Contractors of Department of Health and Human Services Receive Additional Guidance for Disclosing Violations to OIG
Broadly speaking, organizations that enter into contracts with the Department of Health and Human Services (HHS) are generally considered government contractors. As government contractors, organizations also have mandatory disclosure requirements, which are separate and apart from other, voluntary disclosures that health care providers or suppliers might make to the Office of the Inspector General (OIG) for HHS. For example, contractor disclosure is mandatory when there is “credible evidence” (which is a higher standard than “reasonable grounds to believe”) of a violation the False Claims Act, or a violation of federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18.
To this end, OIG-HHS recently posted an (8) page guidance document to its website, Guidance for Submitting a Contractor Self-Disclosure, providing a road map for submitting a contractor disclosure to OIG.
The Guidance document contains the standard government disclaimer which clarifies that: “Contractor self-disclosures are made with no advance agreement regarding possible OIG resolution of the matter and with no promises regarding potential civil or criminal actions by the Department of Justice. Prompt disclosure, full cooperation, completed access to necessary records, restitution, and adequate corrective actions are key indicators of an attitude of contractor integrity even in the wake of self-disclosures of potential criminal liability.”
Further, the Guidance document contains (3) Sections which merit additional discussion.
Section E – Disclosure
Provide a full description of the nature of the violation being disclosed, including the period during which the violation occurred, the names of individuals involved, and an explanation of their roles in the alleged conduct and the relevant periods of their involvement. This field must be completed to submit a disclosure.
Comment: It is not uncommon to see these types of requirements as part of a disclosure (e.g. OIG Provider Self-Disclosure Protocol) or as a condition of a deferred prosecution agreement (DPA). The Contractor should therefore expect to make these types of disclosures if the contractor wants to continue doing business with the government. The Contractor should also expect that counsel for the individuals “involved” might challenge the descriptions provided in the self-disclosure assuming counsel is able to obtain a copy of the disclosure provided to OIG.
Section F – Overpayments
Did an Overpayment Occur?
Comment: Contractors should broadly construe the word “overpayment” to include all overpayments and not just overpayments that result from violations of the False Claims Act. Read literally, a contractor might be permitted to simply write “yes” or “no” in its disclosure. But, if the overpayment results from a violation of the FCA, then perhaps an additional description of the circumstances surrounding the violation should be included in the disclosure either in this Section or Section E.
Estimated Amount of Overpayment
Comment: Again, this leaves open the possibility that the Contractor can simply write in a number since it does not expressly require the Contractor to undertake any analyses or implement any specific method for calculating the overpayment.
Nonetheless, where an overpayment is not easily quantifiable, the Contractor should adopt a reasonably acceptable method for calculating the overpayment and should attach any corresponding reports to support the overpayment noted in the disclosure. Although OIG may take issue with the method used to calculate the overpayment, the report and the analyses contained in the report will demonstrate to OIG that the Contractor has made a good faith effort to calculate the overpayment.
Finally, while the Guidance Document recommends a workable format for submitting a disclosure and does not provide any guidance on when, or how, to reimburse the government for an overpayment, the Contractor might consider submitting a check with the overpayment report and determination since the preamble to the Guidance document specifically references “restitution” as one of the “key indicators of an attitude of contractor integrity..”
Section G – Company Internal Investigation
Has an investigation been conducted?
Comment:This Section reinforces the importance of conducting an internal investigation. Further, conducting an internal investigation is already a factor that the Suspension and Debarment Official (SDO) and HHS will consider in deciding whether a contractor is sufficiently responsible to continue to do business with the government. Likewise, this is consistent with OIG’s Provider Self-Disclosure Protocol, which requires a provider to conduct an internal investigation.
Enter a description of the records reviewed and the number and positions of the employees interviewed.
Comment:Answering this question ensures that the internal investigation was thorough, complete, and, hopefully, independent.
Is the Company Willing to Provide a Copy of the Investigative Report?
Comment: Providing the investigative report is certainly a factor that the Suspension and Debarment Official (SDO) will consider in deciding whether the contractor is “presently responsible,” but it also may contain attorney-client communications. Thus, a decision to provide the Report may also be a decision to waive attorney-client privilege communications, which might apply to a wide variety of communications, (e.g. internal emails) which are not included in the Investigative Report.
Measures Taken to Prevent Recurrence
Comment: The measures taken to prevent recurrence will depend on the particular violation and the size of the organization. Was the violation continuous and egregious? Was it committed by senior members of the organization? Or, was the violation an isolated incident that can be easily resolved without significant changes to the organization?
Disciplining or terminating wrong-doers, even if they are in senior management positions, will demonstrate to the SDO that the contractor is serious about its commitment to a culture of compliance. Similarly, making significant changes internally to the organization’s system of reporting and the organization’s internal audit policies and procedures, should send the proper message to the SDO. And, where appropriate, the organization might ask whether the organization needs to strengthen its compliance program by hiring a new chief compliance officer.
Author: Andrew Feldman
Mr. Feldman represents professionals, corporations, health care providers, and health care marketers in government investigations and prosecutions throughout the United States. Mr. Feldman works tirelessly for his clients from the time an investigation begins until the time a jury renders a verdict.
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