OIG Publishes Revised Provider Self-Disclosure Protocol
On April 17, 2013, the Department of Health and Human Services,
Office of Inspector General ("OIG") published on its
website an Updated Provider Self-Disclosure Protocol
("SDP"). According to the OIG, the revised protocol
supersedes and replaces the 1998 Federal Register Notice and
previous OIG guidance provided in three Open Letters to Health Care
Providers published in 2006, 2008, and 2009.
The revised SDP incorporates several noteworthy comments,
clarifications, and additional instructions including:
" A formally "instituted" presumption against
requiring integrity agreement obligations in consideration for a
release of the OIG's permissive exclusion authority.
" Acknowledgement that individuals or entities seeking
resolution through the SDP process "deserve" the benefit
of a lower multiplier on damages. Specifically, the OIG discussed
its practice of utilizing a minimum multiplier of 1.5 times single
damages, although retaining the right to use a higher multiplier
when deemed appropriate.
" Recognition that participation in the SDP may mitigate
potential exposure under the 60-day mandatory repayment provisions
governing overpayments.
" Acknowledgement that all health care providers, suppliers,
as well as other individuals or entities, including pharmaceutical
and medical device manufacturers, subject to the OIG's civil
monetary penalty ("CMP") authorities are eligible to use
the SDP.
" A streamlined process to limit the average time a case is
pending to less than 12 months, while reducing the time frame to
submit internal investigation findings to 90 days from the date of
the initial submission.
" Clarification that entities utilizing the SDP will be
expected to waive and not to plead statute of limitations or other
similar affirmative defenses to administrative actions filed by the
OIG.
" Clarification and further guidance regarding the
methodologies to be utilized when calculating damages under three
different disclosure categories.
Eligibility
The protocol identifies the types of health care entities eligible
for participation in the SDP and specifically what conduct is and
is not eligible for acceptance into the SDP. The OIG clarifies the
SDP is available not only to health care providers and suppliers,
but also other individuals or entities that are subject to the
OIG's CMP authorities, such as pharmaceutical and medical
device manufacturers. Because the SDP is intended to resolve
matters that, in the disclosing party's "reasonable
assessment," potentially violate federal criminal, civil, or
administrative laws for which CMPs are authorized, the OIG
expressly requires that the disclosing party's submission
itemize the particular law or laws potentially violated. The OIG
also instructs disclosing parties to acknowledge the identified
conduct constitutes a potential violation of law(s), including,
where applicable, the Anti-Kickback Statute ("AKS") and
Stark Law.
The OIG highlights an expectation that disclosing parties resolve
"all liability within the CMP law's six year statute of
limitations." Further, the OIG requires "as a condition
precedent" to acceptance into the SDP, the disclosing party to
agree to waive and not to plead statute of limitations, laches, or
any similar defenses to any administrative action filed by the OIG
relating to the disclosed conduct, unless such defenses existed on
the date of the SDP submission.
Finally, the OIG instructs disclosing parties that corrective
action should be taken "prior to disclosure" to ensure
the conduct has ended; however, if the disclosed conduct relates to
an improper kickback arrangement that is not terminated at the time
of submission, the disclosing party should ensure it is terminated
and corrective action implemented within 90 days of SDP
submission.
General Disclosure Requirements
Similar to the 1998 self-disclosure protocol, the revised
SDP requires the disclosing party to conduct an internal
investigation and report its findings to the OIG in its submission.
The narrative description requirements are comparable to those of
the previous protocol; however, the revised SDP also requires the
disclosing party provide the name of an individual authorized to
enter into a settlement agreement on behalf of the disclosing
party. Additionally, the SDP details disclosure requirements for
three specific categories: false billing, excluded persons, and the
AKS and Stark Law.
Disclosures Involving False Billing
A disclosure relating to the submission of improper claims must
include an estimate of the improper amount or "damages"
paid by the federal health care program. The OIG advises that the
estimation of damages should be based on either a review of all
claims affected by the disclosed matter or a statistically valid
random sample capable of extrapolation. The revised SDP provides
specific guidance on using a sample to estimate damages and
outlines certain minimum requirements including the review
objective, population of claims, sources of data, personnel
qualifications for individuals conducting the review, and
characteristics measured (e.g., criteria used to define a claim as
proper or improper).
