The federal government’s offer comes with an ultimatum. When the Pilot Program launched, then-Assistant Attorney General Brett A. Shumate described it as offering “a favorable resolution framework to companies that want to take responsibility for past conduct,” while warning that “for companies unwilling to take accountability, the Civil Division, in partnership with whistleblowers, will root out the fraud.” With submissions due on April 22, 2027, and with only conduct previously unknown to the government eligible, the clock is already running. Companies with known or suspected compliance issues should consider acting now to proactively address the situation and determine whether the Pilot Program may offer a better path forward.¹

The Pilot Program at a Glance

The Pilot Program is a joint initiative between the DOJ Civil Division and three HHS components: the Centers for Medicare and Medicaid Services (“CMS”), the Office of the General Counsel (“OGC”), and the Office of the Inspector General (“OIG”). According to the protocol, the program is designed to support “legitimate American healthcare businesses endeavoring to quickly and cooperatively resolve prior misconduct and move forward with a clean slate,” and is not intended for “illegitimate businesses that knowingly exploit the generosity of the American people through various fraudulent schemes.” Through the Pilot Program, participating companies may obtain a coordinated resolution of civil liability under the FCA and three potential HHS administrative enforcement scenarios: (1) revocation of Medicare enrollment; (2) permissive exclusion for false or improper claims; and (3) permissive exclusion based on fraud, kickbacks, or other prohibited activities.²

Eligibility extends to healthcare providers, suppliers, manufacturers, payors, and related entities that furnish, arrange for, manufacture, distribute, insure, administer, or bill for items or services paid for, directly or indirectly, by HHS federal healthcare programs. The Pilot Program is limited, however, to potential FCA violations previously unknown to the government. Where the government is already aware of the conduct, the disclosing company may still receive self-disclosure and cooperation credit under DOJ’s Justice Manual Section 4-4.112, but it is not eligible for resolution under the Pilot Program. The program is also limited to civil violations. Companies seeking to disclose potentially criminal healthcare conduct must do so through DOJ’s National Fraud Enforcement Division (“NFED”). DOJ has clarified that a company that self-discloses criminal conduct to NFED remains eligible for the benefits of the FCA SDPP. Companies with potential criminal and civil exposure should therefore start with a disclosure to NFED. A company that has already disclosed to NFED does not need to resubmit that disclosure to obtain a civil release under the Pilot Program.³

A self-disclosure under the Pilot Program must describe all relevant details of the potential FCA violations, including the specific laws, regulations, or other binding requirements at issue and the relevant time period. The submission must also include exhibits sufficient to reflect the nature, terms, and operation of the conduct, a description of the remedial measures the company has taken, and financial information sufficient for the Civil Division to calculate a “Base Self-Disclosure Repayment” amount to which the program’s repayment multiplier is applied. DOJ and HHS reserve the right to request supplemental information in connection with any submission. Submissions must be sent to FCA-SDPP@usdoj.gov by 11:59 P.M. on April 22, 2027, and late or partial submissions will not be accepted or reviewed.

In exchange, a disclosing company will receive a civil release with no factual admissions for the disclosed conduct. Consistent with the OIG Health Care Fraud Self-Disclosure Protocol (“SDP”), OIG will not require a Corporate Integrity Agreement as part of any resolution of its exclusion authorities, and CMS will not impose civil monetary penalties or seek revocation of Medicare enrollment. A company that participates in the Pilot Program also need not separately disclose the same conduct through the SDP or the CMS Self-Referral Disclosure Protocol. This coordinated approach may prove particularly valuable following HHS’s October 14, 2026, delegation of permissive exclusion authority to CMS.⁴ OIG has since updated its Exclusions Frequently Asked Questions (“FAQs”) to state that parties negotiating an FCA settlement with DOJ or a self-disclosure with OIG need not separately engage CMS, because OIG “will resolve permissive exclusion authority for the Department of Health and Human Services . . . in False Claims Act matters and submissions to the OIG’s Self Disclosure Protocol.”⁵ The FAQ substantially addresses the concern that an OIG exclusion release might not prevent CMS from pursuing a permissive exclusion based on the same conduct. But some uncertainty remains. OIG has stated that it has “no additional information to share regarding case allocation” between the agencies and has directed questions about CMS’s implementation of the delegated authority to CMS.⁶ CMS also has not yet indicated whether it will consider itself bound by exclusion resolutions reached by OIG. Considering these open questions, the Pilot Program’s joint framework may provide additional assurance that a single resolution will be respected by both agencies.

