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The Office of Inspector General (OIG) Updates its Self-Disclosure Protocol

On April 17, 2013, the Office of Inspector General (OIG) of the United States Department of Health and Human Services released a new voluntary Self-Disclosure Protocol (SDP). The SDP provides a process for health care providers to identify, report and resolve potential conduct involving the federal health care programs, including Medicare and Medicaid, for which the OIG may impose a civil monetary penalty (CMP). The new SDP published by the OIG updates and replaces the prior self-disclosure protocol released by the OIG in 1998. This article discusses some of the key highlights and changes in the OIG's new SDP.

Applicability of the SDP

The SDP continues to apply only to situations involving potential violations of federal, civil or administrative law for which the OIG may impose a CMP. The SDP does not apply in situations involving simple overpayments. The purpose of the SDP is to resolve potential violations, rather than requesting an opinion as to whether a violation exists. Providers must acknowledge that the potential violation exists when submitting a disclosure under the SDP.

Consistent with the prior protocol and the OIG's Open Letter in 2009, the new SDP does not apply to disclosures that only involve a potential Stark violation. For Stark-only disclosures, the proper process for providers to self-disclose a potential violation remains the Centers for Medicare and Medicaid Services's (CMS) Self-Referral Disclosure Protocol. However, disclosure to the OIG under the new SDP will remain an option for disclosures that involve both a Stark violation and a potential violation of the Anti-Kickback Statute (AKS).

Content of the Self-Disclosure

The new SDP updates the basic requirements for all self-disclosures. The SDP also provides guidance on disclosures involving false billing. Additionally, unlike the prior self-disclosure protocol, the new SDP now directly addresses additional requirements for disclosures involving potential AKS violations and conduct involving excluded persons. Notably, the OIG also indicates that the disclosing party should identify any part of its submission that constitutes a trade secret or is exempt from disclosure under the Freedom of Information Act.

1. Disclosures Involving False Billing

Consistent with the prior protocol, the disclosing party must review the amount of improper payments in situations involving false billing and submit a report on its findings. Similar to the prior protocol, the estimate of damages may consist of reviewing all affected claims or a statistically valid random sample. However, if the disclosing party is able to determine the actual amount of damages, it must do so. The SDP no longer requires a minimum precision level for the sample size in reviewing claims. Instead, the sample size must now include a minimum of 100 items, although the OIG notes that a larger sample size is necessary where the population of claims contains a more diverse mixture of claim types.

2. Disclosures Involving the AKS

The new SDP addresses specific requirements for disclosures involving potential AKS violations, including those that may also involve a Stark violation (again, Stark-only disclosures are not permissible under the SDP). For AKS violations, the disclosure must include:

  • A concise statement of all details relevant to the conduct and a specific analysis of why each arrangement potentially violates the AKS and Stark, if applicable.

  • A description of the parties' identities and their relationship if it affects potential liability.

  • A description of the payment arrangements.

  • The dates during which the arrangement occurred.

  • An explanation of the context and features of the arrangement that raise potential concerns (e.g., how fair market value was determined and why it is now in question).

  • The corrective action taken to remedy the suspect arrangement.

  • An estimate of the amount paid by federal health care programs for the items or services associated with the potential AKS, or AKS and Stark, violations.

3. Disclosures Involving Excluded Persons

The SDP now provides guidance on the information required for disclosures involving the use of personnel who are excluded from the federal health care programs. Before submitting the disclosure, the disclosing party must screen all current employees and contractors to determine if any appear on the OIG's List of Excluded Individuals and Entities. If the party identifies any more excluded employees or contractors, it must address all in a single disclosure. The disclosure must include certain information such as a description of any background checks previously conducted by the party and a description of the party's screening process.

Notably, the SDP now identifies the process for calculating damages in connection with employing or contracting with the excluded individual, including situations in which the services provided by the individual are not billed separately to the federal health care programs. An example of services not separately billable would include services performed by a nurse that constitute part of a hospital's care payable under the hospital inpatient prospective payment system. When the services of the excluded individual were separately billable, the disclosure must include the total amount claimed and paid by the federal health care programs. When the items and services are not separately billable, the OIG will use the disclosing party's total costs (e.g., salary, benefits and other items of value) of employment or contracting with the excluded individual to estimate the value of the items or services furnished by the individual. The amount of damages would then be estimated based on such total costs multiplied by the disclosing party's revenue-based federal health care program mix during the applicable time period.

Potential Settlement Amount

Consistent with prior guidance, the OIG will continue to generally require a minimum multiplier of 1.5 times the damages, unless a higher multiplier is appropriate. The OIG will also continue to require a minimum $50,000 settlement amount for AKS disclosures. The OIG will require a minimum $10,000 settlement amount for non-AKS disclosures. The SDP now provides that if a disclosing party refunds an overpayment related to the same conduct prior to resolving the matter with the OIG, the OIG will credit the amount paid toward the settlement. However, the OIG could still dispute the method the party used to calculate the overpayment.

Copyright © 2020 Godfrey & Kahn S.C.National Law Review, Volume III, Number 129


About this Author

Thomas Shorter Healthcare Attorney Godfrey Kahn Law Firm

Thomas N. Shorter is a shareholder in the firm's Madison office and Chair of the Health Care Team. Tom represents hospitals, physicians' groups, research institutions and health care related organizations, as well as other businesses, providing counsel on health care, corporate, labor and employment and regulatory matters. For clients in the health care industry, Tom handles matters regarding Medicare compliance, Health Insurance Portability and Accountability Act (HIPAA), Emergency Medical Treatment and Labor Act (EMTALA), Physician Self-Referral (Stark), and Anti-Kickback. Additionally,...

Scott LeBlanc, Labor & Employment Attorney with Godfrey Kahn

Scott LeBlanc is an associate in the firm's Labor, Employment & Immigration and Health Care Practice Groups. Scott represents a wide range of employers, including health systems, hospitals, physician groups, and other health care related organizations, with respect to employment law and health care regulatory issues.

Scott assists employers of all types during the hiring process, through employment terminations, and at all points in-between. In addition to advising clients on day-to-day employment issues such as disability accommodation, family and medical leave administration, wage and hour compliance, and avoiding employment discrimination, Scott regularly provides guidance with regard to labor and employment issues arising out of business sales, mergers and acquisitions, and other forms of corporate restructuring. Scott’s practice includes advising on the recruitment and termination of executive-level employees and drafting and reviewing employment, severance, confidentiality, and non-competition agreements for such individuals.

Scott‘s practice routinely includes advising clients both inside and outside of the health care industry on medical record privacy issues, including issues related to compliance with the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act. Scott also works with the firm’s health care clients to ensure compliance with various federal and state laws, including the Medicare and Medicaid regulations, the Physician Self-Referral (Stark) Law, and the Anti-Kickback Statute.

Scott graduated cum laude from the Duke University School of Law, where he was an Executive Editor of the Duke Journal of Constitutional Law and Public Policy and a Staff Editor for the Duke Environmental Law and Policy Forum. He is a graduate of Northwestern University’s Medill School of Journalism. Prior to law school, Scott worked as a news producer and reporter for CBS and FOX affiliate television stations in Cedar Rapids and Des Moines, Iowa.