Lab Defense Attorneys for Executives

FBI or OIG Investigation? We Can Help.

Lynette Byrd
Healthcare Fraud Team Lead
Former Federal Prosecutor

Kevin M. Sheridan
Healthcare Fraud Team
Former FBI Special Agent

Wade McFaul
Healthcare Fraud Team
Former HHS-OIG Assistant Special Agent-in-Charge

The United States Health and Human Services Office of Inspector General (HHS OIG) and the Federal Bureau of Investigation has recently illustrated a renewed interest in investigating and prosecuting clinical laboratories. While it seemed as though many labs were given a “free pass” during the COVID-19 pandemic, that time appears to be up. Recently, the federal government has announced dozens of prosecutions involving molecular and respiratory labs; many of these cases relate to how these labs handle COVID-related issues.

Once the OIG or FBI gets their foot in the door, their investigation is not limited to COVID-related procedures; they will often conduct a lab-wide investigation looking for any sign of misconduct. And given the complexity of the regulatory environment labs face, even well-intentioned labs may find themselves in violation of the federal healthcare fraud laws. Thus, after the announcement of an upcoming federal investigation, everything must be done to ensure a favorable outcome.

Matters we handle on behalf of independent and physician-owned laboratories include (but are not limited to) those involving:

Clinical research contract and other contract disputes
Clinical Laboratory Improvement Amendments (CLIA) violations
False Claims Act (FCA) violations
Health Insurance Portability and Accountability Act (HIPAA) violations
Licensing violations
Marketing and labeling violations
Medicare, Medicaid, Tricare, and U.S. Department of Labor (DOL) billing violations
MAC, RAC, UPIC, and ZPIC audits
Stark Law and Anti-Kickback Statute violations
U.S. Food and Drug Administration (FDA) defense
U.S. Department of Health and Human Services’ Office of Inspector General (OIG) defense

Relevant Laboratory Defense & Compliance Experience

Lab Compliance Counseling

Our firm represents independent and physician-owned laboratories throughout the country as compliance counsel. Our attorneys draft custom-tailored compliance policies and procedures, assist with compliance training and implementation, and conduct compliance audits for our clients. Our lab compliance programs are comprehensive, and are designed specifically to help our clients withstand scrutiny during federal audits and investigations.

Lab Audit Defense

We have successfully represented numerous independent and physician-owned laboratories in MAC, RAC, UPIC, and ZPIC audits. These audits present unique challenges, and achieving a favorable outcome is as much about ensuring that auditors follow the rules as it is about demonstrating compliance. We have successfully defended labs during private insurance audits as well, in many cases correcting auditors’ mistakes and protecting our clients against substantial unwarranted liability.

Federal Investigations

Federal investigations can present significant risks for independent and physician-owned laboratories. Without a strategic defense, labs and their owners can face substantial liability, loss of program eligibility, and even prison time. Our lawyers have handled hundreds of investigations involving all major federal law enforcement agencies, and we have resolved the majority of our clients’ investigations without charges being filed.

FDA and OIG Defense

The FDA and OIG aggressively enforce labs’ compliance obligations. If your lab is facing FDA or OIG scrutiny, it is important that you engage defense counsel promptly. We have significant experience representing labs in FDA and OIG matters, and we have been successful in helping most of our laboratory clients avoid any civil or criminal liability.

Private Litigation

We also have experience representing independent and physician-owned laboratories in private litigation and other dispute resolution proceedings. This includes matters involving private insurance carriers and other commercial parties.

Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Lynette S. Byrd

Former Assistant U.S. Attorney

Partner

Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

How Labs Can Defend Themselves in the Face of an FBI/OIG Investigation

If you recently learned that your lab is under investigation by the FBI or OIG, there are steps you can take to protect yourself from civil and criminal liability. While the best life of defense against a federal investigation into your lab is to develop a robust compliance program, at the moment an investigation is opened, your efforts should shift away from compliance and onto damage control. This isn’t to say that a late-in-the-game compliance strategy is worthless; that’s not the case at all. However, while developing a compliance strategy to address any deficits will help mitigate liability, it may not be enough, and other efforts must be made.

That said, below are a few things to keep in mind if you recently learned that your lab is under investigation by the FBI or OIG.

Retain All Records (Especially Those You Don’t Want To)

The moment that the Department of Justice of OIG announces an investigation, you assume an immediate duty to preserve any evidence that relates to the government’s investigation. Thus, anything you do to hide, alter or destroy evidence will very likely come back to bite you. For example, if the federal government learns that you destroyed or altered evidence, it could lead to an adverse inference allowing the judge or jury to assume that the evidence, if presented, would have been harmful to your case. It can also result in new criminal charges for the destruction of evidence or interfering with a federal investigation. Thus, despite any temptations, refrain from doing anything to hinder the investigation.

Evidence that investigators may want to review includes:

Billing records;
Documentation of medical necessity;
Documentation of any referral relationships with doctors, pharmacies, hospitals, marketers or consultants; and
The lab’s OIG compliance program.

Of course, this is a partial list, and federal agents may seek a broad range of evidence during the course of their investigation.

Be Prepared

When FBI or OIG agents arrive to conduct an investigation, a clinical or molecular lab should be expecting their arrival and have taken the necessary steps to prepare for the investigation. This includes making all records that the investigators will likely want to examine easily accessible. The last thing you want is for agents to be rifling around your lab any more than absolutely necessary. You also do not want to appear unorganized, as agents may take your lack of organization as an indication that you play fast and loose with the rules.

