Earlier this month, the Deputy Attorney General of the Department of Justice (“DOJ”) released a memorandum (“Guidance”) setting forth six key steps to which DOJ attorneys should adhere in the investigation of corporate misconduct. At the same time, the Guidance underscores the importance of having corporate compliance policies and procedures that stress individual accountability and provides critical information for any organization that finds itself under investigation by the DOJ.

The overarching theme of the Guidance is that every act of a corporation or other organization is carried out by one or more individuals and that by focusing on individual conduct and holding specific individuals accountable for corporate misconduct when it is found to have occurred, the DOJ will investigate and combat corporate wrongdoing more effectively.  The six key steps contained in the Guidance are as follows:

• “to qualify for any cooperation credit, corporations must provide to the [DOJ] all relevant facts relating to the individuals responsible for the misconduct;

• criminal and civil corporate investigations should focus on individuals from the inception of the investigation;

• criminal and civil attorneys handling corporate investigations should be in routine communication with one another;

• absent extraordinary circumstances or approved departmental policy, the [DOJ] will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation;

• [DOJ] attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and

• civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.”

The Guidance will apply to matters that are pending as of September 9, 2015 as well as all future DOJ investigations of corporate wrongdoing.

For more information on this Guidance, contact Chris Raphaely, Nicole Martin, or any member of Cozen O’Connor’s Healthcare law team.

On August 3, 2015, a federal judge in the Southern District of New York ruled that the United States’ and state of New York’s complaints in intervention can move forward against a group of hospitals, under the federal False Claims Act (“FCA”) and New York’s FCA corollary. The hospitals allegedly failed to report and return Medicaid overpayments that were brought to their general attention over two years before all of the relevant repayments were made.

The judge’s opinion denying the defendants’ motions to dismiss in Kane v. Health First, et al. and U.S. v. Continuum Health Partners Inc. et. al., should be of particular note to providers because it contains extensive discussion and guidance as to how at least one federal judge interprets the Affordable Care Act’s (“ACA”) “60 day rule.” Specifically, the ACA’s rule requires any provider who receives an overpayment from Medicare or Medicaid to repay such overpayment within 60 days of the “date on which the overpayment was identified.” Further, retention of such an overpayment beyond the sixty-day period can result in liability under the FCA.

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