The Regulator

500: that is how many attorneys and staff the Justice Department’s new fraud-fighting division will have on the ground within days, after its chief used his first policy memo to put home health, hospice and telemedicine squarely in the crosshairs. Colin M. McDonald, assistant attorney general for the Department of Justice’s newly created National Fraud Enforcement Division, issued a memorandum August 13, 2026 naming healthcare fraud one of five enforcement priorities, alongside public trust and financial integrity, tax enforcement, global trade and corporate misconduct. The memo singles out telemedicine schemes, Medicare and Medicaid fraud, controlled substance diversion, and home health and hospice billing for expanded use of data analytics and financial forensics, and states that national healthcare expenditures are projected to grow from more than $3 trillion a year to more than $7 trillion, with an estimated 3 to 10 percent of that lost to fraud. The division’s headcount is set to reach roughly 500 attorneys and staff by August 24, 2026, with further growth planned over the next two years. Confidence: Medium. This run could not independently retrieve the Justice Department’s own release, which returned an access error, but trade press covering home health and hospice compliance reviewed and quoted the memo directly, and multiple law-firm client alerts corroborate its structure and quotes. Sources: Assistant Attorney General Colin M. McDonald Issues Memorandum on the National Fraud Enforcement Division’s Enforcement Priorities, U.S. Department of Justice, DOJ Names Home Health, Hospice Among Top Fraud Enforcement Priorities, Home Health Care News.

35: that is how many people the Justice Department has now charged in the largest health care fraud case it has ever prosecuted, after an Ohio man became the 16th to plead guilty this week. Eldar Zarbavel, 45, of Pepper Pike, Ohio, pleaded guilty August 14, 2026 to one count of money laundering for his role in Operation Gold Rush, the Russia-based scheme prosecutors say submitted $1.42 billion in false claims to Medicare and other insurers between July 2022 and July 2024 through Royce Medical Supply LLC, a Florida durable medical equipment company. Prosecutors said Zarbavel opened Northeast Ohio bank accounts that moved approximately $3.4 million in fraud proceeds for the organization; he faces up to 20 years in prison at sentencing December 16, 2026. This is the same transnational network behind the Brooklyn bank manager’s fraud-laundering sentence this newsletter covered August 15, and Operation Gold Rush remains the largest health care fraud case the Justice Department has ever prosecuted, with 35 people charged and 16 convicted so far. Confidence: Medium. This run could not independently retrieve the Justice Department’s own release, which returned an access error, but a Cleveland-market television station reviewed the plea and DOJ’s underlying statement directly. Sources: Ohio Man Pleads Guilty to Laundering Health Care Fraud Proceeds for Transnational Criminal Organization, U.S. Department of Justice, Man from Pepper Pike pleads guilty to international money laundering scheme, WKBN.

$120 million: that is how much more than 225 hospitals and health systems billed insurers for pediatric gender-transition care over a decade, using diagnosis codes a new HHS report says were chosen in a way that obscured what was actually being billed. The Department of Health and Human Services released “Wolves in White Coats: How Doctors and Hospitals Pushed and Profited from the Fraud of ‘Gender Medicine’” on August 13, 2026, an analysis of nationwide claims data from 2015 through 2025 that found roughly $50 million in claims for puberty blockers billed under ICD-10 (International Classification of Diseases, 10th Revision) code E34.9, “endocrine disorder, unspecified,” a code that does not reference gender dysphoria, plus nearly $11 million more billed under the code for precocious puberty for patients ages 13 to 17. The report states more than 225 hospitals and health systems established pediatric gender programs during the period covered, filing close to $120 million in claims covering roughly 5,500 surgeries and 8,500 courses of puberty blockers or hormones, and HHS said it referred providers to the Department of Justice and its own Office of Inspector General for investigation. Vice President JD Vance and HHS Secretary Robert F. Kennedy Jr. publicly amplified the referral August 14, with Vance saying providers who intentionally defrauded Medicaid or private insurers should face prison; a referral is not a criminal charge or a finding of liability, and the hospitals named have not yet issued a detailed public response to the report’s coding analysis. The report follows a $10 million settlement Texas reached in May 2026 with Texas Children’s Hospital over similar Medicaid billing allegations, which required the hospital to open the country’s first “detransition clinic.” Confidence: Medium. This run could not independently retrieve HHS’s own report and press release, which returned access errors, but multiple outlets reviewed the report and referral directly, and its underlying document is published at the link below. Sources: HHS Releases Report Exposing Fraudulent Insurance Coding for Sex-Rejecting Procedures on Minors, U.S. Department of Health and Human Services, Wolves in White Coats, HHS Office of Population Affairs, Trump administration accuses hospitals of improper billing over gender care for minors, U.S. News & World Report.

September 16: that is the date companion cancer-diagnostic makers get access to a cheaper, faster FDA (Food and Drug Administration) approval path, after the agency reclassified an entire category of tests out of its costliest review tier. The FDA finalized a rule reclassifying in situ hybridization test systems, laboratory tests used alongside an approved oncology drug to detect chromosomal abnormalities in cancers such as breast cancer and certain leukemias, from Class III devices requiring premarket approval to Class II devices cleared through 510(k) special controls, a switch that removes the agency’s most expensive and time-consuming device review requirement for the category. The rule, covering product codes NYQ, MVD, OWE and PNK, is scheduled for Federal Register publication August 17, 2026 and takes effect September 16, 2026. In the same batch of filings, FDA also proposed reclassifying a list of medical device accessories into its lowest-risk Class I tier and proposed renaming and reclassifying diagnostic endoscopic light source systems as “cystoscopic systems” for bladder cancer detection, both with public comments due October 16, 2026. Confidence: High. This run reviewed the Federal Register filings directly. Sources: Hematology and Pathology Devices; Reclassification of In Situ Hybridization Test Systems for Use With a Corresponding Approved Oncology Therapeutic Product, Federal Register, Medical Devices; Classification of Accessories Distinct From Other Devices; Proposed List of Accessories Suitable for Class I, Federal Register.

425,000: that is how many acres have burned across Washington state this wildfire season, the backdrop for a CMS (Centers for Medicare and Medicaid Services) waiver package this month that lets hospitals bend normal Medicare and Medicaid rules to keep treating patients. HHS Secretary Robert F. Kennedy Jr. declared a public health emergency for Washington on August 7, 2026, covering Spokane, Stevens, Okanogan, Ferry, Chelan and Yakima counties, and CMS followed August 10, 2026 with flexibilities retroactive to August 1 that speed prescription refills and medical equipment replacement, reduce prior-authorization and paperwork requirements, and let providers treat patients in alternative care settings. The declaration responds to a wildfire season that has burned more than 425,000 acres statewide, including the Spokane-area Old Trails, Autumn Lane and Fairview fires that destroyed more than 800 structures and forced roughly 65,000 evacuations before reaching majority containment in the past week. Confidence: High on the declaration and CMS flexibilities, drawn directly from HHS and CMS. Medium on the acreage and evacuation figures, which reflect local news coverage of state and county officials rather than a single federal tally. Sources: CMS Announces Resources, Flexibilities to Assist with Public Health Emergency in the State of Washington, Centers for Medicare and Medicaid Services, HHS Secretary Robert F. Kennedy Jr. Declares Public Health Emergency for Washington to Aid Healthcare Response to Wildfires, Administration for Strategic Preparedness and Response.