United States: Research Misconduct: A New Area Of Focus For Government Enforcement

On April 14, 2005, the University of Alabama at Birmingham and two related entities paid $3.39 million to settle allegations that they had violated the False Claims Act with respect to claims submitted in connection with the University’s health research activities. The government and the relators (plaintiffs) in two parallel qui tam lawsuits (one brought by a former research compliance officer for the school and the other by a physician who had previously served on the medical school faculty) alleged that the University had unlawfully billed Medicare for clinical health services provided to patients enrolled in clinical research trials that were also billed to the sponsor of the research trials. The complaints further alleged that in completing applications for federal health science research grants or in drawing down funds on such grounds, the school had overstated the percentage of work effort that the researchers were able to devote to the grants. The two whistleblowers collectively received $395,000 of the total recovery.¹

A month earlier, federal prosecutors reached a plea agreement with a former tenured professor of medicine at the University of Vermont College of Medicine who had been accused of using false and fabricated research data to obtain $2.9 million in research funding from the National Institutes of Health ("NIH") and the U.S. Department of Agriculture. The researcher pled guilty to one count of making a material false statement in connection with preparing, signing and submitting a $542,000 grant application to NIH. In addition, the researcher agreed to pay $180,000 to settle a civil complaint relating to numerous false grant applications filed while at the University of Vermont. He also agreed to be barred for life from seeking or receiving any federal funding, to submit letters of retraction and correction to various scientific journals that had published his false data; to be permanently excluded from participation in all federal health care programs and to pay $16,000 in attorneys’ fees to the former research assistant who reported him. United States v. Poehlman, D. Vt., No.2:05-CR-38-1 (3/17/05).²

Whether these incidents of research misconduct are isolated events or indicative of a potentially greater problem is unclear. What is certain is that effective June 16, 2005, it will be easier for the federal government to identify and pursue potential misconduct, with the increased possibility of subsequent suspension or debarment of affected individuals and institutions.

On May 17, 2005, the U.S. Department of Health and Human Services ("HHS") published its "Public Health Service Policies on Research Misconduct" (hereafter "Research Misconduct Rules" or "Rules") which become effective June 16, 2005. The new regulations establish a comprehensive mechanism for investigating and punishing research misconduct, with much of the responsibility for identifying, investigating and reporting allegations of such misconduct placed squarely on the institutions that receive federal grant funds. The confluence of recent enforcement action and the publication of the expansive research misconduct regulations suggest that research fraud will be a fertile area for government prosecutors in the time to come.

Briefly summarized, the Research Misconduct Rules, which remove 42 CFR §§ 50.101-50.105 and add a new part 93, require entities that receive research funds from the Public Health Service ("PHS") to: 

1. Develop and implement policies and procedures to investigate allegations of research misconduct; and 
2. (2) Report to the Office of Research Integrity ("ORI") the results of its investigation.

Based on the information it receives from the institution, HHS can undertake administrative action against the subject researcher or the institution or both. The regulations make clear that adverse administrative action is in addition to and not in lieu of other enforcement action that may be available. The regulations authorize ORI to cooperate with other enforcement agencies, including the HHS Office of Inspector General ("OIG") and the Department of Justice.

In the preamble to the regulations, HHS acknowledges that it has received criticism that the Research Misconduct Rules continue a trend toward legalization of scientific disputes by immediately casting parties into adversarial roles (70 Fed. Reg. 28370). The more realistic view may be that when public money is in play, the government can do what it believes it needs to do to protect the public fisc. In the case of biomedical and behavioral research and research involving federal funds, the Research Misconduct Rules establish that entities receiving PHS funds have an affirmative duty to ensure the integrity of government-funded research and have primary responsibility for promptly responding to and reporting allegations of research misconduct.

