While the Department of Justice (“DOJ”) has continued to make statements expressing a desire to impact organizational compliance through forward-looking compliance mandates, its influence has been limited to-date, as such efforts have come exclusively in connection with criminal resolutions. For decades, there has been a clear divide in DOJ practice in resolving enforcement actions against business organizations—criminal matters have routinely required defendants to take on forward-looking compliance mandates, while civil False Claims Act (“FCA”) resolutions have focused exclusively on recovery of money. Agencies such as HHS-OIG  and the DEA have frequently imposed mandates alongside FCA civil settlement agreements (“CSAs”), but DOJ has stayed out of it. The result is that civil resolutions, which far outnumber criminal resolutions, especially in the health care industry, have been immune to DOJ’s pronouncements about an increased compliance focus, and presumably untouched by recent DOJ Criminal Division efforts to bulk-up its compliance expertise. But a recent, and high-profile, civil resolution raises the possibility that DOJ may seek to expand its compliance sphere of influence to civil cases.

In February, Massachusetts General Hospital (“MGH”) agreed to pay $14.6 million to settle an FCA suit in the District of Massachusetts alleging it had improperly billed the federal government for surgeries performed in violation of the rules and regulations prohibiting teaching physicians from performing and billing for concurrent surgeries—surgeries where the primary surgeon moves between operating rooms with multiple surgeries scheduled during overlapping time periods. The case was closely watched as hospitals and DOJ continue to debate the limits of acceptable overlapping surgeries (DOJ filed a separate suit against University of Pittsburgh Medical Center last September, which remains pending), and MGH is one of the country’s most prestigious hospitals. While MGH did not admit to wrongdoing under the CSA, the resolution was notable for another reason—it included a provision that MGH would amend its patient consent form to inform patients of any overlapping surgery.  Under the agreement, MGH agreed to add language to its consent forms stating:

My surgeon has informed me that my surgery is scheduled to overlap with another procedure she/he is scheduled to perform. I understand that this means my surgeon will be present in the operating room during the critical parts of my surgery but may not be present for my entire surgery. I understand that my surgeon or another qualified surgeon will be immediately available should the need arise during my surgery.

Interestingly, the MGH mandate came in the context of a FCA case which DOJ had declined in 2017, and which was then litigated over the next five years by the relator before being settled with DOJ’s approval.  The whistleblower—a doctor who had been employed by MGH when the alleged misconduct occurred—presumably pushed for the requirement, with her counsel telling the Boston Globe it would help set “a new standard of care in informed consent for overlapping surgeries.”  While it is not unusual for private litigants to seek reforms, the practice has been notably absent from FCA practice, with FCA whistleblowers generally having no visibility into what HHS-OIG would require of a settling defendant entering into a CIA.

It remains to be seen whether the MGH settlement will open the floodgates and lead future relators to seek compliance reforms. More significantly, it raises the possibility that DOJ will itself begin to demand forward-looking compliance mandates in FCA CSAs. Historically, DOJ has been reluctant to use its negotiation leverage on anything other than maximizing financial recoveries, and this would represent a major shift in approach for civil DOJ attorneys. But with DOJ seeming to increase its focus on compliance, using CSAs would exponentially increase DOJ’s influence in the area. To-date, although DOJ has expressed its desire to impact organizational compliance, it has done so only through the comparatively small number of corporate resolutions which resolve criminally. If DOJ begins to view FCA resolutions as an opportunity to impose its vision for the future of compliance, it could mean dozens or more resolutions annually where DOJ takes compliance-focused action.

If the MGH resolution is a sign of things to come, it raises numerous issues. While the Criminal Division has stated it has hired personnel and implemented training in order to enable its attorneys to judge compliance programs, the Civil Division has made no similar pronouncements. (I have separately called for the Civil Division to increase its compliance expertise in order to improve its ability to reward pre-existing compliance programs.) And with the Criminal Division regularly providing and updating compliance guidance, an increased presence of the Civil Division in the area would likely require additional coordination between DOJ’s civil and criminal attorneys.

Finally, the inclusion of such a mandate in a CSA also raises questions of how it would be enforced.  Requirements included in DPAs raise the specter of DOJ declaring a breach and either proceeding with prosecution, extending the term of the DPA, or requiring an additional fine payment, as the District of Vermont did in March. The same is true of CIA requirements, where HHS-OIG maintains the ability to seek exclusion, extend the term of a CIA, or collect monetary penalties based on a violation. It is less clear what DOJ’s mechanism or remedy would be for holding a defendant accountable for breaching a CSA requirement. Though not present in the MGH CSA, it is possible future CSAs with forward-looking requirements will include stipulated damages provisions, as have appeared in some DOJ criminal agreements.