By Matthew Macklin, Managing Attorney, Stratagem Law Group. A False Claims Act compliance lesson from DOJ’s January 2026 ophthalmology settlement.
Key takeaways
- In January 2026, DOJ announced that five Florida ophthalmology practices agreed to pay nearly $6 million to resolve False Claims Act allegations tied to trans-cranial Doppler ultrasounds billed to Medicare and Medicaid. The claims were allegations only; there was no determination of liability.
- The False Claims Act is the government’s enforcement engine. Coding and documentation are the fuel.
- Stark and Anti-Kickback problems do not stay in their own lane. A noncompliant financial relationship can make an otherwise appropriate service “false” for FCA purposes.
- Most enforcement stories are about misalignment between clinical, billing, and leadership teams, and misalignment is most likely when something new is introduced.
- Every new procedure, device, or modality deserves compliance vetting that is as rigorous as its clinical vetting. Six steps below.
Innovation moves fast. Reimbursement rules do not. The gap between the two is where False Claims Act compliance breaks down and enforcement cases are born.
When the Department of Justice announced in January 2026 that five ophthalmology practices had agreed to pay nearly $6 million to resolve allegations of false claims submitted to Medicare and Medicaid, it would be easy to file it away as “another billing case.”
However, that would miss the point.
According to DOJ, the practices billed for trans-cranial Doppler ultrasounds (TCDs) through an arrangement with a third-party testing company. The government alleged the tests were medically unnecessary, were premised on diagnoses the patients did not actually have, and resulted from violations of the Anti-Kickback Statute and the Stark Law, including payments to the testing company tied to the volume or value of tests ordered. The matter originated as a whistleblower lawsuit under the FCA’s qui tam provision.
To be clear: DOJ press releases typically reflect allegations resolved by settlement, not an adjudicated finding of liability, and this release says exactly that. That posture matters. Nevertheless, so does the compliance lesson.
Why This Settlement Matters
This settlement highlights a pattern we see repeatedly in healthcare enforcement. A practice adds a modality outside its core competency. Clinical operations, documentation habits, and coding choices drift out of alignment. And when they do, the False Claims Act becomes the government’s enforcement tool of choice.
Therefore, healthcare leaders should read announcements like this through a different lens. The question is not, “How do we avoid getting in trouble?” The better question is:
How do we build a compliance workflow that keeps our clinical reality, our documentation, and our billing in the same lane, especially when adopting new procedures, devices, or treatment modalities, or expanding into unfamiliar markets?
The False Claims Act Is the Enforcement Engine. Coding and Documentation Are the Fuel.
The FCA is not a “billing statute.” It is a fraud statute. It allows the government, and whistleblowers through qui tam actions, to pursue treble damages plus per-claim penalties when claims submitted to federal healthcare programs are false or fraudulent.
In practice, many FCA cases are built from familiar building blocks:
- The practice bills a service under a code that does not match what actually occurred
- The record does not support medical necessity
- Documentation relies on templates or copy-forward text, or otherwise falls short
- The service misses supervision, ordering, or credentialing requirements
- The service connects, directly or indirectly, to a financial relationship that violates Stark or the Anti-Kickback Statute (AKS)
The government does not need to prove a “perfect crime.” It needs to establish that the claims were not payable under applicable rules, and that the provider acted knowingly, which under the FCA includes deliberate ignorance or reckless disregard, not just actual knowledge.
That is why False Claims Act compliance must treat coding and documentation as risk controls, not administrative afterthoughts.
Stark and AKS: When the “Why” Behind the Claim Makes It False
A persistent misconception is that Stark and AKS live in a separate compliance silo, disconnected from FCA exposure.
In reality, they often function as tainting statutes in enforcement theories. Stark is a strict-liability framework governing physician referrals for designated health services to entities with which the physician has a financial relationship. AKS is a criminal statute prohibiting remuneration intended to induce or reward referrals. If a financial relationship violates either one, the claims resulting from those referrals may be alleged to be non-payable, and therefore “false” for FCA purposes.
In fact, the ophthalmology settlement is a textbook example. The government’s theory was not simply that the tests were unnecessary. It was that the financial arrangement behind the claims tainted them.
The practical takeaway is straightforward:
It is not enough that the service was clinically appropriate. If the referral structure or compensation model is noncompliant, the resulting claims may be non-payable.
