Self-dis­clo­sure data lack­ing

Providers ea­ger to know ex­tent of CMS’ le­niency for Stark law vi­o­la­tors

Modern Healthcare - - Front Page - Joe Carl­son

In the year since the CMS re­leased new rules on how health­care providers can turn them­selves in for vi­o­lat­ing the highly pu­ni­tive Stark law on physi­cian self-re­fer­ral, the agency has qui­etly set­tled a few of its 109 cases and pub­licly ac­knowl­edged only one. Lawyers who rep­re­sent hos­pi­tals and physi­cians in the mat­ters are frus­trated by the dearth of in­for­ma­tion about the fed­eral agency’s new self-dis­clo­sure pro­to­col, which went into ef­fect on Sept. 23, 2010, and gives CMS reg­u­la­tors an abil­ity—but not a man­date—to re­duce health­care providers’ li­a­bil­ity when they turn them­selves in.

Robert Belfort, a part­ner in the health­care prac­tice at Manatt Phelps & Phillips, said providers want to know what le­niency, if any, the CMS is giv­ing to or­ga­ni­za­tions that self-re­port tech­ni­cal vi­o­la­tions such as un­signed leases for physi­cian of­fice space, which can eas­ily trig­ger mil­lions in penal­ties.

“The ex­pec­ta­tion and the hope is that the set­tle­ments for tech­ni­cal vi­o­la­tions will be sig­nif­i­cantly less than the max­i­mum penalty, and that was the rea­son why the pro­to­col was set up,” Belfort said. “If that’s not the case, I think the pur­pose of the self-dis­clo­sure pro­to­col will be un­der­mined.”

In an in­ter­view, CMS of­fi­cials who spoke on con­di­tion of anonymity de­clined to say ex­actly how many of the cases have been re­solved so far or which health­care providers have re­ceived set­tle­ments un­der the process, which the agency was man­dated to es­tab­lish un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act.

The agency plans to post pe­ri­odic sum­maries of its set­tle­ments online, in­clud­ing cur­sory dis­clo­sures of the il­le­gal con­duct and the type of provider, along with set­tle­ment amounts.

Saints Med­i­cal Cen­ter in Low­ell, Mass., be­came the first hos­pi­tal in the na­tion last Fe­bru­ary to an­nounce a set­tle­ment with the CMS for a self-dis­closed vi­o­la­tion, pay­ing $578,000 to re­solve li­a­bil­ity es­ti­mated to have been as high as $14 mil­lion. It re­mains the only pub­licly ac­knowl­edged set­tle­ment. Saints Med­i­cal Cen­ter ex­ec­u­tives de­clined to be in­ter­viewed about the ex­pe­ri­ence.

The Stark law seeks to pre­vent physi­cians’ busi­ness in­ter­ests from in­ter­fer­ing with their med­i­cal de­ci­sions in med­i­cal re­fer­rals by mak­ing it il­le­gal for doc­tors to re­fer pa­tients to hos­pi­tals that com­pen­sate them, in­clud­ing with of­fice space.

The law and sub­se­quent CMS de­ci­sions es­tab­lished a com­plex set of “safe har­bor” ex­cep­tions to the rule, un­der which physi­cians can con­tinue mak­ing self-re­fer­rals as long as they fall within the bounds of the nar­row ex­cep­tions.

At­tor­neys say the penalty for vi­o­lat­ing the law is se­vere— providers are com­pelled to give back all re­im­burse­ments for pa­tients who were treated or re­ferred un­der pro­hib­ited ar­range­ments, and they may also face jeop­ardy un­der the False Claims Act, de­pend­ing on the cir­cum­stances.

The Ohio Val­ley Health Ed­u­ca­tion & Ser­vices Corp., a two-hos­pi­tal sys­tem based in Wheel­ing, W.Va., found out just how se­vere the penal­ties can be last month when ad­min­is­tra­tors there agreed to pay $3.8 mil­lion to set­tle a sit­u­a­tion in which the hos­pi­tals had im­proper com­pen­sa­tion ar­range­ments with lo­cal physi­cians be­tween Jan­uary 2005 and Au­gust 2010.

The health sys­tem vol­un­tar­ily dis­closed the vi­o­la­tions af­ter they were un­cov­ered by a turn­around con­sul­tant, but the dis­clo­sure came dur­ing an 18-month win­dow be­tween when HHS’ in­spec­tor gen­eral’s of­fice closed its self-dis­clo­sure process to Stark vi­o­la­tions in 2009 and be­fore the CMS un­veiled its new Stark process last year.

Although HHS’ self-reporting process re­mained open for vi­o­la­tions in­volv­ing the anti-kick­back statute, which of­ten over­lap with Stark vi­o­la­tions, HHS In­spec­tor Gen­eral Daniel Levin­son closed the pro­gram to Stark-only in­frac­tions like those at Ohio Val­ley.

Ohio Val­ley threw it­self on the mercy of the U.S. at­tor­ney’s of­fice in Wheel­ing, W.Va. The sys­tem ul­ti­mately agreed to pay $3.8 mil­lion and en­ter a cor­po­rate-in­tegrity agree­ment for what U.S. At­tor­ney Wil­liam Ih­len­feld II called “sig­nif­i­cant” vi­o­la­tions of the Stark law when he an­nounced the set­tle­ment un­der the False Claims Act.

“You re­ally can’t tell how bad the un­der­ly­ing con­duct is, but the fact

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