Monday, January 30, 2012

Government Threats to 'Come Down and Look Around' to Force Settlement in Qui Tam Cases

In my experience, health care executives often believe that a U.S. Attorney wields unlimited power when investigating a health care provider for False Claims Act violations and, in some instances, the government counsel conducting such investigations have certainly fostered that impression as well.  Last year, I came across an article in Modern where a hospital executive acknowledged that his hospital had reluctantly settled a qui tam investigation which was then under seal because the Assistant United States Attorney conducting the investigation threatened to widen the civil investigation far beyond the allegation at issue if the hospital did not settle.  Though it did not unearth any evidence of fraudulent billing, the hospital settled the investigation in the face of threats that if it did not settle the investigation, the government would "come down and look" at every one day hospital admission. I subsequently spoke with two other counsel who had similar experiences wherein the Assistant United States Attorney threatened to "come down and look around" if their clients did not settle more limited qui tam investigations, both of which were still under seal.

These experiences prompted the question:  Can the government do that?  Can they threaten to "come down and look around" in order to force settlement in qui tam cases?  I answered that question in an article that the ABA's Health Lawyer magazine was kind enough to publish last month:  Can They Do That?  Government Threats to 'Come Down and Look Around' to Force Settlement in Qui Tam Cases.  As I found, a U.S. Attorney has broad, though limited, powers when conducting a civil investigation of qui tam allegations while the matter remains under seal, and even more limited powers once the matter is unsealed.  In health care investigations, however, Congress has granted the U.S. Department of Health and Human Services broad powers to investigate the records of Medicare and Medicaid providers.  As I point out, though agents may have such broad authority, practical considerations will limit when and where such investigative powers will be used.

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