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New York partner John Carney and Houston partner Bob Wolin co-authored an article, "Target Health Care Fraud," which was published in the July 13, 2009, edition of the New York Law Journal.

According to Carney and Wolin, "Over the past several years, the federal government has collected billions in fines and restitution from corporations accused of violating federal health care statutes and regulations. The targets of the government actions were not small, unknown companies, but major U.S. corporations including Eli Lilly, Pfizer and Abbott Laboratories. In addition to the staggering financial payments to the government, these corporations also incurred significant defense costs and unavoidable disruption of their businesses. Considering these significant past actions, the newly enacted Fraud Enforcement and Recovery Act (FERA) and the growing 'saber rattling' by the Department of Justice (DOJ) and the Department of Health and Human Services (HHS), the question arises: Can proactive internal investigative and compliance measures make a difference?"

The article goes on to discuss the creation of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a cabinet level team composed of high-ranking DOJ and HHS officials, whose creation "is in keeping with President Obama's increased focus on health care fraud as a key component of health care reform efforts." The authors also discuss the Fraud Enforcement and Recovery Act (FERA) recently signed into law by President Obama. "Although FERA, in the main, addresses the concerns arising from the use of economic recovery funds, the law also provides for more vigorous enforcement of the FCA [False Claims Act]."

"Health care providers, like others in heavily regulated industries, face a daunting challenge to remain abreast of changing legal requirements and to assure that their operations are administered in a consistent compliant manner, particularly when many of the requirements are subjective in nature and involve hundreds of one-on-one, human-to-human interactions. Compliance efforts must be organized and should focus on the risk areas that are relatively well understood in the industry and on evolving risks in order to develop effective internal controls. Companies should also develop procedures to ensure that allegations of improprieties are promptly and thoroughly investigated and corrected to minimize the provider's exposure to civil litigation damages and penalties, criminal sanctions, and administrative agency remedies," state Carney and Wolin.

Carney and Wolin go on to recommend that effective compliance and investigative programs should assure that:

• Written standards of conduct are developed and implemented, as well as written policies and procedures that promote the organization's commitment to compliance;
• Individuals are appointed to administer and monitor the compliance efforts in a clear manner and assure that they report directly to the CEO and the governing body;
• Regular and effective education and training programs are provided to all affected employees and contractors;
• A process is put in place to receive complaints, such as a hotline, and that procedures are adopted to protect the anonymity of complainants and to assure whistleblowers are protected from retaliation;
• The organization implements a system to respond to allegations of improper or illegal activities;
• The organization utilizes appropriate disciplinary actions against employees who have violated internal compliance policies, applicable statutes, regulations or federal health care program requirements;
• The organization routinely audits and evaluates its compliance;
• The organization identifies and remediates identified systemic problems;
• Investigations into the cause of suspected compliance failures are launched quickly and are designed to probe in sufficient depth in order to be effective; and
• Strict policies are implemented to preclude employing individuals who have been sanctioned for fraud and abuse activities.

Carney and Wolin conclude: "While the specifics of this administration's health care reform are still changing, companies can be assured that increasing enforcement initiatives against waste, fraud and abuse will be a significant component of the effort. Investing now in upgrading internal compliance and investigative programs could make all the difference in avoiding becoming the target of the next government crackdown. More than just a good legal idea, it's simply good business."

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