CMS Investigations: What Healthcare Professionals Need to Know

You may have heard the phrase “CMS investigation.” Unlike a CMS audit, which is administrative in nature, a CMS investigation usually connotes a federal criminal investigation of suspected health care fraud. A CMS investigation will likely be conducted by either the Department of Health and Human Services Office of Inspector General (“OIG”), the Federal Bureau of Investigation (“FBI”), or both, as they are the primary federal agencies for investigating healthcare fraud. Other federal agencies, such as the Drug Enforcement Administration (“DEA”), United States Postal Service Office of Inspector General, Department of Defense Office of Inspector General, and the Food and Drug Administration (“FDA”), may also be involved. CMS of course stands for the Centers for Medicare and Medicaid Services, and thus a CMS investigation is an investigation of health care fraud that involves, at least in part, federal monies such as Medicare, Medicaid and Tricare. 

These investigations get started in various ways. Previously we have written about CMS audits, and certainly such audits can lead to a referral to a federal investigatory agency. CMS investigations may also be triggered by complaints from disgruntled ex-employees, patients, or competitors. Oftentimes they can be triggered by data mining by CMS contractors, where it is found that the billing of a medical practice or pharmacy falls outside of the standard deviation of peer comparison. Cooperating witnesses or confidential informants in other matters can lead to the opening of separate investigations. In short, there are numerous ways a licensee can get on the federal “radar screen.”

These investigations are conducted using all the traditional tools and methods associated with a White Collar Criminal Investigation. They may consist of federal agents taking witness statements, including statements of patients and employees. These interviews are many times unannounced and unscheduled, so as to catch the witness off-guard and more inclined to cooperate. The investigations usually involve the issuance of a grand jury subpoena for documents or testimony,  and may also involve physical surveillance, and even electronic surveillance such as wiretapping or consensually monitored conversations. The investigation will almost always involve the review and analysis of financial documents such as billing records and bank records, and also patient medical records. One step that the government may take during these investigations, which is both the most onerous and concerning for a licensee, is the execution of a search warrant. Other methods of investigation may also be utilized, such as the engagement of experts for the Government to opine on lack of medical necessity or improper coding. 

Many times, those who are the focus of an investigation will gain some knowledge that they are being investigated. That knowledge will come about because of the deliverance of a subpoena, the request for an interview, or a patient, present/former colleague, or business associate notifying the licensee that they were questioned by federal agents, or even the freezing of bank accounts (which sometimes occurs based on suspected fraudulent activity or after a bank has been subpoenaed for account records). Sometimes it may involve a target letter or direct approach by agents to the licensee under investigation. These steps can occur on their own or simultaneously. If you ever receive any knowledge that you are under investigation, do not hesitate to speak to legal counsel. Do not wait until the investigation “picks up steam” or criminal charges result. It is critical to get counsel engaged immediately.

It is also important that one react appropriately during the course of the investigation. The licensee should always act professionally, politely and show respect for the authority and the office of the agents. However, that does not mean that one must consent to the waiver of constitutional rights. When contacted by authorities for an interview, the licensee should have the presence of mind to decline answering questions and simply invoke the right to counsel. If counsel is already engaged, then refer the agents to counsel. If one speaks with authorities one must answer truthfully, but remember although may be a crime to lie in the course of a federal investigation, it is not a crime or a negative to request the opportunity to speak with counsel, and one cannot be forced to give up the right to counsel. Do not speak with authorities without the benefit of counsel. 

If served with a subpoena, the same presence of mind should be employed. Politely take the subpoena; do not discuss it with the serving agents, and let them know you will forward it to your attorney. Do not produce the records called for in a subpoena “on-the-spot.” Subpoenas will usually give a timeframe in which to respond and counsel may also be able to obtain extensions for that response. A determination must be made of how onerous it will be to respond to a subpoena for records, and records need to be produced in an orderly fashion and examined for privilege and responsiveness. These are tasks for legal counsel and therefore records should never be turned over to the government in a federal investigation, or any investigation for that matter, without being reviewed by legal counsel, regardless of whether the records appear to be innocuous. 

It also important to refrain from speaking with third parties about the investigation in any respect. Remember, any third parties may also be interviewed by the agents, and you must assume that all relevant individuals will be identified and questioned. Conversations with third parties are not privileged, and therefore these individuals can legally be forced to reveal what you said. These third parties could also be working with the federal agents as cooperators and/or recording the conversation. Also these conversations could be interpreted by federal agents as obstruction of justice, a cover-up, or intimidation of witnesses.  

How Frier Levitt Can Help

Legal counsel can assist in the course of an investigation in many ways. It bears repeating that it is extremely important to have legal counsel engaged as early as possible. An attorney experienced in federal criminal investigations can help determine your status – whether you are the target (focus) of an investigation, subject, witness, or merely a person of interest. Counsel can also advise whether it is in your best interests to submit to an interview or to actually cooperate in the federal investigation. And, of course, counsel can conduct the production of documents in response to a subpoena for records, and handle preparation and legal issues regarding a request for an interview or a subpoena to testify.

A CMS investigation is no laughing matter; it is a federal criminal investigation of a particularized subject area. Effective legal representation encompasses expertise in both criminal and health care law, and legal counsel should be consulted immediately upon learning of the investigation. If you have any suspicion you are under investigation – by CMS or any other agency – contact Frier Levitt today.

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