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June 1999

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Between a Rock
and a Hard Place

By John W. Lundquist and Laurie Nesseth

Could You Be Prosecuted for Giving Legal Advice
to a Client?

Upon request, Trudy Trueheart, Esq., puts together a consulting agreement for her best client, Hospital Corporation of the World ("HCW"). The agreement provides for Dr. Smith to assist HCW in establishing a geriatrics department. Dr. Smith happens to be the medical director for 90 percent of the nursing homes in town. He has a very substantial practice.

HCW’s administrator tells Trudy that he hopes this agreement will cause Dr. Smith to begin referring patients to HCW. Trudy advises the administrator that such an arrangement might create a problem because of the Medicare Anti-Kickback Statute.1 The anti-kickback statute makes it a criminal offense to knowingly or willfully offer, pay, solicit or receive any remuneration to induce referrals of services or items that are reimbursable by a federal health care program.

Trudy explains that many of the patients that the hospital wants Dr. Smith to refer will be Medicare patients, and the hospital is prohibited from paying for those referrals if they do not fit into one of the so called "safe harbors."2 The client responds, "I know all about that. This agreement is to prove that Dr. Smith is getting paid for his consulting efforts and not for patient referrals." Trudy tells the administrator that the statute has been interpreted to apply to situations where inducing referrals is just one of the purposes of the arrangement and that violation of the statute is a criminal offense.3 The client assures her that it is merely wishful thinking that HCW will get more patients from the doctor and that the consulting agreement is a bona fide arrangement to pay him for his services and know-how in setting up their geriatrics department. Trudy, not without some misgivings, prepares a consulting agreement that is executed by the parties.

Two years later, Trudy learns that a whistleblower claims that HCW was paying Dr. Smith over $100,000 a year "for patient referrals." The Office of the Inspector General ("OIG") at the federal Department of Health and Human Services investigates, and the Department of Justice ("DOJ") threatens criminal charges against both Smith and HCW. HCW responds to the OIG, "How can we be guilty when our attorney reviewed the situation and prepared a consulting agreement that we were told was legitimate?" HCW waives privilege and invites the DOJ to verify this assertion with Trudy. Trudy explains what she did, only to have the government agents tell her that Dr. Smith never did any work and the agreement is, therefore, a sham.

Despite her pleas, the DOJ begins to see Trudy as part of the problem, namely, part of the conspiracy to defraud the government. She is viewed as an accommodating lawyer who knowingly helped her client "paper" an illegal kickback arrangement. The DOJ threatens prosecution of not only HCW and Dr. Smith, but also Trudy.

Attorneys Not Immune

Sound like fiction? Not to a couple of attorneys in Kansas City, Missouri. The two attorneys drafted consulting agreements between Baptist Medical Center and brother osteopaths, Ronald Lahue and Robert Lahue, who provided services at 200 different nursing homes. The government, following a five-year investigation of the Lahues, indicted and charged them with seven bribery counts under the anti-kickback statute. In no time, the government added the two lawyers and several former hospital officials to the indictment. The lawyers were charged with crafting consulting agreements in furtherance of a scheme to solicit, receive, and pay over $2.2 million in bribes. The hospital had already settled with the government and agreed to waive its attorney-client privilege, creating much pre-trial dispute over the privilege and whether the lawyers had to produce their files. Following the prosecution’s presentation of its case, the trial judge issued a judgment of acquittal on March 9, 1999, for the two attorneys. The acquittal was based on the insufficiency of the evidence that the attorneys knew of, or intended to facilitate, an illegal arrangement. At the conclusion of the trial in April of 1999, the jury convicted the remaining defendants following more than four days of deliberations.

John Lundquist

John W. Lundquist has 20 years of experience in white collar criminal investigations, trials, and appeals in state and federal courts. He heads the Medicare Fraud and Compliance Group at Fredrikson & Byron in Minneapolis and can be reached at jlundquist@
fredlaw.com.

Laurie Nesseth

Laurie Nesseth practices in the Health Law Group at Fredrikson & Byron, dealing primarily with organizational, reimbursement, and regulatory matters for clients in the health care industry. She can be reached at lnesseth@
fredlaw.com.

