An increase in government investigations and enforcement actions under the False Claims Act (FCA) and other federal laws can subject healthcare organizations, financial services firms, government contractors and others to enormous financial strain and reputational risk.

One aspect of FCA investigations that can make them so onerous is a prosecutor's use of a Civil Investigative Demand (CID). Similar to a grand jury subpoena, a CID gives the government access to a broad range of non-privileged information.

Given the often broad scope of these requests, an organization's response is crucial not only for setting the tone of the investigation, but also for minimizing the amount of time and money required to comply with the government's demands.

While each organization's response should be tailored to the circumstances of the investigation, the following ten tips can help the process go more smoothly and foster more positive results:

  1. Establish and maintain an open line of communication with investigators to better understand the investigation's focus and what’s needed in the organization’s response plan.
  2. Retain outside counsel experienced with such government inquiries to help assess the scope of the information being sought, formulate a response plan and avoid any actions which might negatively impact the company during the investigation.
  3. Conduct an internal investigation to gather facts, better prepare the organization's response and assess the organization's exposure to financial and reputational damage.
  4. Implement measures to prevent employees from destroying or altering documents that could potentially fall within the scope of the CID. The government may view destruction or alteration of documents as an attempt to impede the investigation.
  5. Advise IT personnel as soon as possible of the CID and the potential need to produce large volumes of data in formats compatible with government software. Also, contact third-party vendors to access certain data, undertake trial runs to ensure reliable data formats and/or estimate the time it will take to produce relevant information.
  6. Determine how much information to disclose about the CID to employees and others and who will be responsible for complying with its requests.
  7. Provide investigators with specific details on the type, form and amount of information in the organization's files to give them a better idea of the estimated time and costs — for both the organization and the government — of responding to the original CID request.
  8. Consider whether the organization can avoid expending more time, resources and money than necessary by narrowing the scope of the CID. If so, prepare a detailed alternative that outlines the organization's legitimate reasons for narrowing the scope, while recognizing the government's need for a thorough and organized investigation.
  9. Suggest compartmentalizing the CID according to subject matter, file type or location to both ease the organization's burden and gain insight into the focus of the government's investigation. Provide a clear roadmap for which documents will be produced by specific dates to avoid charges of impeding or delaying the investigation.
  10. Assure investigators of the organization's commitment to cooperating with their requests and providing prompt and thorough responses to their inquiries.

Properly responding to government inquiries is essential for minimizing the cost, time and impact of an investigation and securing a positive outcome. Knowing what to expect in advance allows organizations to respond as efficiently and cost-effectively as possible.

Training employees on how to recognize and prevent fraudulent activity — and respond appropriately when issues do arise —can help organizations avoid being the target of a government investigation in the first place.

[View source.]

Topics:  Banking Sector, Chief Compliance Officers, Civil Investigation Demand, Corporate Counsel, Enforcement, Enforcement Actions, False Claims Act, Federal Contractors, Government Investigations, Healthcare Providers, Internal Investigations, Training

Published In: Government Contracting Updates, Health Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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