|
Health Law Advisory Bulletin
The Specter of Mandatory Stark Reporting
Rears its Head (Again)
By Edwin
D. Rauzi and Ingrid
Brydolf
[June 2007]
The Stark Law has long included a section
that authorizes the Centers for Medicare and Medicaid Services (CMS)
to require all entities that participate in the program to provide
information about financial relationships with physicians. For a
time in the 1990’s, CMS (then HCFA) pursued an initiative
that would have required widespread and mandatory annual reporting
(with updates when changes occurred). That initiative was eventually
abandoned. Several years later, however, CMS promulgated a regulation
that defines a response deadline for requests for information and
imposes a fine of up to $10,000 a day for each day the information
is late.
In a little-noticed recent development,
CMS has begun the process to require 500 hospitals to provide a
broad range of detailed information about their financial relationships
with physicians, including copies of documents that define these
relationships. The CEO or CFO will be required to certify in writing
that the submission is “true and correct to the best of my
belief and knowledge.” The notice appeared in the May 18th
Federal Register.
The initiative is part of a filing under the Paperwork Reduction
Act. Before CMS can require an entity to complete and return a form,
it must comply with the process defined in that Act. The process
involves articulating why the information is necessary, how it will
be used, and estimating the burden it will impose on the recipients.
Included in the filing is a copy of the CMS cover letter, as well
as the forms the 500 hospitals will be required to complete. According
to CMS, the information is necessary “to analyze each hospital's
compliance with” the Stark Law and its implementing regulations.
The survey is described as being an outgrowth of an earlier survey
that focused on specialty hospitals. In 2006, CMS sent a survey
to 500 hospitals soliciting information on physician ownership and
investment. The survey, which was voluntary, was sent both to physician-owned
specialty hospitals and their competitors. Of the 500, more than
half—290—failed to respond.
CMS is uncertain whether those who failed to respond had “tainted
relationships,” so the 290 non-respondents will now be required
to respond under the regulation. A list of the hospitals that would
be included can be constructed by comparing the list of initial
recipients against those who responded. They will be given 45 days
to respond, after which the imposition of the $10,000 per-day penalty
is possible. The method whereby the additional 210 hospitals will
be chosen is not clear.
What is more noteworthy, however, is that the survey has been expanded
to include not only physician ownership and investment interests,
but also compensation arrangements. For each—office space
lease, equipment lease, personal service arrangement, and recruiting
arrangement— the hospital will be required to provide:
- the physician’s name;
- the physician’s NPI;
- whether the physician is also an owner or investor; and
- a copy of the written agreement that was in force in 2006.
The cover letter notes that CMS has the discretion to share the
information with other agencies.
There is also a second worksheet that asks questions about compensation
related to:
- a one time sale of the physician’s practice or other property;
- remuneration that did not relate to a designated health service;
- charitable donations by the physician to the hospital;
- non-monetary compensation that exceeds the $300 limit defined
in the Stark regulations; and
- any other payments made by a physician to the hospital as compensation
for any item or service “not previously covered.”
For a copy of the packet that the 500 hospitals will receive, click
here. Scroll down until you find CMS-10236.
Even if you are not one of the “Lucky 500,” you might
want to consider whether your hospital could respond appropriately
and comprehensively in the time allotted. CMS estimates it will
take each hospital four hours to complete the form; we suspect it
will take much, much longer.
For more information, please contact:
Other DWT Contacts:
Jill
H. Gordon, Los Angeles, (213) 633-6800, jillgordon@dwt.com
Lisa
Hayward, Seattle, (206) 622-3150, lisahayward@dwt.com
John Krave, Los Angeles, (213) 633-6800, johnkrave@dwt.com
Steve
Lipton, San Francisco, (415) 276-6500, stevelipton@dwt.com
Kent
B. (Bernie) Thurber, Portland, (503) 241-2300, berniethurber@dwt.com
This advisory is
a publication of the Health Law Group of Davis Wright Tremaine LLP.
Our purpose in publishing this
advisory is to inform our clients and friends of recent legal developments.
It is not intended, nor should it be used, as a substitute for specific
legal advice as legal counsel may only be given in response to inquiries
regarding particular situations. Attorney Advertising. Prior results
do not guarantee a similar outcome. Thank you.
Copyright 2007, Davis Wright Tremaine LLP.
return to Advisory Bulletins main page
|
