HHS and DOJ open a fraud self-disclosure window. Boards should act by April
- Posted by Greg Wahlstrom, MBA, HCM
- Posted in Blog
A new six-month HHS and DOJ pilot offers hospitals a faster, more predictable way to resolve potential False Claims Act problems, but only for issues the government does not already know about.
What the pilot offers
On October 22, HHS and the Justice Department’s Civil Division launched a joint pilot for healthcare organizations that voluntarily disclose potential civil violations of the False Claims Act. Submissions are accepted through April 22, 2027. Late or incomplete filings will not be reviewed.
The trade is clear. An organization that discloses fully, documents the conduct, describes its corrective actions and repays between 1.25 and 1.6 times a base repayment amount receives a coordinated resolution. DOJ releases False Claims Act liability for the disclosed conduct. HHS-OIG agrees not to exclude the organization or require a corporate integrity agreement. CMS agrees not to revoke enrollment and billing privileges, and neither CMS nor OIG imposes civil monetary penalties. The release comes without factual admissions.
The program also replaces separate filings for the same conduct under the OIG Health Care Fraud Self-Disclosure Protocol and the CMS Self-Referral Disclosure Protocol, which have often moved slowly and on separate tracks.
Where the limits are
Eligibility turns on one condition: the potential violation must be unknown to the federal government. If an agency is already aware of it, the pilot is off the table, though general DOJ cooperation credit may still apply. The pilot covers civil conduct only; potential criminal matters go to a different DOJ unit.
The multiplier is not fixed. Where an organization lands in the 1.25 to 1.6 range depends on how quickly it discloses, how long and broad the conduct was, whether senior leaders were involved, how much the organization benefited, and whether an acquirer promptly fixed problems it inherited. Speed and leadership distance from the conduct are the factors executives control.
Why the timing matters
Health-fraud enforcement is a stated priority for HHS and DOJ, and the two agencies have coordinated closely on False Claims Act matters. A defined six-month window, with a known price range and protection from exclusion, gives organizations a reason to surface open issues now rather than wait for a whistleblower suit or audit to surface them first.
For health systems, the most likely candidates are coding and documentation patterns found in internal audits, physician compensation arrangements with Stark or anti-kickback questions, and compliance gaps inherited through acquisitions.
What leaders should do this quarter
- Inventory open matters. Ask compliance and counsel for every unresolved audit finding, hotline report and overpayment review that could carry False Claims Act exposure.
- Brief the board. The audit and compliance committee should decide, with outside counsel, whether any matter belongs in the pilot.
- Review recent deals. Successor liability with prompt remediation is a named factor. Recent acquisitions deserve a focused look.
- Set an internal deadline. Building a complete submission with exhibits and repayment calculations takes time. Plan backward from April.
Executive takeaway: This pilot rewards organizations that find and disclose problems first. Boards should ask management now whether any open compliance matter qualifies, and decide well before the April 22, 2027 deadline.