Category: Uncategorized

Merle M. DeLancey Jr. and Lyndsay A. Gorton

On May 19, 2015, the chairman of the Senate Judiciary Committee, Senator Charles E. Grassley (R-IA), requested information from United States Attorney General Loretta Lynch and Andrew M. Slavitt, Acting Administrator for Centers for Medicare and Medicaid Services (CMS) regarding how the agencies are working together and separately to prevent Medicare Advantage fraud. Senator Grassley’s letters rely on April 2015 investigative findings issued by the Center for Public Integrity for his assertion that there is “an increasing number of lawsuits against insurance companies” for Medicare Advantage fraud, and the Government Accountability Office’s (GAO) 2015 Annual Report, which suggests that CMS “could save billions of dollars by improving the accuracy of its payments to Medicare Advantage programs. . . .” To ensure that CMS has the appropriate “safeguards” in place to prevent fraud, Senator Grassley requested answers to the following questions by June 3, 2015:

1. What steps has the Department of Justice (DOJ) taken, and is currently taking, to ensure that insurance companies are not fraudulently altering risk scores?
2. Is DOJ working in conjunction with CMS to investigate risk score fraud? If not, why not?
3. In the past five years, how many Medicare Advantage risk score fraud investigations has DOJ conducted? Of the investigations, how many have resulted in criminal and/or civil sanction?

Senator Grassley’s letters were sent only weeks after CMS issued its 2016 Rate Announcement and Call Letter on April 6, 2015. After accepting and reviewing comments on its Advance Notice and Draft Call Letter, which estimated a 0.95 percent decrease in revenue for plan providers, the April 6 announcement estimated a 3.25 percent increase in revenue based on finalized 2016 rates. Neither the Attorney General nor CMS has responded to Senator Grassley’s requests. Continue reading “Medicare Advantage Program Enforcement: Increased Publicity May Lead to Increased Scrutiny”

Merle M. DeLancey Jr., Steven J. Roman, and Philip E. Beshara

This is the scenario: you are an executive or manager at a government contractor. It’s Friday morning. You are hoping to leave early and get a jump on the weekend. Then, the receptionist buzzes you and says, “There are men and women out here wearing FBI windbreakers and they want to execute a search warrant.” You wonder, “Can I tell the agents they cannot come in?” Your company does not have in-house counsel. You can call your attorney, but his or her office is across town and the FBI agents say they are not going to wait. “What should I do?”

This may sound like an unlikely scenario, but such government investigations happen all of the time around the country and are rarely expected. In recent years, prosecutors and agents from the Department of Justice (DOJ) and Inspector General Offices have brought charges of procurement fraud and corruption against over 100 defendants, including officers and employees of companies of all sizes. In September 2014, DOJ’s Criminal Division announced that it would be “stepping up” its investigation and prosecution of criminal violations of the False Claims Act, using a team of senior federal prosecutors dedicated exclusively to procurement fraud. DOJ’s announcement cited the use of search warrants as one of the significant investigative tools at prosecutors’ disposal. In addition to their increased exposure to law enforcement authorities, small businesses should expect greater scrutiny of their contracting dollars, an initiative that has received bipartisan support in Congress. In March, the House Small Business Committee approved a measure calling for a sweeping examination into abuses in small business contracting, and the Small Business Administration recently proposed a rule for harsher penalties relating to small business subcontracting limitations. Continue reading “Responding to a Warrant—What to Do if Your Company Is Subject to a Fraud Investigation”

Merle M. DeLancey Jr., Daniel A. Broderick, and Philip E. Beshara

On January 29, 2015, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration published a final rule, effective March 2, 2015, implementing extensive new prohibitions and compliance requirements to the Federal Acquisition Regulation (FAR). The changes, mandated by President Obama’s December 2012 Executive Order (E.O. 13627) and the FY 2013 National Defense Authorization Act, raise across-the-board compliance concerns for government contractors—especially those that regularly employ foreign nationals.

New Restrictions and Requirements

The rule, amending FAR Subpart 22.17 and Contract Clause 52.222-50, will prohibit contractors and subcontractors from denying employees identity or immigration documents; using misleading or fraudulent recruitment practices; charging employees recruitment fees; using recruiters that do not comply with local labor laws of the country recruited from; and providing or arranging housing that fails to meet the host country’s housing and safety standards. The regulations also generally require contractors and subcontractors to pay for or provide transportation of foreign workers back to their home country at the end of their employment if they were brought to the work-country for the purpose of working on a U.S. Government contract or subcontract; or if the work-country is the U.S., they are not a U.S. national, and transportation is required under existing temporary worker programs or pursuant to a written agreement with the employee.

If required by law or under the contract, contractors and subcontractors must provide a written work document to employees in a language the employee understands. The rule further requires that the document contain, at minimum, details about work description, wages, the prohibition on recruitment fees, work location(s), living accommodations and associated costs, time off, round-trip transportation arrangements, grievance process, and the content of applicable trafficking laws and regulations. Continue reading “New Anti-Trafficking Regulations Finalized for Government Contractors”

Merle M. DeLancey Jr. and Christian N. Curran

As the holiday season approaches, companies may consider giving gifts to their government customers. But companies should be aware of the legal limits imposed on gift giving, which could result in serious penalties if ignored. Generally, federal government employees may not solicit or accept gifts or any other thing of value from prohibited sources. See generally, 5 C.F.R. Part 2635, Standards of Ethical Conduct for Employees of the Executive Branch. A prohibited source is defined as a person or company seeking official action by, doing business with, or seeking to do business with the employee’s agency, or a person or company regulated by the employee’s agency or that has interests that may be substantially affected by the employee’s official duties.

There are exclusions under the definition of “gift” that allow for some leeway in giving. Snacks or light refreshments (e.g., coffee and doughnuts at a seminar, but not as part of a meal) are excluded from the definition of gift. Items of little intrinsic value such as greeting cards are also excluded. Further, anything that a government employee pays “market value” for is not considered a gift. Market value can have varying meanings, but generally is considered face value, what the contractor paid for it, or the open market equivalent, depending on the item. Continue reading “Guidelines for Contractors Considering Giving Gifts to Government Customers”