OIG refines Self-Disclosure Protocol through Open Letter to Health Care Providers

On March 24, 2009, the Office of Inspector General (“OIG”) of the Department of Health and Human Services released an “Open Letter to Health Care Providers” providing further refinements to the OIG’s Self-Disclosure Protocol (“SDP”). In an effort to further prioritize the OIG’s work and effectively use resources, these refinements narrow the SDP’s scope and establish a minimum settlement for all submissions accepted into the SDP.

First, the Open Letter announces that the OIG will no longer accept disclosure of a matter that only involves liability under the physician self-referral law (aka “Stark”). The OIG will, however, continue to accept providers into the SDP when the disclosed conduct involves “colorable violations” of the anti-kickback statute (even if they also involve colorable violations of Stark). According to the Open Letter, these refinements are intended to focus the OIG’s resources on kickbacks intended to induce or reward a physician’s referrals. However, the OIG urges providers not to interpret these refinements as the government losing focus on the enforcement of Stark.

Second, the Open Letter establishes a minimum settlement amount for all submissions accepted into the SDP. The OIG will now require a minimum of $50,000 to settle any kickback-related submissions accepted into the SDP, regardless of the nature or scope of the potential misconduct at issue. The Open Letter suggests that such minimum amounts are consistent with the OIG’s statutory authority to impose a penalty of up to $50,000 (in addition to treble damages). While imposing a minimum penalty amount, the OIG did reiterate that it will continue to look at the facts and circumstances of each disclosure “to determine the appropriate settlement amount consistent with our practice, stated in the 2006 Open Letter, of generally resolving the matter near the lower end of the damages continuum, i.e., a multiplier of the value of the financial benefit conferred.”

A copy of the OIG’s March 24, 2009 Open Letter to Health Care Providers can be found at http://www.oig.hhs.gov/fraud/docs/openletters/OpenLetter3-24-09.pdf.