How to Respond When the Government Comes KnockingHow to Respond When the Government Comes Knocking...

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How to Respond When the Government Comes Knocking

Renee H. Martin, JD, RN, MSNDilworth Paxson, LLP

1500 Market Street, Suite 3500EPhiladelphia, PA 19102

Tel: 215‐575‐7313 Fax: 215‐575‐7200E‐mail: [email protected]

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Government Investigations 101:

Investigations:• May be civil, criminal, or concurrent.

• May involve multiple government agencies in multiple jurisdictions working together or independently.

• Are increasingly common in highly regulated industries (finance, banking, health care, pharmaceuticals, technology).

• A civil investigation may lead to a criminal investigation and vice versa, so all investigations require thoughtful treatment at the time of initial contact.

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Government Investigations 101Investigations can be difficult to deal with because:

• You may not know what triggered the investigation. It could be a “whistleblower” complaint, an audit result, an initiative focusing on a particular issue, etc.

• You may not know right away whether your agency and/or your employees are viewed as “targets” of the investigation or merely as witnesses.

• Nonetheless, can implement numerous practical strategies to ready your agency your employees in the event of an investigation and to ensure any government contact is handled appropriately.

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Government Investigations 1014

• WHO ARE THE MAJOR PLAYERS ?– Centers for Medicare and Medicaid Services (CMS)

– Office of Inspector General (OIG)‐Can bring civil and criminal actions‐works with DOJ and MFCUs for criminal cases.

– Department of Justice

• United States Attorneys’ Office

• Federal Bureau of Investigation

– “HEAT” Health Care Fraud Prevention and Enforcement Action Team (CMS and DOJ)

– State Attorneys General Offices

– State Medicaid Fraud Control Units (MFCU)


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Government Investigations 101• WHO ARE THE MAJOR PLAYERS ? (Cont’d.)

– Internal Revenue Service

– Federal Trade Commission

– Medicare Contractors

– Private Insurers

– Medicaid and Medicare Program Beneficiaries

– State Licensure Boards

– Qui Tam Relators


Healthcare Investigations and Prosecutions

– How are the health care investigations begun and what tools does government use?

– What’s the difference between a civil case and criminal? What’s a parallel investigation?

– What turns a health care case from a civil matter into a criminal case?

– Increased Oversight by Gov’t & DOJ’s Yates Memo

– How to best protect your agency ‐begins before the government comes knocking


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COLD HARD FACTS

• For FY 2016, OIG reported expected recoveries of more than $5.66 billion consisting of nearly $1.2 billion in audit receivables and about $4.46 billion in investigative receivables

• The investigative receivables include about $953 million in non‐HHSinvestigative receivables, resulting from our work in areas such as the States’ shares of Medicaid restitution.

• 844 criminal actions against individuals or entities that engaged in crimes against HHS programs.

• 708 civil actions, which include false claims and unjust‐enrichment lawsuits filed in Federal district court, CMP settlements, and administrative recoveries related to provider self‐disclosure matters.

• CMP recoveries increased almost five‐fold over the past 3 years.

• Exclusions of 3,635 individuals


Investigative Tools Used in Criminal Health Care Fraud

Investigations


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Voluntary Interviews

• Patient victims• Whistleblowers• Relevant medical personnel• Perfectly legitimate to require

employees to tell you if they have been contacted by any government investigator

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Access Request• Billing Data from CMS

• Medicare Enrollment data from CMS

• Reports of Internal investigations from CMS contractors


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Now things get interesting…

• When you begin to know not just civil action‐Compulsory Process

• Search Warrants

• Subpoenas

• Grand Jury/HIPAA Subpoenas

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Compulsory Process

• Game Plan:

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• Know your rights• Plan ahead • Coordinate interaction with government agents • Preserve the integrity of information • Respond courteously and cooperatively without waiving rights • Maintain a calm, thoughtful strategy • Consult with experienced counsel when necessary‐will be in house if part of larger entity

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Search Warrants

• Give permission to agents to enter physical premise

• Look at documents, confiscate computers, Internet‐based e‐mail accounts


Search Warrant Response• Have a plan now.

• Particularly important because there is typically less lead time than for subpoena response.

• FBI, IRS and others may appear unexpectedly.


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Search Warrant Response• Increasing reliance on search warrants as a tool in

business crimes

Investigations vs. issuing subpoenas

Government’s key advantage:• SURPRISE & CONTROL

• “knock and announce rule”

4th Cir. Exceptions – danger or imminent evidence destruction.

• Focus of government’s search =

Not just documents

But all “instrumentalities of crime”

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Search Warrants Background• All searches and seizures are

governed by the Fourth Amendment’s:

Prohibition against unreasonable searches and seizures; and

Requirement the warrants to conduct searches be supported by “probable cause.”


