In this episode of AHLA's monthly series on fraud and abuse issues, Matthew Wetzel, Associate General Counsel, Compliance Officer, GRAIL, speaks to John Kelliher, Managing Director, BRG, and Mike Gordon, Partner, Bradley Arant Boult Cummings LLP, about Congressional oversight and investigations, including predictions for 2021 and beyond. The speakers note that the COVID-19 pandemic may lead to more oversight of the health care industry and discuss the issues that Congress might focus on, including drug pricing. They also talk about the purpose of oversight and give advice for companies and individuals that are facing a Congressional inquiry. From AHLA's Fraud and Abuse Practice Group. Sponsored by BRG.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
In this episode of AHLA's monthly series on fraud and abuse issues, Matthew Wetzel, Associate General Counsel, Compliance Officer, GRAIL, speaks to John Kelliher, Managing Director, BRG, and Mike Gordon, Partner, Bradley Arant Boult Cummings LLP, about Congressional oversight and investigations, including predictions for 2021 and beyond. The speakers note that the COVID-19 pandemic may lead to more oversight of the health care industry and discuss the issues that Congress might focus on, including drug pricing. They also talk about the purpose of oversight and give advice for companies and individuals that are facing a Congressional inquiry. From AHLA's Fraud and Abuse Practice Group. Sponsored by BRG.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
The following message and support for A H L A is provided by Berkeley Research Group, a global consulting firm that helps organizations advance in the areas of disputes and investigations, corporate finance and strategy and operations. BRG helps clients stay ahead of what's next. For more information, visit think brg.com.
Speaker 2:Welcome to the American Health Law Associations Fraud and Abuse podcast. I'm your host, Matt Wetzel, and today is Tuesday, March 9th, 2021. We are talking about a somewhat new topic for the podcast in this edition. Specifically, uh, we're speaking today with two former Congressional Council on the topic of Congressional oversight and investigations. What can we predict for 2021 and beyond, and what can companies and individuals expect if they are subject to a congressional inquiry? Joining us today are John Kelleher of B r g and Mike Gordon of the Bradley Firm, both based in Washington dc. Mike is a partner at Bradley, where he represents companies and individuals, uh, including in, in, uh, congressional inquiries. He served in senior roles for multiple US House committees where he led investigations and planned hearings on the healthcare industry. John is a managing director of B R G and has 20 years of experience in healthcare policy, including spending four years as chief council of the committee on ways and means of the US House. John Mike, welcome.
Speaker 3:Thank
Speaker 2:You. Good to be here.
Speaker 3:Yes.
Speaker 2:Morning. Good afternoon. Sorry. Absolutely. Well, we're g really glad to have you here on the podcast today, and like I said, this is a little bit of a new topic for us. And you know, Mike, I think we might just start with you. Uh, we have a new administration. We have a new Congress. It's, uh, early in 2021. Can we expect more congressional oversight around the corner? Especially when it comes to the healthcare industry.
Speaker 3:Uh, that's a, that's an affirmative. The, the way a congressional oversight works over time is that it, it certainly ebbs and flows with changes in congressional leadership and, um, all signs point to an uptick in oversight activity, uh, in this Congress. For, for a few reasons, first, Democrats control both the House and Senate and, um, in the Senate, I would note that even if you only have a 51 vote working majority, that's enough to give you all the powers of oversight and subpoena authority in all the committees. Um, so, uh, when Democrats control congressional committees, uh, they tend to do more oversight of the private sector than, uh, when Republicans control those committees, just as a general matter. Um, and then this year, there are a couple additional factors that I think point to enhanced congressional scrutiny of the healthcare industry. One is that, um, in times of crisis that have a, a healthcare component to them, the, the, the environment for oversight by Congress is sort of supercharged. Where there's widespread hardship, um, other issues that are drawing a lot of p media attention, Congress will, uh, generally respond with more oversight activity in those same subject matters. So here you we're gonna, obviously we have the Covid crisis and all that, that entails, um, coupled with, um, a huge influx of federal investment and spending to address the crisis. And whenever their big federal, um, initiatives, congressional oversight tends to follow, to kind of follow the money and see if the program, the relief programs that have been put in place are working to Congress's satisfaction. Um, the last point I'd mention is that the fact that Congress is evenly divided between Democrats and Republicans, um, makes legislating more difficult and I think opens up more space than for oversight, because generally speaking, those are the two main functions that Congress does. They legislate and they conduct oversight. And when they're frustrated because they can't pass legislation, um, they will spend their more energy on oversight, uh, activity. So all that,
Speaker 2:Can you maybe put this in a little bit of context for us? So comparing, say this Congress with the previous Congress, you said you think you'll see an uptick, uh, but, uh, you know, what sort of areas do you think will be of primary importance, uh, uh, this time around versus in the last Congress?
