Section 6409 of the Affordable Care Act (ACA) established the Medicare voluntary self-referral disclosure protocol (“SRDP”) for providers of services and suppliers to self-disclose actual or potential violations of federal law governing the limitation on certain physician referrals (42 U.S.C. § 1395nn). These regulations prohibit:

(1) a physician from making referrals for certain designated health services (“DHS”) payable by Medicare to an “entity” with which he or she (or an immediate family member) has a direct or indirect financial relationship (an ownership/investment interest or a compensation arrangement), unless an exception applies; and

(2) the entity from presenting or causing a claim to be presented to Medicare (or billing another individual, entity, or third party payor) for those referred services.

The SRDP requires health care providers or suppliers to submit all information necessary for CMS to analyze the actual or potential violation.  In return, CMS can reduce the amount due and owing for violations. The SRDP is intended to facilitate the resolution of only matters that, in the disclosing party’s reasonable assessment, are actual or potential violations of the physician self-referral law.

In addition to violations of the physician self-referral law, other criminal offenses for non-disclosure include:

• Misprision (18 U.S.C. § 4): A criminal charge against individuals “having knowledge . . . of a felony” and conceals the felony or “does not as soon as possible make known the same.” Individuals convicted of misprision “shall be fined . . . imprisoned . . . or both.”   The mere failure to report a known violation is insufficient to justify a conviction for misprision.  Instead, the crime requires “active concealment.”

• Medicare Fraud Statute (42 U.S.C. § 1320a-7b(a)(3):  A person or entity commits a felony where “having knowledge of the occurrence of any event affecting his initial or continued right to any such benefit or payment, or the initial or continued right to any such benefit or payment of any other individual in whose behalf he has applied for or is receiving such benefit or payment,” the person (or entity) conceals or “fail[s] to disclose” the information with an “intent fraudulently to secure” excessive or unauthorized payment.

• False Statements Relating to Health Care Matters (18 U.S.C. § 1035) and False Statements as to Matters under Federal Jurisdiction (18 U.S.C. § 1001) make it a crime to knowingly and willfully falsify, conceal or cover up, by any trick, device or scheme, any material fact in a health care matter.

• The Fraud Enforcement and Recovery Act (FERA, 31 U.S.C. § 3729) makes it illegal to “knowingly conceal . . . or knowingly and improperly avoid . . . or cause . . . an obligation to pay or transmit money or property to the Government.  This is also known as the “reverse false claim” action.

CMS revised the SRDP in May 2011 and clarified the information that should be disclosed. The SRDP now requires that the disclosing parties provide the total amount of remuneration a physician or physicians received due to the actual or potential violation (and during the appropriate “look back” period).

CMS submitted its report to Congress on the implementation of the SRDP, a copy of which can be viewed here. SRDP settlements can be viewed here.

Hospitals who wish to voluntarily disclose self-discovered evidence of potential fraud to the Office of the Inspector General may do so under the Provider Self-Disclosure Protocol (SDP) (63 Fed. Reg. 58,399).