Compliance and Enforcement - Andrew Grosso

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Compliance and Enforcement - Andrew Grosso

Andrew Grosso
Andrew Grosso is a former Assistant United States Attorney who is now practicing in Washington, D.C. Mr. Grosso served as an Assistant U.S. Attorney from 1983 until 1994, in both Tampa, Florida, and Boston, Massachusetts. During that time, his primary area of concentration was the criminal prosecution of government fraud and corporate crime. In 1988, he founded the nation's first federal-state task force to combat health care fraud, and, in 1991, became a member of the Health Care Fraud Working Group of the U.S. Department of Justice.

Among Mr. Grosso's areas of concentration are government program and corporate compliance matters, particularly in the health care field but also including defense procurement matters and customs, education, and housing transactions. He has represented both corporate clients as well as Relators in qui tam law suits. Mr. Grosso also has an active practice in Internet law and E Commerce, particularly concerning federal laws involving privacy matters, such as the Health Insurance Portability and Accountability Act, the Privacy Act, and the Electronic Communications Privacy Act.

Andrew Grosso earned his law degree in 1980 from the University of Notre Dame, and holds Master of Science degrees in both physics and computer science from Rensselaer Polytechnic Institute. He is a member of the bars of New York, Florida, and the District of Columbia; and has served on the Council for the Criminal Justice Section of the American Bar Association and as Chair of that section's Science and Technology Committee. Currently, he is Chair of the Committee on Law and Computer Technology for the Association for Computing Machinery.

Among Mr. Grosso's publications are: Essentials for the Prosecution and Defense of Federal Program Fraud, Criminal Defense Techniques 85-1 (Matthew Bender & Co., Inc., 1994); "Medical Necessity and the Medicare and Medicaid Anti-Kickback Statute," Federal Bar News and Journal (1993); "Prosecuting Health Care Fraud: Tools of the Trade," Federal Bar News and Journal (1993); "Health Care Fraud: Prosecuting Lack of Medical Necessity," FBI Law Enforcement Bulletin (1992); Computer Crime, Criminal Defense Techniques (Matthew Bender & Co., Inc., 1996); "The Qui Tam Law Suit," Labor and Employment Section Newsletter of the N.Y.S. Bar Association (1995); and "Search Warrant Applications," FBI Law Enforcement Bulletin (1994).

2121 K Street, N.W., Suite 800
Washington, D.C. 20006
Tel.: (202) 261-3593 Fax: (202) 261-3595
eMail: Agrosso@acm.org


Question 1 - Andrew, Is making a voluntary disclosure a good way to make sure you are not dealing with a False Claims whistleblower? Some say yes and some say no. What is the truth of the matter. by drethics on May 16, 2000

Answer 1 - Good question Mark. The answer is a definite "maybe."

(Never ask a lawyer for advice, for he will say both yes and no at the same time . . . .)

There is no way to stop a qui tam from being brought against your company, absent the settlement of the matter at issue before the qui tam is filed. To the extent that a voluntary disclosure leads to a speedy settlement, such a settlement will stop the qui tam. However, a disclosure itself cannot stop a qui tam, even if the disclosure is "first in line." In this regard, the False Claims Act puts heath care providers at a disadvantage compared to prospective Relators.

That being said, the submission of a voluntary disclosure, even in the face of a possible qui tam, has very real benefits. If the qui tam is filed, the damages which the government can seek may be reduced. In addition, one will have "softened the blow" by cooperating with the government *before* law enforcement comes to investigate, a factor which is exceedingly important in the government's way of thinking when it is deciding (a) whether to bring an enforcement action, and (b) what penalties to impose (if any) once it has done so. by Andrew Grosso on May 16, 2000
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Question 2 - Are there any current or beta versions of technology being used by the gov't that may alert when potential fraud and abuse is occurring? Or pattern tracking, etc.? What about technology for providers regarding compliance? Do you see technology eliminating the need for a compliance division within providers? Thanks by tammy on May 16, 2000

Answer 2 - The carriers which administer the Medicare program at the disbursement level have for years used computers to look for patterns which might indicate false billings or overpayments. That information is then turned over to HCFA or the OIG for further evaluation.

