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Fraud and Abuse: Demystifying Monitorships—What General Counsel and Compliance Officers Need to Know
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In this episode of AHLA's monthly series on fraud and abuse issues, Matthew Wetzel, Partner, Goodwin Procter, speaks to Rob Cepielik, Managing Director, Berkeley Research Group, and David Resnicoff, Partner, Riley Safer Holmes & Cancila LLP, about third-party monitorships, including recommendations for how companies can plan for a government-imposed monitor or an independent review organization and what to expect during the process. They discuss the different types of monitorships, key government guidance, the benefits to a company of having a monitorship in place, and how monitors handle potential violations. From AHLA's Fraud and Abuse Practice Group. Sponsored by BRG.
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Speaker 2From the American Health Law Association in Washington, DC Good morning, good evening, wherever you may be listening. Welcome to the A H L A Fraud and Abuse Podcast. I'm your host, Matt Wetzel. Today we're talking about healthcare organizations in crisis providers, payers, makers of medical products have all experienced that dreaded moment when the government knocks on their door. But sometimes even once the prosecution is done and a settlement has been reached, a government imposed monitor may still be waiting in the wings. The idea of a third party monitor , uh, looking over a company's shoulder can send shivers up the spine of even the hardiest of compliance officers and general counsel . We're gonna spend some time today demystifying the idea of a monitor ship , providing you our listeners with recommendations for how to plan for a government imposed monitor or even an independent review organization, and offer a sense of what to expect when you find yourself in this boat. My guests today are Rob Sippel , managing director with Berkeley Research Group, and Dave Resnikoff , partner with Riley Safer Homes in Silla in Chicago. Rob is a forensic accountant and has served as an independent monitor. He regularly consults with clients on monitor and I r o readiness. Rob's testified as an expert witness and has met with and presented the results of his work to law enforcement and regulatory agencies on countless occasions. He's a certified public accountant and a certified fraud examiner. In Dave's three decades of a practice, he served as an A U S A prosecuting healthcare fraud, a chief compliance officer with a 12 billion medical device company and a law firm partner. Dave and his team of former prosecutors at Riley Safer have represented businesses and executives and a variety of government investigations, internal investigations, and proactive compliance assessments. Rob, Dave, welcome. Thanks so much for joining us today.
Speaker 3Uh, great. Matt , uh, on behalf of Berkeley Research Group, I'm , uh, glad to be here.
Speaker 4Thanks, Matt, on behalf of Riley, safer Homes of Cancilla , also glad to be here. Appreciate the
Speaker 2Opportunity. Absolutely. We've got a great topic today, and I think we should just dig in. Rob, I'm gonna start with you . I think we should level set a little bit for our listeners and, you know, get back to basics. What do we mean by a monitor ship ?
Speaker 3Sure. So , uh, a monitor ship is a internal control and compliance monitor that , uh, oftentimes is part of a criminal settlement agreement with a US Attorney's Office or Department of Justice, and I say settlement agreement that could come either in the form of a plea agreement, a non-prosecution agreement , uh, or a deferred prosecution agreement. And in a monitorship, there are certain elements that the government , uh, will want , uh, a monitor to , uh, observe in regards to a company's enhancement of its corporate compliance program , uh, or internal controls to , um, compensate and remediate , um, for shortcomings in those programs and controls , uh, that allowed whatever situation to occur , uh, that that did occur. And it's an opportunity , uh, to bring integrity back to the company and also to help the integrity of the marketplace.
Speaker 2Great. Now , that's a , that's a , an excellent definition. And, you know , um, oftentimes in the healthcare space, we're focused on corporate integrity agreements with OIG at Health and Human Services. Uh, and, and that might involve an I R O or an independent review organization. Um, sometimes we consider them under the same umbrella. How do you view a monitor under a deferred prosecution agreement, for example, versus an I R O under a corporate integrity agreement?
Speaker 3A and so they, they have similar attributes. Um, but one of the biggest differences is , um, one is in the context , uh, a monitorship of a criminal proceeding. And , uh, an I R O is under , uh, the auspices of a civil c uh , civil proceeding. And you know, Dave as being , um, a former US attorney. Maybe , uh, maybe you could discuss a little bit , uh, I think people generally know criminal versus civil, but maybe just a , a quick overview on the differences in the authorities.
