OIG “Open Letter” Delivers Welcome News to Health Care Providers

The Office of the Inspector General’s (“OIG’s”) April 15, 2008 Open Letter to Providers (the “Open Letter”) guarantees further benefits to health care providers that choose to disclose and cooperate under the OIG Provider Self-Disclosure Protocol (“SDP”), first established in 1998. The new benefits include not only the expeditious resolution of SDP matters, but also the OIG’s predisposition not to require a Corporate Integrity Agreement (“CIA”) or Certification of Compliance Agreement (“CCA”) following self-disclosure.

New and Fleshed Out Requirements

Initial Submission

A self-disclosing provider’s Initial Submission must contain, in addition to the basic information laid out in the SDP, (1) a complete description of the conduct being disclosed; (2) a description of the provider’s internal investigation; (3) an estimate of the damages to the Federal health care programs and a description of the provider’s methodology used to calculate that figure, and (4) a statement of the laws potentially violated by the conduct. The OIG will accept, in lieu of submissions (2) and (3), a commitment as to when these items will be completed. However, the OIG makes it clear that the Provider must be able to complete the investigation and damages assessment within three months after acceptance into the SDP.

Continuing Cooperation

In repetition of the OIG’s previous, April, 2006 Open Letter, the OIG states that providers must make an expeditious effort to respond to requests for verification. Providers will be removed from the SDP if they do not cooperate fully with the OIG’s requests for information.

Eligibility for SDP

In an effort to more efficiently utilize its resources, the OIG makes clear that “mere billing errors or overpayments” are not appropriate for SDP, stating that such matters should be submitted directly to the appropriate Medicare contractor. Rather, the intent of the SDP is to resolve matters of potential fraud that would violate criminal, civil, or administrative laws and for which providers would suffer program exclusion or civil monetary penalties.

Benefits to Self-Disclosing Providers

The OIG reiterates that it will seek to resolve self-disclosures at a multiple of the amount of the benefit conferred, as opposed to a multiple of per-claim statutory amounts, a point of interest from the 2006 Open Letter. The OIG also claims that it has “streamlined” internal processes to make SDP resolution a priority, which should guarantee faster response time and quicker resolution. However, self-disclosing providers should keep in mind that resolutions with the OIG (quick or not) do not prevent, preempt or govern DOJ initiatives related to the same matter .

Perhaps the most positive outcome of the Open Letter is the OIG’s statement that, in the presence of a provider’s self-disclosure, timely responses to requests for information, and quick and accurate auditing of the disclosed matter, the OIG will generally not require the provider to enter into a CIA or CCA. In fact, the OIG indicates there will be a “presumption” in favor of not requiring a CIA or CCA. Previously, under the terms of the 2006 Open Letter, the OIG’s determination of whether it would impose a CIA or CCA on a self-disclosing provider turned on (1) the provider's level of cooperation with the OIG after self-disclosure, and (2) an analysis of the provider's compliance program.

In general, it is noteworthy that (1) the OIG continues to extend an olive branch to self-disclosing entities, but also that (2) the Open Letter was published one day after CMS' proposal to thoroughly query 500 of the 6200 Medicare-participating hospitals’ Stark Law compliance. The contemporaneous publication of CMS’ proposed rule and the OIG’s Open Letter may be coincidental, but can also be interpreted as a “carrot and stick” approach by the federal health care fraud and abuse enforcement agencies.