A healthcare company that discovers an Anti-Kickback Statute violation, a pattern of improper Stark Law referrals, or a billing scheme buried in its own claims data faces an early choice: disclose it to the Department of Justice or wait to see whether the government finds it first. The Criminal Division's Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP), set out at Justice Manual 9-47.120 and last updated January 2025, defines what counts as a voluntary disclosure and what a company gets in return.
What Qualifies as a Voluntary Self-Disclosure
The CEP defines voluntary self-disclosure through six conditions. The company must disclose to the Criminal Division, though a good-faith disclosure to another Department of Justice component can qualify if the resolution includes the Criminal Division. The misconduct must not already be known to the Department of Justice, and the company must have had no pre-existing obligation to disclose it. The disclosure has to occur before an imminent threat of disclosure or government investigation, the standard the CEP borrows from the U.S. Sentencing Guidelines, and within a reasonably prompt time after discovering the conduct, with the burden on the company to prove that timing. The company must also disclose all relevant, non-privileged facts it knows about everyone involved in the misconduct, regardless of seniority. A report that misses any one condition is not a voluntary self-disclosure, whatever the company intended.
Full Cooperation and Timely Remediation
Voluntary disclosure alone earns nothing. The CEP also requires full cooperation: disclosing all relevant, non-privileged facts about everyone involved regardless of seniority, proactively surfacing facts not yet asked for, preserving relevant documents, and making current and former officers and employees available for interviews, subject to Fifth Amendment rights. None of this requires waiving attorney-client privilege or work product protection. Remediation must be timely and appropriate: a documented root-cause analysis, an effective compliance and ethics program, discipline for the employees responsible, and controls over business records, including the personal and ephemeral messaging applications that can otherwise destroy evidence a cooperating company is obligated to preserve.
A cooperating company starts at zero cooperation credit and earns credit for specific cooperative actions, not the other way around.
What Credit Can Follow
When a company meets all four conditions, voluntary disclosure, full cooperation, timely remediation, and no aggravating circumstances, the Criminal Division presumes a declination. An aggravating circumstance includes executive management's involvement in the misconduct, how egregious or pervasive the misconduct was inside the company, or criminal recidivism. Even with an aggravating circumstance, prosecutors can still find a declination appropriate if the company disclosed immediately on becoming aware of the misconduct, had an effective compliance program in place at the time that helped identify it, and provides extraordinary cooperation and remediation beyond the policy's ordinary requirements. A CEP declination still requires paying any disgorgement, forfeiture, restitution, or victim compensation tied to the misconduct, and the declination is made public.
A company that cannot earn a presumed declination because of an aggravating circumstance, but that still voluntarily self-disclosed, fully cooperated, and timely and appropriately remediated, generally avoids a guilty plea, absent particularly egregious or multiple aggravating circumstances, and avoids a monitor if its compliance program is effective, under a resolution structure discussed in Deferred and Non-Prosecution Agreements in Healthcare. It can still receive a reduction of at least 50% and up to 75% off the low end of the Sentencing Guidelines fine range. A company that only acts in good faith short of a full voluntary self-disclosure, or does not self-disclose at all, leaves the resolution's form and term to prosecutorial discretion, with any reduction capped at 50% off the Sentencing Guidelines range.
How This Differs From Waiting to Be Caught
Waiting changes the posture entirely. Once the Department of Justice learns of the misconduct on its own, through a grand jury subpoena, a civil investigative demand, a whistleblower, or a referral from a PBM or a Medicare contractor, the voluntary self-disclosure path closes. The company can still earn cooperation and remediation credit, but the fine reduction caps at 50%, a monitor stays on the table, and there is no presumption of a declination or a non-prosecution agreement. The CEP rewards the company that comes forward first, not the one that cooperates well once it has no other option.
Why Early Legal Counsel Is Critical
It is critical that healthcare companies promptly retain experienced healthcare defense counsel before deciding whether, when, and how to disclose potential misconduct to the Department of Justice. Early legal intervention can shape an internal investigation so its findings support a voluntary disclosure rather than undercut it, protect the company's rights, avoid inadvertent admissions, and let counsel communicate with the Criminal Division on the company's behalf. Waiting too long can cost a company the voluntary self-disclosure window and push it into the narrower credit available to companies that do not self-disclose.
How Health Law Alliance Can Help
Health Law Alliance advises healthcare companies, pharmacies, and physician practices on whether and how to self-report potential misconduct to the Department of Justice, from the initial healthcare fraud defense assessment through the cooperation and remediation a declination requires.
Health Law Alliance's attorneys have overseen 2,000+ audits and handled 5,000+ matters, with 25+ years of experience.
If your organization has discovered potential misconduct and is weighing whether to self-report, contact Health Law Alliance's self-disclosure defense team for a free, confidential consultation before deciding how and when to approach the Department of Justice.