Speaker 4Sure. Well, in, in the healthcare space , um, uh, the , uh, uh, predominant prosecutions and resolutions of actions against companies , um, are under the False Claims Act, and the, you know, DOJs partner and client in those matters tends to be the , uh, the Department of Health and Human Services, office of Inspector General , uh, as well as , um, you know , the F D A and appropriate, appropriate matters. Um, as part of the resolution of those matters, there is , uh, frequently a corporate integrity agreement that's executed between , uh, the defendant , uh, and the government , um, in which there are, you know, very significant , um, compliance , uh, uh, obligations that are spelled out in the corporate integrity agreement, including the retention of an I R O, an independent review organization, which, who's , who's , uh, uh, uh, uh, role is really more narrow than most monitors. It's really , um, a oftentimes and most, most frequently a, a claims review process on an annual basis , um, rather than , um, a fullblown evaluation of a company's compliance program and adherence to the D P A or the C I A or the corporate Integrity Agreement, like, like in the case of a monitorship. Th those are the two principle differences. Um ,
Speaker 2Great. No , thanks, Dave. And, and Rob, that's , uh, good, good background information. You know, kind of continuing that theme of level setting for the audience here, there are some key government guidance documents when it comes to monitorships, the Morford memo, Griner memo, et cetera. Could, could you walk through those quickly and just sort of highlight, you know, what our listeners at A H L A should know about them?
Speaker 3Uh, sure. So , uh, I'll , I'll take on the, the Morford memo and then , uh, Dave, if you could take Grr and Ben Kowski. Um, so the Morford memo was issued in , uh, 19 or 2008 , um, by the , uh, assistant Attorney General Mr. Craig Morford, and it outlined , um, the principles , um, for selection and use of the monitor. There, there are nine , uh, principles that, that deal with , um, the selection process, independence of the monitor , uh, the compliance , uh, with , uh, the agreement, the, the plea, the deferred prosecution or non-prosecution, kind of an understanding of the scope of the assignment, how communication will take place, disclosure in regards to failure to adopt recommendations by the monitor disclosure in regards to new issues that the monitor might encounter , uh, the duration of the monitor ship . And then , um, the extension , uh, of , uh, the monitor ship . So that was issued in 2008, and I'll turn it over to Dave.
Speaker 4Sure. In 2010 , the , uh, the GRR memo added a 10th principle to, to, to the , uh, to the Morford memo, essentially outlining the role that DOJ should play in resolving disputes between the, the company and the monitor. And , um, essentially , um, providing that the, the Department of Justice would be a , a referee between the two in terms of compliance with the underlying agreement, the plea agreement, the D p A , the N P A , um, and always with reference to the terms of that agreement , um, but, but specifically carving out and excluding a role to resolve , uh, disputes concerning the monitorship agreement itself. So do j's you know, role is to, to broker , uh, disputes concerning interpretation of the D P A , the N P A and the , the , the plea agreement?
Speaker 2No, that's great. And I wanna , I wanna get back to that topic in a little bit, this idea of a dispute between the monitor in the company, because I think that's got some , um, interesting implications for our listeners, but we'll, we'll get there. Um, so, you know, moving forward, just, you know, one step, let's say you're a company facing the prospect of a monitor or an I R O , um, there's a lot to be done , um, Dave Monitorships, and , and , and those relationships require significant readiness. What, if anything, should a company be doing as they head towards a monitorship? What should they do to prepare?
Speaker 4Sure. Well, I think there's, there's two stages actually. One is , uh, the stage in which it's not clear whether Monitorship is going to be imposed or not. Um, and then there's this stage where you're pretty sure monitorship will be imposed, and you've gotta prepare for that. Um, th they're actually, the, the, the preparation for both stages is, is really the same. And that is to conduct what we, we call a pre-motor ship . That is to evaluate the company's business practices and operations that are at issue in the prosecution , um, and then evaluate the degree to which there is an effective compliance program in effective internal controls. Two different things, right? Uh, but related , um, as it relates to the operations , uh, that are at issue in the underlying prosecution. And that, you know, involves a, a very serious, significant look at , um, how the business operates as a qualitative matter , uh, usually supported by some quantitative or forensic work in terms of , um, you know, how, how the money is actually flowing, you know, in, in cases where , uh, it's, there , there are financial issues at stake. Um , and the , the goal of all of that is to determine whether the company has an effective compliance program within , uh, as the government would look at it, whether it's DOJ or S E c or even a state agency. And importantly, monitor ships can be opposed by state agencies as well. Um, to, to, to articulate to the government why a monitor in the first instance would not be appropriate because the company is, has actually remediated , um, Ian has an effective compliance program, or to get ready for a monitor ship so that when a monitor comes in and actually starts looking under the covers , um, the company's compliance program is already in anticipation of the D P A or the N P A , um, up to speed with respect to its compliance programs. It makes the whole monitor ship easier.
