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The Signal: More Prosecutors, Same Targets
The DOJ’s National Fraud Enforcement Division is being resourced at a level we have not seen since the post-pandemic telehealth sweep. The 2024 National Health Care Fraud Enforcement Action already produced charges against 193 defendants and roughly $2.75 billion in alleged false claims. Add the new funding, and the math gets worse for sloppy operators.
Behavioral health is not a hypothetical target. It is a repeat one. SUD treatment, toxicology and confirmation testing, and telehealth prescribing have been named in HHS-OIG work plans and DOJ Strike Force announcements three years running. If you run a residential program in Florida, an IOP network in California, or a tele-MAT platform licensed in 14 states, assume your billing patterns are already being compared against peer benchmarks at CMS and the MFCU in your state.
This is not a legal alert. It is an operator alert. The agencies have the data. The question is whether your documentation, your UR file, and your billing logic tell the same story your EMR does.
What Federal Enforcement Actually Looks At
I have sat through three SIU audits and two federal subpoena responses in the past 18 months. The pattern is consistent. Investigators do not start with intent. They start with patterns. Length of stay clustering at the upper bound of the authorization. Every patient at 3.5 ASAM regardless of presentation. UDS panels billed at the same CPT combination on the same day of the week. Group notes that read like they were cloned, because they were.
DOJ and HHS-OIG are also reading the False Claims Act qui tam filings before they ever knock. A disgruntled biller in Tennessee or a former clinical director in Arizona who kept screenshots can launch a five-year investigation. The new funding means more of those relator complaints get worked instead of shelved.
What does that mean operationally? Medical necessity documentation has to be defensible at the chart level, not the policy level. Your level of care decisions need ASAM dimensional scoring that a surveyor and a prosecutor can both follow. Your UR team needs to be making real determinations, not rubber-stamping admissions because census is soft.
The Quarterly Review CEOs Should Run Right Now
If you are a CEO or compliance lead, here is what I would put on the agenda before the end of the quarter. Not next year. This quarter.
- Medical necessity sampling. Pull 30 charts across your highest-volume CPT and revenue codes. Have a human auditor (not AI) confirm the documentation supports the level of care billed under ASAM criteria.
- UM and UR file reconstruction. Can you produce, for any given admission, the clinical rationale, the concurrent reviews, and the discharge criteria in under 10 minutes? If not, that is the gap.
- Lab and toxicology billing review. Confirmation testing without documented clinical justification is the single fastest way to land on an OIG referral list. Review your standing orders.
- Telehealth prescribing audit. If you operate across state lines, confirm DEA registration, state-by-state controlled substance rules, and the post-Ryan Haight flexibilities still in effect.
- Timely filing and clean claim rates. Payer-side patterns get shared with SIUs. A 22% denial rate is a flag, not just a finance problem.
None of this is exotic. It is the operational backbone. The operators getting indicted are not the ones who did this work and got it wrong. They are the ones who never did the work.
M&A Diligence: The Buyer's Problem Becomes the Buyer's Liability
For PE-backed platforms and strategic acquirers, the enforcement expansion changes the diligence calculus. Successor liability under the FCA is real. If you close on a Texas SUD platform in Q2 and DOJ opens an investigation in Q4 covering pre-close conduct, the indemnity cap in your purchase agreement is not going to make you whole when CMS suspends payments to the NPI you just bought.
Pre-acquisition compliance diligence has to go beyond a policy review and a sample of credentialing files. We run mock surveys, billing pattern analysis against peer benchmarks, and clinical documentation audits before close. On a recent $40M transaction, that work surfaced a $1.2M overpayment exposure the seller had not disclosed. The deal still closed. The price moved.
If your last three acquisitions had compliance diligence run by the same firm that ran financial QofE, you have a structural gap. The skill sets are different. The findings live in different files.
What AHS Is Doing About It, and Where to Find Us
Atlantic Health Strategies builds compliance programs and runs audit-readiness work for behavioral health operators in 20+ states. That includes mock surveys, UR rebuilds, billing compliance audits, 42 CFR Part 2 program reviews, and pre-acquisition diligence for PE sponsors. We are operators who have sat in your seat. We have responded to the subpoena. We have rebuilt the UR department after the consent decree.
If you want to talk about any of this in person, Allison, Benjamin, Leah and I will be at NAATP National in Amelia Island, Florida, May 4-6. AHS is sponsoring the Women in Leadership Luncheon. Find us there. Bring the hard questions, the ones you do not want to put in an email.
The DOJ funding is a multi-year signal. The operators who treat Q1 and Q2 as their window to clean up documentation, UM, and billing logic are the ones who will not be writing checks to the government in 2027.