"Counsel need be mindful that what seems to be innocuous, routine advice could turn out to be, years later, a critical aspect of a fraud investigation."

Between a Rock and a Hard Place

As part of its pact with the American public to cut down on wasted financial resources, the government has stepped up its efforts to enforce the fraud and abuse laws against health care providers. Lawyers are with increasing frequency being placed in a position where the government can accuse them of being part of a conspiracy to defraud the government. Because the web of health care regulations is so complicated, providers frequently consult with counsel about the very issues that the government is scrutinizing.

In their efforts to comply with often ambiguous rules, health care providers also recognize that if challenged by the government, they can avoid liability by showing that they sought the advice of counsel and made a good faith effort to comply with the law. The defense of "reliance on the advice of counsel" can prove that the defendant-provider did not have the intent necessary to violate the law. The lawyer and her advice, interposed between her client and the government, effectively interfere with the government’s ability to prove its case.

Since the provider, however, cannot rely on the advice of a lawyer who knowingly participates in the wrongdoing, the government may choose to characterize the lawyer as a co-conspirator in order to successfully prosecute the provider. So, the government indicts the lawyer as a co-conspirator, thus defeating the advice-of-counsel defense, and it can then try to prove the intent element without the attorney-client privilege hampering its efforts.

The recent qui tam lawsuit of United States ex rel. Zissler v. Regents of the University of Minnesota,4 illustrates why the government wants to avoid confronting the advice-of-counsel defense. In that case, the government sought the disgorgement of certain profits received by the University of Minnesota based on an alleged violation of the anti-kickback statute. The university relied on the advice-of-counsel defense to show the court that it lacked the required intent to violate the anti-kickback statute, which requires that the defendant act "knowingly and willfully." The 8th Circuit has interpreted the act to require proof that the defendant acted wrongly and knew he was doing so unjustifiably.5

The university showed that before taking any action, it sought in good faith the advice of a lawyer it considered competent and made a full disclosure of the material facts to the lawyer regarding a future arrangement. The school then acted in strict compliance with the advice that it received. The court found that the defendant had relied in good faith upon the reasonable advice of counsel.6 The court said that the evidence indicated that at all times the lawyer believed the arrangement did not violate the anti-kickback statute and that the advice given was reasonable.

Therefore, Judge Richard Kyle granted summary judgment on Oct. 14, 1998, in favor of the university on the anti-kickback claims, finding the government unable to prove the intent required by the statute. The conclusion seems to be that even if the advice given is not the advice that the government believes should have been given, if that advice was reasonable, the defendant may be able to successfully prove a good-faith basis for its actions.

Lawyers Under Fire

In this and other areas, lawyers are coming under fire both for giving advice and for using the attorney-client privilege as a shield that impairs or even prevents, as the government sees it, the legitimate and appropriate prosecution of fraudulent activity. In the Columbia/HCA investigation, the DOJ has maintained that the attorney-client privilege was wrongfully used to shield fraudulent activity. In the Kansas City case discussed above, one of the "overt acts" alleged to have taken place in furtherance of the conspiracy to defraud was the lawyers’ instructing others at the hospital "to use attorneys to make as many communications privileged as possible." While these lawyers were acquitted by the court, an assistant U.S. attorney recently wrote an article suggesting that a lawyer who discovers a client has received an overpayment and advises the client to keep the money could be charged with aiding and abetting criminal conversion of government property and retention of stolen property under 18 U.S.C. §§641 and 2315. Even if the lawyer receives information concerning a past potential overpayment received by a client and treats that information as confidential and privileged, the lawyer could be viewed as concealing the overpayment and, accordingly, violating 42 U.S.C. §1320a-7b(a)(3).

In Minnesota, lawyers may be treated somewhat more gently than in other states. Approximately ten years ago, a lawyer for an alleged pornographer was himself indicted on the grounds that he had participated in a conspiracy to defraud the IRS by establishing various corporations which, as it turned out, did not file tax returns. The government alleged that these corporate entities were nothing but dummies established for the purpose of evading the federal tax liabilities of the pornography business. The lawyer was indicted as a co-conspirator but was acquitted by the jury.

