This presentation will cover the nuts and bolts of responding to a government subpoena and investigation, from recognizing when and how an investigation starts through to the aftermath of an investigation. We will walk through the steps you can take before your organization receives a subpoena, issues that may arise in responding to a subpoena, when to conduct your own internal investigation, and possible outcomes. Finally, we will review recent developments and trends in the healthcare enforcement landscape. Our agenda: -Relevant government agencies -Steps in responding to a government subpoena -When to conduct, and how to conduct, an internal investigation -Recent developments and trends

1. Navigating Government
Investigations of Healthcare Fraud
June 15, 2016
Brian Bewley
bbewley@polsinelli.com
Kelly Schulz
kschulz@polsinelli.com

2. 2
Agenda
 Overview of Healthcare Fraud Enforcement Landscape
 How Things Get Started
– Understanding how investigations begin, interested parties, and conduct
that attracts attention
 Responding to an Investigation
– Providing information in response to subpoenas and other requests for
documents and information
– When and how to conduct an internal investigation
 Aftermath of a healthcare fraud investigation
 Recent Developments and Trends

3. Enhanced Enforcement Authorities
Civil Criminal Administrative
 Funds criminal investigations
 Biggest settlements with large
companies
 Physicians & individuals
increasingly targeted
 Strike Force
 Actively involved in reviewing what
historically were simply civil cases
 OIG’s CMP Authority
 Penalties – Exclusion
 More aggressive than in the past
 Focus on providers that employ
excluded individuals
 2015 – $3.5 billion
 Over life of program- $27.8 billion
 ROI = $7.70

4. HealthCare Fraud Recoveries
 OIG reported $2.77 billion in recoveries through the
first half of fiscal year 2016
 Enforcement resulted in recoveries of $7.70 for every
dollar spent investigating healthcare related fraud and
abuse in 2012-2014
 Targets: Hospitals, nursing facilities, long-term care
facilities, residential treatment facilities, intermediate
care facilities, institutes for mental disease, hospices,
institutional healthcare providers, home health
agencies (HHAs)
4

5. False Claims Act ("FCA"):
Whistleblowers Driving Enforcement
 FCA establishes liability for any person who KNOWINGLY
presents false or fraudulent claims to the US government for
payment
– Actual knowledge
– Acts in deliberate ignorance of truth or falsity
– Acts in reckless disregard of trust of falsity
 Includes "Qui Tam" provisions that allow private citizens
(relators) to sue violators on behalf of the government
 Penalties:
– Monetary penalties of not less than $5,500 and not more than
$11,000 per claim
– Plus damages of not more than 3 times the total amount of
remuneration offered, paid, solicited or received
– Potential Exclusion From Federal/State Programs
5

6. Enforcement Trends
 Types of allegations:
– Quality of care
– Billing practices
– Provision of medically unnecessary services
– Arrangements and relationships for AKS and Stark
law compliance
• Sales and marketing practices
6

7. 7
They’re ALL Watching You . . . .
RACs/
ZPICs
State
Legislatures
State AGs
Congress Medicaid
HHS
FTC
FDA
DOJPlaintiff
Lawyers
Whistle-
blowers
Commercial
Payors
Personal
Injury
Litigants
Competitors
OIG
PRESS
Medicare/CMS
YOU

8. DepartmentofJustice
Main DOJ
FBI
USAO
 Lead on False Claims Act cases
 Can prosecute criminal conduct
 Slightly different view between Main
Justice – USAO
 National vs. Local

9. Office of Counsel to
the Inspector General
Office of
Investigations
Office of Audit
Services
Office of Evaluation &
Inspections
CMS
Department of Health & Human Services
 Delegated Authority to bind HHS on FCA matters
 “Client Agency”
 Civil Monetary Penalty Authority
 Exclusion Authority
 OI has 600 Special Agents & Analysts
 OAS projects $65 Billion in Overpayments
 Program Agency for
Medicare & Medicaid
 Responsible for Stark
Law
 Payment Suspensions
& Pre-Pay Reviews
 Recovery Auditors &
ZPIC Audits

