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Stark Violators Can Self-Report to Minimize Penalties

Posted 5:00 PM by

In 2010, the Centers for Medicare & Medicaid Services (CMS) enacted a Self-Referral Disclosure Protocol authorizing all healthcare companies in violation of the Stark Law to self-report their own wrongdoing in order to minimize the financial risk of violating the Stark regulations. So far, the settlement amounts have proven to save these healthcare companies substantial sums of money, as published reports indicate that several settlements have resulted in settlement payments of just 5% of the potential Stark violation penalties had they not self-reported.   

Most healthcare organizations do not intentionally violate Stark regulations, and they are most often brought to the attention of a healthcare organization’s leadership when a potential buyer does its due diligence analysis of the organization. However, the stiff Stark law penalties are the same regardless of whether the violation was intentional or an honest mistake.

Since the self-reporting protocol was enacted, 29 hospitals have already come forward to CMS with an average settlement price of $114,000. In one case, a hospital based out of Massachusetts settled for $579,000 when the standard Stark law penalty could have totaled to nearly $14,500,000. 

This self-disclosure program provides an avenue for Stark violators, intentional or unintentional, to save their healthcare company significant amounts of money, and is a risk-minimizing tool of which all healthcare organization leaders should be aware.

This article uses certain statistics contained in Modern Healthcare’s article, "Penalty Loophole – Disclosure a Good Deal for Stark Violators" from August 3, 2013.

About the Author
Jimmy Wade is a member of Katz, Sapper & Miller’s Healthcare Resources Group. Jimmy provides tax preparation and planning, financial statement compilations, healthcare consulting, and fair market value analyses. Connect with him on LinkedIn.

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