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What Does the Yates Memo Mean to Your Practice's Compliance Program?

In September of 2015, the Deputy Attorney General for the Department of Justice (DOJ) circulated a memo that detailed a change in how corporate officers would be treated by the federal government. Known as the Yates Memo, this document puts all corporate officers on notice of a new stance taken by the federal government. It also notifies corporate officers to seek competent legal counsel to avoid any conflict with its policies.

The essential message of the memo is that the DOJ will increasingly hold individuals accountable for corporate misdeeds. Gone are the days when a corporation can simply settle with the federal government and pay a large fine for wrongs. Now, corporate officers and directors face the prospect of individual charges for things that go wrong at a corporation.

The Yates Memo outlines six (6) key steps for DOJ attorneys “to most effectively pursue the individuals responsible for corporate wrongs.” These steps are designed to compel corporations to turn over information, including employees involved in wrongdoing. If compliant, corporate directors can hope for leniency from the federal government if there is corporate misconduct. Healthcare providers, particularly compliance officers, should incorporate these guidelines to strengthen the corporate compliance program and investigations/audit process.

  1. Companies will have to turn over information on involved individuals in order to get cooperation credit
  2. All investigations – both criminal and civil – will start with a focus on individual actors within the company
  3. Criminal and civil attorneys will work in lockstep on corporate cases, sharing information freely
  4. Line prosecutors need written approval from a senior DOJ attorney before offering protection to individuals
  5. Individual actions have to be resolved (or have a resolution plan) before corporate actions can be resolved
  6. Civil actions will be pursued against culpable individuals, even if they can’t pay a substantial fine

What it means for healthcare providers?

  • Compliance officer must train Board members and executive leaders on the Yates Memo.
  • Board members and executive leaders must exercise proper supervision.
    • The Board and leadership cannot take a passive role when non-compliance is identified or when the healthcare organization is audited or investigated by third-party vendors, like RACs and MACs.
  • The compliance department should review its current compliance plan, particularly policies and procedures on how to conduct investigations, in light of the Yates Memo.
    • The process for conducting an investigation must include identifying responsible individual(s), in order to seek cooperation credit should the organization be investigated under the FCA.
    • The policy should include how non-privilege evidence will be documented and persevered should DOJ investigate the organization.
    • These steps are critical because if the organization fails to do so and is investigated, any assistance or cooperation provided will not be considered a mitigating factor. Also included in the Memo is that, at minimum, all relevant facts about the responsible party must be revealed during a FCA investigation to trigger the reduced damages provision.
    • The review should also include evaluating and updating forms and templates.
  • Train auditors on the Yates Memo, and the updated compliance plan and policy / procedure for conducting an investigation, if applicable.
  • Healthcare providers should consider hiring an outside firm to conduct an investigation when an audit or pattern has been discovered or suspected that may require disclosure.

The question that remains is what steps medical practices must take going forward. To be a successful medical practice and avoid this kind of liability, corporations need the right legal counsel on their side. At Hendershot, Cannon and Hisey, P.C., we can provide the guidance and counsel you and your needs to succeed. Contact us today at (713) 909-7323 or message us online.

[1] Memorandum from Sally Quillian Yates, Deputy Att’y Gen., Individual Account-ability for Corporate Wrongdoing (Sept. 9, 2015) [hereinafter Yates Memo], http://www.justice.gov/dag/file/769036/download (PDF: 449 KB) [http://perma.cc/PD2L -AVX9].

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