10. State Agencies
Attorney
Generals
Medicaid Fraud Control
Units
 Focus on Medicaid Fraud
 Civil & Criminal
 OIG-OEI has oversight
authority on MFCUs
 Ability to suspend payments
pending an investigation

11. RECOGNIZING WHEN AND HOW THE
HEALTHCARE FRAUD INVESTIGATION
STARTS
11

12. How Cases Originate
 Qui Tams
 Hot Line Complaints
 Referrals
 Data-Mining
 Self-Disclosures
12

13. Grand Jury Subpoena
 What is a grand jury subpoena?
– Order of the court for a
witness to appear at a
particular time and place to
testify and/or produce
documents in the control of
the witness
– Will require you to provide
the requested materials
and/or testimony
– Deadline to respond varies
 Will you know it when you see it?
– What does it look like?
13

14. Civil Investigative Demand
 What is a CID?
– Production of documents
– Interrogatories
– Sworn testimony
– Usually 20 days to respond
on face
– Time frame negotiated in
actuality
– Becoming much more
common /onerous
 What does it look like?
– Will you know it when you
see it?
14

15. OIG Subpoena
 Could be from Assistant Inspector
General for Legal Affairs (AIG) or
Special Agent in Charge (SAC).
 May seek documents (example at
right) or be a testimonial
subpoena (see 42 C.F.R. §§ 1006.1
– 1006.5).
 Response usually due in 30 days
but often negotiated.
15

16. RESPONDING TO THE GOVERNMENT
16

17. Responding to Subpoenas and CIDs
 The subpoena/CID makes its way to you . .
What do you do?
– Who is the subpoena/CID addressed to?
– Do you have a process / procedure for who will
handle them / who should receive? (Legal or
compliance)
– Make sure employees know who to send the
document to so that it can be reviewed and
response provided within required timeframes
17

18. Reviewing the Subpoena / CID
 Quickly determine the nature of the allegations
 Identify potential sources of documents and data
 Document preservation and retention
– Understand when a document hold is necessary
– Determine who needs to receive the document hold–including IT staff
 Develop effective document collection, review, and
production strategies
– What is the volume of information? Who will be reviewing it?
– Document production requirements specified by requesting authority
 Conduct thorough and objective internal investigation
– Preserve privilege and work with and consult internal and outside
counsel
 Results of investigations  compliance enhancements
18

19. Key Considerations
for Government Investigations
 Government investigation requires Company to
respond to government agency’s inquiries
 Communicating with Government prior to response to:
– Determine potential areas of concern
– Developing production schedule
– Obtain clarification of requests
– Set the proper tone
– Obtain control of the process
 Maintain open dialogue
19

20. Preparing a Subpoena Response
• Scope and focus - prepare a work plan
• Consider costs, needs of business to continue v. need to adequately
conduct investigation
• Identify the right investigator
• Outside counsel, in-house counsel, compliance department, or some
combination of the above
• Do your in-house resources have the capacity to respond?
• Will your investigator be able to defend the company’s response to an
allegation or problem if it came to the attention of criminal
prosecutors, regulatory agencies, shareholders, or the public?
20

21. Get the Word Out – Balanced
Approach
 Determine who within the organization needs to know
– Who can answer questions or issues relating to the allegations?
– Who needs to know of financial and/or legal implications?
– Who needs to assist Organization in responding to the allegations (e.g., collecting
data)?
 Usual Suspects tend to be:
– Executives
– Board
– Audit Committee/Compliance Department (if not already involved)
– Investor Relations (for public company)
– IT Department
– Key Employees (all those with or likely to have knowledge)
– Human Resources
21

22. Document Preservation and Retention
 Preservation Notice/Document Hold Memorandum
– Notice/memo circulated to all employees to preserve relevant information upon
learning of pending or threatened litigation or investigation, or receipt of a
subpoena or CID
– Retain all relevant documents – don’t delete or alter anything that would be
considered responsive to the notice/memo
– If you are responsible for identifying recipients, think of “record custodians” -
employees who may be in the possession, custody or control of documents
related to the investigation
– A defensible preservation and collection methodology and protocol
 Those who refuse to cooperate can be charged with
obstruction of justice
22