Speaker 3:Uh, think about a crisis like Covid that's certainly gonna be at the top of the agenda for many congressional committees. There's so many issues wrapped up within that from how the virus has been spread or controlled to healthcare responses to it, to the vaccine rollout. And, um, the past Congress was starting to do some of that. Um, but, um, the current Congress will do much, much more, and it will be more focused on private actors and how they're responding to it because, um, one factor I didn't mention here is that a big focus of congressional oversight can be the executive branch, but when, when the president is of the same party as the chairs of the committees, there tends, tends to be a less attractive target to go after the executive branch. And so it's all the more reason why private companies who've either received, for example, some, uh, benefits through the Cares Act or other relief packages or otherwise involved in responding to the Covid crisis, are gonna be very high on the list of congressional priorities. Now, other congressional democratic priorities of all the other areas they'd like to legislate will also, uh, be likely targets for, uh, congressional oversight activity, think drug pricing, um, as a prime example, that's always a big priority of Democrats. So there are some kind of pride and true ones. And I know John, John Keller, you may have
Speaker 4:Yeah, that was the one I was gonna point to is drug pricing. I mean, I think you're a hundred percent correct. There's been, I don't know, however many tens of billions of dollars of covid money that's flowed out. And there's gonna be, you know, a lot of just good government oversight of that. You know, has it been spent well, and there might be some scandal oversight of that, right? I don't know, doctors buying boats or something. But the one that I can think of that might be a, that I think will be a legislative priority, and I kind of have, probably have mike's more of the oversight background. I have a little more of a legislative background. I think the one legislative area that I think will come up in healthcare in this Congress is, or the one I'd put at the top of my list is drug prices, right? So you can have a whole series of oversight hearings to build the case for the legislation, right? Bring in the CEOs or bring in academics, you know, think tanks, members of Congress can testify about their own bills, even, uh, but just a whole series. And that could be in multiple committees, right? House ways and means en energy and commerce, senate finance, senate help. You could have, you know, at least 4, 5, 6 different committees that could get a different piece of a big drug bill. Um, um, you know, so I think that's probably the biggest healthcare thing that I think of other than the covid that we've already talked a little bit about.
Speaker 2:Well, and even so, uh, thinking back on, you know, Mike's comment about a supercharged environment for oversight, you know, the co covid, uh, has, as Mike so aptly noted, has touched on so many different issues, including a significant, uh, impact or effect on or effect by, uh, the pharmaceutical industry. Uh, I, you know, and, and, and also to Mike's point about, uh, you know, the executive is of the same, same party that there might be, um, more of a focus on, uh, on private actors, more of a focus on oversight of private, uh, activity. How do you think, um, on the drug pricing front in particular, uh, how do you think that, uh, that, that this comes into play with respect to, um, the proposed regulations that hh h h s has put out, uh, the increased interest we saw sort of at the end of last year and in previous years on drug pricing, do you think we'll actually see some movement this year with, with respect to drug pricing?
Speaker 4:Yeah, I, I think it's, I tell people if there's a moderate chance of a moderate bill<laugh>
Speaker 2:<laugh>,
Speaker 4:So not, you know, paradigm shifting, like all of a sudden the government's gonna seize control of drug prices. But I don't know, limits on, in inflationary increases. And I think, ironically, we've even talked about this a little bit internally in some ways, I think the, the pharmaceutical industry has, has a good talking point about covid, and they can say, Hey, you know, we just invented these vaccines and these treatments and record time. You know, we, they get a moment to have white hats, I guess, a little bit, and not always be portrayed as, I don't know, price gouging or, or whatever. Um, but I, I still think they're gonna be under scrutiny and, you know, we'll see where it goes. I mean, I don't think it's, for sure there'll be a drug bill, but there's a chance and, you know, it'll have some impact on prices.
Speaker 2:Absolutely. Absolutely. Mike, I wanna go back to you for a minute and preparing for, uh, the, uh, the, the podcast today we had a discussion about, uh, Congress setting its, uh, substantive priorities. Uh, and one thing I I think our listeners might be interested in understanding is the why. So sort of returning, taking a few steps back and turn about the purpose of congressional oversight and, and, and, and why, uh, Congress would take a particular interest in one topic over another.
