Health care providers, lawyers and consultants who have been waiting for years for guidance on reporting Stark violations to the U.S. Department of Health and Human Services (HHS) finally have some illumination.

Section 6409 of the Patient Protection and Affordable Care Act (PPACA) informed us that within six months of its enactment, a self-disclosure protocol would be issued. And approximately six months later, the Centers for Medicaid & Medicare Services (CMS) published the Voluntary Self-Referral Disclosure Protocol (OMB Control Number: 0938-1106). Now, providers who want to self-report have a mechanism and format to use. This disclosure protocol is to be used exclusively for Stark violations. Thus, if an arrangement poses a violation under Stark and False Claim or the Anti-Kickback Statute, that disclosure should not use the Stark disclosure protocol, but rather the Office of the Inspector General (OIG) Self-Disclosure Protocol.

A significant part of the disclosure protocol is spent explaining the mechanics of a self-disclosure. For example, the disclosure must be submitted electronically; not so with an OIG self-disclosure. The submission should include the typical information about the provider (e.g., provider number, EIN, system information, designated representative) and a description of the incident and why the provider believes it constitutes a Stark violation, how it was discovered, any history of similar conduct, information about the party’s compliance program, notices given to other government organizations, and whether the provider knows if the matter is under government investigation. The provider is also to supply a financial analysis, the total amount that is potentially to be repaid and the methodology utilized.

At that point, CMS will conduct its investigation to verify the information. However, what appears to be the most interesting part of the protocol is vague at best. That is the part (Section VIII) which allows CMS to reduce Stark repayments. While the government sets forth factors it may consider, including the nature of the illegal conduct, the timelines of the disclosure, cooperation, litigation risk and financial position, the government does not provide any specifics on how much it could reduce the penalty. Thus, until there are some reported disclosures with specific financial outcomes, it is unclear how CMS may use this tool to reduce claims.