Tips for reporting Stark violation

John B. Garver III, JD, and Jennifer Csik Hutchens, JD, attorneys in the Charlotte, NC, office of the law firm Robinson Brandshaw, offer these tips for healthcare risk managers deciding whether to use the Stark Voluntary Self-Referral Disclosure Protocol (SRDP), and if so, how to then prepare a SRDP submission.

1. Set parameters for the investigation.

Typically, a provider's path to entering the SRDP starts with the discovery of a single potentially non-compliant arrangement. Because the provider should ensure that it ultimately reports all existing issues, it will want to survey the level of its compliance. In some instances, a provider might be faced with a daunting task of conducting a Stark self-audit of various physician payment streams over many years.

Prudent providers will set reasonable parameters for their self-audit. For example, a provider could consider starting with a review of all payment streams to or from physicians or physician practices during the past six years (typically considered the Stark Law statute of limitations period). Although it is possible that arrangements existing prior to such six-year cutoff also violate the Stark Law, the provider should circumscribe, with defensible boundaries, what might otherwise be an unlimited review.

2. Establish a plan for allocating responsibility.

Under the SRDP, disclosures and refunds of overpayments should be submitted within 60 days of the date on which the overpayment was identified or the date a corresponding cost report is due. Conducting a self-audit and preparing a SRDP submission can be an extremely time-consuming process, and those 60 days are certain to pass quickly. Thus, at the outset of a Stark self-audit, the provider should establish a timeline and clearly allocate responsibilities among its employees and between itself and its legal counsel.

3. Carefully prepare the SRDP submission.

A SRDP submission includes three components:

— an extensive report describing, among other things, the actual or potential Stark violation, the circumstances under which the violation was discovered, whether the disclosing party has a history of similar conduct, and the nature and adequacy of the disclosing party's existing compliance program;

— a financial analysis of the amount due;

— a certification by a corporate fiduciary, such as a hospital CEO, that the contents of the submission were prepared in good faith and are accurate.

The SRDP's good faith requirement makes careful preparation of the submission particularly important. To the extent that CMS sees errors or omissions as being uncooperative, as evidence of a continued lack of effort to comply with the Stark Law, or as an attempt to circumvent further investigation, it might demand a larger settlement. In the egregious case, the disclosing party risks being removed from the SRDP and having the submission referred to the Office of Inspector General (OIG) or the Department of Justice (DOJ) for further investigation.

For these reasons, disclosing parties should have legal counsel involved in the preparation, compilation, and/or review of SRDP disclosures before submission to CMS.