A healthcare provider’s receipt of a civil investigative demand (CID) from the federal government typically means that a federal False Claims Act investigation has begun. This realization can trigger a variety of concerns from CID recipients, including the nature of the conduct being investigated, the extent of the potential liability, the financial and reputational costs to the provider, and the possibility that individual employees will be targeted.
In this environment of uncertainty, a critical question is all too often overlooked: what steps can the provider take to reduce the scope of documents demanded by the CID, thus reducing the time, employee resources and expense otherwise required to respond?
The issue of whether the CID’s document requests can be narrowed needs to be addressed at the outset; otherwise, the provider may end up spending far more time, energy and money gathering responsive information than might be necessary.
While negotiating to limit the scope of a CID can be challenging, it is far from unattainable. Many federal prosecutors are open to good faith negotiations about the scope of CIDs, particularly where the recipient can demonstrate a sincere desire to ensure that the government gets the information it needs without getting bogged down with vast quantities of irrelevant documents and data.
Crafting a response
The first step after receiving a CID is to initiate a dialogue with the government. Because the issuance of a CID typically indicates that the provider is the subject of an ongoing investigation, having the provider’s counsel maintain an open line of communication with the government facilitates informed decisions about how to respond to that investigation.
Simply telling the government that the provider has done nothing wrong will likely have no impact. Nor will generalized complaints about the time and money the provider will have to spend to comply – the government frequently hears these types of vague protests and is almost never moved by them. Instead, the provider needs to prepare a response to the government premised on two pillars: specificity and credibility.
Be specific
As to specificity, the provider should be armed with details about the type, form, and volume of the information in its files, as well as detailed estimates of the costs that it will incur – in the form of computer forensics efforts and outside counsel involvement – if required to respond to the CID as initially structured. In this context, the more precise the provider can be, the better.
The first major issue to be addressed is how to deal with the potentially sizeable expense of complying with the CID in its original form. Given the vast amounts of electronic data that even relatively small providers may possess, responding to the CID as written may result in a deluge of data that the government requestor may not have anticipated or even need. The provider should be prepared to propose a specific alternative to the CID’s expansive requests.
It is not enough to offer complaints about the harm the provider would suffer if forced to respond to the CID in its original form; the provider must also demonstrate that it recognizes the government’s legitimate need to conduct its investigation in an orderly fashion. While a CID recipient’s ideal approach will always be to secure the government’s agreement to withdraw entire categories of requests, as a practical matter, the more realistic response – i.e., one most likely to be agreed to by the government – will endeavor to strike a balance between the potential cost to be incurred and the legitimacy of the investigative interest.
Often, the best way to do this is to suggest an incremental approach, whether on a geographic or subject matter basis. For those providers that operate in multiple states, seeking to secure the government’s agreement to limit the CID to certain locations serves a dual purpose: it reduces the burden on the provider and, perhaps equally important, provides valuable insight on the true focus of the government’s investigation.
Whether or not the government agrees to this proposed limitation, the provider can also make headway by offering to produce initially certain types of easily identifiable and readily deliverable materials (such as compliance policy manuals, organization charts, and personnel files) while securing an agreement to hold off on searching for and producing the more difficult categories (such as emails, patient files, and documents which relate to a particular topic and thus necessitate a more involved, substantive review before they can be produced).
Credibility is key
Under an incremental approach, both sides realize a benefit but neither gets exactly what they want. For the government to agree to forego or at least delay its right to certain information, the provider must be prepared to demonstrate credibility sufficient to warrant the government’s concession.
Credibility is valuable currency in this context. The provider starts out at a deficit, since the issuance of a CID almost always means that allegations of wrongdoing have not only be made, but in fact they have been deemed reliable enough for the government to dedicate resources to investigate. To overcome that initial presumption, the provider needs to be able to establish that it takes the investigation seriously, is committed to determining whether violations of law have occurred, and is prepared to take the measures necessary to fix whatever problems are determined to exist.
This commitment can be shown by taking quick and decisive action to implement safeguards to prevent the destruction or alteration of relevant documents and records, undertaking cooperative efforts to make employees available for interviews, and ensuring prompt and complete responses to the government’s inquires through counsel. If the government believes that the provider is genuinely dedicated to addressing the issues behind the government’s investigation, concessions on the CID will come much easier than if the government reaches the conclusion that the provider seeks only to delay or hinder the investigative process.
Of course, this does not mean that wholesale concessions are the best and only way to obtain relief from a CID’s burden. Instead, it’s the ability to know which battles to pick – and how best to fight them – that ultimately serve a CID recipient best. Healthcare providers who understand this fact at the outset are well positioned to weather the storm that accompanies a CID in the most effective and cost-efficient manner possible.