In April 2005, a settlement agreement was entered into between St. Joseph Mercy- Oakland (SJMO) Hospital in Michigan and the OIG. The settlement related to a voluntary disclosure initially filed by the hospital in July 2001. The disclosure related to a number of relationships between the hospital and specific physicians.

As background, SJMO, immediately following a merger with another hospital, implemented its corporate compliance program and reviewed, among other things, existing relationships with physicians on its medical staff. SJMO identified a number of such relationships which could have been viewed as potential violations of either the federal antikickback statute or the Stark II self-referral law. Under the settlement agreement, SJMO agreed to a payment of $4 million without an admission of liability relating to the various relationships and transactions. In exchange, SJMO received a release by the OIG relating to claims that the OIG asserted were available to it under the federal antikickback statute and the Stark law. Of particular note, the settlement did not require SJMO to enter into a corporate integrity agreement with the OIG.

The SJMO settlement generally demonstrates that the OIG's Voluntary Disclosure Program may be both appropriate and helpful to providers in certain circumstances. In this particular situation, SJMO believed that there were no particular facts or individuals which would have justified an investigation or prosecution under the criminal sanctions of the antikickback statute. However, the written agreements appeared to be problematic under federal law. SJMO's affirmative and concerted efforts to address these situations were viewed by the OIG favorably in resolving the disclosure. It should also be noted that the settlement amount appears to be less than the amount which might have resulted from a strict application of the Stark law's nonpayment provision.

There are numerous voluntary disclosure matters currently pending with the OIG. Continued review of future settlements is advisable to determine whether the benefits of the Voluntary Disclosure Program may outweigh the costs and risks associated with making a disclosure under the program.