Westhill Insurance Consulting Forum Health Care Self-Disclosure Pr..
Health Care Self-Disclosure Protocols10 Years Ago
In recent years the federal government has aggressively investigated and
prosecuted pharmaceutical companies and health care providers for possible
violations of anti-fraud, anti-kickback and other laws. These efforts have
resulted in massive fines and financial penalties.
In the face of these dangers, participants in the health care market need to
consider various ways to forestall or at least mitigate possibly crippling
sanctions. One important means is to investigate and voluntarily disclose
wrongdoing before the start of an investigation – of course, in the hope of
convincing the authorities to forego charges altogether or at least
substantially reduce the penalties that would otherwise be sought and imposed.
As logical as this approach seems, the results of self-reporting often fall
short of expectations. In “Dilemma of Self-Reporting: The FCPA Experience,”
Elkan Abramowitz and I describe how federal authorities seek to give companies
an incentive to self-report misconduct. But, with the possible exception
of the Department of Justice, Antitrust Division’s Leniency Program and the Internal Revenue
Service’s Offshore Voluntary Disclosure Program, the benefit of
self-reporting remains uncertain in many contexts.
The benefits of self-reporting are certainly similarly uncertain in the
health care context, in which the U.S. Department of Health and Human Services,
Office of Inspector General (“OIG”) and the Centers for Medicare and Medicaid
Services (“CMS”) have established protocols that offer incentives to health
care providers that self-report.
The Voluntary Self-Referral
Disclosure Protocol (“SRDP”) – established by CMS in 2010 in response to a
Congressional mandate in the Affordable Care Act – sets forth a process for
Medicare services providers and suppliers to self-disclose actual or potential
violations of the physician self-referral statute, commonly knows as the “Stark
Law.” That law prohibits physicians from making referrals for certain
health services payable by Medicare to an entity in which the physician or a
member of the physician’s family has a financial relationship. In exchange
for a potential reduction in overpayments and penalties, the SRDP
requires detailed disclosures, including an explanation of why the violation
occurred and a “complete legal analysis.” Yet, the SRDP makes no
guarantees. It lists factors that CMS may consider in reducing the
amounts owed by a disclosing party, but states: “CMS is not obligated to
reduce any amounts due and owing.” CMS also may refer disclosed matters
to the OIG or the Department of Justice for further investigation and possible prosecution.
The OIG Provider
Self-Disclosure Protocol (“SDP”), issued in April 2013, sets forth the
process for health care providers to voluntarily disclose self-discovered
evidence of potential fraud involving federal health care programs, which, according
to OIG “gives providers the opportunity to avoid the costs and disruptions
associated with a Government-directed investigation and civil or administrative
litigation.” The SDP offers several benefits, including a presumption
against requiring corporate integrity agreements because good-faith
self-disclosure is an indication of a robust and effective compliance process.
OIG generally imposes a lower damages multiplier on self-disclosing
parties, although it determines in individual cases whether a higher multiplier
may be warranted. And, participation suspends the obligation to return
Medicare or Medicaid overpayments.
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