Waiving Privilege and Its Impact
“Wish They Made Imodium for the Mouth”
by Sean Weiss, Partner & VP of Compliance
Good Morning, I am Special Agent Johnson and this is Jane Doe of the U.S. Attorney’s Office and we are here to ask you questions about your organization.
Office Manager: Good Morning, come on in and we are happy to speak.
FBI and AUSA: We would like to discuss your process of billing, coding and documentation of services provided to your patients.
OM: Sure, we just had an audit with a well-respected third-party firm out of Tennessee.
FBI/AUSA: Can you tell us about the findings?
OM: Sure, the firm that performed our audit found some discrepancies and we issued refunds for those and for other filed corrected claims. They also said we did a lot correctly as well.
FBI/AUSA: Great, can you tell us how you determined the sample of claims for review, was it statistically valid, what was your overall error rate, and did you extrapolate to determine the total overpayment?
I will stop there – do you see the problem? I am guessing you do and hope that this tiny excerpt above demonstrates the situations practices put themselves into by not stopping and thinking about what it means when the FBI and AUSA show up to your office unannounced. I get it, when the FBI and AUSA show up, it becomes overwhelming and fear sets in so we begin to babble without thinking and folks develop (if I can be so crude) what I call diarrhea of the mouth. Believe me when I say this – special agent(s) and AUSA Attorneys love that!
Let’s talk about a few things:
- When you perform an audit with a third-party vendor for any reason regardless of how small the audit is, always have an attorney engaged and have them retain the audit firm to ensure privilege to the extent the law in your state allows. In the law of the United States, attorney–client privilege or lawyer–client privilege is a “client’s right privilege to refuse to disclose and to prevent any other person from disclosing confidential communications between the client and the attorney.” The attorney–client privilege is one of the oldest recognized privileges for confidential communications. The United States Supreme Court has stated that by assuring confidentiality, the privilege encourages clients to make “full and frank” disclosures to their attorneys, who are then better able to provide candid advice and effective representation. Although there are minor variations, the elements necessary to establish the attorney client privilege generally are:
- The asserted holder of the privilege is (or sought to become) a client; and
- The person to whom the communication was made:
- is a member of the bar of a court, or a subordinate of such a member; and
- in connection with this communication, is acting as an attorney; and
- the communication was for the purpose of securing legal advice.
There are a number of exceptions to the privilege in most jurisdictions, chief among them:
- the communication was made in the presence of individuals who were neither attorney nor client, or was disclosed to such individuals,
- the communication was made for the purpose of committing a crime or tort,
- the client has waived the privilege (for example by publicly disclosing the communication).
A corollary to the attorney–client privilege is the joint defense privilege, which is also called the common interest rule. The common interest rule “serves to protect the confidentiality of communications passing from one party to another party where a joint defense or strategy has been decided upon and undertaken by the parties and their respective counsel.”
The attorney–client privilege is separate from and should not be confused with the work-product doctrine. “The work-product doctrine is more inclusive than attorney-client privilege. Unlike the attorney–client privilege, which includes only communications between an attorney and the client, work product includes materials prepared by persons other than the attorney him/herself. The materials may have been prepared by anybody as long as they were prepared with an eye towards the realistic possibility of impending litigation. Additionally, it includes materials collected for the attorney such as interrogatories, signed statements, other information acquired for the prosecution or defense of a case.
Despite its inclusiveness, the work-product doctrine is less powerful than the attorney-client privilege, and therefore may be overcome by a showing of necessity. An example of a possible exception would be a witness being unavailable due to death or living in a remote/hostile nation.
Even if an exception to the work-product doctrine is made, the court would still protect privileged actions by an attorney, by redacting the privileged part of the document. “Memoranda, briefs, communications … other writings prepared by counsel for his/her own use in prosecuting the client’s case … mental impressions, conclusions, opinions, or legal theories are never discoverable by an opposing party.”
When an attorney is not acting primarily as an attorney but, for instance, as a business advisor, member of the Board of Directors, or in another non-legal role, then the privilege generally does not apply.
The privilege protects the confidential communication, and not the underlying information. For instance, if a client has previously disclosed confidential information to a third party who is not an attorney, and then gives the same information to an attorney, the attorney–client privilege will still protect the communication to the attorney, but will not protect the communication with the third party.
The privilege may be waived if the confidential communications are disclosed to third parties. Other limits to the privilege may apply depending on the situation being adjudicated.”
- When contracting with an attorney, make sure they are health care centric. Believe me when I tell you this – there is no such thing as a health care attorney – it is not a certificate they earn in law school. There are courses in law school one can take but they are actually electives unless there is now a law school that offers as part of their curriculum a specific focus in health law. Health care law is typically learned over years of experience. So, before you engage your attorney friend who handled your 3rd divorce, make certain they truly specialize in health law.
- When choosing a consultant or consultancy to work with, make sure they have handled your specific type of situation before and more than once or twice. You do not want someone learning on the job. It is expensive and it costs a lot of money. Check their references, make sure they have testified in court (Civil or Criminal) and truly understand the issue(s) at hand. A consultant/expert can either make or break your case. Don’t just look at the alphabet of letters after their name; make sure they possess the requisite skills to do the job thoroughly.
- When an investigatory agency shows up at your door, tell them you are happy to speak with them but you request your legal counsel to be present for all the reasons I cited above regarding attorney-client privilege and the work-product doctrine.
At the end of the day it is critical to understand the requirements of the Attorney-Client Privilege and the difference between that and the Work-product Doctrine. Follow the recommendations outlined in this Blog Post and you will find things go much smoother for you if faced with an investigation or potential litigation.
- Federal Rule of Evidence 502 Attorney-Client Privilege and Work Product; Limitations on Waiver
- Office of the General Counsel: The Attorney–Client Privilege from Stanford University
What to do next…
- If you need help with an audit appeal or regulatory compliance concern, contact us at (800) 635-4040 or via email at email@example.com.
- Read more about our: Total Compliance Solution
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