Speaker 3:Yeah, sure. So, um, I'll, uh, I, I group these in roughly into five, five categories of sort of purposes for oversight. And, and first I should say, the power to investigate that Congress has derives from its power to legislate. And, but that is very broadly construed and has been construed that way by the Supreme Court, so that there need not be a particular piece of legislation about which they're investigating or holding a hearing. Um, so it gives, Congress has very wide latitude in terms of subject matter and, and, and therefore, these, these purposes, it should be sort of viewed in that context. But, so one main purpose is to gather facts to assess the need for legislation. Um, that's been, you know, that's basic, uh, congressional Oversight 1 0 1 since the founding of the Republic. A second one is assessing the effectiveness of federal programs and the implementation of statutes. Um, so checking up on how, what, how, how, how things are working in practice that congresses intended to put in place. Um, a third is the sort of policy and political, um, you know, because, you know, our, our elected representatives are political animals. You know, political considerations are never very far from, uh, congressional inquiries. And then they're also sort of related policy objectives. So investigation might, might not be designed to actually learn facts that the Congress doesn't know, but maybe to build support for some reform or some other political objective. Um, you know, I worked on the, um, we talked about, uh, how Congress can use oversight to build support for legislation, and that could happen in drug pricing and other areas. You know, I worked on the Energy and Congress Committee in the ramp up to the Affordable Care Act, and put together investigations and hearings on the private health insurance market to highlight what were then legal practices that the Democrats on the committee didn't like and wanted to, uh, to reform. And so those, those, those oversight efforts were just designed to draw attention to, uh, practices, uh, to build support for future reforms. Um, and of course, there's always a big part of congressional oversight work, or, you know, other than intelligence committee and, and a few examples, uh, like that. Um, another category of, of sort of purposes is to put the executive branch to affect their priorities and their regulatory agenda, to put pressure on agencies to address practices that, um, the highlight that are highlighted by the oversight. And they will use oversight to draw attention to problems they want regulators to work on. Sometimes the oversight activity is really merely just to put pressure on private actors just by putting a spotlight on certain conduct, kenbridge companies from engaging in, you know, legal, but disfavored activity. We, we see quite a bit of that. I mean, think of executive compensation and, um, tax issues, uh, offshoring, there are a variety of kinds of issues where, uh, just because it's, it's disfavor, they want to shine a light on it, and there, there's a political policy advantage to do that, and they're, and by doing it, they can affect, they can really affect how companies behave.
Speaker 2:Absolutely. No, Mike, thanks so much for that. And, and, and that's interesting and, and, and informative as we kind of look into our crystal balls here to, to identify different areas where Congress might have some interest this year, especially when it comes to healthcare. We've talked about covid obviously, that kind of, you know, sets that, or, or, or, or creates that supercharged environment, as you mentioned. But I'm also interested in this last concept to talk about here, pressure on private actors and sort of shining a spotlight on potential behaviors that, you know, may not necessarily be, uh, uh, contradictory to the law, but might, uh, pose some questions. And John, I wonder, wonder if in your experience, um, uh, you have some thoughts about, uh, uh, about that last concept and whether there might be some areas of interest for Congress when it comes to sort of casting a light on private acts?
Speaker 4:Yeah. Um, I'm trying to think of one in the current context. I can think of one instance with a healthcare, uh, industry from, from back when I was on the hill that I thought had some pretty poor performance and some hearings. And it was, um, the dialysis industry around the utilization of epogen, which, uh, is in a very expensive drug. They were using a lot of it. There was some indication it was actually bad for patients, lots of controversy. Uh, they were hauled up to the hill. They testified that if, that they weren't doing anything wrong, that the patients needed these really expensive drugs. And, um, then Congress changed the payment system to disincentivize or reduce the incentive to use those drugs. And the utilization collapsed. And I think, you know, even 10 plus years later, um, you know, the credibility of that healthcare sub-sector still suffers from that episode where they publicly maintain something that just on its face was not credible. And then Congress went ahead and made policy changes that exposed it as not being credible. Um, so I guess my advice, if I were still a lobbyist or still advising industry groups, while there's one that I work for private equity firms and there's some scrutiny of private equity firms right now, and we're advising them to cooperate and be forthcoming with information rather than going into their bunker. Um, we'll see if they take our advice. Um, but yeah, similarly is to be forthcoming and avoid the shortsighted behavior of, of, um, trying to maintain really sort of untenable positions. It's much better to come clean. It's like<laugh>, same thing you tell your kids, right? Come clean rather than, rather than digging in. But I don't know, they don't always listen, so.
Speaker 2:Absolutely. Absolutely. And you know, it's a, it's a good segue. I think, you know, one thing that our, our listeners are interested in, uh, to your point John, is where have, uh, your, your clients or, um, companies that you've seen, uh, bef in Congress, especially in your nine years as congressional council, uh, you know, where have you seen companies or individuals really kind of fail or fall flat? You mentioned, uh, you know, the epogen, uh, question or the epogen issue from so many years ago, but what pitfalls should be avoided in your opinion?
