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Issues of Fraud and Abuse ComplianceSeries

Keeping In House Out of theDoghouse – Invoking the Attorney-Client Privilege

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Keeping In House Out of the Doghouse– Invoking the Attorney-Client Privilege

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Today’s Host

David W. GrauerChair, Squire Sanders Healthcare PracticeT +1 614 365 2786david.grauer@squiresanders.com

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Today’s Speakers

Thomas E. ZenoT +1 513 361 1202thomas.zeno@squiresanders.com

Emily E. RootT +1 614 365 2803emily.root@squiresanders.com

Elizabeth E. TrendeT +1 614 365 2728elizabeth.trende@squiresanders.com

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Importance of the Attorney-Client Privilege

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Scenario #1

A medical director sends an email to a hospitalemployee negotiating physician compensation, with acopy to in-house counsel who is not involved in thenegotiations. The email says that because thephysician refers lots of patients to the hospital, themedical director thinks the hospital should pay thephysician more than the current proposal. The emailsubject says “Attorney-Client Privilege.”

Can the hospital claim the email is covered by theattorney-client privilege?

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Caveat!

The attorney-client privilege is a complex andevolving doctrine.

• Detailed analysis

• Fact-specific

• Differs across jurisdictions

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What Is Covered by Attorney-ClientPrivilege?

1. Communication

2. Attorney

3. Client

4. Providing Legal Advice

5. Expectation of Confidentiality

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What is Protected by the Work ProductDoctrine?

1. Documents

2. Prepared by or for an attorney

3. In anticipation of litigation

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Don’t Lose It!

Practice Tip

• Don’t forward attorney emails outside theorganization

• Don’t forward attorney emails toemployees with no need to know

• Make Board presentations in executivesession

• Enforce social media and publicstatement policies

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Copying In House Counsel on Emails

Copying in house counsel on an email or letter doesnot, by itself, make the email privileged.

• Reference on-going legal matter in the email (Foryour review of the contract…)

• Only include attorneys who are handling the legalmatter

Practice Tip:

• Include explicitrequest for legaladvice (Can wepay thephysician morebecause…?)

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When In House Counsel Also Has aBusiness Role

Many in house counsel also have a businessrole (Vice President, Chief Operating Officer,etc.)

Key issue is whether thecommunication:

• Seeks legal adviceOR

• Relates to thebusiness role

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Privilege and the Compliance Officer

Not automatically privileged

Practice Tip:

• Chief Compliance Officer is

Part of the General Counsel office OR

Acting under the direction of counsel

• Explicit reference to legal purposes, rather

than business purposes

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The Privilege and Consultants

Not automatically privileged

Practice Tip:• Counsel retains the

consultant• Document that the

purpose of theconsultant’s work is toanalyze data regardingidentified legal issues

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The “Attorney-Client Privilege” Label

Is a best practice because it is evidence ofconfidentiality and seeking legal advice

Also assists in identifying privilegeddocuments in subsequent review ofdocuments that may be produced

BUT it does not make a documentprivileged that doesn’t meet the criteria

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Scenario #2

During an internal investigation into alleged improperMedicare billing by a provider group, in house andoutside counsel jointly conduct an interview with thephysician in charge of coding and billing. In theinterview, the physician states that the group hasidentified problems with physician coding in the past buthas not taken any action.

The group waives the attorney-client privilege andsettles with the government. The government thenprosecutes the physician.

Can the statement during the interview be usedagainst the physician?

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Who Can Waive the Privilege

The “Client” owns (and canwaive) the privilege

In internal investigations,the company is the “client”– not the individual beinginterviewed

• Individual cannot waive the company’sprivilege (generally)

• Company can waive the privilege, even ifthe waiver exposes the individual

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“Upjohn” Warnings

Practice Tip:

• Provide (read) complete Upjohnwarnings to an employee beforeinterviewing the employeeduring an internal investigation.

• Have an associate with you totake notes of the interview.

• Document Upjohn warnings andanswers in interviewer notesand interview summary.

Upjohn warnings should be given beforeinterviews in furtherance of internalinvestigations

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Sample “Upjohn” Warnings

• I am a lawyer with the Company. I and my associaterepresent the Company. We represent only the Company.We do not represent you personally.

• We are conducting this interview to gather facts in order toprovide legal advice to the Company. This interview is partof an investigation to determine the facts andcircumstances about _________.

• Your communications with us are protected by the attorneyclient privilege. But the attorney client privilege belongssolely to the Company, not to you. That means theCompany alone may decide to waive the attorney clientprivilege and reveal our discussion to third parties. Thecompany alone may decide to waive the privilege anddisclose our discussion to third parties such as federal orstate agencies, without your permission or notice.