Speaker 2Absolutely. And you mentioned , um, you know, this concept of arguing that , um, to the government that a monitor might not be necessary, that sort of, you know, first question. How often are companies successful in making that argument?
Speaker 4Well, more successful recently than historically, from the period of, say, you know, 2008 through 2000, you know, 17 or 18 monitors, in significant cases, serious cases seemed to be imposed with, with some regularity. There were almost, you know, 80 , uh, monitors I imposed during that period with the issuance of the , uh, Bikowski memo, which we , I don't think we had a chance to quite discuss that. Um, which , uh, imposed some , uh, uh, uh, a, a, a more rigorous framework for evaluating when monitors are appropriate or not. Um, there seem to be a bit of a slowdown in the imposition of monitors , um, and both through the Bens Kowski memo and in public statements by doj , um, you know, the department has, has said pretty clearly that they don't view monitors as appropriate in every circumstance, and particularly not in circumstances where there , where the company has made a significant investment in enhancing its compliance program, enhancing its internal controls, and that those are now effective. And essentially, the company doesn't need, you know, the, I'll call that the training wheels of a monitor , um, to ensure that, that , that they won't be a , uh, a recidivist and that the conduct won't occur again. Uh , so , um, that's all to say that , um, there is room for companies to effectively argue their way out of a monitorship inappropriate circumstances. However, it's important to note that, you know, where there are the underlying scheme involved senior management, where there was deliberate manipulation of the books and records, where there was an deliberate evasion of the compliance program where compliance and control gaps, you know, have not been filled. Uh, a company's not gonna be successful in arguing its way out of monitorship.
Speaker 2You know, you raise a good point , uh, Dave , and , and , and Rob, I'd love your take on this as well. Uh, and not to jump too , too far ahead here, but you know, it seems that there's, you know, even some benefit to , uh, you know, maybe not necessarily having a monitor imposed, but the prep work that goes into a monitor ship , evaluating your compliance program, making sure it's up to snuff , uh, making sure you've got the right controls in place, you've found the gaps, you've found the vulnerabilities, and you're patching those. Are there other areas , um, where a company might actually benefit from having a monitor ship either in place or the , you know, sort of prospect looming over their head?
Speaker 3So I think one of the, you know , one of the general benefits is you have this outside expertise taking a, a fresh look at what the underlying issues , uh, were of the organization and what gaps existed either in its corporate compliance program or its internal control. So you have that, that independent third party look. Um, it is , uh, also particularly helpful if the issues , um, were involving senior management of the organization who may have been replaced. And so now you have , um, new people to the corporation that are either involved in management or governance, and having that external third party , uh, can be , uh, very helpful to the organization because now they're dealing with somebody that's objective. And from the outside looking in also , um, oftentimes, you know, from the, the government standpoint and really the integrity of the market, having that external , uh, party , um, looking at controls and compliance , uh, as a marker to reduce recidivism , um, but also to, to put an additional , uh, protection on the integrity of the marketplace , uh, that gives the public some confidence, the investing public, the shareholders of the corporation , um, that there is an outside party that is looking , uh, on behalf of the shareholders who are the owners of the company.
Speaker 2Absolutely. Absolutely. All right . So let's say a monitor is required. Uh, you know, there , there , there's , uh, no turning back at this point. Um, when it comes to developing a work plan around a monitorship, what are the government's expectations? How should a monitorship be designed? Uh, what kind of insight can you provide our listeners on that front?
Speaker 3So probably the, probably the most important element of this process is quality planning at the front end. Sometimes in a monitorship, the steps , uh, that a monitor is going to undertake may be outlined in the agreement. Uh , other times the, the first step of the monitor's duty is to scope and outline , um, the plan for the monitorship term. It's important to get the scope just right. The monitor is not a, it's not a broad , uh, nor is it a punitive , um, imposition. It is focused on the underlying issues of the plea agreement. So having that, that right scope and the scope is something that's reviewed and agreed , uh, upon , uh, both with the government and with the company.
