The U.S. Department of Justice (DOJ) has issued “Guidelines for Taking Disclosure, Cooperation and Remediation into Account in False Claims Act Matters.” These Guidelines identify factors that will be considered and credits that will be provided by the DOJ when providers voluntarily self-disclose misconduct that may serve as the basis for False Claims Act (FCA) violations, take other steps to cooperate with investigations and settlements, or take adequate and effective remedial measures.
Practically speaking, what do these Guidelines mean for providers?
• Having a Corporate Compliance Program is no longer good enough. The quality of providers’ Programs is crucial.
• Enforcers will consider whether Programs have been tested and proven to prevent or detect violations. In other words, Programs can’t sit on shelves gathering dust!
• Regulators will also determine whether Programs actually work.
• The spotlight is on accurate identification and prioritization of potential of risks of fraud and abuse depending on the types of services provided and periodic updates to this activity.
• The focus of regulators will also be on: (1) content of policies and procedures related to compliance; (2) education of all staff members; and (3) the process for confidential reporting and investigations.
• Regulators will also scrutinize whether providers involve third party contractors in their Compliance Programs.
• When it comes to mergers and acquisitions, the emphasis will be on whether comprehensive due diligence was performed. Sellers: this means that you must have a current Compliance Program in place and it must be fully implemented as part of preparations for possible sales.
• Also in terms of transactions, the DOJ wants to avoid situations that it frequently encounters in which Buyers discover compliance issues after Closing that could and should have been identified and addressed as part of the due diligence process.
• Consistent with enforcers’ determination to hold individual senior managers responsible for violations, reviewers will now look for concrete evidence that senior management is committed to compliance. Do the actions of senior managers promote a culture of compliance? Or are senior managers paying lip service only and thumbing their noses at compliance issues?
The proverbial handwriting regarding Compliance Programs has been on the wall for a long time. The feds are serious about Compliance Programs, so providers must be serious about them, too.
©2019 Elizabeth E. Hogue, Esq. All rights reserved.
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