Reporting Health Care Fraud: How and When to Self-Disclose

All members of the health care industry have a legal and ethical duty to deal with the Federal health care programs (e.g., Medicare, Medicaid, and Tricare) with integrity. In keeping with this duty, practitioners are expected to employ measures to detect and prevent fraudulent and abusive activities. If a practitioner (whether in the process of submitting a claim or causing a claim to be submitted) becomes aware of potential fraud involving claims submitted to Federal health care programs, he or she may have obligations and/or options to voluntarily disclose that information to the appropriate authorities. The proper avenue for self-disclosure depends on the underlying activity.

Once potential fraud has been discovered and self-disclosure is warranted, the disclosing party must analyze the underlying activity under the Anti-Kickback Statute (“AKS”) and the Stark physician self-referral law (“Stark”) to determine which disclosure protocol is available to it.

This analysis should be done with the help of competent health care counsel. Mislabeling the fraud will likely lead to denial of acceptance into the relevant self-disclosure protocol.

Once the appropriate disclosure protocol has been selected, counsel will guide the disclosing provider through the disclosure process. The OIG and CMS each have specific processes that must be carefully followed to ensure acceptance into the respective protocol and resolution of the disclosure. In both instances, the disclosing provider will need to provide in its submission certain information, including but not limited to, identifying information, a description of the details relevant to the conduct giving rise to the disclosure, a statement of the laws that are potentially violated by the disclosed conduct, a statement of the corrective actions taken to address the noncompliant behavior, and an estimate of the damages to the relevant Federal health care program(s).

Potential Benefits of Voluntarily Self-Disclosing Health Care Fraud

There can be significant benefits to self-disclosing potential health care fraud including paying lower damages than would normally be required in a government-initiated investigation and mitigating potential exposure. By self-disclosing in good faith, a provider may also avail itself of the presumption against requiring Corporate Integrity Agreements and buttress arguments against potential exclusion from participation in Federal health care programs. Additionally, the obligation to report and return overpayments to the Centers for Medicare & Medicaid Services (“CMS”) within 60 days may be suspended if a self-disclosure is timely and appropriately filed. At the very least, self-disclosing 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.

Notwithstanding the foregoing, self-disclosure generally 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 or the CMS from making a criminal referral to the Department of Justice (DOJ). 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.  

How Frier Levitt Can Help

Frier Levitt has extensive experience with both the SDP and the SDRP. We can provide valuable insight to members of the health care industry that may suspect they are not in full compliance with the AKS, Stark, or other health care fraud laws and regulations. If you would like more information or have any questions regarding the SDP or SRDP, please contact Frier Levitt today.