This dynamic becomes especially important when a practice introduces a new device or modality that shifts revenue patterns. New revenue streams create new incentives. New incentives invite new scrutiny.
The Real False Claims Act Compliance Problem Is Misalignment
Most enforcement stories are not about a single bad actor twirling a mustache. They are about misalignment:
- The clinical team believes it is delivering appropriate care
- The billing team selects what seems to be the “closest” code
- Leadership assumes vendor training addressed compliance
- Documentation habits lag behind service complexity, innovation, or the well-intentioned push to “do what’s right for the patient”
- The organization assumes that because “everyone bills this way,” or because a commercial payer or a single program allows a billing practice, it must be allowed under federal rules
Misalignment is where False Claims Act compliance erodes and FCA exposure grows.
And misalignment is most likely when something new is introduced.
New Procedures and Devices Require More Than Clinical Vetting
Healthcare organizations are generally strong on clinical vetting:
- Is it safe?
- Does it work?
- Will it fall within scope?
- Do we have the appropriate competencies and training?
In contrast, where organizations often fall short is compliance vetting. It is thinner, more informal, and too often assumption-driven.
Every new procedure, device, or modality should be treated as both a clinical initiative and a reimbursement and regulatory project.
What Robust Compliance Vetting Should Include: Six Steps
1) Define What Is Actually Happening, Step by Step
Before selecting a CPT, HCPCS, CDT, or any other code, write the workflow in plain English.
Who does what, when, and where? Under whose supervision? Which equipment does the team use? Where are the decision points? What data does the service generate? And how does the patient experience it?
If you cannot describe the service operationally, you cannot code it defensibly.
2) Map the Workflow to Regulatory Definitions, Not Marketing Language
For example, vendors describe products in benefit language. Regulators define services in precise, technical terms, many of which are terms of art. Drilling into the definitions in the applicable guidance or regulation is essential.
Your role is to reconcile the two.
Ask:
- Does the service meet the definition embedded in the code descriptor?
- Are the required elements present (physician work, interpretation, supervision level, time thresholds, site-of-service constraints)?
- Are there payer-specific rules, LCDs, or NCDs that narrow coverage?
3) Confirm That the Code Fits the Service, and the Service Fits the Code
Coding should never be “close enough.”
After all, codes are not labels. They are representations of what occurred.
If the modality is new, or your use of it is new, do not assume the code you have always used still applies.
4) Build Documentation Requirements Into the Workflow
Documentation is not something added after the fact. It is part of the service.
A defensible record should support:
- Medical necessity (why this patient, why now)
- The service performed (what, how, by whom)
- Clinical rationale and decision-making
- Required measurements, interpretations, or findings
- Supervision or ordering elements
- The code-specific language identified during planning
If you do not embed documentation requirements in the workflow, staff will miss them, especially under time pressure.
5) Stress-Test Financial Relationships for Stark and AKS Risk
New modalities frequently involve:
- Per-click equipment leases
- Percentage-based management fees
- “Free” training, staff, or marketing support
- Referral relationships that suddenly become more valuable
These arrangements may be common. They may even be described as “industry standard.” That does not make them compliant.
Healthcare’s scale and innovation potential have drawn entrants from industries unfamiliar with these rules. They can misread the requirements, or simply assume the rules will bend to keep pace with the latest idea or technology. They will not.
A structured review should evaluate:
- Compensation methodology (fair market value and commercial reasonableness)
- Referral implications
- Any remuneration tied to volume or value
- Documentation of a legitimate business purpose
When AKS is implicated, remember the statute’s core prohibition: remuneration intended to induce or reward referrals for items or services reimbursable by federal healthcare programs.
6) Train, Audit, and Adjust Early
The first 90 days of a new service line are critical.
Above all, that is when habits form.
During that window:
- Train clinicians and billing staff together so workflow and coding align. Be clear and direct, but leave room for an interactive conversation that surfaces confusion early.
- Conduct pre-bill reviews on sample claims
- Audit documentation against payer requirements
- Correct drift immediately
In short, early correction is far less expensive than late defense.
False Claims Act Compliance Is an Operational Discipline
The strongest compliance programs do not live in policy binders. They live in operations, and they are journeys, not destinations:
- Clear definitions of what services are, and are not
- Repeatable workflows that generate compliant documentation
- Coding decisions grounded in objective criteria that map cleanly to requirements
- Financial relationships reviewed before they become normalized
- Audits that detect drift before a whistleblower does
That is how you protect patients, clinicians, and the organization.
