HCCA - Part D Conference
Tips for Conducting Internal Investigations
Howard J. Young, Esq.
Sep. 11, 2006
Baltimore, MD
nternal Investigations – CMS Mandated
Chapter 9 Part D Program to Control FWA
• Prompt follow-up investigation procedures in
response to hotline inquires and other
complaints (§50.2.4.2 and §50.2.7.1)
• Sponsor should initiate “reasonable inquiry
immediately, but no later than two weeks from
date potential misconduct is identified.”
Reasonable Inquiry”
Section 50.2.7.1 states:
• A reasonable inquiry includes a preliminary
investigation of the matter by the Part D
Compliance Officer and/or Special
Investigative Unit (SIU) for the Sponsor. In
the event that the Sponsor does not have
either the time or the resources to investigate
the potential misconduct, it should refer the
matter to the MEDIC within two weeks of the
date the potential misconduct is identified . . .
elf-Reporting of Potential Fraud
Regulations state that self-reporting is “voluntary” (42
CFR § 423(b)(4)(vi)(H)), but is a critical element of FWA
compliance program.
• Report potential fraud of sponsor, first tier and
downstream entities
• Challenging to monitor and investigate potential fraud
at downstream and first tier levels
• If you verify “potential fraud”, report to MEDIC
promptly, but no later than 60 days from
determination and sooner if discovered at 1st tier or
downstream entities. Also consider reporting to OIG
or DOJ. (§ 50.2.8.2)
ractical Effect of FWA Guidance –
stablish a Plan for Investigations
CMS and its contractors “will investigate all
cases as potentially fraudulent and will refer to
law enforcement as warranted.”
Unless willing to allow MEDIC to conduct the
“internal investigation”, you must have an
internal investigation plan and process in place,
with adequate staffing, resources, and access to
qualified legal counsel.
Time to establish or assess investigation
protocols is now, not when the first potential
issue arises.
onsiderations for Establishing
nternal Investigation Protocols
Roles and Responsibilities
Time frames for action
Involvement of Legal Counsel – attorney-client
and “attorney work product” protections
Information gathering and interview
considerations
Documenting Investigatory Findings
Regulatory and Legal Analysis
reate a Written Investigative Work Plan
Lead roles and responsibilities
• Compliance, SIU, legal counsel (be specific)
Tasks
Time frames and deadlines
Comment field
Review and revise periodically throughout
investigation
Include assessment of corrective actions
Avoid listing legal conclusions/findings
stablishing a “Control Group”
Internal investigations may involve sensitive
information and require exercise of considerable
judgment
Determine which personnel will assist
Need people with expertise, professional
independence, discretion, authority
If “high risk” area (potential legal violations,
considerable dollars at issue), involve legal
counsel
Keep group small if possible
Use of Legal Counsel
Investigation of high risk areas should involve legal
counsel to protect organization and individuals
Communications with counsel must be kept confidential
to maintain attorney-client privilege
Communications seeking legal advice protected;
underlying facts are NOT protected
Attorneys may supervise investigatory work of others protected by “Work Product” doctrine (e.g., hire forensic
consultants)
Use of Internal vs. External Counsel
Role of Compliance Officer/SIU
Initial fact finding to assess credibility of
complaint – document date of discovery and
initial steps
Gather background information – what was
known, by whom and when?
Assess whether to engage counsel
Apprise senior management at appropriate
times
Ensure timely investigation ensues – managing
resources effectively
nformation/Fact Gathering
Ensure documents are secured and preserved intact
• Memo to employees – do not destroy/alter
• Emails/voicemails/electronic data presents challenges
to preserve
Assess who may have relevant information
Determine who should gather documents
• Independence, reliability, organized
Relevance - Err on side of over-inclusiveness at
gathering stage
Document controls – bate stamping, security, system to
establish source of documents
Document review – relevance, privilege, “hot documents”
mployee/Contractor Interviews
Information gathered is “confidential” but may be shared
with management and/or government
If very sensitive (e.g., potential criminal violation),
apprise of access to their own counsel
Two people should conduct interviews (note-taker) and
to avoid “he said/she said”
Interview notes – protected by privilege/work product
protections? If not an attorney, avoid legal conclusions
in notes
Access to downstream contractor personnel – look to
terms of contract
Assessing Investigative Findings
Systemic problems or isolated?
Legal/regulatory violation?
Intentional, negligent, or inadvertent?
Assessing whether organization “should have
known” of violation (reckless)
First Tier or downstream entities – responsibility
to share findings and allow comment?
Documenting findings (is less more?)
haring Findings
Senior management report
Board of Directors (Compliance/Audit Committee or full
Board)
• Oral presentation
• Power Point or investigative report?
Reporting findings to MEDIC
What if you can’t meet 60 day reporting time frame?
If no report to MEDIC, document rationale
Share with affected employees, contractors?
What you share, form of report, etc. may itself become
subject to scrutiny, so choose carefully
Content of Report
Chapter 9 - Section
50.2.8.3
• Provider data (billing
#, tax I.D., address)
• Item or service
involved
• Place of service
• Nature of allegation
• Timeframe
• Description of
investigation and
findings
• Date of Part D Service,
drug codes, etc.
• Beneficiary names, HIC #
• Contact information of
complainant
• Documents re: prior
sanctions and/or
“compliance history” and
corrective actions, if any
• Not an all-inclusive list
• MEDIC may request
more information
Questions and Answers
Howard J. Young, Esq.
Sonnenschein – Washington DC
202 408-9210
[email protected]