Posted On Tuesday, November 24, 2015
On October 22, 2015, the Securities and Exchange Commission (“SEC”) announced its enforcement results for Fiscal Year (“FY”) 2015. The agency filed 807 enforcement actions, including a record 507 independent actions for violations of federal securities law, and recovered approximately $4.18 billion in disgorgement and penalties. The number of independent enforcement actions represents a 22% increase over the number of such actions filed in FY 2014 (413) and a 49% increase over those filed in FY 2013 (341).
The agency has yet to release its Select SEC and Market Data, the report that will breakdown the quantity and types of enforcement actions pursued. However, the overview contained in the October 22 announcement provides some insight into the agency’s foci for the past year, and likely going forward.
Taking action against individuals – A theme throughout the overview is the SEC’s enforcement efforts against alleged individual wrongdoers. It touts its aggressive pursuit of insider traders and its actions against attorneys, accountants, and other “gatekeepers” for failing to comply with professional standards in advising clients. Indeed, in each category of enforcement action it highlights, the SEC notes actions brought against – and, in many instances, recovery from – individuals.
The overview’s focus on enforcement against individuals aligns with recent public statements from SEC officials. In May 2015 remarks, for example, Director of Enforcement, Andrew Ceresney, emphasized that companies attempting to cooperate with an SEC investigation were expected to share facts implicating individual wrongdoers, if such facts exist. Accordingly, it is clear that the SEC has joined the Department of Justice in shifting its investigative focus and enforcement efforts to hold individual – and not just corporate – wrongdoers responsible, and to require corporations seeking resolution to cooperate in those efforts.
Using data and analytics innovatively – Although it does not get into specifics, the SEC touts its cutting-edge use of data and analytics to spot suspicious practices and “crack” complex insider trading rings. The reference to data and analytics no doubt serves a signaling function to would-be insider traders: the agency is technologically fluent and equipped to investigate in the modern world.
Combating foreign corrupt practices – The SEC highlights its enforcement of the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. § 78dd-1 et seq. In particular, it notes filing a “first-ever” FCPA action against a financial institution, which is also the “first-ever” case to allege hiring practices in violation of the statute. The SEC’s efforts to emphasize the innovative nature of its FCPA actions indicates that it will wield the statute aggressively, a message that the agency has also sent in its public statements throughout FY 2015.
Rewarding whistleblowers – The SEC awarded approximately $38 million through its whistleblower program in FY 2015. Eight whistleblowers received awards, with one earning $30 million, the largest payment made by the program to date. Because of that enormous award, the program paid far more to whistleblowers in FY 2015 than it has in any year since its inception in August 2011. The SEC’s report to Congress on the whistleblower program can be found here.
Posted On Monday, November 23, 2015
On November 2, 2015, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) released its Fiscal Year 2016 Work Plan summarizing new and ongoing reviews with respect to HHS programs and operations. In furtherance of the OIG’s 2015 Work Plan, there are numerous OIG audits, evaluations, and certain legal and investigative initiatives that are continuing and/or are revised for the 2016 Work Plan. In addition, the 2016 Work Plan describes well over 40 new areas of inquiry.
The 2016 Work Plan on a whole reconfirms OIG’s stance that combating health care fraud and abuse remains a top priority for the OIG and HHS in 2016.
An abbreviated list of topics set forth in the work plan that may be of interest to the health care providers includes:
Medicare Parts A and B: Medicare Oversight of Provider Based Status (Revised); Medical device credits for replaced medical devices (New); Skilled nursing facilities prospective payment system requirements (New); Medicare payments during MS-DRG payment window (New); Hospice general inpatient care (Revised); Orthotic Braces – reasonableness of Medicare payments and supplier compliance with payment requirements (New); Increased billing for ventilators (New); Ambulatory Surgery Centers – quality oversight (New); Physicians – referring/ordering Medicare services and supplies (New); Anesthesia Services—Non-Covered Services (New); Physician home visits – reasonableness of services (New); Prolonged services – reasonableness of services (New); Part B Payment for drugs purchased under the 340B Program (Revised); Histocompatibility Laboratories—Supplier Compliance with Payment Requirements (New)
Medicare Parts C and D: Medicare Advantage encounter data – CMS oversight of data integrity (Revised); Review of financial interests reported under the Open Payments Program (Revised); Increase in prices for brand-name drugs under Part D (New)
Medicaid Program: Specialty drug pricing and reimbursement in Medicaid (New); State and CMS oversight of provider ownership information (Revised); Provider payment suspensions during pending investigations of credible fraud allegations (Revised)
Other Programs: Controls over networked medical devices at hospitals (New); NIH – controls over subcontracting of NIH grant and contract work (New); Office of Civil Rights’ oversight of the security of electronic protected health information
In a hint of things yet to come, the Work Plan reveals that future planned work of the OIG includes a holistic examination of HHS’ efforts to reduce opioid misuse and abuse, as well as further examinations of government-wide financial data standards related to expenditures of federal grants, contracts, and loans. It also anticipates a broadening of the OIG’s portfolio regarding information privacy and security, including issues that arise from the continuing expansion of the Internet of Things (IoT). IoT is loosely defined as the environment in which physical objects transfer data over a network without requiring human-to-human or human-to-computer interaction. Basic examples of IoT’s include: GPS technology, smart locks, smart thermostats, and, increasingly popular health and fitness wearable devices. The utilization of IoT data and its security is of increasing concern to privacy advocates and governments as more and more objects, individuals and animals utilize embedded devices that become a part of the IoT.
Corporate, legal and compliance executives at health care providers and related entities should review in detail the 2016 OIG Work Plan and consider all of the topics listed in the Work Plan that are applicable to their entities. Such a review can assist these entities in determining their risk areas and enable them to prioritize new or enhanced compliance initiatives that may be necessary to address any potential risks.