Closing Thought
DOJ announcements are not just cautionary tales. They are the clearest roadmaps available. They show where the government believes the gap exists between what was billed and what was actually done.
If your organization is adopting new partnerships, models, services, procedures, devices, or modalities, make compliance part of the implementation plan from day one. Vet the clinical case, but also vet the reimbursement logic, the documentation architecture, and the Stark and AKS implications.
Ultimately, innovation is gold.
But innovation without alignment is more expensive than gold.
If you have questions about False Claims Act compliance, building a compliance review process for a new service line, or stress-testing an existing one, our healthcare compliance practice can help you get to a safe yes.
Frequently Asked Questions
What did the DOJ ophthalmology settlement actually involve?
According to the DOJ’s January 15, 2026 announcement, five Florida ophthalmology practices agreed to pay a combined total of nearly $6 million to resolve allegations that they submitted false claims to Medicare and Medicaid for trans-cranial Doppler ultrasounds. The government alleged the tests were medically unnecessary, were premised on diagnoses patients did not have, and resulted from Anti-Kickback Statute and Stark Law violations. The claims resolved were allegations only, and there was no determination of liability.
How can a clinically appropriate service still be a “false claim”?
Under common FCA enforcement theories, a claim can be alleged to be false if it results from a financial relationship that violates the Stark Law or the Anti-Kickback Statute, even if the service itself was medically appropriate. The referral structure and compensation model matter as much as the clinical decision.
Why are new procedures and devices a particular compliance risk?
New modalities are where misalignment is most likely. Clinical teams, billing teams, and leadership may each make reasonable assumptions that do not line up with the applicable code descriptors, coverage rules, or documentation requirements. New revenue streams also create new financial incentives, which invite new scrutiny.
What should compliance vetting for a new service line include?
At minimum: a plain-English description of the workflow, a mapping of that workflow to regulatory definitions and code descriptors, confirmation that the code fits the service, documentation requirements built into the workflow, a Stark and AKS review of any financial relationships, and early training, pre-bill review, and auditing during the first 90 days.
How Stratagem Law Group can help
Stratagem Law Group advises Washington healthcare providers and practices on False Claims Act exposure, Anti-Kickback Statute and Stark Law compliance, billing and documentation audits, and self-disclosure, and represents them when the government or a payer comes calling. If your practice has identified a billing problem or received a civil investigative demand, subpoena, or audit notice, contact us. We serve clients across Washington and nationwide for select federal cases, in person and virtually. Matthew Macklin is admitted to the Washington State Bar and to the U.S. District Courts for the Western and Eastern Districts of Washington.
This article is provided by Matthew Macklin and Stratagem Law Group for general informational and commentary purposes only. It is not legal advice, does not address any specific facts or circumstances, and does not create an attorney-client relationship between the reader and Stratagem Law Group or any of its attorneys. Laws, regulations, and enforcement priorities change. Readers should consult qualified counsel regarding their specific situation before acting on any information contained here.
Sources
- U.S. Department of Justice, Office of Public Affairs, “Five Ophthalmology Practices Agree to Pay Nearly $6M to Resolve Allegations of Fraudulent Claims to Medicare and Medicaid for Cranial Ultrasounds” (Jan. 15, 2026): https://www.justice.gov/opa/pr/five-ophthalmology-practices-agree-pay-nearly-6m-resolve-allegations-fraudulent-claims
- HHS Office of Inspector General, Enforcement Action summary (Jan. 15, 2026): https://oig.hhs.gov/fraud/enforcement/five-ophthalmology-practices-agree-to-pay-nearly-6m-to-resolve-allegations-of-fraudulent-claims-to-medicare-and-medicaid-for-cranial-ultrasounds/
- U.S. Department of Justice, Civil Division, Fraud Section, “The False Claims Act”: https://www.justice.gov/civil/false-claims-act
- HHS Office of Inspector General, “Fraud & Abuse Laws” (overview of the FCA, Anti-Kickback Statute, and Stark Law): https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/
- False Claims Act, 31 U.S.C. §§ 3729–3733: https://www.law.cornell.edu/uscode/text/31/3729
- Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b): https://www.law.cornell.edu/uscode/text/42/1320a-7b
- Physician Self-Referral Law (Stark Law), 42 U.S.C. § 1395nn: https://www.law.cornell.edu/uscode/text/42/1395nn
