• Voluntary Self-Referral Disclosure:  Good or Bad Move?    
  • February 14, 2011 | Author: David Dirr
  • Law Firm: Dressman Benzinger LaVelle psc - Crestview Hills Office
  • The Patient Protection and Affordable Care Act (PPACA) requires the Secretary of Health and Human Services (HHS) to create a self-referral disclosure protocol (SRDP) for violations of the physician self-referral "Stark" Law.  The Center for Medicare and Medicaid Services (CMS) will administer the SRDP.  Providers are well aware that the Stark Law prohibits them from referring Medicare patients to an entity for "designated health services" if the physician or his/her immediate family member has a financial relationship with the entity to which the patient is referred, unless the arrangement meets an applicable exception of the law or its associated regulations.  The list of designated services includes inpatient and outpatient hospital services.

    Given the complexity of relationships between health care providers, violations of the Stark Law are unfortunately common and inadvertent.  The SRDP may be in some cases an efficient way for Medicare providers to report known violations.  However, a Medicare provider should consider several factors before using the SRDP or it may possibly face unintended consequences.

    Only Disclose in Good Faith
    Although a provider can disclose if it is already subject to a government inquiry, the SRDP should not be used to circumvent, or if a provider is not fully cooperating, it will dismiss the provider from the SRDP process.

    Use for Actual Stark Violations Only
    A provider should only use SRDP once it determines that an actual violation has occurred, and if it is prepared to accept responsibility.  A provider should not use SRDP in order to determine whether a violation has occurred; in that situation, using the CMS self-referral advisory opinion process may be more appropriate.  In addition, if the provider believes it has violated other federal laws, such as the anti-kickback statute, it must disclose through the  HHS Office of Inspector General's Self-Disclosure Protocol; disclosing through SRDP alone will not be enough.

    Collateral Consequences
    When CMS receives a self-disclosure, it will coordinate with the Office of Inspector General and the Department of Justice.  This may expose the provider to further liability under other laws and regulations.  Therefore, a provider should have legal counsel to perform a full assessment of its liability or risks before making a disclosure through the SRDP.

    Possible Waiver of Rights
    If a provider discloses a matter through the SRDP and then resolves it through a settlement agreement, the provider waives all appeal rights relating to it.  Additionally, the provider must agree to have the reopening rules, which pertain to remedial actions to change a final determination of CMS that resulted in an overpayment or an underpayment, apply from the date it makes its initial disclosure.

    No Automatic Reduction Penalties for Disclosure
    Although CMS has the authority to reduce the penalties of a provider who self-discloses through the SRDP, it has made clear that this is not automatic.  CMS will determine each case based on its facts.  Thus a provider should not enter the SRDP with any expectation of reduced penalties.

    Although the SRDP may be an efficient option for providers dealing with clear Stark violations, for the reasons described above, it may not be appropriate in all cases.  A provider should consult legal counsel before using the SRDP.