Under the new Part 93, any institution that applies for or receives PHS support for biomedical research, research training or activities related to that research or research training must comply with the Research Misconduct Rules. Colleges and universities, research and development centers, national user facilities, industrial laboratories or other research institutes, small research institutions and independent researchers that have obtained PHS funding or submitted applications or proposals for such funding are all "institutions" subject to the Research Misconduct Rules. Because of the reach of the PHS itself³ and the amount of biomedical and behavioral research it supports, a very substantial part of all governmentfunded medical research will be subject to the Rules.

New 42 CFR § 93.103 defines the term "research misconduct" broadly. For purposes of the regulations, research misconduct means fabrication, falsification or plagiarism in proposing, performing or reviewing research or in reporting research results. Fabrication is making up data or results and recording or reporting them. Falsification is manipulating research materials, equipment or processes or changing or omitting data or results such that the research is not accurately represented in the research record. Plagiarism is the appropriation of another person’s ideas, processes, results or words without giving appropriate credit. Research misconduct does not include honest error or differences of opinion.

A finding of research misconduct requires that there be a "significant departure" from accepted practices of the relevant research community. Importantly, it also requires that the misconduct be committed intentionally, knowingly or recklessly. 42 CFR § 93.104.

The destruction, absence of or failure to provide research records adequately documenting the questioned research will be deemed evidence of research misconduct, if it can be shown that the subject researcher (i) intentionally, knowingly or recklessly had research records and destroyed them; (ii) had the opportunity to maintain the records but did not do so; or (iii) maintained the records and failed to produce them in a timely manner. In each such instance, the conduct must reflect a significant departure from accepted practices of the relevant research community. 42 CFR § 93.106(b)(1).

The Rules establish certain evidentiary standards. For example, an allegation of misconduct must be proven by a preponderance of the evidence.4 42 CFR § 93.104. Depending upon whether the matter is at the institution investigation stage or the administrative action stage, the burden of proving research misconduct is on the institution or HHS, respectively. 42 CFR § 93.106(b)(1) and (2).

The Research Misconduct Rules will apply to research misconduct occurring within six years of the date HHS or the institution receives an allegation of misconduct. The six-year limitation does not apply where the alleged misconduct could possibly have a substantial adverse effect on the health or safety of the public. 42 CFR § 93.105(b)(2). Allegations received by HHS or an institution before June 16, 2005 are not subject to the Rules. 42 CFR § 93.105(b)(3).

Importantly, the Research Misconduct Rules are in addition to and do not supplant other existing law and regulation governing the handling of fiscal improprieties, the ethical treatment of human research subjects, criminal matters or other actions that can be taken under HHS debarment and suspension regulations. The Rules also do not prohibit or otherwise limit how institutions handle allegations of misconduct that do not fall within the regulatory definition of research misconduct or that do not involve PHS support. 42 CFR § 93.102(c), (d).

The regulations require institutions that receive PHS support for biomedical or behavior research or research training to assume the following obligations, many of which reflect elements of OIG Compliance Program Guidance for providers and manufacturers in other areas:

• Have written policies and procedures for inquiring into and investigating research misconduct that meet the requirements of Part 93.

• Respond to each allegation of research misconduct for which the institution is responsible in a thorough, competent and fair way. This includes taking precautions to ensure that those responsible for carrying out the research misconduct proceedings do not have an improper bias or conflict of interest.

• Foster a research environment that promotes the responsible conduct of research, discourages research misconduct and deals with allegations or evidence of misconduct in a prompt and timely way.

• Take all reasonable and practical steps to protect the positions and reputations of good faith complainants, witnesses and hearing committee members and protect them from retaliation.

• Maintain confidentiality as required by 42 CFR § 93.108 for all respondents, complainants and research subjects identifiable from the research records. Disclosure of the identity of respondents and complainants in research misconduct proceedings is limited to those who need to know, consistent with fair hearing proceedings.

• Take all reasonable and practical steps to ensure the cooperation of respondents and other institutional members with research misconduct proceedings.

