DOJ and HHS Pilot Offers New Incentives to Self-Disclose Healthcare FCA Violations

The announcement is significant in at least three ways. First, it reduces the financial uncertainty that has long discouraged self-disclosure by setting a defined repayment multiplier. Second, the FCA SDPP will not require a Corporate Integrity Agreement (CIA) as part of any pilot resolution, removing an obligation that can be costly and run for several years. Third, the coordinated civil release will require no factual admissions, limiting a company’s potential collateral exposure.

Who Is Eligible Under the FCA SDPP?
The FCA SDPP offers broad eligibility for healthcare companies. The FCA SDPP is open to healthcare “providers, suppliers, manufacturers, payors, and related entities that furnish, arrange for, manufacture, distribute, insure, administer, or bill for items or services reimbursed, subsidized or otherwise paid for, directly or indirectly,” by Medicare or other HHS federal healthcare programs.

To qualify under the FCA SDPP, participants must disclose a potential violation of the FCA previously unknown to the federal Government. If the Government already knew of the potential violation, the company may receive cooperation credit pursuant to Justice Manual Section 4-4.112, but it will not qualify for a resolution under the FCA SDPP. All disclosing companies must submit their self-disclosures by 11:59 pm on April 22, 2027, to FCA-SDPP@usadoj.gov. No late or partial submissions will be accepted or reviewed.

The self-disclosure must include: (1) all relevant details of conduct the company reasonably believes may violate the FCA, including the specific legal requirements implicated and the relevant time period; (2) supporting exhibits sufficient to fully describe the conduct, cross-referenced in the narrative; (3) corrective measures taken to stop the conduct and prevent recurrence; (4) financial information sufficient to calculate the Base Self-Disclosure Repayment, subject to requests for supplemental information; (5) an authorized representative’s certification that, to the best of her or his knowledge, the submission is truthful and complete; and (6) a designated contact’s phone number and email address.

Importantly, the FCA SDPP covers only conduct that potentially violates the FCA, a civil enforcement law. A company seeking to self-disclose potential criminal conduct related to healthcare must disclose that conduct to DOJ’s National Fraud Enforcement Division pursuant to the National Fraud Enforcement Division and HHS-OIG Policy on Coordination of Voluntary Self-Disclosure in Healthcare Fraud Matters.

What Should Companies Consider?
The FCA SDPP’s value lies in its incentives. In announcing the FCA SDPP, Civil Division AAG Brett A. Shumate stated, “Voluntary self-disclosure is a powerful indicator of a company’s commitment to compliance and accountability.” The FCA SDPP offers meaningful rewards for that commitment. Companies that take full advantage of it, however, will need to move quickly and carefully from the moment a potential problem arises.

Defined Multiplier
Unlike prior self-disclosure programs, the FCA SDPP provides a predictable multiplier, with a repayment floor of 1.25 and a ceiling of 1.6 times the “Base Self-Disclosure Repayment” (i.e., single damages). The applicable multiplier depends on factors including timeliness of disclosure, duration and scope of the misconduct, senior leadership’s involvement, financial benefit to the company, and whether an acquiring company facing successor liability promptly remediated the misconduct. These criteria give companies an incentive to disclose and address potential violations promptly.

For Anti-Kickback Statute (AKS) violations, the Government will, for purposes of the pilot only, forgo claims-based damage amounts and instead consider remuneration-based (kickback) amounts as the “Base Self-Disclosure Repayment” for the revenue derived from the disclosed conduct, and the absence of aggravating factors such as patient harm. This approach, while creating some uncertainty, could significantly reduce exposure for kickback-related conduct.

No Corporate Integrity Agreement and Other Administrative Benefits
In addition to receiving an FCA release from DOJ when resolving matters, HHS Office of Inspector General (HHS-OIG) will not require participants to enter into a CIA. This allows participating companies to avoid the additional expenses and obligations associated with CIAs, although companies must still implement and disclose corrective measures addressing the underlying conduct. Additionally, Medicare & Medicaid Services (CMS) will not impose civil monetary penalties. And FCA SDPP participants’ releases will cover HHS-OIG’s permissive exclusion authorities regarding false claims and fraud (42 C.F.R. §§ 1001.901, 1001.951) and CMS’s revocation of enrollment in the Medicare program (42 C.F.R. § 424.535).

No Factual Admissions
Companies will also receive a coordinated civil release “with no factual admissions.” This significant benefit allows a company to resolve past conduct without admissions and move forward with what the Government calls a “clean slate.” Resolving a matter without admissions significantly limits the risk of collateral exposure in outside litigation.

Timeline
Timing is particularly important because the program requires complete submissions by April 22, 2027, and the Government will not consider late or incomplete submissions. Companies should budget ample time to investigate the facts, assess whether to disclose, implement necessary remediation, and prepare a submission if they proceed. Eligibility also depends on the Government’s lack of prior knowledge of the potential FCA violation. Mishandling an internal whistleblower complaint could therefore jeopardize eligibility if the whistleblower files a qui tam action. Because disclosure requires substantial investigation and documentation, companies should begin the process as early as possible.

Moving Forward Following the Announcement of the FCA SDPP.
Disclosure can have substantial financial consequences and warrants careful consideration. Companies assessing potential FCA violations should consider these steps:

• Establish an internal whistleblower program and response protocol. Companies that do not already have a program should establish clear channels for employees to report compliance concerns, and procedures for promptly reviewing and addressing those reports.
• Promptly identify and evaluate potential issues. Potential FCA violations may surface through an internal audit, a billing or coding review, an employee complaint, or a review following an acquisition. Companies should have procedures in place to ensure that concerns receive timely attention.
• Engage experienced outside counsel. When concerns arise, experienced counsel can evaluate allegations, preserve relevant documents, structure an internal investigation with appropriate attention to privilege, and advise on the necessary corrective actions.
• Weigh the costs and benefits of disclosure. With guidance from experienced counsel, companies should assess whether to disclose under the FCA SDPP by considering the conduct and weighing potential financial benefits against expected repayment, investigation and remediation costs, and other legal and business consequences
• Consider issues the FCA SDPP does not expressly resolve. Companies should assess the possibility that the Government might disagree with their proposed damages methodology, whether individuals may participate in or obtain protection through the program, and how disclosure would be handled if the conduct also implicates non-HHS federal healthcare programs such as TRICARE.
• Act within the program’s limited window. The short submission window and risk that a whistleblower may alert the Government first, make prompt identification and evaluation of potential issues essential to maximizing the program’s benefits.