What Providers Should Know About the Updated Health Care Fraud Self-Disclosure Protocol

HHS-Office of Inspector General “updated” its Self-Disclosure Protocol on Nov. 9 to rename it, increase the minimum settlement amounts, and make other “clarifying changes.” Now known as the “Health Care Fraud Self-Disclosure Protocol (SDP)”, the SDP is a voluntary process for health care providers of every stripe – hospitals, physicians, DME providers, etc. – to disclose and resolve instances of potential fraud involving federal health care programs such as Medicare, Medicaid and TriCare. HHS-OIG established this program years ago to give health care providers a process and incentives to self-report potential health care fraud. The new SDP update is the first since 2013.

While important, the SDP changes are generally modest. The “new” SDP:

• Provides new figures as to the number of the SDP matters resolved (“over 2200”) and the amount recovered by HHS-OIG (“more than $870 million”). The revised SDP also reports that from 2016 – 2020, HHS-OIG settled 330 disclosures and did not require a Corporate Integrity Agreement (CIA) for any settlement.
• Clarifies what steps a party subject to a CIA must take if it wishes to file an SDP, that it may file an SDP for a “reportable event” under the CIA, and that it must notify the CIA’s “monitor” of any SDP filing.
• Clarifies that conduct subject to the OIG’s Grant and Contractor Self-Disclosure Programs should be disclosed through those programs and are not subject to the SDP.
• Provides that SDP submittals must be made through the HHS-OIG’s website and may no longer be mailed in.
• In a change of emphasis, notes initially that U.S. Department of Justice (DOJ) may choose “in some instances” to participate in the settlement of an SDP disclosure and that the disclosing party may request a release from the False Claims Act (FCA), which only the DOJ can provide. As in previous versions, the new SDP makes clear that if DOJ participates in any settlement, the matter will be resolved as DOJ determines is appropriate for FCA settlements, including DOJ’s calculation of FCA damages for Anti-Kickback Statue violations. DOJ damages for kickback violations in FCA cases are much higher than SDP settlements by an order of magnitude, but OIG continues to counsel that if DOJ takes part in any SDP settlement, OIG will continue to “advocate” to DOJ that the matter be “resolved consistent with OIG’s approach.”
• No longer “encourages” disclosing parties to disclose potential criminal conduct through the SDP process and has withdrawn its prior claim that HHS-OIG would “advocate [to DOJ] that disclosing parties receive a benefit” for disclosing criminal conduct through the SDP process. As it stated before, HHS-OIG will refer any disclosure of criminal conduct to DOJ, but now it simply states that “OIG also coordinates with DOJ on disclosures involving criminal conduct.”
• Increases the minimum SDP settlement amount of kickback-related claims from $50,000 to $100,000 and of “all other matters” from $10,000 to $20,000.
• Clarifies that disclosers must establish the damages to each affected federal health care program.

Thankfully, the new SDP does not alter the many favorable benefits of the program: disclosers need only acknowledge “potential violations” and no admission of guilt is required. HHS-OIG still seeks to settle disclosed matters within a year, and it continues to employ the more favorable damages multiplier formula of “1.5 times the single damages” where “appropriate.” The SDP also remains an effective means to get out in front of potential qui tams.

Please contact A. Brian Albritton or any member of Phelps’ Health Care team if you have questions or need compliance advice and guidance.