Civil Investigative Demands

One of the first indicators that may tip off a healthcare provider or government contractor that their organization may be the subject of a False Claims Act (FCA) investigation is contact with a government investigator.  That contact may take many forms – service of a subpoena or Civil Investigative Demand (CID), an interview of an employee, or simply a phone call by a government regulator or investigator.  How an organization responds to those earliest contacts often sets the tone for how the government investigation unfolds.

Organizations with well-developed policies and procedures addressing how the organization will respond to contacts by government regulators often have a more orderly process to guide the organization in responding to government investigations (referred to herein as a Government Response Policy).  A Government Response Policy can set a clear tone of cooperation by the organization with any appropriately authorized government inquiry, while at the same time making clear that the organization will assert all protections afforded by law in any such investigation or inquiry.  And, a well-crafted Government Response Policy also can make clear to employees that concealment, alteration or destruction of information or the making of false or misleading statements to regulators will not be tolerated.

An effective Government Response Policy depends upon educating employees regarding the types of contacts that an organization or an employee may receive from government regulators and on establishing clear points of contact and lines of communication within the organization.  Typically, the organization will establish its legal department as a central point of contact for government inquiries or investigations (and organizations without a legal department would have to think through an alternative appropriate point of contact) as the entity within the organization best suited to coordinate the organization’s response either directly or through outside counsel.  Below we provide broad principles and guidelines that should be considered in preparing an organization’s Government Response Policy.

This post contains five parts and looks at the following:

  • Responding to a subpoena or CID.
  • Responding to visits by investigators at an office/facility.
  • Responding to a search warrant.
  • Responding to an interview request.
  • Responding to inbound calls from government officials.


Continue Reading An Ounce of Prevention: Effective Corporate Policies for Dealing with Government Investigations and Inquires

The Department of Justice (DOJ) announced this month that it obtained over $3 billion in settlements and judgments from civil fraud and false claims cases during the fiscal year ending September 30, 2019 (FY 2019). Of this total recovery, the vast majority—$2.6 billion—arose from matters related to different sectors of the healthcare industry. DOJ noted that 2019 was the tenth consecutive year that recoveries from civil healthcare fraud cases have exceeded $2 billion, indicating that the government’s enforcement efforts remain focused on allegations of fraud in the healthcare sector.

Large Recoveries Related to Drug Manufacturers & EHR

Within the healthcare industry, the government reported significant recoveries against pharmaceutical manufacturers. Insys Therapeutics paid $195 million to resolve civil False Claims Act (FCA) allegations that it paid kickbacks to induce healthcare providers to inappropriately prescribe its fentanyl product, Subsys, to their patients. This civil settlement was part of a larger global resolution of civil and criminal allegations, with Insys agreeing to pay a total of $225 million. Reckitt Benckiser Group agreed to pay $1.4 billion to resolve criminal and civil allegations related to the marketing of the addition treatment drug Suboxone, a buprenorphine product. The global resolution included a $500 million civil settlement with the federal government.


Continue Reading DOJ Announces 2019 FCA Recovery, Majority Came from Healthcare Industry

Jeff Gibson co-authored an article for the American Bar Association (ABA) outlining some of the tools a company may use in response to a False Claims Act (FCA) investigation. Jeff co-authored the article with Greg Russo, managing director at Berkeley Research Group, for the ABA’s Health Law Section. As the authors point out, the government has been very successful in recent years in pursuing allegations against healthcare companies accused of submitting false claims under the FCA.

Continue Reading Jeff Gibson Outlines Investigative Tools in FCA Cases

Civil Investigative Demands (CIDs) are powerful pre-litigation tools the government frequently utilizes to investigate potential allegations of FCA liability. CIDs can be broad and invasive, time-consuming and expensive.  What’s a company to do upon receipt of a CID?  Is there any recourse?  Unfortunately, neither case law nor published guidance offers the recipient much in the way of a formal, timely mechanism to challenge the scope or appropriateness of a CID.  Nevertheless, there are certain practical steps one can take to reduce a CID’s scope that, in turn, will reduce disruption and expenses associated with CID compliance.
Continue Reading The Civil Investigative Demand: An Increasingly Aggressive Investigative Tool and Common-Sense Scope-Reduction Strategies