In another Minnesota investigation (which never reached the courtroom), a corporate attorney was identified as the subject of a federal grand jury fraud investigation as a result of his giving an opinion that certain practices, while subject to potential challenge, were lawful. Because the lawyer qualified his opinion, the DOJ investigated the situation for several years to determine whether the lawyer was counseling the client to pursue a practice that was known to be unlawful. Ultimately the investigation was dropped.

Making Sense of Laws in Flux

This aggressive attitude fails to take into account the function of a lawyer in a heavily-regulated industry. The government often fails to take into account the uncertainties inherent in advising clients in any highly regulated industry where the law is often unclear and the clients often propose new and creative arrangements that may or may not fit cleanly into the framework presupposed by the lawmakers. The judge in the Kansas City case, U.S. District Court Judge John Lungstrum, held that there was not enough evidence for a reasonable jury to conclude that the attorneys intended to create sham agreements to further an illegal plan. He noted that, at the time the agreements were made, the law was in flux and the attorneys did their best to advise their client on what would be legal transactions, and that this advice changed over time as the state of the law evolved.

Judge Lungstrum stated that all evidence showed that the lawyers consistently advised their client that the arrangement was legal so long as the compensation reflected fair market value and the services were legitimate and actually provided, and the lawyers consistently updated their advice when new information became available to them. The lawyers were not retained to monitor the doctors or to determine the actual fair market value of the services that the client said would be rendered. Instead, lawyers have to rely on credible information given to them by their clients.

Lawyers Aren’t Mind Readers

A lawyer, whether advising on a health matter or a tax issue, cannot be expected to read a client’s mind. If the client gives incomplete or misleading answers, the lawyer should not be sanctioned for what the client does with the advice when he leaves the lawyer’s office. In addition, a lawyer must be able to communicate openly with the client and explain potential pitfalls and illegal arrangements without worrying that such statements will be taken out of context and used as evidence that the attorney was involved in helping to break the law, as occurred in the Kansas City case. The attorney-client privilege is, and long has been, protected as the best way to encourage honesty in the attorney-client relationship and to allow the attorney an opportunity to advise the client to act in accordance with the law. Even the most honest and conscientious of lawyers may want to know less about what the client really wants, if the lawyer fears that his files and notes will be open for the taking when the government attempts to implicate him in the wrongdoings of a client he represented years ago on a relatively simple employment issue.

Unfortunately for counsel, the dynamic of a criminal regulatory investigation is unsympathetic. From the client’s perspective, it is in the client’s interest to point to the attorney as providing the advice upon which the client relied. This establishes the client’s good faith and will entitle the defendant to a jury instruction on the defense of good faith reliance on the advice of counsel.7 On the other hand, viewed from the government’s perspective, the attorney will be viewed as standing in the way of a successful prosecution unless the government can establish that the attorney was not given all of the facts or was participating in the wrongdoing. Either way, counsel ends up in the thick of the investigation. Counsel need be mindful that what seems to be innocuous, routine advice could turn out to be, years later, a critical aspect of a fraud investigation.

"the lawyer should not be sanctioned for what the client does with the advice when he leaves the lawyer’s office"

"Being an advocate requires an exercise of independent judgment, and in some cases the conclusion will be that the client’s dream plan is not in the client’s best interest."

Documentation the Best Defense

So does the government’s zeal in its prosecution of health care fraud make any sense? Is it appropriate that the prosecution reaps a contingent financial reward for bringing more and more cases? Probably not. Most health care providers struggle to make sense of the myriad regulations that affect them on a daily basis and do want to comply with these laws, even when the laws don’t seem to make any sense on a practical level. Nevertheless, in the post-HIPAA world with qui tam relators in the wings, the hazards of practicing in a heavily regulated industry are increasing in number, as is the severity of the consequences for failing to avoid such pitfalls.

To benefit the client and protect him or herself, a lawyer must carefully consider not only what he or she does while getting a project to a client on a tight schedule, but also what the advice, file and notes will look like down the road. As always, a lawyer’s advice or opinion should be carefully researched and reasoned, but, especially in heavily regulated industries, it should also be well-documented, consistent and updated over time if necessary. The lawyer should take time to confirm in writing his or her understanding of the facts that form the basis of any legal conclusions and a summary of the specific advice given. This will not only serve to protect the client’s interests should the client need to assert the advice-of-counsel defense, it will also protect the lawyer should the government come knocking at the door.

