Developing Your Strategic Response to COVID-related Government Audits
Audits Are Coming
If you have received COVID-related financial support from the government, you may soon find yourself under the government’s microscope. The Small Business Administration (SBA) has announced that it will review all Paycheck Protection Program (PPP) loans in excess of $2 million, and the U.S. Department of Health and Human Services (HHS) has stated that a single audit will be required for any non-federal entity that expends $750,000 or more of Provider Relief Funds (PRF) during its fiscal year. Behind the scenes, the Office of Inspector General (OIG) will continue to use analytics to identify providers warranting further investigation: those with an anomalous use of PRF compared with peer groups; those who may have experienced a change in ownership during 2020; and those who are outliers in terms of their receipt of PRF.
New Hotline and Fraud Watchdogs
The Department of Justice (DOJ) has announced it will “prioritize the investigation and prosecution of coronavirus-related fraud schemes” and has established a national hotline for whistleblowers to report suspected fraud. The OIG’s and DOJ’s efforts will be supported by new entities established by the CARES Act: the Office of the Special Inspector General for Pandemic Recovery; the Pandemic Response Accountability Committee; and the Congressional Oversight Commission. In addition, the FBI has established the COVID-19 Working Group and has already begun to identify fraudulent schemes, including overbilling for services, billing for services not rendered, and billing for medically unnecessary services. Each of these entities work together to investigate providers, subpoena records, and take testimony under oath.
Steps to take in the event that you receive notice of an investigation:
Immediately notify in-house and outside counsel.
Designate a corporate representative to be the point person for counsel and to coordinate all responses.
In conjunction with counsel, consider a parallel internal investigation.
Stop document destruction or data purges.
Preserve all relevant documents, including hard-copy documents, emails, electronic copies of documents, and text messages.
The Investigation and Your Strategic Actions
Providers frequently discover that they are under investigation when they receive a request for documents, a civil investigative demand, or a subpoena from the OIG, the DOJ, or by the Office of the Attorney General of the state in which the provider operates. Occasionally, an investigator may show up unannounced at the practice’s location. The provider’s response to these investigative steps is critical in determining the tone and outcome of the investigation. If the investigation was initiated as a result of an audit, the government will decide based upon the results of discovery whether to settle, impose penalties, or initiate a lawsuit or criminal prosecution. If the investigation was initiated as a result of a whistleblower lawsuit, the government will decide whether to settle, join with the whistleblower in a lawsuit, or initiate criminal prosecution.
Most importantly, be prepared to cooperate fully with government investigators. The DOJ may award “credit” in the form of reduced penalties for those who cooperate with the government investigations. But note that “cooperate” means more than just responding to subpoenas, which is required by law. The government expects that you will share information, identify individuals with knowledge, voluntarily disclose issues that you identify during your own investigation, and take remedial steps through new or improved compliance programs.
View the article in the Chambliss Connection: Radiology Spring 2021 digital edition on pages 8 – 9.
The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings, and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. In some cases, the underlying legal information is changing quickly in light of the COVID-19 pandemic. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship. Please contact your legal counsel for advice regarding specific situations.