Successful medical practices may have different specialties, services, or structures, but they share a common focus on regulatory compliance. In a space as aggressively policed as health care, a sound and carefully crafted compliance program – one that is actively implemented, maintained and audited / updated – can make the difference when it comes to reducing risks for penalties that can accompany health care fraud investigations.
As we recently discussed on our blog, the federal government has continued its aggressive crackdown on waste, fraud, and abuse in federal health care programs. Having recovered nearly $3 billion in 2018, federal regulators from the Department of Justice (DOJ) and HHS / OIG have already conducted numerous civil and criminal enforcement takedowns.
Amid this environment, the DOJ also recently announced the release of formal guidance for how the Justice Department’s civil attorneys can award “cooperation credits” to those under investigation for False Claims Act violations.
Cooperation Credits in False Claims Act Cases
The newly released guidelines were added to Section 4-4.112 of the Department of Justice Manual, and they detail the scope of cooperative conduct which may make providers facing health care fraud investigations eligible for credit.
The revisions are a reflection of the DOJ’s goal to incentivize cooperation with regulators through credits which may “merit a more favorable resolution” for False Claims Acts defendants. Under the policy, False Claims Act cooperation credits may be earned for:
- Voluntary disclosures regarding misconduct unknown by regulators
- Cooperation in ongoing investigations
- Remedial measures in response to alleged violations
Though it’s a significant step for the DOJ, providers and medical businesses which prioritize transparency and cooperation during federal health care investigations have long done so in order to earn some type of “credit” from investigators. Though not by name, those credits usually (and still are) take the form of good faith negotiations which provide investigators with the information they need, while minimizing disruption, costs, and potential setbacks for providers.
Transparency, a willingness to deliver requested documentation, and other similar efforts can also open the door to striking resolutions which are fair and just for the circumstances at hand – and for keeping federal False Claims Act cases within the civil realm, away from the risks of criminal liability and prison time. Of course, as the DOJ now explicitly states, the benefits of cooperation credits are potential “reduc[tions] of penalties or damages multiple sought by the government.”
Disclosures & “Cooperation”
Per the new guidelines, voluntary disclosures and “cooperation” may include:
- Self-disclosure of misconduct discovered during an internal investigation;
- Assisting federal regulators with an investigation, or with resolving a qui tam claim;
- Preserving and providing documents their native form, and facilitating the evaluation of data requiring special/proprietary technology, etc.;
- Identifying individuals substantially involved or responsible for alleged misconduct, or who have relevant information;
- Acceptance of responsibility / stipulating to liability;
- Conducting detailed internal reviews to determine the root of misconduct;
- Making employees and or company officers available for interviews, meetings, or depositions;
- Assisting in the recovery or determination of alleged damages.
It’s important to note the DOJ’s guidelines – which you can read in their entirety here – create a narrow scope for what’s considered “cooperation” worthy of credit. Under the policy, cooperation does not include:
- Furnishing disclosures required by law – such as responding to subpoenas, investigative demands, and other compulsory elements of investigations;
- Disclosures or seemingly cooperative conduct which conceals an individual’s or entity’s involvement in misconduct, or which lack good faith to regulators during the investigation;
- Disclosing information that is known or under imminent threat of discovery.
In addition to ensuring cooperation as defined by the DOJ, providers should also be aware that the government has discretion when awarding credits to FCA defendants. Some of the most important factors considered in relation to possible credits include:
- Timeliness of disclosures/degree of “voluntariness” when disclosing;
- Accuracy, completeness, and reliability of information/testimony provided;
- Nature and extent of cooperation and/or assistance; and
- Significance of the cooperation to the government’s efforts.
Remedial Actions in False Claims Act Investigations: Where the Compliance Plan Fits In
Disclosure and cooperation can help position individuals and entities under FCA investigation positively with regulators, but taking decisive action provides objective evidence of change that would prevent or reduce the potential for similar misconduct in the future.
With regard to what the DOJ deems “remedial actions,” there are several responses that may further help FCA defendants seeking more favorable resolutions. These may include:
- Demonstrating a thorough analysis into the cause of the underlying alleged misconduct, and taking action to address it, when appropriate;
- Administering adequate disciplinary action against responsible parties, or replacing those parties internally;
- Other remedial steps which indicate a recognition of the seriousness of alleged misconduct, acceptance of responsibility, and implementation of measures to reduce risks of future misconduct;
- Creation or improvement of an effective compliance plan.
As noted, federal investigators will consider any compliance plan implemented or improved during an investigation as grounds for a potential cooperation credit. Regulators want to see that such plans are adequately comprehensive in scope, address current compliance issues, and are effective in ensuring the alleged misconduct at hand, or any similar misconduct, will not occur again in the future.
Additionally, federal regulators may also consider any compliance program and internal policies which existed prior to the investigation when evaluating a defendant’s liability under the FCA. That includes evaluations into the scope and effectiveness of any pre-existing compliance programs so as to determine whether violations were committed knowingly. The FCA is an intent-based statute, and the government will base its determination of a defendant’s intent in accordance to the Department of Justice Manual § 9-28.800.
The Compliance Plan Toolkit: Your Guide to Regulatory Compliance
Why Medical Compliance Programs Fail & How to Fix Them
Health Care Fraud Defense: Legal Guidance Amid False Claims Act Investigations
False Claims Act investigations can make for a minefield of risks, and the DOJ’s new policies regarding cooperation credits may only create more of them for defendants who overzealously disclose, cooperate, or remediate in hopes of receiving credit. These credits are discretionary, and there are risks to any measure a defendant may take when cooperating or corresponding with the federal government.
Protecting your rights, interests, and your personal and professional future in cases as complex as these demands the attention of experienced health care attorneys.
Hendershot Cowart P.C. has extensive experience defending health care professionals, providers, and medical businesses facing fraud investigation under the False Claims Act. We know how to communicate and cooperate with state and federal officials, establish good-faith relationships while protecting our clients’ rights and interests, and develop effective compliance programs and defense strategies.
Call (713) 909-7323 or contact us online to speak with an attorney. Our firm serves clients across Houston, the state of Texas, and beyond.