A lawyer must also understand the client’s business and know how his or her advice will be implemented. Clients will not always know what information is relevant to a complete legal analysis and the lawyer should know when to probe a client for more information. Finally, when it is clear that the client’s plan is in violation of the law (whether the law makes sense or not), a lawyer needs to be able to tell the client that the idea will not fly, even if that is not what the client wants to hear. Being an advocate requires an exercise of independent judgment, and in some cases the conclusion will be that the client’s dream plan is not in the client’s long-term best interest.

This hard-headed approach could have saved our fictional counsel, Trudy Truehart, and other real, live attorneys hours of unnecessary legal battles and the professional embarrassment that comes from being embroiled in cases in which they are working against rather than on behalf of their own clients. While a lawyer will not be able to completely insulate himself or herself from the perils of practicing in a heavily regulated industry, the extra minutes spent completing the steps discussed above will help reduce a lawyer’s exposure to both criminal charges and civil malpractice liability for the advice given.

Notes

1 42 U.S.C. §1320a-7b(b). (Back to text)

2 42 U.S.C. §1320a-7b(b)(3); 42 C.F.R. §1001.952. (Back)

3 United States v. Greber, 760 F.2d 68 (3d Cir.), cert. denied, 476 U.S. 988 (1985). (Back)

4 United States ex rel. Zissler v. Regents of the U. of Minn., Civ. No. 3-95-168 (D. Minn. filed Oct. 14, 1998). (Back)

5 U.S. v. Jain, 93 F.3d 436 (8th Cir. 1996). (Back)

6 See, e.g., United States v. Cheek, 3 F.3d 1057, 1061 (7th Cir. 1993) regarding the advice-of-counsel defense. (Back)

7 See, e.g., United States v. Casperson, 773 F.2d 216 (8th Cir. 1985). (Back)

Classifieds Letters Display Ads Archives Article Index Jun '99 Issue Latest Issue MSBA Home Page	Between a Rock and a Hard Place By John W. Lundquist and Laurie Nesseth Could You Be Prosecuted for Giving Legal Advice to a Client?
	Upon request, Trudy Trueheart, Esq., puts together a consulting agreement for her best client, Hospital Corporation of the World ("HCW"). The agreement provides for Dr. Smith to assist HCW in establishing a geriatrics department. Dr. Smith happens to be the medical director for 90 percent of the nursing homes in town. He has a very substantial practice. HCW’s administrator tells Trudy that he hopes this agreement will cause Dr. Smith to begin referring patients to HCW. Trudy advises the administrator that such an arrangement might create a problem because of the Medicare Anti-Kickback Statute.1 The anti-kickback statute makes it a criminal offense to knowingly or willfully offer, pay, solicit or receive any remuneration to induce referrals of services or items that are reimbursable by a federal health care program. Trudy explains that many of the patients that the hospital wants Dr. Smith to refer will be Medicare patients, and the hospital is prohibited from paying for those referrals if they do not fit into one of the so called "safe harbors."2 The client responds, "I know all about that. This agreement is to prove that Dr. Smith is getting paid for his consulting efforts and not for patient referrals." Trudy tells the administrator that the statute has been interpreted to apply to situations where inducing referrals is just one of the purposes of the arrangement and that violation of the statute is a criminal offense.3 The client assures her that it is merely wishful thinking that HCW will get more patients from the doctor and that the consulting agreement is a bona fide arrangement to pay him for his services and know-how in setting up their geriatrics department. Trudy, not without some misgivings, prepares a consulting agreement that is executed by the parties. Two years later, Trudy learns that a whistleblower claims that HCW was paying Dr. Smith over $100,000 a year "for patient referrals." The Office of the Inspector General ("OIG") at the federal Department of Health and Human Services investigates, and the Department of Justice ("DOJ") threatens criminal charges against both Smith and HCW. HCW responds to the OIG, "How can we be guilty when our attorney reviewed the situation and prepared a consulting agreement that we were told was legitimate?" HCW waives privilege and invites the DOJ to verify this assertion with Trudy. Trudy explains what she did, only to have the government agents tell her that Dr. Smith never did any work and the agreement is, therefore, a sham. Despite her pleas, the DOJ begins to see Trudy as part of the problem, namely, part of the conspiracy to defraud the government. She is viewed as an accommodating lawyer who knowingly helped her client "paper" an illegal kickback arrangement. The DOJ threatens prosecution of not only HCW and Dr. Smith, but also Trudy. Attorneys Not