DOJ’s Newly Implemented Voluntary Self-Disclosure Policy Incentivizes Corporate Responsibility and a Culture of Compliance

On February 22, 2023, the U.S. Department of Justice (“DOJ”) issued a corporate Voluntary Self-Disclosure policy (the “Policy”) that applies to all United States Attorney’s Offices (“USAOs”), effective immediately. The articulated goal of the Policy is: “to standardize how [voluntary self-disclosures] are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, to expeditiously and voluntarily disclose and remediate misconduct, and to cooperate fully with the government in corporate criminal investigations.” Provided that certain requirements are satisfied, the Policy enables companies to obtain more favorable terms than if the government discovered the misconduct through other means, e.g. audit/investigation or whistleblower report.

The applicable USAO is vested with the discretion to evaluate each self-disclosure on a case-by-case basis to determine if it is truly voluntary, timely, and factually substantive. For a company that satisfies the criteria, the USAO may not require a guilty plea and may seek a lower criminal penalty or decline to impose a criminal penalty at all. When determining such things as whether to require a guilty plea and whether to appoint an independent compliance monitor, the government will consider the presence or absence of certain aggravating factors. Aggravating factors that may warrant the USAO seeking a guilty plea include, but are not limited to, misconduct that:

  1. poses a grave threat to national security, public health, or the environment;
  2. is deeply pervasive throughout the company; or
  3. involved current executive management of the company.

Whether or not a criminal penalty is imposed, remediation would include, but would not necessarily be limited to, paying all disgorgement, forfeiture, and restitution resulting from the misconduct. Companies are well-advised to conduct regular internal audits aimed at detecting and addressing any misconduct by its employees or agents before it comes to the attention of the government through other means. Preservation of the record and prompt action are essential, as misconduct already known to the government may not qualify for the benefits of the voluntary self-disclosure program.

How Frier Levitt Can Help

Companies that become aware of possible misconduct should immediately confer with experienced healthcare counsel to determine if the situation is appropriate for a voluntary self-disclosure. In certain situations, the voluntary self-disclosure process may provide an avenue to avoid the harshest penalties that may otherwise apply to the applicable conduct. Frier Levitt’s team of attorneys has successfully navigated clients’ resolution of self-disclosed matters with the Department of Health and Human Services’ Office of Inspector General and the Centers for Medicare and Medicaid Services. To learn more about the DOJ’s Voluntary Self-Disclosure Policy and/or other types of self-disclosure, contact Frier Levitt to speak with an attorney.