Internal Investigations and Self-Disclosure in Healthcare

Internal Investigations and Self-Disclosure in Healthcare at a Glance

Healthcare providers and entities subject to federal oversight face significant legal risks when engaging in activities that may violate the Anti-Kickback Statute (AKS) or other fraud laws. Internal investigations and voluntary self-disclosure are critical tools for addressing potential violations before government action is taken. These processes involve evaluating the scope of alleged misconduct, assessing exposure under the False Claims Act and related statutes, and using the HHS OIG Provider Self-Disclosure Protocol to resolve matters proactively.

The Legal Framework

The Anti-Kickback Statute at 42 U.S.C. § 1320a-7b(b) criminalizes the knowing and willful offer, payment, solicitation, or receipt of remuneration to induce or reward referrals of items or services payable by a federal health care program. Violations can result in criminal penalties, including fines of up to $100,000 or imprisonment of up to 10 years, or both.

Under 42 U.S.C. § 1320a-7b(g), since 2010, any claim that includes items or services resulting from an AKS violation is treated as a false or fraudulent claim under the False Claims Act (FCA), found at 31 U.S.C. §§ 3729–3733. This provision significantly increases the exposure for entities involved in AKS violations, as it allows for civil penalties and qui tam actions by private relators.

The FCA itself provides for financial incentives for relators, with qui tam relators receiving 15-25% of the proceeds if the government proceeds with the action, 25-30% if the government declines, and no more than 10% if the action is based primarily on public disclosures.

Enforcement and Cases

Self-disclosure strategies must weigh the implications of the tainted-claims rule under 42 U.S.C. § 1320a-7b(g) and the potential for qui tam relator awards under the FCA. The HHS OIG Provider Self-Disclosure Protocol allows entities to voluntarily disclose self-discovered evidence of potential fraud, including AKS violations, to resolve matters before government investigations are initiated.

The Federal Overlay

The federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), makes it a felony to knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward referrals of items or services payable by a federal health care program. The Stark Law, 42 U.S.C. § 1395nn, separately prohibits physician self-referrals for designated health services payable by Medicare or Medicaid, on strict-liability terms. Both regimes carry safe harbors and exceptions published at 42 C.F.R. § 1001.952. State referral and fee-splitting statutes operate alongside these federal prohibitions and can apply even where no federal program payment is involved.

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For further information, explore related research topics and analyses, including practice areas, explanations of the AKS, safe harbors, AKS and Stark Law overlap, recent decisions, and FAQ.