Speaker 4:Yeah, again, I think when you have an issue coming at you and I, and I'll use my current clients now who are mostly private equity firms, and there's been some congressional letter writing and there was some controversy about this outta network billing, right? K K R and some other private equity firms were lobbying against a bill that eventually became law, um, is it's much better to go out, go out and hire somebody like Mike<laugh> and engage the committees, right? And come in, explain what's going on, lay out the facts, and, you know, try to, I don't know, tell your story rather than bunker, um, mm-hmm.<affirmative>. That would be my advice. I don't know if my disagrees, but I<laugh> I think people should hire him and go talk to the committees.
Speaker 2:Uh, it, so it sounds like good advice to me. And, you know, lemme turn it over to Mike. Um, what are your thoughts on that question? What do you advise a client who's facing a congressional inquiry?
Speaker 3:The, the biggest, um, most important kind of lens to use here is that this is not like anything you've experienced before. This is not litigation. Um, it's not merely a, a PR campaign. It's, it's its own animal and it has elements that make it seem like litigation, things like depositions and document requests and subpoenas. And it, um, has the feel of a, a media battle, and it has the feel of, of a lot of things, but it's, it's its own thing with its own set of rules and practices, and that that's the guiding principle. And then from there, um, it's important to understand as early as possible, what is really the objective of this inquiry. What, and, and to, and here, uh, it is important to understand the players and also to build a rapport with staff. Um, because you, if you can anticipate what their end game is and what they're trying to get out of it, um, you can often minimize the burden and the disruption associated with it by cutting to the chase, um, and providing sort of the minimal amount of information you need to provide in order to help them meet their objectives, um, in, in a way that is sort of minimally painful for the company. Um, there are, um, the, you know, congress people have a lot on their plates and, um, that, that means that for congressional investigations, they're, they're largely staff driven exercises. So it's, it's hard to overemphasize the importance of staff in these things who make a lot of the investigative decisions about which tools to employ, um, and the timeline. And of course, the member will make the ultimate big decisions. Um, but staff has a, has a huge amount of latitude, and there's tremendous amount of, of negotiating that goes on in these kinds of inquiries. Um, the, it's important to have a media strategy because the, the congress and the committee certainly will have their own media strategy. So you need to be thinking about that out of the box. And, and you also need to understand that, um, anytime there's a congressional inquiry, there's quite likely a whole host of other kinds of, uh, associated risks, uh, that are implicated, um, legislative risk, litigation risk, regulatory risk, uh, even criminal referrals. And, and so your strategy has to be designed from the start with that in mind. And, um, you know, I'm, we're, companies are often in the position of, of being asked for quite sensitive and confidential business information that can be competitively harmful if, um, if made public or could lead to more civil litigation risk. And, um, solve often a huge, uh, consideration in how you respond to these, understanding what's the most important stuff that you would like to keep outta the public eye and trying to negotiate to that outcome. Because once you hand something over to Congress, you really have no ability to keep, keep it private at that point, uh, despite whatever assurances you may receive. Congress has the authority to release whatever they want. And, um, so depending on the nature of the inquiry, that can be a, a really huge consideration as well.
Speaker 2:Absolutely, Mike, that's great advice. And, you know, just to kind of sum that up, collaboration and cooperation, uh, proactivity, as you said, John, don't bunker up. Develop a media strategy in your proactive, uh, approach. Really understand the why is this inquiry being driven by a political agenda is the inquiry being driven by, um, you know, the optics of legal, uh, activity. And then finally, Mike, as you know, you know, you've gotta be mindful of the potential downstream risk, litigation, risk, reputational risk, regulatory risk, criminal risk, and even competitive risk. Uh, great advice. Uh, Mike, John, we're just about out of time today. Any final thoughts or advice for our listeners when it comes to congressional, uh, oversight or predictions for what we can expect to see in this upcoming congress?
Speaker 4:I think we know lots of activity as always, um, already thinking about the next election cycle, crazily enough. Um, you know, the country's in a crazy time, so, you know, I think congress will have maybe a little bit of an unusual rhythm. We've already done one massive bill. There could be more to come. I guess expect the unexpected here, you know, in this time in our country is my, my thought with that
Speaker 2:Well said, well said.
Speaker 3:That sounds right to me. And we've got a, we've got a Congress that is, got a lot of different voices, particularly on the, the Democratic side, um, with kind of newfound power. And I think that contributes to the unpredictability and, um, I think it'll expand the, the array of issues that, that, uh, congressional oversight will be focused on.
Speaker 2:Well, thanks so much, Mike Gordon of Bradley and John Callaher, B r g. Uh, really appreciate you joining us today and sharing your thoughts and your insights. And thank you to our listeners for checking out this latest edition of the A H L A Fraud Abuse Podcast. We'll be back next month with another episode. If you have enjoyed this edition, please subscribe, uh, to the podcast series, which is available anywhere you get your podcast. Thanks so much.