3 Critical Steps to Take Right Now If You Are Under Healthcare Fraud Scrutiny

Immediately Halt All Billing and Clinical Documentation Changes While Preserving Every Byte of Evidence

In my 25 years as a federal prosecutor, I saw more healthcare providers incriminate themselves through well-intentioned "cleanup" of billing records than through any actual fraudulent scheme. The moment you suspect you are under scrutiny—whether from a subpoena, a Civil Investigative Demand under the False Claims Act, or a visit from OIG agents—you must freeze all billing operations and clinical documentation modifications. Federal prosecutors and agents from the FBI, HHS-OIG, and the Department of Justice rely heavily on the concept of "consciousness of guilt," and any alteration, deletion, or backdating of medical records or billing entries after you receive notice can be charged as obstruction of justice under 18 U.S.C. § 1519, which carries a 20-year maximum sentence. You must instruct your billing manager, coding staff, and all clinicians to cease any changes to existing records, including adding late entries, correcting codes, or deleting duplicate claims, until your defense attorney provides written guidance on what, if anything, may be modified. Preservation obligations extend beyond paper records; you must also preserve all electronic health record metadata, email communications with billing vendors, internal audit reports, and even Slack or Teams messages that discuss coding or reimbursement practices. I have personally handled cases where a single deleted spreadsheet, later recovered by forensic examiners, transformed a civil recoupment action into a criminal indictment for obstruction under 18 U.S.C. § 1512(c). You should also preserve all versions of your compliance manual, any prior audits conducted by outside consultants, and any correspondence with Medicare administrative contractors or Medicaid fiscal agents. Do not assume that routine data retention policies apply—issue a written litigation hold immediately, and confirm receipt from every employee who touches billing or clinical documentation.

Retain Independent Federal Healthcare Defense Counsel Before You Respond to Any Government Request

One of the most common and dangerous mistakes I observed as a prosecutor was healthcare providers relying on their corporate counsel, malpractice attorney, or general practice lawyer to handle a federal healthcare fraud investigation. Federal healthcare fraud is prosecuted under a web of statutes including the False Claims Act (31 U.S.C. §§ 3729-3733), the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Law (42 U.S.C. § 1395nn), and the Health Care Fraud Statute (18 U.S.C. § 1347), each with its own intent requirements, safe harbors, and penalty structures that are entirely different from civil malpractice or contract law. When you retain counsel who also represents your practice, your medical group, or your billing company, you create an immediate conflict of interest because the government will inevitably argue that communications among these entities are not privileged under the joint defense or common interest doctrines, especially if one entity begins cooperating with the government in exchange for immunity. I have seen cases where a practice's general counsel inadvertently waived privilege by sharing a client's internal investigation report with a billing vendor, and that report became the centerpiece of the government's criminal case. You need a lawyer who has personally tried healthcare fraud cases before federal juries, who knows how to negotiate with Assistant U.S. Attorneys in the Fraud Section, and who understands the nuances of the federal sentencing guidelines for healthcare fraud, including the loss calculation tables under U.S.S.G. § 2B1.1. Your independent counsel should immediately conduct a conflict check with every potential witness, every current or former employee, and every entity that received payments from your practice, because the government will depose or immunize these individuals to build a cooperating witness network. Do not assume that your existing attorney-client relationship protects you—federal prosecutors routinely file motions to disqualify counsel based on conflicts, and once that happens, you lose months of strategic momentum and may be forced to start from scratch with new representation.

Do Not Voluntarily Produce Documents or Offer Explanations Without a Targeted, Privileged Response Strategy

