In our previous article, we outlined steps companies can take now to protect themselves during later government investigations and enforcement actions related to COVID-19 relief funding. These steps include: leverage compliance resources, document the application/funding process, document how money is used, schedule an interim internal review, and respond to employee complaints. In this article we focus specifically on the health care industry and how companies can protect against inevitable government scrutiny after receiving COVID-19 relief funding.

The health care industry must be particularly vigilant about protecting against future enforcement risks because it is a highly regulated industry facing an enforcement perfect storm—fast cash, poor guidance and retrospective review. Congress allocated $175 billion to the U.S. Department of Health and Human Services (HHS) through the Coronavirus Aid, Relief and Economic Security Act Provider Relief Fund (Relief Fund). To support an industry hurt by COVID-19-related patient surges, stay-at-home driven closures and elective procedure treatment delays, HHS adopted a strategy to release relief funds quickly and perform reconciliation on the back end. As a result, HHS released what it touted as “no strings attached” relief funds through a series of general and targeted allocations each with a list of somewhat vague terms and conditions. The only other guidance available were application instructions, where applicable, and a continuously evolving set of frequently asked questions.

Of course, no government funding comes with “no strings attached.” The government inevitably will review whether recipients of HHS relief funds met the eligibility requirements and complied with the terms and conditions for using relief funds. Given that any deliberate omission, misrepresentation or falsification of information related to the HHS relief funds comes with potentially severe consequences—including but not limited to revocation of Medicare billing privileges; exclusion from federal health care programs; and/or the imposition of fines, civil damages and/or imprisonment—health care companies should consider the following steps to support their acceptance and use of the funds:


Continue Reading How Health Care Companies Can Protect Against Government Scrutiny of COVID-19 Relief Funding

While the government is writing checks to companies to cope with recent pandemic losses, it simultaneously updated its internal guidance for scrutinizing a company’s corporate compliance program.  Earlier this week, the Department of Justice (DOJ) issued to prosecutors an update to its guidance document for the “Evaluation of Corporate Compliance Programs.”  DOJ counsel has long considered the existence and adequacy of a company’s corporate compliance program when determining whether, and to what extent, charges should be brought against that company, as well as how investigations should be resolved.

This guidance document, originally published in 2017, assists government counsel with that evaluation process.  While primarily intended for use in the criminal context, the same guidance could undoubtedly be considered during a civil investigation against a company, such as in a False Claims Act investigation.  The guidance document and its updates are excellent resources for a company to use in the company’s ongoing evaluation of its compliance program.

Purposefully tailoring the compliance program to your company.  Many DOJ updates reinforce the notion that a company should create a corporate compliance program that is tailored to that specific company, based upon its evaluation of its particular risks and anecdotes.  For instance, the update clarifies that government counsel should consider “the company’s size, industry, geographic footprint, regulatory landscape, and other factors, both internal and external to the company’s operations, that might impact its compliance program.”  And when evaluating whether the compliance program is well designed for a particular company, government counsel is directed “to understand why the company has chosen to set up the compliance program the way that it has, and why and how the company’s compliance program has evolved over time.”


Continue Reading DOJ Updates Guidance for Evaluating Corporate Compliance Programs as a Record Number of Companies are Receiving Federal Funding

As developments related to COVID-19 continue to unfold, Bass, Berry & Sims attorneys are monitoring the situation and providing guidance through a series of video chats entitled, “COVID-19 Compliance Conversations.”

In this episode, Lindsey Fetzer and John Kelly provide a brief overview of compliance considerations related to conducting internal investigations remotely. Watch the video

Despite the mounting pressures on healthcare entities related to the COVID-19 (coronavirus) pandemic and recent announcements of regulatory waivers and flexibility in particular areas, regulators are still showing interest in the enforcement of federal requirements for life safety and emergency and infectious disease control preparedness for long-term care facilities.

OIG Medicaid Nursing Home Life Safety and Emergency Preparedness Reviews

On March 23, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) updated its Work Plan in response to the COVID-19 pandemic. Please see this post for more information about all of the OIG Work Plan updates. One of the areas that the OIG Office of Audit Services will focus on is Medicaid Nursing Home Life Safety and Emergency Preparedness Reviews.

OIG’s rationale for focusing on this is, in part, because the patient population in long-term care (LTC) facilities is especially vulnerable to COVID-19 and other disease outbreaks. The focus of the audit is LTC facilities’ compliance with federal requirements for life safety and emergency preparedness, as well as 2019 Centers for Medicare & Medicaid Services (CMS) expanded guidance on emerging infectious disease control.


Continue Reading Increased Oversight of Long-Term Care Facilities Related to COVID-19

As the impact of the COVID-19 pandemic continues to spread, the federal government is preparing to take unprecedented action to curb its effects on the nation’s health and economy by freeing up federal dollars for private businesses, manufacturers and healthcare entities of all types. But, those receiving these dollars, directly or indirectly, should continue to monitor updates to and maintain compliance with all applicable laws and regulations as this unprecedented economic response comes with heightened scrutiny and potential enforcement and regulatory risk.

