Pre- and Post-Commencement of an Investigation of Health Care Compliance: Key Considerations for all Providers

   By Gretchen Heinze Townshend and Elizabeth Bedore Campbell, Attorneys at Law

Five health care fraud settlements in excess of $100 million were reported last year, with total recoveries from health care providers amounting to $2 billion. Providers need to understand that in today's regulatory and political climate, the government continues to receive increased funding to uncover violations, and the number of health care fraud investigations continues to rise. The passage of the Deficit Reduction Act in 2006 not only contributed additional funding to government investigations, it provided states with an incentive to adopt their own false claims acts, evidencing the government's continued support and encouragement for whistleblowers to step forward and report suspect practices among health care providers and institutions. Whistleblowers and their attorneys filing suit under the federal False Claims Act helped authorities recover $2.2 billion in Medicare and Medicaid fraud cases in fiscal year 2006. The individual whistleblowers received $140 million of the proceeds for their efforts.

With such economic incentives on the part of the government and private parties to target health care fraud, implementing compliance policies, including routine and directed internal audits, and understanding how to respond when being investigated are crucial to a health care provider avoiding entanglement in the vast web of regulations and penalties encompassing the health care industry. Part I of this article will provide a brief summary of fundamental components of effective compliance policies, including an in-depth look at internal audits and options to address compliance issues revealed as a result of such audits. Part II discusses methods in which the government may commence an investigation, initial decisions a provider faces when confronted with an investigation, and certain doctrines which protect limited types of information from production in response to the investigation. This article is intended to highlight some key considerations for providers before and after a government investigation commences, but should in no way be viewed as exhaustive of any topic. Compliance policies and responses to government inquiries are highly fact specific based on the specialty of the provider, among other things. Providers are best advised to seek expert advice before proceeding with an internal audit or responding to a government investigation.

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Gretchen Heinze Townshend is an associate based in the Chicago office of McGuireWoods LLP Health Care Department. Elizabeth Bedore Campbell is Associate Compliance Officer at the Rehabilitation Institute of Chicago. Prior to that she was a health care attorney at McGuireWoods LLP.

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