The Pilot Program’s financial terms also offer a meaningful incentive to come forward. Rather than facing the treble damages and per-claim penalties available in a litigated FCA action, a disclosing company will repay between 1.25 and 1.6 times its Base Self-Disclosure Repayment amount. Where a company falls within that range will turn on several factors, including how promptly it discloses the conduct, the duration and scope of the misconduct, whether senior leadership was involved, the extent to which the company benefited financially, and, for acquirers, whether the company inherited the conduct through successor liability but promptly remediated it. Since the inception of its SDP in 1998, OIG has consistently settled matters under the SDP for 1.5 times damages. Although disclosures under the Pilot Program have the potential to be settled for 1.25 times damages, even lower than under the SDP, disclosing entities will need to carefully weigh the risks and benefits of disclosing to DOJ under a new initiative, when compared to the relatively predictable nature of OIG’s SDP over almost the past 30 years.

Notably, the protocol adopts a different approach for disclosures involving the Anti-Kickback Statute (“AKS”). Acknowledging that courts have generally found the remuneration or revenue in kickback schemes to be inconsistent with the government’s actual damages, the government will, for the purposes of the Pilot Program, forgo damages based on claims-paid amounts. It will instead calculate the Base Self-Disclosure Repayment amount by considering the amount of the remuneration, the revenue derived from the disclosed conduct, and the absence of aggravating factors such as patient harm. Each of these metrics may result in a significantly reduced financial component to the resolution. In this way, the Pilot Program appears to bring DOJ’s approach to self-disclosure damages in AKS matters in line with OIG’s longstanding use of remuneration as a proxy for damages in the SDP.

The Pilot Program in the Context of Intensifying Healthcare Fraud Enforcement

The Pilot Program is best understood as one part of DOJ’s and HHS’s broader healthcare fraud enforcement strategy. Over the past several months, DOJ and HHS have substantially expanded their capacity to detect and pursue healthcare fraud, and the Pilot Program offers companies a cooperative alternative to that increasingly formidable enforcement apparatus.

Much of that expansion has centered on DOJ’s National Fraud Enforcement Division. Established in April 2026, the Division absorbed the Health Care Fraud Unit, is slated to grow to 500 attorneys and staff, and operates under a mandate that emphasizes the use of data analytics to identify billing outliers. On October 1, 2026, the Division issued Directive 26-12, which lists healthcare industry schemes first among its enforcement priorities and directs prosecutors to place “great weight” on ten factors in charging and resolving corporate cases, including management’s knowledge of the misconduct, efforts to conceal it from government agencies, conduct lasting three years or more, conduct affecting three or more federal districts, and conduct causing financial harm to twenty-five or more victims or $25 million or more in loss. Several of these considerations parallel the factors that determine where a company falls within the Pilot Program’s 1.25 to 1.6 multiplier range, such as the involvement of senior leadership and the duration and scope of the misconduct. As a result, the same facts that may aggravate a company’s exposure in a contested enforcement action may also bear on the terms available to it through self-disclosure.⁷

At the same time, the government has made it more likely that potential misconduct will come to its attention through channels other than the company itself. DOJ’s new Fraud Whistleblower Incentive Program now offers awards of $10,000 to $30,000 for information leading to certain criminal charges, and the Civil Division has adopted an accelerated process for reviewing qui tam complaints within 60 to 120 days. DOJ has also launched the Fraud Oversight through Careful Use of Statistics (“FOCUS”) Initiative, under which it will prioritize qui tam actions brought by data miners whose analyses of public data “reliably correlate to fraud.” CMS, for its part, is expanding its use of artificial intelligence and data analytics, including an expansion of Risk Adjustment Data Validation audits to all eligible Medicare Advantage contracts. These developments carry particular significance for the Pilot Program, which is available only for conduct previously unknown to the government. As whistleblower incentives and data-driven detection make it more likely that the government will learn of potential issues independently, the window in which a company can take advantage of the Pilot Program’s terms may narrow.⁸

