The Government's Knocking, Should You Be Talking?
When federal agents start investigating your company for healthcare fraud, Lisa Noller, a Foley & Lardner partner who works on government enforcement, compliance and white-collar defense, stresses that general counsel should rely on what she calls a “response template.” It was one of the pieces of advice she gave as part of an Association of Corporate Counsel webcast Thursday, “When Investigators Come Knocking, Should You be Talking? Tips for Responding to Government Investigations.”
“A lot of times I find that clients panic when there’s someone knocking at the door, and they stray from an otherwise excellent investigation tool because there’s a little bit of uncertainty at that point,” she said during the webcast. “Stick to what you know, what you believe is going to work, and what you’ve designed in a moment of calm rather than in a moment of panic.”
According to Noller, a GC’s response template, which details actions to take under different circumstances, will prove useful when determining when to internally investigate allegations of fraud, when to self-report the findings of the investigation, and how to correct the problems that arise.
Wendy Rubas, vice president and general counsel of Northwest Community Healthcare and another speaker during the program, said a company should also take steps to prevent problems well before an investigation occurs. She recommended training employees, officers, and directors on how to respond to a government investigation. Rubas also suggested creating a due diligence checklist by collecting an indexing company policies and identifying potential issues.
Noller, a former prosecutor, discussed one problem that she has come across frequently when aiding companies in these types of investigations: when employees and executives talk to government investigators, they often don’t know that they can invoke their Fifth Amendment right and not answer questions.
“As a prosecutor, I was shocked at how many people would talk to us when it’s not in their own best interest,” she said. She detailed the importance of specifically invoking the Fifth Amendment; under the doctrine from Salinas v. Texas, simply declining to answer questions (without invoking one’s Fifth Amendment rights) can be used against you. She added that another problem that comes up during investigations is that members of the company sometimes guess or accidently provide incorrect information to investigators when questioned.
Noller also advised on the pros and cons of self-disclosure at the conclusion of an internal investigation. For example, the Affordable Care Act requires disclosure of conclusions reached during internal investigations of Medicare fraud. However, this can create a tension with criminal law, where there is a right to not incriminate oneself, and may lead to both positive and negative aspects of disclosure. On the one hand, self-disclosure may neutralize False Claims Act lawsuits; on the other, it may provide information to the federal government that it did not already have.
When determining whether or not to disclose, Noller said that one should take into account the Filip Memo [PDF], which is guidance issued by the Department of Justice that specifies when the federal government may prosecute fraud. She said that the government will consider the nature and seriousness of the offense, pervasiveness of wrongdoing within the organization, a history of similar misconduct, timely and voluntary disclosure of wrongdoing, and pre-existing and effective compliance plans when making its decision.
The speakers said these types of precautions and preparations are especially important under the strengthening enforcement environment. In 2012, there were 1,131 criminal healthcare fraud investigations opened by the Department of Justice, compared to 836 filed in 2006, according to the presentation.