AG’s Office Offers Compliance Tips While Noting New Enforcement Strategies

The Department of Justice's Assistant Attorney General for the Criminal Division has offered some helpful tips regarding how to avoid liability for compliance violations relating to Medicare reimbursement. Assistant Attorney General Leslie R. Caldwell, recently addressed two compliance audiences and taken together, her comments highlight new strategies for fraud enforcement and suggestions for avoiding compliance problems that laboratory compliance officers should consider.

Why You Should Listen
Noting that "Medicare Fraud remains a serious drain on our health care system," Caldwell addressed the American Bar Association's 25th Annual National Institute on Health Care Fraud and discussed future enforcement efforts, specifically highlighting laboratory services. "Strike Force is looking at emerging fraud trends, and we are seeing those in areas including Medicare Part D, laboratory services, hospital-based services and hospice care. These are the latest frontiers in Medicare fraud. … [W]e are working hard to identify those engaged in these new schemes and to bring them to justice."

Caldwell contrasted early enforcement efforts, which relied on the Centers for Medicare and Medicaid Services to refer cases to the Department of Justice, with current efforts in which the Medicare Fraud Strike Force's "intensive health care fraud enforcement efforts" target billing issues most often subject to fraud. Advances in data collection and usage are helping Strike Force achieve its success, according to Caldwell. "The Strike Force is a model of 21st Century data-driven policing." Strike Force now uses nearly real-time billing data from CMS to "bring cases more quickly" and "identify emerging fraud schemes and new types of Medicare fraud" or existing fraudulent conduct that is expanding geographically. She also advised that the Division is using "traditional investigative techniques" including undercover officers, wires, bugs, hidden cameras, and GPS tracking. Strike Force is also pursuing high-level individuals including physicians and executives as well as multi-district cases, she noted. See page 9 for how the Centers for Medicare and Medicaid are similarly using the latest in data analytics to ferret out improper payments.

Check for Hallmarks of an Effective Compliance Program
Addressing the Compliance Week Conference, Caldwell highlighted the "hallmarks of effective compliance programs" for all types of organizations noting that "compliance programs are too often behind the curve, effectively guarding against yesterday's corporate problem but failing to identify and prevent tomorrow's scandals." The hallmarks she referenced echo the principles espoused in the OIG Compliance Program Guidances:

• Senior leadership promotes a culture of compliance and "provide[s] strong, explicit and visible support" for compliance policies—noting the Division looks not just at written policies but other messaging through meetings, emails, incentives and bonuses.
• Senior level executives take responsibility for overseeing compliance.
• Clear and easily understood compliance policies.
• Adequate funding and resources for compliance staff.
• Adequate funding and resources for internal investigations.
• Periodic review of "compliance policies and practices" and updating as necessary to meeting changing risks.
• "[E]ffective system for confidential, internal reporting of compliance violations."
• Enforcement mechanisms, incentives for compliant conduct and discipline for noncompliant conduct.
• Holding third parties with which the organization works accountable for their compliance.

Truly Cooperate with Investigations
Discussing prosecution of corporate entities, Caldwell explained the value of corporate cooperation. Caldwell explained that entities seeking to benefit from alleged cooperation must "conduct a thorough internal investigation and turn over all available evidence of wrongdoing to our prosecutors in a timely and complete way" and identify culpable individuals, even if evidence points toward high level executives. "A company should not expect to receive cooperation credit for just producing documents in response to a grand jury subpoena," said Caldwell. "To the contrary, compliance with lawful process is a legal requirement, not voluntary cooperation."

In discussing the criminal division's collaboration with the Civil Division on parallel prosecutions, Caldwell noted that prosecutors consider the severity and pervasiveness of the alleged activity and the culpability of individuals, among other factors, when deciding whether to bring criminal prosecution.

Takeaway: Fraud enforcement in the laboratory sector isn't abating any time soon as the Department of Justice names laboratory services as one focus of its efforts. So consider tips the Assistant AG highlights for effective compliance programs and cooperation during investigations.