Responding to state government health care fraud investigations.

If your practice includes the representation of health care provider clients, you should be prepared to respond to a government health care investigation. This article will help you make decisions during a government health care fraud investigation, including when and what, if any, information should be provided to the government. While there are numerous governmental agencies that regulate the health care profession, this article is directed at responding to Florida Office of Attorney General, Medicaid Fraud Control Unit (MFCU) investigations.

The MFCU performs both criminal and civil investigations of reimbursement fraud and criminal investigations regarding alleged patient abuse, neglect, and exploitation. (1) Since the practice of health law contains a myriad of statutes and regulations, it may be wise to consult a health law attorney who regularly handles compliance and fraud and abuse matters. As will be discussed, cooperating with the government beyond what is required by law can lead to disastrous results.

Many attorneys, especially those not familiar with a fraud and abuse practice, may not adequately represent their clients' interests. Often, this is because the attorney is unfamiliar with this specialized area of the law and wants to placate the prosecution or investigator, believing that "helping" the government will help his or her client. Many times, the opposite results.

In a common investigative technique, the government investigator will inform the attorney that the health care provider client is not the "target" of the investigation or that the client just needs a few or certain documents to "clear" the provider of any alleged wrongdoing. The investigator may appear friendly and cordial, and the attorney, believing that he or she is helping the client, may turn over health records or reimbursement documents. However, these documents may contain damaging information that might not have needed to be produced. Once provided to the government, these documents may be severely damaging to your client and you may have waived any available objections. Thus, it is important not to obstruct justice and, at the same time, force the government to prove its case.

MFCU Investigative Authority

The MFCU is a unit within the Florida Office of Attorney General (OAG), which has been granted statutory authority to issue investigative subpoenas and review provider records for evidence relating to Medicaid fraud and/or patient abuse-related offenses. (2) Under this authority, the MFCU may enter upon the premises of any Medicaid participating health care provider to examine accounts and records that may be relevant in determining the existence of fraud in the Medicaid program. In addition, these powers may be utilized to investigate the alleged abuse or neglect of patients, or the alleged misappropriation of patients' private funds.

A participating physician is required to make available any accounts or records that may be relevant in determining the existence of fraud in the Medicaid program, alleged abuse or neglect of patients, or alleged misappropriation of patients' private funds. (3) However, the accounts or records of a non-Medicaid patient may not be reviewed by, or turned over to the attorney general without the patient's written consent. (4) Additionally, the MFCU can subpoena witnesses or materials, including medical records relating to Medicaid recipients, within or outside the state, and through any duly designated employee, administer oaths and affirmations and collect evidence for possible use in either civil or criminal judicial proceedings. (5)

Differences Between a Subpoena Duces Tecum and a Search Warrant

Subpoenas may be issued by the MFCU attorney of record to request a witness to bring documents or materials under his or her control. However, these subpoenas are not issued by a neutral, detached judge or magistrate. MFCU subpoenas are considered investigatory subpoenas and are issued as part of an OAG investigation. Florida courts have held that a subpoena duces tecum is less intrusive than a search warrant. A person may challenge a subpoena prior to the production of documents or materials. During a subpoena service there are no police rummaging through one's belongings, no threat or actual use of force, and the person responding to the subpoena brings the materials to a time and place described in the subpoena. (6) Furthermore, the Florida courts have approved the use of a subpoena duces tecum in criminal matters. (7) In State v. Tsavaris, 394 So. 418 (Fla. 1981), the Hillsborough County Sheriff's Department served a subpoena on the office of Dr. Tsavaris, requesting documents related to a patient death. An employee turned over the requested records to the state attorney's office. Dr. Tsavaris objected on two grounds. The first objection was that the government obtained the subpoenaed office records in violation of his right to be free from unreasonable searches and seizures. The second objection was that the subpoenas were defective and improperly served. The court held that Dr. Tsavaris had no grounds to object to the defective process and determined that the duty rested on the employee to object to the form of process served. If a witness fails to object to the form or service of process, the witness waives any right to be heard at a later date on those matters. Objections to the legality of a subpoena are personal and may be asserted or waived only by the person being searched or examined. Thus, Dr. Tsavaris lacked standing to object to the subpoena service and process. However, the court held that he did have standing to object on the grounds that his constitutional rights under the Fourth Amendment were violated. The court, relying upon In re Horowitz, 482 F.2d 72 (2d Cir. 1973), cert. denied, 414 U.S. 867 (1973), determined that the Fourth Amendment only required that a subpoena must not be unduly burdensome and all of the subpoenaed documents must have a relevant purpose. (8) The court then noted that there was no claim that the subpoenas were overbroad or irrelevant. The court also held that a subpoena, unlike a search warrant, does not require issuance by a neutral and detached magistrate. Furthermore, the court held that a subpoena will not constitute an unreasonable search and seizure under the Fourth Amendment as long as the subpoena is properly limited in scope, relevant in purpose, and specific in directive, so that compliance will not be unreasonably burdensome. (9)

Challenging an MFCU Subpoena

As previously indicated, both timing and the grounds for challenging a MFCU subpoena are important. Subpoena issuance, service, and execution must be proper. Health care providers should have a proper compliance plan in place that will require the subpoena and additional materials to be reviewed by the provider's compliance officer or another attorney. This reviewer can then determine whether the subpoena has been properly served and is lawful. In addition, if a determination is made that documents should be provided to the government, the reviewer can determine what documents are responsive to the subpoena.

