10 Steps to Take When Accused of Healthcare Fraud in Detroit

Oberheiden P.C.

Medical professionals, patients, and others can commit healthcare fraud by deceiving the healthcare system, such as providing medically unnecessary services, in order to get unauthorized benefits or payments. Facing accusations or if you commit healthcare fraud is a serious matter. Whether charged civilly or criminally, healthcare fraud carries substantial penalties under federal law.

For healthcare providers in Detroit, the risk of facing fraud allegations or having healthcare fraud cases is a very real concern. The U.S. Department of Justice (DOJ) Health Care Fraud Unit’s Detroit Strike Force has been active since 2010, and it has spearheaded several high-profile healthcare fraud investigations in recent years. While some of these investigations have targeted scam artists who have intentionally defrauded private insurance companies and federal healthcare programs such as Medicare and Medicaid, many have targeted legitimate providers who were previously unaware that they faced a risk of prosecution.

While the DOJ Health Care Fraud Unit’s Detroit Strike Force is at the forefront of the government’s fight against Medicare and Medicaid services fraud in the Motor City, it is not the only authority involved. Other federal and state authorities are targeting local healthcare providers as well. This includes the U.S. Department of Health and Human Services’ Office of Inspector General (DHHS OIG) and the Michigan Attorney General’s Medicaid Fraud Control Unit (AG MFCU), among many others.

“Healthcare providers in Detroit are at very real risk of being targeted in federal and state investigations. Whether accused of fraudulently billing Medicare or Medicaid, paying or receiving kickbacks, or engaging in other unlawful conduct, targeted providers must take a swift, comprehensive, and effective approach to avoid civil or criminal liability.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

Healthcare fraud investigations in Detroit tend to progress swiftly, and providers can quickly find themselves in precarious situations. With this in mind, here are 10 steps providers in Detroit should take when facing allegations of healthcare fraud:

1. Review Your Compliance Policies and Procedures

When facing a healthcare fraud investigation, it is important to rely on the resources your company or practice has in place. If your company or practice has a compliance program – as it should – this program should include policies and procedures for responding to a government inquiry.

Too often, targets of healthcare fraud investigations make the mistake of ignoring the work they have already done. A well-drafted and custom-tailored compliance program will provide a clear roadmap for handling the initial stages of a healthcare fraud investigation. Facing an investigation is not a time to plan. It is a time to execute. By reviewing—and following—their compliance policies and procedures, companies and practices targeted in healthcare fraud investigations can avoid unnecessary (and potentially costly) mistakes and delays.

2. Engage Healthcare Fraud Defense Counsel

Companies and practices in Detroit that are facing federal or state allegations should engage healthcare fraud defense counsel promptly. Successfully fending off charges and penalties requires experienced legal representation. Once engaged, the company’s or practice’s defense counsel should intervene in the investigation to slow its progress and gather key insights, and then defense counsel will need to work diligently to build and execute a strategic defense.

Another common mistake healthcare companies and medical providers make is waiting too long to engage defense counsel. As discussed in greater detail below, several important ways experienced defense counsel will be able to assist at all stages of the investigative process. By engaging counsel at the first sign of a government inquiry, targeted companies and providers can both mitigate their risk and increase their chances of a swift (and discrete) resolution significantly.

3. Identify Any Response Deadlines

If you learned about the accusations against your company or practice through a subpoena, target letter, civil investigative demand (CID), or any other type of formal notice or demand, you may have a deadline to respond. Failure to meet this deadline could have consequences whether or not your company or practice has improperly billed the government or committed other federal healthcare law violations.

As a result, it is critical to ensure that you are aware of any deadlines to which your company or practice is currently subject. As you move forward, you will need to work with your company’s or practice’s healthcare fraud defense counsel to submit an appropriate response. Depending on the circumstances, this may involve producing responsive records, requesting an extension, challenging the government’s demand in court, or any of a variety of other possible courses of action.

