1. The act refers to the civil rights division. Specifically, it refers to institutions and hospitals under various civil rights statutes. The special litigation section handles these particular matters.
2. It does not deal with the investigation of fraud. That is flat out wrong. It deals with investigations brought pursuant to powers already held by the civil rights division and special litigation section. Fraud is wholly unmentioned in this section of obamacare
3. It is not true that these health care providers are subject to pre-litigation subpoenas. It is also not true that this is common. Only “highly regulated industries”, which thankfully there are few, are subject to prelitigation subpoena power. Securities and nuclear energy are two such examples of highly regulated industries. On March 20 health care was not a highly regulated industry subject to constant oversight through federal subpoenas. On March 21, it was.
Looking at the specific language again, though, it looks like when the language you are quoting says that subpoenas may be issued "to any institution that is the subject of an investigation under this Act," that the phrase "this Act" refers not to ObamaCare, but rather specifically to the Civil Rights of Institutionalized Persons Act. That Act, in turn, applies only to state-run (not privately-operated) facilities. So, while this section of the Act may be an unconstitutional overreach of Federal authority over the States, it is not nearly as expansive an increase in power as you are suggesting. This section does not subject privately-run doctor's offices/hospitals/etc to subpoena power.