In my opinion, technology will never eliminate the need for a compliance officer within a company. The technology looks for patterns indicative of fraud: it does not identify actual fraud, nor does it catch all fraud. Further, once overpayment or fraud is identified, the program can never make the hard decisions of who in the company to identify as the cause; bring the matter to the attention of the Board of Directors, or implement a training and awareness program to insure that future problems do not occur.

As an analogy, the output of a computer is only as good as the person who uses the computer and interpretes its output. by Andrew Grosso on May 17, 2000
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Question 3 - Do you have any experience to the point of a disclosure softening the blow in a whistle-blower case or is this just what is supposed to happen? by drethics on May 16, 2000

Answer 3 - The answer is that a voluntary disclosure does soften the blow. If submitted before the government begins investigating the matter, the voluntary disclosure program calls for the reduction of the damages demanded from three times damages to two times damages. More significantly, perhaps, the policy of the DOJ has been not to seek the $5,000 to $10,000 penalties authorized by the False Claims Act when a disclosure has been submitted; and any Corporate Integrity Agreement included as part of a settlement will be much more lenient, or perhaps not required at all by HHS. by Andrew Grosso on May 16, 2000
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Question 4 - Wow what a bio...

Where is the line drawn between civil and criminal? I assume that minor infractions of Medicare fraud (maybe GPs facing shrinking reimbursements) are dealt with by imposing fines and penalties; where the huge abusers (big hospital companies who systematically cook the books) are dealt with by civil actions and punitive damages.

Where is the line drawn and how much does a consideration of ROI play on the decision of who and when to sue?

I personally believe that the government suing in 'civil' actions is wrong. Suing Tobacco companies, Gun companies and even MicroSoft is not in the interest of the public good and actually subverts representative government's role... in the interest of bigger more paternal government. If they were breaking the law go after them under criminal statutes and with fines established as a matter of public policy. It seems like the role with Medicare is different though (because public policy has decided to pay for health care in this fashion; government can rightly usurp a certain amount of control over private enterprise that wishes to participate) but you would think it would just be more of an audit / fine process rather than legal litigation and the potential for huge awards that drive down the value of my retirement portfolio and up the cost of medical care on the private side.

Please don't beat me up too badly in your response... by BenDover on May 16, 2000

Answer 4 - There are two lines between a civil action and a criminal action.

The first line is based upon what is referred to as the "scienter" standard, and depends upon the distinction between "intentionally" doing something, and merely "knowingly" doing something. For example, I may throw a rock at a window intending to break it, or I may merely throw a rock at a window intending to strike a rodent, all the while knowing that I will incidently break the window (while not intending to so).

(Very) generally speaking, intentionally submitting false claims to the government will more often result in criminal prosecution, while mere "knowingly" submitting false claims will more often result in civil claims. This is not a hard and fast rule, but it helps in assessing liability when the government comes knocking at the door.

The second line is based upon the seriousness of the violation, including the harm done and the positions of the parties involved. It is grounded in the discretion given to federal prosecutors to choose whether or not to prosecute, and to choose what charges to bring. By its nature, this standard is very subjective, and the same offense can be treated differently from city to city and prosecutor to prosecutor.

I believe that bringing civil prosecutions plays an important role. First, it enables the government to recover damages without excessively punishing a person by sending him (or her) to jail, or by stigmatizing the person, including a company, with a criminal record. Second, because double and triple damages are possible (as well as lump sum penalties), the threat of these sanctions provides a deterent effect for other persons who might otherwise commit the same offense.

