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What to do if you get a subpoena: consider these do's and dont's.

While the receipt of a government subpoena or an inperson visit by government investigators can be a deeply unsettling experience, failing to properly respond to these government investigations can be far worse for both the company and the individuals involved in preparing the response.

While many healthcare investigations are initiated at the federal level either by the Federal Bureau of Investigation or the Office of Inspector General of the U.S. Department of Health and Human Services, it is important to remember that there are more than 300 federal agencies alone with administrative subpoena power. In addition, most states also have specialized divisions within their state attorney general's office that conduct healthcare fraud and/or compliance investigations. The healthcare industry also has to deal with a number of private, non-governmental entities, such as zone program integrity coordinators and recovery audit contractors, which have congressionally delegated authority to initiate document requests and investigations (though these are usually limited in scope).


You've just received a government subpoena. Now what?

After receiving a government subpoena, it is important to determine what the government actually wants. Most subpoenas contain a section just under the recipient's name that states "YOU MUST PRODUCE" and a section that states "YOU MUST TESTIFY" Either one or both of these sections will contain an "X," indicating what is required and will also announce the date on which compliance is required.

Once your initial review of the subpoena is complete, it is usually worth having your counsel call the government lawyer or agent whose name is listed on the subpoena. The most important question is whether your company is a target of the investigation or a third-party witness. Unfortunately, the government is often unwilling to divulge this information during its investigative process, so, it is generally safest to assume your company is or may become a potential target.

The preliminary call also provides an opportunity to establish a good rapport with the government lawyer and to express the company's desire to comply to the best of its ability with the subpoena. This is also a good time to ask for an extension or a rolling production, if it appears unlikely that the company can comply with the (usually short) timeline for a response. As the government's initial document requests are often very broad in both time and scope, this initial call is also a good time to broach narrowing the subject matter of the subpoena. Proper handling of the initial contact is critical, especially when the potential for criminal charges exists.

After determining the source and scope of the subpoena, there are several necessary steps that must be quickly taken to protect the company.


* Immediately suspend routine document destruction and automatic data deletion procedures.

* Consider whether to capture data from phones and other devices.

* Consider whether prior or departing employees may have responsive information.

* Talk to the government before distributing preservation notices.

* Consider conducting an internal investigation.

If you decide to conduct an internal investigation (which is particularly important in dealing with internal whistleblower complaints), the first question is whether to use in-house or outside counsel. Making this determination will vary by situation. Three significant factors that assist in determining whether independent outside counsel is required include:

* The seriousness of the alleged conduct and the possible risk exposure;

* The seniority and positions of any individuals who may have been involved in the conduct under investigation; and

* The connection between the investigating lawyer and witnesses.

Assess whether the potential witnesses include people the investigating counsel regularly interacts with, reports to, or someone who might otherwise have even a perceived influence on the independence of the investigation. The possibility of a close relationship between lawyer and witness is particularly important in light of the Yates Memorandum's (the "Yates Memo") increased focus on investigating and prosecuting individuals. (1)

Once you have embarked on an internal investigation, there are additional steps that should be taken and certain pitfalls that should be avoided whenever a company conducts an internal investigation.


* Provide Upjohn or corporate Miranda warnings to witnesses. (2)

* Consider any mandatory reporting deadlines implicated by the type of alleged misconduct.

* Consider potentially voluntarily self-reporting potential misconduct or adverse findings.

* Discuss privilege early and often.

* Prepare for the unexpected.


* Hold group meetings with potential witnesses.

* Withhold non-privileged materials simply because they appear unfavorable. (3)


Government agents are in your lobby. Now what?

Unfortunately, government investigations, especially in the healthcare space, sometimes include on-site "dawn raid" visits where government agents or contractors appear at a company's offices and demand to inspect records and interview employees. Sometimes these are search warrants and sometimes these are merely consensual record requests through Medicare or other government program auditors. Nonetheless, there are a number of steps that your company can take to minimize the damage and preserve its rights.


* Identify the lead agent, establish a line of communication, get that person's credentials and a card from every agent.

* Contact your legal counsel and ask the lead agent to wait until he/she arrives.

* Request a copy of both the warrant and the affidavit.

* Make a copy of agents' responses to all requests and other communications.

* Request the opportunity to close down business operations for the day.

* Request that company counsel be present at all interviews.

* Keep an inventory of all items the agents view and/or take.

The number of government investigations is at an all-time high and is expected to continue increasing. This is particularly true in the healthcare industry as the federal government continues an intensive push in both the civil and criminal arenas to pursue all alleged instances of healthcare fraud.

All healthcare executives should therefore be prepared for the unexpected. Your company should develop policies and procedures on how to respond to investigations and train employees on document retention, as well as protocols for talking to government investigators. Employees should know whether, and under what circumstances, the company will provide them with legal counsel. These policies and procedures should be reviewed with employees during their initial orientation, integrated into annual company training programs, and copies of these policies and procedures should be maintained in areas that are readily accessible.

Knowing how to properly respond to a government investigation protects the company and minimizes potential riskexposure.




Barrett Howell is a partner and Ryan J. Meyer is an associate at Bracewell LLP in Dallas, where they focus on white collar criminal defense, including investigating and litigating complex civil and criminal cases involving securities and healthcare fraud.


(1) Sally Yates, United States Deputy Attorney General, Individual Accountability for Corporate Wrongdoing, available at: Under the terms of the Yates Memo, the Department of Justice has taken the position that companies will not receive cooperation credit unless and until they provide information on all individuals responsible for the conduct. The Yates Memo goes on to emphasize that individuals must be the focus of investigation from the start, not just as the investigation winds down, and that individuals are not to be released in settlement agteements because the company itself settles the case.

(2) Under the Supreme Court's holding in Upjohn, company counsel must explain at the outset of any internal investigation interview that he or she represents the company, not the individual employee, and therefore the privilege belongs to the company and only the company can raise or waive privilege protections. Upjohn Co. v. United States, 449 U.S. 383 (1981). This warning is a necessary step in rebutting any privilege claims by the employee. Without it, the employee may be able to demonstrate a reasonable belief that the lawyer was representing the employee individually and thereby suppress statements the employee made to counsel during the interview on the basis of a putative attorney-client privilege.

(3) While every company has bad documents, they do not automatically impute liability, and the worst thing that can be done is covering them up. For instance, an in-house lawyer was indicted in December 2008 by the Department of Justice for allegedly making false statements, concealing documents, and obstructing an investigation by the United States Food and Drug Administration. See United States v. Stevens, No. 10-CR-0694 (D. Md. Nov. 8, 2010). Likewise, the CFO of Devos, Ltd. (a pharmaceutical returns company) was indicted and convicted on several counts of obstruction of justice for withholding and concealing former employees' emails and documents from a Department of Justice investigation into mail and wire fraud. Her actions ultimately resulted in greater government attention on the company, which has now been indicted and convicted, along with her brother, the CEO, on numerous counrs of mail fraud, wire fraud, money laundering, and obstruction of justice. See United States v. Devos, Ltd., Dean Volkes, and Donna Fallon, No. 14-CR-00574 (E.D. Pa. Oct. 23, 2014).
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Title Annotation:PERSPECTIVES
Author:Howell, Barrett; Meyer, Ryan
Publication:Behavioral Healthcare
Geographic Code:1USA
Date:Jun 22, 2017
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