The head of the Office of the Inspector General (“OIG”) recently announced a new initiative to promote the use of Provider Self-Disclosure Protocols (“SDP”) to  mitigate civil monetary penalty (“CMP”) liability in cases where a provider has violated either the federal self-referral or anti-kickback statute.  The OIG has the authority to impose penalties of up to $15,000 for each service billed in violation of the Stark II self-referral law and assessments of up to three times the amount of claims.  The Anti-Kickback Statute authorizes penalties of $50,000 for each kickback, plus an assessment of not more than triple the total unlawful remuneration offered or received. 

       One strategy for providers to mitigate these penalties is to voluntarily disclose conduct that violates fraud and abuse laws.  Voluntary internal compliance programs create an internal control system which enables a provider to become aware of improper conduct before it leads to a criminal investigation, imposition of penalties and even exclusion from federal health care programs.  When a provider uncovers such problems, self-disclosure provides a vehicle to reduce the resulting liability.

       The new SDP initiative provides guidance on how the OIG will handle providers’ voluntary disclosures. Although more detail is still to be provided by the OIG, it is clear the OIG will: (a)  confer with the Department of Justice before allowing a provider to participate in the SDP; (b)  focus on situations in which a hospital knowingly conferred a financial benefit on physicians (such as when a hospital provides a physician with an office space at below fair market rent in exchange for referrals); and (c) generally settle matters for a monetary amount near the lower end of the penalty scale for providers participating in the SDP. 

       If you have any questions about federal regulations prohibiting self-referrals or kickbacks or if you believe your practice would benefit from an internal compliance plan, please feel free to call our office.