OIG softens its stance on corporate integrity agreements
Existing compliance plans may eliminate the need for CIAs or shorten their duration
The Health and Human Services Office of Inspector General (OIG) revealed May 23 that it will consider foregoing corporate integrity agreements (CIAs) as part of settlements when there is adequate evidence of an effective compliance program.
"This marks a retreat from the position that all cases require CIAs, and that is very beneficial," says Ted Acosta, a senior manager at Ernst & Young in New York City, who recently completed a four-year stint as senior attorney at the OIG.
According to health care attorney Tom Crane of Mint Levin in Boston, never before has the OIG publicly stated that it might waive the need for a CIA entirely when the case does not involve a voluntary disclosure. "That part is new and represents a step forward." He notes that the OIG’s "Open Letter to Providers" in March 2000 indicated these measures would be possible only if the matter involved a voluntary disclosure.
Acosta says the OIG’s update on CIAs has an important dual purpose. First, it publicizes the benefits of prompt and diligent self-disclosures. But he says it also illustrates that the OIG is open to alternative ways of working with providers to achieve compliance by giving them significant credit for what they already have accomplished.
That said, Acosta notes there are some instances where providers still ended up with a CIA, even though they came forward voluntarily. "It is very hard to judge from the outside without knowing all of the facts," he adds. "The OIG may have had other reasons."
Acosta also warns that it can be dangerous to read too much into CIAs as an indicator of where the OIG or the Department of Justice is zeroing in. He points out that CIAs follow investigations, and the majority of those investigations stem from qui tam suits. "The government does not have any control over the kinds of qui tams that are filed," he says.
In the area of sampling, that is not the case, however. "The OIG has really changed the landscape in this area," Acosta contends. He adds CIAs offer significant insight into OIG’s own policies and practices. "The CIA provisions almost set a minimum standard for the industry," he explains.
The OIG reports that its informal review of the results of recent negotiations shows that "significant" and "appropriate" modifications are being made to CIAs with providers that have established compliance programs and make disclosures of misconduct.
The OIG also indicated that it will consider reducing the term of CIAs from the usual five years to three years and scale back the role of the independent review organization if providers can show they have an established system of internal audits.
While CIAs usually include the seven basic elements included in the Federal Sentencing Guidelines, the specific terms of a provider’s CIA are subject to negotiations. Notably, the OIG offers "real-life" examples of how its stated policy is working in practice:
- A rural hospital in the Southeast self-reported that it had submitted claims with information that was falsified to support reimbursement. The hospital agreed to resolve its financial and exclusion liability. However, the OIG did not impose a CIA because the misconduct was committed by the former management and the new management disclosed its findings as part of a pre-existing compliance program.
- A northeastern hospital system identified during the course of an internal audit that one of its teaching hospitals had submitted improper claims. The hospital system agreed to resolve its False Claims Act liability, but the OIG did not impose a CIA because the hospital system disclosed the misconduct to the government, and the system had a comprehensive pre-existing compliance program.
- A hospital in the Southwest identified that it had improperly coded claims for mammography services. The hospital uncovered the false claims during the course of an internal audit and agreed to resolve its liability. However, the OIG did not impose a CIA because the misconduct was "isolated and distinct," the hospital disclosed its findings, the damages were relatively small, and the hospital had a comprehensive pre-existing compliance program.
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