The Department of Justice’s National Fraud Enforcement Division is directing prosecutors to prioritize healthcare fraud schemes in corporate investigations, according to an Oct. 1 memo from Assistant Attorney General Colin McDonald.
Seven things healthcare leaders should know:
1. Healthcare is one of four priority areas for the division’s corporate investigations, covering healthcare fraud, distribution of controlled substances and violations of the Federal Food, Drug, and Cosmetic Act. The other three are fraud tied to procurement and government contracts, significant revenue evasion, and tariff evasion, importation of goods or services and forced labor. The National Fraud Enforcement Division was created in April and absorbed the Criminal Division’s Health Care Fraud Unit.
2. Prosecutors must place “great weight” on 10 factors when deciding whether to bring charges or negotiate plea or other agreements. The first is knowledge of or involvement in a fraud scheme by corporate management.
3. The second factor is efforts to conceal fraud from government agencies or auditors or to otherwise obstruct government oversight.
4. Two factors address taxpayer-funded programs: conduct that causes substantial financial hardship to a program or government function, and conduct that affects multiple programs or government functions.
5. Other factors include schemes lasting three years or more, conduct affecting three or more federal districts and financial harm to 25 or more victims or losses of $25 million or more. The list also includes threats to Americans’ safety or security, the movement of U.S. dollars to support foreign adversaries and immigration offenses. Mr. McDonald wrote that the list is not exhaustive.
6. Prosecutors must follow the departmentwide Corporate Enforcement and Voluntary Self-Disclosure Policy, which credits companies that disclose misconduct, cooperate and remediate. The memo said the division will also guard against overly broad enforcement that could interfere with legitimate business operations.
7. The division is using data analytics through its National Fraud Detection Center to open new individual and corporate investigations “at a rapid pace,” the memo said. Mr. McDonald also directed division leaders to develop programs that incentivize whistleblowers to come forward, including those who participated in the misconduct.
