The Criminal Division of the Department of Justice (“DOJ”) recently announced that it will review all complaints filed under the qui tam provisions of the federal False Claims Act (“FCA”) to determine if a parallel criminal investigation is appropriate. This announcement came during a September 17, 2014 speech by the recently-confirmed Assistant Attorney General for the Criminal Division of the DOJ, Leslie Caldwell, at the Taxpayers Against Fraud Education Fund Conference in Washington D.C. This DOJ announcement signals a departure from prior policy, which allowed, but did not require, the Criminal Division to investigate Civil Division claims. In the past, the decision to open a criminal investigation was left to the discretion of each U.S. Attorney’s Office.
Now, the Civil Division of the DOJ will share all new qui tam complaints with the Criminal Division as soon as they are filed. This change in procedure will likely be detrimental for defendants in future qui tam cases. With the Criminal Division more involved in False Claims cases, settlements with the government may become more difficult due to the need for approval from both the Civil and Criminal Divisions. Defendants may also face increased pressure to accept settlement offers from the government to avoid high-risk criminal penalties.
In 2009, Attorney General Eric Holder and Department of Health and Human Services Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”), to increase coordination and optimize criminal and civil enforcement. This coordination yielded momentous results: the Department recovered $12.1 billion dollars under the False Claims Act from January 2009 through the end of the 2013 fiscal year. Most of these recoveries relate to fraud against Medicare and Medicaid Programs. In fiscal year 2013 alone, the DOJ recovered $2.6 billion dollars for health care fraud violations and brought health care fraud-related prosecutions against 345 individuals.
Thus, providers seeking reimbursement from federal programs should be aware that non-compliance risks have never been greater. Providers or entities faced with a civil qui tam suit should immediately evaluate their exposure to possible criminal charges. Because an ounce of prevention is worth a pound of cure, companies should closely review their compliance programs and pay special attention to the protocols in place to prevent and detect potential false claims or billing violations.