The US Department of Justice and the US Department of Health and Human Services have launched a pilot program offering healthcare entities the chance to pay significantly reduced penalties for voluntarily reporting violations of the False Claims Act. For compliance officers handling Medicare, Medicaid, and federal health program billing, this shifts the decision-making process on whether to disclose errors or remain silent.
This checklist guides you through the decision-making process and preparation steps to determine if self-disclosure is the right move for your organization.
What This Checklist Covers
Use this checklist when you've identified a potential False Claims Act violation related to federal health program billing. It includes assessment criteria, documentation requirements, and organizational readiness factors to consider before deciding to participate in the DOJ-HHS self-disclosure pilot program.
This guide is not a substitute for legal counsel. Engage outside counsel experienced in FCA matters before making any disclosure decision.
Prerequisites
Before using this checklist, ensure you have:
- Legal counsel engaged: Retain attorneys with FCA defense experience to evaluate privilege considerations.
- Issue containment: Stop the problematic billing practice or coding error that triggered the potential violation.
- Executive awareness: Brief your CFO, General Counsel, and CEO on the nature and potential scope of the issue.
- Preliminary financial estimate: Calculate a rough estimate for affected claims (a precise figure isn't necessary yet, but a range is).
Self-Disclosure Readiness Checklist
1. Violation Assessment
☐ Document the violation type and scope
Identify whether the issue involves upcoding, unbundling, medically unnecessary services, or another FCA trigger. Quantify the number of affected claims and the dollar value submitted to federal health programs.
Good looks like: A spreadsheet showing claim dates, amounts, procedure codes, and the specific billing error for each affected claim.
☐ Determine if the violation was knowing
Assess whether the billing error resulted from reckless disregard, deliberate ignorance, or actual knowledge. The FCA requires scienter; pure mistakes may not qualify as violations.
Good looks like: A written legal analysis from counsel explaining the scienter standard and how your fact pattern maps to it, with supporting documentation of what staff knew and when.
☐ Identify when you discovered the issue
Document the date your organization first became aware of the potential violation and what triggered the discovery (internal audit, external tip, coder question, etc.).
Good looks like: Timestamped emails, audit reports, or meeting notes showing the discovery timeline and initial response.
2. Financial Impact Analysis
☐ Calculate standard FCA exposure
Under the FCA, violators face treble damages plus per-claim penalties. Multiply your overpayment amount by three, then add the statutory penalty range per false claim submitted.
Good looks like: A financial model showing: (1) actual overpayment amount, (2) trebled amount, (3) number of claims, (4) per-claim penalty calculation, (5) total potential exposure under traditional enforcement.
☐ Estimate pilot program exposure
The pilot program allows entities to potentially pay less than half the standard fines. Model scenarios where you pay 40-50% of standard exposure.
Good looks like: The same financial model with a second scenario showing reduced penalty calculations, creating a side-by-side comparison of traditional versus pilot program outcomes.
☐ Factor in investigation costs
Whether you self-disclose or wait for government investigation, you'll incur legal fees, forensic accounting costs, and staff time. Estimate these costs under both paths.
Good looks like: A budget showing estimated legal fees, e-discovery costs, and internal labor hours for both self-disclosure and contested enforcement scenarios.
3. Operational Readiness
☐ Confirm you can produce complete documentation
Self-disclosure requires providing the government with a full account of the violation, including all relevant claims data, policies, training records, and communications.
Good looks like: An inventory of all relevant documentation with current locations, custodians, and accessibility status (immediately available, requires IT retrieval, etc.).
☐ Verify the root cause is corrected
The government expects you've already fixed the underlying compliance breakdown. Document what control failed and what you've implemented to prevent recurrence.
Good looks like: A written corrective action plan showing: (1) root cause analysis, (2) control design changes, (3) implementation dates, (4) testing results confirming the new control works.
☐ Assess organizational cooperation capacity
Participating in the pilot means sustained cooperation with DOJ and HHS investigators. Confirm your staff can support document requests and interviews without disrupting operations.
Good looks like: A project plan assigning specific staff to disclosure support roles, with backup coverage for their regular duties and executive approval for the time commitment.
4. Strategic Considerations
☐ Evaluate qui tam risk
Determine whether any employee, contractor, or vendor might file a qui tam lawsuit as a whistleblower. Self-disclosure may reduce your exposure if a qui tam suit is likely.
Good looks like: A risk assessment identifying individuals who knew about the issue, their current employment status, and any concerning behaviors (recent termination, expressed concerns, etc.).
☐ Consider payor contract implications
Federal health program violations may trigger cross-default provisions in commercial payor contracts or credentialing issues. Review your contract portfolio for disclosure obligations.
Good looks like: A legal memo analyzing your top 10 payor contracts for FCA-related disclosure requirements, cross-default clauses, and potential credentialing consequences.
☐ Assess reputational impact
Self-disclosure becomes public if it leads to a settlement. Weigh the reputational cost of voluntary disclosure against the cost of contested enforcement.
Good looks like: A communications plan addressing how you'll explain the disclosure to your board, medical staff, patients, and community if it becomes public.
Common Mistakes
Disclosing before calculating exposure: Organizations sometimes rush to disclose without understanding their true financial risk. Run the numbers first. If your exposure is minimal, traditional repayment through the 60-day rule might make more sense than pilot program participation.
Incomplete root cause analysis: The government won't give you credit for self-disclosure if you can't explain why the violation happened and what you've fixed. A surface-level "we'll retrain staff" response won't cut it.
Mixing self-disclosure with ongoing government investigation: The pilot program is for voluntary disclosure of unknown issues. If DOJ or HHS has already contacted you about the matter, you're past the self-disclosure window.
Failing to preserve privilege: Once you decide to disclose, you're waiving privilege over disclosed materials. Work with counsel to carefully scope what you provide and protect everything else.
Next Steps
If this checklist reveals you're a strong candidate for the pilot program:
- Schedule a decision meeting with your CEO, CFO, General Counsel, and outside FCA counsel to review the completed checklist.
- Direct outside counsel to contact the appropriate DOJ office to express interest in the pilot program.
- Prepare a disclosure package containing your violation assessment, financial calculations, corrective actions, and supporting documentation.
- Establish a disclosure project team with clear roles for managing government interaction throughout the process.
If the checklist reveals significant gaps or uncertainties, pause. Address the gaps first, or consult with counsel about whether traditional resolution paths (60-day repayment rule, CMS voluntary refund) might be more appropriate for your situation.
The pilot program offers a real incentive to come forward, but only if you're prepared to do it right.
