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Sep 17 2018

The Dilemma of Joint Defense Agreements in Internal Investigations After the Yates Memo

Copyright 2018, American Health Lawyers Association, Washington, DC. Reprint permission granted. Previously published in the August 2018 issue of the American Health Lawyers Association Fraud & Abuse Newsletter.

The release of "Memorandum on Individual Accountability for Corporate Wrongdoing" – the so-called Yates Memo1 – by the Department of Justice (DOJ) in September 2015 caused much alarm about the prospect of DOJ's pursuit of individuals for corporate misconduct. Now, more than two years later, the public can start to assess the real effect of the implementation of that policy. In fact, significant fines have been levied against senior corporate officials. The Chief Executive Officer of Tuomey Healthcare System paid $1 million to resolve his role in the allegations pursued by the DOJ that Tuomey violated the Stark law through its financial relationship with a group of specialists.2 In reaching the agreement, the CEO also agreed to waive any right to indemnification from the company, ensuring that the settlement was paid out of personal funds.3 Indeed, in FY 2017, the DOJ touted for the first time that it "obtained more than $60 million in settlements and judgments with individuals under the False Claims Act that did not involve joint and several liability with the corporate entity."4 Taking individual liability one step further, the DOJ also seems to be willing to consider the liability of lower level employees. In the recent eClinicalWorks settlement, not only were senior executives jointly responsible for the $155 million settlement, but a software developer and three project managers also entered into settlements with DOJ for $50,000 and $15,000 each, respectively.5

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Aug 15 2017

To Disclose or Not To Disclose, That is the Question

Health care providers and suppliers face a dilemma when they identify that potentially problematic claims have been submitted to a federal health care program. To disclose or not to disclose, that is the question. Balancing legal disclosure obligations and business interests can be difficult when entities look at short term risks and benefits. When balancing those interests, many providers are inclined to keep a potential violation quiet and hope that the government does not independently discover the violation. Is that a good strategy? Probably not. At a minimum, reporting and refunding wrongfully obtained reimbursement to Medicare is now a requirement. Moreover, depending on the circumstances, providers may be under an obligation to engage in a more fulsome self-disclosure, which may not only be an obligation but may also provide concrete benefits to the provider or supplier. But the dilemma does not end there. If a provider does decide to engage in the self-disclosure process, there are several vehicles to make that disclosure. Which is the right vehicle? This Update will provide some sign posts for providers and suppliers that are on this journey.

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