On April 17, 2013, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a Notice updating the Provider Self-Disclosure Protocol (the “SDP”).

The SDP sets forth the specific process for healthcare providers to voluntarily identify, disclose, and resolve instances of potential fraud involving Medicare, Medicaid, and other Federal healthcare programs. The OIG first published the SDP in the Federal Register in 1998 and has updated the protocol through three Open Letters to Health Care Providers, issued in 2006, 2008, and 2009. This revised SDP supersedes and replaces the 1998 Federal Register Notice and all previous OIG guidance regarding the SDP.

Significantly, the revised SDP provides new guidance on the following:

  • The SDP and the 60-day Rule. The Affordable Care Act imposed a general duty to report and return any Medicare, Medicaid or other Federal healthcare program overpayment within 60 days. Providers that fail to meet this obligation risk liability under the False Claims Act and the Civil Monetary Penalties Law. In February 2012, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule suspending the obligation to report an overpayment for entities that enter into the SDP process in a timely manner. CMS also proposed to suspend the obligation to return overpayments until such time when the disclosing party enters into a settlement (or withdraws or is removed from the SDP process). As such, the revised SDP requires disclosing parties to agree, as a condition precedent to being accepted into the SDP, to waive and not plead statute of limitations, laches, or similar defenses to any administrative action filed by the OIG relating to the disclosed conduct, except to the extent that such defenses may have been available to the disclosing party at the time of submission. The OIG states that it will provide additional guidance once CMS finalizes its 60-day rule.
  • Estimating potential damages. Under the revised SDP, the disclosing party must calculate the estimated damages relating to improper claims based on either (1) all the claims affected by the disclosed matter, or (2) a statistically valid random sample of the claims affected by the matter. To be statistically valid, the sample must include at least 100 items and use the mean point estimate to calculate damages.
  • Disclosures relating to potential AKS or Stark Law (or both) violations. The OIG will no longer “accept any disclosing party into the SDP that fails to acknowledge clearly that the disclosed arrangement constitutes a potential violation of the AKS and, if applicable, the Stark Law.” Instead, under the revised SDP, the disclosing party’s narrative statement must contain a “concise statement” of all the details directly relevant to the disclosed conduct and a specific analysis of why each disclosed arrangement potentially violates the AKS and Stark Law, including the participants’ identities, their relationship to one another to the extent that the relationship affects their potential liability, the payment arrangements, and the dates during which the suspect arrangement occurred.
  • Disclosures relating to the employment of, or contracting with, excluded individuals. If the submission relates to excluded individuals, the disclosure must include the following information:
  1. The identity of the excluded individual and any provider identification number.
  2. The applicable job duties performed by the individual. 
  3. The individual’s dates of employment or contractual relationship.
  4. A description of any background checks that were performed on the individual before or during his/her employment or contract.
  5. A description of the provider’s personnel screening process (including policies and procedures) and any flaw or breakdown that led to the excluded individual being retained. 
  6. A description of how the provider discovered that the individual was an excluded individual. 
  7. A description of any corrective actions (including providing a copy of revised policies and procedures) that were taken to ensure that excluded individuals are not hired in the future.
  • Minimum Settlement Amounts and Multipliers. The revised SDP sets a minimum settlement amount of $50,000 for kickback-related claims and $10,000 for all other matters. OIG also acknowledged that it typically imposes a 1.5 multiplier of the single damages to resolve claims.