23. Identifying Document Custodians
 Cast a wide net - think of where ALL the relevant
information could possibly be located
– Employees’ hard drives
– Employees’ personnel files, submissions to third parties,
– Company’s databases
– Company’s shared drives
– Company’s archived files
– Paper files forgotten in drawers, cabinets, etc.
– At home?
– Off-site locations (storage?)
 Once sources are identified, work with counsel to
determine best method of collection, review, and
production
 Often negotiable what types of documents government
wants produced or produced first
23

24. Develop Effective Document Collection,
Review, and Production Strategy
 Effective Document Collection
– What are internal capabilities?
– If collecting documents from foreign countries, be mindful of privacy laws
 Effective Document Review
– Goals: Review of documents to determine responsiveness to requests
and to identify and protect privileged documents
– Develop review protocol for consistent review
– Volume may be determinative of need for outside assistance
 Effective Production Strategy
– Ensure docs are produced in appropriate/requested format
– Keep record of what was produced and when (e.g., production letters and
logs)
24

25. WHEN AND HOW TO CONDUCT AN
INTERNAL INVESTIGATION
25

26. Thorough and Objective Internal
Investigation Is Necessary
 In parallel with response to Government, conduct
your own internal investigation into the concerns
raised
 Why is an internal investigation necessary?
– Helps to accurately assess potential liability
– Helps to develop a strategy for responding to allegations
– Identifies other areas of potential concern
– Demonstrates cooperation and that the company is taking
the allegations seriously
– Is critical to developing successful defenses
26

27. Internal Investigation v.
Government Investigation
27
Internal Government
Start •Initiated by Company
• Perceived discrepancy in routine
monitoring
•Receipt of internal/external complaint
•Initiated by Government Agency
•Subpoena, CID, search warrant,
whistleblower, etc.
Goal/Strategy • Assess whether any wrongdoing has
occurred, and determine appropriate
action if any
•Company must be convinced whether
wrongdoing has/has not occurred
• Playing offense and sometimes defense
• Identify basis and evidence behind
government's allegations
• Identify basis and evidence of any
potential defenses (cooperation v.
defense)
• Playing defense
Investigator • Compliance/audit department
• Counsel (in-house and outside counsel)
•Government agency but with cooperation
from Company’s Counsel
Investigation • Collect and review documents
•Interview relevant employees
•No production of documents
• Collect, review, and produce documents
to Government
• Interview relevant employees,
• Outside Counsel (likely) will
communicate with Government
• Make presentations to Government
Results/
Consequences
•Disclosure to Management
• Potential disclosure to Government
• Revised policies/compliance
• Disciplinary actions
• Penalties (e.g., exclusion, CIA, etc.)
• Disclosure in SEC filings
• Revised policies/compliance
• Disciplinary actions

28. Protecting the
Attorney Client Privilege
 Internal investigations performed by counsel are
protected by attorney client privilege
– Summaries of issues identified in document review
– Employee interviews (Upjohn)
– Development of defenses
28

29. Steps in an Investigation
 Preservation of relevant documents and electronic
records
– Receipt of a preservation notice/document hold memorandum
asking you not to delete any relevant emails, electronic or hard
copy documents, etc.
– When company has already received subpoena, document
hold likely already issued
 Interviews of relevant individuals
 Investigative steps should be documented in detail
29

30. Conducting the Investigation
 Document Collection
– Identify relevant custodians
– Do not make copies of notes or reports
– Deliver all originals and work papers to the lawyers
 Interviews
– Provide general outline of the investigation/litigation (including details
as to the divisions or products of the company that are at issue)
– Interviewees are requested to assist in the investigation by being
forthcoming and providing relevant information
 Treat all information as privileged and confidential
– Remind all custodians and interviewees not to discuss investigative
work or findings with others
– Mark all investigative notes, reports or other documents or
communications, including e-mail correspondence, “Privileged and
Confidential”
30

31. Reminders to Employees
 Provide instruction and reminder to:
– Adhere to preservation notice/document hold
memorandum
– Honestly answer questions presented during all interviews
– Respond to all follow up requests
– Maintain all communications with attorneys confidential –
do not share with anyone
 Failure to be truthful or destruction of documents is serious
AND could result in prosecution for obstruction of justice
31

