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New Guidance on Contractor Self-Disclosure




by:
David L. Douglass
Rachel Landauer
Sheppard, Mullin, Richter & Hampton LLP - Washington Office

 
August 27, 2014

Previously published on August 21, 2014

The Health and Human Services (HHS) Office of Inspector General (OIG) provides health care providers an opportunity to disclose potential violations of certain Federal civil and criminal laws in relation to HHS contracts or subcontracts, pursuant to which OIG offers a means for facilitated resolution. A new publication issued by OIG offers guidance on completing the self-disclosure form, and has been posted alongside an FAQ on the protocol.[1]

More specifically, Federal contractors are required to disclose “credible evidence” of potential violations of the Federal civil False Claims Act or of certain Federal criminal laws involving fraud, conflict of interest, bribery, or gratuity violations. Contractors must additionally disclose credible evidence of “significant overpayments.” Disclosures must be made in a “timely” manner.

“Credible evidence” is not defined within the rule mandating disclosure. The “Discussion and Analysis” section of the rule simply imputes a standard greater than “reasonable grounds to believe.” Furthermore, an FAQ establishes that OIG will not be providing additional insight regarding acceptable evidence—responsibility for a determination that disclosure is warranted is left with contractors.

The meaning of a “timely” disclosure is also left undefined by the rule. An FAQ states that, “OIG encourages contractors to make disclosures quickly after identifying behavior that should be disclosed,” but adds that the Office anticipates that “a reasonable period of time will be necessary to conduct internal investigations.” (Emphasis added.)

Neither the guidance, nor the FAQ provides a definition of what constitutes “significant overpayment.”

Submissions must in writing, using the disclosure form provided by OIG. The new guidance offers instructions on completing the form’s seven fields, which cover elements such as contractor information, the affected contract(s), a description of the violation and any overpayment that occurred, and a description of any internal investigation that was conducted as well as actions taken to prevent the recurrence of the violation. With respect to internal corrective actions, an earlier notice establishes that disclosing parties should ensure that inappropriate conduct has ended. The standard is lowered slightly for improper kickback arrangements, requiring termination of the arrangement within 90 days of the making of the disclosure.[2]

Failure to submit a proper and complete disclosure is cause for exclusion, whereas a submission may be a mitigating factor in the OIG’s exclusion.

According to a notice published in April 2013, HHS OIG has resolved more than 800 disclosures since the protocol’s inception in 1998.[3]

 

[1] The guidance is available here - http://oig.hhs.gov/compliance/self-disclosure-info/files/Contractor&under;Self-Disclosure&under;Guidance&under;April&under;2014.pdf. OIG has also published an FAQ on the subject, available here.

[2] For more information, see “OIG’s Provider Self-Disclosure Protocol”.

[3] For more information, see “OIG’s Provider Self-Disclosure Protocol,” as provided in footnote no. 2.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Author
 
David L. Douglass
Practice Area
 
Health Care
 
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