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Sample “Upjohn” Warnings

• In order for this discussion to be protected, itmust be kept in confidence. It is the Company’sdecision whether it will waive the privilege. Inother words, with the exception of your ownattorney, you may not disclose the substance ofthis interview to any third party, including otheremployees or anyone outside of the Company.You may discuss the facts of what happened,but you may not discuss this discussion.

• Do you have any questions?

(Record answer (No) in memo)

• Are you willing to proceed?

(Record answer (Yes) in memo)

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Scenario #3

Following preliminary results of a peer reviewcommittee meeting that indicates a physician isperforming medically unnecessary procedures, inhouse counsel conducts an additional investigationand hires an outside consultant to review a sampleof charts. The hospital concludes that self-disclosure is necessary.

What parts of the investigation process, if any,are privileged?

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In House Counsel and Investigations

Investigations undertaken in theordinary course of business aregenerally not privileged.

Practice Tip:Document privilege elements(requesting legal advice, identityof counsel, identity of employeesacting for the company, etc.)

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In House or Outside Counsel?

Retain Outside Counsel When Appropriate

• Allegations about senior executives or general

counsel’s office

• Particularly serious or complex matters

• Unique skill sets or experience needed

• Matters where business role of general counsel

could make privilege arguments complicated

Practice Tip:

Full support of outside counsel by general counseland key executives is necessary to get the bestadvice and limit costs

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The Golden Rule

Practice Tip:

ALWAYS write like the government (andeveryone else) is looking over yourshoulder

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Public Statements

Practice Tip:

• Get Legal Dept.to review publicstatements inadvance

• Have designatedspokespersonson sensitiveissues, andinformemployees ofthe protocol

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Government Investigations

Asserting the Privilege in GovernmentInvestigations

Since the McNulty Memo in December 2006, DOJhas shown greater respect for the privilege.

The DOJ generally will not:• Request waiver of the attorney-

client privilege or attorney workproduct protections.

• Hold against a company thedecision to assert the attorney-client privilege when decidingwhether to prosecute.

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The Disclosure

Delicate balance between adequatedisclosure and maintaining privilege.

• Purpose of disclosure

• Level of knowledge

• Type of activity to disclose (settlement,litigation, government investigation,internal investigation, etc.)

• Other public statements

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Scenario #4

An employee forwards to the legal department

some emails between human resources

individuals, which the employee considers to be

evidence of employment discrimination.

The emails are later requested through the

discovery process in subsequent litigation.

Does the company have to produce the

emails?

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The Privilege and Pre-Existing Documents

• Cannot protect documents from discovery

just by giving them to an attorney

• Documents (letters, emails, notes, etc.) that

were not created as communications with an

attorney or under the direction of an attorney

Practice Tip:To avoid confusion,explicitly state in adocument if it isprepared for or bycounsel

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Scenario #5

The Board of Directors, of which General Counsel

is a member and Secretary, receives a

presentation regarding the hospital’s financial

performance for the year, a proposal to make

certain improvements to retain market share, and

an update on an internal investigation by the

compliance officer. The General Counsel also

makes a presentation regarding on-going

litigation, where the hospital is represented

primarily by outside counsel.

Are all or part of the minutes of the meeting

privileged?

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Attorney as Board Member

Key Issue – What communications were made to

seek or obtain legal advice and which were made

for a business purpose?

Practice Tip:

If the GC is a voting member of the Board or a

committee, they may be more likely to be viewed as

acting in their business capacity.

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Steps Organizations CanTake to Protect Themselves

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Training

• Training for individuals who are likely to beseeking legal advice

• Legaldepartmentshould teachbest practicesas they interactwith otheremployees

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Best Practices – Highlights

Invoke the privilege early and often

Write carefully – never count on the privilege

Explicitly ask for legal advice or reference on-going legal issues when making sensitivecommunications

Designate privileged emails or memos as“Attorney-Client Privilege”

Send documents to only those people who needto see them

Hire consultants for legal issues through counsel

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Questions?

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Thank You for Joining Our Webinar

Join Us for Future Calls in This Series …

• Addressing Enterprise Risk After the AffordableCare Act – November 15, 2012

• Corporate Integrity Agreements and CorporateCompliance Programs – January, 2013

• Proper Recordkeeping in a HeightenedEnforcement Environment – March, 2013

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Thank You for Joining Our Webinar

Contact us with other topics, questions or issues:

• Tom Zeno: thomas.zeno@squiresanders.com

• Emily Root: emily.root@squiresanders.com

• Emy Trende: elizabeth.trende@squiresanders.com

37 Offices in 18 Countries

What Keeps You Up atNight?

Issues of Fraud and Abuse ComplianceSeries