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By Ken Briggs, originally published by American Health Lawyers Association, Fraud and Abuse Practice Group (April 18, 2013)

On April 17, the U.S. Department of Health & Human Services, Office of Inspector General (OIG) issued an update of the Provider Self-Disclosure Protocol (SDP). This update is in response to OIG’s solicitation of comments issued in June 2012. It is intended to supersede and replace the SDP OIG originally issued in 1998, as well as the Open Letters OIG issued to provide additional guidance on the SDP to the healthcare community.

All individuals or entities subject to OIG’s civil monetary penalty (CMP) authority are eligible to use the SDP to resolve liability arising from the potential violation of federal criminal, civil, or administrative laws for which CMPs are authorized. Conduct for which CMPs are not authorized, e.g., simple overpayments or errors, are not eligible for resolution through the SDP. Importantly, matters involving only potential liability under the Physician Self-Referral (Stark) Law still are not eligible for resolution under the SDP, and should be disclosed to the Centers for Medicare & Medicaid Services under its Self-Referral Disclosure Protocol.

The update clarified the necessary elements of a disclosure:

  • The identifying information of the disclosing party, including a description of the organization of the disclosing party;
  • A concise statement of all details relevant to the conduct disclosed;
  • A statement of the federal laws that are potentially violated by the disclosed conduct;
  • The federal healthcare programs affected by the disclosed conduct;
  • An estimate of the damages or a certification that the estimate will be completed and submitted to OIG within 90 days of the date of submission;
  • A description of the disclosing party’s corrective action upon discovery of the conduct;
  • A statement of whether the disclosing party has knowledge that the matter is under current inquiry by a government agency or contractor;
  • The name of an individual authorized to enter into a settlement agreement on behalf of the disclosing party; and
  • A certification statement.

For disclosures involving false billing, OIG stated that the disclosing party must conduct a review to estimate the improper amount paid by the federal healthcare programs. The damages estimate may be derived from the actual claims submitted or from a sample. Where the disclosing party uses a sample, the sample size must include at least 100 items. The damages report must describe the:

  • Review objective;
  • Population sources of data;
  • Qualifications of personnel that conducted the review; and
  • Characteristics measured.

Additional elements are required where the damage estimate was derived from a sample.

For disclosures involving excluded persons, OIG clarified that the disclosing party should describe:

  • The identity, job of the excluded individual, and dates of employment;
  • The disclosing party’s screening and background check procedures;
  • How the conduct was discovered; and
  • Any corrective action taken.

Before making the disclosure, the disclosing party must screen all current employees and contractors against OIG’s List of Excluded Individuals and Entities. The SDP provides guidance on how to estimate damages related to excluded individuals.

For disclosures relating to potential liability under both the Anti-Kickback Statute and the Stark Law, OIG reiterated the requirement that the disclosing party clearly acknowledges that the disclosed arrangements constitute potential violations of the laws, as applicable. OIG requests that the disclosing party describe the total amount of remuneration involved without regard to whether a lawful purpose existed for the arrangement. However, the disclosing party may explain why it believes OIG should not consider a portion of the remuneration in determining the settlement amount.

OIG clarified its general practice for calculating settlement amounts, stating it typically requires a minimum multiplier of 1.5 times the single damages, but will determine whether a higher multiplier is appropriate depending on the facts. OIG reiterated that a minimum $50,000 settlement is required for kickback-related disclosures. For other matters accepted into the SDP, OIG requires a minimum $10,000 settlement. In the “unusual instance” where OIG does not find potential liability, it will refer the matter to the appropriate payor for resolution. If a disclosing party is unable to pay the anticipated settlement amount, it should promptly notify OIG so that OIG can review the disclosing party’s financial information to determine an appropriate resolution.