On April 17th, 2013, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) released an update to its Provider Self-Disclosure Protocol (SDP).
The SDP was established in 1998 to incentivize healthcare providers and suppliers to voluntarily disclose potential fraud related to payments received under Federal health care programs. All healthcare entities who are subject to the OIG’s Civil Monetary Penalty (CMP) authorities are eligible to use the SDP.
The SDP dictates the procedures that healthcare providers must follow to identify potentially fraudulent conduct, determine damages, and report to the OIG. Successful use of the SDP leads to a settlement that reduces the healthcare entity’s liability under the OIG’s CMP provisions. To this end, the updated SDP states the OIG’s belief that providers who disclose fraud through the SDP deserve to pay less than they would be required to pay pursuant to an investigation initiated by the government. Notably, the updated SDP explicitly references the OIG’s general practice of imposing a multiplier of 1.5 times the single damages in CMP settlements of SDP cases; however, the OIG expressly reserves the right to determine whether a higher multiplier is warranted in each case. In addition, the OIG states that corporate integrity agreements are typically not required for providers utilizing the SDP in good faith.
The OIG reports that through the SDP, the OIG has resolved over 800 disclosures and returned more than $280 million to the U.S. government. The most commonly disclosed instances of healthcare fraud include submissions of false or inflated Medicare claims, receipt of federal healthcare payments by entities that employ persons excluded from Medicare, and payments to doctors meant to induce referrals. These instances commonly result from violations of the Anti-Kickback Statute. Arrangements that solely violate the Stark Law are not to be disclosed using the SDP and should instead be disclosed through CMS’ Self-Referral Disclosure Protocol. However, the SDP is available for hybrid offenses that violate both the Anti-Kickback Statute and Stark Law. Because many arrangements that implicate the Stark Law also implicate the Anti-Kickback Statute, it is important for providers who suspect possible fraud to carefully analyze these arrangements so that the correct course of action can be taken.
Further, the OIG recognizes self-disclosure as the result of an effective compliance plan. As compliance plans are increasingly required as a condition to participation in Federal healthcare programs, the implementation of a proper compliance plan is recommended for reducing government scrutiny. Overall, it is important that health care providers maintain an effective and well-developed compliance plan that includes processes for detecting, reporting and correcting potential misconduct.
If you need assistance in analyzing established or prospective business arrangements under the Anti-Kickback Statute, Stark Law or other federal or state fraud and abuse laws or regulations, or need help developing an effective compliance plan, please contact an experienced health care attorney at Wachler & Associates at (248) 544-0888.