United States: Updated Procedures For Self-Reporting Stark Law Violations

Last Updated: December 11 2017
Article by Harold B. Hilborn

Beginning on June 1, 2017, providers must use specific forms published on the Centers for Medicare and Medicaid Services (CMS) website in order to utilize the Voluntary Self-Referral Disclosure Protocol (SRDP) to self-disclose actual or potential violations of the Physician Self-Referral Law (commonly referred to as the Stark Law). While voluntary disclosures do not eliminate the financial penalties that may result from an enforcement action, they do offer significant benefits that should be taken into consideration when deciding whether to self-report a violation of the Stark Law.

Stark Law Basics

The Stark Law prohibits physicians from ordering designated health services for Medicare and Medicaid patients from an entity with whom the physician, or an immediate family member of the physician, has a financial arrangement. When first enacted, the Stark Law applied only to relationships between physicians and clinical laboratories. Over the years, the list of designated health services expanded and now includes inpatient and outpatient hospital services; outpatient prescription drugs; home health services and supplies; prosthetics, orthotics, and prosthetic devices; parental and enteral nutrients, equipment, and supplies; durable medical equipment and supplies; radiation therapy services and supplies; radiology; occupational therapy services; and physical therapy services.

Under the Stark Law, a financial relationship includes compensation arrangements, investment interests, and ownership interests. Direct and indirect arrangements both implicate the Stark Law. As a result, when a physician has an ownership interest in a physician organization, financial relationships between providers of designated health services and the organization must be scrutinized.

The Stark Law is a strict liability statute. A violation is a violation, whether intentional, negligent, or inadvertent. While the Stark Law is not a criminal statute, providers who violate it face civil penalties of up to $23,863 per violation and exclusion from participating in federal health care programs. A violation of the Stark Law can also trigger liability under the False Claims Act, which provides for substantial additional civil penalties and allows for private parties to file lawsuits in the name of the government. Each claim submitted by a provider constitutes a separate violation, so the civil penalties can very quickly become substantial.

The Voluntary Self-Referral Disclosure Protocol

The Affordable Care Act (ACA), enacted on March 23, 2010, provides for the establishment of a voluntary self-referral disclosure protocol, or SRDP, under which providers of services and suppliers may self-disclose actual or potential violations of the Stark Law. Specifically, section 6409(b) of the ACA grants the Secretary of the Department of Health and Human Services the authority to reduce the amount due and owing for all violations of the Stark Law.

The SRDP is separate from the advisory opinion process. A provider of services or supplier may not disclose an actual or potential violation through the SRDP and request concurrently an advisory opinion for conduct underlying the same arrangement.

Voluntarily disclosing violations of the Stark Law can result in settlements that, while smaller than penalties in an enforcement action, may be still substantial. However, there are several significant benefits to using the SRDP:

First, voluntary disclosure typically indicates that the provider or supplier has a robust and effective compliance program. As a result, it may reduce the likelihood that the Office of Inspector General (OIG) will require a corporate integrity agreement in exchange for a release from exclusion from federal healthcare programs.

Second, self-disclosure extends the deadline established under section 6402 of the ACA for reporting and returning overpayments. Ordinarily, that deadline is the later of (1) the date which is 60 days after the date on which the overpayment was identified, or (2) the date any corresponding cost report is due, if applicable. By submitting a disclosure under the SRDP, however, the obligation to return the disclosed overpayment is suspended until a settlement agreement is reached, the provider or supplier withdraws its disclosure under the SRDP, or CMS removes the provider or supplier from the SRDP.

Third, a voluntary disclosure can often bar private parties from bringing False Claims Act lawsuits. Although a party can submit a disclosure to CMS while it is already subject to a government inquiry or investigation, the disclosure must be made in good faith. If the disclosure is submitted in order to circumvent an ongoing inquiry, CMS will remove the disclosing party from the protocol. To help gauge a disclosing party's good faith, the SRDP requires that party to state whether it has any knowledge that the matter is under current inquiry by a government agency or contractor and to specify the details of any such inquiry to the extent known.

The SRDP is intended to facilitate the resolution of matters that the disclosing party has, in its reasonable assessment, identified as actual or potential violations of the Stark Law. When reviewing a disclosure, CMS will not determine whether a violation actually occurred. Consequently, a provider or supplier should not make a submission to the SRDP with the intention of obtaining a finding of no violation and paying nothing. In fact, a disclosure under the SRDP must include a statement that either (1) its financial relationship was noncompliant, or (2) because it cannot confirm whether its relationship complied with the Stark Law, it is certifying noncompliance.

