It’s a moment to be dreaded: a federal investigative agent shows up at the door of the company that you work for. Even the best compliance plan or program cannot ensure that a healthcare provider will not become the target of - or, at the very least, tangentially involved in - a federal investigation. The following overview provides a basic and very general outline of the significant points regarding the complicated world of federal investigations, and some “best tips” on how to handle a visit from a federal agent.
At the outset, it’s important to note that the agents may be conducting a criminal investigation, a civil investigation, or both. Further, it’s important to note that a visit from a federal agent does not mean that the government suspects you or your company of wrongdoing – a fair amount of requests for documents seek information from third parties who are not suspected of wrongdoing. However, any visit from a federal agent should be taken seriously, and a company should try to get as much information about the investigation as possible. The first clue as to the nature of the investigation starts with the investigating agency, which may include one or more of the following:
- The Department of Health and Human Services, Office of the Inspector General (HHS-OIG). An HHS-OIG “special agent” is an agent who generally does both criminal and civil investigations, while an HHS-OIG “civil investigator” is limited to investigating potential civil liability.
- The FBI, as a general law enforcement agency, is often involved in criminal healthcare fraud investigations.
- Depending on the healthcare practice, some other investigatory agencies that could show up at a practice are the DEA and the FDA (for cases involving improper dispensing/prescribing of drugs) and the IRS (for tax and money laundering charges).
- Also, an agent from the state Medicaid Fraud Control Unit (MFCU) at the Louisiana Attorney General’s Office is included in this list, as state and federal authorities often work Medicaid fraud cases jointly.
The Subpoena and What It Means
The second clue as to the nature of the investigation will lie with the agent, who will usually announce the purpose of his or her visit. More often than not, the visit will involve service of a subpoena or other request for documents. In some cases, the agent will inform the company that it is not a “target” of any investigation – i.e., that the company is not suspected of wrongdoing and is not the subject of the investigation – and will often ask that the company keep the request confidential. When the agent makes no representation as to the nature or the target(s) of the investigation, the biggest clue is the type of request for information served and the information it seeks. The following are the different types of requests a provider could receive, and potential implications:
- A grand jury subpoena can be for documents, testimony (in front of the grand jury), or exemplars (such as handwriting samples). The grand jury subpoena is issued only for criminal investigations. A grand jury subpoena can be served on targets of an investigation, on potential targets, and on third parties. If you get a grand jury subpoena, the first step is to notify and/or retain counsel, even if the agent has informed the company that it is not a target. An experienced attorney will protect the company’s interests and will likely save time and money by streamlining the response to the subpoena.
- In addition to grand jury subpoenas, prosecutors may also use an administrative subpoena for records during the investigation of healthcare offenses. These are used in both civil and criminal cases.
- In a civil false claims investigation, the U.S. Attorney may issue a civil investigative demand to a party. The CID may require the production of documents and/or testimony.
- In lieu of a formal request for records, a federal agent may attempt to conduct and/or obtain records by simply showing up and asking if there are responsive records.
The best response to an agent’s service of a subpoena or demand is simply to politely accept it. Often, however, the agent will attempt to obtain other information from employees while serving the subpoena. It’s important to understand the consequences of consenting to an interview and the potential repercussions down the line.
To Talk or Not to Talk?
The first thing to understand is that agents often use the unannounced visit as a way to get the most information possible. Agents know that the element of surprise is a powerful investigatory tool, because catching people “off guard” usually makes it more likely that they’ll be more intimidated and less guarded with what they say. While sometimes there is no such ulterior motive when an agent asks questions on routine matters from third parties, clients need to exercise extreme caution when answering anything other than routine questions, especially where the agent has not made it known what he/she is investigating.
- A person can always decline to speak with an agent and may only be compelled to speak through a subpoena, which must specify a time and place for the testimony. If a company’s representative doesn’t know who or what conduct the agents are investigating, then he or she may unwittingly answer questions that could come back to haunt the company.
- Thus, it is a good practice in most cases to politely request a more convenient time to speak with the agent. This will give the representative and the company time to notify the appropriate persons of the investigation and to determine the appropriate steps to take, including informing and/or hiring counsel.
- Most importantly, if you decide to speak to a federal agent or prosecutor, you need to tell the truth, even in a consensual interview, as providing false information to a federal official can be a felony offense.
- Be aware also that a federal agent cannot guarantee immunity from prosecution. An agent’s stated belief that “we don’t expect you of any wrongdoing”– even if true at the time – can change according to the information that the agents later find.
