Le­gal Learn­ing more about the SRDP

Modern Healthcare - - SPECIAL REPORT -

While health­care watch­ers will stay fo­cused this year on the over­ar­ch­ing le­gal­ity of the Pa­tient Pro­tec­tion and Af­ford­able Care Act, many spe­cial­ized lawyers are keep­ing an eye on one dis­crete niche of the law that al­lows hos­pi­tals to ’fess up when they broke the law.

The new SRDP, or Self-re­fer­ral Dis­clo­sure Pro­to­col, is sup­posed to give hos­pi­tals a way to es­cape hugely pu­ni­tive pro­vi­sions of the Stark law by ad­mit­ting er­rors re­gard­ing physi­cian sel­f­re­fer­ral and then get­ting a break on the fines.

Never heard of the SRDP? Ob­servers say that what the pro­to­col lacks in gen­eral pub­lic expo- sure is made up for by the keen fo­cus paid to it by scores of in­dus­try lawyers. And their in­ter­est is of course driven by the mul­ti­mil­lion-dol­lar price tags com­mon to sim­ple Stark vi­o­la­tions.

Ex­perts say many rou­tine vi­o­la­tions of the Stark law’s pro­hi­bi­tions on physi­cian self-re­fer­ral in­clude a worst-case-fines sce­nario that can climb into the tens of mil­lions or more, es­pe­cially if the sit­u­a­tion has per­sisted for years. That’s be­cause penal­ties in­clude $15,000 per pro­hib­ited pa­tient re­fer­ral plus re­fund­ing of all pay­ments made un­der the il­le­gal ar­range­ment.

The SRDP was sup­posed to give hos­pi­tals a way to come clean with au­thor­i­ties, strike a set- tle­ment, and wipe Stark li­a­bil­ity off the books in a me­thod­i­cal way—very help­ful for trans­ac­tional lawyers look­ing to elim­i­nate X-fac­tors when fi­nal­iz­ing hos­pi­tal merg­ers. The prob­lem was, the CMS re­ceived more than 100 sub­mis­sions un­der the pro­to­col in 2011, but by mid-de­cem­ber had only an­nounced two set­tle­ments on its web­site, www.cms.gov/physi­cian­sel­fre­fer­ral. And for those two, lawyers say the in­for­ma­tion didn’t seem com­plete enough to tell whether self-reporting hos­pi­tals were get­ting rea­son­able set­tle­ment of­fers from the CMS.

“I’m hope­ful that we’re go­ing to see some fairly stan­dard­ized set­tle­ments, but the like­li­hood of that hap­pen­ing is low. I think they’re go­ing to play their cards close to their chest,” says health­care com­pli­ance at­tor­ney Robert Wade, a part­ner with Krieg Devault in Mishawaka, Ind.

—Joe Carl­son

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