DOJ Prioritizes COVID-19 Wrongdoing

On March 16, the United States Attorney General issued a memorandum to all U.S. Attorneys prioritizing the detection, investigation and prosecution of wrongdoing “related to the current pandemic.”  Attorney General Barr also issued a press release on March 20 urging the public to report suspected fraud schemes related to COVID-19. Among the schemes, Attorney General Barr encouraged the public to report were any medical providers “fraudulently bill[ing]” tests and procedures.


Continue Reading COVID-19 and the False Claims Act

Bass, Berry & Sims is pleased to announce the release of the 2019 edition of its Healthcare Fraud & Abuse Annual Review. Compiled by the firm’s Healthcare Fraud Task Force​​​​​​​, the Review is an in-depth and comprehensive analysis of enforcement settlements, court decisions, and recent developments affecting the healthcare industry.

The Review details

In addition to the United States Department of Justice’s recently issued guidelines related to cooperation in FCA enforcement actions, the Department of Justice (DOJ)’s Criminal Division recently revised its guidance pertaining to assessment of corporate compliance programs.  The revised guidance will inform DOJ’s approach to criminal investigations, charging decisions, plea agreements, and sentencing in cases involving alleged corporate noncompliance or wrongdoing.

DOJ previously published guidance on its evaluation of corporate compliance programs in 2017.  As with the previous version, the revised guidance eschews a “rigid formula” for assessing compliance programs.


Continue Reading DOJ Asks “Fundamental Questions” of Corporate Compliance Programs

On March 18, 2019, the Department of Justice (DOJ) filed an amended complaint-in-intervention in the False Claims Act (FCA) case against Diabetic Care Rx, LLC d/b/a Patient Care America (PCA); two of PCA’s executives; and the company’s private equity owner, Riordan, Lewis & Haden, Inc. (RLH).  This filing comes on the heels of a March 5 decision by the U.S. District Court for the Southern District of Florida that dismissed for insufficient pleading DOJ’s FCA claim that the defendants submitted or caused the submission of false claims to TRICARE for compound prescriptions obtained through the payment of unlawful kickbacks to marketers, physicians and patients.  This case is significant and has been closely watched by the industry because it represents the first time DOJ has intervened in an FCA suit against a private equity firm alongside a healthcare portfolio company accused of submitting false claims.

Government Accused Private Equity Owner of Being Involved in Kickback Activity

This matter involves allegations that PCA paid kickbacks to marketers to target TRICARE beneficiaries for compound pain creams, scar creams and vitamins, regardless of medical necessity.  The marketers allegedly paid telemedicine physicians who prescribed the products without ever physically examining the patients, and colluded with PCA to pay many patients’ copayments to induce their acceptance of the lucrative compound drugs.  As support for its claim against RLH, as the private equity firm, the government has repeatedly cited to evidence purporting to show RLH’s material day-to-day involvement in the operations of PCA and its awareness of the facts surrounding the alleged kickback conduct.  The government has alleged that at all relevant times, RLH managed and controlled PCA through two RLH partners who also served as officers and/or directors of PCA and of two holding companies with an interest in PCA.


Continue Reading Government Files Amended FCA Complaint Against Private Equity Firm and its Portfolio Company

Download Annual Healthcare Fraud & Abuse ReviewBass, Berry & Sims is pleased to announce the release of its seventh annual Healthcare Fraud and Abuse Review. The Review, compiled by the firm’s Healthcare Fraud Task Force, is an in-depth and comprehensive review of enforcement settlements, court decisions and developments affecting the healthcare industry.

The Review is intended to assist healthcare

In December 2018, the Department of Justice (DOJ) updated its Justice Manual to add Title 1-20.000 et seq., Limitation on Use of Guidance Documents in Litigation. This addition formalizes guidance provided in two previous internal DOJ memoranda—the Sessions Memo and the Brand Memo—each discussing limiting the use of guidance documents and advisory opinions in both criminal and civil enforcement actions.

The Sessions and Brand Memos

The Sessions Memo, authored by then-Attorney General Jeff Sessions in November 2017, prohibited the DOJ from promulgating guidance documents “that purport to create rights or obligations binding on persons or entities outside the Executive Branch[.]” It also prohibited the DOJ from creating binding standards that could then be used to determine a person or entity’s compliance with applicable federal statutes or regulations. Importantly, the memo noted that such guidance documents were not produced through a notice-and-comment rulemaking process and were not promulgated by the agency charged with the constitutional authority to do so.


Continue Reading DOJ Formalizes Previous Directives Regarding Limiting Use of Guidance Documents to Prove Violations of Law