• Cooperate with HHS during any research misconduct proceedings or compliance review.

• Assist in administering any HHS administrative actions imposed on institutional members.

• Have an active assurance of compliance.

An institution with PHS-supported research must provide PHS with an assurance of compliance with new Part 93. PHS funding for biomedical and behavioral research, research training or activities related to that research or research training will only be awarded to institutions that have approved assurances and required renewals on file with ORI.

The written assurance submitted on behalf of the institution by the responsible institutional official must assure: (1) that the institution has written policies and procedures for inquiring into and investigating research misconduct; and (2) that the institution complies with these policies and procedures as well as with the requirements of Part 93. 42 CFR § 93.301. Institutions will also be required to file annual reports with ORI regarding their compliance with its assurances.

In order to obtain an approved assurance, institutions must have written policies and procedures that address the inquiry into, and investigation and institutional resolution of, research misconduct. The policies and procedures must conform to the standards articulated in Part 93.

At a minimum, the policies and procedures must: provide for necessary confidentiality; secure a fair hearing for the affected individuals; provide for protection and custody of the evidentiary record; assure timely prosecution and completion; take reasonable measures to protect from actual or potential retaliation good faith complainants, witnesses and those participating in the review process; provide for interim institutional action if necessary to protect public health, federal funds and the integrity of the research process; and assure necessary notice, communication and cooperation with ORI. 42 CFR § 93.304.

To deal with the eventuality that an individual may be wrongly accused of research misconduct, the policies must incorporate reasonable measures to protect and restore the individual’s reputation – not a simple or easy task, to be sure. 42 CFR § 93.304(k). The policies must also provide for "full and continuing cooperation with ORI" during its oversight review and any subsequent administrative hearings.

If an institution is too small to handle research misconduct proceedings, it may file a "Small Organization Statement" with ORI in place of the formal institutional policies and procedures required by the regulations. By submitting a Small Organization Statement, the institution agrees to report all allegations of misconduct to ORI. ORI or another HHS office would then work with the institution to implement a process for handling allegations of misconduct.

The point of the required policies and procedures is to require institutions to articulate a mechanism for inquiry and investigation that will result in a meaningful assessment of whether research misconduct has occurred. Because the institution is required to notify ORI of an investigation and provide the results of the investigation to the agency, the policies also serve to create a road map upon which HHS or other government agencies may base later enforcement action.

The initial step in the research misconduct process is the inquiry. An institution must initiate an inquiry upon receipt of an allegation that is "sufficiently credible and specific so that potential evidence of research misconduct may be identified." 42 CFR § 93.307 (a). The institution must notify the subject of the inquiry that it is embarking on the inquiry. It must also promptly take all reasonable and practical steps to obtain custody of all research records, inventory the records and the evidence, and "sequester them in a secure manner."

The purpose of the inquiry is to conduct an initial review of the evidence to determine whether an investigation should be conducted. An investigation will be warranted if:

• There is a reasonable basis for concluding that the allegation falls within the definition of research misconduct;

• The research involves PHS-supported biomedical or behavioral research, research training, or activities related that that research or research training; and

• Preliminary information-gathering indicates that the allegation may have substance.

Upon completion of the inquiry, the institution must prepare a written report that includes the name and position of the subject (referred to in the regulations as the "respondent"), a description of the allegation of research misconduct, the nature of PHS support (including grant numbers if applicable), and the basis for recommending that the alleged actions warrant investigation. The subject of the report must be given an opportunity to review and comment on the inquiry report.

The institution must complete the inquiry within 60 calendar days of its initiation. The report and the attached comments of the respondent must be provided to ORI within 30 days of finding that an investigation is warranted.

If the institution determines that an investigation is not warranted, it must keep sufficiently detailed records of the inquiry to permit a later assessment by ORI of the reasons that the institution decided not to conduct the investigation. These records must be maintained for seven years.

