The consideration of voluntary disclosure has been put forward by government attorneys, as well as members of the private bar, as a means of mitigating liability for past improper claim practices. A basic tenet behind voluntary disclosure is that the threat of liability for improper claims practices has dramatically increased in recent years and it is not a matter of if, but when, such practices may be discovered by state and/or Federal authorities. This may happen either through the governments own enforcement efforts or through the efforts of a private whistleblower. Accordingly, a strategy of voluntary disclosure can become critical as a matter of risk management for any provider or supplier of health care goods or services who wishes to remain in business.
This does not mean that every provider and supplier should immediately engage in a self-audit of past claims to determine if any liability exists, but where such practices are suspected or brought to the attention of principals or officials of health care organizations, then the prospect of detecting and quantifying the scope and degree of improper reimbursement should be undertaken as a minimal threshold of compliance with the health care fraud and abuse laws. The facts and circumstances identified through a self-audit of this nature can be the basis for criminal, civil and/or administrative liability and, therefore, should be carefully examined within the context of the attorney-client and work product privilege before any decisions are made regarding waiver of such privilege and voluntary disclosure of the information.
The issue of voluntary disclosure is one of the more challenging ones facing providers and suppliers in today's market place for health care services. It is clear, as a general rule, that an individual or organization is not legally required to report to the government knowledge of its own criminal or unlawful activities, nor must it voluntary disclose any evidence of such conduct, so long as it does not take affirmative steps to conceal a crime. The Social Security Act, however, which governs the Medicare and Medicaid programs, requires self-disclosure of the discovery of the submission of improper claims to the Medicare or Medicaid Programs, whenever a party has knowledge of the occurrence of any events affecting initial or continued right to any such benefit or payments (from Medicare or Medicaid) and conceals or fails to disclose such activities with an intent to fraudulently secure such benefit or payment. Unfortunately, this statute has never been interpreted by any case law or regulations or even enforced in a reported case, so it is difficult to determine, with any degree of assurance, if, when and how it may apply. Nevertheless, the Federal government has adopted an official voluntary disclosure program through the Office of Inspector General of the Department of Health and Human Services ("OIG-HHs") under the Medicare and Medicaid Programs. There has been little utilization of this official voluntary disclosure program (twelve instances of disclosure to date) and, therefore, no assurances can be made that any information disclosed will not be used to further scrutinize and/or prosecute a health care provider or supplier under the Federal criminal and/or civil statutes. The development of this official voluntary disclosure program, however, does signal the Federal government's intentions to promote self-disclosure in the health care industry, but the viability of this course of action still leaves a great deal of room for doubt amongst providers and suppliers of health care goods and services.
The discovery of improper receipt of reimbursement, however, cannot be ignored in today's enforcement climate and, therefore, it seems that at least one of these general courses of action should be considered once a circumstance of this nature is identified.
The identification and correction of potential violations of the health care fraud and abuse laws and rules of reimbursement under Medicare and Medicaid, without any formal self-disclosure and/or return of any unauthorized payments received by virtue of potential violation of the law is one course of actin which can be considered. The identification and correction of potential violations of the health care fraud and abuse laws could, by itself, mitigate against any future criminal culpability should the circumstance be discovered later through government investigation or a private whistleblower action. However, little assurance can be given about such an outcome because the government could just as easily conclude that the act of not disclosing and not making restitution is itself a criminal act. It is more likely than not that the government would, at a minimum, conclude that such a non-disclosing party would be liable under the United States Civil False Claims Act and potentially be subject to triple damages and civil penalties.
Another course of action is a determination of the amounts associated with improper claims activity and voluntary disclosure either to the local United States Attorney or through the formal OIG-HHS voluntary disclosure program. The primary benefit of voluntary disclosure to the local United States Attorney would be to resolve any criminal culpability, directly, and expeditiously, with the only Federal agency authorized to make such a determination, but also to resolve any civil penalty culpability, at the same time, under the Civil False Claims Act, including any exposure to a qui tam (or whistle-blower) action by a private party (e.g. current or former employee or competitor). This type of formal voluntary disclosure can also be made through the OIG-HHS program, which would result in the referral of the matter to the Department of Justice ("DOJ") to determine the extent of any criminal or civil culpability before making any final determination. This alternative is one which should be seriously considered when the circumstances giving rise to the improper claims may involve criminal or knowing or willful conduct which could be liable under the United States Civil False Claims Act. A voluntary disclosure under these circumstances to the local United States Attorney may, at this time, be more desirable than disclosure through the OIG-HHS program because little assurances can be given by OIG-HHS that it will not result in criminal or civil enforcement action by the Federal government. It cannot be said at this stage of experience with the official OIG-HHS voluntary disclosure program that there is any reasonable assurance which can be given that the benefits of voluntary disclosure to OIG-HHS outweigh the risks.
A third alternative is "technical disclosure" to the Medicare carrier or intermediary with return of the amounts of unauthorized payments received by the provider or supplier. This would clearly involve credible voluntary disclosure with restitution of the overpayment amounts to the government's agent. This type of disclosure and restitution would, more likely than not, still form a basis to mitigate against a finding of criminal liability and also triple damages and civil penalties under the Civil False Claims Act. These additional basis for liability would only be considered, however, if the carrier or intermediary referred the matter to OIG-HHS or DOJ and these agencies elected to initiate a government enforcement action. This alternative means of disclosure is often desirable when the circumstances do not give rise to criminal culpability, but could form the basis for civil liability or overpayment.
It must be emphasized that there are no easy decisions when it comes to self-initiated voluntary disclosure, but the failure to self-disclose in today's enforcement climate may raise even greater risks of liability.