Storm Signals: Litigation Risks for Healthcare Leaders to Consider in 2026

Healthcare leaders don’t need reminding that this is one of the most heavily regulated industries in the world; most organizations already operate with robust compliance programs and daily procedures built to anticipate regulatory scrutiny and payer oversight. Yet, even well-run programs can feel unsteady as political crosswinds churn the waters, making enforcement patterns less predictable and controversies more combustible. The latest messages from government enforcers and litigation trend findings in our report echo that reality: the risk environment is intensifying, driven by federal and state priorities, culture-war flashpoints, and evolving business models across the care continuum. Healthcare leaders know this terrain well, and the practical question for 2026 is how to navigate, not simply observe, these trends. 

Key messages healthcare leaders should not ignore

1) Expect more regulatory and enforcement activity—federal and state

It won’t surprise many that over a third of healthcare counsel in our litigation trends survey (35%) expect an uptick in regulatory and enforcement actions this year. Driving this climate is the U.S. Department of Justice’s May 2025 announcement that healthcare fraud remains a top white-collar enforcement priority. Other heightened-enforcement risk areas identified by national enforcers with direct healthcare implications include cybersecurity and privacy, elder fraud, DEI programs, and drug diversion/opioid issues. Taken together, these focal points underscore that the government’s fraud lens continues to widen beyond traditional billing and coding to include the security and integrity of patient services and data across the enterprise.

On the state level, our healthcare industry respondents overwhelmingly reported an 86% increase in activity by state attorneys general—a trend aligned with the growth of state-level health care program integrity, consumer protection, and data privacy initiatives. In parallel, state enforcers are increasingly pursuing their own False Claims Act cases further multiplying potential exposure. The result is a more complex multi-front landscape where a single incident can prompt federal action, state AG action, and downstream civil litigation, often in simultaneously and/or rapid succession.

Politics are an unmistakable undercurrent. Our report reflects heightened investigations on politically charged issues—including areas such as abortion, transgender care, and parental involvement in the care of their children—where healthcare providers can find themselves squeezed between conflicting legal mandates and enforcement initiatives. This is where compliance policies, escalation protocols, and mindful governance pay dividends, ensuring that frontline staff and leadership know how to triage sensitive requests and preserve both compliance and patient trust under intense scrutiny.

Finally, it remains critical to understand that the qui tam whistleblower engine drives much of civil healthcare enforcement. Our report’s takeaways align with the Department of Justice’s recently reported 2025 False Claims Act statistics showing that healthcare is a persistent driver of False Claims Act recoveries (84% of all recoveries), and that whistleblower activity is a major pipeline source for new investigations and litigation (32% more complaints than 2024, and accounting for 78.5% of all recoveries). That combination—steady healthcare recoveries and a vigorous whistleblower bar—helps explain why in-house counsel are bracing for more actions, not fewer. For providers, this all points to proactive compliance culture (including monitoring of known risk domains (referrals, remuneration, medical necessity, coding/billing, privacy/security, etc.) and disciplined internal investigation and response to allegations.

2) Private equity remains a prominent litigation risk driver for mid-tier and small providers

Our report also highlights that private equity (PE) is viewed as a leading source of litigation risk by a meaningful share of mid-tier (43%) and smaller (38%) healthcare company respondents. Several practical dynamics explain why:

• Regulatory unfamiliarity. Some new owners or operators apply playbooks from other industry sectors to healthcare’s rules-intensive environment, underestimating how quickly “business as usual” can be construed as regulatory noncompliance. That includes common commission-based sales approaches, which will be treated skeptically as potential kickbacks depending on how they intersect with referrals.

• Metrics and margin pressure. Tight funding conditions and aggressive performance metrics can appear, to enforcers, to conflict with patient-centric care—especially if incentive designs inadvertently nudge documentation, utilization, or referral patterns in ways that raise red flags. For health systems selling service lines to PE-backed platforms or partnering in joint ventures, clarity around medical decision-making independence and clinical quality safeguards is not optional—it’s existential.

• Regulatory ripple effects post-transaction. Real-world research suggests pricing and operational changes after transactions can draw attention from regulators, payers, and plaintiffs’ counsel. While each market and deal thesis is different, heightened post-transaction scrutiny is now part of the baseline assumption for many transactions—particularly where local access, pricing, or patient mix shift in visible ways.

From legal counsel’s vantage point, our team has directly advised through DOJ False Claims Act investigations involving PE portfolio companies, which reinforces a simple lesson—diligence is not a box-check. It is the foundation for a defensible operating model. Effective pre-close diligence must stress-test revenue cycle integrity, sales and marketing practices, referral relationships, data privacy/security posture, and prior audits/investigations; post-close integration must operationalize compliance, not just promise it in a policy binder. That means deploying realistic training, hotline and non-retaliation controls, third-party oversight, and measurable continuous monitoring keyed to the acquired entity’s actual risk profile—not a generic template.

What this means for 2026—and how to prepare

The big picture from our report is that providers are actively recalibrating to this enforcement environment, but also forecasting continued unpredictability. Storms happen—and increasingly from unpredictable sources. The most resilient organizations are leaning into three imperatives:

• Fortify the shelter; modernize your compliance program. Even strong programs need refreshers: tighten governance (board and executive oversight), ensure risk assessments are current, tune controls to evolving cyber/privacy threats, develop better access and utilization of historic data and email, and pressure-test issue escalation and evaluation pathways. Clear lines between clinical judgment and business incentives should be explicit and auditable.

• Stay situationally aware. Maintain a disciplined cadence for tracking policy shifts, payer rules, and enforcement trends, and adapt playbooks accordingly. Use curated industry sources and trade media to inform leadership discussions and frontline enablement so that new requirements are absorbed before they become costly errors.

• Engage healthcare counsel early. In a climate where federal and state regimes can be overlapping—and occasionally colliding—counsel can help pressure-test new business models, incentive designs, and integration roadmaps; triage and scope allegations; and manage potential multi-agency exposure from the first inquiry through ultimate resolution.

The throughline for 2026 is straightforward. The enforcement bar is not lowering; stakeholders across government, payers, and the qui tam whistleblower plaintiffs’ bar are aligned in expecting more rigor, more documentation, and more guardrails. Providers that normalize vigilance—and translate it into everyday practice—will be best positioned to minimize investigations and litigation, protect patients and clinicians, and keep strategic priorities on track even as the weather turns unsettled.