Effective March 1, 2023, the Stark Law’s Self-Referral Disclosure Protocol (SRDP) will include a new Group Practice Information Form for physician practices to report noncompliance arising from a failure to fully satisfy the Stark Law’s onerous definition for a “group practice.” The Centers for Medicare & Medicaid Services (CMS) intends for the changes to reduce regulatory burden and streamline the disclosure process by allowing practices disclosing the failure to qualify as a group practice to submit a single Group Practice Information Form covering all physicians that submitted non-compliant referrals, rather than a separate Physician Information Form for each physician.

Background on the SRDP

First introduced in 2010, the SRDP allows providers to report existing or potential Stark Law violations to CMS, which has the authority to reduce the amount that would otherwise be due as a result of submitting claims prohibited under the Stark Law. The primary reason that a provider might opt to use the SRDP is the likelihood of a reasonable settlement. Another significant benefit of using the SRDP is that it suspends the 60-day deadline to report and return overpayments. On the other hand, a major downside of the SRDP is that CMS has been extremely slow to close out disclosures. There have been, by some estimates, several thousand self-disclosures submitted, and, as of the end of 2020, CMS has only closed out 524 disclosures. (369 were settled, and 155 were either withdrawn or closed without settlement.)

The Stark Law’s Definition for a Group Practice

The Stark Law’s definition for a “group practice” is among its most difficult provisions to understand and apply, but it is also one of the most important. For example, the definition permits a practice that qualifies as a group practice greater latitude than other entities to pay physicians using productivity bonuses and profit shares. Moreover, a group practice can utilize the Stark Law’s in-office ancillary services exception, which permits physicians in the group practice to refer ancillary services (e.g., imaging, certain durable medical equipment, etc.) to other members of the group practices.

However, the group practice definition includes a number of technical requirements. For example, the Full Range of Services test requires that each physician in the group practice furnish substantially the full range of patient care services that the physician routinely furnishes through the joint use of shared office space, facilities, equipment, and personnel. The Substantially All test requires that 75% of the patient care services provided by physicians in the group must be furnished through the group and billed under the group’s billing number. Because the requirements to qualify as a group practice are numerous and challenging from a compliance standpoint, technical noncompliance with the group practice definition is frequently the subject of SRDP disclosures, according to CMS.

Group Practice Information Form

Under the revised SRDP, physician practices can report Stark Law noncompliance arising from the failure to qualify as a group practice using the new Group Practice Information Form. Specifically, if a practice intended to qualify as a group practice in order to use the exceptions for physician services or in-office ancillary services, but these exceptions were not available to the practice because it failed to meet all the criteria to qualify as a group practice, the noncompliance can be disclosed using this form. Importantly, the new form can only be used to disclose the failure to qualify as a group practice and should not be used to report noncompliance with the requirements of a Stark Law exception, including the exceptions for physician services and in-office ancillary services.

Though the Group Practice Information Form has a limited applicability, it should streamline the process and reduce the paperwork, because CMS only requires submission of a single Group Practice Information Form covering all physicians in the practice that made non-compliant referrals. Otherwise, the disclosing party must submit separate Physician Information Forms for each physician covered under the self-disclosure, even if the factual details for each physician are identical.

The Group Practice Information Form requires the practice to identify and describe the specific circumstances for each element of the group practice definition that it failed to satisfy. For example, if the group practice failed to satisfy the Full Range of Services Element, the practice would need to identify how many physicians and the percentage of physicians in the practice that failed to furnish substantially the full range of patient care services that the physicians routinely furnish. The Group Practice Information Form also requires the disclosing physician practice to submit a single spreadsheet with information about the physicians who made prohibited referrals to the practice, including statements on:

• whether each physician is or was an owner, employee, or independent contractor of the practice;

• whether each physician received compensation in a manner that was inconsistent with the group practice requirements; and

• a description of the period of noncompliance for each physician.

Though the latest revisions to the SRDP are minor, the Group Practice Information Form should streamline the process and provide some relief to physician practices disclosing noncompliance with the group practice definition – a discreet yet frequently occurring – issue.