DOJ Issues First Healthcare Fraud Declination Under New Policy

The US Department of Justice has formally declined to pursue criminal healthcare fraud charges against a healthcare organization—Campus Eye Management—a first under its recently announced department-wide corporate enforcement policy. The policy, which encourages voluntary self-disclosure, cooperation, and remediation, offers a potentially attractive option for healthcare companies navigating criminal exposure that must be weighed carefully against the potential costs of self-reporting.

The Campus Eye Management case is also a reminder of the importance of considering healthcare fraud risk as part of investors’ due diligence efforts. 

KEY TAKEAWAYS

• The US Department of Justice (DOJ) issued a declination letter to Campus Eye Management under its new department-wide corporate enforcement policy, following the company's voluntary self-disclosure and cooperation in a healthcare fraud investigation.
• The new policy offers the potential avoidance of criminal charges to incentivize companies to self-report misconduct, cooperate, and remediate.
• The policy’s application to an entity facing potential criminal liability for healthcare fraud is a first, illustrating how self-disclosure may be advantageous for healthcare companies facing potential criminal exposure.
• The Campus Eye Management case also illustrates the importance of due diligence related to potential healthcare fraud risk for outside investments in healthcare companies.

BACKGROUND

As reported in our March 12, 2026 LawFlash, the DOJ on March 10, 2026 released its first-ever department-wide corporate enforcement policy for criminal matters, establishing uniform standards for voluntary corporate self-disclosure of misconduct—with the exception of antitrust matters, for which the Antitrust Division’s long-standing leniency policy remains in effect. In what the DOJ has described as a “carrot-and-stick” model, the policy rewards companies that self-disclose misconduct with potential declination—meaning the company can avoid criminal charges entirely—while emphasizing individual accountability for corporate wrongdoing.

TERMS OF THE DOJ’S NEW CORPORATE ENFORCEMENT POLICY

The policy has three core requirements: voluntary self-disclosure, full cooperation, and timely and appropriate remediation. Under the policy, and subject to the prosecuting office’s discretion, certain aggravating circumstances, such as egregious or pervasive misconduct, severe harm, or recent similar criminal conduct may disqualify a company from receiving a full declination.

The DOJ’s policy also covers “near miss” scenarios, where a company’s self-report does not fully meet core requirements or aggravating circumstances exist. In these cases, DOJ still may offer attractive incentives short of declination, including a non-prosecution agreement, waiver of the need for a compliance monitor, and fines reduced by 50% to 75% off the low end of US Sentencing Guidelines.

Even with a declination under the policy, companies still are subject to disgorgement, forfeiture, and restitution obligations, and all declinations are made public.

THE CAMPUS EYE DECLINATION

On July 29, 2026, the recently formed National Fraud Enforcement Division of the DOJ announced that Campus Eye Management, an eye care physician group practice in New Jersey, secured a formal declination letter from DOJ. The DOJ’s investigation revealed that the founder of a Campus Eye optometry practice and affiliated eye-surgery center submitted claims to Medicare and other insurers for duplicative and medically unnecessary diagnostic tests and paid unlawful kickbacks in exchange for referrals.

The kickbacks were concealed by the creation of sham consulting agreements that paid what were purported to be flat monthly fees but actually were based on a percentage of the practice’s Medicare reimbursement for diagnostic tests performed on patients the provider consultants had referred in the previous year. The conduct allegedly lasted approximately eight years and had been ongoing for several years before private equity investors obtained ownership interests in Campus Eye through a managed services organization (MSO).

In issuing the declination, the DOJ cited the organization’s “timely and voluntary self-disclosure of the misconduct,” its “full and proactive cooperation” and commitment to future cooperation, and its “timely and appropriate remediation” efforts. Campus Eye also agreed to disgorgement of $1 million to compensate victims.

While the organization avoided criminal charges, the practice founder, E. Bruce DiDonato, was indicted on seven counts related to alleged healthcare fraud and illegal kickbacks. The indictment alleges DiDonato, a licensed optometrist, conspired to charge Medicare for fraudulent, unnecessary diagnostic eye tests often induced by kickbacks, resulting in approximately $1 million in excess Medicare payments.

IMPLICATIONS FOR HEALTHCARE ORGANIZATIONS AND THEIR INVESTORS

Campus Eye’s declination under the new DOJ policy offers key lessons for healthcare organizations and their investors.

First, the DOJ’s uniform policy is intended to provide healthcare organizations with clarity, consistency and predictability across the Department, with incentives to self-disclose, cooperate, and remediate to avoid prosecution. To take advantage of the “carrots” the policy offers, up to and including declination, healthcare organizations should ensure that their compliance programs are built to support early detection of misconduct and prompt internal investigations.

Second, the DOJ’s continued focus on individual accountability means that declination for the organization does not shield responsible executives from prosecution, as shown by the indictment of Campus Eye’s founder. Campus Eye’s commitment to cooperate with DOJ’s investigation, including its investigation of potentially responsible individuals, was among the factors DOJ cited in granting the declination.

Third, as outside investors increasingly seek equity interests in healthcare organizations, whether through MSOs or otherwise, Campus Eye illustrates the need to assess healthcare fraud risk as part of investors’ due diligence. Notably, the DOJ’s Mergers & Acquisitions Policy continues to provide for presumptive declination for acquiring companies that report misconduct within six months of acquisition and remediate within one year.

Fourth, while the DOJ’s policy offers significant incentives for healthcare organizations to self-report misconduct, they must be carefully weighed against the potential costs, including reputational risk from public declinations, exposure under the False Claims Act when the misconduct involves government-payor programs, and potential shareholder class actions against public companies.

CONCLUSION

The DOJ’s department-wide corporate enforcement policy rewards companies that self-report and cooperate, while emphasizing individual accountability through criminal charges against culpable executives. The Campus Eye case illustrates the potential benefits—and accompanying costs—of self-disclosure under the new policy, while also underscoring the importance of assessing healthcare fraud risk when conducting due diligence involving healthcare organizations and investor-owned MSOs.

HOW WE CAN HELP

Our team can help healthcare organizations build effective, industry-tailored compliance programs, to take advantage of DOJ’s new policy if needed. We can also assist investors in healthcare organizations during due diligence by providing experience-driven assessments of healthcare fraud risk. By carefully assessing the costs and benefits of self-disclosure, we can help healthcare organizations make informed decisions as they navigate potential criminal exposure.