Immune Sound like fiction? Not to a couple of attorneys in Kansas City, Missouri. The two attorneys drafted consulting agreements between Baptist Medical Center and brother osteopaths, Ronald Lahue and Robert Lahue, who provided services at 200 different nursing homes. The government, following a five-year investigation of the Lahues, indicted and charged them with seven bribery counts under the anti-kickback statute. In no time, the government added the two lawyers and several former hospital officials to the indictment. The lawyers were charged with crafting consulting agreements in furtherance of a scheme to solicit, receive, and pay over $2.2 million in bribes. The hospital had already settled with the government and agreed to waive its attorney-client privilege, creating much pre-trial dispute over the privilege and whether the lawyers had to produce their files. Following the prosecution’s presentation of its case, the trial judge issued a judgment of acquittal on March 9, 1999, for the two attorneys. The acquittal was based on the insufficiency of the evidence that the attorneys knew of, or intended to facilitate, an illegal arrangement. At the conclusion of the trial in April of 1999, the jury convicted the remaining defendants following more than four days of deliberations.	John W. Lundquist has 20 years of experience in white collar criminal investigations, trials, and appeals in state and federal courts. He heads the Medicare Fraud and Compliance Group at Fredrikson & Byron in Minneapolis and can be reached at jlundquist@ fredlaw.com. Laurie Nesseth practices in the Health Law Group at Fredrikson & Byron, dealing primarily with organizational, reimbursement, and regulatory matters for clients in the health care industry. She can be reached at lnesseth@ fredlaw.com.
*"Counsel need be mindful that what seems to be innocuous, routine advice could turn out to be, years later, a critical aspect of a fraud investigation."*	Between a Rock and a Hard Place As part of its pact with the American public to cut down on wasted financial resources, the government has stepped up its efforts to enforce the fraud and abuse laws against health care providers. Lawyers are with increasing frequency being placed in a position where the government can accuse them of being part of a conspiracy to defraud the government. Because the web of health care regulations is so complicated, providers frequently consult with counsel about the very issues that the government is scrutinizing. In their efforts to comply with often ambiguous rules, health care providers also recognize that if challenged by the government, they can avoid liability by showing that they sought the advice of counsel and made a good faith effort to comply with the law. The defense of "reliance on the advice of counsel" can prove that the defendant-provider did not have the intent necessary to violate the law. The lawyer and her advice, interposed between her client and the government, effectively interfere with the government’s ability to prove its case. Since the provider, however, cannot rely on the advice of a lawyer who knowingly participates in the wrongdoing, the government may choose to characterize the lawyer as a co-conspirator in order to successfully prosecute the provider. So, the government indicts the lawyer as a co-conspirator, thus defeating the advice-of-counsel defense, and it can then try to prove the intent element without the attorney-client privilege hampering its efforts. The recent qui tam lawsuit of United States ex rel. Zissler v. Regents of the University of Minnesota,4 illustrates why the government wants to avoid confronting the advice-of-counsel defense. In that case, the government sought the disgorgement of certain profits received by the University of Minnesota based on an alleged violation of the anti-kickback statute. The university relied on the advice-of-counsel defense to show the court that it lacked the required intent to violate the anti-kickback statute, which requires that the defendant act "knowingly and willfully." The 8th Circuit has interpreted the act to require proof that the defendant acted wrongly and knew he was doing so unjustifiably.5 The university showed that before taking any action, it sought in good faith the advice of a lawyer it considered competent and made a full disclosure of the material facts to the lawyer regarding a future arrangement. The school then acted in strict compliance with the advice that it received. The court found that the defendant had relied in good faith upon the reasonable advice of counsel.6 The court said that the evidence indicated that at all times the lawyer believed the arrangement did not violate the anti-kickback statute and that the advice given was reasonable. Therefore, Judge Richard Kyle granted summary judgment on Oct. 14, 1998, in favor of the university on the anti-kickback claims, finding the government unable to prove the