Moving the HME Industry Forward

General Healthcare

Self-Disclosure of Stark Violations

April 17, 2017

AMARILLO, TX – The Self-Referral Disclosure Protocol (“SRDP”), or “Stark disclosure protocol,” signed into law under the Affordable Care Act (“ACA”) on March 23, 2010, required the Department of Health and Human Services (“HHS”) and the Office of Inspector General (“OIG”) to establish a self-referral disclosure protocol for violations of the Stark physician self-referral statute. Beginning June 1, 2017, that protocol takes effect.

The SRDP is intended to motivate health care providers and suppliers to disclose an actual or potential violation of Section 1877 of the Social Security Act (Stark). The Office of Management and Budget approved a 12-page “collection instrument” entitled CMS Voluntary Self-Referral Disclosure Protocol (“SRDP Form”). The SRDP Form must be used for the self-report process and includes one page for disclosure of noncompliant financial relationships with a physician. If more than one physician is being disclosed, then there is a separate form to submit for each additional physician.

Violations and Services
The SRDP is meant for providers and suppliers who reasonably believe that an actual or potential violation of Stark exists with “the intention of resolving its overpayment liability exposure for the conduct it identified.” While the SRDP does not state that overpayment liability arises at the time of the submission of the SRDP Form, expect any “designated health services” billed in violation of Stark to be reviewed, assessed, and resolved.  Stark includes a specific list of designated health services which are:

a) clinical laboratory services
b) physical therapy services
c) occupational therapy services
d) radiology and certain other imaging services
e) radiation therapy services and supplies
f) DME and supplies
g) prosthetics, orthotics, and supplies
h) parenteral and enteral nutrients, equipment, and supplies
i) home health services
j) outpatient prescription drugs
k) inpatient and outpatient hospital services
l) outpatient speech-language pathology services

Amounts Owed
As an incentive to voluntarily disclose self-referral violations (versus waiting for violations to be discovered by the government), Section 6409 of the ACA gives HHS the authority to reduce the amount due and owing for violations of Stark. In establishing the amount of a violation, the following factors will be taken into consideration:

1) The nature and extent of the improper practice
2) The timeliness of the self-disclosure
3) The cooperation in providing additional information related to the disclosure
4) Such other factors as HHS considers appropriate

Lookback Period
The “lookback period” for disclosures was published in the final rule for reporting and returning of overpayments and became effective on March 14, 2016. Prior to the final rule, the “lookback period” was four years. This final rule established a six-year “lookback period” for reporting and returning of overpayments; and CMS used this as a guide to determine the time frame of the SRDP. CMS has stated that providers and suppliers that reported self-referral overpayments to the SRDP prior to March 14, 2016, were subject to the four-year “lookback period”.  Providers and suppliers reporting overpayments on or after March 14, 2016, are subject to the six-year “lookback period”.

Special Instructions for SRDP for Physician-Owned Hospitals and Rural Providers
Special instructions require physician-owned hospitals and rural providers to publicly disclose (e.g., website and advertisement) that the hospital is owned or invested in by physicians.

Failure to disclose this information obligates the hospital or rural provider to submit an SRDP Form.  But, if the hospital or rural provider is only disclosing non-compliance with the physician ownership disclosure requirement (42 C.F.R. §411.362(b)(3)(ii)(C)), then it need only provide:

a) The name and address of the hospital or rural provider
b) The hospital or rural provider’s CCN, NPI(s), and TIN(s)
c) The name and contact information of the hospital or rural provider’s designated representative
d) The names and NPIs of all of the physician owners/investors during the period(s) of noncompliance
e) The dates for the period(s) of noncompliance (expressed as a date range)

Further, the hospital or rural provider must certify that:During the period(s) of noncompliance, the hospital or rural provider had at least one instance of noncompliance with the physician ownership disclosure requirement;

a) For each month during the period(s) of noncompliance, at least one of the physician owners/investors referred Medicare patients for designated health services to the hospital or rural provider, and the hospital or rural provider billed Medicare for such services;
b) The hospital or rural provider otherwise met the requirements of an ownership or investment interest exception to Stark (42 C.F.R. §411.356(c)(1) or (c)(3)) and the other requirements of the physician ownership disclosure requirement (42 C.F.R. §411.362); and,
c) No other exception to Stark was available during the period(s) of noncompliance.

The ACA has moved CMS’s focus from “pay and chase” to “guard the henhouse.” This is evidenced by CMS’s Final Rule in December 2014 that announced changes to allow CMS new “common-sense safeguards to preserve Medicare,” including revocation of enrollment if the provider or supplier has a “pattern or practice of billing for services that do not meet Medicare requirements.”  CMS will also deny enrollment of providers and suppliers if they, or their owners, are affiliated with an entity that owes money to Medicare. These measures, coupled with the SRDP and other self-reporting tools, further CMS’s goal of preserving the Medicare program and promoting cost containment.

The SRDP, effective in June 2017, along with the Voluntary Overpayment Rule finalized in March 2016 and CMS’s Final Rule regarding enrollment safeguards in December 2014 are evidence of a shift in addressing improper payments and fraud. Auditing and voluntarily refunding improper payments are difficult, but the alternative can be extremely costly.

Jeff Baird will be presenting the following webinar:
Webinar sponsored by Mediware Information Systems, Inc.
Waiver or Reduction of Medicare and Commercial Co-Payments: What DME Providers Can and Can’t Do
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Thursday, April 20, 2017
1:00 p.m. CENTRAL TIME
When every dollar counts in the DME industry, it is vital that suppliers make every effort to collect copayments and deductibles. In many cases, it is challenging when patients do not have supplemental insurance, and the supplier gets in the habit of routinely waiving co-payments. This is why DME suppliers need to understand that this behavior can result in an investigation from the OIG for potential fraud.

Join Jeffrey S. Baird, Esq., Chairman of the Health Care Group of Brown & Fortunato, P.C., to learn the latest DME requirements regarding co-payments from Medicare beneficiaries and commercial patients, and the steps that the supplier should take before waiving a co-payment.

This presentation will help attendees:
• Learn why the collection of copayments and deductibles is critical to the success of a business
• Analyze when it is legally acceptable to waive copayments and deductibles
• Understand what the OIG considers to be a kickback, inducement, or false claim

Register for “Waiver or Reduction of Medicare and Commercial Co-Payments:  What DME Providers Can and Can’t Do” on Thursday, April 20, 2017, 1:00 p.m. CT, with Jeffrey S. Baird, Esq., of  Brown & Fortunato, PC.

Contact Kolby Wegener at if you experience any difficulties registering.

This webinar is free for attendees.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Texas. Pam F. Colbert, JD, is an attorney with the Health Care Group at Brown & Fortunato, P.C. They represent pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Jeff Baird is Board Certified in Health Law by the Texas Board of Legal Specialization. He can be reached at (806) 345-6320 or Pam Colbert can be reached at (806) 345-6378 or