On September 17, 2014, during a speech at the Taxpayers Against Fraud Education Fund Conference in Washington, D.C., Assistant Attorney General for the Criminal Division of the Department of Justice (DOJ)  Leslie Caldwell  highlighted the fact that the DOJ “will be stepping up [its] use of” False Claims Act (“FCA”) lawsuits against health care companies, corporate health care entities, and their employees.

Ms. Caldwell specifically stated that the DOJ would be “committing more resources” to scrutinizing FCA complaints for evidence of criminal wrongdoing.  According to Ms. Caldwell, the DOJ has recently implemented a procedure that “all new qui tam complaints are shared by the Civil Division with the Criminal Division as soon as the cases are filed.”  The Criminal Division would then review these lawsuits for criminal conduct.

This news is especially relevant to the healthcare industry, one of the three industries specifically highlighted by Ms. Caldwell as targets of increased scrutiny through FCA lawsuits.  Ms. Caldwell touted the successes of the Department’s Medicare Fraud Strike Force and announced her intention to increase prosecutions of corporations involved in healthcare fraud.  She further noted that the Strike Force averaged sentences of over four years of incarceration per individual in criminal cases, signaling that the DOJ has determined that monetary fines are not the only resolution to cases that involve fraudulent conduct.

With the DOJ’s increased scrutiny of FCA complaints for evidence of criminal misconduct, healthcare providers and related entities must continually evaluate their policies and procedures with respect to governmental health care programs, including current and prospective financial relationships with referring entities, to ensure that existing structures and relationships are compliant with current regulations, including Stark and Anti-Kickback laws.

If contacted by any governmental entity, through subpoena or otherwise, a company’s initial response may prove critical and have a profound impact on the investigation. Immediate analysis of all potential options and responses, including negotiation with the government, is vital to the ultimate success of the company’s dealings and the resulting costs of involvement. Preparation of a planned response and proactive collection and preservation of documents and materials are essential in these inquiries.