OIG: No Stark-Only Disclosures Under Provider Self-Disclosure Protocol
The Department of Health and Human Services Office of Inspector General (“OIG”) today announced two significant refinements to its Self-Disclosure Protocol (“SDP”). First, the OIG has decided that it “will no longer accept disclosures of a matter that involves only liability under the physician self-referral [Stark] law in the absence of a colorable anti-kickback statute violation.” See Open Letter to Health Care Providers (Mar. 24, 2009), available at http://oig.hhs.gov/fraud/docs/openletters/OpenLetter3-24-09.pdf. Second, the OIG announced that it is establishing a “minimum settlement amount” of $50,000 for all kickback-related submissions after March 24, 2009 in order “to better allocate provider and OIG resources in addressing kickback issues through the SDP.” Therefore, providers who disclose potential kickback violations through the SDP can expect to pay at least $50,000 to settle the matter, regardless of whether the amount in question is of nominal value.

Given its references to “prioritiz[ing]” and “allocat[ing] . . . resources,” it is likely that the OIG has been inundated with SDP submissions, perhaps stemming from its April 15, 2008 Open Letter in which it assured providers that they could avoid entering into corporate integrity agreements as long as the disclosures faithfully adhered to the SDP and the providers cooperated with the OIG’s investigation. Now, providers faced with a probable Stark violation with no corresponding anti-kickback statute violation—or an “under $50,000” anti-kickback statute violation—face a dilemma. On the one hand, providers who discover events causing overpayments confront potential criminal penalties for failing to disclose those events. See 42 U.S.C. § 1320a-7b(a)(3). On the other hand, the OIG has signaled that it is not interested in expending its resources in resolving matters through the SDP unless they involve both a probable kickback violation and a minimum $50,000 recovery. In the absence of such facts, providers are faced with the uncertainty of whether to make the disclosure at all, and if so, to whom—for example, the fiscal intermediary, carrier, CMS, local United States Attorney’s Office, or the OIG outside of the SDP process.

We stand ready to assist with interpreting and applying this new and unwelcome refinement of the SDP. Please contact David Robbins or Renee Howard for more information.