- Don’t worry that declining to speak may make you look guilty. Agents understand that their visit can be scary and are used to people requesting to speak at a later time and/or contacting counsel.
In the end, common sense is important in discerning how much, if any, information you want to reveal.
The Investigation - What Else Could Be Going On?
Except in cases where the federal agent informs the provider that it is not a target and asks that the visit be kept confidential to preserve the integrity of the investigation, by the time the agent shows up at the doorstep, a conscious decision has been made to “out” the investigation - i.e., make it known to the parties that are being investigated. By the time the investigator shows up with a subpoena in hand, one, some, or all of the following may have occurred:
- Whistleblower/Informant interview. The attorneys and agents may have spoken with a whistleblower or a cooperator in a criminal case and thus may have some direct evidence – albeit perhaps of questionable veracity – regarding allegedly wrongful conduct.
- Data mining from billing records. Investigators use billing data to identify potential fraudulent billing practices. They may also cross-reference the billing data of one provider with that of another provider to determine whether there is suspicious conduct warranting investigation.
- Subpoena of financial records. Investigators can get a company’s and an individual’s financial records through a grand jury subpoena. With these records, the investigators will have traced the money stream of the provider and payments to and from individuals and other entities. In criminal investigations, the prosecutors may have also obtained copies of individual and corporate tax returns.
- Interviews/grand jury testimony, or CID testimony of former employees/other third parties. Often the whistleblower or cooperator will give investigators information on others with knowledge of the alleged conduct who are no longer involved with the company or individual investigated. Department of Labor reports allow investigators to identify former employees to interview and also give the investigators an idea of the potential decision-makers within the company.
- Surveillance. This is actually the old-fashioned method of going by the facility and monitoring who is coming and going. This method is used in cases where the allegations include a lack of services or unbundling of services.
- Consensual recordings. Many successful criminal and civil cases are made by consensual recordings of face-to-face conversations and/or phone calls. This is allowed only in those states that allow recordings upon one-party consent (Louisiana is such a state).
It's important to note that in prosecutions the thing that often proves guilt is the cover-up, i.e., the creation of after-the-fact records in response to a subpoena. You should presume that the agents may obtain information of such an occurrence through a cooperating witness or a whistleblower.
Conclusion: A Checklist for Handling the Agent’s Visit
- Try to get as much information about the agent(s). Where possible, get the business cards of all the agents who participate in the visit.
- Ask the purpose of the visit. Sometimes the agent will let you know what and whom they are investigating. Get as much information about the investigation as you can.
- Be polite but do not be caught off guard. Absent a subpoena or similar demand, the agents cannot compel you to speak. Further, a subpoena or a similar request for documents sets forth the date that you must provide the information to the agents – it’s not necessary to provide any documentation at the visit.
- Do not volunteer information or documents. Again, you are not compelled to do anything except accept service of the subpoena or demand.
- Be cautious about allowing an agent to interview employees. This is meant to protect both the company and the employees – the employees should be aware of the repercussions of their testimony, as well as their rights under the law.
- Use your chain of command in your favor. If your company has a policy of notifying management when there is a subpoena or other legal inquiry – as it should – let the agent know as much when you decline to provide information voluntarily.
- Try to minimize the impact of the agent visit within the office. A visit from a federal agent may result in the rumor mill going into high gear; the briefer the visit, the less grain for the mill.
- Institute a records preservation policy. This will show your integrity in responding to the federal investigation.
- Work with counsel to develop an internal investigation. If it's clear that you or your company is a target or potential target, you should begin working with counsel to identify potential problems and formulate strategies for resolving the investigation in the most favorable way possible.
- Identify potential weaknesses and correct them. A swift response to an oversight or weakness in the organizational compliance structure will go a long way in showing good faith to the federal investigators.
- Do not coach employees or create records. Remember that often the cover-up is the best evidence that the prosecutors will use in a criminal case. The cover-up can turn a potential civil case into a criminal prosecution.
- Presume the informant. The investigation should be on a “need to know” basis within the company. Company-wide meetings setting forth the issues are likely to get back to the investigators if there is a whistleblower employed with the company.
- Do not retaliate. If you suspect a whistleblower, do not retaliate. You could be liable for damages down the road.
Finally, if there is any possibility of civil or criminal liability, retaining an experienced lawyer is the most important thing a company can do. An experienced fraud litigator will be able to quickly understand the nature of the investigation and the targets, and will be able to better protect the company’s interests by controlling communications and cooperation with the investigators, organizing an internal investigation with all the potential legal ramifications in mind, and intervening early with the investigators/prosecutors to ensure the best outcome possible.