At a time when everyone in Louisiana appears to be focusing on the aftermath of Hurricanes Katrina and Rita, First Assistant United States Attorney for the Middle District of Louisiana Lyman Thornton assured Kean Miller in a January 25th interview that his office is continuing to focus on health care fraud violations. During the interview with Thornton, he stated that health care fraud has been and will continue to be a priority of his office.
According to Thornton, the efforts of Assistant United States Attorney Rene Salomon, who heads up the health care fraud program, have not been diverted by the post-hurricane FEMA violations. With this in mind, Savoie asked Thornton if there are any particular areas that hospitals and other health care providers should be focused on at this time.
Although Thornton was unable to provide details about his office’s current areas of focus, he did allude to the fact that the emphasis on the 2006 Office of Inspector General Work Plan may be unfounded. Instead, for guidance as to current actions by his office, Thornton refers to the 2004, or even 2003 Work Plan. The cases his office works on take time, so much of the subject matter had been known to the agency for a few years.
As far as additional guidance for hospitals, Thornton says that all corporate clients, including hospitals, should be aware of two documents. The first is the June 16, 1999 memorandum from then Deputy Attorney General Eric Holder to all Heads of Department Components and all United States Attorneys and attached Guidelines for Federal Prosecution of Corporations (“Holder Memorandum“). The second is the Memorandum from Deputy Attorney General Larry D. Thompson to Health of Department Components, dated January 20, 2003, and attached Principles of Federal Prosecution of Business Organizations (“Thompson Memorandum“). According to Thornton, a review of the Holder and Thompson Memoranda tells corporate clients the behavior his office expects. These are the guidance materials hospitals should turn to when a problem arises. According to Thornton, when his office shows up, they already have insiders and have privately investigated the matter. Consequently, Thornton recommends that a hospital under investigation be aware of the guidelines in the Holder and Thompson Memoranda so that they know how to cooperate with his office.
Both the Holder and Thompson Memoranda stress cooperation with governmental investigations. According to the Holder Memorandum, one factor a prosecutor may weigh when evaluating whether to indict a corporation is “the completeness of its disclosure, including, if necessary, a waiver of the attorney-client and work product protections…” Similarly, the Thompson Memorandum states that, in deciding whether to prosecute a company, “the prosecutor may consider the corporation’s willingness to identify the culprits within the corporation, including senior executives; to make witnesses available; to disclose the complete results of its internal investigation, and to waive attorney-client and work-product protection.”
According to Thornton, the importance of appropriate cooperation with a government investigation can be seen in the infamous Columbia/HCA matter. In the mid-1990s, Columbia/HCA Healthcare Corporation was the subject of a governmental investigation. Either in anticipation of or in response to the investigation, Columbia/HCA conducted internal audits, which were referred to as “Coding Audits.” When the Department of Justice sought copies of the Coding Audits, Columbia/HCA refused on privilege grounds. Although Columbia/HCA eventually agreed to produce the Coding Audits subject to strict confidentiality provisions, the fraud investigation eventually resulted in a settlement of $840,000,000.