Don’t Talk to Federal Agents Any More Than Necessary

If the FBI or OIG comes to your lab to conduct an investigation, they are naturally going to ask you questions. However, you are under absolutely no duty to answer them. Not only that, but answering federal agents’ questions can only hurt you. For example, if you say something you think is helping you, will the agents believe you? Probably not without documentation that supports what you told them. On the other hand, if you say something against your interest, they will certainly believe you. The result is that there is no reason to talk to FBI or OIG investigators if they ask questions during an investigation. The better option is to retain an experienced federal defense lab lawyer who can interact with law enforcement on your behalf.

Be Careful Who Else You Talk To

An FBI or OIG investigation is not necessarily limited to what is within the walls of your lab. Investigators may ask affiliated third parties for evidence or testimony. Thus, once you are made aware of an investigation, it is important not to talk with these parties about the investigation. Innocent words can be taken out of context, and you can’t be sure who is going to end up working with federal agents. Often, agents will try to “flip” certain participants, providing them with immunity or a favorable plea agreement in exchange for their testimony against other participants. You don’t want to be on the wrong end of that deal.

Reach Out to an Experienced Lab Defense Lawyer with Experience Defending Independent Clinical Laboratories and Physician Owned Laboratories (POLs)

If you are under investigation by the FBI or OIG, chances are this is the first time. That being the case, you may not know what to expect or how to best protect your interests. By retaining an experienced clinical lab defense law firm, you will benefit from their experience. Whether it’s helping you identify the potential areas of compliance concern, negotiating with the DOJ after an unfavorable investigation, or litigating civil or criminal charges at trial, an attorney’s assistance is an invaluable asset to molecular and respiratory labs subject to a federal investigation.

Lab Defense Focus Areas

FAQs: FBI and OIG Investigations Targeting Labs and Their CEOs

Which Federal Agencies Regulate Laboratories?

Many lab owners and executives are surprised to learn just how many federal agencies have oversight and regulatory authority over their laboratories. All lab owners and executives should be familiar with the U.S. Food and Drug Administration’s (FDA) role in regulating laboratories in the United States, and most will be well aware of the U.S. Centers for Medicare and Medicaid Services’ (CMS) role in ensuring compliance. But many owners and executives are surprised to learn that the Federal Bureau of Investigation (FBI), U.S. Department of Justice (DOJ), U.S. Department of Health and Human Services Office of Inspector General (OIG), and other federal authorities could be scrutinizing their business practices as well.

When Can a Lab (or Lab Executive) Face Liability Under the Anti-Kickback Statute?

Labs and lab executives can face liability under the Anti-Kickback Statute when they engage in (or attempt to engage in) prohibited financial relationships. Broadly speaking, the Anti-Kickback Statute prohibits health care entities from paying or accepting referral fees and other forms of “remuneration” using funds received from federal payors (i.e., Medicare and Medicaid). It also outlaws attempts to pay or accept these forms of compensation, as it specifically includes “offering” and “soliciting” remuneration among its prohibitions.

The regulations promulgated under the Anti-Kickback Statute establish several “safe harbors,” and defending against alleged Anti-Kickback Statute violations often involves proving that a safe harbor applies. But, if a lab has not specifically structured a financial relationship to satisfy a safe harbor’s requirements, establishing safe harbor protection may not be possible.

What Do Doctors Who Own Labs Need to Know about the Stark Law?

The Stark Law prohibits unlawful referral fees, much like the Anti-Kickback Statute. However, it applies specifically to doctors, and even more specifically to so-called physician “self-referrals.” For doctors who own labs, it is imperative to ensure that any financial relationships between their labs and their medical practices do not violate the Stark Law’s prohibitions.

What are the Consequences of Violating CLIA?

The Clinical Laboratory Improvement Amendments (CLIA) and the CLIA regulations establish mandatory quality standards for laboratory testing. CLIA compliance is an essential component of a broader laboratory compliance program, as failure to comply with CLIA or the CLIA regulations can have severe consequences. On top of loss of CLIA certification, labs that fail to maintain compliance can face civil monetary penalties (CMP). Since these CMP are imposed on a per-violation basis, labs that violate CLIA or the CLIA regulations can easily face hundreds of thousands of dollars—if not millions of dollars—in penalty liability.

Can a Lab Lose Its License Due to an FBI or OIG Investigation?

Yes, laboratories and physician-owners can lose their licenses due to FBI and OIG investigations. The FDA and CMS can suspend laboratories’ licenses (i.e., FDA registration and CLIA certification), and state medical boards can suspend or revoke physicians’ medical licenses if they are found in violation of pertinent federal laws. This is yet another reason why labs that are facing FBI and OIG investigations need to engage experienced defense counsel promptly.

The Lab Attorneys at Oberheiden, P.C. Represents Labs & CEOs Under Federal Investigation

If your respiratory or molecular lab is under investigation by the OIG or FBI, reach out to Oberheiden, P.C. as soon as possible. We have attorneys standing by to answer your questions and immediately get involved in your case. Many of our senior lab defense attorneys were formerly employed in high-ranking positions with the federal government and command an in-depth knowledge of how these investigations are handled. We are prepared to put this knowledge to use, protecting you and your lab. To learn more, and to schedule case evaluation with a clinical lab defense lawyer, give Oberheiden, P.C. a call at 888-680-1745 or fill out our online form.

Lab Defense Attorneys for Executives

FBI or OIG Investigation? We Can Help.