This blog is the sixth in a series about interacting with government regulators and is intended to help our clients understand and manage contact and outreach from government regulators, law enforcement, or both.
The Setup
As noted in “Government Relations 101: The Onsite, Part 1 – How to Prepare for a Scheduled Onsite,” this blog post explains how best to handle a surprise onsite by a government regulator or outside auditor or investigator acting on behalf of the government or on behalf of a third-party vendor who has a contractual right to inspect your premises.
The Law
Onsite visits—be it an audit, investigation, or credentialing review—are common and authorized by a variety of local, state, and federal laws. As noted in the last Government 101 blog post, the best defense, whether it’s a scheduled or surprise onsite, is to recognize that your business will inevitably be subject to an onsite and to always be prepared. Keep your records, compliance manuals, and staff training up to date.
Our Advice
In the event you’re subjected to a surprise onsite, our recommendation is to treat the onsite more circumspectly, similar to how the execution of a search warrant would be treated. Assume your business is the target of an investigation, unless you’re a new enrollee to a health care program or just signed a third-party vendor contract, in which case the onsite is likely part of the enrollment process.
You should immediately call your attorney or an attorney experienced in handling government investigations. Be cooperative. Barricading the doors or refusing to cooperate is not recommended and won’t stop the audit or investigation from occurring. You may prevent the auditor or investigator from conducting an onsite that day, but surely they will be back. There may also be adverse consequences of not cooperating, including, if you’re a new enrollee, not getting approved for enrollment.1
Even if the onsite is unannounced, there are important steps you can take to help protect you and your business.
Ask to see the lead auditor’s or investigator’s identification. This allows you to confirm their identity and their agency affiliation. Jot it down so you can later give it to your attorney.
Ask the lead auditor or investigator why they’re there and what they’re looking to accomplish. Government auditors, investigators, or agents of theirs are often forthcoming with details about their focus, both because they need your cooperation to locate records and because the underlying government agencies often strive for transparency. Ask and jot down what they say. This information will later prove helpful.
Speak to your employees and advise them to cooperate in the audit or inspection. They should assist the audit team with locating records or items they’re entitled to inspect and open containers that contain items they’re entitled to inspect.
Be careful about conversing with an auditor or investigator about substantive matters. You and your employees have the right to speak to them, to refuse to speak to them, or to consult with an attorney before speaking to them. You should advise your employees of their rights. If you decide that you want to speak to the auditor or investigator, it’s best to defer that conversation until you’ve had a chance to consult with your attorney and your attorney has had an opportunity to arrange the terms of the interview. Remember: anything you say can be, and likely will be, used against you unless arrangements are made otherwise or you have invoked your Fifth Amendment right to remain silent. A well-prepared interview can be very beneficial to you and your business; an unprepared one can be a disaster.
Be advised, though, that an auditor or investigator may consider your failure to respond to some or all questioning a failure to cooperate. As noted, health care providers are required to cooperate with government regulators, and a failure to do so can have negative consequences on your business, including exclusion.2 If you’re unsure whether it’s better for you, your business, or both to respond to questioning or to individually exercise your right to remain silent, it’s best to contact your attorney for guidance.
If your employees decide to speak to the auditor or investigator, you should advise them to answer questions completely, accurately, and truthfully. Do not suggest otherwise in word or deed. Your employees should understand that they can terminate questioning whenever they want. They should also understand that they can answer some questions and refuse to answer others. If an employee decides not to be questioned, their declination should be polite but firm.
Monitor the onsite as it occurs. Don’t delegate that task to an employee. During an onsite, a government auditor or investigator is entitled to ask questions and review records. You can refuse to cooperate. Whether or not you cooperate, they aren’t entitled to search for records or look inside closed containers on their own. For that, they need a search warrant; unless they produce one, you are entitled to demand they stop opening containers or looking through files unless you have expressly given them permission to do so.
It’s possible, but not likely, that the onsite will be recorded using videotape, still photography, or both. That fact, however, does not preclude you from monitoring it in real time. Document, videotape, or photograph the onsite if possible. Document which employees or other persons are being interviewed as well as the substance of the questions being asked and the answers being given. All of this may prove helpful down the road if you decide to challenge the results of the underlying audit or investigation.
Ask to copy the documents the auditor or investigator seeks to remove from your premises. You may need them down the road to run your business, and it’s generally important to track and maintain copies of whatever government regulators remove (or copy) from your business. They may later base an audit or investigation on these records or reference them in an audit or investigation. Having your own copies will make it easier to challenge their conclusions.
Contact your attorney and debrief them on what happened and provide them with the contact information for the lead auditor or investigator. Armed with this information, they can start investigating why you were the target of a surprise onsite and can devise a plan to protect your interests.
If you have any questions regarding the content of this blog, please contact Chris Shaw, partner, at cshaw@barclaydamon.com, or another member of the firm’s Health Care Controversies or Health & Human Services Providers Teams or White Collar & Government Investigations Practice Area.
1Failure to cooperate with a program audit is an “unacceptable practice” (18 NYCRR § 515.2[a][1], [b][6]) and may subject a provider to sanctions (18 NYCRR § 515.3[a]). Medicaid’s audit provisions, however, do not trump an individual provider’s state and constitutional right to remain silent. While you are required as a Medicaid-enrolled provider to provide records upon request (18 NYCRR § 504.3[a]), you are not required to answer questions.
2Id.