The Unintended Consequences of Secrecy and Confidentiality in Qui Tam Settlement Agreements (Part Three)

3. The Corporate Integrity Agreement

The third item in the settlement process that conspires to undermine the FCA’s stated goal of “deterring similar conduct by others” is what is known as the Corporate Integrity Agreement – the CIA. This document that is signed by the settling corporate defendant is, – in laymen’s terms – an “I won’t do it again” promise from the defendant corporation. But instead of saying “The reason I’m signing this is because I’m as guilty as sin,” instead it says “these are all the good deeds I’ve already been doing and what I’m going to be doing in the future.”

There’s nothing really wrong with this, and it does set forth specific actions that must be taken in the future to prevent any future violations of the False Claims Act.. But, here again, the CIA diminishes the deterrent impact of the settlement payment, not only because nothing is being admitted, but also because the Corporate Integrity Agreement is a document that sets forth all the incredibly nice, wonderful things the corporate defendant promises to do in the future. The language of the Corporate Integrity Agreement is tailored to create the impression that the corporate defendant has only just now gotten around to formalizing and putting into concrete terms – memorializing – all of the wonderful things the company has already been doing all along.

Take, for example, one of the early sentences in a Corporate Integrity Agreement between American Medical Response and the Government. It begins with a brief reference to some of the ‘bad stuff’:

The DOJ alleged that AMR provided discounted transports to various healthcare facilities in the state of Texas in exchange for referrals of transports from the facilities from 1994 through 2001, a period during which AMR was under different ownership and management. Under the terms of the settlement, AMR paid $9,000,000 to the federal Government, and entered into a corporate integrity agreement with the Office of Inspector General.

After the suggestion – that the only reason the $9,000,000 was being paid – “AMR was under different ownership and management” – the paragraph is followed by the following self serving language that allows AMR to retrieve its virginity:

The Company entered into the settlement in order to avoid the uncertainties of litigation, and has not admitted any wrongdoing. Commenting on the settlement, William A. Sanger, Chairman and CEO of AMR’s parent company, EMSC, said, “We are pleased that we were able to resolve this matter with the Government. AMR cooperated fully with the Government during the course of its inquiry into prior conduct of the Company, and we believe it is in AMR’s best interest to put this matter behind us.” Sanger added, “We maintain an active compliance program nationwide, and we believe the requirements of the CIA are consistent with our existing compliance program. We remain committed to conducting our business in a manner consistent with applicable laws and ethical practices.”

Then, after the mildest of hints, the Corporate Integrity Agreement follows with language like this:

The INC hereby enters into this Corporate Integrity Agreement (CIA) with the Office of Inspector General (OIG) of the United States Department of Health and Human Services (HHS) to promote compliance with the statutes, regulations, and written directives of Medicare, Medicaid, and all other Federal health care programs (as defined in 42 U.S.c. § 1320a-7b(f)) (Federal health care program requirements). Contemporaneously with this CIA, the corporation is entering into a Settlement Agreement with the United States. The corporation enters into this Corporate Integrity Agreement on behalf of its CORPS, its SUBSIDIARIES, its FACILITIES. Prior to the effective date of this CIA, the corporation established a corporate compliance program that applies to all INC subsidiaries and facilities. See – we were already doing good stuff, even before we got caught and had to pay the $9,000,000. The corporation’s compliance program includes written policies and procedures, an education and training component, mechanisms for the ongoing monitoring and auditing of INC operations to assess compliance, mechanisms for employees and agents to report incidents of noncompliance in an anonymous way, disciplinary actions for individuals violating compliance policies and procedures, and oversight of the compliance program by the corporation’s Compliance Officer and Compliance Committee. The corporation shall continue the operation of its compliance measures in accordance with the terms set forth below for the term of this CIA. The corporation may modify its voluntary compliance measures as appropriate, but, at a minimum, The corporation shall ensure that during the term of this CIA, it shall comply with the integrity obligations enumerated in this CIA.

And this is just the first page!

The CIA does establish a code of conduct to be followed, with implementation reports, reportable events, names of compliance officers and members of the compliance committee, descriptions of disclosure programs, unallowable cost reviews, IRO’s, training materials, and on and on through 35 pages. But unless one is versed in the legal language, there’s nothing here to indicate that AMR is anything but a wonderful, well-respected corporate citizen anxious to “continue” doing the right thing.

And one searches in vain throughout the 35 pages of the Corporate Integrity Agreement and the two Appendices for even a hint of wrongdoing, or what AMR did that would make it pay $9,000,000 and then sign the Agreement.

There’s nothing.