Health Care Compliance & Self-Disclosures
In our world, earlier is better. We want our clients to meet with us as soon as trouble is on the horizon. There’s only one way to improve on a legal plan that was in the works before charges were filed—and that’s to start planning before an investigation even begins.
We’re here to help clients figure out any False Claims charges being that may brought against them.
If you or a loved one has been charged or is under investigation for fraud or a False Claims Act violation, call us now >>>
Not everyone realizes this, however. When someone finds a discrepancy in their Medicare billing, or have concerns about the way a drug was marketed, the temptation is high to bury it. But doing that not only makes a legal defense harder, it also removes a powerful tool from their arsenal.
That tool is called self-disclosure, and it can be a lifesaver in the hands of the right attorney. But it’s not a common-sense approach, and it requires a lot of legwork before acting. That means resources to get a full accounting of the client’s position before disclosing. It is a delicate legal process.
What are “Compliance Investigations and Self Disclosures?”
“Compliance investigations” have one purpose: to determine if a healthcare institution is following the False Claims Act and other healthcare fraud laws.
Ideally, compliance investigations are ordered by the institution. This allows them to find and correct any law-breaking before the government begins to investigate.
If the compliance investigation finds a serious breach of the law, the institution may decide to self-disclose the illegal activity to tell the government about it before federal agents decide to come sniffing around themselves.
Why would anybody do this?
Because in some cases, honesty is the best policy. In 2014, the head of the Department of Justice’s Civil Division explained it well:
“When a company or individual acts responsibly by timely and voluntarily disclosing unlawful conduct, we will give serious consideration to that disclosure in deciding whether or how to charge or resolve the matter.”
In essence what the policy states is : Fess up, and we may go easy on you.
Who should consider compliance investigations and self-disclosures?
Any individual or institution that has reason to believe it’s violated the False Claims act or other federal healthcare laws may benefit from these actions.
Health Care Compliance and Self Disclosure Issues Explained.
False Claims Act,
Which makes it illegal to send the fraudulent government bills. For our purposes, that usually means getting money from government healthcare programs for patient services that weren’t needed, were performed wrong, never actually happened, etc.
On its face, the False Claims Act imposes civil penalties—restitution and fines.
This law makes it a felony for people to be paid, or pay, for assistance in defrauding the government. One example would be a pain management clinic that treats Medicare patients who don’t need their services (False Claims Act violation) and pays doctors to send more Medicare patients their way (Anti-Kickback violation).
Which makes it illegal for doctors to send their patients to places where the physician has a financial interest. So even if the pain management clinic wasn’t paying kickbacks, a doctor who owns part of that clinic can’t send patients there. The Stark Law also applies to the doctor’s immediate family, as well.
The Stark Law imposes civil penalties, not criminal ones, but they can be steep. Navigating the Stark Law (and those exempted from it) can be a serious challenge.
It can be very hard to know if you’re in federal compliance, and odds are they won’t tell you until it’s too late. Finding an attorney with healthcare fraud expertise is a must.
Who does compliance investigations?
In an ideal world, you do. It’s always a good idea to make sure you’re in compliance. And if you aren’t following the law, you’ll want to know as soon as possible—because that’s the best way to preserve all legal options.
Because of the devastating consequences of non-compliance, it’s important to get the investigation right. Investigations should be led by a compliance officer working closely with an attorney or a law firm. They’ll build an investigatory team that looks at the problems you know about and finds the ones that you didn’t.
It’s important to have investigators without “skin in the game.” Hiring an outside attorney at the beginning is probably the best way to do this. Because they aren’t members of the organization, they have no incentive to hide or overlook non-compliance. They’ll also bring a fresh set of eyes to the team. Hire the right lawyers, and they can even structure the investigation for you.
Who handles self-disclosure investigations?
A self-disclosure is an admission of wrongdoing, but you don’t just want to say “We did it!” and cross your fingers for leniency. Once the compliance team is done, you’ll know what to disclose. You’ll also know what penalties may result. This information is vital to an effective legal defense.
Your attorneys will guide you through the self-disclosure process. This ensures you don’t get taken advantage of. “We’ll take it easy on you” is not a legally binding agreement, and it wouldn’t be the first time someone confessed and then got the maximum possible penalty anyway.
In general, once the government has been notified, they’ll start their investigation. If your investigation team did its job, the government’s team would find no surprises. If your team was haphazard, unprofessional, or biased—well, let’s say that federal regulators don’t like finding illegal behavior that wasn’t disclosed.
Which agencies conduct the government’s compliance investigation after self-disclosure?
Sometimes it seems like just about all of them. The combination of False Claims Act violations with healthcare law could give a lot of different agencies a seat at the table:
Office of Inspector General for the Department of Health and Human Services (HHS)
● Federal Bureau of Investigation (FBI)
● Veterans’ Administration Office of Criminal Investigations (VA)
● Defense Criminal Investigative Service (DCIS)
● Office of Criminal Investigations for the Food and Drug Administration (FDA),
● Office of the Inspector General for the Office of Personnel Management (OPM)
● Office of the Inspector General for the United States Postal Service (USPS)
Not all of these agencies will be involved with every case. Then again, various state and local law enforcement may become involved. After a self-disclosure, expect an alphabet soup of federal agencies to show up.
How to start a compliance investigation (and maybe a self-disclosure)?
Investigations often require outsourcing, especially when it comes to combing through data. You have to know who to call, what steps to take first, and what legal preparations to make. One example of a legal preparation has a backup plan in case the government starts its investigation before yours is complete.
Once you’ve marshaled your resources and structured the investigatory team, you’ll need some objective oversight over the work. The importance of this cannot be stressed enough—coming clean means finding every piece of noncompliance first.
