By: Aaron E. Kacer and Steven T. Lawrence
On March 30, 2026, the U.S. Treasury and the Financial Crimes Enforcement Network (FinCEN) announced a new coordinated policy aimed at fraud schemes that intend to exploit Medicare, Medicaid, and other federal and state healthcare benefit programs.[1] The new policy includes (i) FinCEN advisory describing common healthcare fraud schemes and related money‑laundering patterns (the “FinCEN Advisory”),[2] and (ii) a proposed rule to implement a federal whistleblower incentive and protection program (the “Proposed Whistleblower Rule”).[3] Together, this new policy signals heightened scrutiny on tracking the flow of healthcare dollars through the financial system and how fraud risks are detected and reported in the healthcare environment.
While the FinCEN Advisory is primarily directed at banks and other financial institutions, it is likely that the practical impact will be felt beyond the financial sector, particularly by physician practices, health systems, providers, and healthcare‑adjacent businesses that receive reimbursements from governmental programs and/or payors.
FinCEN Advisory
The FinCEN Advisory focuses on fraud schemes targeting governmental healthcare benefit programs, including Medicare and Medicaid, and highlights recurring patterns observed by federal law enforcement, including:
- The use of straw owners and shell companies to register healthcare providers or suppliers;
- Stolen or misused provider and beneficiary identifiers;
- Kickbacks or bribes paid to complicit professionals, marketers, or recruiters; and
- Improper billing practices such as phantom billing, upcoding, unbundling, double billing, and billing for medically unnecessary services.
While these concepts are familiar to those in the healthcare space, the FinCEN Advisory reframes them through an anti‑money laundering lens, emphasizing how fraudulently obtained reimbursements rapidly move through bank accounts, wires, digital assets, and other financial channels.
The FinCEN Advisory specifically urges financial institutions to enhance monitoring and to file Suspicious Activity Reports if it knows, suspects, or has reason to suspect a transaction conducted or attempted by, at, or through the financial institution (i) involves funds derived from illegal activity; (ii) is intended or conducted to disguise funds derived from illegal activity; (iii) is designed to evade regulations promulgated under the Bank Secrecy Act; (iv) lacks a business or apparent lawful purpose; or (v) involves the use of the financial institution to facilitate criminal activity. As a result, healthcare providers and operators should expect increased diligence from banks and payment providers, including more detailed inquiries regarding ownership structure, changes of control, referral relationships, marketing arrangements, and reimbursement flows.
The FinCEN Advisory also highlights certain healthcare sectors as frequent points of exposure in fraud schemes, including durable medical equipment suppliers, home health and hospice providers, pharmacies, telemedicine platforms, laboratories, and adult day care services.
Proposed Whistleblower Rule
Alongside the FinCEN Advisory, FinCEN released the Proposed Whistleblower Rule to establish a formal whistleblower incentive and protection framework. The proposal outlines procedures for:
- Submitting tips related to covered violations;
- Determining whistleblower eligibility;
- Applying for and adjudicating awards; and
- Protecting whistleblowers from retaliation.
Under the proposal, eligible whistleblowers could receive 10% to 30% of collected monetary penalties if their information leads to a successful enforcement action, and although grounded in federal AML statutes, the proposal is not limited to traditional financial institutions – meaning individuals internal and external to healthcare practices and organizations have expanded opportunities to report potential healthcare fraud schemes.
From a healthcare perspective, this proposal underscores the importance of effective internal compliance and reporting mechanisms. Where employees or contractors perceive that concerns are ignored or inadequately addressed, external reporting incentives become more compelling. Even healthcare organizations with mature compliance programs may experience increased reporting activity as awareness of the program grows.
Importantly, the notice and comment period under the Proposed Whistleblower Rule ends on June 1, 2026, meaning that further developments are expected as the rulemaking process unfolds.
Practical Implications for Healthcare Providers
For physician practices, health systems, providers, and healthcare‑adjacent operators, these developments do not create new billing laws or fraud standards. Rather, these new developments increase the likelihood that existing compliance risks will surface through enhanced third‑party scrutiny. Healthcare providers and operators should anticipate:
- Increased scrutiny from banks and payment processors, particularly in connection with unusual reimbursement patterns, rapid growth, or ownership changes;
- Heightened sensitivity around referral, marketing, and recruiting arrangements, especially where compensation may be tied (directly or indirectly) to volume or value;
- Greater focus on credential integrity, including safeguarding provider identifiers and monitoring for unauthorized use; and
- Elevated expectations around internal reporting processes and non‑retaliation protections in light of expanded whistleblower incentives.
For many healthcare providers and operators, the focus is less on immediate operational changes and more on ensuring that existing compliance, governance, and documentation practices are sufficient to withstand increased external review.
If you would like assistance with, or have questions regarding, how these developments may impact you or your practice’s compliance or risk posture, please contact Aaron Kacer or Steve Lawrence.
[1] https://home.treasury.gov/news/press-releases/sb0426;
https://www.fincen.gov/news/news-releases/fincen-proposes-rule-pay-whistleblowers
[2] https://www.fincen.gov/system/files/2026-03/FinCEN-Advisory-Health-Care-Fraud.pdf
[3] https://www.federalregister.gov/documents/2026/04/01/2026-06271/whistleblower-incentives-and-protections