Voluntary disclosures under the SRDP remain uncommon, though their use has increased each year. Between 2011 and 2016, CMS settled 233 disclosures, and an additional 92 disclosures were withdrawn, closed without settlement, or settled by CMS's law enforcement partners. The settlements during that period totaled $23,209,222; individual settlements ranged from as low as $60 to as much as $1,195,763.

The 2017 Amendments

Effective June 1, 2017, a disclosing party must submit disclosures using standardized forms. Previously, CMS had only specified in narrative form the required content of disclosures, leaving it up to the disclosing party how best to format and package the disclosure.

Four forms are now required, each of which specifies in detail the information to be provided by the disclosing party and where on the form to provide it:

  • SRDP Disclosure Form. The SRDP Disclosure Form provides information about the disclosing party, including information regarding the disclosing party's history of abuse, pervasiveness of noncompliance, and steps to prevent future noncompliance.
  • Physician Information Form. For each physician included in the disclosure, the disclosing party must submit a separate Physician Information Form providing details of the noncompliant financial relationship between the physician and the disclosing party. While this may seem onerous, the form provides checkboxes that allow parties to more quickly identify which elements of exceptions may apply to a particular financial relationship.
  • Financial Analysis Worksheet. The Financial Analysis Worksheet quantifies the overpayment for each physician included in the disclosure who made referrals in violation of the Stark Law.
  • Certification. The disclosing party must sign a certification which states that, to the best of the individual signatory's knowledge, the information provided is truthful and is based on a good-faith effort to bring the matter to CMS' attention for the purposes of resolving the disclosed potential liabilities relating to the Stark Law. The disclosing party may, but is not required, to submit a cover letter that includes any additional information that the party believes may be relevant to CMS' evaluation of the disclosure.

The recent changes to the SRDP go beyond the form of disclosure. In substance, they add to a disclosing party's responsibilities by specifying in the Disclosure Form that the disclosure must be updated within 30 days of a bankruptcy filing, change of ownership, or change of designated representative. In addition, under the Disclosure Form, the description of actual or potential Stark Law violations must include a report of the "pervasiveness of noncompliance." Rather than simply providing a narrative description of what occurred and how that conduct may have violated the Stark Law, a disclosing party must now report on how common or frequent the disclosed noncompliance was in comparison with similar financial relationships between the disclosing party and physicians. For example, a hospital might state that it has "numerous compensation arrangements with physicians" and that it "estimates that the noncompliant compensation arrangements disclosed herein represent less than three percent of all financial relationships with physicians." The Disclosure Form, unlike the prior disclosure process, does not require a description of any pre-existing compliance program.

The Financial Analysis Worksheet replaces a more general requirement to provide a "financial analysis relating to the actual or potential violation(s) of the physician self-referral law." Under the new procedure, a disclosing party must provide prepare an analysis worksheet in Excel-compatible format. For each physician included in the disclosure, the worksheet must include all of the following:

  • Physician's name and national provider identifier (NPI)
  • Date that the overpayment associated with the physician was identified
  • Overpayment arising from the physician's prohibited referrals, itemized by calendar year, for the previous six years (this information must be placed in seven columns, one for each calendar year covered by the disclosure, regardless of whether the disclosing party actually received an overpayment during a particular calendar year) The Financial Analysis Worksheet must include a text box describing the methodology used to set forth the overpayment. If estimates were used, the disclosing party must explain how they were calculated. Unlike the financial analysis that was required under the prior SRDP, the Financial Analysis Worksheet does not require the disclosing party to list the actual amount of remuneration between the parties unless otherwise requested by CMS.

The recent changes to the SRDP also suggest that CMS will consider fewer factors in reducing the amount owed by a disclosing party. Under the prior version of the SRDP, those factors included the following:

  • The nature and extent of the improper or illegal practice
  • The timeliness of the self-disclosure
  • The cooperation in providing additional information related to the disclosure
  • The litigation risk associated with the matter disclosed
  • The financial position of the disclosing party
  • The current SRDP, however, does not list litigation risk or the disclosing party's financial position as factors in calculating an appropriate settlement. Nonetheless, the current list of factors is non-exclusive, so it remains possible that CMS will evaluate a settlement under the SRDP the same way that any party to a dispute would and take into account the risks associated with litigation and ability to collect on a judgment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Morris, Manning & Martin, LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Morris, Manning & Martin, LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions