Is Increased Corporate Fraud and Compliance Oversight on the Horizon for Healthcare Companies?

Steven T. Boell      Feb. 16, 2016

Recently, the United States Deputy Attorney General issued a Memorandum entitled “Individual Accountability for Corporate Wrongdoing” which signals intent by federal prosecutors to increasingly investigate and prosecute corporate executives’ and officers’ roles in corporate fraud and compliance issues. While not specifically targeted to the healthcare industry, this increased focus could affect the compliance culture, as the purpose is to “seek accountability from the individuals who perpetrate wrongdoing.”

Many of the efforts are not new, but are simply amendments of existing policies reflecting best practices already employed by federal prosecutors to more efficiently pursue individuals responsible for corporate wrongdoing. . One key is that the guidance is not intended solely for criminal prosecutions, but civil corporate enforcement actions as well. The six key steps outlined by the Attorney General are as follows:

(1) In order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct.

(2) Criminal and civil corporate investigations should focus on individuals from the inception of the investigation.

(3) Criminal and civil attorneys handling corporate investigations should be in routine communication with one another.

(4) Absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation.

(5) Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases.

(6) Civil attorneys should consistently focus on individuals, as well as the company, and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.

This Memorandum will have broad-reaching implications in federal prosecutions and investigations relating to the False Claims Act, Anti-Kickback Statute, and Stark Law. The Memorandum will result in more enforcement actions (both civil and criminal) as individual corporate officers and the greater communication between the civil and criminal enforcement arms of the government will increase efficiency of prosecutions.

The Attorneys at Fitzpatrick Lentz & Bubba have extensive experience advising hospitals, practitioners and other healthcare providers on a wide range of healthcare law matters, including regulatory and governance issues. For more information, please contact please contact Steve Boell or any other attorney in our Healthcare Group.


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