HHS OIG Updates Health Care Fraud Self-Disclosure Protocol

For the first time since 2013, on November 8, 2021, the Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) updated its Health Care Fraud Self-Disclosure Protocol (“SDP”). Originally published in 1998, the SDP established a process for health care providers, suppliers, and other persons with potential exposure under the Civil Monetary Penalties Law (“CMPL”) to voluntarily identify, disclose, and resolve instances of potential fraud involving Federal health care programs (e.g., Medicare and Medicaid). By self-disclosing in good faith, a provider may avail itself of the OIG’s presumption against requiring Corporate Integrity Agreements (“CIAs”) and buttress arguments against potential exclusion from participation in Federal health care programs. In addition, the OIG has generally imposed a lower damages multiplier on self-disclosing parties than on parties who have not disclosed and later find themselves under investigation. At the very least, the SDP presents an opportunity for disclosing parties to avoid the costs and burdens associated with government-directed investigations and, to a degree, allows the disclosing party more control of the process.

Although the SDP presents an excellent opportunity to limit adverse consequences while resolving CMPL liability, it provides for the release of civil liability only. Where fraudulent conduct is of such a nature and pervasiveness that criminal intent can be inferred from the self-disclosure submission, nothing in the law prevents the OIG from making a criminal referral to the Department of Justice (DOJ), a tenet underscored in the November 8, 2021, update to the SDP. In addition, certain changes reflected in the updated SDP indicate that the OIG may be less willing to advocate to the DOJ on behalf of providers disclosing criminal conduct, as further explained below. Therefore, care must be taken to determine if a self-disclosure is in the best interests of the provider or supplier. That decision should only be made in conjunction with advice from experienced health care legal counsel.  

Pursuant to the November 8, 2021, update, the SDP (which, under the amendment, has been renamed the OIG Health Care Fraud Self-Disclosure Protocol) underwent several important changes, including the following:

• Providers under CIAs: Both the prior and current versions of the SDP allow providers under CIAs to utilize the SDP. The revised SDP, however, requires the disclosing party to “reference the fact that the disclosing party is subject to a CIA” and “send a copy of the disclosure to the disclosing party’s OIG monitor.” The updated SDP further requires that any disclosure that constitutes a reportable event (as defined by the CIA) be reported to the OIG.
• OIG’s Grant and Contractor Self-Disclosure Programs: Through language newly introduced in the revised SDP, the OIG has clarified that disclosures regarding government grants or contractors should be disclosed pursuant to the OIG’s Grant Self-Disclosure Program or Contractor Self-Disclosure Program, respectively, as distinct from the Health Care Fraud Self-Disclosure Program. The SDP is not to be considered an appropriate vehicle for disclosures related to recipients of grants or federal contractors.
• Submitting a Self-Disclosure: The OIG now requires that all self-disclosures be submitted through the OIG’s website: https://oig.hhs.gov/compliance/self-disclosure-info/self-disclosure-protocol/. Previously, the OIG allowed providers to make disclosures online or by mail.
• Calculation of Damages: Through language first appearing in the updated SDP, the OIG has made clear that all self-disclosures submitted through the SDP must include a calculation of damages for each separately impacted Federal health care program as well as a grand total of all damages.
• Department of Justice (“DOJ”) Involvement: As previously alluded to, in the updated SDP, the OIG made clarifying revisions to existing language which confirmed that it will coordinate with the DOJ to resolve civil and criminal matters, and that, in some instances, the DOJ may elect to participate in SDP settlement discussions, particularly where the False Claims Act (“FCA”) is implicated.
• Disclosing Criminal Conduct: The updated SDP contains several noteworthy changes which may bear on a provider’s decision to disclose criminal conduct. Namely, the updated SDP no longer includes certain language that was present in the 2013 SDP, including the following: “OIG encourages disclosing parties to disclose potential criminal conduct through the SDP process.” Additionally, the following language has disappeared in the updated SDP: “As in civil cases referred to DOJ, OIG will advocate that the disclosing parties receive a benefit from disclosure [of criminal conduct] under the SDP.” While the significance of these changes is yet to be seen, the changes may imply a decreased willingness by the OIG to shield providers who are disclosing certain criminal conduct. In any event, these changes must receive thoughtful consideration by providers in tandem with their healthcare counsel when determining whether to disclose criminal conduct through the SDP
• Minimum Settlement Amounts: The OIG has doubled the minimum amounts required to settle under the SDP to match new statutory penalty amounts. Consequently, the OIG now requires a minimum settlement of $100,000 to resolve violations of the Anti-Kickback Statute (42 U.S.C. § 1320a-7b) through the SDP, and $20,000 for all other matters. Under the previous version of the SDP, the minimum settlement amounts were $50,000 and $10,000, respectively.

Frier Levitt acknowledges that a provider’s decision to self-disclosure is a difficult and daunting task. Frier Levitt has extensive experience with the SDP, as well as other government self-disclosure protocols. We can provide valuable insight to providers that may suspect they are not in full compliance with the CMPL and guide you through the process from the initial determination of whether to self-disclose through settlement and release. If you would like more information or have any questions regarding the SDP, please contact Frier Levitt today.