Increased Focus on Healthcare Prosecutions

The Department of Justice has indicated an increased focus on healthcare fraud by devoting additional resources to these investigations and highlighting recent prosecutions in this area. Of note was the June 2016 sweep led by the Medicare Fraud Strike Force, which resulted in criminal and civil charges of 301 individuals and alleged approximately $900 million in false billing.[1] Among those charged were doctors, pharmacists, physical therapists, home health care providers, and other medical providers. This nationwide sweep involved 23 state Medicaid Fraud Control Units and took place in 36 federal districts. This coordinated takedown has been described as the largest in history, both in terms of number of defendants charged and loss amount.

Historically, many of these types of cases were resolved through civil settlements and sanctions or the corporate entity alone was deemed responsible. These new charges indicate a continued shift to the more aggressive pursuit of criminal charges and greater focus on holding individuals accountable.

With the Department of Justice vowing to maintain this focus on healthcare fraud, it is important for healthcare providers to be mindful of the potential to become the subject of a federal investigation. Corporations need to be aware of the potential for the corporate entity as well as responsible individuals to be held criminally liable for healthcare fraud. Training in compliance with applicable laws and regulations is one essential component. Healthcare providers must be more vigilant and responsive to any observed potential violations of legal or regulatory requirements. Providers’ plans for responding to instances of alleged violations of legal requirements should presume a real risk of a criminal investigation, possibly resulting in criminal prosecution.

So what can you do if you identify a problem at your facility?

You have discovered a potential issue at your company. What you do in response to that discovery can prove to be the difference between facing civil or criminal charges (or both) and resolving the problem without further issue. Depending on the circumstances, one of the best options may be to conduct an internal investigation. An internal investigation can aid you in identifying the extent and severity of any corporate issues. This is a decision that would likely be made by board members or compliance officers, in conjunction with in-house counsel, if applicable.

Many corporations assume that an internal investigation should be conducted by in-house counsel. This may be a viable starting point but there are a number of reasons why utilizing outside counsel to conduct an internal investigation may be the better option. Outside counsel inherently has separation from the company and whatever conduct has taken place or is taking place that is giving rise to the need for the internal investigation. This separation lends credibility to the internal investigation and its conclusions, which will be conducted and formulated by a neutral voice rather than an employee of the corporation.

Outside counsel has the benefit of being able to conduct an internal investigation without any preconceived notions about personnel and company business practices. This allows them to be more objective while making assessments and drafting recommendations.

The involvement of outside counsel is also likely to lessen concerns about unintentional waiver of attorney-client privilege that can be a concern when investigations are conducted by in-house counsel.

Utilizing outside attorneys experienced with internal investigations may allow your company to avoid some of the more subtle issues that may arise during the course of the investigation. This experience can provide critical direction that can maintain the effectiveness and ultimate credibility of the internal investigation. Outside counsel may help avoid unfounded accusations of obstruction of justice and interference with potential witnesses. Government investigators are likely to be looking for interactions with employees by management that appear to be attempting to exert influence over the employee.

An internal investigation can not only address the specific issue your company is dealing with but also will allow counsel to draft recommended changes to training, oversight, and compliance plans. The bottom line is that being proactive in the face of a potential issue is a crucial component of minimizing the potential fallout and being able to make changes that may prevent similar issues from threatening the corporation in the future.


[1] Department of Justice – Office of Public Affairs, National Health Care Fraud Takedown Results In Charges Against 301 Individuals For Approximately $900 Million In False Billing. 2016. Web. 30 Nov. 2016.

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These articles are provided for general informational purposes only and are marketing publications of Gentry Locke. They do not constitute legal advice or a legal opinion on any specific facts or circumstances. You are urged to consult your own lawyer concerning your situation and specific legal questions you may have.