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 You are the Compliance Officer of an organization that has just become the target of a government legal inquiry. What are three of the first steps that you want to take in response? Please refer to material covered in the text supported by your external research. (i attached a powerpoint in case it helps you)

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Internal Investigations

Chapter 11

Learning Objectives

Situations requiring investigation or audit

Steps in conducting an internal investigation

Interviewing employees and third parties

Reviewing documents and records

Contents of a thorough investigation report

Sources of a government investigation

Responses to a government investigation

When to conduct an internal compliance audit

Taking advantage of attorney-client privilege


An organization conducts an internal investigation to discover whether a violation of law has occurred or is likely to occur.

Internal sign or report that a violation has occurred

Organization learns that a government agency has launched an investigation

As a preventive measure, the organization conducts periodic audits

Investigations in a Compliance Program

Key component of an effective compliance program

Discover problems before a government agency learns of them

Opportunity to control resolution of the problems

Once government initiates its an inquiry, the organization is compelled to conduct its own parallel investigation

Multi-Step Investigation Procedure

Use trained, trusted employees to carry out the investigation

Consider using an attorney and a consultant

Fit the investigation to the suspected misconduct

Investigative techniques: personnel interviews, records and document reviews

Report based on investigation findings

After the investigation is complete

Use Trained, Trusted Employees

Starts with the Compliance Officer. Other staff should be ….

Trained in investigation techniques

Knowledgeable about area where misconduct suspected, but preferably not working there

People of good judgment and discretion

Willing to make hard decisions

Able to maintain confidentiality

Consider Using an Attorney

For all but trivial incidents, consult an attorney

For serious matters, conduct investigation under the guidance of an attorney

Take advantage of work-client or work-product privileges whenever possible

Attorney will direct the investigation, communicate with top management, and control information flows about the events


Consider Using a Consultant

If the organization lacks the time, the experienced personnel, or the expertise to carry out the investigation

Consultant performs work that is channeled through the attorney

Consultant lacks close relationship with the organization

Consultant duties should be carefully defined

Fit the Investigation to the
Suspected Misconduct

As the investigation proceeds and the gravity of the misconduct is revealed, efforts can be scaled up or down.

Investigative techniques should be discussed with management and the attorney.

Anticipate effects of the investigation on workforce morale and productivity.

Focus of the Investigation

Nature and scope of the problem incident

Statutes and regulations related to the incident

Clarity or ambiguity of the relevant standards

Knowledge and intent of the persons involved

Prior incidents with same department or employees

Exactly how the incident took place

Possible actions to mitigate or prevent the problem

Investigative Techniques:
Personnel Interviews

Current/former employees, customers.

Patients, providers, vendors, payors, & other third parties

Logistics of the interview process

Legal implications of personnel interviews

Warnings to interviewees

Caution when interviewing third parties with no allegiance to the organization

Training in interview skills

Investigative Techniques:
Document Reviews

Bills, claims, cost reports, financial statements, clinical records, policies and procedures, internal & external communications, and compliance program materials

Unique issues in reviewing electronic data

Employee warnings against destruction or modification of documents or records

Store collected documents in secure locations

Report Based on
Investigation Findings (I)

Attorney oversees preparation of report that includes these elements ….

Facts discovered by investigators

Facts sought but still unknown

Laws implicated by the revealed facts

Attorney analysis of facts in light of the laws

Specific facts indicating cause of the incident

Report Based on
Investigation Findings (II)

Detailed description of non-compliant incident

Incident’s impact on safety and quality of care

Time period during which incident occurred

Identity of persons involved in incident

Identity of persons who should have detected or reported the incident

Financial and legal enormity of the issue

After the Report Is Completed

Determine corrective action needed to fix the problems identified – personnel changes, retraining, or discipline, modify policies and procedures, reallocate resources, revise work processes, reorganize departments, and modify the compliance program

Whether to disclose investigation results to government authorities and repay monies wrongly received

Agency-Driven Investigation Inquiry

Agency suspects non-compliant behavior that violates laws and costs the government money.

It wants to learn more to determine the scope of the non-compliance.

Organization must take the matter seriously and move quickly.

Responding will consume time and money.

Sources of the Inquiry

Center for Medicare and Medicaid Services

Office of the Inspector General (DHHS)

Office of Civil Rights (DHHS)

Department of Justice

Solicitor’s Office (DOL)

State attorneys general

Legal Forms of the Inquiry

An inquiry can take several legal forms. The organization’s attorney can explain them.

Informal inquiry

Subpoena duces tecum

Search warrant

Formal legal action

Informal Inquiry

Letter, phone call, or personal visit

Concerning the organization or a business partner

Carefully consider and manage the response

Caution employees on their rights and responsibilities

Subpoena Duces Tecum

Order to produce documents or other tangible evidence

Work activities targeted, documents sought, number of years, how soon needed (days or weeks)

Prelude to a more formal and invasive investigation

Immediately contact legal counsel

Search Warrant

Issued by judge upon showing of “probable cause”

Investigator shows up demanding documents immediately

Follow pre-planned protocol during this often traumatic event

Ask for warrant copy and contact legal counsel

Record details of the search

No interference, no document destruction

Formal Legal Action

Criminal complaint filed with a court charging a violation of law. If judge finds “probable cause”, will issue a summons.

Organization is now a “defendant”.

Civil complaint does not require probable cause and states a claim for relief from misconduct or damages caused.

Government action preceded by one of three information-gathering methods.

Responses to the Inquiry

Protect integrity of related evidence

Identify areas that are targets of the inquiry

Designate one person to manage the response

Expert legal counsel is essential (in-house, ad hoc engagement, permanently retained)

Leverage fully the protections of the attorney-client relationship

Organization-Initiated Internal Audit

Conducted to make sure an existing compliance program and policies are operating at peak effectiveness.

An audit is a formal, systematic investigation intended to assess compliance with legal standards and identify existing or potential compliance violations.

Baseline vs Routine Audits

An initial audit by an organization establishes a baseline of compliance effectiveness for future audits.

After that, routine audits are conducted on a regular schedule (monthly, quarterly, semi-annual, annual).

Audits may target diverse areas of the organization at risk of non-compliance.

Scope of Audits

Direct audits to areas of highest legal risk and potential impact on the organization.

Based on prior audit reports, public and private payor correspondence, claims denials, and data analysis.

Based also on public sources: OIG compliance guidance and work plans, RAC priorities, CMS CERT reports, and Health Care Fraud and Abuse Control Program annual reports.

Type of Audit

Range of activities studied (an entire process vs just one part of the process)

Rough conclusions from a small sample vs statistically valid results from a more comprehensive, sophisticated survey

Review of documents or analysis of data

Audit type depends on its purpose

Other Audit Characteristics

Personnel conducting the audit

Audit standards (recognized benchmarks)

Reporting audit results

Debriefing among investigators

Final report on operational shortcomings

Legal counsel reports on violations

Basic Audit Techniques

Personnel interviews

Document review

Data sampling

Basic Sampling Process

Time period from which sample taken

Population of items to be sampled

Sample plan (sample size, and item selection)

Execution of sample plan

Determining extent of non-compliance

Evaluate Results & Correct Problems

Non-compliance without legal violations

Significant violation with major repercussions

Appropriate employee discipline and behavior correction

Policies and procedures changed or replaced

New education and training of employees

Attorney-Related Protections

Attorney-client privilege

Work product privilege

Self-evaluation privilege

Advice of counsel