Civil Investigative Demands by the U.S. Department of Justice

Healthcare providers and organizations face complex regulations and heightened scrutiny from federal agencies, particularly in matters involving allegations under the federal False Claims Act (FCA). A Civil Investigative Demand (CID) from the Department of Justice (DOJ) is a powerful tool used to investigate potential false claims. Understanding what a CID entails, its implications, and how to respond can make a significant difference in navigating the process effectively.

If you have received a CID or otherwise learned you are under investigation by the DOJ or any government agency in Los Angeles or statewide, contact the Law Offices of Art Kalantar in Beverly Hills to speak with a skilled and knowledgeable California False Claims Act defense attorney.

What Is a Civil Investigative Demand?

A Civil Investigative Demand is a formal request issued by the DOJ as part of its investigation into suspected violations of the False Claims Act. The FCA prohibits individuals or entities from submitting false or fraudulent claims for payment to the federal government. In the healthcare context, this often involves allegations of improper billing practices, kickback schemes, or violations of Medicare or Medicaid regulations.

The federal government uses a process referred to as “data mining” in which it analyzes large sets of data. When it identifies healthcare providers who are outliers in their billing, or present anomalies in the types or frequency of services rendered, an initial step in the government’s investigation into the healthcare provider is to serve upon it a Civil Investigative Demand.

CIDs allow the DOJ to gather evidence before deciding whether to file a lawsuit or intervene in a whistleblower (qui tam) case. Unlike standard subpoenas, a CID grants the government broad authority to demand documents, written responses, and oral testimony without requiring court approval.

Key features of a CID include:

1. Document Requests
   A CID may require the production of extensive documentation, such as billing records, communications, contracts, and policies. If the CID requires production of metadata (i.e., data about data), a third-party vendor, which specializes in retrieving and storing metadata, may be required to properly respond to the CID. These requests are often detailed and time sensitive.

2. Written Interrogatories
   The DOJ may include questions that require written answers under oath. These interrogatories typically focus on understanding your organization’s practices, processes, and potential involvement in the alleged misconduct.

3. Oral Testimony
   CIDs can compel individuals to provide oral testimony under oath, often in a deposition-like setting.

4. Confidentiality
   Investigations involving CIDs are typically confidential, and disclosing the existence of the CID or investigation may be prohibited.

Why Healthcare Providers Receive CIDs

Healthcare providers are frequent targets of FCA investigations due to the complexity and volume of claims submitted to federal healthcare programs. The federal government has made it a priority to recoup funds from healthcare providers. Common allegations leading to CIDs include:

• Upcoding or overbilling for services.
• Billing for medically unnecessary procedures or services not rendered.
• Violations of the Anti-Kickback Statute or Stark Law.
• Improper relationships with vendors or referral sources.
• Submitting claims based on falsified patient records.

How to Respond to a CID

Receiving a CID can be intimidating, but a strategic and informed response is critical. Here are steps to consider:

1. Consult an Attorney Immediately
   Legal counsel experienced in healthcare law and FCA defense should be your first call. An attorney can help assess the scope of the CID, protect privileged information, and negotiate with the DOJ on your behalf.

2. Review the Scope of the Demand
   Carefully evaluate the CID to understand its requirements and deadlines. Overbroad or unclear requests can often be narrowed through negotiations with DOJ attorneys.

3. Preserve Relevant Records
   If required to do so, implement a litigation hold to ensure all relevant documents and communications are preserved. Failure to do so could lead to allegations of obstruction.

4. Comply While Protecting Your Rights
   It is essential to properly comply with a CID. Work closely with your attorney to produce the required materials while protecting all of your rights.

5. Prepare for Potential Outcomes
   A CID may lead to one of several outcomes:

   • The DOJ may close the investigation without further action.
   • The DOJ may join a whistleblower lawsuit or initiate its own FCA lawsuit.
   • The matter may be resolved through a settlement.

6. Maintain Confidentiality
   Avoid discussing the CID with employees, colleagues, or third parties unless necessary. Unauthorized disclosures could jeopardize the investigation or harm your defense.

How a Healthcare Law Criminal Defense Attorney Can Help

Failure to comply with a CID can result in significant consequences, including court enforcement of the CID and possible penalties for contempt, increased scrutiny from the DOJ, and damage to your credibility and negotiating position during the investigation. Avoiding these negative outcomes requires a thorough understanding of healthcare regulations, licensing requirements and criminal defense strategies. An experienced attorney can evaluate the legal and factual basis of the CID, develop a tailored response strategy, protect your rights while cooperating with the investigation, and work to resolve the matter efficiently, whether through negotiations, litigation, or settlement.

While no provider can eliminate the risk of receiving a CID, implementing strong compliance practices can help reduce your exposure to FCA investigations. Key steps include conducting regular internal audits of billing and coding practices, training staff on compliance with federal and state healthcare laws, and establishing clear policies to identify and address potential fraud risks. California healthcare law attorney Art Kalantar can work with you to take proactive steps to minimize FCA risks.

Contact Attorney Art Kalantar for Strategic and Effective False Claims Act Defense in California

Receiving a Civil Investigative Demand from the Department of Justice is a serious matter that requires careful handling. For healthcare providers, the stakes are particularly high, as FCA investigations can lead to significant financial penalties, reputational harm, and even criminal liability. If you or your organization has received a CID, working with an experienced healthcare law criminal defense attorney can provide the guidance and advocacy needed to navigate the process effectively.

The Law Offices of Art Kalantar are committed to protecting healthcare providers facing DOJ investigations and FCA allegations. Contact our office today for a no-cost, initial and confidential consultation.