On September 23, 2010, the Centers for Medicare and Medicaid Services (CMS) posted on its web site the long awaited voluntary “Self-Referral Disclosure Protocol” which it refers to as the “SRDP.”  Information about the SRDP is available on the CMS website, and the SRDP is available here.

In March 2010, Congress enacted the Patient Protection and Affordable Care Act (sometimes referred to as the “PPACA” or “ACA”).  Section 6409 of the ACA required CMS to promulgate a Stark law self-disclosure program by September 23, 2010, which it has now done.  CMS intentionally decided to establish the SRDP without going through rule making.  While it is good news that there exists a formal mechanism for resolving Stark law violations, the SRDP raises as many questions as it answers.  Important aspects of the SRDP include the following:

  • The SRDP is separate from the advisory opinion process and cannot be used to obtain a CMS determination about an actual or potential violation;
  • CMS makes no guaranty about the treatment a disclosing party will receive, i.e., that overpayment amounts will be compromised in any particular manner or at all;
  • CMS will coordinate disclosures it receives with the DHHS Office of Inspector General (OIG) and Dept. of Justice (DOJ) as appropriate;
  • The disclosure must be comprehensive, address all of the elements set forth in SRDP, and include a comprehensive financial analysis;
  • Disclosures made within 60 days of the overpayment being identified will suspend the obligation to return any overpayment until a settlement agreement is entered or the disclosure is removed from the SRDP;
  • The disclosing party or an appropriate officer of the disclosing party must certify that the submission is truthful and based on a good faith effort to resolve any potential liabilities under the Stark law;
  • CMS will verify the submission, including requesting additional information and requiring cooperation from the disclosing party to provide information that may be subject to the attorney-client or attorney work product privileges; and
  • Repayment of any overpayment will not be accepted prior to CMS’s completion of its verification and inquiry.

Throughout the process, CMS will require the diligent and good faith cooperation of a disclosing party.  Failure to provide cooperation will be considered by CMS as it assesses appropriate resolutions.  If a disclosing party provides false or misleading information, or intentionally omits relevant information, CMS may refer the matter to the DOJ or other appropriate agencies.  Disclosures must be made within 60 days of the date the original overpayment was identified, or the date any corresponding cost report is due, if applicable.  Finally, CMS has set forth factors that it will consider in determining whether to reduce the amounts that would otherwise be owed.  Again, CMS provides no guarantees, or even guidelines, for how it will determine appropriate resolutions.  The factors CMS will consider include

  • The nature and extent of the illegal or improper practice;
  • The timeliness of the self-disclosure;
  • The cooperation of the disclosing party in providing additional information;
  • The litigation risk associated with the disclosure; and
  • The financial position of the disclosing party.

Despite the request of various industry groups, CMS has made no explicit statements about how it will consider or treat disclosures of technical violations (e.g., missing signature, expired agreements, etc.).  Ultimately, CMS states that it has “no obligation to reduce any amounts due and owing,” and that it will make determinations on an individual, facts and circumstances basis for each disclosure.

Having this avenue to attempt to resolve Stark law violations is indeed an improvement that has been needed for a long time.  However, providers cannot take much comfort from CMS’s statement that it has no obligation under the SRDP to compromise amounts due.  Only time and experience will tell how CMS treats these disclosures.  Ultimately, if a disclosing party does not believe that it is receiving appropriate treatment, it appears that the party can remove itself from the SRDP;  however, that is cold comfort after it has brought the matter to CMS’s attention and now has the obligation under the ACA to return overpayments.

For more information on the SRDP or the Stark law in general, please contact Don Black, Dave Schoolcraft or any one of OMW’s Healthcare Team members.