New DOJ-HHS Pilot Offers Health Care Companies a Limited-Time Path to Resolve FCA Liability Through Self-Disclosure

The Department of Justice (DOJ) Civil Division and the Department of Health and Human Services (HHS), through its Office of the General Counsel, Office of Inspector General (OIG), and Centers for Medicare & Medicaid Services (CMS), announced a new Healthcare Self-Disclosure Pilot Program (FCA SDPP). It gives health care companies a defined pathway to resolve civil False Claims Act (FCA) liability and certain HHS administrative matters, including Medicare enrollment revocation and permissive exclusion for false or improper claims and fraud or other prohibited activities.

The pilot program is temporary: disclosures must be submitted by 11:59 pm on April 22, 2027. Late or incomplete submissions will not be accepted or reviewed. The announcement does not indicate whether a permanent self-disclosure option will follow, so health care companies should assess now whether to participate.

Eligibility

The program covers companies that furnish, arrange for, manufacture, distribute, insure, administer, or bill for items or services paid for directly or indirectly by a federal health care program, but it is notably silent with respect to individuals. Disclosures must concern potential FCA violations unknown to the federal government; if the government already knows of the conduct, self-disclosure and cooperation credit under Justice Manual § 4-4.112 may still be available.

Separate disclosures through other civil programs, such as the OIG Self-Disclosure Protocol or CMS Self-Referral Disclosure Protocol, are unnecessary. Potential criminal conduct, however, must be disclosed separately to DOJ’s National Fraud Enforcement Division under its OIG coordination policy rather than through the FCA SDPP. If the company also seeks a civil FCA release, DOJ may request a supplemental submission.

Submission Requirements

The disclosure must be complete when submitted, although DOJ and HHS may request supplemental information, and it must:

1. detail all conduct that, in the company’s “reasonable assessment,” may violate the FCA, specifying the relevant period and identifying the laws, regulations, or other binding requirements potentially violated;
2. include relevant documents as exhibits and cross-reference them in the narrative;
3. describe corrective and remedial measures implemented to stop the conduct and prevent recurrence (see Justice Manual § 4-4.112 for examples);
4. provide sufficient financial information for DOJ to calculate the “Base Self-Disclosure Repayment” (which is a capitalized but undefined term);
5. include an authorized representative’s certification that the submission is truthful and complete to the best of their knowledge; and
6. provide the name and contact information of a designated contact.

Benefits

Coordinated Civil Release and No Factual Admissions. DOJ will provide an FCA release for the disclosed conduct without requiring the factual admissions that certain U.S. Attorney’s Offices routinely demand when settling FCA cases. Consistent with the OIG’s Health Care Fraud Self-Disclosure Protocol (OIG SDP), OIG will not require a Corporate Integrity Agreement in resolving its exclusion authorities, and CMS will not impose civil monetary penalties or seek revocation of Medicare enrollment.

Predictable (and Likely Favorable) Financial Resolution.Repayment will be 1.25 to 1.6 times the Base Self-Disclosure Repayment, which could lead to more favorable results than under the current self-disclosure framework. According to the OIG SDP, OIG’s “general practice” is to require a minimum multiplier of 1.5x, and FCA settlements resulting from self-disclosures over the past few years generally fall within the 1.5x-1.6x range. Factors that will influence the multiplier under the FCA SDPP include:

• timeliness of the disclosure,
• duration and scope of the misconduct,
• involvement of senior leadership,
• financial benefit to the company, and
• whether the company has successor liability for the misconduct but promptly remediated.

Notably, for Anti-Kickback Statute (AKS) violations, DOJ will, for purposes of the pilot only, forgo damages based on allegedly tainted claims and instead calculate the repayment by considering the amount of the remuneration, the revenue derived from the conduct, and the absence of aggravating factors such as patient harm. OIG applies a similar approach in the self-disclosure context, but DOJ typically does not do so when settling an FCA self-disclosure.

Practical Considerations

• Time is limited. The six-month window for submissions leaves limited time to investigate, prepare the self-disclosure, and obtain the internal approvals and certification necessary to move forward. Companies interested in the pilot program should plan for this compressed timeline.
• Race to the government. A self-disclosure is eligible only if the government does not already know about the conduct, which means that it cannot overlap with a pending qui tam complaint. Time is therefore of the essence once a potential issue is identified, because a relator could already be on the way to the courthouse.
• Get it right the first time. Under existing OIG and DOJ self-disclosure processes, the disclosing company typically gets at least one opportunity to correct deficiencies in its submission, but the FCA SDPP requires a complete initial submission.
• Bad actors need not apply. The FCA SDPP states that the program is open to “legitimate American healthcare businesses endeavoring to quickly and cooperatively resolve prior misconduct” but not to “illegitimate businesses that knowingly…engage in fraudulent schemes.”
• Do your diligence. Buyers of health care companies should follow up on diligence findings with FCA implications as quickly as possible after closing and consider taking advantage of the FCA SDPP.

While the FCA SDPP leaves some questions unanswered, such as whether related state Medicaid program liability will be resolved as part of the process, the health care industry should be cautiously optimistic about this new avenue for self-disclosure, even if temporary.

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