Doctors are personally paying more settlements under the False Claims Act. In that regard, the Yates memorandum appears to be having its intended effect. The 2015 memo required investigators to focus more on individual liability when resolving fraud investigations. That year only 6 settlements forced doctors to pay when settling complaints filed under the False Claims Act. According to an analysis by Eric Topor of Bloomberg BNA (subscription required), personal settlements paid by doctors have more than tripled. This year the number is up to 26 — and the year is not over yet.
The trend is likely to continue. A recent post reported that Deputy Attorney General Rosenstein wants to incorporate the Yates memo into the United States Attorney’s Manual. Although Rosenstein will review the policy at that time, he indicated that he intends to maintain pressure on individuals.
Torpor’s analysis suggests doctors working for hospitals may be safer because they are farther away from billing. True as far as it goes; a doctor probably has greater exposure when the doctor owns the entity. However, the Yates memo is not concerned with entrepreneurial risk. A doctor remains liable when the doctor participates in fraudulent practices regardless of who owns the entity. If the investigation reveals a doctor’s involvement, the government is much more likely to demand a personal settlement from that doctor. Not surprisingly, Topor’s article shows qui tam relators also want a greater payout from doctors.
The analysis reveals an increase in clauses requiring individuals to cooperate with ongoing fraud investigations. Use of cooperation clauses in settlements appears to have doubled since 2008. This increase is not necessarily ominous. The Yates memo encourages government attorneys to keep the option of additional settlements where possible. Although a cooperation clause does not mean an additional false claims settlement is inevitable, doctors must recognize the clause allows an investigation to continue.