Speaker 4I , in my mind, the most , uh, fundamentally important , uh, first step for any monitor is, is to understand the business that's at issue. Um , understand the , the products, understand the services, understand the channels to market, understand how the money flows, understand the corporate organization and in a, in a very qualitative way. Um, and, and without that predicate first step, I , I really, I think it's impossible to understand whether there are sufficient compliance controls and internal controls , uh, and, and whether they're effective or not. And so, in any work plan, you know , uh, my my view is the place to start is understanding the business in, in a real serious way through a number of interviews with, with business folks , um, that has a, a dual advantage, which is to begin to build relationships from with the people who you need information from about how the compliance programs actually operating. Um, and , uh, and even maybe even as important is understanding, you know, company and corporate culture. Um, because without, you know, understanding all of that, it's really impossible to report back to the Department of Justice on how the whole thing is operating in the first place. So that's the first step of , I think of it , any work plan. The , the second would would be to understand the , um, the actual , uh, business processes and compliance processes and internal controls that , um, that are , um, uh, imposed on top of those , uh, that, that business organization. Um, so tho those are the two, you know, key components of any work plan.
Speaker 2Absolutely. I that very well said. And in fact , um, you know, part of my next question had to do with this concept of getting to know the company and , um, and making for a more effective , uh, monitorship my own experiences more on the I r o side. But I think that, you know, that, that understanding company culture, understanding how the executives work, understanding the interpretations , um, especially in the healthcare space where , uh, you know, if you're dealing with, for example, an anti-kickback statute issue, there's a lot of gray in there. There's not a significant amount of black and white. Uh, and so understanding, you know, the perspective or the view of the company, I think probably makes for, you know, a , a more effective relationship. You know , um, uh, when it comes to monitorships , um, you know, we sometimes see a big distinction between the need for a lawyer's leadership, say, you know, you have a monitorship with a, you know, a heavy policy focus or system focus , um, versus maybe an accountants leadership where you might have, for example, a , a a monitorship that's more, you know, claims oriented or transactions oriented, financial oriented. How does a monitorship differ when you have a lead that's an accountant versus an attorney? And I'm glad I've got both of you on the podcast today to represent those views.
Speaker 4Rob, what are your thoughts on that? Sure.
Speaker 3Um, so I think it, it often depends, and as Matt as , as you've set it up, there are, there is a continuum where you have issues that are purely legal. You have issues that are purely accounting and books and records, and then you have , um, those, that, those that kind of fall somewhere in the middle , uh, as a , an accountant and a consultant, where we've been involved in monitor ships or where we've taken the leads on the monitor ships, i , i is, is when it has to do with books and records , um, transaction , um, oriented type items. Uh, some things that come to mind , um, are often in the stark and anti-kickback area where, again, financial transactions come into play , um, in , um, anti-money laundering and cfius or OFAC type violations, where, again, you have financial transactions somewhere where you're getting into kind of , um, controls, activities, and , uh, financial monitoring activities , uh, tends to be the area where we, where we may be in the lead, but then also in other areas where it's more of a legal lead, the accountant and compliance , uh, uh, professional could be in a support role. So let me , uh, ask David for, for your thoughts on that.
Speaker 4Yeah, so, you know, I , I think , um, when I think about roles where, you know, we've, we've essentially played the role of counsel to a forensic resource or vice versa, where, you know, we are in the lead and , and , uh, the forensic resources supporting us, it ends up being a very strong partnership. And, and I think the case is rare where , um, we're not both at the table , um, in, in sort of an equal capacity, because every compliance issue, you know, typically is going to involve the, an operational piece and a qualitative piece, and then the forensic piece and the internal controls piece. So, you know, where, where there's a, a company that had very weak internal financial controls in terms of, you know, things like, you know, invoice approval, and , um, uh, and, you know , uh, uh, you know, revenue reporting and things like that. You know, obviously the forensic resource is gonna, the accounting resource is gonna , is gonna take the lead, but, but we'll be, we'll be right there in terms of the operational piece and vice versa.
