As the impact of the COVID-19 pandemic continues to spread, the federal government is preparing to take unprecedented action to curb its effects on the nation’s health and economy by freeing up federal dollars for private businesses, manufacturers and healthcare entities of all types. But, those receiving these dollars, directly or indirectly, should continue to monitor updates to and maintain compliance with all applicable laws and regulations as this unprecedented economic response comes with heightened scrutiny and potential enforcement and regulatory risk.
DOJ Prioritizes COVID-19 Wrongdoing
On March 16, the United States Attorney General issued a memorandum to all U.S. Attorneys prioritizing the detection, investigation and prosecution of wrongdoing “related to the current pandemic.” Attorney General Barr also issued a press release on March 20 urging the public to report suspected fraud schemes related to COVID-19. Among the schemes, Attorney General Barr encouraged the public to report were any medical providers “fraudulently bill[ing]” tests and procedures.
The False Claims Act
For many years, the Department of Justice’s (DOJ) chief tool to investigate, prosecute and extract settlements relating to fraud against the government has been the False Claims Act (FCA), which allows whistleblowers to file federal anti-fraud suits on behalf of the United States. In 2019 alone, whistleblowers filed more than 600 qui tam actions under the FCA alleging fraud against the government, for which they received $265 million in bounties. On whole, the DOJ recovered approximately $3 billion in civil fraud recoveries last year.
Many enforcement actions were also the result of coordinated efforts taken by specific healthcare strike force teams, like the Appalachian Regional Prescription Opioid Strike Force, who filed charges in 11 federal districts against 60 individuals, including 31 physicians, seven pharmacists, eight nurse practitioners, and seven other licensed medical professionals stemming from 350,000 prescriptions and other narcotics.
It is very likely the government will form a similar task force related to the COVID-19 pandemic. By way of example, following the 2008 financial crisis, President Obama announced the formation of the Financial Fraud Enforcement Task Force, which continues to pursue fraud investigations and settlements under the FCA. An early sign of such coordinated efforts was Deputy Attorney General Jeffrey Rosen’s March 19 memorandum directing each U.S. Attorney to appoint a Coronavirus Fraud Coordinator for their district to serve as legal counsel on all matters relating to the COVID-19. The DOJ has also set up a fraud hotline and website for reporting frauds related to the pandemic.
The Administration has also formed a Supply Chain Stabilization Task Force, charged with scouring the United States and abroad for necessary supplies and handling its import and subsequent distribution to critical demand spots in the country.
The government is taking steps to root out any potential fraud, waste, or abuse of resources related to the COVID-19 response. These anti-fraud efforts are likely to continue after the country moves past the immediate crisis. This will involve criminal and civil enforcement activity, including the use of the FCA where companies or individuals submit or cause the submission of false claims for federal dollars. During this time, it is critically important to maintain a vigorous compliance program. It is also essential to remind personnel at all levels of an organization that compliance and ethics are as important now as ever.
Keeping Up with Compliance
Any company benefiting from federal funds should review and adhere to the terms of their agreements and the laws under which they benefit. Hospitals and health systems, in particular, should continue to analyze and document the measures they are taking in response to COVID-19 since the standards and regulatory requirements are shifting daily in response to the pandemic. This includes responding fully and promptly to any compliance concerns, and monitoring the evolving regulatory landscape through our COVID-19 Resource Center.
Healthcare providers and entities should also ensure they fully document the services and items they are providing in direct response to the COVID-19 pandemic to justify reimbursement in the future, whether through traditional reimbursement channels or novel sources of funding that may become available, including through the CARES Act.
Responding to Inquiries
Given the continued prevalence of qui tam suits, it is very likely we will see a wave of COVID-19-related FCA suits filed by employees, contractors, market competitors, and other potential whistleblowers in the wake of this pandemic.
The government often employs a variety of means to inquire into allegations of potential fraud, waste and abuse, including subpoenas, civil investigative demands, letters, and requests for interviews, among others. Entities receiving inquiries should take certain steps to limit the uncertainty, burden and expense that comes with a government inquiry, including:
- Engaging in early and frequent dialogue with the investigating attorney or agent.
- Making clear your intention to comply with the request(s).
- Describing in practical and specific terms the time and resources it would take to comply with the requests as they are drafted.
- Proposing reasonable priorities and deadlines for producing information or documents in response to the requests.
- Pushing back on requests where appropriate, including the scope and time of the information sought.
- Pursuing available opportunities to educate the government on topics under inquiry.
To follow developments related to the FCA and COVID-19, subscribe to Inside the FCA, stay up-to-date with our COVID-19 Resource Center, or contact a member of the Bass, Berry & Sims Healthcare Fraud Task Force.