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Search Warrants• Government has legal leverage during execution of

search

• Number of agents varies (2‐50)

• No need for agency or employees to display “cowboy” mentality: Be professional courteous

• Best Advice: Advance planning & organized response

• Establish internal procedures search response plan

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Advance Planning: Overall Goals• Improve “crisis” management:

Demystify “searches”

Prepare agency representatives

• Protect legal interests of company and personnel

• Respond appropriately & legally –

Not doing whatever the government request

• Convey “good corporate” image

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Overall Goals

• Get the government what it is entitled to take or review as quickly as possible ‐‐‐ and get the agents out.

• Minimize disruptive impact of search to ongoing business operations.

• Get patients out of area

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Action Steps During Search• Request agents’ credentials & copy of the

warrant (and supporting affidavit – if unsealed)

• Request meeting with agents to discuss ways to minimize disruption with ongoing operations (floor plans, organizational charts, etc.).

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What your Search Warrant Policy or Staff Prep Should Include

Agency statement that it objects & does not consent to search;

BUT – Is willing to cooperate;

Is represented by counsel;

Requests opportunity to confer with counsel prior to search and

IF POSSIBLE request all inquires during search be directed to agency search coordinators, ideally counsel only – not employees.

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Action Steps During Search• Carefully review warrant for:

Accuracy of information;

Particularity of search limits; and

Nature of alleged violations

• Typical “Defects.” Name/Address of company

Beyond deadline

• Pay close attention to scope of warrant – i.e. “places to be searched and items to be seized.”

• Limit search to those areas specifically designated in warrant.

• Do not consent to or allow agents to exceed limits and conduct an “expanded” search.

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Action Steps During Search• Accompany agents & carefully monitor and record

all aspects of search

(i.e., conduct, statements, questions, requests, attitude).

• If agents Refuse to allow company to accompany them – seek order from magistrate who issued the warrant‐agents should respect that and magistrate’s name on warrant

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Employee’s Rights During Search:• Employees are under no legal obligation to talk to the

agents – their choice;

• Employees have a right to consult with an attorney;

• Company may provide counsel

• In many circumstances, employees should be sent home (after being advised of their rights)

• Where employees consent to be interviewed, try to be present during the interview and take detailed notes on both; Questions asked; and

Answers given.

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After the Smoke Clears:• Information is power

• Gather all facts surrounding the allegations/investigation

• The good, the bad and the ugly

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Post-Search: Info to Obtain• Request copy of search receipt/inventory

(list of items taken).

• Request copies of all items seized‐if originals are taken (rare)..

• Obtain copy of “return” filed with court.

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Post-Search: Debriefing• Immediately and thoroughly debrief all

employees who consented to interview (if you were not present).

• Important insight into basis for investigation & positions you to better anticipated allegations.

• Summarize all interviews into written memoranda.

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Intro: Purpose of the Subpoena• Secure documents and physical evidence.

‐ Subpoena duces tecum.

‐ “A subpoena may order the witness to produce any books, papers, documents, data or other objects the subpoena designates.”

‐ And secure testimony‐Subpoena ad testificandum.

• Criminal subpoena broader than civil equivalent.

‐ Can be served “at any place within the United States” –less option to quash for procedural venue problems.

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Your Initial Subpoena Review• When you receive the

subpoena, whether focused on documents or testimony, develop an action plan:

‐ Contact the in‐house counsel or your attorney

‐ Carefully Review the Subpoena

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Note on: Subpoena Ad Testificandum

• Initial questions unique to those subpoenas that seek testimony:

• Whose testimony is sought?

‐ Executive/Management?

‐ Employees?

• Need for separate representation?

‐ Employee with conflict

‐ Fact witness

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Focus: DocumentsThe Subpoena Duces Tecum• Initial review of subpoena to determine scope

‐ Date range

‐ Type of documents

‐ Cost/feasibility of compliance

‐ Deadline?

• Review for indication of allegations/potential crimes

• Determine whether grounds to challenge.

• Start considering whether compliance is better strategic option, even where challenge groups exist.

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Subpoena Duces Tecum• Caution: penalties for improper response.

‐ Avoid “game‐playing” that is prevalent in some civil discovery.

• Contact experienced counsel

• Immediately suspend regular document destruction ‐even if consistent with document retention policies

• Memorialize all steps & decisions in written memorandum.

• Notify some employees/control group‐ Do not discuss the subpoena or any aspect of the investigation with all

employees.

• Remember: You’ll be better off if you have prepared a response protocol in anticipation of subpoena.

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Your Subpoena Response Plan• Keep on hand in case of emergencies and refresh

periodically.

• Should contain: A copy of the company’s document retention policy.

A contact list: key executives who need to know, go‐to‐outside counsel, responsible IT person; custodian of records.

Policy for responsible employees with instructions regarding preservation of electronic and hard copy documents.

