Vendor Compliance

The Department of Health and Human Services Office of Inspector General released an Open Letter to Health Care Providers on March 24, 2009 to refine the provider Self-Disclosure Protocol (SDP).   Two important comments are included.   First, only disclosures that include a colorable anti-kickback statute violation will be accepted.   Second, a health care provider accepted in the SDP program can expect a minimum of a $50,000 judgment. 

For background, SDP was described in an earlier open letter as designed to:

…Encourage the healthcare provider community to help ensure the integrity of the Federal health care programs by voluntarily disclosing self-discovered evidence of potential fraud…. to disclose improper arrangements under the physician self-referral (Stark) law (42 D.S.C.§ 1395nn) and committed to settling liability under OIG’s authorities generally for an amount near the lower end of the damages continuum. 

Looking at Civil Monetary Penalties (CMP) by the OIG, the minimum penalty requirements doesn’t appear to have significant impact.   Of the 10 judgments noted in the past year, just four are identified as self-disclosure.   The penalties averaged $348,700.   Though the only one less than $100K was a $21,000 self-disclosure participant.

But the “colorable anti-kickback” requirement could.   While the OIG carefully states that this shouldn’t be construed as a change in the government’s interest in enforcing physician self-referral, it’s difficult not to.  

The change makes sense.  In effect, the OIG is saying, “Help us identify and focus on the serious fraud cases, and we’ll all benefit from a greater return on our regulation investment.”