The Specter of Mandatory Stark Reporting Rears its Head (Again)
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 1990s, 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 18 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 nonrespondents 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.