Header graphic for print
Triage Healthcare reform winners & losers

CMS Issues Self-Referral Disclosure Protocol, But Concerns Remain

Posted in Fraud and Abuse, PPACA

As required under The Patient Protection and Affordable Care Act (PPACA), CMS has issued the Self-Referral Disclosure Protocol (SRDP), through which healthcare providers may voluntarily report actual or potential Stark Law violations.  While the OIG maintains a voluntary disclosure protocol for suspected violations of the Anti-Kickback Statute and other Federal laws, the SRDP represents CMS’s first attempt at providing such a disclosure mechanism, and we may expect some tinkering as the process is implemented.

The SRDP offers health care providers an opportunity to work with CMS to potentially reduce liability for Stark violations through disclosure to, and cooperation with, CMS.  Factors CMS may consider in determining any liability reduction include:

  • The nature and extent of the improper illegal practice;
  • The timeliness of the self disclosure;
  • The cooperation in providing additional information related to the disclosure;
  • The litigation risk associated with the matter disclosed; and
  • The financial position of the disclosing party.

Disclosure under the SRDP also suspends the running of the 60-day overpayment refund clock until a settlement agreement is entered or the provider either withdraws or is removed from the SRDP process.  Unfortunately, CMS has still not clarified when the 60-day clock begins to run in the first place.

Although implementation of the SRDP has seen significant support, its actual provisions raise several questions and concerns.  First, CMS makes it very clear that it is under no obligation to eliminate or reduce the liability of any disclosing provider, stating that it “is not obligated to resolve the matter in any particular manner.”  Secondly, CMS also states that it will coordinate with the OIG and DOJ in reviewing the disclosed matter, it reserves the right to refer the issue to law enforcement, and may use the provider’s submission to prepare a recommendation to the OIG and DOJ for additional penalties.   Somewhat ominously, CMS states that “the disclosing party’s initial decision of where to refer a matter involving non-compliance with section 1877 of the Social Security Act should be made carefully.” 

While many healthcare providers may applaud the release of the SRDP, it remains to be seen how valuable this tool will be in reducing potential Stark liability.  Given the potential that any such disclosure could open the disclosing party to wider regulatory investigation and legal liability (with no assurance that any of the provider’s Stark liability will be reduced), providers should heed CMS’s warning and be very careful when considering whether to disclose under the SRDP.  The SRDP may be found here.