickly and accurately if inquiries arise.

The federal government has made it clear that Medicare Advantage enforcement is a top priority. As enrollment continues to grow and payment methodologies evolve, regulators are focused on ensuring that risk-adjusted reimbursements reflect true clinical realities. Providers, suppliers, and other healthcare businesses that take a proactive approach to compliance will be best positioned to navigate this environment. Routine audits, strong documentation standards, and careful review of financial relationships can prevent small issues from escalating into significant enforcement actions.

The bottom line is that the creation of the DOJ-HHS working group signals a coordinated federal effort to hold both plans and providers accountable for the integrity of Medicare Advantage payments. Organizations that treat compliance as an ongoing process, supported by documentation and internal oversight, will be far better equipped to withstand this heightened enforcement climate.