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A Scary Investigation Ends Well

Posted in Fraud and Abuse

Shortly before Halloween of last year, a Squire Sanders healthcare client received an omen that all was not well – a Civil Investigative Demand (“CID”) served by the United States Department of Justice (DOJ).  Broad, aggressive, and without identifying any pending legal complaint (CIDs usually don’t), the CID made a frighteningly lengthy list of demands for documents from the client.  The client, which possessed an exemplary compliance history and is a pioneering provider of lithotripsy surgical services in America, was shocked.  In less than one year, the Squire Sanders Health Care Investigations Team assisted the client to a happy ending.  (View a press release regarding the dismissal.) Here is more of the story. Document Folders

A qui tam complaint often is filed by a “whistleblower” – a party claiming certain insider knowledge of a company’s fraudulent and abusive activity against the government.  The suit claims violations of the False Claims Act because of fraudulent claims that that could result in triple damages and even exclusion from health care programs.   Because the qui tam complaint is filed under seal to allow the government the opportunity to investigate the allegations, the DOJ can utilize CIDs, among other investigative tools, to determine whether or not to intervene in the underlying action.  Meanwhile, the client does not know the particulars of the allegations against it.  As providers are learning, this type of investigation itself often feels punitive.  A CID can, and does, demand information and records spanning several years.   The compliance is costly and distracting from the company’s business.  All the while, the client does not know the basis for the investigation.

After learning of the CID in this matter, the Health Care Investigations Defense Team began a nearly year-long endeavor to explain to DOJ both the client’s operations and the history of the regulated lithotripsy market in Michigan.  The team, led by Tom Zeno – a former DOJ prosecutor for more than 25 years with extensive knowledge of healthcare fraud investigations, also consisted of litigator Aneca Lasley and health care practitioners John Kirsner and Emy Trende.  In Zeno’s judgment, the CID looked suspiciously like the type of investigative demand that DOJ issues for pending qui tam investigations, a bad sign for a healthcare organization to receive in the current era of enforcement and multi-million dollar settlements.

“CIDs and qui tam investigations are not only frightening, they are frustrating,” Zeno said.  “Moreover, they can be incredibly expensive and intrusive into the client’s operations.  We worked closely with the client to decide upon the best approach.  Fortunately, the government was open to hearing what the company had to say about its careful structure and its persistent compliance efforts.  After we made our presentation on behalf of the client, the government moved to dismiss the complaint.”

Zeno attributed the success of the Squire team to experienced teamwork, including a cross-practice group approach, which used top-notch document search technology called Equivio, to reduce the costs to the client substantially.

“Good healthcare organizations and providers hope CIDs or qui tams are not going to happen to them,” Zeno added.  “And yet, anticipation of ‘the worst’ is the best preparation for an effective response.  We are using lessons learned from this endeavor to help other clients prepare against, and then, if necessary, respond effectively to a similar type of government investigation.  Fortunately, Squire Sanders had assisted the client with preparation of its compliance program and the client persisted in its quest for compliance.”

To learn insights from Zeno and the Health Care Investigations team tune into the Firm’s complimentary webinars in the “What Keeps You Up At Night” fraud and abuse series.  More information is available on the event webpage.