32. Determining Investigation Results
 Potential criminal, regulatory or civil liability
 Reporting requirements to either the government,
the board of directors or the company’s outside
auditors
 Notification requirements to insurance carriers, state
licensing boards?
 Need for employee disciplinary actions?
 Extent and content of any communication with
employees or the public
32

33. ARE WE THERE YET?
33

34. OIG and DOJ Focusing Intensely on
Compliance Programs
34
FOOTNOTE: DOJ has hired official dedicated 100%
of time to assessing compliance programs

35. DOJ Yates Memo
 To be eligible for cooperation credit—in civil or criminal investigations—a
company must provide “all relevant facts about the individuals identified in the
corporate misconduct.”
 Both criminal and civil corporate investigations should focus on individuals from
the inception of the investigation.
 Criminal and civil attorneys handling corporate investigations should be in
routine communication with one another.
 In criminal investigations, “absent extraordinary circumstances, . . . Department
lawyers should not agree to a corporate resolution that includes an agreement
to dismiss charges against, or provide immunity for, individual officers or
employees.”
 Corporate cases should not be resolved without a clear plan to resolve related
individual cases.
 Civil attorneys should consistently focus on individuals as well as the company
and evaluate whether to bring suit against an individual based on considerations
beyond that individual’s ability to pay.
35

36. Key Takeaways from Yates Memo
 Not really new, but maybe formalizing existing policy
 DOJ is serious about individual liability – both criminal
and civil
– Look for more civil FCA actions and settlements against
individuals (examples: Columbus Regional settlement and
pending LifeCare FCA case)
 Parties should ensure appropriate releases when settling
FCA cases (current and former officers, directors . . . .)
36

37. Recognizing the End of the
Investigation
 Internal/External Conclusion is communicated
– In-house attorney/compliance person might communicate conclusion of
investigation
– Press Release might be issued as to fines, penalties resulting from investigation.
 Resulting policies (e.g., compliance programs) are
introduced
– Consistent and comprehensive training
– Oversight, monitoring and reporting system (e.g., hotline)
 Improvements or modifications to existing compliance
programs and practices
– Ensure all practices adhere to applicable regulations
– When in doubt, contact legal for their advice
 Disciplinary procedures to address violations
 Call to request or confirm results
37

38. Questions
38
Brian D. Bewley, Shareholder
Health Care Regulatory
816.360.4372 | bbewley@polsinelli.com
Kelly E. Schulz, Associate
Health Care Regulatory
816.572.4464 | kschulz@polsinelli.com
Kelly Schulz believes in a practical approach to addressing each client’s
business outcomes and objectives in a timely and efficient manner. She
assists a broad range of health care organizations in criminal and civil
investigations and regulatory compliance matters, and draws from this
experience to assist clients with:
• Conducting investigations regarding potential violations of various
civil, criminal, and administrative laws, including the False Claims Act
and the Foreign Corrupt Practices Act
• Responding to government inquiries and subpoenas
• Assessing whistleblower allegations
• Performing due diligence in connection with corporate transactions
Prior to joining Polsinelli, Kelly practiced laws for over three years
abroad, and she is easily attuned to the importance of understanding
the nuances of each unique client's needs.
Brian focuses his practice on healthcare fraud and abuse and compliance
issues, and routinely represents entities under investigation based on
alleged violations of various civil, criminal, and administrative laws,
including the False Claims Act (FCA) and OIG’s Civil Monetary Penalties
(CMP).
Prior to joining Polsinelli, Brian served as Senior Counsel at OIG-HHS and
acted as the Team Leader for the Boston, Miami, Dallas, and San
Francisco regions. Brian was also appointed by a former United States
Attorney, now a federal court judge, to act as a Special Assistant U.S.
Attorney to handle civil health care fraud matters.
Brian frequently presents on various health care regulatory fraud and
abuse issues, acts as Program Chair for the Health Care Compliance
Association’s Midwest Region Conference, and serves as a member of the
American Health Lawyers Association Advisory Opinion Task Force for
the Fraud and Abuse Practice Group.

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