Not all non-compliance requires the “nuclear option” of self-disclosure. But that means knowing what the law allows you to fix, and in what way. The government term for a “fix” that didn’t follow the rules is “cover-up.” As with everything else, it’s not something you want to get wrong.
What is necessary to disclose?
If you need to disclose, you’ll want to approach the right people with the right message at the right time. Some agencies will be understanding; some need to be reported to first, and some may take down your address and start looking for the handcuffs.
It may be useful to have contacts in federal law enforcement. Of course, you can save yourself all of this by hiring a law firm that’s done this before right at the outset.
They’ll organize and lead the investigation. They’ll have the resources to conduct the investigation. They’ll know what can be fixed and what can’t. And they’ll know how to approach the government with your self-disclosure. They may even have those law enforcement contacts.
“Compliance Investigations and Self Disclosures” in the News
Maryland St. Joseph’s Medical Center Agrees to Pay $4.9 Million for Medically Unnecessary Hospital Admissions
Charge: Violating the False Claims Act
Allegations: Admitting Patients for Unnecessary Hospital Stays
In 2013, a Maryland hospital, St. Joseph’s medical center, said they would pay $4.9 million in settlement restitution to the government of the United States and the State of Maryland. These fees are the result of the hospital disclosing its wrongdoing.
According to the DOJ press release, between 2007 and 2009 St. Mary’s regularly admitted patients for hospital stays who didn’t need them. These stays typically only lasted a few days, but they brought in a lot of money—especially if the hospital could bill federal healthcare programs.
St. Mary’s self-disclosed this activity, starting a negotiating process with the government that ended in the financial settlement. Although the fine is substantial, it settles the case once and for all. In addition, nobody will face criminal charges.
To learn more about this case, click this link, or copy the URL below:
Oklahoma Hospital Group Pays U.S. $13 Million to Settle False Claims Act Allegations
Charge: Violating the False Claims Act and Anti-Kickback Statute
Allegations: Paying Physicians for Referrals
In 2009, the St. John Health System, of Oklahoma, settled with the federal government. They agreed to pay $13.2 million as part of the settlement. According to the DOJ press release, St. John’s disclosed their concern that some of their physician agreements were illegal. This disclosure occurred in April 2008 and sparked a negotiation ending in the settlement.
The case was investigated by the DOJ Civil Division and the DHS Office of the Inspector general. During this process, it became clear that St. John’s had paid doctors and physician groups for referrals. The federal Anti-Kickback statute makes this behavior generally illegal.
St. John’s ran afoul again when they billed federal healthcare programs for patients who had been referred illegally. This was a violation of the False Claims Act and violating the Anti-Kickback Statute is a felony. St. John’s self-disclosure played a strong part in keeping this case in the civil court system. No criminal charges were filed.
To learn more about this case, click this link, or copy the URL below:
Justice Department Announces Largest Health Care Fraud Settlement in Its History
Charge: Violating the Food, Drug, and Cosmetic Act; Violating the False Claims Act
Allegations: Promoting Drugs for the Wrong Uses
In 2009, the drug company Pfizer settled several civil and criminal actions with a total fine of $2.3 billion. Much of that money went to the federal government as restitution.
According to the DOJ press release,
Pfizer and its subsidiaries engaged in several illegal behaviors related to how they marketed certain drugs for uses that were not approved by the FDA. Among those drugs was Bextra, an anti-inflammatory. Pfizer advocated that Bextra is used in ways that the FDA had specifically said were unsafe.
Bextra was discontinued in 2005, but that didn’t change the illegality of Pfizer’s behavior before the drug was pulled. The company pled guilty to a felony violation of the Food, Drug, and Cosmetic Act, and agreed to pay almost $1.3 billion. At the time this was the largest criminal fine in the history of the United States.
At the same time, Pfizer settled a civil case for $1 billion. Most of the sum is restitution to the federal and state governments. Those governments were defrauded when Pfizer advocated the use of Bextra and other drugs for unapproved treatments. When the bill for those treatments was sent to government healthcare programs, fraud occurred.
The multi-agency investigation started when six whistleblowers alerted the U.S. to the fraud. The whistleblowers will split a reward of $102 million. Pfizer has also agreed to submit to more direct federal scrutiny.
To learn more about this case, click this link, or copy the URL below:
Need help with an investigation or the disclosure process?
While all healthcare institutions should conduct regular compliance investigations, the truth is that many don’t. And if they do, the investigation occurs entirely “in-house,” without an objective third party with an impartial perspective on the process.
At best, the investigators will be too familiar with the details to see the big picture. But even if they get it right, nobody wants to hear that they’re out of compliance. Pressure from the institutional leaders may be strong to give a passing grade—and they also pay the investigator’s salaries. It’s not hard to see how that could turn out.
Non-compliance can result in felony charges at the federal level, especially if it looks like there was a deliberate “cover-up.” The best legal defense starts now.
It’s been our experience that a law firm with the right know-how provides more than just an objective look at the situation and good legal advice. Knowing that your investigation is being guided by experts relieves a tremendous amount of stress, and that allows you to make the important decisions when the time comes.
A top legal team makes sure you get all the benefits of self-disclosure.
We’ve stepped in at every stage of the non-compliance process, from the start of an investigation on down. There is no doubt that the best results come when we lead investigations and then self-disclose before the government ever gets a whiff of non-compliance.
But we can help at any time, and if you’re dealing with this nightmare right now, you should call us. This stuff is too complicated and too important—you can’t go through it alone.
And more importantly, you shouldn’t have to.
If you or someone you care for is under investigation, may be charged, or has been charged with “violating the False Claims Act,” call our firm today for a free legal consultation.