CMS Revises Self-Referral Disclosure Protocol in Advance of the End of COVID-19 Stark Law Blanket Waivers

End of COVID-19 Public Health Emergency Impacts Stark Self Disclosure

On Feb. 11, HHS Secretary Xavier Becerra announced that the COVID-19 Public Health Emergency (PHE) declaration will end on May 11, 2023, which means the end of blanket waivers of sanctions under the Stark Law, the physician self-referral law. HHS does not have legal authority to extend or grant further waivers. The Consolidated Appropriations Act of 2023 did not extend these waivers as it did for telehealth services, which now end on Dec. 31, 2024. Becerra gave providers a 90-day notice before the end of COVID-19 PHE ends to allow everyone time to comply with the Stark Law. Proactively reporting to CMS through the self-referral disclosure protocol (SRDP) could mitigate penalties and ultimately save providers money.

The SRDP gives proactive providers a great opportunity to mitigate or reduce the amount owed to the Medicare program and hopefully avoid any further government action. Failing to be proactive, a provider found liable under Stark Law faces: (1) civil monetary penalties of up to $185,009, (2) assessments up to three times the amount of the total remuneration offered, paid, solicited, or received, and/or (3) exclusion from Federal health care programs. A Stark Law violation can be the basis for liability, treble damages plus civil penalties, under the federal False Claims Act.

The Stark Law generally prohibits any person from billing Medicare for designated health services (DHS) furnished by an entity with whom the referring physician (or his/her immediate family member) has a financial relationship. Unless an exception applies, the physician cannot refer, and an entity receiving a prohibited referral is prohibited from billing Medicare for the services. This means that both the referral and subsequent submission of a claim are prohibited. Examples of financial relationships include investment or ownership interests in another healthcare provider, medical directorships, profit sharing, work bonuses, office or equipment leases, or independent contractors.

If providers are not compliant with the Stark Law by May 11, 2023, they may qualify for the CMS voluntary self-referral disclosure protocol (SRDP). Before making a disclosure, providers should review the latest changes to the SRDP. Starting March 1, providers who voluntarily self-report violations or potential violations of the Stark Law must complete a new form and follow new requirements under the SRDP. Failure to use the new form or follow the new requirements may result in rejection by CMS.

SRDP Basics

The Affordable Care Act (ACA) allows the Secretary of HHS to reduce the amount owed for violations of the Stark law. Pursuant to this authorization, the SRDP allows providers to voluntarily report and settle overpayments from the Medicare program due to non-compliance with the Stark Law. Generally, there are three types of disclosures under SRDP: physician-owned hospital website and advertising, failure to qualify as a group practice, and everything else. The SRDP only resolves matters that the provider believes are actual or potential violations of the Stark Law. Providers cannot use the SRDP to obtain a determination by CMS whether an actual or potential violation of the Stark law has occurred. For that determination, providers may go through the CMS physician self-referral advisory opinion process which is separate from the SRDP.

To use the SRDP, providers must certify for each disclosed noncompliant financial relationship that the financial relationship was noncompliant. Amongst other factors, CMS may consider: (1) the nature and extent of the violation, (2) the timing of the self-disclosure, and (3) the provider’s cooperation in reducing the amount owed to the Medicare program. For each disclosed actual or potential violation of the Stark Law, CMS will make an individual determination whether to reduce and how much to reduce the amount owed to the Medicare program. By going through the SRDP, providers waive administrative appeal rights for those claims covered by the self-disclosure. If a provider withdraws or is removed from the SRDP, the provider may appeal an overpayment determination through the administrative appeal process.

SRDP Changes Effective March 1, 2023

As of March 1, 2023, CMS requires providers making a self-disclosure under SRDP to use new or updated forms and follow updated instructions. For a disclosure based solely on a physician-owned hospital’s failure to disclose physician ownership on a public website or advertising, CMS only requires certain information and a signed certification. For a disclosure based on a physician practice’s failure to qualify for the group practice exception under Stark Law, CMS requires an SRDP Disclosure Form, Group Practice Information Form, Financial Analysis Worksheet, and a signed certification. For all other disclosures, CMS requires an SRDP Disclosure Form, Physician Information Form(s), Financial Analysis Worksheet, and signed certification.

Before submitting to the SRDP, providers might consider among other items: (1) the type, duration, and correction of the noncompliance, (2) their compliance history, (3) existing integrity agreements, and (4) pending government audits or investigations. A well-prepared submission may result in a favorable settlement that saves money and avoids further government action.

Clark Hill’s Healthcare team is ready to assist providers in complying with the Stark Law, appealing overpayment determinations, submitting to the SRDP, and as necessary, preparing for and defending against government audits, investigations, and prosecutions.

For further information, please contact the author, Jose Vela Jr. at jvela@clarkhill.com.

The views and opinions expressed in the article represent the view of the author and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is it intended to be a substitute for professional legal advice.