intent required by the statute. The conclusion seems to be that even if the advice given is not the advice that the government believes should have been given, if that advice was reasonable, the defendant may be able to successfully prove a good-faith basis for its actions. Lawyers Under Fire In this and other areas, lawyers are coming under fire both for giving advice and for using the attorney-client privilege as a shield that impairs or even prevents, as the government sees it, the legitimate and appropriate prosecution of fraudulent activity. In the Columbia/HCA investigation, the DOJ has maintained that the attorney-client privilege was wrongfully used to shield fraudulent activity. In the Kansas City case discussed above, one of the "overt acts" alleged to have taken place in furtherance of the conspiracy to defraud was the lawyers’ instructing others at the hospital "to use attorneys to make as many communications privileged as possible." While these lawyers were acquitted by the court, an assistant U.S. attorney recently wrote an article suggesting that a lawyer who discovers a client has received an overpayment and advises the client to keep the money could be charged with aiding and abetting criminal conversion of government property and retention of stolen property under 18 U.S.C. §§641 and 2315. Even if the lawyer receives information concerning a past potential overpayment received by a client and treats that information as confidential and privileged, the lawyer could be viewed as concealing the overpayment and, accordingly, violating 42 U.S.C. §1320a-7b(a)(3). In Minnesota, lawyers may be treated somewhat more gently than in other states. Approximately ten years ago, a lawyer for an alleged pornographer was himself indicted on the grounds that he had participated in a conspiracy to defraud the IRS by establishing various corporations which, as it turned out, did not file tax returns. The government alleged that these corporate entities were nothing but dummies established for the purpose of evading the federal tax liabilities of the pornography business. The lawyer was indicted as a co-conspirator but was acquitted by the jury. In another Minnesota investigation (which never reached the courtroom), a corporate attorney was identified as the subject of a federal grand jury fraud investigation as a result of his giving an opinion that certain practices, while subject to potential challenge, were lawful. Because the lawyer qualified his opinion, the DOJ investigated the situation for several years to determine whether the lawyer was counseling the client to pursue a practice that was known to be unlawful. Ultimately the investigation was dropped.
	Making Sense of Laws in Flux This aggressive attitude fails to take into account the function of a lawyer in a heavily-regulated industry. The government often fails to take into account the uncertainties inherent in advising clients in any highly regulated industry where the law is often unclear and the clients often propose new and creative arrangements that may or may not fit cleanly into the framework presupposed by the lawmakers. The judge in the Kansas City case, U.S. District Court Judge John Lungstrum, held that there was not enough evidence for a reasonable jury to conclude that the attorneys intended to create sham agreements to further an illegal plan. He noted that, at the time the agreements were made, the law was in flux and the attorneys did their best to advise their client on what would be legal transactions, and that this advice changed over time as the state of the law evolved. Judge Lungstrum stated that all evidence showed that the lawyers consistently advised their client that the arrangement was legal so long as the compensation reflected fair market value and the services were legitimate and actually provided, and the lawyers consistently updated their advice when new information became available to them. The lawyers were not retained to monitor the doctors or to determine the actual fair market value of the services that the client said would be rendered. Instead, lawyers have to rely on credible information given to them by their clients. Lawyers Aren’t Mind Readers A lawyer, whether advising on a health matter or a tax issue, cannot be expected to read a client’s mind. If the client gives incomplete or misleading answers, the lawyer should not be sanctioned for what the client does with the advice when he leaves the lawyer’s office. In addition, a lawyer must be able to communicate openly with the client and explain potential pitfalls and illegal arrangements without worrying that such statements will be taken out of context and used as evidence that the attorney was involved in helping to break the law, as occurred in the Kansas City case. The attorney-client privilege is, and long has been, protected as the best way to encourage honesty in the attorney-client relationship and to allow the