The Department of Justice (DOJ) published a final rule formally establishing the National Fraud Enforcement Division (NFED). The rule transfers certain enforcement responsibilities from DOJ’s Criminal Division to the NFED, including authority over criminal proceedings involving healthcare fraud, health plan fraud and abuse, and schemes involving the distribution and diversion of controlled substances. The rule also empowers the NFED to pursue related civil remedies, including injunctions, restitution, forfeiture, and monetary penalties.
Key Takeaways
- The DOJ has formally established the National Fraud Enforcement Division (NFED), transferring certain enforcement responsibilities involving healthcare fraud, health plan fraud and abuse, and controlled substance distribution and diversion schemes.
- Healthcare is one of the NFED’s principal enforcement priorities, including fraud involving Medicare and Medicaid, telemedicine, home health and hospice services, controlled substance diversion, and deceptive marketing of unsafe healthcare products and services.
- The NFED will expand upon the existing Healthcare Fraud Strike Force model by deploying additional prosecutorial resources, advanced data analytics, and technology to identify schemes and aid in subsequent prosecutions.
- The Eleventh Circuit’s decision in U.S. ex rel. Zafirov v. Florida Medical Associates, LLC preserves the right for private citizens to pursue False Claims Act claims.
The publication of the rule followed an August 2026 memorandum issued by Assistant Attorney General Colin M. McDonald. In the memo, McDonald identified five principal enforcement priorities, with a particular emphasis on healthcare. Specifically, the memo outlined that the NFED will target fraud involving Medicare and Medicaid, telemedicine, home health and hospice services, controlled substance diversion, and deceptive marketing of unsafe healthcare products and services.
The memo further emphasized the NFED’s intention to target schemes involving substantial financial losses, unlawful controlled substance distribution, and associated financial crimes, including money laundering and tax offenses. To accomplish these objectives, the NFED will buildon the existing Healthcare Fraud Strike Force model by deploying additional prosecutorial resources, advanced data analytics, and technology to identify schemes and to aid in subsequent prosecutions.
In addition to the newly published enforcement priorities, a recent decision by the United States Court of Appeals for the Eleventh Circuit indicates that private False Claim Act (FCA) litigation, is unlikely to slow down anytime soon. In U.S. ex rel. Zafirov v. Florida Medical Associates, LLC, the Eleventh Circuit unanimously reversed a district court ruling which held that the FCA’s qui tam provision violated the Appointments Clause in Article II of the Constitution. In its decision, the Eleventh Circuit preserved the right of private citizens to pursue FCA claims.
These developments signal the need for healthcare providers to review and evaluate their existing compliance programs, with particular attention to billing practices, referral arrangements, documentation, and controlled substance prescribing, to identify potential vulnerabilities and mitigate exposure. McCarter’s Healthcare team is monitoring the evolving federal healthcare enforcement landscape. For more information on how these changes may affect your company, please contact the authors of this alert or any member of McCarter’s Healthcare team.