On April 17, 2013, the U.S. Department of Health and Human Services Office of Inspector General (OIG) published a revised Provider Self-Disclosure Protocol (SDP) that clarifies the process for healthcare providers, suppliers or other individuals or entities subject to the OIG's civil monetary penalty authority to voluntarily identify, disclose and resolve instances of potential fraud involving federal healthcare programs. The SDP provides additional transparency with regard to calculating penalty multipliers, reporting conduct involving excluded individuals and disclosing potential violations of the anti-kickback statute. The SDP supersedes and replaces prior guidance, including the original 1998 issuance and the three subsequent Open Letters to Health Care Providers. The OIG has resolved more than 800 disclosures since 1998, resulting in recoveries exceeding $280 million, according to the SDP.

The OIG encourages providers to utilize the SDP process, pointing to the following benefits of disclosure:

• The presumption for releasing the disclosing parties from permissive exclusion without requiring any integrity measures;
• The potential for a lower penalty multiplier -- while identified on a case-by-case basis, the OIG recognizes that common practice is to require a minimum multiplier of 1.5 times the single damages;
• The suspension obligations under the Centers for Medicare and Medicaid Services (CMS) proposed rule requiring a provider to report and return overpayments within the later of 60 days of identification or due date of any corresponding cost report (60-day Overpayment Rule), thereby mitigating potential exposure; and
• A speedy resolution -- the average time a case is pending with the OIG is less than 12 months from acceptance into the SDP.

The revised SDP provides additional guidance on how to report conduct involving individuals excluded from federal healthcare programs. Specifically, providers must disclose the following:

• Identity of the excluded individual and any provider identification number;
• The excluded individual's job duties;
• The excluded individual's dates of employment;
• A description of any background checks completed before and/or during the individual's employment;
• A description of the employee screening process and any flaw or breakdown in that process that led to the hiring of the excluded individual;
• A description of how the conduct was discovered; and
• A description of any corrective action.

Similarly, the OIG advises that disclosure of potential violations to the anti-kickback statute and, if applicable, Stark Law should include specific information. As a threshold issue, the disclosing party must acknowledge that the conduct is a potential violation and explicitly identify the laws that were potentially violated. The SDP includes examples of the type of information that the OIG deems helpful in assessing and resolving the disclosed conduct, including:

• How fair market value was determined;
• Why required payments from referral sources were not timely made, collected or did not conform to the negotiated agreement, including how long such lapses existed;
• Why the arrangement arguably was not commercially reasonable;
• Whether payments were made for services that were not performed or documented; and
• Whether referring physicians received payments from designated health service entities that varied with, or took into account, the volume or value of referrals without complying with a Stark Law exception.

To encourage disclosure of potential violations to the anti-kickback statute, the OIG advises that it may use its discretion to assess penalties based on a multiplier of the remuneration conferred by the referral recipient to the individual or entity making the referral. In evaluating a decision to disclose, providers should be aware that any cases in which the U.S. Department of Justice (DOJ) participates, including False Claims Act cases, the matter will be resolved as the DOJ determines appropriate and not necessarily within the confines of the SDP. Therefore, when considering whether to utilize the SDP process, it is important to first ensure a full understanding of the potential ramifications.