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OIG Self-Disclosure Protocol: Consider the Potential Benefits

Attorneys for Medicare Fraud and Medicare Compliance Matters in Florida and Michigan.

Physicians and other medical providers have a responsibility to continuously monitor their billing practices to ensure claims filed to Medicare and other health insurance payers are accurate and truthful. Sometimes medical providers may not intentionally file fraudulent claims but, nonetheless, claims filed may not accurately reflect the services provided. Medicare and other payers consider payments made for inaccurately coded claims as overpayments. Retaining overpayments made by Medicare or other federal payers is a violation of Medicare policy and can lead to damages and civil monetary penalties (CMP).

Medical providers should conduct systematic self audits to detect fraudulent claims or errors in medical coding. If an error is discovered, the medical provider should investigate the conduct that lead to the error, quantify the damages, and consider reporting the overpayments to the Office of Inspector General (OIG). The OIG has set up the Self Disclosure Protocol (SDP) to help medical providers identify, disclose and resolve instances of potential fraud that involve Medicare and other federal health care programs. There are several benefits to self disclosing the violation.  OIG has extended benefits to self disclosing providers to encourage providers to come forward to resolve issues before a formal investigation is launched.  These benefits can reduce the financial penalties and lead to a quicker resolution for the medical provider.

Medicare fraud can lead to significant penalties, including: multiplied damages, civil monetary penalties, exclusion from Medicare program, and Corporate Integrity Agreements (CIA). These penalties can affect medical practices for many years and can be financially devastating. In order to reduce the burden of these penalties, a medical provider can opt to come forward and self disclose problems before the government discovers the problem through their own investigation.

OIG has publicly stated the concessions they will extend to medical providers that are proactive in their compliance efforts and utilize the Self Disclosure Protocol.  First, in most cases, OIG will release self disclosing parties from permissive exclusion without a Corporate Integrity Agreement (CIA). Second, OIG believes medical providers that use the Self Disclosure Protocol and cooperate with OIG deserve to pay lower multiplied damages than would normally be required if the government discovered the fraudulent activity. Third, using the Self Disclosure Protocol suspends the provider’s responsibility to refund overpayments, as long as the disclosure was made and received timely. Finally, if the Self Disclosure Protocol is used, the OIG is committed to reviewing and resolving the matter faster than it would if the OIG initiated the investigation.

Release from Permissive Exclusion without Corporate Integrity Agreement (CIA)

In some instances of Medicare fraud, the OIG is required to exclude the medical provider from the Medicare program.  In other cases, the OIG has permissive exclusion authority. This means the OIG can use its discretion to determine if the provider should be excluded from the Medicare program. If the OIG determines a provider should not be excluded permanently from the Medicare program, the OIG may require the provider to enter into a Corporate Integrity Agreement (CIA). While under a CIA, the medical provider is required to hire independent audit firms and to report information to OIG for several years. If a medical provider opts to use the Self Disclosure Protocol, the OIG has the option to waive the permissive exclusive without requiring the medical provider to submit to a Corporate Integrity Agreement. This can greatly reduce the cost of the violation and can allow the medical provider to continue to participate in the Medicare program without the constant monitoring of the OIG.

Lower Multiplied Damages

If the OIG determines that a medical provider has committed Medicare Fraud and has received overpayments as a result, the medical provider is not only required to pay back the amount of the overpayment, but the overpayments or damages are multiplied by different amounts depending on the infraction. In an effort to encourage the use of the Self Disclosure Protocol, the OIG will allow the medical provider to pay reduced damages. The OIG will allow the medical provider to pay damages multiplied by a minimum of 1.5. This can be a significant reduction in damages owed by the medical provider.

Obligation to Pay Overpayment Suspended During Resolution

If a medical provider discovers it has received overpayment from Medicare or other federal payors, it is required to return the overpayments immediately. If the medical provider opts to use the Self Disclosure Protocol, this obligation is suspended while the claims are being investigated. The Self Disclosure Protocol must be filed and received timely by the OIG in order to receive this concession by the OIG.

Faster Review and Resolution

The OIG knows it is a significant burden for a medical provider to endure an investigation into Medicare Fraud. The investigation can take a long time and leaves the medical provider in a difficult position. In an effort to encourage medical providers to come forward and utilize the Self Disclosure Protocol, the OIG is committed to investigating and resolving issues of Medicare Fraud more swiftly than if the OIG initiates the investigation. This can allow a medical provider to resolve and move past the violation faster. This can reduce the anxiety and cost of the investigation.

Utilizing the Self Disclosure Protocol is a consideration that a medical provider should not take lightly. There is a great risk in disclosing Medicare Fraud to the OIG. A medical provider should conduct a thorough investigation of its claims to determine if the Self Disclosure Protocol is an option for resolution of the claim issues. The medical provider should determine the extent of the violation and the cause of the violation to ensure that the violation does not continue after the self disclosure has been made. The medical provider is required to determine the amount of damages caused by the violation. This determination must be made with the highest degree of accuracy depending on the circumstances.

Comparison of Health Care Fraud Statutes and Penalties (click on chart to enlarge)

Chart: Health Care Fraud, Medicare Fraud, Stark, Anti-Kickback, False Claims, and Drug Trafficking Charges

Chapman Law Group is a health care law firm, with offices in Michigan and Florida (Sarasota & Miami). For over 25 years we have defended the rights of health care professionals, providers and corporations involved in the delivery of health care at all levels.  We handle claims involving False Claims, Anti-kickback, Stark, Civil Monetary Penalty, DEA Controlled Substance Act violations, Compliance related issues including Medicare, Medicaid and private pay, OIG investigations, audits of all types, Professional Licensing, State and Federal Criminal Charges, Civil and Administrative actions, Peer Review and Credentialing issues, HIPAA compliance, and much more involving health care professionals. We believe the dedicated men and women who provide health care deserve an exceptional defense when their integrity and actions are called into question.

Ronald W. Chapman is the founder and shareholder of Chapman Law Group.  For 30 years Ron has focused his practice in the defense of health care providers of all levels of health care including medical malpractice defense, compliance issues, fraud, criminal and civil defense, peer review and credentialing issues, correctional health care law, civil rights law, and all types of health care administrative law matters at the state and federal level in Michigan and Florida.