When the government sends a Civil Investigative Demand or a grand jury subpoena, your natural instinct as a healthcare professional is to cooperate fully, explain the billing codes, and provide "context" for why certain claims were submitted in a particular way. In my experience as a federal prosecutor, that instinct is exactly what the government relies on to build its case. The False Claims Act imposes liability not only for knowingly submitting false claims but also for claims submitted with "reckless disregard" or "deliberate ignorance" of the truth, as codified in 31 U.S.C. § 3729(b)(1)(A)-(B). When you voluntarily produce documents without a privilege log, without a targeted response, and without an accompanying written explanation that is carefully crafted by defense counsel, you hand the government a roadmap to cherry-pick damaging entries while ignoring exculpatory context. Federal prosecutors are trained to look for patterns, not anomalies, and they will use your own production to argue that you had notice of improper billing patterns and failed to correct them, which satisfies the scienter element under 18 U.S.C. § 1347. You must insist that every document production be accompanied by a detailed privilege log that designates attorney-client communications, work product, and any materials covered by the self-evaluative privilege or the peer review privilege under state law. Furthermore, you should never agree to an informal interview with OIG agents, FBI special agents, or DOJ trial attorneys without your counsel present, and even then, you should rarely agree to a proffer session unless the government has provided a formal proffer letter under U.S. v. Mezzanatto, 513 U.S. 196 (1995), which limits the use of your statements. I have represented clients who thought they could "clear things up" in a voluntary meeting, only to have the agents ask a single question about a specific date of service, and the client's nervous, off-the-cuff answer became the basis for a perjury charge under 18 U.S.C. § 1621 or a false statement charge under 18 U.S.C. § 1001. Remember that the government does not need to prove you intended to defraud Medicare or Medicaid; it only needs to prove that you acted with reckless disregard for the truth, and your voluntary explanations often provide the very evidence of knowledge that the government lacks.

Conduct a Privileged Internal Audit to Identify and Remediate Any Overpayments Within the 60-Day Repayment Window

The Affordable Care Act codified the 60-day overpayment repayment rule at 42 U.S.C. § 1320a-7k(d), which requires any person who has received an overpayment from Medicare or Medicaid to report and return the overpayment within 60 days of identifying it, or face liability under the False Claims Act. This deadline is not triggered by a government subpoena; it is triggered by your own knowledge or what you should have known through reasonable diligence, and the Centers for Medicare & Medicaid Services (CMS) has taken the position that this includes constructive knowledge. In my years of practice, I have seen providers who received a subpoena, conducted a superficial review, found a few overpayments, and returned them, only to discover later that a qui tam relator had already documented a much larger pattern of overpayments, and the government argued that the provider's failure to identify and return all overpayments within 60 days constituted a reverse false claim under 31 U.S.C. § 3729(a)(1)(G). You must immediately engage your defense counsel to conduct a privileged internal audit of all billing data for the past six years—the statute of limitations for False Claims Act cases is six years under 31 U.S.C. § 3731(b)(1), but it can extend to ten years if the government invokes the Wartime Suspension of Limitations Act. This audit should be directed by your attorney to maximize protection under the work product doctrine and the attorney-client privilege, and it should focus on high-risk areas such as evaluation and management code levels, modifier usage, incident-to billing, telehealth services, and any claims involving durable medical equipment or compounded medications. If your audit identifies overpayments, your counsel can structure the disclosure and repayment in a way that demonstrates cooperation and good faith, which can be critical factors in persuading the government to decline prosecution or to negotiate a non-prosecution agreement. Do not attempt to conduct this audit yourself or through your billing department without legal supervision, because any documentation created during the audit can be subpoenaed by the government if it is not properly protected by privilege. I have handled cases where a provider's internal audit, conducted by a compliance officer without attorney direction, became the government's primary exhibit at trial, showing exactly how much the provider knew and when they knew it, which destroyed any argument of ignorance or mistake.

If you are under healthcare fraud scrutiny, you are facing the full weight of the federal government, including potential treble damages, per-claim penalties, exclusion from federal healthcare programs, and years of imprisonment. The decisions you make in the next 48 hours will determine whether this becomes a civil recoupment action, a criminal indictment, or a negotiated resolution. I have spent over 25 years on both sides of these cases, and I know that the difference between a favorable outcome and a catastrophic one often comes down to whether you take the right steps immediately—preserve evidence, retain independent specialized counsel, refuse to make voluntary statements, and conduct a privileged internal audit. Do not wait for the subpoena to arrive; call my office today for a confidential consultation, and let us build a strategic defense that protects your license, your practice, and your freedom.