When to Use the OIG’s Self Disclosure Protocols

March 30, 2017

The HHS Office of Inspector General offers providers an opportunity to self-disclose certain violations in exchange for avoiding some of the more draconian penalties that may otherwise apply under applicable regulations.  Even though the OIG’s Provider Self-Disclosure Protocols (“SDP”) can be very compelling, the decision whether to utilize the OIG’s self-disclosure protocols is often very difficult.

To begin, the SDP is not available in all situations.  The SDP is limited to situations that potentially violate Federal criminal, civil, and administrative laws for which Civil Monetary Penalties are authorized.  The SDP requires the disclosing party to identify the specific legal provisions that were potentially violated and acknowledge the conduct potentially violated the identified laws.  The OIG does not use the SDP to provide opinions on whether a law was violated by the conduct described as the basis for the self-disclosure.

The SDP is not available to disclose and settle Stark Law violations that do not also potentially violate the Anti-Kickback Statute.  The Center for Medicare and Medicaid Services maintains a separate process that can be used for Stark Law only issues.  The OIG protocols are generally used where there is a potential violation of the Anti-kickback Statute, overpayments that become False Claims under the 60-day repayment rule, and other cases where CMP statutes are potentially implicated.

It is not always clear whether a violation of a CMP law has occurred.  Those involved in health care law are familiar with the level of ambiguity that often exists with respect to specific billing rules and other regulatory standards.  On the other hand, the potential liability for making the wrong call about whether an infraction has actually occurred can be quite significant.  This may force the provider to make use of the SDP as a risk mitigation device; even in cases where it is less than clear that a violation has occurred.

Additional penalties are often present when a provider “knows or should know” that a regulation has been violated or an overpayment exists.  A decision whether a provider “should” have known about an overpayment or other infraction is often made on the margins in the context of a self-disclosure decision.  For example, failing to repay an overpayment within 60 days of gaining actual or imputed knowledge can triple the amount of penalties and add up to $22,000 per claim to the price tag.  It might be easy to determine that a provider did not have actual knowledge as of a certain date.  It is much more difficult to determine when the provider should have had knowledge through the operation of an effective compliance program.  If the date of imputed knowledge was more than 60 days before the date of disclosure, there is potential liability for increased damages; even if actual knowledge was obtained within the 60-day repayment period.  The SDP might be considered to mitigate the potentially enhanced damages that would be potentially applicable under the False Claims Act in this situation.

Not every situation where there has been a billing error amounts to fraud or wrongdoing requiring use of the self-disclosure protocol.  Many overpayments that are identified through audit can be dealt with at the intermediary level.  Where investigation raises questions about whether incorrect bills are “knowingly” submitted, the self-disclosure process may provide some mitigation of potential loss.  Situations where the provider perhaps “should have known” raise more difficult issues of analysis.

When errors are discovered, the provider’s best bet is to be forthright and deal with the matter “head on.”  It is never a good alternative to pretend the situation does not exist or will never be discovered or brought to light.  These cases can come to light in strange and unexpected ways.  A reasonable investigation should be conducted that leads to a reasoned decision about the nature of the violation.  The SDP is available to mitigate potential damages when investigation reveals there is potential exposure to enhanced civil monetary penalty exposure.

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