On March 23, 2010, the Patient Protection and Affordable Care Act (“PPACA” a/k/a the Health Law Reform Act) was signed into law. One of its lesser publicized provisions required the Centers for Medicare and Medicaid Services (“CMS”) to set forth a process for providers to self-disclose actual or potential violations of the Stark Law (also referred to as the “physician self-referral law”). On September 23, 2010, CMS complied with these requirements and published a self-referral disclosure protocol (“SRDP”) for health care providers to report actual or potential violations of the Stark Law and to resolve any overpayments related to the violations. The SRDP is designed to mimic the Office of Inspector General of the U.S. Department of Health and Human Services’ (“OIG”) Self-Disclosure Protocol which is already available to address actual or potential violations of the Anti-kickback Law.
Participation in the SRDP
Participation in the SRDP is open to all health care providers of services and suppliers, whether individuals or entities. For purposes of the SRDP, these participants will be referred to as “Disclosing Parties.” Being already subject to government investigation will not automatically preclude a Disclosing Party from participating in SRDP so long as the disclosure is made in good faith. Any attempts to circumvent an ongoing investigation or failure to fully comply with the self-disclosure process will result in the Disclosing Party being removed from the SRDP.
The SRDP is not intended for the purpose of obtaining a CMS determination as to whether an actual or potential violation of the physician self-referral law occurred. Those questions should be referred to the CMS physician self-referral advisory opinion process. Furthermore, the SRDP is not intended to resolve issues arising under the Anti-kickback Law. Those questions should be referred to the OIG’s separate Self-Disclosure Protocol. Disclosing Parties are advised to avoid disclosing the same conduct under both processes. If a Disclosing Party believes that both laws are implicated by its conduct, the disclosures should be made through the OIG.
Benefits of Disclosure
The Stark Law is a strict liability statute with huge potential penalties that could attach to even technical violations of the law, such as a lapsed contract or a missing signature. As a result, many providers would welcome the opportunity to reduce potential exposure to Stark Law penalties. The SRDP permits providers to have a chance to reduce this exposure. CMS has authority to reduce the penalties that would otherwise have to be paid for Stark Law violations, based on a number of relevant factors including, but not limited to:
- the nature and extent of the Stark Law violation,
- the timeliness of the disclosure,
- the provider's cooperation in the disclosure process,
- the litigation risk associated with the matter disclosed; and
- the financial position of the Disclosing Party.
In addition, once CMS receives an SRDP disclosure, the obligation to return any potential overpayment within 60 days (as required under PPACA) will be suspended until one of the following occurs: a settlement agreement is entered into, the Disclosing Party withdraws from the SRDP, or CMS removes the Disclosing Party from the SRDP.
Risks of Participation
The biggest risk to participating in the SRDP is that although CMS may reduce a reporting provider’s repayment obligation, CMS is always free to pursue the full penalties for a reported violation of the Stark Law. In addition, participation in the SRDP may reveal additional violations of the Stark Law, as well as violations of the Anti-kickback Law and the False Claims Act. CMS reserves the right to refer matters, if warranted, to the appropriate law enforcement agency for consideration under its civil and/or criminal authority.
Disclosure Process
In order to submit a disclosure to CMS, Disclosing Parties must both email and mail CMS the following:
- The name, address, national provider identification (“NPI”) number, CMS Certification Number and Tax Identification Number of the Disclosing Party;
- A description of the nature of the matter being disclosed, including the type of financial relationship(s) implicated, the parties involved, the specific time periods of potential Stark Law violation, the type of claims at issue, a description of the conduct at issue, and the names of individuals and entities believed to be implicated;
- A statement describing why the Disclosing Party believes a violation of the Stark Law may have occurred, including a complete legal analysis of the application of the Stark Law to the conduct and any relevant exceptions that may apply;
- Circumstances under which the disclosed matter was discovered and any corrective action taken to prevent future abuses;
- A statement identifying whether the Disclosing Party has a history of similar conduct;
- A statement indicating whether the Disclosing Party has knowledge that the matter is currently under investigation by a government agency or contractor;
- A financial analysis, setting forth the total amount, itemized by year, that is actually or potentially due; and
- Certification by the Disclosing Party that the information provided is true and based on a good faith effort to resolve liability under the Stark Law.
Your Houston Harbaugh attorney can assist you if you believe you may have a potential or actual Stark Law violation on your hands.