Should organizations self-report potential fraud?

Is it worth it for healthcare providers to self-report potential fraud under Stark Law to avoid or reduce potential fines and penalties for violating anti-fraud and anti-kickback laws?

Not necessarily, according to a column by Jonathan Sack in Forbes. Current protocols for self-disclosure in healthcare "often fall short of expectations," he writes.

Under the physician self-referral statute, commonly known as Stark Law, physicians must not make referrals for services payable by Medicare to a person or entity in which they or a family members have a financial interest. In 2010, after the passage of the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) created the Voluntary Self-Referral Disclosure Protocol (SRDP), which established a process for Medicare services providers to voluntary self-report potential or actual Stark Law violations, according to the column.

The issue with the SRDP, Sack writes, is that it is too vague to properly incentivize self-reporting. Although the protocol lists circumstances that CMS can consider when reducing financial penalties, it explicitly states CMS "is not obligated to reduce any amounts due and owing." The agency may also refer voluntary disclosures to the Office of Inspector General or the Department of Justice.

Last summer, the OIG revised its self-disclosure policies for reporting self-discovered actual or potential healthcare fraud, which includes a presumption against requiring corporate integrity agreements. However, the OIG protocol has problems of its own, according to Sack. The person who self-discloses cannot seek an advisory opinion from the OIG as to whether fraud is occurring, and must conduct his or her own internal investigation and either report the results to the OIG or guarantee that he or she will complete the investigation within 90 days. And like the SRDP,the OIG can still report any potential criminal activity to the DOJ, according to the column.

"In healthcare, like other industries, it is important for companies to weigh the risks and rewards of self-reporting misconduct," Sack writes. "The right decision is often quite difficult to reach, especially given the uncertainty of federal policy that, in theory, seeks to encourage voluntary disclosure, but in practice leaves much to chance."

To learn more:
- read the column

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