Healthcare executives on notice, DOJ cracking down on individuals for corporate misconduct

The federal government has taken a tough stance on healthcare fraud for many years. For the most part, companies caught up in the net have responded by paying huge fines and promising not to engage in fraudulent activities again. Despite the billions of dollars paid out, corporate fraud persists.

Now, the feds are turning up the heat even more and the stakes for those involved in corporate misconduct are becoming greater.

Earlier this month, the U.S. Department of Justice Office of the Deputy Attorney General issued a memo titled “Individual Accountability for Corporate Wrongdoing.” In a nutshell, the memo calls for high-ranking individuals, and not just the companies they run, to be held accountable for corporate wrongdoing.

This is a sea change in the way the government has historically pursued corporate misconduct. Although the new directive is not targeted specifically at the healthcare industry, healthcare executives are being put on notice that they will need to ramp up compliance.

The memo, issued by Sally Quillian Yates, provides for six areas of guidance:

Cooperation credits: For a company to receive any consideration for cooperation, it must completely disclose to investigators all relevant facts about individual misconduct. It can not pick and choose what facts to disclose.

Focus on individuals: Prosecutors – both criminal and civil – should focus on individual wrongdoing from the beginning of any investigation of corporate misconduct. Because a corporation acts through individuals, investigating the conduct of those individuals is the most effective way to determine the facts and extent of any corporate misconduct.

Communication is key: Early and regular communication between civil attorneys and criminal prosecutors handling investigations is crucial to effectively pursuing individuals.

Individuals v. corporate liability: Absent extraordinary circumstances, if the matter is resolved on the corporate level, department attorneys are to take care to preserve the ability to pursue individuals who may be involved.

Develop a clear plan: Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized.

Ability to pay: Recovering as much money as possible, as well as holding individuals accountable, are equally important. Therefore, pursuit of civil actions against individuals should not be based solely on their ability to pay a fine.

Although many healthcare companies have compliance programs in place, this memo should serve as a warning to those individuals in charge that their feet will be held to the fire should their company become the target of a federal investigation.

The Health Law Offices of Anthony C. Vitale has been representing clients under investigation for 25 years. If you have any questions relating to healthcare fraud and abuse call us.

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