In a pair of recent memoranda from the Executive Office for United States Attorneys (“EOUSA”) issued on March 31, 2020, and April 13, 2020, the United States Department of Justice (“DOJ”) has effectively halted enforcement actions and the collection of civil penalties. Included in this temporary suspension is the collection of civil penalties incurred in suits under the False Claims Act (“FCA”). The FCA is the federal government’s primary tool for recourse against false or fraudulent claims made against government programs.
In the FCA context, this suspension has implications for key government programs in light of the current coronavirus outbreak, including Medicare and Medicaid. Pursuant to this new guidance, U.S. Attorney’s Offices will temporarily suspend enforcement activity on civil debt levied against health care providers who billed the government insurance programs for goods and services that were not rendered, were substandard, and/or medically unnecessary. The temporary suspension will also affect enforcement activity on civil debt levied against other government contractors.
This moratorium on the collection of civil debt is effective until at least May 31, 2020, and may potentially be extended either by legislation or administrative action. The temporary suspension applies broadly to collection activity on civil debts, including debts in active repayment. The memoranda direct the U.S. Attorney’s Offices not to pursue new enforcement actions, and payments scheduled under active payment plans will not be considered in default if left unpaid. However, interest may accrue depending on the type of civil debt, and affected parties may continue to make voluntary payments on interest or their full penalties. The April 13, 2020, memorandum from the EOUSA clarifies that the collection of debts pursuant to voluntary settlement agreements may continue, since they are appropriately considered “voluntary payments.”
Although affirmative civil debt collection and enforcement actions are temporarily suspended, U.S. Attorneys may continue to investigate claims, file complaints, litigate cases to judgment, settle any affirmative civil enforcement matter, and pursue preparatory collection actions and other measures to protect the government’s interests. This temporary suspension does not apply to ongoing litigation, appeals, or cases not subject to a final, non-appealable judgment, and the government’s remedies for breach of any settlement agreement remain intact at this time.
In addition, this temporary suspension does not extend to the collection of criminal penalties, including fines and restitution that are the result of a criminal conviction or plea and entered pursuant to a court order or judgment under a criminal statute.
Entities and individuals currently making payments to the federal government who wish to take advantage of the temporary suspension should ensure they fall within the parameters of the memoranda. Before delaying payments, entities and individuals should seek legal guidance from their existing counsel or retain counsel to discuss their potential options, including possible outreach to the relevant authorities.
Please contact the authors for additional guidance on how these issuances and other COVID-19 considerations will affect federal enforcement actions and the related rules. McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial coronavirus-related business and legal issues.