ROI, or return of interest (I assume this is what you mean), can play a role, but it is would be a very secondary role. The primary factors are the degree of culpabity and scienter of the perpetrator; the harm done to the government and to third parties (such as patients receiving health care); and the amount of money lost. ROI may affect this last factor.

In deciding whether to bring a law suit, civil or criminal, do not lose sight of the deterent factor. Yes, your portfolio may go down because a company whose stock you own has been sued. However, many other companies, not sued, will take a lesson from that lawsuit. For that reason, prices will go down since the economy will work better, and taxes will go down because the government is less subject to fraudulent conduct. As an analogy, changing the oil in your car may be an expense, but its cheaper then replacing the engine every 20,000 miles. by Andrew Grosso on May 16, 2000
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Question 5 - Please excuse my legal ignorance…

Doesn't the threat of stiffer penalties for not 'coming clean' serve to subvert some of the constitutional provisions of warrant-less search and seizure; coerced testimony; and the right to not testify against one's self (if not backed by legal precedent; at least in spirit). Does not the general question, "Have you committed a crime?" require someone to either perjure themselves or refuse to answer - thus providing a de facto admission and giving reasonable cause for further warranted search? Sounds a little like back door prospecting too me… kinda like looking at "everyone's" banking transactions or internet activity for patterns of criminal behavior or stopping everyone leaving the parking lot of bar and asking "have you been drinking"; where a truthful answer might be reasonable cause for further investigation and wind you up in the pokey… presumption of guilt - have you…

Please again… don't beat me up too much… I'm just trying to understand… by BenDover on May 16, 2000

Answer 5 Hmmm. . . . Our jurisprudence has historically recognized that a legitimate factor in determining the sentence to be imposed upon a defendant is the extent of his or her contrition and acceptance of responsibility for the offense.

A more recent development has been giving a lighter sentence or other penalty in exchange for "making it easier" on the prosecutor and the judge, in recognition of the fact that our criminal justice system could never, ever, handle the volume of cases is must process if all defendants demanded a trial. This is a "qui pro quo," and in the civil context does not intrude upon any constitutional rights. When utilized in the criminal context, there is a risk that this proess can go too far, and can result in coercion designed to deprive a defendant of his constitutional rights. The counter to this coercion is the right every criminal defendant has to counsel, including the appointment of counsel if the defendant is unable to afford a lawyer.

Voluntary disclosures for health care fraud usually involve health care professionals and corporations. Generally, these people are sophisticated, and can afford competent counsel and other professional assistants who can provide insightful advice as to the viabiity of all options available, from filing a voluntary disclosure to sugging it out with teh governmetn to the bitter end. All in all, I am of the opinion that the HHS voluntary disclosure program does not adversely affect constitutional safe guards. by Andrew Grosso on May 16, 2000
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Question 6 - I've been trying to encourage Miami Dade County to adopt a false claims ordinance in order to fight fraud against the County. Finally, an ordinace was adopted, but it punishes whistle blowers, not corrupt contractors. Thus, my endeavor seems futile.

I know you have some experience with the Florida False Claims Act. Do you think that statute covers false claims against Miami Dade County? What about other Florida Counties? I distinguish between Dade and other counties because of our strange state constitution. I hope you understand its implications better than me.

p.s. What a bio! by Kroner on May 17, 2000

Answer 6 - By its language, the Florida False Claims Act does not cover fraud against municipalities, such as counties. The focus one must look for is whose treasury is affected by the fraud, and whose treasury is protected by the statute. The Florida False Claims Act protects the State Treasury, not the county's. A fraud of the county is therefore not reachable by the State False Claims Act.

There is a caveat. If a program is funded by *both* state and municipal (county, city, etc.) funds, directly or indirectly, then the Act would cover those funds, and possibly all of the funds including the minicipal funds. Often states, as well as the federal government, will indirectly supply funding for projects and programs, so a close examination of the source of the money for the project or program you are concerned with is advisable. by Andrew Grosso on May 17, 2000