CMS recently finalized a new Self-Referral Disclosure Protocol (SRDP) that includes forms for healthcare providers to use to disclose actual and potential violations of the federal physician self-referral statute (the “Stark Law”). Use of the new forms is mandatory starting June 1, 2017, but CMS encourages healthcare providers to start using the new forms immediately. The new SRDP itself, however, appears to be effective immediately, such that certain new elements of a self-disclosure addressed in the forms must arguably be included in self-disclosures submitted before June 1st in which the disclosing party chooses to not utilize the new forms.
CMS says that the new forms provide “a streamlined and standardized format” that will “will reduce the burden on providers and suppliers submitting disclosures and facilitate CMS’ review of the disclosures.” However, because the new forms expand the information required for submission and still permit an optional cover letter, preparing a submission under the new protocol is likely to require at least as much time and effort on the part of the disclosing party, if not more. Moreover, for parties with complex self-disclosures, the prescriptive structure of the forms may make it somewhat more challenging to weave a compelling narrative that frames the self-disclosed conduct in the best possible light.
As proposed last year, disclosures under the new SRDP include three main components:
- SRDP Disclosure Form
- Physician Information Form
- Financial Analysis Worksheet
The SRDP also retains a fourth “Certification” component, which is largely unchanged from the previous SRDP. Each of the three main components is discussed in more detail below.
SRDP Disclosure Form
Under the new SRDP Disclosure Form, the disclosing party must provide information regarding the party’s “history of abuse, pervasiveness of noncompliance, and steps to prevent future noncompliance[,]” in addition to providing general background information about the party.
CMS defines “pervasiveness of noncompliance” as “how common or frequent the disclosed noncompliance was in comparison with similar financial relationships between the disclosing party and physicians.” CMS suggests that “pervasiveness” can be answered in terms of percentages or raw numbers, and provides several examples of how to address the pervasiveness question.
The Disclosure Form also clarifies the “stand in the shoes” provisions of 42 C.F.R. § 411.354(c) and how to report noncompliance when a physician organization does not meet the requirements necessary to qualify as a group practice.
Physician Information Form
For each physician identified in the disclosure, the disclosing party must provide a “Physician Information Form.” For compensation arrangements, the new Physician Information Form provides “yes” or “no” checkboxes that CMS frames as allowing the disclosing party “to quickly identify those elements of an applicable exception that a financial relationship satisfied and those elements that the relationship failed to satisfy.” However, this checkbox approach constrains the flexibility of disclosing parties in characterizing a compensation arrangement’s violation of the Stark Law.
The disclosing party must still provide a narrative explanation detailing the specific type of noncompliant conduct being disclosed and how the arrangement was made compliant or otherwise terminated. As part of the Physician Information Form, the disclosing entity must also “(a) certify that the applicable financial relationship was noncompliant (or that the services failed to satisfy an applicable exception at 45 C.F.R. § 411.355), or (b) state that, because it cannot confirm that the financial relationship complied with the physician self-referral law, it is certifying noncompliance with the law.”
Additionally, the Physician Information Form requires the disclosing party to identify the “date of the discovery,” which under 42 C.F.R § 401.305(a)(2) is defined as “when the person has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.” The date of discovery starts the 60-day clock for reporting and returning overpayments.
Financial Analysis Worksheet
The Financial Analysis Worksheet requires that the disclosing party provide a financial analysis of the potential overpayment based on the 6-year lookback period. The 6-year lookback period is calculated from the date the overpayment was “identified.” Because the definition of “identified” includes when a party should have determined that an overpayment was made, identifying this date may be challenging for some providers.
In addition to providing specific details about the physician(s) and overpayment, the Financial Analysis Worksheet must include an explanation of the methodology used to determine the overpayment and must specifically state whether estimates were used and, if so, how those estimates were calculated.
Finally, unlike the previous SRDP, the disclosing party is not required to provide CMS with the actual amount of remuneration between the parties, unless specifically requested by CMS. However, under the new SRDP, the disclosing party is obligated to update CMS in the event of a bankruptcy filing, change of ownership, or change of designated representative with 30 days.