An investigation must be initiated within 30 days after an inquiry determines that it is warranted. The institution must notify the respondent in writing of the allegations before the investigation begins.

The regulations charge the institution with ensuring a "fair" investigation – a broadly-stated requirement. Under the regulations, this includes the participation of persons with appropriate expertise who do not have financial or personal conflicts with those involved. The complainant, the respondent and any other person identified as having relevant information must be interviewed, and the results of every interview must be recorded and transcribed. The institution is required to pursue all leads.

Following completion of its investigation, the institution must prepare a written report, giving the respondent a copy of the draft report and an opportunity to respond to it. The final report must be provided to ORI and include:

• A description of the allegations;

• A description of the PHS support, including grant numbers, applications and contracts;

• A copy of the institutional policies and procedures under which the investigation was conducted;

• Identification and summary of the research records and evidence reviewed;

• For each separate allegation of research misconduct, a finding as to whether misconduct did or did not occur, and if so, (1) whether the research misconduct involved falsification, fabrication or plagiarism and whether it was knowing, intentional or in reckless disregard; (2) a summary of the facts and analysis that support the conclusion and consideration of the merits of any reasonable explanation by the respondent; (3) identification of specific PHS support; (4) identification of any publications that need correction or retraction; (5) identification of the persons responsible for the misconduct; and (6) a list of any current support or known applications or proposals for support that the respondent has pending with non-PHS federal agencies; and

• Inclusion and consideration of any comments made by the respondent.

The institution must maintain and provide to ORI upon request all relevant research records and the records of the proceeding. The institution must also provide ORI with information regarding the institution’s final action in the matter, indicating whether the institution accepts the findings of the investigation and describing any pending or completed administrative actions imposed by the institution. All aspects of the investigation, including preparation of and transmittal of the final report to ORI, and completion of internal institutional appeals procedures must be accomplished within 120 days. 42 CFR §§ 93.311; 93.314.

An institution’s failure to comply with its responsibilities for dealing with research misconduct under Part 93 may result in enforcement action against the institution. Penalties for institutional noncompliance may range from issuing a letter of reprimand to debarring or suspending the entity. Findings of institutional noncompliance and HHS action in response to such compliance may be made public. 42 CFR § 93.413.

It is important to note that, unlike peer review proceedings in the usual medical context, those involved in the misconduct proceedings as fact finders, experts, witnesses and participants do not have immunity from personal liability for their actions. In the preamble to the regulations, HHS observes that there is no statutory basis for such immunity, and it encourages interested parties to submit evidence as to whether there is a need for federal legislation to provide such protection. 70 Fed. Reg. 28380.

ORI has broad authority to review allegations of research misconduct, before, during or after an institution’s response to the matter. 42 CFR § 93.400. It may conduct its own assessment of research misconduct allegations (42 CFR § 93.402) or review institutional proceedings (42 CFR § 93.403).

After completing its review, ORI may close a case without finding research misconduct, or obtain HHS approval for the imposition of administrative action or settlement. 42 CFR § 93.404. If ORI determines that a criminal or civil fraud violation may have occurred, it must refer the matter promptly to the Department of Justice, the OIG, or other appropriate enforcement agency. When such referral occurs, ORI may provide expertise and assistance to the investigative agency. ORI may also notify PHS funding components so that these agencies can make "appropriate interim responses" to conserve public funds. 42 CFR §93.401(b).

ORI can recommend to HHS a wide variety of administrative actions and/or sanctions, including:

• Clarification, correction or retraction of the research record;

• Letters of reprimand;

• Imposition of special certification or assurance requirements to ensure compliance with applicable regulations or PHS grant or contract terms;

• Suspension or termination of a PHS grant, contract or cooperative agreement, or restrictions on specific activities or expenditures under an active PHS grant, contract or cooperative agreement;

• Special review of all requests for PHS funding;

• Imposition of supervision requirements;

• Certification of attribution or authenticity in all requests for support from PHS;

• No participation in any advisory capacity to PHS;

• Adverse personnel action if the respondent is a federal employee;

• Suspension or debarment; and

• Recovery of PHS funds.

