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On April 7, 2026, Acting U.S. Attorney General Todd Blanche announced the creation of the National Fraud Enforcement Division (“NFED”) in response to the Trump Administration’s Executive Order.[1] According to Mr. Blanche’s Memorandum, the U.S. Department of Justice (“DOJ”) has established the NFED to “zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars.”[2] To accomplish this, the NFED will coordinate with agencies responsible for administering benefit programs; partner with federal, tribal, state, territorial, and local law enforcement; develop systems and processes that identify fraud; and equip prosecutors and law enforcement with state-of-the-art tools.

Notably, the NFED has been granted operational control over the Criminal Division’s Tax Section, the Health Care Fraud Unit, and the Market, Government, and Consumer Fraud Unit. The centralized management of all three Criminal Division units’ resources will likely increase the efficiency and frequency of fraud investigations. The NFED has also required each U.S. Attorney’s Office to designate an experienced prosecutor to be detailed-in-place to the NFED, further supporting investigations and prosecution of fraud throughout the nation.

Additionally, the NFED has coordinated with the Justice Management Division and other agencies to establish a National Fraud Detection Center that uses data analytics to identify potential fraud across taxpayer-funded programs and generate leads for investigators and prosecutors. Although the Criminal Division’s units have already been mining and analyzing data for years, the Detection Center may be more proactive with flagging data for potential fraud investigations.

It is also worth noting that Mr. Blanche’s Memorandum directs the Office of Legal Policy to provide a recommendation to the Depuy Attorney General on whether non-criminal elements of the Department should be brought within the NFED. This means that parallel civil proceedings, such as the False Claims Act, the Stark Law, and the Anti-Kickback Statute, may be under the NFED’s purview.

Healthcare fraud is a key enforcement priority for the NFED. Accordingly, hospitals, clinics, and other healthcare providers that participate in Medicare, Medicaid, and other federally funded programs should take steps to strengthen compliance and reduce regulatory risk.  The creation of the NFED is likely to result in increased scrutiny of billing practices, reimbursement claims, physician compensation arrangements, and documentation supporting medical necessity and services billed to federal programs. Hospitals, clinics, and other healthcare providers receiving federal funding should therefore consider the following:

•      Review and strengthen compliance. Evaluate and update existing policies, procedures, and practices related to federal funding requirements.

•      Audit billing and documentation practices. Conduct internal or external audits focused on federal billing and reporting criteria.

•       Train workforce. Train employees on the False Claim Act requirements, the Stark Law, and other laws imposing non-criminal elements. Ensure that employees understand internal reporting mechanisms for fraudulent claims.

The creation of the NFED represents a meaningful escalation in federal healthcare fraud enforcement. Healthcare providers should treat this as an opportunity to assess and strengthen their compliance programs before, rather than after, becoming the subject of government investigation.

If you have questions regarding the NFED, or if you would like assistance with evaluating your compliance program, please contact a member of Cline Williams’ Healthcare Section.