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OIG’s Update to the Provider Self-Disclosure Protocol Offers Expanded Detail and Transparency

on Tuesday, 30 April 2013 in Health Law Alert: Erin E. Busch, Editor

The updated Provider Self- Disclosure Protocol (SDP) issued April 17, 2013 by the OIG expanded and updated the original SDP issued on October 30, 1998 and the OIG’s Open Letters to health care providers issued subsequent to the original SDP. Both the original and the updated SDP provide guidance on how to investigate potential fraud, quantify damages and report the conduct to resolve the provider’s liability under the OIG’s civil monetary penalty (CMP) authorities. In its background comments, the OIG noted that it had resolved over 800 disclosures under the SDP amounting to more than $280 million in settlements over the past 15 years.


One of the announced purposes of the update was to provide a means for the OIG to communicate greater detail about how to investigate, report and calculate damages in some of the most common types of disclosures—false billing, conduct involving individuals excluded from federal health care programs and conduct or arrangements involving both the anti-kickback statute and Stark Law.


The updated SDP emphasizes the benefits of disclosure, including the belief that providers who self-disclose under the SDP and who cooperate with the OIG throughout the SDP process deserve to pay a lower multiplier on single damages than would be typically be required in a settlement of a government investigation. Further, the OIG pointed out that using the SDP may mitigate exposure under section 1128J(D) of the Social Security Act (42 U.S.C. 1320a-7k(d), the rule that requires reporting and repayment of a Medicare or Medicaid overpayment by the later of 60 days from the date the overpayment was identified or the date any corresponding cost report is due.


CMS proposes to suspend the repayment obligation from the time a submission to the SDP is acknowledged by the OIG until a settlement agreement is entered or, the provider withdraws or is removed from the SDP. Once CMS issues a final rule, the OIG plans, if necessary, to issue additional guidance on its website correlating the rule to the SDP.


The OIG commits to working with providers who access the SDP and to streamlining the process to reduce the average time from acceptance to resolution to less than 12 months. Under the streamlined process, providers will be required to submit the findings from their competed internal investigation along with a damages’ calculation within 90 days a the initial submission. The original SDP required the submission within 90 days of acceptance into the SDP.


As updated, the SDP continues to be available to health care providers, suppliers or other individuals or entities who are subject to the OIG’s CMP authority. The SDP is only to be used to report conduct for which the reporter has liability—not to report the potential misconduct of other parties to report misconduct by others. The OIG Hotline 1-800 OIG-TIPS should be used for that purpose.


The SDP may not be used to obtain an opinion regarding whether or not a potential violation has occurred—the Advisory Opinion process should be used. The SDP is not available to report potential liability under Stark Law–the Self- Referral Disclosure Protocol is to be used to report Stark-only issues. Finally, mere overpayments without suspicion of fraud or legal violation should be handled through Medicare contractors and state Medicaid agencies.


Additional Detail in the Updated SDP:

  • Disclosing parties will be expected, as a condition of admission to the SDP, to enter a tolling agreement with the OIG that waives the party’s right to plead the statute of limitation, laches or similar defenses to any administrative action filed by the OIG related to the disclosed conduct except to the extents that such defenses would have been available to the disclosing party had an administrative action been filed on the date of submission.
  • Disclosing parties are also expected to have terminated the improper arrangement or conduct within 90 days of submission to the SDP.


Although the original SDP had included an explanation of the necessary elements of the narrative of all submissions under the SDP, the updated SDP now adds specific requirements for disclosures pertaining to false billing, conduct involving persons excluded from federal health care programs (including instructions for calculating damages when the excluded individual did not bill separately for items or services, but whose costs were included in in cost reports) and conduct or arrangements involving both the Anti-kickback Statute and Stark Law.


The final section of the updated SDP sets out the details of resolution of submissions to the SDP: responsiveness and cooperation by the disclosing party, OIG coordination with the Department of Justice on civil matters and criminal matters and coordination with CMS with respect to conduct involving both the anti-kickback statute and Stark Law, minimum settlement amounts ($50,000 for Anti- kickback-related disclosures and $10,000 minimum for all other disclosures as well as procedures for disclosing parties unable to pay due to financial hardship.


The OIG also explains how overpayments refunded prior to entering the SDP may be credited toward the settlement amount subject to the OIG’s review and acceptance of the methods for calculating the overpayment and subject to the multiplier. Finally, the OIG explains that submissions are subject to the Freedom of Information Act (FOIA) and trade secrets or other proprietary information included in the submission must meet the FOIA requirements for exemption in order to disclosing parties to be notified of disclosures pursuant to FOIA requests and other rights under the Act.


The updated SDP provides helpful instruction and insights that should assist parties disclosing in the future to better understand the process and to provide the necessary information and proper calculation of damages for frequently disclosed situations.

Julie A. Knutson

Read the Full Newsletter: Health Law Advisory April 30, 2013

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