The Department of Health and Human Services Office of Inspector General (OIG), along with the Centers for Medicare and Medicaid Services (CMS), is the federal agency that conducts audits and is responsible for overseeing the Medicare, Medicaid, and other federally funded benefit programs. While the CMS creates the rules healthcare professionals must follow, the OIG fills the investigatory (to detect fraud) and law enforcement role, initiating investigations into practices that the CMS or other federal agencies identify as non-compliant. It is essential that all providers who bill Medicare or Medicaid understand the role of the OIG, what OIG's investigation looks like, and how to survive an OIG audit. 

The OIG Investigation Process

The OIG is responsible for investigating a wide range of civil and criminal healthcare fraud matters. While the OIG investigation process varies slightly depending on the allegations and how they are discovered, an investigation typically takes the following path:

Allegations Are Revealed

The first step in the investigatory process is that the OIG receives a referral from another federal agency, often CMS, raising suspicions of misconduct or fraud. For example, CMS may discover that practice has billing inconsistencies or a high rate of rejected claims, prompting a referral to the OIG. In some cases, the OIG receives a referral through the OIG Hotline, which allows for any member of the public with knowledge of fraud or waste to make a referral. This is fairly common, as the False Claims Act provides a mechanism for referring parties to recover a portion of any damages recovered by the government. 

Preliminary Review of the Allegations

The next step in the process is for OIG investigators to conduct a preliminary review of the allegations. This entails an OIG investigator taking a closer look at the allegations to make sure that, if proven, they constitute a violation. The investigator will also assess the credibility of the allegations.

The Investigation Commences

If allegations survive a preliminary review, the next step is for the OIG to begin its formal investigation. Initially, an OIG investigation takes place behind the scenes, as investigators review all the evidence. However, at some point, investigators are likely to issue an OIG subpoena to the subject of the investigation. An OIG subpoena is an administrative subpoena that OIG investigators can issue without first obtaining a judge’s approval. However, these subpoenas still carry the force of law, and subjects may be found in contempt for failing to comply with the subpoena. 

However, the OIG’s subpoena power is broad. A subpoena for documents often demands an excessive amount of information, including billing records, marketing, and promotional materials, email correspondences, financial records, documentation of referral relationships, and so on. The documents and testimony gathered during the investigation help the OIG determine whether there is sufficient evidence to pursue civil or criminal charges against the provider.

Challenging an OIG subpoena is very difficult, although not impossible. In a very limited number of cases, the recipient of a subpoena can get a judge to invalidate an OIG subpoena. However, more often, the subject can negotiate with the OIG to limit the scope of the subpoena if it is overly burdensome. Practitioners who suspect that a subpoena is overbroad should reach out to a federal healthcare fraud defense attorney for assistance, as the process of challenging or negotiating an OIG subpoena is very technical.

Referral to the Federal Prosecutors

If the OIG determines that there is sufficient evidence to bring federal healthcare fraud charges, it will refer the case to federal prosecutors. From here, OIG investigators and any other federal agents involved in the investigation will work with prosecutors to put a case together against the provider. While civil charges can be filed almost immediately, any criminal charges must be approved by a grand jury before an indictment. 

Surviving an OIG Audit

The thought of an OIG audit is overwhelming to many healthcare providers. And for good reason, OIG audits are not only incredibly burdensome and invasive but also present very high stakes. Thus, providers must understand what they can do to protect themselves in advance of an audit as well as how to effectively respond if they are audited. 

Compliance Is Key

The best proactive approach to surviving an OIG audit is to ensure that practices have comprehensive OIG compliance programs on the books. Compliance programs are incredibly effective at decreasing the chances of an audit because they bring a provider’s billing in line with the expectations of CMS. These programs also ensure that all levels of staff understand their legal obligations, making inadvertent errors less likely. 

While practice would ideally develop compliance programs well before the OIG announces audits, developing these programs in the face of an audit still provides significant benefits. This is because federal prosecutors are instructed to consider the remedial actions a provider takes when under investigation. While subsequently developed compliance programs are given less weight than those that were in existence before the audit, they can still help providers avoid the worst consequences of OIG audits.

Review the Subpoena

Once a provider receives an OIG subpoena, the first thing they should do is have an experienced healthcare fraud attorney review the subpoena to determine whether it is enforceable. In most cases, the subpoena will not contain any fatal defects; however, if investigators fail to provide a basis for requested documentation, it may open the door to a successful challenge. An attorney may also be able to work with the OIG investigators to narrow the scope of overly burdensome subpoenas. For example, providers are not obligated to turn over any privileged information.

Determine What Is at Stake

While all healthcare fraud cases are serious, some are more serious than others. Early on in the process, a provider needs to determine whether the nature of the OIG investigation is civil or criminal. This will give a provider the information they need to evaluate all of their options. While criminal healthcare fraud cases require the government to meet a higher burden, they also carry more severe consequences. 

Consider Negotiating with the OIG

Every case is unique; however, in some situations, it is worth considering approaching the OIG with a proposed resolution that avoids the most serious charges. However, it is essential that providers exercise caution when negotiating with the OIG. Anything a provider tells an OIG investigator can generally be used against them later, unless expressly in the context of negotiating a resolution. Thus, the best practice is for providers to refrain from directly negotiating with the OIG and instead retain the assistance of a Medicare fraud defense attorney. 

Each of these steps should be taken before charges have been filed. Ideally, providers should reach out to a healthcare fraud lawyer for assistance. In many cases, an experienced lawyer can work out a satisfactory resolution without charges ever being filed. Of course, the earlier a provider can bring counsel on board, the better. 

Federal healthcare fraud lawyer and founder of Oberheiden, P.C., Dr. Nick Oberheiden, explains,

OIG investigations present very high stakes for providers. However, often, healthcare professionals knowing that they did not intentionally violate CMS regulations, end up taking a lackadaisical approach to these investigations. While the element of intent is required for some criminal violations, that is not always the case, and honest providers can very easily find themselves unprepared for OIG audits or OIG investigations. Thus, all providers must reach out to an experienced attorney as soon as they learn of an investigation, regardless of the allegations they face.

While an OIG investigation is undoubtedly a stressful event, it doesn’t need to cause significant disruption to a provider’s practice. However, to ensure the best chances of a smooth audit, it is essential to work with a knowledgeable attorney who has successfully helped other practitioners navigate the investigation process.