December 2011 Volume 8 Number 4

Stark Self-Disclosure Protocol – 1 Year Later!

By Conrad Meyer, Chaffe McCall, L.L.P., New Orleans, LA

AuthorOn September 23, 2010, in response to the enactment of the Patient Protection and Affordable Care Act (“PPACA”), the Centers for Medicare & Medicaid Services (“CMS”) released the Self-Referral Disclosure Protocol (“SRDP”)1. More than a year later, well over 100 providers have submitted self-disclosures to CMS, but only two resolutions have been reported. Despite the two reported cases, CMS is rumored to have several additional SRDPs in the works that will be disclosed on the website shortly. The premise behind the SRDP was to provide providers with an opportunity to disclose to CMS violations of the physician self-referral law (the “Stark Law”) and request a compromise by the government of its overpayment liability. A closer review of the SRDP however, presents other issues for providers in deciding whether to disclose or not disclose Stark Law violations to CMS, including potential referral of disclosures to the Office of Inspector General (“OIG”), excessive costs involved in production of documents to CMS and retention of counsel in response to the disclosure.

BACKGROUND OF the SRDP

The Stark Law prohibits an entity from billing Medicare for “designated health services” (“DHS”) that were referred to the entity by a physician who has (or whose immediate family member has) a financial relationship with the entity, unless an exception applies. The statute does contain several exceptions to the general prohibition. Penalties for violating the Stark Law include denial of Medicare claims that were made as a result of the prohibited referrals as well as potential civil monetary penalties and possible exclusion from Medicare and Medicaid. Providers who violate the Stark Law can do so unknowingly, and the government does not require any intent on behalf of the provider to violate the Stark Law for the government to impose penalties.

In order to assist providers in avoiding liability for violations of the Stark Law, CMS created the SRDP back in September 2010. The following SRDP requirements afford [I’m not fond of ‘provides providers’] providers a roadmap to the manner and content when submitting disclosures to CMS:

1. Disclosures must be submitted both electronically and by mail to CMS.

2. Disclosures must include a signed certification that the submission contains truthful information and is based on a good faith effort to bring the matter to CMS’ attention for the purpose of resolving potential liabilities.

3. Disclosures must describe in detail:

A. The matter involved;

B. A legal analysis of why the disclosing party believes a violation of the Stark Law may have occurred;

C. The circumstances under which the disclosed matter was discovered; and

D. Any corrective action that has been taken.

4. Disclosures must include a description of any pre-existing compliance program that the disclosing party had in place at the time of the conduct.

5. Disclosures must have a statement identifying whether the disclosing party has a history of similar conduct or other enforcement actions being taken against it.

6. Disclosures must contain a description of notices provided to other government agencies in connection with the disclosed matter, and an indication of whether the disclosing party has knowledge that the matter is under current inquiry by a government agency or contractor or if the disclosing party is under investigation for any other matters relating to a federal healthcare program.

7. Disclosures must include a financial analysis of the disclosed conduct which sets forth the total amount that is potentially due and owing, describe the methodology used to determine the stated amount, and provide a summary of the auditing activity undertaken and a summary of the documents relied upon.

After providers submit the information outlined above, CMS will process the same and attempt to verify the information. The extent of CMS’ verification efforts will depend on the quality and thoroughness of the submitted information.

After verification, CMS reviews the disclosure to determine what amounts, if any, should be reduced by the disclosing party/provider. In determining whether to reduce the amounts owed by the disclosing party under the SRDP, CMS will consider:

(1) The nature and extent of the improper or illegal practice;

(2) The timeliness of the self-disclosure;

(3) The cooperation in providing additional information related to the disclosure;

(4) The litigation risk associated with the matter disclosed; and

(5) The financial position of the disclosing party.

An important factor contained in the SRDP requires providers to comply with the overpayment provisions contained in PPACA should CMS determine an amount owed. As such, providers shall be responsible for returning overpayments within 60 days until a settlement agreement is entered, the entity withdraws from the SRDP, or CMS removes the entity from the SRDP.2

REPORTED RESOLUTIONS  

As of December 14, 2011, CMS has only published two resolutions invoking the SRDP. The first was on February 10, 2011, when CMS settled several violations of the Stark Law disclosed by a general acute care hospital located in Massachusetts under the SRDP. CMS’ only reference to the resolution provided the following information:

On February 10, 2011, CMS settled several violations of the physician self-referral statute disclosed by a general acute care hospital located in Massachusetts (the "Hospital") under the SRPD. The Hospital disclosed under the SRDP that it violated the physician self-referral statute by (1) failing to satisfy the requirements of the personal services arrangements exception for arrangements with certain hospital department chiefs and the medical staff for leadership services, and (2) failing to satisfy the requirements of the personal services arrangements exception for arrangements with certain physician groups for on-site overnight coverage for patients at the Hospital.

All violations disclosed were settled for $579,000.00.3

The second resolution was published on December 13, 2011, whereby CMS settled several violations of the Stark Law disclosed by a critical access hospital located in Mississippi. Again, the only information provided by CMS regarding this second resolution is as follows:

On November 11, 2011, CMS settled several violations of the physician self-referral statute disclosed by a critical access hospital located in Mississippi (the Hospital) under the SRDP. The Hospital disclosed under the SRDP that it violated the physician self-referral statute by failing to satisfy the requirements of the personal services arrangements exception for arrangements with certain hospital and emergency room physicians.

All violations disclosed were settled for $130,000.00.4

Providers Still in the Dark

The two resolutions issued by CMS to providers invoking the SRDP leave little in the way of guidance and information to assist providers who wish to utilize the SRDP properly. In addition, the fact that CMS has only published two resolutions it settled with providers since the SRDP went into effect almost fifteen (15) months ago leaves providers wondering. Some of the most significant concerns include:

  • Are there any other providers taking advantage of the SRDP?
  • How many disclosures have been submitted to CMS under the SRDP?
  • How many disclosures were referred by CMS to OIG for prosecution under the Anti-Kickback statute?

Interestingly, PPACA requires the HHS Secretary to issue a report to Congress no later than 18 months after establishing the SRDP to provide information on (among other things) the number of entities making disclosures pursuant to the SRDP and the amounts collected pursuant to the SRDP. That report is expected in March 2012 and hopefully will answer some of the outstanding questions providers have regarding the SRDP and its usefulness.


For more information on this topic, the Health Law Section is hosting a webinar "Navigating the Choppy Waters of the SRDP: Lessons Learned One Year Later" on January 12, 2012.


1

A copy of the SRDP can be found at the following CMS url: https://www.cms.gov/PhysicianSelfReferral/98_Self_Referral_Disclosure_Protocol.asp#TopOfPage

2 See section 6402 of PPACA for deadline of reporting and returning overpayments.
3

https://www.cms.gov/PhysicianSelfReferral/DPS/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID= CMS1249488&intNumPerPage=10

4

https://www.cms.gov/PhysicianSelfReferral/DPS/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID= CMS1254832&intNumPerPage=10


The ABA Health eSource is distributed automatically to members of the ABA Health Law Section . Please feel free to forward it! Non-members may also sign up to receive the ABA Health eSource.