It is important that an attorney with experience in health law fraud and abuse investigations perform the subpoena review. The attorney should determine what documents are required to be provided and then advise his or her client of the findings. The attorney should make sure that the subpoena is not too sweeping in its terms. It must be determined to be reasonable. (10) In other words, an overbroad subpoena is one that requests irrelevant information and is an improper invasion of privacy. The attorney may challenge a subpoena on U.S. Constitutional grounds as well as under the Florida Declaration of Rights of the Florida Constitution. The Florida Declaration of Rights provisions are under [sections]12 (searches and seizures) and [sections]23 (right of privacy).

A subpoena duces tecum is not a substitute for an unlawful warrantless search and seizure (i.e., you cannot serve the subpoena on an employee and immediately search and seize records). (11)

When Your Client Receives a Subpoena or Request to Review Records

All health care providers should have a written compliance plan, drafted by their compliance office or attorney. This plan should advise the health care provider client and its employees on how to respond to government investigators. The plan should provide that if government investigators appear on premises, employees should request that the investigators obtain a subpoena or a warrant describing the records the investigators desire to review. If the government denies such a request, the provider or employees should note this denial and inform the investigators who are on the premises that they may not review any non-Medicaid patient records or files. As part of a compliance plan, have your client "color code" files beforehand. Remember, investigators are not permitted to remove any records under any Medicaid review regulations.

A MFCU investigatory subpoena is not reviewed by a neutral or detached magistrate. Thus, any compliance plan should state that any records to be forwarded to the government in response to a subpoena also should be forwarded to the company's attorney with a copy of the subpoena and the records for legal review. As previously discussed, once the materials are produced, objections relating to defects or service may be considered waived. An attorney can apply for a protective order if the subpoena is arguably improper. If a lawful subpoena is not obeyed, the government can go to the courts and file a motion for order to show cause or file a petition to compel compliance with investigative subpoena along with a request for attorneys' fees and costs.

Objections to Subpoenas on HIPAA Grounds

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) provides exceptions to the confidentiality of identifiable health information. HIPAA does not apply to MFCU records requests for health oversight or abuse and/or neglect matters. State MFCU units are health oversight agencies. (12) Thus, in almost all cases during an MFCU investigation, a HIPAA objection is improper and will not be upheld.

Health Oversight Activities

Pursuant to 45 C.F.R. [sections]164.52(d), a covered entity may disclose protected health information to a health oversight agency for oversight activities authorized by law. This includes audits; civil, administrative, or criminal investigations; inspections; licensure or disciplinary actions for appropriate oversight of 1) the health care system; 2) government benefit programs for which health information is relevant to beneficiary eligibility; or 3) entities subject to government regulatory programs for which health information is necessary for determining compliance with program standards.

Disclosure of Victims of Abuse, Neglect, or Domestic Violence

Pursuant to 45 C.F.R. [sections]164.512(c), a covered entity may disclose protected health information about an individual whom the covered entity reasonably believes to be a victim of abuse, neglect, or domestic violence to a government authority authorized by law to receive such report to the extent the disclosure is required by law and the disclosure complies with and is limited to the relevant requirements of such law.

Search Warrants

A judge or magistrate having jurisdiction may issue a search warrant upon the making of proper affidavits. A search warrant may be issued under the provisions of this chapter when property shall have been stolen or embezzled in violation of law and when any property shall have been used as a means to commit any crime. (13)

The search warrant must be supported by probable cause and accompanied by an affidavit naming and describing with particularity the person(s), place, or thing to be searched, and particularly describing the property or thing to be searched. (14)

The warrant must be sworn prior to issuance, meaning it is reviewed by the judge or magistrate, who must be satisfied that probable cause exists. (15) The judge, if satisfied, will issue the search warrant. (16)

Service by Warrant

If the investigator attempts to serve the warrant and provides notice of the investigator's authority and purpose and is refused entry, the investigator may break down the door or a window of the premises to execute the warrant. (17) The search warrant may be executed during the day or night if expressly authorized in the warrant by the judge or magistrate. (18) The same holds for Sunday service. (19) Warrants should be executed in duplicate and are issued to the investigator. When the investigator executes the warrant, the investigator shall deliver a copy to the person named or a person in charge of or living on the premises. Any seized property shall be noted on the inventory receipt and delivered to the person in possession of the premises or left on the premises if the person is not found. (20) After the warrant is served, the investigator shall attach an inventory listing the items seized and verify this by oath. (21) Upon request, the inventory form shall be delivered to any claimant or person from whom property has been taken. (22)

Investigators exceeding their authority face criminal offense charges for willfully exceeding their authority in executing a search warrant or exercising authority with unnecessary severity. (23)

Unlike subpoena service, a warrant must be reviewed by a neutral magistrate. Providers and their employees may request to see the law enforcement officer's credentials and a copy of the warrant. The providers and their employees should not hinder the law enforcement officers on the scene because they may face arrest for obstruction of justice. The provider or employees cannot be compelled to assist in the search. In addition, they are under no obligation to discuss any matters with law enforcement officials. A provider may wish to send his or her employees home while the search is being conducted. The provider and/or any employees should contact their attorney or compliance officer at once.

