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So you’re a health care provider who’s received a civil investigative demand. Now what?

Holly Campbell Renato Mariotti February 2, 2022

Getting any communication from the U.S. Department of Justice can be a bit unnerving. That’s particularly true for medical providers receiving a Civil Investigative Demand (CID) for documents and testimony.  

If you’re not sure what to do in response, keep reading and we’ll answer many of the questions you may be asking or should be asking. 

What is a Civil Investigative Demand (CID)?

It’s a tool used by the Justice Department to investigate potential violations of the False Claims Act (FCA). The DOJ can issue a CID whenever the DOJ has “reason to believe that any person may be in possession, custody, or control of any documentary material or information relevant to a false claims law investigation." The bottom line is that the DOJ uses CIDs to obtain documents and identify potential witnesses so they can bring False Claims Act suits against the recipient or others. 

What is the False Claims Act anyway?

It’s a broad statute that punishes many things, one of which is making false statements to the government in connection with a claim for payment from the government. The DOJ often uses CIDs to investigate medical providers who seek payment from Medicare and Medicaid. 

We’ve also seen the DOJ use the False Claims Act as a tool to investigate supposed violations of the Anti-Kickback Statute. 

What is the Anti-Kickback Statute?

It’s a law that prohibits receiving anything of value in exchange for referring business reimbursable by federal health care programs. While giving someone payment in exchange for referring business is legal in certain industries, it’s not legal in this one. 

Why should health care providers be concerned about FCA violations?

If the government can prove an FCA violation, they can obtain triple the amount of money that the DOJ claims was lost as a result of the false claim, in addition to civil monetary penalties. You don’t need to be good at math to see that even a small case could turn into a major financial headache for a health care provider.

Are there other consequences that can come from a FCA suit against a health care providers?

If the public becomes aware of a FCA suit against you, that could cause insurance companies, health care systems and other entities you rely on to reevaluate their relationship with you and could seriously impact your practice. 

There is also a criminal version of the False Claims Act. When I was a federal prosecutor, it was not uncommon for the DOJ to investigate criminal violations at the same time that it investigated civil violations of the FCA. For that reason, it’s extremely important to get outside counsel involved as early as possible in a CID, knowing that criminal charges may not be far behind. 

But the CID isn’t part of a criminal investigation, right?

Even though the CID is a civil investigative tool, the information you provide the government in response to the CID is often used by criminal prosecutors at DOJ to help form the basis of a criminal investigation. Your documents and testimony can be used against you in a criminal proceeding even if DOJ does not tell you that they are also investigating you for criminal violations. 

How could an outside lawyer help me manage this problem?

Outside counsel can negotiate with the government to narrow the scope of the CID and give you more time to respond. While you’re gathering documents, the lawyer can work with you to look into the issues raised by the government and determine what liability you have. Together, you can formulate a strategy that reduces your potential liability and puts your best foot forward in order to manage the risk that comes with a DOJ investigation. 

Renato Mariotti is a Chicago partner in Thompson Coburn’s White Collar Defense and Investigations group. As a federal prosecutor with the Securities and Commodities Fraud section of the U.S. Attorneys’ Office, he tried and won the first spoofing prosecution. He also represented the first non-trader to face spoofing charges for developing software that was used to spoof the markets and ultimately obtained the dismissal of those charges. Holly Campbell is a Chicago associate in Thompson Coburn’s White Collar Defense and Investigations group. She defends clients who are subjects of DOJ, SEC, CFTC and other regulatory enforcement actions. Holly also was part of the trial team that represented the first non-trader to face spoofing charges for developing software that was used to spoof the markets.