OIG Issues Updated Provider Self-Disclosure Protocol

An enlarged photo of a word "fraud"The Department of Health and Human Services Office of Inspector General this week issued an updated provider self-disclosure protocol (SDP) that gives healthcare providers guidance on how to disclose potential fraud, avoid prosecution, and mitigate potential penalties under its civil money penalty authority.

OIG first published the protocol in 1998 as a way for healthcare providers to disclose potential fraud involving federal healthcare programs. Since then, the OIG has resolved more than 800 disclosures resulting in more than $280 million in recoveries to federal healthcare programs.

Some of the most common issues providers disclose include:

  • Billing for items or services furnished by excluded individuals
  • Evaluation and management services and DRG upcoding
  • Duplicate billing
  • Alteration or falsification of records
  • Kickbacks and Stark Law violations

The SDP is organized to provide guidance on what submissions should include for specific types of conduct—improper claims, employment of, or contracting with, excluded individuals and violations of the anti-kickback statute.

Some new features include:

  • Minimum settlement amounts of at least $50,000 for self-disclosures involving kickback-related submissions and $10,000 for all other disclosures to reflect minimum civil monetary penalty (CMP) amounts for such violations.
  • Suspension of the obligation to report overpayments under section 1128J of the Social Security Act Waiver of statute of limitations defenses by disclosing parties.
  • Calculation of damages within 90 days of initial self-disclosure (formerly within 90 days of OIG’s acceptance of submission).
  • Minimum sample size of 100 units and the use of a mean point estimate for billing-related disclosures.
  • Express clarification that manufacturers may use the SDP if at least one of OIG’s CMP authorities is implicated by the conduct.
  • Express recognition of the various damage calculation methodologies that OIG has often used in resolving different types of disclosures (e.g., different damage calculation methodologies for excluded individual disclosures versus kickback-related disclosures)

OIG said it will issue further guidance after CMS issues the 60-day overpayment final rule.

Click here to read the full document.


HHS OIG issues unusual fraud alert on physician-owned distributorships

Surgeons performing a surgery

The HHS Office of Inspector General issued a Special Fraud Alert on March 26 focusing on specific attributes of physician-owned distributorships (PODs) that  it believes “produce substantial fraud and abuse risk and pose dangers to patient safety.”

PODs, as defined by the OIG, are “physician-owned entities that derive revenue from selling, or arranging for the sale of, implantable medical devices ordered by their physician owners in procedures the physician owners perform on their own patients at hospitals or ambulatory surgery centers.”

Because the OIG views PODs as “inherently suspect under the anti-kickback statute,” one should not be lulled into thinking that just because the Fraud Alert focused principally on implantable medical devices that the OIG is only interested in those types of arrangements. Nothing could be further from the truth because the OIG stated that the principle set forth in the Fraud Alert “would apply when evaluating arrangements involving other types of physician-owned entities.

The OIG listed eight characteristics of suspect POD’s that are likely to attract more scrutiny:

  1. The size of the investment offered to each investment varies with the expected or actual volume or value of devices used by the physician.
  2. Distributions are not made in proportion to ownership interest, or physician-owners pay different prices for their ownership interests, because of the expected or actual volume or value of devices used by the physicians.
  3. Physician-owners condition their referrals to hospitals or ASCs on their purchase of the POD’s devices through coercion or promises, for example, by stating or implying they will perform surgeries or refer patients elsewhere if a hospital or an ASC does not purchase devices from the POD, by promising or implying they will move surgeries to the hospital or ASC if it purchases devices from the POD, or by requiring a hospital or an ASC to enter into an exclusive purchase arrangement with the POD.
  4. Physician-owners are required, pressured, or actively encouraged to refer, recommend, or arrange for the purchase of the devices sold by the POD or, conversely, are threatened with, or experience, negative repercussions (e.g., decreased distributions, required divestiture) for failing to use the POD’s devices for their patients.
  5. The POD retains the right to repurchase a physician-owner’s interest for the physician’s failure or inability (through relocation, retirement, or otherwise) to refer, recommend, or arrange for the purchase of the POD’s devices.
  6. The POD is a shell entity that does not conduct appropriate product evaluations, maintain or manage sufficient inventory in its own facility, or employ or otherwise contract with personnel necessary for operations.
  7. The POD does not maintain continuous oversight of all distribution functions.
  8. When a hospital or an ASC requires physicians to disclose conflicts of interest, the POD’s physician-owners either fail to inform the hospital or ASC of, or actively conceal through misrepresentations, their ownership interest in the POD.

Physicians who are invested in PODs or other joint ventures should have those arrangements reviewed by legal counsel to ensure that they continue to remain compliant with state and federal laws.

For the complete fraud alert, click here.


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