CMS Announces Voluntary Self-Referral Disclosure Protocol

Author:Ms Michele Madison, Rusty Ross, Holly Pierson, Bob Threlkeld, James Hunter and Jennifer Monroe
Profession:Morris Manning & Martin

On September 23, 2010, the Centers for Medicare & Medicaid Services (CMS) issued the much anticipated Medicare self-referral disclosure protocol (SRDP) mandated by section 6409 of the Patient Protection and Affordable Care Act (PPACA). The SRDP provides an important process for health care providers of services and suppliers to facilitate resolution of only matters that, in the disclosing party's reasonable assessment, are actual or potential violations of the physician self-referral law (Stark Law). Such a process has been unavailable since March 24, 2009, when the Office of Inspector General of the Department of Health and Human Services (OIG) indicated that it would henceforth, under its self-disclosure protocol that has been in place since 1998, only consider self disclosures of conduct that constitutes a colorable violation of the anti-kickback statute, and would no longer consider self disclosures of potential Stark Law violations.

There are a number of important considerations for any provider, including a physician group or a hospital, to consider when deciding whether to self disclose. That is particularly true since the Stark Law is technically a strict liability statute, and the good faith intent of a provider is simply not relevant in determining whether a Stark Law violation has occurred. For one, CMS clearly states that it "has no obligation to reduce any amounts due and owing" but that it "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." The factors CMS may consider in reducing the amounts otherwise owed 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.

Moreover, if a disclosing party discloses a matter under the SRDP, it waives its appeal rights to the claims relating to the conduct disclosed if a settlement agreement is reached. However, if the disclosing party withdraws or is removed from the protocol, the disclosing party may appeal any overpayment demand letter in accordance with applicable regulations. Additionally, it is important to understand that CMS may coordinate with the OIG and Department of Justice (DOJ) upon review of the...

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