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CMS Releases Stark Self-Referral Disclosure Protocol

On September 23, CMS released its Voluntary Self-Referral Disclosure Protocol (“SRDP”) pursuant to Section 6409 of the Affordable Care Act (“ACA”), which “requires the Secretary of HHS to inform providers of services and suppliers of how to disclose an actual or potential violation pursuant to the protocol….” The new statutory deadline for reporting and returning over payments due to inappropriate referrals (i.e., Stark law violations) is by the later of two dates: (1) 60 days after the date on which the overpayment was identified; or (2) the date any corresponding cost report is due. Once a provider or supplier has self-disclosed, that 60-day period is suspended.

“The SRDP is open to all health care providers of services and suppliers, whether individuals or entities, and is not limited to any particular industry, medical specialty, or type of service.” CMS emphasizes good faith throughout the entire disclosure process, both at the beginning–to avoid being removed from the SRDP–as well as at the end–to, hopefully, have a reduced amount in owing. Furthermore, CMS emphasizes that every disclosure is evaluated independently and every outcome is very fact-specific. Finally, CMS will be working alongside federal law enforcement and the Office of Inspector General (“OIG”) and the Department of Justice (“DOJ”) to address self-disclosures.

A provider or supplier making a voluntary self-disclosure, must go through the following process:

1. Disclosure – Providers and suppliers must submit an electronic disclosure as well as an original disclosure, with 1 copy, submitted by mail

2. Disclosed Information – The following comprise the disclosure:

a. Description of the actual or potential violations – Include the names, national provider identification numbers (NPIs), CMS Certification Number(s) (CCN), and tax identification number(s) of the disclosing party; a description of the nature of the matter being disclosed; a statement from the disclosing party regarding why it believes a violation of the physician self-referral law may have occurred; the circumstances under which the disclosed matter was discovered; a statement describing whether or not the disclosing party had a history of similar conduct; a description of the compliance program; a description of appropriate notices; and an indication of whether or not the disclosing party has knowledge that the matter is under current inquiry by a Government agency or contractor.

b. Financial Analysis – Set forth the amount, itemized by year, based on the applicable “look back” period; describe the methods used to set forth the amount that is actually or potentially due and owing; and a summary of auditing activity

3. Certification – The disclosure must be certified as true by either the disclosing party or the CEO or CFO of an entity

4. Verification – CMS must verify the disclosure, which depends on how thorough and cooperative the disclosing party has been

5. Payments – CMS will not accept payments prior to CMS’ completion of the investigation

6. Considering the Amount in Owing – “The factors CMS may consider in reducing the amounts otherwise owed include: (1) the nature and extent of the proper 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.” CMS notes that while it considers these factors, it is under no obligation to reduce any amounts due and owing.

It must be emphasized that this SRDP only applies to inappropriate referrals–Stark law violations. Furthermore, because this self-disclosure protocol involves all providers and suppliers, providers and suppliers must reacquaint themselves with and, where necessary, revise and update their compliance programs and ensure that there are no inadvertent (or deliberate) inappropriate referrals. If an inappropriate referral is identified, contact your healthcare attorney immediately to determine the most effective response.

For more information, please contact Adrienne Dresevic, Esq., Carey F. Kalmowitz, Esq., at (248) 996-8510 or (212) 734-0128 or Daniel B. Brown, Esq. at (770) 804-6475, or visit the Stark and Anti-Kickback specialty page on the HLP website.

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