Because healthcare providers operate in a highly regulated industry, most recognize that it is more a question of when, rather than if, they will be subject to a government investigation. Despite this recognition, the issuance of a civil investigative demand or a grand jury subpoena triggers understandable concern leading to a broad range of responses. While providers facing a government inquiry should be mindful of certain key measures necessary to respond in the "right" way, they should be even more concerned about avoiding unquestionably "wrong" tactics. The failure to appreciate these potentially catastrophic pitfalls can create problems that might otherwise not exist, and deepen those that do.
Healthcare fraud inquiries by the federal government typically take one of two forms. A civil investigative demand (CID) normally requires the production of documents and computer records - though witness testimony may also be sought. A CID usually signals the existence of a False Claims Act investigation, often stemming from the filing of a qui tam complaint. Through such actions, whistleblowers usually allege that the provider has submitted false claims to the government for services that were either not actually performed, or were medically unnecessary. The complaint is filed under seal while the government investigates those allegations.
A grand jury subpoena can compel the production of the same scope of information as a CID (documents and electronic evidence, as well as witness testimony). A grand jury subpoena means a criminal investigation is underway. This increases the risk that individuals associated with the provider, rather than the corporate entity alone, may face exposure for alleged wrongdoing. Given these heightened stakes, criminal inquiries need to be treated with even greater caution.
Regardless of the form of government inquiry, healthcare providers should at least consult with qualified counsel before taking any action. Counsel experienced in dealing with government investigations can help to secure the most precious commodity in this setting: credibility. By projecting an aura of integrity and reliability, a provider facing a government inquiry maximizes the ability to secure concessions from the government regarding the timing and scope of document production, and the degree to which the ongoing inquiry impacts the provider's operations.
The government views a provider's integrity with great skepticism at the beginning of the investigation. The fact that the inquiry exists means that allegations deemed to have merit - or at very least, warranting exploration -
have been lodged against the provider. By setting the tone early through steps like preserving potentially relevant information, pledging cooperation, and initiating a dialogue with the government, the provider can begin to stem the tide.
While it is important for providers to employ the right steps to respond to government inquiries, it is critical for them to avoid taking the wrong ones. In matters of this type, there is often little question about whether certain events occurred (typically, the submission of claims to the government). Rather, the battle is fought over questions of intent: e.g., did the provider know that the services were medically unnecessary and thus undeserving of payment when it submitted the claims?
In answering this question, the government often seeks to prove intent through evidence demonstrating "consciousness of guilt"; that is, proof of actions taken by the provider that reveal an awareness that the conduct was wrongful. Efforts to support the inference that the provider acted with the requisite intent obviously involve scrutiny of conduct at or near the time of the transaction. Investigators search for evidence that employees were instructed to undertake unnecessary procedures or admit unqualified patients before doing so, and focus on whether demonstrably false information was recorded around the time of the action in question in an effort to conceal improper conduct.
Investigators do not confine their search for evidence of consciousness of guilt to events immediately surrounding questionable conduct, however. In fact, the most compelling evidence is often churned up when the provider learns of the investigation. Conduct such as destroying or altering documents or computer records or instructing employees not to cooperate with (or even worse, to make false statements to) investigators is interpreted by the government as forceful evidence of a provider's knowledge of its wrongful conduct. The government frequently interprets a provider's decision to stake out a gratuitously adversarial posture in a similar fashion.
Navigating a government investigation can be a challenging process for any healthcare provider. By understanding the need to avoid strengthening the government's case - or its resolve - providers can chart a course that maximizes the possibility of a positive outcome.
William C. Athanas is a partner and Mark M. Bell is an associate at law firm Waller.