4. Institute a Legal Hold

Any time an entity is facing a government investigation, it is necessary for that entity to institute a legal hold. This is a formal and structured effort to preserve all relevant records in the entity’s possession. Failure to institute a proper legal hold can lead to allegations of concealing evidence or spoliation, and this can lead to litigation regardless of the merit of the accusations underlying the government’s inquiry.

A legal hold should ensure the preservation of all relevant electronic and hardcopy records that are in the entity’s possession, custody, or control. This means that it must cover not only computers and storage shelves on the entity’s premises, but employees’ mobile devices and storage vendors’ facilities as well. As with most other aspects of responding to accusations of healthcare fraud in Detroit, instituting a legal hold is a step that companies and practices should undertake with the advice and oversight of outside counsel.

5. Assemble a Response Team

Defending against accusations of healthcare fraud can be a substantial undertaking. While it is important for healthcare companies and medical practices not to lose sight of maintaining their day-to-day operations, they must devote due time and resources to the government’s investigation. To this end, they should assemble a response team composed of appropriate internal personnel who will work closely with outside counsel. This internal personnel should have first-hand knowledge of the company’s or practice’s recordkeeping and compliance practices; and, crucially, they should not be implicated in the investigation.

6. Conduct an Internal Compliance Audit

With a legal hold in place and a response team assembled, the next critical step in the process of responding to accusations of healthcare fraud in Detroit is to conduct an internal compliance audit. By engaging outside counsel to conduct the audit, targeted companies and practices can achieve several important outcomes: (i) ensuring that the audit is sufficiently comprehensive to identify any issues that may create problems during the investigation; (ii) ensuring an accurate and unbiased assessment of the sufficiency of the company’s or practice’s compliance efforts; and, (iii) ensuring that the audit and its findings are protected by the attorney-client privilege.

This internal compliance audit needs to be conducted as soon as possible—as the outcome of the audit will inform the company’s or practice’s defense strategy going forward. Without a clear understanding of the facts at hand, it is not possible to make informed decisions.

7. Avoid Common Mistakes

We’ve touched on a couple of common mistakes already, and avoiding mistakes is a key theme for successful healthcare fraud defense. While there are no guarantees, there are also strategies that have proven effective for defending against accusations of healthcare fraud on a fairly consistent basis. By knowing both what to do and what not to do, companies and practices targeted in healthcare fraud investigations can help position themselves for a favorable outcome that avoids unnecessary and unwarranted consequences.

8. Assess Your Risks, Defenses, and Obligations

After reviewing any formal written demands, intervening in the investigation, and conducting an internal compliance audit, it should be possible to assess your company’s or practice’s risks, defenses, and obligations. Are there issues that need to be addressed? If so, what is the best way to address them? Does your response team need to be gathering documents to provide to the government? Is it necessary, or is it in your best interests, to self-disclose any violations uncovered during the internal compliance audit? None of these are questions that you can afford to leave unanswered.

9. Formulate a Cohesive Defense Strategy

Based on the information gathered thus far, it should now be possible for your company or practices outside counsel to formulate a cohesive defense strategy. Whether this involves disputing the government’s allegations, questioning the sufficiency of the government’s evidence, asserting statutory or constitutional violations, deploying other defense mechanisms, or some combination of the above will depend entirely on the unique facts and circumstances at hand.

10. Proactively Engage in the Investigative Process

Finally, when facing accusations of healthcare fraud or being a target of healthcare fraud charges, it is imperative to proactively engage in the investigative process. Companies and practices targeted in these investigations should not take a wait-and-see approach. By working strategically with the agency (or agencies) handling the investigation, it will be possible to achieve a favorable pre-trial result in many cases.

What qualifies as a “favorable” result? Again, the answer depends. In many cases, it will be possible for targets of healthcare fraud investigations to avoid penalties entirely (with the help of experienced outside counsel). When this is not a realistic option in light of the facts presented, negotiating a resolution that avoids charges, avoids publicity, and mitigates any financial liability can allow targets to move on without facing significant long-term (if not business-threatening) ramifications.

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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