In determining the administrative action to be imposed, HHS may consider aggravating or mitigating factors. These include whether the conduct was knowing, intentional and reckless, whether the misconduct constituted an isolated event or reflected a pattern of conduct, whether the misconduct had a significant impact, whether the respondent accepted responsibility, and other relevant factors. 42 CFR § 93.408.

ORI must give a respondent written notice of its finding of research misconduct and intent to impose administrative action in the form of a charge letter. In the case of a recommendation for debarment or suspension, the HHS debarring official will issue a notice of proposed debarment or suspension as part of the charge letter. Unless the respondent contests the charge letter within 30 days from receipt, the ORI finding of research misconduct and HHS administrative action becomes final. In the event of a debarment or suspension action, the debarring official’s decision is the final HHS action. 42 CFR § 93.406.

Individuals and entities may contest ORI findings of research misconduct and HHS administrative action by requesting an administrative hearing before an administrative law judge ("ALJ") affiliated with the HHS Departmental Appeals Board. The administrative hearing procedures are quite detailed, however, and failure to observe technical and substantive filing requirements may result in dismissal of the matter.

For example, the regulations require that there be a genuine dispute over facts material to the findings of research misconduct or proposed administrative action before a hearing will be permitted. A hearing request must specifically deny each finding of research misconduct in the charge letter, each basis for the finding and each HHS administrative action in the charge letter, or it will be considered an admission by the respondent. 42 CFR § 93.503(b). If the hearing request does not specifically dispute the HHS administrative action, it will be considered accepted by the respondent. The ALJ may only grant a hearing request if the ALJ determines that there is a genuine dispute over facts material to the findings of research misconduct or proposed administrative action. A general denial or assertion of error will not be sufficient to establish a genuine dispute 42 CFR § 93.503(b).

The regulations permit the ALJ to retain one or more persons with scientific or technical expertise to assist the ALJ in evaluating scientific or technical issues related to the misconduct. The expert’s advice to the ALJ will be provided in the form of a written report that will be served on the parties who may respond to the report. Both the report and the response will be made part of the record.

The ALJ hearing is intended to provide an independent de novo review of the ORI findings of research misconduct and the proposed HHS administrative action. The burden of proof is on ORI which must establish by a preponderance of the evidence that research misconduct occurred. ORI also bears the burden of proving that the proposed HHS administrative action is reasonable under the circumstances of the case.

In its impact statement, HHS asserts that only 86 inquiries and 46 investigations were conducted in 2001 by the 4000 institutions that currently have research misconduct assurances. 70 Fed. Reg. 28381. It estimates that 3500 institutions already have policies and procedures in place that address research misconduct, although they spend only an average one half hour each year updating them. 70 Fed. Reg. 28383. Nevertheless, the level of detail in the regulations leaves little doubt that the 4000 institutions will need more than a half hour to assure that their policies meet the new standards.

Because the new regulatory scheme puts primary responsibility for responding to allegations of research and misconduct directly on the institutions themselves, there is also little doubt that the number of inquiries and investigations will increase. Moreover, as complainants realize that -- dedication to research integrity notwithstanding -- they may benefit financially from federal whistleblower statutes, including the False Claims Act, that coexist with the Research Misconduct Rules, the level of investigative activity is likely to skyrocket.

Institutions receiving PHS research funds should begin as soon as possible, if they have not done so already, evaluating whether existing policies and procedures conform to the new requirements. If need be, new policies should be drafted, and training on their terms should be conducted. In a legal environment where compliance officers can report their employers and benefit handsomely from it, greed and ethics can conflict. Adherence to the Rules will protect not only PHS funds but also the researchers and institutions that receive them.

This article is presented for informational purposes only and is not intended to constitute legal advice.