The Centers for Medicare and Medicaid Services (CMS) recently updated the publicly available information regarding the Self-Referral Disclosure Protocol (SRDP) settlements to include aggregate settlement data from calendar years 2021 and 2022.
The SRDP is a voluntary process that CMS was required to provide to providers under Section 6409(a) of the Affordable Care Act. It is a process by which providers can self-disclose actual or potential violations of the federal physician self-referral law (the “Stark Law”). The Stark Law prohibits physicians from making referrals for certain "designated health services" payable by Medicare to an entity with which the physician (or an immediate family member) has a financial relationship (e.g., ownership, investment, or compensation), unless an exception applies.
As the Stark Law is a strict liability statute, even minor technical violations can result in large liability amounts. The SRDP process has generally allowed providers to settle a Stark Law violation for less than the total liability a provider could face and avoid additional penalties.
In CMS’s latest release of settlement data, CMS provided (i) the total number of settlements within the year, (ii) total amount settled for 2021 and 2022, and (iii) the range of the highest and lowest settlement.
Total Number of Settlements
The 2021 data showed a downward trend in settlements, with only 27 occurring. However, in 2022, CMS settled 104 SRDP submissions, nearly quadrupling the number of settlements occurring the year prior and setting a record for the most SRDP submissions settled in a single year (the previous record was 103 in 2016). Although CMS settled more SRDP submissions in 2022 than in 2020 and 2021 combined, there could be many reasons for this, including a shifting of resources after the acute phase of the pandemic. While some may believe this could be a sign that CMS is settling submissions faster, we know from experience that SRDP submissions can sometimes take years to be accepted into the protocol and then settled. Additionally, this data does not necessarily show that 2022 had an increased number of providers entering the SRDP process, as some of the submissions may have occurred in years prior.
Total Dollar Amount CMS Settled With Providers and Range
The data from 2022 does show that CMS recovered $9,287,866, the highest amount ever recovered in a calendar year since 2011. While some may see this figure and believe there is an increase in the amounts providers pay under the SRDP process, this is not true. It is important to note that the average settlement value in 2022 was not the highest for a given year. In 2022, the settlements ranged from a low of $299 to a high of $1,171,148, which is an average of $89,306.40. In 2021, the settlements ranged from $631-$1,110,148, with an average settlement of $73,646.33. However, since 2011, there have been (i) 6 years where the average settlements were above $100,000 and (ii) two other years with at least one provider settling for more than $1 Million. There does not seem to be a discernable trend as to when there are higher settlement amounts or higher average settlements over time. The website also notes that “[a]s of December 31, 2022, an additional 232 disclosures to the SRDP were withdrawn, closed without settlement or settled by CMS’ law enforcement partners.”
Although CMS in the past provided a little more detail on the settlements that occurred within a given year, they began to limit the amount of information more recently to only include the elements noted above. Their final note on the webpage is that “[b]ecause disclosures of actual or potential violations of the physician self-referral law include proprietary, confidential, or otherwise nondisclosable information, we present settlement information on an aggregate basis.” Providers worried about reputational damage from SRDPs have less to worry about the amount of information CMS publicly makes available on its website around an individual disclosure.
