In March 2016, the Centers for Medicare and Medicaid Services (“CMS”) published a long-awaited final rule pertaining to the 60‐day rule, which requires Medicare providers to report and return Medicare overpayments to the government no later than sixty (60) days after identifying and quantifying such overpayments. That final rule states that “overpayments must be reported and returned only if a person identifies the overpayment within 6 years of the date the overpayment was received.” In an update published May 6, 2016, CMS made clear that this 6-year lookback period applies to the Self-Referral Disclosure Protocol (“SRDP,” the agency’s mechanism for Medicare providers to self-report violations of the Stark Law), thereby replacing the SRDP’s previous 4-year lookback requirement.
The SRDP requires providers who use the protocol (known as “disclosing parties”) to submit all materials (including all contracts with physicians) to be reviewed by CMS for compliance with the Stark Law (i.e., the Physician Self-Referral Law). By way of background, the Stark Law prohibits physicians from referring Medicare beneficiaries for the provision of certain “designated health services” to entities with which the referring physician has a “financial relationship” (defined as either a direct or indirect ownership or compensation arrangement), unless an exception applies. In reviewing SRDP submissions for Stark Law compliance, CMS looks for the applicability of certain Stark Law exceptions. However, as CMS notes, the SRDP cannot be used to obtain a CMS determination as to whether an actual or potential violation of the Stark Law occurred, and thus is separate and distinct from the CMS advisory opinion process.
The SRDP update includes a new form that providers must use to disclose Stark Law violations. This SRDP Disclosure Form (CMS-10328) requires information about the disclosing party, including the disclosing party’s history of abuse, pervasiveness of noncompliance, and steps taken to prevent future noncompliance. Additionally, disclosing parties must submit: (a) Physician Information Forms for each physician included in the disclosure (i.e., each physician with whom the disclosing party has a financial relationship), (b) a Financial Analysis Worksheet to quantify the overpayment, and (c) a Certification signed by a ranking officer or other representative stating that, to the best of the individual’s knowledge, the information provided is truthful and based on a good-faith effort to bring the matter to CMS’ attention.
Determining whether or not to disclose under the SRDP requires a provider to weigh the costs and benefits of such disclosure. Due to the extension of the lookback period from four years to six, the recent SRDP update alters that analysis, as the payback amount potentially increases for disclosing parties who confess actual or potential Stark violations to CMS. In making this determination, providers should keep in mind that CMS typically offers reduced damages to providers who self-disclose through the SRDP. Moreover, providers should keep in mind that Stark Law violations may lead to liability under the False Claims Act, thereby subjecting providers to treble damages, plus penalties of up to $11,000 for every claim submitted in violation of the law. Thus, providers should likewise consider that disclosing through the SRDP might prevent such consequences.
The attorneys at Chilivis Grubman have vast experience representing healthcare providers of all types in connection with self-disclosures, Stark and Anti-Kickback compliance, and various other regulatory matters. For any questions, or if we can assist you in connection with a healthcare regulatory or compliance issue, please contact us at (404) 262-6505 or sgrubman@cglawfirm.com.