New DOJ Guidance sheds light on the “road map” for self-reporting criminal violations to DOJ

The Office of Inspector General at the Department of Health and Human Services (the “OIG”) and the Centers for Medicare and Medicaid Services (“CMS”), two entities responsible for regulating healthcare providers and suppliers, have long provided a pathway for violators of federal fraud and abuse laws - for example, the Stark law and the Anti-Kickback Statute - to self-report violations. On September 27, 2018, the Department of Justice (“DOJ”) for the first time announced its own “road map” guiding voluntary self-disclosures and cooperation with government investigations of fraud and abuse in the healthcare industry. DOJ will immediately begin using the guidelines outlined in DOJ’s Foreign Corrupt Practices Act (“FCPA”) Corporate Enforcement Policy to govern corporate self-disclosures of healthcare fraud and other potentially criminal conduct by healthcare entities.

Beginning in 1998 and continuing through 2013, the OIG has issued guidance to the healthcare community regarding self-disclosure of activities. Similarly, CMS has issued guidance to physicians regarding self-disclosure of the Stark Law (42 USC § 1395nn), the last of which was updated in 2017.  However, it was not until recently that the Department of Justice (“DOJ”), which prosecutes individuals for criminal violations of federal fraud and abuse law, released its own guidance. By encouraging self-disclosure, these agencies aim to incentivize healthcare entities to come forward early with reports of violations in the hope of negotiating reasonable settlements, avoiding exclusion from Federal healthcare programs, and reducing the severe civil and criminal penalties that would otherwise be imposed for such violations.

Why does self-disclosure to DOJ matter?

The purpose of self-disclosue is to minimize the impact of potential prosecution by the DOJ, but if an individual decides to self-disclose, such self disclosure must be carefully made in order to give such an effect. The language of the FCPA, which is a departure from the broader language found in CMS and OIG guidance, describes under what specific circumstances violators can expect leniency from DOJ and - importantly - how far that leniency may extend.

According to the FCPA, in the absence of “aggravating circumstances,” a violator who voluntarily self-discloses misconduct, fully cooperates with DOJ prosecutors, and timely and appropriately remediates, can presume that (1) the entity or individual will not be prosecuted, or (2) if the entity or individual is prosecuted, the DOJ will recommend a 50% reduction off the low end of the U.S. Sentencing Guidelines fine range, and will not require the appointment of a monitor. “Aggravating circumstances” include “involvement by executive management of the company in the misconduct; a significant profit to the company from the misconduct; pervasiveness of the misconduct within the company; and criminal recidivism.” A DOJ representative has indicated that, even in the presence of aggravating circumstance, “partial credit” may be given for self-disclosure.

Should a healthcare provider or healthcare entity self-disclose?

If you discover or suspect that your healthcare entity may have violated Federal fraud and abuse laws, there are steps you can take immediately to determine whether self-disclosure is warranted. First, research and remediate. Investigate how and why a violation may have occurred, and how widespread the implications of a violation may be. Second, seek assistance from an experienced healthcare attorney. Violations of federal fraud and abuse laws can have serious consequences for you and your healthcare practice or company. Experienced counsel can help you analyze your existing compliance program and begin the remediation process, updating policies and procedures to ensure that no additional violations occur. If you become aware that OIG, CMS, or DOJ has commenced an investigation, be sure to retain healthcare defense counsel prior to communicating with the government.

If you think you may have violated a federal healthcare law, we’re happy to help guide you through the decisionmaking process regarding self-disclosure and remediation, please contact Nixon Law Group for assistance.