HHS Adds Former U.S. Attorney for Fraud Efforts

The appointment of former U.S. Attorney Scott Brady to the U.S. Department of Health and Human Services (HHS) Office of General Counsel signals a sharp escalation in the agency’s fraud enforcement strategy. Joining General Counsel Mike Stuart, himself a former federal prosecutor, Brady enters HHS amid what leadership calls the most aggressive anti-fraud campaign in the agency’s history. The move reflects a strategic posture shift: from administrative oversight to criminal accountability.

This realignment has clear implications for health systems, vendors, and grant recipients across the federal healthcare ecosystem. It raises the stakes on compliance risk, particularly within Medicaid, Medicare, opioid-related prescribing, and COVID-era relief programs. But it also invites broader questions about the role of federal healthcare agencies in criminal prosecution, and the long-term impact of prosecutorial culture on health innovation, contracting, and clinical autonomy.

From Oversight to Prosecution

Historically, anti-fraud efforts at HHS have leaned heavily on audit functions, administrative recoupments, and civil penalties coordinated through the Office of Inspector General (OIG). Criminal referrals, when made, often involved coordination with the Department of Justice (DOJ), but HHS rarely acted as a prosecutorial force in its own right.

The integration of two former U.S. Attorneys directly into the General Counsel’s office represents a recalibration of that dynamic. It is a move that centralizes criminal legal expertise within the agency and signals intent to pursue fraud not only as a compliance lapse, but as a felony offense deserving of federal indictment.

This prosecutorial lens will be especially relevant in domains where fraud intersects with public health risk. During his prior tenure, Brady led the country in opioid-related criminal prosecutions, including high-profile cases against prescribers and pharmacies. His record suggests that fraud investigations under this initiative will not be limited to financial misconduct but will extend to prescribing behavior, medical necessity decisions, and potentially even research and grant fraud involving academic institutions and health systems.

Enforcement Momentum and Precedent

This approach is not without precedent. The DOJ’s Health Care Fraud Unit, as part of its Medicare Fraud Strike Force, has prosecuted complex schemes involving telehealth fraud, durable medical equipment kickbacks, and fraudulent diagnostic testing labs. But these efforts have generally operated with separation between prosecutorial functions and regulatory agencies.

By embedding prosecution-oriented leadership within HHS itself, the agency is effectively collapsing the distance between enforcement oversight and legal action. The result is likely to be a more aggressive stance on referrals, quicker escalation of investigations, and potentially a redefinition of what constitutes prosecutable behavior in federally funded healthcare programs.

Recent analysis from Fierce Healthcare reported that federal agencies recovered over $2.7 billion from healthcare fraud enforcement in 2023 alone, with increased collaboration across HHS, DOJ, and state-level partners. If the current leadership fulfills its stated intent, that figure may rise substantially, but so too will the operational and legal complexity for those under scrutiny.

Compliance Pressure on Health Systems and Vendors

For hospital systems, physician groups, and digital health vendors, the presence of prosecutorial leadership at HHS raises the bar on compliance readiness. Organizations that contract with federal payers or receive HHS grants should anticipate a sharper focus on billing patterns, clinical documentation integrity, opioid prescribing thresholds, and telehealth utilization.

Of particular interest is the potential reopening of pandemic-related claims. Brady previously led the nation’s first COVID Fraud Task Force, which became a national model for detecting and prosecuting misuse of pandemic relief funds. That task force focused not only on fraudulent vendors but also on false attestations in provider relief fund applications, PPP loan fraud by medical groups, and misuse of telehealth expansion authorities.

A 2024 OIG report flagged persistent vulnerabilities in COVID-related program oversight, including lax identity verification, unclear audit trails, and insufficient follow-up on flagged claims. These vulnerabilities are now likely targets for the newly empowered legal apparatus at HHS.

Health systems that viewed prior pandemic enforcement as a retrospective compliance task may now face renewed exposure if their actions intersect with patterns the new task force deems criminal.

Implications for Innovation and Policy Friction

There is, however, a policy friction embedded in this shift. Aggressive criminal enforcement can serve as a deterrent, but it also risks chilling legitimate innovation, especially in fields such as telehealth, value-based care experimentation, and digital therapeutics. When line-drawing between fraud and novel care delivery becomes ambiguous, the threat of prosecution may cause risk-averse behaviors that hinder care access or delay implementation of promising models.

Brady and Stuart bring a prosecutorial mindset built for clarity in culpability. But healthcare delivery is rarely linear. Clinical decisions made under conditions of uncertainty, evolving evidence, or patient nonadherence can complicate fraud determinations. If enforcement lacks nuance, providers may overcorrect, eschewing marginal cases that are clinically appropriate but legally ambiguous.

This tension is not new, but it becomes more acute when enforcement authority is both investigative and prosecutorial. The distinction between waste and willful fraud, already murky in administrative contexts, may become even less predictable under a legal strategy shaped by federal courtroom logic.

Strategic Considerations for Executives

For healthcare executives, the message is clear: traditional compliance protocols may no longer suffice. Risk management must now integrate legal exposure analysis, with an emphasis on internal controls, peer benchmarking, and proactive documentation strategies.

Board-level governance teams should ensure that internal audit, legal, and compliance officers are fully briefed on the scope and direction of HHS’s evolving enforcement strategy. This includes reviewing documentation standards, grant management policies, opioid prescribing safeguards, and subcontractor oversight procedures.

For organizations receiving federal dollars, especially those operating in high-risk areas such as behavioral health, substance use disorder treatment, and rural health access, the margin for error is narrowing. What once might have triggered a repayment demand could now trigger a subpoena.

This prosecutorial escalation is not an isolated personnel shift. It is a deliberate reconfiguration of HHS’s legal posture, one that prioritizes deterrence through litigation. For those tasked with delivering care, managing federal funds, or innovating within regulatory frameworks, the consequences are immediate, and unavoidable.