On September 23, 2010, the Centers for Medicare & Medicaid Services ("CMS") released the much anticipated Medicare physician self-referral disclosure protocol ("SRDP"), established pursuant to Section 6409 of the Patient Protection and Affordable Care Act of 2010 ("ACA"). The SRDP sets forth the procedures by which health care providers may disclose actual or potential violations of the federal physician self-referral law, 42 U.S.C. § 1395nn (commonly referred to as the "Stark Law"), in return for the opportunity to resolve any attendant Stark Law liability for an amount less than that provided for under the statute's refund provisions.

Nuts & Bolts

SRDP submissions must be made both electronically and via mail. The submissions must:

  • Identify the disclosing party's name, address, NPI, CMS certification and tax identification numbers.
  • Describe the potentially offending arrangement, how it was discovered and why it may give rise to a Stark Law violation.
  • Describe the disclosing party's compliance program at the time of the potential violation.
  • Disclose any prior criminal actions or Stark Law violations.
  • State whether the disclosing party (1) is aware of any ongoing government investigation of the potentially offending arrangement or (2) has informed any other government agency of the potentially offending arrangement.
  • Submit a financial analysis of how much is due and owing as a result of the potential violation of the Stark Law (presumably, the total refund amount).
  • Include a certification by an authorized representative of the disclosing party, attesting that the SRDP "contains truthful information."

The Carrot

The historical challenges presented by the Stark Law and its implementing regulations were many, including its extraordinary technicality, its strict liability nature (meaning that the parties' good intentions are irrelevant), and its potentially disproportionate consequences (including massive refunds and per-service penalties). These challenges were exacerbated by the fact that, until the enactment of Section 6409 of the ACA, the federal enforcement community - including the Department of Justice ("DOJ"), the U.S. Department of Health and Human Services - Office of the Inspector General ("HHS-OIG") and CMS - took the position that it lacked the authority to compromise the statutory refund provision. The challenges were further exacerbated by HHS-OIG's 2009 decision to terminate its own (and highly functional) voluntary disclosure program to potential violations of the Stark Law.

In contrast to the HHS-OIG program, the SRDP offers no tangible incentives or guarantees. Instead, the SRDP simply identifies the factors that may be considered in reducing the amounts owed to include: (1) the nature and extent of the improper 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. Further, the SRDP cautions that CMS has no obligation to make any reductions, thereby arguably wasting an opportunity to bring proportionality and fairness to a statutory regimen that can, and has, often lead to severe results.


CMS advises industry players that the SRDP is limited to Stark Law violations, and that it may elect to use the information in a disclosure to make referrals to (1) the HHS-OIG pursuant to the federal health care anti-kickback statute ("AKS") or the OIG's civil monetary penalty authority, or (2) the DOJ under the federal civil False Claims Act ("FCA"). These vague statements, however, raise more questions than they answer. For example, it is unclear whether a party that self discloses under the SRDP will be able to obtain a release covering the civil monetary penalty provisions set forth at 42 U.S.C. §§ 1395nn(g)(3) and 1395nn(g)(4), given that those provisions fall under HHS-OIG jurisdiction. (The SRDP states that a party should not disclose the same conduct to CMS and HHS-OIG under their respective disclosure programs.) It is equally unclear what CMS has in mind when it refers to the FCA. Surely, the principal motivation behind a disclosure will be to extinguish Stark Law liability (thereby removing the predicate falsity for FCA purposes) and not just to resolve the refund obligation. In sum, although an important first step, the ultimate confines and, therefore, value of the SRDP very much remain to be seen.