OIG Announces Significant Change in Provider Self-Disclosure Protocol

In a March 24, 2009 Open Letter to Health Care Providers (Open Letter), the Office of the Inspector General of the U.S. Department of Health & Human Services (OIG) limited the scope of disclosures under the federal physician self-referral law (Stark) that it will accept under its Provider Self-Disclosure Protocol (SDP) to those that also involve colorable violations of the Anti-Kickback statute. The OIG’s scope limitation of these disclosures under SDP is prompted by the OIG’s effort to effectively manage its resources and desire to devote such resources to combating activities that pose a serious threat to the integrity of the health care system.

Prior to the release of the Open Letter, the OIG accepted and even encouraged providers to disclose Stark violations voluntarily regardless of whether the violation constituted a colorable violation of the Anti-Kickback statute. The OIG’s announcement that it will no longer accept disclosures of matters only involving liability under Stark in the absence of a colorable violation of the Anti-Kickback statute represents a significant departure from this past guidance. However, the OIG will continue to accept providers into the SDP when the disclosed conduct involves colorable violations of the Anti-Kickback statute with or without a colorable violation of Stark. Additionally, although the Open Letter did not specifically address the issue, the OIG will presumably continue to accept disclosures regarding other types of fraud that do not implicate either Stark or the Anti-Kickback statute.

The OIG also announced that it will require a minimum $50,000 settlement amount for self-disclosures involving Anti-Kickback statute violations accepted into the SDP. The $50,000-minimum settlement amount is designed to correlate to the OIG’s authority to impose a $50,000-civil monetary penalty for each kickback. The OIG will, however, continue to consider the facts and circumstances surrounding each disclosure to determine the appropriate settlement amount. Consistent with past practices, matters will generally be resolved near the lower end of the damages continuum (i.e., a multiplier of the value of the financial benefit conferred).

The OIG stressed that the change was made to streamline resources and is not representative of the U.S. government’s approach to Stark enforcement. Providers are now left with limited options and incentives for voluntary disclosure of potential Stark violations. Accordingly, it is prudent for providers to consult legal counsel to assist in any investigation and analysis under the new SDP to determine the appropriate course of action.

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