The Attorney-Client Privilege: Its Use and Misuse

Warning! HME companies, you may want to share portions of this article with your billing, compliance and any other advisers who look over your claims submission, records documentation, contracts, compliance and marketing activities. Inadvertently, they may be putting you (and themselves) in some danger.

The risk is real, but home medical equipment companies can use the attorney-client privilege to shield internal assessments of billing, anti-fraud and related legal compliance problems from government scrutiny.

The attorney-client privilege protects certain communications between an attorney and his or her clients. When it is in place, no one can be compelled to testify about what was discussed between the lawyer and the client, even when potential violations of various laws were discussed. Similarly, no privileged notes or documents may be scrutinized by the government.

This protection can be important, because if HME companies are not careful, their efforts to assess the scope and nature of legal problems and patterns of billing errors can, in fact, worsen their troubles. The same risk applies to a company's evaluation of its options, as well as the development of its strategy to address the problems and respond to government inquiry. This is because the government, as part of its fraud inquiry, will often want to look at the results of the company's internal review and analysis of billing and contracting activity, as well as any recommended actions included as part of that internal review.

Let me explain. HME companies have been inundated over the past few years with new laws, regulations and CMS policies. MAC, RAC and ZPIC audits have significantly added to governmental scrutiny of documentation, billing decisions and operational policies. Both CMS fraud units and the HHS Office of Inspector General are looking at marketing activities and referral patterns for evidence of fraud or abuse.

Further, when a MAC, RAC or ZPIC audit suggests violations of the false claims, anti-kickback or similar laws, the auditors are obligated under the law to report this information to government investigators for further analysis and action. Under the false claims laws, if the government thinks you have been "recklessly indifferent" to compliance with reimbursement rules, it may consider repeated billing deficiencies evidence of fraudulent activity.