Speaker 2So speaking of, you know, sort of the, the relationships and, and, you know, the dualities of , uh, implementing a monitorship , um, the monitor itself has a dual reporting relationship, right? You've got this third party entity, it's retained by the company, but has reporting obligations to the government. What challenges have you seen , uh, that this kind of, you know , uh, dual reporting relationship or dual relationship, but what challenges does that create and, and how do you maneuver through that , uh, as a company in crisis?
Speaker 3Dave, would you like to take that one out first, please?
Speaker 4Sure . So, you know, the , the , the role of monitorship is not for the faint of heart. Um , you , you have to walk, it's walking a very , uh, a very tight tightrope with several constituencies. Um, there's multiple levels of , uh, constituencies within the company itself, and then there's the US Attorney's Office, the Department of Justice , uh, if OIG is involved, you know, the OIG or some other federal agency. So , and there's, you know, each of those has their own interests, and they're represented by individuals with their own personalities. And so there's a , there's a lot of people, people to keep happy. Um, there's always a tension between what the business wants in terms of , uh, you know, efficient processes and procedures that don't bog down the business. Um , and they want an early end of the agreement. And then there's DOJ who wants, who's protecting the shareholders and public interest, and, and they want , uh, compliance , um, with the underlying agreement. Um, but there's, so the , the , you know, the , the way in my mind to satisfy everybody is to find the opportunity to add value to, to spot risk, and to propose efficient processes , uh, to address those, those risks. So those compliance gaps , uh, but also to, you know , report back to the government in a very transparent way about how the company is actually operating. If , if , if you can find a way to add value in that, in that way, you can tend to bring everybody along with you towards the, the , the end of the, the end of the project.
Speaker 3In , in our experience, both as monitors and , uh, as readiness consultants, these matters that we're talking about here are at the end of some type of a criminal investigation. And as a consultant not being an attorney, whenever that word criminal comes into play, the intensity and attention goes up. Mm-hmm. <affirmative>, and remember, at the end of this process, this is where governance of the organization takes over, right? And governance is interested in remediation correction moving forward, but also they're very motivated. Um, we , we talked a little bit about the term of the monitorship. There are opportunities to have that term of the monitorship reduced by demonstration that the issues have been remediated through design and effective implementation of controls and, and programs. So governance is , is often very motivated to , um, work collaboratively with the monitor, looking for those recommendations and observations , um, and in cooperation with the government to complete its observa its obligation under the agreement, but also to have it end as expediently as possible. So you, you might think there'd be more of a dynamic tension, but in practicality, by observation, by the time you get to the monitorship and the agreement, there's, there's a great desire to cooperate and, and move beyond this issue.
Speaker 2Mm-hmm. <affirmative>. Mm-hmm. <affirmative>, I can imagine , um, you know, you , you mentioned criminal being a, a big word. Uh, I can imagine there's investigation fatigue. I can imagine that , um, you know, Dave, as you mentioned , um, executives are looking to, you know, keep efficiencies and reduce terms , uh, uh, you know, the duration , uh, uh, of a monitor ship . Um, where have you struggled with executives views or company's company leadership's views on , uh, monitorships or on, you know, the imposition of, you know, a third party to, you know, look over their shoulder, so to speak?
Speaker 4So , so oftentimes , uh, you know, by the time , uh, you know , uh, uh, uh, of a resolution, the , uh, the folks who were involved in misconduct have been relieved of their duties, and they're gone from the company, and you're dealing with , um, uh, typically a , uh, somewhat of a new management team or a change management team. Um, and so there, there can be oddly , um, some resentment , uh, either by new , new management to have to deal with the issue , uh, or , um, remaining employees who are not involved in the conduct that they have to find the bandwidth to deal with, you know, yet another , um, uh, uh, review and , um, uh, and audit of, you know, their processes and procedures and, and changes to the processes of procedure. So it's not, you know, so the , the , there's, there's, I'll call it resentment or , uh, um, you know, friction because you're imposing, you know , uh, additional obligations on their, on, on their work. Um, you know how to deal with that. Um, you know , ultimately the monitor is, you know, Rob says, has a lot of leverage, right? And , um, you know, ultimately the leverage is reporting back to the government that the, that the company's not in the cooperative or it's not meeting its obligations. But leverage is a double-edged sword. And , um, I find that the, the more you rely on that leverage, the more you come in and, and liken inspector general and demand , uh, uh, compliance, the less cooperation you get. So, a so , and in my experience, a software approach is, is , uh, important where you, you know , uh, partner with the business to , um, uh, get through the monitorship , um, and , uh, as a, as a, as a partnership rather than imposing, you know, your will on the , on the business tends to be most effective.
