U.S. Department of Health and Human Services (HHS) Inspector General Janet Rehnquist last week announced a new willingness to settle False Claims Act and other disputes without requiring Corporate Integrity Agreements (CIAs), as well as an easing of some of the audit requirements in existing CIAs.
If implemented as announced, one of the main impediments to settling False Claims Act investigations and cases may be removed in many instances. Previously, the Office of Inspector General (OIG) demanded that providers agree to enter into expensive and intrusive CIAs in settlements of almost every investigation or litigation matter. Under the new guidelines that Rehnquist announced, a wide variety of disputes can be resolved without a CIA, and CIA issues can also be resolved independent of and after the False Claims Act case.
Rehnquist’s new guidelines direct OIG lawyers to consider foregoing a CIA based on such as the following: whether the provider self-disclosed the violation to the government, the extent of the asserted monetary damage to the government, whether the case is being brought against a successor to the entity that allegedly committed the violation, the age of the alleged conduct, and whether the provider already has an effective compliance program and will agree to limited additional steps. This non-exhaustive list of factors provides significant discretion for OIG lawyers to forego a CIA or to accept agreements requiring providers to take only limited compliance steps.
Rehnquist also announced that the audit and review provisions in existing CIAs would be renegotiated. Under the new provisions that OIG expects to offer, providers will not be required to sample a statistically valid set of claims unless an initial "discovery" sample turns up overpayments of more than five percent. In addition, OIG will for the first time allow underpayments discovered in the initial sample to be considered. Statistically valid reviews will be required only if the net overpayment is more than five percent.
Providers currently operating under a CIA should carefully review the new policy to determine how they are affected. Providers who are currently the subject of investigations or litigation should discuss with counsel how they can avoid a CIA as part of any settlement.