Counsel's Role During Search Warrant Service

Some general suggestions if the government should appear at a health provider's premises during an investigation are as follows:

1) Assert any attorney-client or work product privileges in any materials and prevent, or at least object to, any such seizures.

2) Attempt to compile an inventory of seized property, items seized, and persons investigated.

3) Observe if it appears that the warrant execution is outside the bounds of the warrant.

4) Prevent the seizure of essential records that the client requires. You may request that the investigator obtain copies of any hard drives.

5) Explain to employees that they do not have to discuss any matters with investigators. Do not tell them that they should not speak with the investigators.

6) Obtain the identity of any investigators. Ask for credentials.

7) Monitor the agents' actions to determine the purpose of the search and document any abuses.

8) Copy important documents.

9) Ask to have computer discs placed under seal pending review for privilege.

10) Do not obstruct justice by interfering with the search. Object, but do not resist.

11) Demand all interviews on premises stop immediately. Remember employees have a right to speak only if they wish to speak. You can inform the agents of this decision.

12) Employees cannot be compelled to tell the location of documents.

13) After the search, debrief employees and tell them not to discuss the matter among themselves.

14) Implement a nondestruction policy at all sites for potentially related documents.

Thus, an attorney may play an important role, albeit a limited role, prior, during, and after the execution of a search warrant.

Searches Conducted Without a Warrant Based on Exigent Circumstances

Exigent circumstances are extremely limited and may become fact-specific. The only time that investigators can enter a premises without a search or arrest warrant or authorization is when there is reasonable grounds to believe that exigent circumstances exist. Under the exigent-circumstances exception to the warrant requirement, the government must demonstrate that a grave emergency exists that makes a warrantless search imperative to the safety of police and the public to rebut the presumption that a warrantless entry is unreasonable. (24) This includes the need to preserve life or render first aid, provided the police do not enter with an accompanying intent either to make an arrest or search the premises without a warrant. (25) For example, if investigators enter a skilled nursing facility on a report of abuse and hear a resident screaming for help, these facts will probably be held to be exigent circumstances. The court will look to the totality of the circumstances. (260

Conclusion

It is imperative to be prepared to properly represent your health care provider clients in a government investigation. If you do not regularly engage in a health law compliance practice, you may want to consider consulting with a health lawyer who handles compliance and fraud and abuse matters prior to any government action. If documents are improperly provided to government investigators, the health care providers may find themselves in a "Pandora's box" situation because many objections can be lost. A properly instituted health care provider compliance program can prevent such problems with the government. q

(1) FLA. STAT. [section]409.920(8)(a-c) (2006).

(2) Id.

(3) FLA. STAT. [section]409.920(9)(a) (2006).

(4) Id.

(5) FLA. STAT. [section]409.9205(2) (2006).

(6) Dean v. State of Florida, 478 So. 2d 38, 42 (1985).

(7) State v. Tsavaris, 394 So. 418 (Fla. 1981), receded from on other grounds, Dean v. State, 478 So. 2d 38, 40-41 (Fla. 1985)(court held that standing is a now a single-treatment analysis of whether the defendant's rights were violated by the illegal search or seizure).

(8) Id. at 45.

(9) Id. at 45-46.

(10) Dean v. State of Florida, 478 So. 2d 38, 42 (1985).

(11) Id.

(12) See 65 Fed. Reg. 82462, 82492 (Dec. 29, 2000).

(13) FLA. STAT. [section]933.02 (2006).

(14) FLA. STAT. [section]933.04 (2006).

(15) FLA. STAT. [section]933.06 (2006).

(16) FLA. STAT. [section]933.07 (2006).

(17) FLA. STAT. [section]933.09 (2006).

(18) FLA. STAT. [section]933.10 (2006).

(19) FLA. STAT. [section]933.101 (2006).

(20) FLA. STAT. [section]933.11 (2006).

(21) FLA. STAT. [section]933.12 (2006).

(22) FLA. STAT. [section]933.13 (2006).

(23) FLA. STAT. [section]933.17 (2006).

(24) See Riggs v. State, 918 So. 2d 274 (Fla. 2005).

(25) Id.

(26) Id.

Mitchell A. Cohen is the senior attorney for Imperial Finance & Trading, LLC in Boca Raton and handles nationwide transactional, compliance, and other legal issues including HIPAA and trust law. He was deputy attorney general with the Pennsylvania Office of the Attorney General, Medicaid Fraud Control Section, and a senior attorney/lead prosecuting attorney with the Florida Department of Health and a Florida lead assistant attorney general, Medicaid Fraud Control Section, and has supervised health care investigations in civil, criminal, and administrative matters.