For repayments based on sampling, the OIG reports an expectation
that a minimum of 100 items be reviewed and the disclosing parties
use the mean point estimate for damage calculations. However, the
OIG comments that smaller sample sizes (still closer to 100) may be
acceptable where there is a high level of homogeneity, whereas
larger sample sizes may be necessary in a highly diverse
population. Notably, the revised SDP no longer requires a minimum
precision or confidence level for the statistical review of
claims.
Disclosures Involving Excluded Persons
In this update, the OIG sets forth additional information required
when disclosing conduct involving excluded persons, including:
specific information identifying the excluded individual, details
regarding the excluded individual's employment or contractual
relationship, a description of the screening process, and any
corrective actions implemented to prevent future hiring of excluded
individuals. The OIG also now requires the disclosing party to
rescreen "all current employees and contractors" prior to
a submission so that all potentially excluded individuals are
identified in one disclosure.
When determining damages for an excluded individual who was a
direct provider of services, the OIG requires that the disclosure
include "total amounts claimed and paid by the federal health
care programs" for items and services "furnished,
ordered, or prescribed" by the excluded individual. In a
situation where the excluded individual provides services that are
not separately billed (e.g., nursing services), the OIG advises
that these calculations should include the party's "total
costs of employment or contracting during the exclusion."
Costs of employment are defined to include salary, benefits, and
any enumerated indirect costs. Once the total cost is determined,
the OIG instructs that this amount should be multiplied by the
provider's applicable federal health care program payor mix for
each federal program for the relevant time period.
Disclosures Involving Anti-Kickback Statute and Stark
Law
The revised SDP requires that submissions provide certain details
concerning the disclosed conduct including, but not limited to, the
participants' identities and their relationship to one another,
the payment arrangements, and the dates covering the time period of
the disclosed conduct. In its updated protocol, the OIG also
provides examples of the types of information found to be helpful
when assessing past submissions, such as fair market value analyses
and commercial reasonableness of suspect arrangements.
When disclosing conduct involving AKS and Stark Law violations,
the OIG requires an SDP submission to include the total
remuneration at issue in each arrangement even though the
disclosing party considers some portion of the remuneration as
lawful. Although a disclosing party may advance an argument as to a
lawful financial benefit conferred, the OIG acknowledges it
generally calculates settlement amounts based upon a
"multiplier of the remuneration conferred by the referral
recipient to the individual or entity making the referral."
The OIG views this approach as an incentive to encourage disclosure
through the SDP process.
Minimum Settlement Amounts
The OIG notes in the revised SDP that its "general
practice" is to require damages be calculated, at a minimum,
utilizing a multiplier of 1.5 times single damages, defined as the
amount paid by the federal health care programs. Consistent with
the March 2009 Open Letter, the OIG maintains a minimum settlement
threshold of $50,000 for kickback-related submissions to the SDP.
The revised SDP now also sets forth a minimum settlement amount of
$10,000 for "all other matters accepted into the SDP."
According to the OIG, these minimum amounts are based upon the
OIG's statutory authority to impose per-transaction and
per-claim penalties, respectively.
The OIG advises it will credit refunds made before resolution of
an SDP matter when the conduct is related. Of course, the agency
cautions that it is not bound by the amount, and even if the
methodology used to calculate the repayment is accepted, the
disclosing party "should expect to pay a multiplier on the
damages under the SDP."
Resolution/Coordination
The OIG reiterates it will continue to coordinate with the
Department of Justice ("DOJ") in resolving SDP matters.
Where the DOJ participates, the matter will be resolved at the
DOJ's direction consistent with its handling of False Claims
Act cases. Although the OIG maintains it will advocate that the
disclosing party receive the benefit of self-disclosure, it
acknowledges that the DOJ will dictate the approach when involved.
Any disclosures involving criminal conduct will be referred to the
DOJ.
Freedom of Information Act
Disclosing parties are reminded that SDP submissions may be
subject to disclosure under the Freedom of Information Act, and
parties should identify clearly any portion of the submission that
may be exempt from disclosure as trade secrets, or as commercial,
financial, privileged, or confidential information.