How to self-disclose Stark, kickback violations

It's always better to fess up on your own than to have someone else tell on you, when it comes to potential cases of fraud, legal experts say.

When Tennessee's Memorial Health Care System in December 2009 submitted a self-disclosure to the Office of Inspector General (OIG), it soon learned that a whistleblower already filed a compliant under the False Claims Act and that the U.S. Attorney's Office was investigating Memorial's arrangement with physicians about their leases, Report on Medicare Compliance reported.

Memorial had time-share arrangements in which physicians were to pay for space on a prorated basis. The physicians, who referred patients to the hospital, could use the leased hospital-owned space to see patients. But due to some bad calculations and automatic renewals, the hospital may have violated the law by letting the physicians slide by with undervalued rent; one physician even used a closet rent-free for about two decades.

In the end, Memorial agreed to pay a $1.3 million settlement and was spared a corporate integrity agreement, Report on Medicare Compliance noted.

Bill Horton, an attorney with Johnston Barton Proctor & Rose in Birmingham, Ala., said the lesson offers a reminder about self-disclosure. "[E]ven when the OIG Self-Disclosure Protocol is not available, there is a benefit in resolving these [matters] through self-disclosure," he said.

The OIG says it recognizes that disclosing information to the government isn't an easy decision but disclosing a problem in good faith demonstrates a culture of compliance and integrity for the federal healthcare programs, according to a compliance video on its website.

Since enacting the self-disclosure protocol, OIG has recovered $270 million from billing for services provided to excluded individuals, evaluation and management and DRG upcoding, double billing, falsifying records, and kickback and Stark law violations, according to the video.

When providers self-disclose, they can end up settling with the government for False Claims or civil monetary penalties rather than winding up with a corporate integrity agreement.

OIG recommends working collaboratively with the government on potential cases of fraud and suggests the following:

  • Clarify the issue and confirm that it is, in fact, a potential fraud issue. Providers can report overpayment errors to Medicare contractors and go through the standard refund process.
  • Consult with a healthcare attorney who has federal healthcare program experience.
  • Decide where to disclose the conduct (U.S. Attorney's Office or the Centers for Medicare & Medicaid Services).

For more information:
- read the Report on Medicare Compliance article
- see the OIG video

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