attorney an opportunity to advise the client to act in accordance with the law. Even the most honest and conscientious of lawyers may want to know less about what the client really wants, if the lawyer fears that his files and notes will be open for the taking when the government attempts to implicate him in the wrongdoings of a client he represented years ago on a relatively simple employment issue. Unfortunately for counsel, the dynamic of a criminal regulatory investigation is unsympathetic. From the client’s perspective, it is in the client’s interest to point to the attorney as providing the advice upon which the client relied. This establishes the client’s good faith and will entitle the defendant to a jury instruction on the defense of good faith reliance on the advice of counsel.7 On the other hand, viewed from the government’s perspective, the attorney will be viewed as standing in the way of a successful prosecution unless the government can establish that the attorney was not given all of the facts or was participating in the wrongdoing. Either way, counsel ends up in the thick of the investigation. Counsel need be mindful that what seems to be innocuous, routine advice could turn out to be, years later, a critical aspect of a fraud investigation.	*"the lawyer should not be sanctioned for what the client does with the advice when he leaves the lawyer’s office"*
*"Being an advocate requires an exercise of independent judgment, and in some cases the conclusion will be that the client’s dream plan is not in the client’s best interest."*	Documentation the Best Defense So does the government’s zeal in its prosecution of health care fraud make any sense? Is it appropriate that the prosecution reaps a contingent financial reward for bringing more and more cases? Probably not. Most health care providers struggle to make sense of the myriad regulations that affect them on a daily basis and do want to comply with these laws, even when the laws don’t seem to make any sense on a practical level. Nevertheless, in the post-HIPAA world with qui tam relators in the wings, the hazards of practicing in a heavily regulated industry are increasing in number, as is the severity of the consequences for failing to avoid such pitfalls. To benefit the client and protect him or herself, a lawyer must carefully consider not only what he or she does while getting a project to a client on a tight schedule, but also what the advice, file and notes will look like down the road. As always, a lawyer’s advice or opinion should be carefully researched and reasoned, but, especially in heavily regulated industries, it should also be well-documented, consistent and updated over time if necessary. The lawyer should take time to confirm in writing his or her understanding of the facts that form the basis of any legal conclusions and a summary of the specific advice given. This will not only serve to protect the client’s interests should the client need to assert the advice-of-counsel defense, it will also protect the lawyer should the government come knocking at the door. A lawyer must also understand the client’s business and know how his or her advice will be implemented. Clients will not always know what information is relevant to a complete legal analysis and the lawyer should know when to probe a client for more information. Finally, when it is clear that the client’s plan is in violation of the law (whether the law makes sense or not), a lawyer needs to be able to tell the client that the idea will not fly, even if that is not what the client wants to hear. Being an advocate requires an exercise of independent judgment, and in some cases the conclusion will be that the client’s dream plan is not in the client’s long-term best interest. This hard-headed approach could have saved our fictional counsel, Trudy Truehart, and other real, live attorneys hours of unnecessary legal battles and the professional embarrassment that comes from being embroiled in cases in which they are working against rather than on behalf of their own clients. While a lawyer will not be able to completely insulate himself or herself from the perils of practicing in a heavily regulated industry, the extra minutes spent completing the steps discussed above will help reduce a lawyer’s exposure to both criminal charges and civil malpractice liability for the advice given. Notes 1 42 U.S.C. §1320a-7b(b). (Back to text) 2 42 U.S.C. §1320a-7b(b)(3); 42 C.F.R. §1001.952. (Back) 3 United States v. Greber, 760 F.2d 68 (3d Cir.), cert. denied, 476 U.S. 988 (1985). (Back) 4 United States ex rel. Zissler v. Regents of the U. of Minn., Civ. No. 3-95-168 (D. Minn. filed Oct. 14, 1998). (Back) 5 U.S. v. Jain, 93 F.3d 436 (8th Cir. 1996). (Back) 6 See, e.g., United States v. Cheek, 3 F.3d 1057, 1061 (7th Cir. 1993) regarding the advice-of-counsel defense. (Back) 7 See, e.g., United States v. Casperson, 773 F.2d 216 (8th Cir. 1985). (Back)