The federal law regulating physician referrals of Medicare or Medicaid patients to entities that the the physician or the physician’s immediate family member has a financial interest, commonly referred to as the “Stark Law,” can have dramatic consequences if violated. The healthcare community has witnessed a dramatic increase in the government’s enforcement of the Stark Law, as well as the federal anti-kickback statute, since the passage of the Affordable Care Act (ACA).
Physicians who violate, or suspect they may have violated, the Stark Law, can take part a program administered by the Centers for Medicare & Medicaid Services (CMS) designated as the Voluntary Self-Referral Disclosure Protocol (SRDP). By using the SRDP, a physician can in effect disclose to CMS their actual or potential non-compliance with the Stark Law prior to any government investigation or enforcement action. The purpose of the SRDP is to facilitate resolutions for actual or potential violations, and most noteworthy the SRDP program permits reduced liability for physicians who “come clean” under the Stark Law. Penalties increase over time for violations of the Stark Law, particularly when physicians retain payments from Medicare or Medicaid, that they know or should know, are overpayments.
On May 6, 2016, CMS released proposed revisions to the SRDP.
One of the major proposed changes is the requirement that submissions of disclosures be provided to CMS using new standardized forms. While the standardized forms, which include four different forms in total, are intended to streamline the disclosure process, the new forms require more detailed information. For instance a separate physician information form is required for each physician who is an owner of a large group practice that needs to self-disclose. These proposed new requirements by CMS also include an obligation to provide a financial analysis based on a 6-year lookback period and an analysis of the pervasiveness of the disclosed non-compliance.
The effort to revise the SRDP comes from the February 2016 final rule on the reporting and returning of overpayments. In February, CMS published its final rule that overpayments are to be reported and returned within 60 days of identification to avoid liability under the False Claims Act (FCA). The final overpayment rule also established the 6-year lookback period for overpayments made under Medicare Parts A and B for the FCA, meaning that the final rule applies to overpayments identified within a 6-year lookback time frame. Before the final overpayment rule, CMS required providers to refund only 4 years of Medicare reimbursement tainted by actual or potential violations of the Stark Law under SRDP. CMS now proposes to revise the SRDP to be consistent with the requirements of the final overpayment rule, that under the revised SRDP the disclosing parties must provide a financial analysis of the potential overpayment based on a 6-year lookback period. So if a Stark Law violation or potential violation occurs, due diligence must be performed on a 6-year lookback period, to determine whether there were any overpayments because of non-compliance with the Stark Law to also avoid liability under the FCA.
Frier Levitt has extensive experience with the SDRP as well as other government self-disclosure protocols. We can provide valuable insight to physicians and group practices that may suspect they are not in full compliance with the Stark Law or other government regulations. If you would like more information or have any questions regarding the SDRP or self-disclosure, please contact Frier Levitt today.
