False Claims Act: Risks Increase for Wound Care Industry

During January 28, 2026, remarks at the American Conference Institute’s Advanced Forum on False Claims and Qui Tam Enforcement, Deputy Assistant Attorney General Brenna Jenny, the U.S. Department of Justice’s (DOJ) top civil fraud enforcement official, noted that DOJ is investigating a growing number of False Claims Act (FCA) cases involving skin substitutes, and that “a lot more skin substitute cases [are] in the pipeline.”

The FCA is DOJ’s primary tool for combatting monetary fraud on the government. It is a significant focus for this administration, which recently announced a record-breaking $6.8 billion in recoveries for FY 2025 and nearly 1,300 new whistleblower qui tam filings.

Jenny’s remarks follow several major resolutions related to wound care from DOJ’s Civil and Criminal Fraud Sections, as well as increased oversight of wound care companies by the Department of Health and Human Services (HHS). Medicare spending on skin substitutes, which cover wounds and aid in wound healing, has increased dramatically, from $256 million in 2019 to over $10 billion in 2024. HHS’s Centers for Medicare & Medicaid Services (CMS) attributes much of that increase in spending to alleged abusive pricing practices in the sector. Given Jenny’s remarks, it appears that DOJ is aware of CMS’s position and is dedicating resources to combat the trend.

Recent DOJ Resolutions with Wound Care Companies

In November 2025, following a lawsuit filed by DOJ just seven months earlier, DOJ settled with Vohra Wound Physicians Management LLC and its owner for $45 million based on allegations that “Vohra engaged in a nationwide scheme to bill Medicare for surgical excisional debridement procedures that were either not medically necessary or had not been performed.” In addition, Vohra entered into a five-year Corporate Integrity Agreement with the HHS Office of Inspector General. This resolution was one DOJ highlighted in announcing its record-breaking FY 2025 recoveries.

DOJ’s Criminal Fraud Section has also been active in this area. In January 2025, two wound care company owners pled guilty to causing over $1.2 billion in false claims to Medicare and other health insurance programs by directing nurse practitioners to apply medically unnecessary skin substitutes and receiving hundreds of millions of dollars in kickbacks from wholesale distributors of skin substitutes. In DOJ’s press release reporting the owners’ sentences, 15.5 and 14 years imprisonment, it also announced a parallel $309 million civil settlement to resolve allegations raised in at least two FCA whistleblower qui tam complaints. DOJ’s press release notes that the qui tam matters remain under seal “while the investigation of other parties continues.”

Along with these recent resolutions, DOJ has stated in recent filings that it is investigating at least one other skin substitute provider, Global Wound Care Medical Group, for violations of the FCA.

CMS’s October 2025 Final Rule: Reducing the Payment Rate for Skin Substitutes

CMS has also increased oversight of wound care companies. In October 2025, CMS issued a final rule significantly reducing Medicare payment rates for skin substitutes beginning January 1, 2026. CMS explained the change: “This dramatic spending increase is largely attributed to abusive pricing practices in the sector, including the use of products with limited evidence of clinical value. Current prices can reach more than $2,000 per square centimeter. . . . We estimate this action will reduce gross fee-for-service program spending for skin substitute services by $19.6 billion in 2026.”

Key Takeaway: Expect continued DOJ focus on wound care companies. Not only has DOJ explicitly notified the industry of “a lot more skin substitute cases in the pipeline,” but CMS has publicly raised concerns about “abusive pricing practices” for skin substitutes. In that context, the recent resolutions in this area appear to be an early indicator of additional criminal and civil enforcement to come.

DOJ is likely to continue investigating the medical necessity of skin substitutes, billing practices surrounding skin substitutes and alleged kickbacks in the wound care space. Providers, manufacturers and distributors of skin substitutes should all prepare for increased scrutiny by committing resources to compliance, taking employee complaints seriously and involving counsel early.

Akin’s former DOJ Criminal and Civil Fraud Section lawyers are monitoring these developments closely, together with the rest of our health care & life sciences and False Claims Act teams. Akin’s False Claims Act practice has long advised clients on compliance and responding to investigations and litigation concerning medical necessity and AKS allegations, including with respect to the challenges that the government and whistleblowers increasingly confront in ultimately proving these types of actions.