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The short answer for behavioral health operators
If you run a behavioral health platform, use Q1 and Q2 of 2026 to fix medical necessity documentation, UR file integrity, lab and toxicology billing logic, and pre-acquisition compliance diligence before the DOJ’s new National Fraud Enforcement Division (NFED) benchmarks your billing against your peers. That is the entire assignment. Everything below is how to execute it.
Acting Attorney General Todd Blanche formally established the NFED on April 7, 2026, with a stated core mission to “zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars.” The April 7 memo requires each U.S. Attorney’s office to designate an experienced prosecutor detailed-in-place to the NFED within 21 days, and immediately vests operational control of the Criminal Division’s Tax Section, Health Care Fraud Unit, and Market, Government, and Consumer Fraud Unit with newly confirmed Assistant Attorney General Colin McDonald.
This is not a rebrand. Blanche also announced a National Fraud Detection Center that will use data analytics to identify potential fraud across taxpayer-funded programs. Acting AG Blanche stated the DOJ currently has over 8,000 fraud matters underway, and framed the detailee program as “an additional 93 prosecutors in every district across the country devoted to the mission of combating fraud.”
Translation for SUD residential operators in Florida, IOP networks in Texas, and tele-MAT platforms licensed across multiple states: your billing patterns are being benchmarked against peers before anyone at CMS picks up the phone.
Why behavioral health sits in the crosshairs
Behavioral health is a repeat target, not a new one. In the 2025 National Health Care Fraud Takedown, DOJ charged 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, across 50 federal districts and 12 State Attorneys General’s Offices, tied to over $14.6 billion in intended loss. The government seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets.
Defendant count up. Alleged loss up sharply from prior years. The trajectory is not subtle.
In that same Takedown, prosecutors charged 49 defendants in connection with over $1.17 billion in allegedly fraudulent claims to Medicare from telemedicine and genetic testing schemes. If your tele-MAT platform runs across Tennessee or Arizona and your average encounter time would not survive a chart pull, that is the surveyor focus.
DOJ is not guessing. The Health Care Fraud Unit’s Data Analytics Team, established in 2018, now joins forces with data analysts from HHS-OIG, FBI, and other partners. The NFED layers a new National Fraud Detection Center on top of that infrastructure. Companies operating in health care should expect that the NFED’s cross-agency coordination infrastructure and planned Detection Center are designed to make fraud enforcement faster, more systematic, and harder to anticipate than in the past.
What federal investigators actually look at
I have worked 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 the same ASAM level 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.
Qui tam matters more than ever. DOJ reported that FCA settlements and judgments exceeded $6.8 billion in the fiscal year ending Sept. 30, 2025, the highest single-year total in the statute’s history, with over $5.7 billion tied to health care and 1,297 qui tam lawsuits filed, breaking the prior record of 980 set in 2024. Deputy Attorney General Todd Blanche put the posture directly: the FCA remains “one of the government’s most powerful weapons against fraud.”
A former clinical director in Tennessee with screenshots, or a disgruntled biller in Arizona, can trigger a five-year investigation. Your clinical leaders must make medical necessity defensible at the chart level, not the policy level. Your UR team must produce real determinations using ASAM Criteria 4th Edition dimensional scoring that a surveyor and a prosecutor can both follow. Your UM nurses cannot rubber-stamp admissions because census is soft.
The quarterly review behavioral health CEOs should run right now
If you lead a behavioral health platform as CEO or compliance lead, here is what I would put on the agenda before quarter close. 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 4th Edition. PHP is an outpatient level of care; if your PHP charts read as if they were residential, you have a coding problem and a regulatory problem.
- UM and UR file reconstruction. For any given admission, can your team produce 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 fastest way to land on an HHS-OIG referral list. Have your billing lead review your standing orders.
- Telehealth prescribing audit. If your tele-MAT platform operates across state lines (say, licensed in 14 states with prescribers in Florida and Georgia), 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 SIU patterns get shared with state Medicaid Fraud Control Units. 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 NFED expansion changes the diligence calculus. Successor liability under the FCA is real, and DOJ enforces it. If you close on a Texas SUD platform in Q2 and DOJ opens an investigation in Q4 covering pre-close conduct, your indemnity cap will not make you whole when CMS suspends payments to the NPI you just bought.
