On September 23, 2010, the Centers for Medicare & Medicaid Services (CMS) published the process for the new Stark Act self-referral disclosure protocol (SRDP) mandated by the Patient Protection and Affordable Care Act (PPACA). The SRDP details are available on the CMS website.
The SRDP is intended to assist health care providers in resolving actual or potential violations of the physician self-referral law, known as the Stark Act. According to the CMS website, health care providers submitting violations under the SRDP "should be prepared to resolve their overpayment liability exposure for the submitted violations." The SRDP cannot be used to obtain a CMS determination as to whether an actual or potential violation of the Stark Act occurred. Thus, a "health care provider may not disclose an actual or potential Stark Act violation through the SRDP and concurrently request an advisory opinion for conduct underlying the same arrangements." Consequently, health care providers questioning whether a Stark violation might exist at their facility should contact their legal counsel prior to submitting any information under the SRDP.
According to the CMS website, the SRDP allows CMS to reduce amounts otherwise owed due to Stark Act violations based on several factors, including: (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. While CMS may consider these factors in determining whether reduction in any amounts owed is appropriate, CMS has no obligation to reduce any amounts due and owing. The SRDP states that "CMS will make an individual determination as to whether a reduction is appropriate based on the facts and circumstances of each disclosed actual or potential violation." Nevertheless, health care providers should breathe a sigh of relief at a possible way to settle Stark Act violations for an amount less than the amount actually owed, which by statute, is all of the reimbursements received from Medicare during the period a financial arrangement did not meet all components of a Stark exception.
Providers currently have to report Stark Act violation overpayments within 60 days from the identification of the overpayment under PPACA. Under the new SRDP, at the time a provider "electronically submits a disclosure under the SRDP (and receives e-mail confirmation from CMS that the disclosure has been received), the 60-day reporting obligation is suspended until (1) a settlement agreement is entered, (2) the provider withdraws from the SRDP, or (3) CMS removes the provider from the SRDP."
Overall, the SRDP provides a new useful way to resolve Stark Act violations. Providers who have recently identified Stark Act violations within their facility, or suspect that Stark Act violations might exist, should contact their legal counsel to determine whether the SRDP can assist in resolving such violations.