Speaker 2Rob, any thoughts on that?
Speaker 3Uh, I, I echo what, what Dave has outlined. I think also what we've found helpful is to have that , um, important liaison both at the governance level, whether that be the board chair, the chair of the audit committee, or the chair of the, the, the special committee so that it's demonstrated to the organization that the monitor has the full cooperation and support of governance. And then also to have an important liaison with a , uh, senior member of the management team. Uh , cuz I think, as Dave had pointed out, that there is some fatigue that can occur, but also remember the , uh, employees of this organization, they, they have day jobs and running the business business, and so helping , um, helping with a liaison from senior management, helping prioritize things both between the needs of the business and the needs of the monitorship can, can be helpful. Planning and calendar management is important as well, so that not only does it give the people you have to interact with , uh, time to, to prepare, but also the monitor has to be, I think, respectful of the time of the people of the organization. Because after all, their business is not to support the monitor, their business is to provide , um, the services or the goods , uh, to which , uh, they're charged with doing .
Speaker 2Absolutely. Absolutely. Um, you know, we talked about friction. Uh, i I of , I, you know, like to shift back to, you know, the benefits of a monitor ship , because, you know, once you're stuck with this , uh, you know, you gotta make the most of it. Um, where have you, in your own experience , uh, you know, maybe this is a good, good, good time to tell war stories, but, you know, where, where in your own experience have you seen a really collegial or collaborative relationship , um, and how has that differed from , uh, relationships that you've seen with a monitor that have been, you know, perhaps, you know , um, Dave, your word was friction, you know, maybe even hostile. Um , can you, can you share some anecdotes that you have?
Speaker 4Sure. Um, um, you know, I can think of , uh, you know, one particular situation where , um, uh, you know, the, the, the company had a significant issue. The management team had been cleaned out, the board had all resigned, and there was a new board imposed. And , um, you know, the , uh, uh, our new new board had been created. And, you know, that was a company who at a very senior level , um, got it. And they understood , um, you know, what the role of the monitor was and what the , uh, uh, path was towards a successful resolution to that monitorship. Um, and so , uh, you know, we had a lot of , um, uh, uh, tailwind in that, in that role , um, at , at the same time in the underlying businesses, which hadn't been part of the problem. Um, there was a lot of , uh, you know, resentment and , um, uh, that, that they, that they needed to be subject to a monitor and ongoing, not just ongoing, you know , uh, compliance imperative from the company, but this third party who was essentially monitoring their activities. And so the , the , the trick there was, you know, really to win the, the, the, the, the operational pieces of the business over , um, and enlist them in, in the cause. And, and that's so actually both issues in the same company. Um, you know, a great partnership at the senior level and challenges at the operational level. Um , but, but you know, as I say , I found that if you can engage people in how their business operates , um, and take a real interest in it, and , uh, they're a lot more willing to talk to you about how , uh, to , uh, align compliance controls in that business than if you just come in and begin imposing compliance controls without really showing an interest in the business.
Speaker 2And perhaps even more open to the recommendations of the monitor as , uh, you know, really strong , um, enhancements to compliance controls, I would imagine as well. Um, Rob, your thoughts on that question?
Speaker 3Yeah. You know, coming, coming back to one of the , uh, the principles of a monitorship, this , um, reduced risk of recidivism and , uh, gaining the integrity back of shareholders, what comes to mind is , uh, where I was a monitor for a physician owned enterprise , um, that had , uh, a tightly controlled management team , uh, which was engaged in some alleged , um, corrupt practices. When the other physician owners took over governance of the organization. They were, they were highly motivated for remediation around internal controls , uh, and compliance because after all, this was their investment, and they were concerned with protecting , uh, the safety of their investment . So they were very interested in , um, additional items that we could help them , uh, find for, for other purposes to make sure they had a good , uh, flushing out of old practices , uh, in favor of , uh, better designed and more effective compliance and internal controls to then better , um, you know, better serve , uh, one their employees, their customers, but also to protect their, their assets. The employees were, were really rejuvenated with the new tone at the top, and also were cooperative because they truly believed in the organization and the great things that it did. So it was almost , um, an energizing , um, process to them, albeit, albeit a lot of hard work.
