The Trump administration’s aggressive push against healthcare fraud took another significant step forward as the U.S. Department of Justice’s new National Fraud Enforcement Division announced substantial developments and an expansion of its Health Care Fraud Section dedicated to Medicaid tracking nationwide. For providers in the Carolinas and beyond, the announcement signals that the federal government's focus on allegations of Medicaid abuse is accelerating rapidly and offers a preview of what they can expect next: more data-driven investigations, heightened scrutiny of fast-growing benefit programs, and an increased risk of parallel criminal and civil enforcement.

In January, the DOJ added a new, ninth division to the agency, the National Fraud Enforcement Division, to consolidate and intensify its efforts to identify and combat allegations of government program fraud. The division’s Health Care Fraud Section now operates nine Strike Force Programs. These programs are joint operations that use the resources, intelligence, and personnel of several agencies at once, which allows the government to systematically tackle high-priority issues. The programs can be found in states such as California, Florida, New York, and Texas, and have recently expanded to include Minnesota.

As a result, over 6,200 people have been charged with allegedly engaging in healthcare fraud. Due to what the DOJ characterizes as a significant increase in Medicaid fraud nationally, the agency has also designated additional funding and resources to support the creation of 15 new trial attorney positions. In collaboration with the Strike Force Programs, attorneys in these positions will focus on investigating and prosecuting Medicaid fraud across the country.

In late May, the DOJ announced another significant development in its healthcare fraud efforts. The Minnesota Health Care Fraud Takedown led to charges against 15 defendants, comprised of Medicaid providers and childcare center owners, who allegedly engaged in more than $90 million worth of Medicaid fraud. Some of the most notable cases include:

• Autism Services Fraud: Two defendants are facing charges in a $46.6 million scheme targeting Minnesota's Early Intensive Developmental and Behavioral Intervention (EIDBI) program, which funds therapies for children on the autism spectrum. The indictment alleges kickbacks to parents, medically unnecessary diagnoses, and billing for therapy that never occurred.
   
• Integrated Community Supports (ICS) Fraud: One defendant was charged in a $1.4 million case involving fabricated billing under Minnesota's ICS program, which funds in-home support for individuals who would otherwise need institutional care. According to the DOJ, one beneficiary was found dead a day after the provider billed for services the deceased never received.
   
• Individualized Home Supports (IHS) Fraud: Two defendants are facing a $22 million indictment alleging they bought more than 20 properties, hid their ownership from the state, and used the housing as a means of acquiring beneficiary information to support fabricated billing practices. Federal program rules prohibit IHS providers from holding financial interests in beneficiary housing. The proceeds the two defendants received allegedly went toward additional real estate, vehicles, and jewelry.
   
• Housing Stabilization Services (HSS) Fraud: Eight defendants were charged in connection with a $15.7 million scheme targeting Minnesota's HSS program, which was created to help disabled, elderly, and other at-risk residents find and keep housing. Minnesota shut the program down at the end of October 2025 because of how widespread the fraud had allegedly become.
   
• Childcare Fraud: Two defendants were charged in Minnesota for allegedly defrauding childcare subsidy programs, one involving about $425,000 in state funds and another involving $4.6 million in federal funds tied to false reimbursement claims.

Several themes described above likely foreshadow what Carolinas-based providers can expect to encounter.

• The DOJ is openly signaling that what recently occurred in Minnesota is what the DOJ intends to replicate across the country.
   
• The DOJ is leaning heavily on data analytics. The Health Care Fraud Section's Data Fusion Center was credited with identifying many of the cases announced, a reminder that in addition to whistleblower tips, the government’s attention and actions are being shaped by anomalies identified in claims data.
   
• Prosecutors are looking for suspicious patterns in new and rapidly growing benefit programs. For example, the Minnesota programs that ultimately were targeted for fraud had experienced extraordinary annual growth. IHS grew from $100 million in 2018 to more than $700 million in 2025; ICS from $4.2 million in 2021 to more than $183 million in 2025; HSS from a projected $2.6 million annually to over $104 million in 2024 before being shut down entirely.

Healthcare fraud enforcement at this scale rarely occurs in isolation. Criminal indictments are routinely accompanied by parallel civil False Claims Act actions and other administrative efforts. The FCA, which authorizes treble damages and per-claim civil penalties that can quickly run into millions of dollars, continues to be the federal government's most powerful financial enforcement tool. Medicaid providers should expect that the resources the DOJ is now investing in criminal Medicaid prosecution will likely result in a wave of civil actions, including qui tam cases filed by whistleblowers.

For providers, childcare operators, behavioral health practices, and any other organizations that participate in Medicaid, or other federally funded benefit programs, the takeaway is straightforward: the federal government is investing real resources in identifying and pursuing Medicaid fraud across the country. Organizations operating in these regulated environments should evaluate their compliance programs, billing practices, documentation protocols, and internal reporting mechanisms now and before federal agents arrive with a warrant or a civil investigative demand. The DOJ has made clear that combating fraud in federally funded healthcare and benefit programs is a top priority, and it will use all available criminal, civil, and administrative tools to hold wrongdoers accountable, recover taxpayer funds, and send a clear message that such misconduct will not be tolerated.

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