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New CMS Self-Disclosure Protocol Used to Resolve First Stark Matter

In February, the Centers for Medicare and Medicaid Services (“CMS”) settled the first Stark matter since the publication of the CMS Voluntary Self-Referral Disclosure Protocol (“SRDP”). Although CMS spokesperson, Ellen Griffith, would not provide additional details, she confirmed that a settlement was reached.

According to other sources, however, the first Stark case involved Saints Medical Center in Lowell, Massachusetts, and the alleged violations related to night coverage, medical directorships, and stipends. The center paid $578,000 to settle the matter which could have cost the hospital as much as $14 million.

The center executives thanked two Congress members for their assistance in resolving the matter. It is unclear what impact Congressional involvement had on the settlement.

Providers who violate the Stark law may now have a choice between CMS and the Office of Inspector General (“OIG”) self-disclosure protocols when the improper conduct violates the anti-kickback statute as well. However, CMS advises that, “[d]isclosing parties should not disclose the same conduct under both the SRDP and OIG’s Self-Disclosure Protocol.” Upon review of a provider’s disclosure, if applicable, CMS will coordinate its actions with the OIG and DOJ.

Although the initial settlement result appears promising for providers looking to the CMS self-disclosure protocol to resolve their Stark matters, time will tell whether the settlement amounts under the new protocol will be similar to those previously reached with OIG assistance. So far, the CMS documentation demands appear to be a great time and financial burden on the providers. This burden, however, needs to be weighed in comparison to the potential savings the providers may gain. If a provider chooses this self-disclosure route, CMS may still decline to accept the applicant to its program.

The risk of reverse false claims has triggered heightened anxiety among health care providers. For assistance navigating this complex area of the law or for more information, please contact Adrienne Dresevic, Esq., Carey F. Kalmowitz, Esq., or Esq. at (248) 996-8510 or (212) 734-0128, or visit the Stark and Anti-Kickback specialty page on the HLP website.

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