Speaker 2Certainly, certainly. Well, final question , uh, and , and , and , and maybe this one's the, you know, the the $10,000 question, but , um, uh, you know, what should a monitor do if they find evidence of a potential violation? Is there a dialogue that the monitor can have with the company before going to the government? Uh, where have you seen that and, and, and, and what's your , uh, your reaction and advice on that question?
Speaker 4Sure. Why don't I take that, Rob? Um, so, you know , uh, very important in the course of representing a company who's resolving a matter with the government to spell some of that out in the monitorship agreement itself. To the extent that there are, there is a process and a procedure, and there are expectations that can be created from the start about what to do when there is , uh, some evidence of potential misconduct. Um, you know, that's very helpful to the monitor. So, you know, assuming that there is some of that guidance, it's, it's typically along the lines of , um, you know, is there credible evidence of , uh, potential criminal misconduct? And if there is , um, there's an obligation to report that to the Department of Justice. Um, uh, if, you know, if it involves senior management and if it involves , uh, you know, sys if it appears to be systemic , uh, if it appears to be , uh, something that might be a threat to public health and safety , um, or is gonna impact the, you know, the , uh, uh, if it's gonna be material to the company , um, you know, then there's real urgency to get that information to the Department of Justice as quickly as possible. You know, there are situations where , uh, you know, Rob used the word continuum, and there's a continuum in, in, in this as well. Uh, the kinds of information that you receive in the course of any potential monitorship , um, uh, it , you know, is along a continuum. You know, there can be indications of potential problems which don't rise to the level of criminal , credible evidence of misconduct. And what do you do in that situation? Do does the monitor run to the Department of Justice? And , um, and , uh, uh, and, and, and , uh, you know, share the view that there's potential criminal conduct, or is it more appropriate to start to pull on those threads, collect more information until you can have a better sense of what you're actually dealing with? I'd argue that the ladder is appropriate. Often it's appropriate to work with unconflicted company council , perhaps outside council for the company or the compliance officer , um, as you're , as you're , uh, uh, gathering more information. But at some point, you know, it's always important to monitor what you've got. And when it rises to that level of credible evidence, then it's gonna be important to get the government involved.
Speaker 2Good advice. Good advice. Uh, Rob Sipick . Dave Resnikoff , thanks so much for joining us today. Uh, any final thoughts before we leave?
Speaker 3The , uh, I, I think we, I think we kind of outlined the, the processes here. And , uh, I think as we discussed , uh, IM important remediation and analysis steps to be taken by the company at the start of a monitor ship , having the monitor understand what the underlying issues were, what the business is , how the business operates is an important first step for the monitor. Um, planning and, and developing , uh, a solid and on point , uh, work plan that, of course will be approved by the government and by the company. And then executing within, within the swim lanes for, for the monitor , uh, this is not a punitive step. Um, there, there is a scope to this, and it's important for the monitor , uh, to operate effectively and efficiently, but within the scope of its monitor ship assignment.
Speaker 4And I'd, I'd leave you with, with two thoughts. You know, number one is that as any company heads towards a , uh, a resolution, very important to start to anticipate , um, the question of how good is the company's compliance program, how effective is it? And is a monitor , um, avoidable , um, through , uh, perhaps a pre-motor ship and , uh, and remediation and , uh, evolution of the compliance program. And then , um, is it prepared for a monitorship and is it, is it taking steps in the course of the investigation and course of the resolution to , um, uh, be prepared to have a successful monitorship? And then the touchstone of any successful monitorship is gonna be that the government and the monitor and the company view that relationship as a partnership where everyone's interest is in getting through that monitored ship period , um, uh, with a , um, uh, strong and successful and effective compliance program, and , um, with adherence to the underlying agreement with the government.
Speaker 2Well said, Rob. Dave, thanks again for the time. Really appreciate you joining us today.
Speaker 4Thank you. Thank
Speaker 2You . Glad to be here. Our guests today have been Rob Sepik of the Berkeley Research Group, and Dave Resnikoff of Riley Safer Homes in Silla. This has been another edition of the American Health Law Association's Fraud Abuse podcast . I'm your host, Matt Wetzel , and we'll be back next month with another edition .
Speaker 5Thank you for listening. If you enjoy this episode, be sure to subscribe to a H L A , speaking of health law, wherever you get your podcasts. To learn more about a H L A and the educational resources available to the health law community, visit American Health law.org.