In a significant development, data recently released by the Centers for Medicare & Medicaid Services (CMS) delineates the agency’s settlement volume for violations—or potential violations—of the physician self-referral law, often referred to as the “Stark Law.” The recent findings illustrate an unprecedented number of voluntary self-disclosures, as reported by McGuireWoods.
According to the CMS, in 2022, the government agency settled on a record 104 self-disclosures. The total settlement amounts accrued to over $9,000,000 in aggregate—nearly four times the aggregate settlement amount for 2021. This marked upsurge not only far exceeds the previous year’s figures but also surpasses the previous record number of settlements from 2016.
CMS’s efforts to enforce the Stark Law, a statute aiming to preclude healthcare fraud and abuse by curbing physicians from referring Medicare or Medicaid patients to entities with which they have financial relationships, has yielded significant results. This enforcement has been facilitated in part by the agency’s Self-Referral Disclosure Protocol (SRDP), which allows healthcare providers who have potentially violated the law to disclose the issue voluntarily, thus presumably mitigating their liability for civil monetary penalties.
It’s clear from these recent figures that an increasingly robust engagement with the mechanism of voluntary self-disclosures has taken place among healthcare providers. This trend has likely been propelled by the perceived benefits of engagement with the SRDP. By opting for self-disclosure, providers not only potentially sidestep stiffer penalties but also could gain more control over how they navigate the process of resolution.
Nevertheless, the increasing number of Stark Law violations self-disclosures raises important considerations for legal professionals working in health law and beyond. Counsel for healthcare corporations, in particular, must proactively navigate the Stark Law’s complexities, paying diligent attention to the financial relationships their clients maintain within the sector. As CMS’s enforcement endeavors continue to cast a wide net, proactive regulatory compliance will be critical in the year ahead.