The Trump administration has made combating healthcare fraud a priority. From the Centers for Medicare & Medicaid Services’ “Medicaid Fraud War Room” to the Department of Justice’s “whole-of-government” campaign against those who defraud federal health programs, its message has been forceful. CMS Administrator Mehmet Oz has warned that if you defraud Medicaid, the government is prepared to “track you down” and “cut you off.” Considered against that backdrop, a recent decision by the Department of Justice (DOJ) not to prosecute a New Jersey eye-care company stands out as a rare show of selective leniency.
On July 29, the DOJ announced two distinct actions arising from the same Medicare-fraud investigation. It declined to prosecute Campus Eye Management, a New Jersey management-services organization that provided billing and administrative support to an optometry practice and an affiliated ambulatory surgery center, even as it indicted the company’s founder and former chief executive.
The declination is the first granted to a healthcare company under the department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy that the DOJ issued in March, and the first secured by the National Fraud Enforcement Division, a unit established in April, following an executive order from President Trump. Campus Eye avoided charges after voluntarily disclosing the misconduct, cooperating with investigators, and remediating. Its founder was charged in a seven-count indictment alleging that, from 2015 through March 2023, he paid referring ophthalmologists as much as half of Medicare’s reimbursement for diagnostic tests performed on the patients they referred and concealed the payments as monthly “flat fees” for consulting services that were never rendered. The company agreed to pay $1 million in victim compensation. The former chief executive, who is presumed innocent, faces up to 10 years in prison on the most serious counts.
The facts of the case are less significant than what the resolution signals about how the DOJ may approach corporate misconduct moving forward. The policy under which Campus Eye was declined replaced a patchwork of component-specific programs with a single framework governing nearly all corporate criminal matters across the department, with the exception of antitrust. In the past, a company that self-disclosed, cooperated, and remediated could receive a rebuttable “presumption” of declination. The current policy goes further. If there are no serious aggravating factors, prosecutors may decline to charge a company that meets the conditions. The framework also lays out middle-ground options for companies that don’t fully qualify. Those companies can still avoid an outright prosecution, agree to a deal lasting under three years and requiring no outside compliance monitor, and pay a significantly smaller penalty.
Such options have rarely been available in healthcare. Historically, the declinations announced under the corporate enforcement policy have involved foreign-bribery and financial-fraud matters, not healthcare. In healthcare, the government has instead pursued civil fraud settlements or agreements requiring companies to reform their practices. On the rare occasions when it charged a healthcare organization criminally, it typically sought a guilty plea or an agreement that suspended prosecution. The new National Fraud Enforcement Division has made healthcare fraud an early target. The Campus Eye decision signals that the division may be willing to extend the same bargain to healthcare providers: come forward, cooperate, and you may avoid charges.
The policy rewards providers for self-reporting but sets a high threshold for a declination. The disclosure must be genuinely voluntary and must precede the government’s awareness of the misconduct. That condition carries particular risk in healthcare, where whistleblower suits are filed under seal, hidden from the company they name. A whistleblower’s complaint filed before a provider self-reports may foreclose the declination path without the provider’s knowledge. That means timing, which can be decisive, is partly outside a company’s control.
The Campus Eye case underscores DOJ’s continued emphasis on compliance and on individual accountability. Campus Eye was formed in 2021, when private-equity investors joined the founder to create a management company that took over billing for his existing optometry practice and surgery center. The alleged conduct predated that transaction and carried into the new entity. The sequence highlights the importance of compliance diligence in acquisitions of healthcare businesses. In addition, the declination was paired with the indictment of the individual the government identified as responsible, consistent with the department’s stated position that corporate cooperation should assist, rather than substitute for, the prosecution of culpable individuals. Companies weighing disclosure should understand that cooperation will require providing evidence about specific employees and executives.
One feature of the resolution may be of particular interest to smaller or financially constrained providers. Although the parties valued the fraudulent payments at approximately $3.7 million, the government reduced the amount Campus Eye had to repay to $1 million after an independent analysis, conducted with a forensic accounting expert, concluded that a larger payment would substantially threaten the company’s continued viability. The reduction suggests that a company’s inability to pay in full need not cost it a declination. Although the Campus Eye declination is a single case, it could indicate how DOJ might employ selective leniency alongside its more aggressive options moving forward. If and how the department will apply the same framework to larger institutions, or to matters where responsibility is spread across current management, remains to be seen.