The Pilot Program also arrives as HHS is recalibrating its existing self-disclosure framework. On October 15, 2026, OIG released its first revision of the Health Care Fraud SDP since 2021, under which potentially criminal conduct is no longer eligible and should instead be disclosed to DOJ. Read together, the revised OIG protocol and the Pilot Program reflect a more defined structure for self-disclosure, with potentially criminal matters directed to DOJ and civil FCA matters eligible for a coordinated resolution with DOJ, OIG, and CMS.

Considerations for Healthcare Companies Contemplating Self-Disclosure

Based on the terms of the protocol and recent DOJ and HHS enforcement activity, companies can anticipate several issues that may shape whether, and on what terms, a self-disclosure under the Pilot Program is likely to be advantageous.

Previously Unknown Conduct and Existing Investigations: Companies already facing a government inquiry into relevant conduct will not be eligible for a resolution under the Pilot Program, though they may still receive cooperation credit under Justice Manual Section 4-4.112. Companies should therefore assess their broader enforcement risk profile, including open hotline matters, audit findings, overpayment analyses, and internal investigations. Given the federal government’s expanding use of whistleblower incentives and data analytics, the timing of any self-disclosure decision may be increasingly important.

Completeness and Timing of the Submission: Because late or partial submissions will not be reviewed, companies should begin any necessary analysis well in advance of the April 22, 2027 deadline. The Pilot Program’s own example, involving a hospital that delayed physician lab orders to circumvent Medicare’s 14-day rule, illustrates that this work may include a sample chart review, extrapolation of the resulting error rate, and documentation of the sampling methodology for the government’s review, which could take time to prepare for submission. This time pressure is also pressing given risks associated with whistleblower disclosure of the same misconduct to the government while a submission is being prepared. Unlike OIG’s 15-page SDP, which contains detailed requirements regarding how the disclosing entity must conduct its review to estimate the improper amount paid by the government in a matter involving false billings, the Pilot Program contains no such requirements. Although this may present disclosing entities with additional flexibility, that flexibility must be balanced against the likelihood that DOJ will likely consider itself the sole decisionmaker when considering the “completeness” of the disclosure.

Multiplier Factors: Companies should evaluate how their facts align with the timeliness, scope, leadership involvement, financial benefit, and remediation factors that determine the multiplier. A realistic assessment at the outset will help a company gauge whether the likely terms of a Pilot Program resolution justify disclosure.

Successor Liability in Transactions: The protocol expressly contemplates disclosures by acquirers that discover potential AKS violations after closing. Because prompt remediation of successor conduct is a multiplier factor, companies would be well served to review legacy conduct at recently acquired businesses and to consider the Pilot Program in post-closing compliance planning.

Kickback Arrangements: The remuneration- and revenue-based approach for AKS disclosures may produce a materially different repayment than a traditional damages analysis. This is particularly relevant considering OIG’s April 2026 FAQ guidance that arrangements consistent with fair market value may nonetheless violate AKS. Companies should evaluate arrangements with referral sources accordingly.⁹

Potential Criminal Exposure: Because neither the Pilot Program nor OIG’s revised SDP accepts potentially criminal conduct, companies must carefully evaluate whether the underlying conduct, including the knowledge and intent of the individuals involved, may implicate criminal liability and, if so, coordinate any civil disclosure with the appropriate DOJ criminal disclosure path.

Overall, the decisions regarding whether, when, and how to self-disclose potential healthcare fraud matters have always been significant and delicate ones. While the Pilot Program introduces a new element of complexity into those decisions, it also has the potential to simplify the resolution of such matters with a coordinated approach among DOJ and three important HHS components.