DOJ’s Fraud Intervention and Compliance Guidance Point to Continued Enforcement


Two recent developments from the DOJ on corporate fraud issues signal that the agency won’t be stepping off the gas when it comes to investigating health-care fraud matters, according to industry attorneys.

The first is the Department of Justice’s intervention in a fraud lawsuit against UnitedHealth Group on Feb. 16. The DOJ’s taking the reins in this case is the latest warning to Medicare Advantage insurers that their practices are being scrutinized for possible wrongdoing (United States ex rel. Poehling v. UnitedHealth Grp., C.D. Cal., No. 16-cv-8697, unsealed 2/16/17).

Tim McCormack, a partner with Constantine Cannon LLP in Washington representing whistle-blower Benjamin Poehling, said the intervention in the False Claims Act lawsuit is a signal that the DOJ is looking at this area, and this particular type of fraud, closely.

Stradling Yocca Carlson & Rauth PC shareholder Jason de Bretteville, who leads the firm’s white-collar criminal defense practice, told Bloomberg BNA Feb. 17 the DOJ’s civil division “significantly expanded FCA enforcement in the healthcare industry under [the] Obama [administration],” including against upcoding practices, and the DOJ’s action appears to continue the trend.

The second indication of the DOJ’s intentions regarding fraud came in the form of corporate compliance guidance released Feb. 8 by the agency’s Criminal Division (without an accompanying press release or other announcement). The under-the-radar guidance nevertheless provided health-care fraud attorneys with a detailed view of how the agency evaluates corporate compliance programs in fraud investigations, providing much-needed practical guidance for the industry, attorneys told me.

The guidance, titled Evaluation of Corporate Compliance Programs, consists of a series of questions federal prosecutors “may ask in making an individualized determination” of how to judge a corporation’s compliance efforts in a fraud investigation.

Melissa L. Jampol, with Epstein Becker & Green, saw a connection between the timing of the guidance and the confirmation of Jeff Sessions as attorney general Feb. 8. Jampol, a New York member in the firm’s life sciences practice, told Bloomberg BNA Feb. 22 the guidance’s release signals the DOJ’s intention to continue its current course of pursuing health-care fraud, especially in light of the monetary return generated from health-care fraud enforcement and the growing share of the economy devoted to health care.

Jampol also noted that certain portions of the guidance borrow ideas from federal sentencing guidelines for organizations (rather than individual persons) as well. Jampol pointed out that “the two factors that mitigate the ultimate punishment of an organization [criminally],” a defendant’s maintaining of an effective compliance program and self-reporting wrongdoing, cooperation with investigations and acceptance of responsibility, appear in the DOJ guidance as well.

Read more about the UnitedHealth litigation in my story here.

Read more about the DOJ’s new compliance guidance here.

Stay on top of new developments in health law and regulation with a free trial to the Health Law Resource Center.

Learn more about Bloomberg Law and sign up for a free trial.