DOJ JUST DROPPED $5.7 BILLION IN HEALTHCARE FRAUD SETTLEMENTS. STILL THINK COMPLIANCE IS OPTIONAL?

The feds had a banner year—and they'd love to thank the whistleblowers making bank while they rat you out.

So the Department of Justice released their annual "look how much money we clawed back" numbers last week, and chevra, it's a doozy. Healthcare fraud settlements under the False Claims Act hit $5.7 billion in fiscal year 2025. That's not a typo. That's more than triple what they collected in 2024 ($1.7 billion), and it's the highest single-year haul in the history of the FCA.

For context: healthcare settlements alone drove $6.8 billion in total DOJ recoveries across all industries. Meaning healthcare represented roughly 84% of all False Claims Act money. We're not just the biggest target. We're basically the only target that matters.

The Whistleblower Economy Is Booming

Here's what should keep SNF operators up at night: a record 1,297 whistleblower cases were filed last year. That's up from 980 in 2024, which was itself a record. The trend line is basically vertical.

Why the spike? Because whistleblowers got paid—$262 million in healthcare cases alone. Nothing motivates a disgruntled former employee quite like knowing they can collect 15-30% of whatever the feds recover. That billing clerk you let go? The DON who left on bad terms? The therapy contractor who saw things they didn't like? They've all seen the headlines, and they all know someone who knows a qui tam attorney.

The Biggest Scalps

The headline grabbers were mostly big pharma and managed care—but don't get too comfortable.

CVS's long-term care pharmacy subsidiary Omnicare got hit with a $949 million settlement for allegedly dispensing meds to elderly and disabled people in assisted living facilities without valid prescriptions. 

Teva Pharmaceuticals settled for $450 million over kickback schemes. Medicare Advantage insurer Independent Health paid up to $98 million for allegedly submitting bogus diagnostic codes. Seoul Medical Group and its subsidiary paid $62 million for the same MA upcoding game—specifically fabricating spinal condition diagnoses to juice their risk adjustment payments.

The common thread? Documentation fraud and inflated billing. MA plans gaming risk adjustment. Pharmacy companies playing fast and loose with prescribing requirements. Providers padding their numbers and thinking nobody would notice.

Why SNF Operators Should Pay Attention

Look, I know what you're thinking: "We're not CVS. We're not a national MA plan. This doesn't apply to me."

Maybe. But here's what the DOJ specifically said they're expanding enforcement on: managed care, prescription drugs, and medically unnecessary care.

Sound familiar? MA penetration in your facilities. Therapy minutes under PDPM. Wound care billing. Hospice referral patterns. The feds are specifically looking at the areas where SNFs live and breathe.

And remember—these settlements often involve conduct from over a decade ago. Cases take years to work through the system. The fraudulent behavior someone reported in 2018 becomes the nine-figure settlement in 2025. Which means the compliance culture you're building (or not building) right now determines whether you're reading about someone else's settlement in 2035... or writing a very large check.

The Bottom Line

The False Claims Act is basically designed to turn your own employees into bounty hunters. Triple damages plus inflation-adjusted penalties, with a cut going to whoever raised their hand first. Every Medicare claim is a potential liability. Every disgruntled ex-staffer is a potential plaintiff.

Is this fair? Probably not—the FCA was written during the Civil War to catch contractors selling sawdust to the Union Army, and the standards of what constitutes "fraud" have gotten... creative. But fair doesn't matter when you're on the wrong end of a qui tam lawsuit.

The smart play: assume someone is always watching, document everything, and make sure your compliance officer has actual authority—not just a title. Because $5.7 billion didn't come from nowhere. It came from people who thought nobody was paying attention.

They were wrong.