On April 15, 2008, the United States Department of Health and Human Services Office of the Inspector General (HHS-OIG) released an Open Letter to healthcare providers clarifying requirements for the OIG Provider Self-Disclosure Protocol (SDP) and specifying that it will not generally require Corporate Integrity Agreements or Certification of Compliance Agreements when providers use the SDP in good faith.

Inspector General Daniel R. Levinson issued the Open Letter to respond to various providers’ suggestions since the SDP was introduced in 1998. The Open Letter builds on the 2006 Open Letter, in which the HHS-OIG assured providers that settlements for self-disclosed violations would result in liability of an amount “near the lower end of the damages multiplier of the value of the financial benefit wrongfully conferred.” HHS-OIG has now further refined its policies in order to “increase the efficiency of the SDP and benefit providers who self-disclose.”

Some of the clarifications made were for the purpose of improving the disclosure process to HHS-OIG. The initial submission of a provider using the SDP must now contain the following information:

• a complete description of the conduct being disclosed;
• a description of the provider’s internal investigation or commitment regarding when it will be completed;
• an estimate of the damages to the federal healthcare programs and the methodology used to calculate that figure, or a commitment regarding when the provider will complete such an estimate; and
• a statement of the laws potentially violated by the conduct.

This additional information must now supplement the Basic Information as described in the SDP. Healthcare providers using the SDP should also complete any damage assessment and investigation within three months after HHS-OIG’s acceptance of the provider into the SDP program.

The Open Letter further discusses HHS-OIG’s intent to “streamline” its internal processes. The Inspector General stated his expectation that providers will “timely and in good faith respond to all of HHS-OIG’s requests for any additional information not initially provided.” Such timely and good faith responses to HHS-OIG throughout the SDP period will now be rewarded by HHS-OIG. The Open Letter states that upon “negotiation of an appropriate monetary payment by the self-disclosing provider, HHS-OIG will not require a provider to enter into a Corporate Integrity Agreement or Corporate Compliance Agreement.” HHS-OIG believes that this commitment will “appropriately recognize the providers’ commitment to integrity,” while “advancing our goal of expediting the resolution of self-disclosures.”

This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.