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OIG Self-Disclosure Protocol Procedure and Scope

By: Jennifer Kirschenbaum

In an attempt to limit the costs and disruptions associated with Government investigations, civil or administrative litigation, in 1998, the Office of the Inspector General introduced the Provider Self-Disclosure Protocol (known as the “SDP”). The SDP lays out a procedure for practitioners to investigate, quantify and resolve potential irregularities or fraud matters with the Federal health care programs through voluntary disclosure to OIG. The SDP operates as a program, whereby practitioners may be accepted into the SDP to work out potential fraud situations in their practice with the OIG. Upon acceptance into SDP, the OIG is agreeing to make every effort to reach a resolution with the practitioner, concluding the disclosed matter.

The theory behind SDP is that by disclosing to the OIG the provider will resolve any irregularities in their practice through a regulated, timely and amicable process that may result in penalties, but will afford the practitioner a modicum of deference by the OIG in resolving any fraud and allowing the practitioner to move on with their practice. To ensure a timely process, the OIG requires that prior to self-disclosure, the provider must be in a position to complete the investigation and damages assessment within 3 months after acceptance into the SDP.

What types of situations is the OIG looking to be Self-Disclosed?

The OIG has recently refined the SDP in their May 24, 2009 Open Letter to providers, wherein the OIG states they will only allow into SDP colorable Anti-Kickback violations. An example of such a violation is a situation involving a financial benefit knowingly conferred by a hospital upon one or more physicians. Under such circumstances, the financial benefit conferred upon a physician may take various forms, for example, an arrangement under which the physician pays the hospital below fair market value for a good or service (e.g. lease of office space).

The aforementioned scenario is violative of the anti-kickback statute and is a situation that may result in a Government investigation. Such a situation is the exact type for which the SDP was developed. Where such a kick-back exists, the OIG will involve the Department of Justice early on in the investigatory process. Notably, OIG’s agreement to resolve an SDP matter is not binding upon the Department of Justice.

What are the benefits of Self-Disclosure?

SDP was initiated to facilitate the resolution of matters that in the provider’s reasonable assessment are potentially violative of Federal criminal, civil or administrative laws. SDP is not for activity that exclusively involves overpayments or errors from Federal health care programs that do not suggest that violations of law have occurred. In fact, the OIG recommends that such errors be brought directly to the attention of the entity that processes claims and issues payment on behalf of the Government agency responsible for the particular Federal health care program.

What is required of me if I do Self-Disclose?

Should you choose to Self-Disclose a potential fraud, you are required to uphold standards of good faith in your disclosure and provide OIG with all “reasonable information” surrounding those activities and to cooperate fully with any subsequent OIG investigation. In fact, if you fail to work in good faith with the OIG to resolve the disclosed matter, that lack of cooperation will be considered an aggravating factor when the OIG assesses the appropriate resolution of the matter. Similarly, the intentional submission of false information or the intentional omission of relevant information may be referred to the Department of Justice or other Federal agencies and could, in itself, result in criminal and/or civil sanctions, as well as exclusion from participation in the Federal health care programs.

Initial disclosures require the following:

1. The initial SDP, promulgated in 1998, requires that all disclosures contain the following Basic Information:

i. The name, address, provider identification number(s) and tax identification number(s) of the disclosing health care provider. If the provider is an entity that is owned, controlled or is otherwise part of a system or network, include a description or diagram describing the pertinent relationships and the names and addresses of any related entities, as well as any affected corporate divisions, departments or branches. Additionally, provide the name and address of the disclosing entity’s designated representative for purposes of the voluntary disclosure.

ii. Indicate whether the provider has knowledge that the matter is under current inquiry by a Government agency or contractor. If the provider has knowledge of a pending inquiry, identify any such Government entity or individual representatives involved. The provider must also disclose whether it is under investigation or other inquiry for any other matters relating to a Federal health care program and provide similar information relating to those other matters.

iii. A full description of the nature of the matter being disclosed, including the type of claim, transaction or other conduct giving rise to the matter, the names of entities and individuals believed to be implicated and an explanation of their roles in the matter, and the relevant periods involved.

iv. The type of health care provider implicated and any provider billing numbers associated with the matter disclosed. Include the Federal health care programs affected, including Government contractors such as carriers, intermediaries and other third party payers.

v. The reasons why the disclosing provider believes that a violation of Federal criminal, civil or administrative law may have occurred.

vi. A certification by the health care provider or, in the case of an entity, an authorized representative on behalf of the disclosing entity stating that, to the best of the individual’s knowledge, the submission contains truthful information and is based on a good faith effort to bring the matter to the Government’s attention for the purpose of resolving any potential liabilities to the Government.

2. In an open letter to providers dated April 15, 2008, the OIG added the following requirements to all initial submissions:

i. a complete description of the conduct being disclosed;

ii. a description of the provider’s internal investigation or a commitment regarding when it will be completed;

iii. an estimate of the damages to the Federal health care programs and the methodology used to calculate that figure or a commitment regarding then the provider will complete such estimate; and

iv. a statement of the laws potentially violated by the conduct.

What are the potential results of Self-Disclosure?

If the OIG determines through the evidence provided and through additional investigation that the evidence amounts to fraudulent activity, then the OIG has the authority, with the assistance of other agencies, such as the Department of Justice, to appropriately penalize the submitting practitioner. Once a Self-Disclosure is made, admissions by the practitioner to OIG are not limited to OIG’s ears. The OIG will report to other affected Government agencies, including the Department of Justice on the practitioner’s investigation and level of cooperation throughout the disclosure process.

The OIG is not obligated to resolve any matter in any particular manner. The OIG’s mission is to work with the provider to coordinate any investigatory steps or other activities necessary to reach an effective and prompt resolution. The OIG may conclude that the disclosed matter warrants a referral to Department of Justice for consideration under its civil and/or criminal authorities. Alternatively, the provider may request the participation of a representative from the Department of Justice or a local US Attorney’s Office in settlement discussions in order to resolve other potential liability, such as under the False Claims Act.

Does SDP work?

The OIG reported in an open letter to providers dated April 15, 2008 that: the SDP has been an important component of our shared commitment to promote integrity in the Federal health care programs. As of April 15, 2008, OIG has returned approximately $120 million to Medicare Trust Fund through the SDP and participating providers have avoided the costs and disruptions often associated with a Government-directed investigation.

Conclusion

The Anti-Kickback statute, which prohibits remuneration as an incentive for directing patient care is a complex statute with many nuances. Whether to self-disclose violations of the Anti-Kickback statute to the OIG is not an easy decision, and one that should not be taken lightly. In fact, in the early stages of identifying an Anti-Kickback violation, you should immediately contact a healthcare attorney to help you assess any potential liability.

For additional information on SDP or for a physician self-referral/Anti-Kickback compliance review please contact Jennifer Kirschenbaum of Kirschenbaum & Kirschenbaum, P.C. at (516) 747-6700 or at Jennifer@Kirschenbaumesq.com.