What Regulators Expect from Internal Investigations in Healthcare and Life Sciences

Organizations conducting internal investigations are often focused on a straightforward objective. They want to understand what happened and determine how to respond.

Regulators, however, approach the same situation differently. Their focus is not limited to the outcome. They evaluate how the investigation was conducted, how conclusions were reached, and whether the process reflects a credible and disciplined effort to identify the truth.

That distinction is important. An investigation that reaches a reasonable conclusion may still carry limited weight if the process behind it appears inconsistent, incomplete, or influenced by internal dynamics.

How Investigations Are Evaluated

In the healthcare and life sciences context, investigations are rarely reviewed in isolation. They are often examined alongside other information, including billing data, internal communications, and witness testimony.

Against that backdrop, regulators assess whether the investigation reflects a structured and reliable process. That assessment typically turns on a few consistent considerations:

The first is scope. Investigations that are narrowly defined without a clear rationale can raise questions about whether relevant issues were overlooked. Conversely, investigations that expand without discipline can appear unfocused or reactive.

The second is consistency. Witness interviews, document review, and analysis should follow a coherent approach. Inconsistent treatment of similar issues or individuals can undermine the credibility of the findings.

The third is documentation. Regulators expect to see how the investigation progressed, what information was considered, and how conclusions were reached. The absence of clear documentation makes it difficult to evaluate the reliability of the work.

What a Defensible Investigation Looks Like

A defensible investigation is not defined by its conclusion. It is defined by the process used to reach that conclusion.

That process typically begins with a defined scope that reflects the nature of the concern and the potential level of risk. The scope may evolve as additional information becomes available, but changes should be deliberate and documented.

Evidence development follows. This includes identifying relevant data sources, preserving information, and conducting interviews in a structured and consistent manner. The goal is to develop a factual record that can support analysis.

Analysis should be grounded in applicable regulatory frameworks. In healthcare and life sciences, that often includes consideration of statutes such as the False Claims Act, the Anti-Kickback Statute, and the Stark Law, along with applicable regulatory guidance.

The final step is documentation. Findings should be clearly articulated, supported by the underlying evidence, and presented in a way that allows others to understand how the conclusions were reached.

Where Investigations Fall Short

Issues tend to arise when investigations are approached informally or without a clear structure.

In some cases, organizations move quickly to gather information without defining the scope of the inquiry. In others, interviews are conducted without a consistent framework, or documentation is limited to conclusions rather than the process that led to them.

Another common issue is the absence of a clear privilege structure. Investigations that are not conducted under the direction of counsel may risk exposing sensitive information to discovery in later proceedings.

These gaps do not necessarily reflect a lack of effort. More often, they reflect a lack of structure at the outset. Once an investigation is underway, it can be difficult to correct those issues.

The Role of Independence

Independence is often a factor in how investigations are evaluated.

When investigations involve sensitive issues, senior leadership, or potential regulatory exposure, regulators may look closely at who conducted the work and how it was structured. Internal investigations can be appropriate in many situations, but their findings may be viewed differently where questions of independence arise.

An investigation conducted by outside counsel can address those concerns by providing separation from internal reporting lines and allowing the process to be structured in a way that aligns with regulatory expectations.

Independence also affects how findings are communicated and how they are received by external audiences, including regulators, investors, and counterparties.

Why Structure Matters Early

The structure of an investigation is often set in its earliest stages.

Decisions about scope, documentation, and privilege are typically made at the outset. Once evidence is collected or interviews are conducted without that structure in place, it may be difficult to revisit those decisions.

Timing also affects the quality of the investigation. Delays can affect the availability of evidence and the reliability of witness recollections. Early, deliberate action allows organizations to preserve information and maintain control over the process.

Key Takeaways

• Regulators evaluate how an investigation was conducted, not only what it concluded

• A defensible investigation is defined by structure, consistency, and documentation

• Scope, evidence development, and analysis should be deliberate and aligned with regulatory frameworks

• Informal or unstructured approaches can undermine otherwise reasonable conclusions

• Early decisions about structure and privilege have lasting consequences

Internal investigations play an important role in identifying and addressing compliance concerns. In many cases, they are the appropriate starting point. What distinguishes effective investigations is not only the outcome, but the process used to reach it. Organizations that approach investigations with structure and discipline are better positioned to respond to issues and to withstand scrutiny if their process is later examined.