CMS is already doing upstream work. As part of the 2025 Takedown, CMS announced it successfully prevented over $4 billion from being paid in response to false and fraudulent claims and suspended or revoked the billing privileges of 205 providers in the months leading up to the Takedown.
At Atlantic Health Strategies, my team runs mock surveys, billing pattern analysis against peer benchmarks, and clinical documentation audits before close. On a recent $40M behavioral health transaction, that work surfaced a $1.2M overpayment exposure the seller had not disclosed. The deal still closed. The price moved.
The October 4, 2023 DOJ M&A Safe Harbor Policy gives acquirers a presumption of declination if they voluntarily self-disclose misconduct within six months of closing, cooperate, and fully remediate within one year, regardless of whether the misconduct was discovered pre- or post-acquisition. That clock only helps you if your diligence team finds the problem. If your last three acquisitions had compliance diligence run by the same firm that ran financial QofE, you have a structural gap.
AHS builds compliance programs for behavioral health operators in 20+ states, including pre-acquisition diligence for PE sponsors. We do not work in California or New York, and we do not provide ABA or autism services. We respond to subpoenas. We rebuild UR departments after consent decrees. The DOJ funding is a multi-year signal. Operators who use Q1 and Q2 to clean up documentation, UM, and billing logic are the ones who will not be writing checks to the government in 2027.
Frequently asked questions
What is the DOJ National Fraud Enforcement Division, and when did it launch?
Acting Attorney General Todd Blanche formally established the NFED on April 7, 2026 as a stand-alone DOJ litigating division whose stated mission is to “zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars.” The April 7 memo placed the Criminal Division’s Tax Section, Health Care Fraud Unit, and Market, Government, and Consumer Fraud Unit under the operational control of AAG Colin McDonald, and requires each U.S. Attorney’s office to designate an experienced prosecutor detailed-in-place to the NFED within 21 days. Blanche also announced a National Fraud Detection Center that will use data analytics to identify potential fraud across taxpayer-funded programs.
How much did DOJ recover from False Claims Act enforcement in FY 2025?
DOJ reported more than $6.8 billion in FCA settlements and judgments in the fiscal year ending September 30, 2025, the highest single-year total in the statute’s history, with over $5.7 billion tied to health care. Whistleblowers filed 1,297 qui tam lawsuits in FY 2025, breaking the prior record of 980 set in FY 2024. Deputy Attorney General Todd Blanche called the FCA “one of the government’s most powerful weapons against fraud.”
How large was the 2025 National Health Care Fraud Takedown?
The 2025 Takedown charged 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, across 50 federal districts and 12 State Attorneys General’s Offices, in connection with over $14.6 billion in intended loss. The government seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets. CMS separately announced it prevented over $4 billion from being paid on false and fraudulent claims and suspended or revoked the billing privileges of 205 providers in the months leading up to the Takedown.
How does the DOJ M&A Safe Harbor Policy affect behavioral health acquisitions?
Under the October 4, 2023 M&A Safe Harbor Policy, acquiring companies that voluntarily self-disclose criminal misconduct discovered at an acquired entity within six months of closing, cooperate with DOJ, and fully remediate within one year of closing receive a presumption of declination of prosecution. The six-month clock runs from the closing date whether the misconduct was discovered pre- or post-acquisition, which puts a premium on compliance diligence that is scoped and staffed independently of financial quality-of-earnings work.
References
- U.S. Department of Justice, “False Claims Act Settlements and Judgments Exceed $6.8B in Fiscal Year 2025” (Jan. 16, 2026)
- U.S. Department of Justice, “National Health Care Fraud Takedown Results in 324 Defendants Charged in Connection with Over $14.6 Billion in Alleged Fraud” (June 30, 2025)
- Holland & Knight, “DOJ Establishes National Fraud Enforcement Division” (April 2026)
- Crowell & Moring, “DOJ Establishes National Fraud Enforcement Division” (April 9, 2026)
- Epstein Becker Green, “DOJ Creates National Fraud Enforcement Division: What It Means for Fraud Enforcement in America” (April 9, 2026)
- Skadden, “DOJ Announces Safe Harbor Policy for Voluntary Self-Disclosures Related to Mergers & Acquisitions” (October 2023)
- HHS-OIG, 2025 National Health Care Fraud Takedown announcement