A plan for ensuring that all versions of electronic documents, in particular, are secured.

A directory of where key general categories of documents are stored and likely to be located.

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Document Search, Review & Production Process

• Retrieve & follow the plan you already prepared.

• Plan & supervised & document “process”

Keys:• What documents are produced?

• What process was followed?

Even – especially – document search efforts tat reveal no docs

• Designate a point person to be “custodian of records.”

Custodian should be prepared to testify about the steps taken to gather information for the subpoena

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Document Search, Review & Production

• Which documents are “responsive?”

• Which responsive documents are privileged?

Create a decision log and a privilege log

• “Bate‐stamp” and keep copy of all that is produced

Note, you generally will produce originals, unlike in civil litigation.

• Types of Privileges:

Attorney Client/Work Product

5th Amendment

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Your Counsel will likely call Prosecutor before responding to Subpoena to:

Discuss role of company, individuals.

• Witness, subject, or target?

If for documents…

• Discuss subpoena to ensure your understand requests, resolve any questions, and narrow or define scope as appropriate.

• You know company and documents/subject matter better than requester: create mutual goodwill/relationship through this conversation.

• Offer to keep dialogue open and avoid adversarial approach. Ability to personally to personally address production and

compliance issues on will save time and resources and avert unintended consequences

Assess where documents are to be produced and whether/when an executive will need testify. Usually can deter until after agent review.

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Grand Jury Subpoenas• Issued on behalf of a grand jury whose function is to

determine if prosecutor has sufficient evidence to bring charges against an individual or entity.

• These subpoenas order you to personally appear before a grand jury or government agency and give testimony under oath.

• Individuals don’t know if they are targets or fact witness.

• Very broad in scope.• If agency receives and is related to a former employee

your counsel should find out whether agency is a target. Must not disclose receipt to target.


Investigation over, but who Makes the “Call?”

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Broad Enforcement DiscretionWhat conduct should be punished/prosecuted?

Higher Standard

Zone of Discretion

Low Threshold

What conduct can be prosecuted?

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Focus of Prosecutor’s Review (Relative to Incident)

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Influencing the Three Phases of a Prosecutor’s Review

“Effective” Compliance &

Self‐Governance

• What is Declared?

• What is Done?

• Funded

• Measured

Before/Prevention

Cooperation

“Responsible Triage”

Litigation Hold

Internal Investigation

During Inciden

t

Remediation• Prompt

• Voluntary

Compliance

Improvements• Prevent

RecurrenceAfter/Reactive

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Factors considered in favor of prosecutionViolation Related:

• Extreme Degrees

• Long Duration or History of Repeated Violations

• Clarity of Standards/Regs/Law

• Economic Benefits from Violations

‐ (Ill‐Gotten Gains or Cost Savings)

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Factors considered in favor of prosecution“Lying & Cheating” Facts:

• False Statements

‐ Certifications

‐ During Investigation

• Concealment

• Failure to Report

• Obstruction

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Factors considered in favor of prosecutionMiscellaneous Facts:

• Overly Adversarial or Delayed Response to Government

• Lack of Remediation/Corrective Action

• Pervasive Involvement of Executives, Management & Employees

• Clear Evidence of Intent/Knowledge

‐ Repeated Past Violations

‐ “Smoking Gun” emails

‐ Insider testimony

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Your Shield:

• Strong/Robust Compliance Program

• Strong Compliance History

• Self‐Detection of Potential Violation

• Prompt Initiation of Internal Investigation

• Self‐Reporting to Government

• Prompt Terminating/Disciplining the Relevant Employee(s)

• Rogue Employee

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Your Shield:

• Full and Meaningful Cooperation with the Government Investigation

• Implementing Comprehensive Remediation to Address the Root Cause of Violations/Problem

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An “effective compliance program” can reduce culpability that can lower the potential “punishment” of a organization

• Can you demonstrate your program’s effectiveness? did it’s design help detect the issue

did the organization self‐report

did the organization “cooperate” in the government’s investigation

• U.S. Federal Sentencing Guidelines https://oig.hhs.gov/compliance/101/files/HCCA‐OIG‐Resource‐Guide.pdf“7 elements” of an “effective compliance program”

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Criminal Corporate liability• NY Cent. & Hudson River RR Co. v. United States (1909). – US Supreme Court held in 1909 that corporations can be criminally responsible for crimes of its employees under a respondeat superior theory IF AND ONLY IF employee was acting within scope of his/her employment for the benefit (or partial benefit) of the corporation.

– Reason for ruling: because of need for corrective justice.


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DOJ policy on prosecuting business organizations

• Prosecutor discretion

• DOJ policy – corporations should be treated same as individuals plus ‐

• Game changer: Yates Memo, Oct. 2015


How to Respond When the Government Comes KnockingHow to Respond When the Government Comes Knocking...

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