More than 50 hospitals are joining in the Stark Law Correction Coalition — organized by the law firm of Hall, Render, Killian, Heath & Lyman — to urge legislators to adopt an amendment to Stark Law that would limit the monetary penalty a healthcare provider can suffer for committing a technical violation of the law and provide an expedited review process of self-disclosed technical violations by CMS.
The new legislation, known as the Stark Administrative Simplification Act, seeks to correct the excessive penalties healthcare providers currently face for minor technical violations. The Act is sponsored by Rep. Charles W. Boustany, Jr., MD, (R-Louisiana), who is a cardiovascular surgeon with more than 30 years of clinical experience.
"The Stark law is flawed because it is a very complex strict liability law that can result in excessive and disproportionate monetary penalties for minor technical violations. A hospital should not be subject to millions of dollars in potential Stark Law penalties for a missing signature or a lapsed contract that resulted in no overutilization of healthcare services and no harm to the Medicare program," says John Williams, shareholder and managing partner of Hall Render's Washington, D.C. office.
Although participants in the Stark Law Correction Coalition believe the Stark Law serves a valid purpose and should be in place to penalize healthcare providers who engage in fraudulent behavior or do harm to the Medicare program, the coalition is pushing for the amendment because "public interest is not served when providers are required to pay penalties for technical violations of the Stark Law that do not involve fraud," says Mr. Williams.
The Stark Law Correction Coalition believes there needs to be a fixed payment for technical disclosures, similar to a "speeding ticket," says Mr. Williams. This will free up CMS' resources to pursue more egregious violations and allow the healthcare industry to focus on ensuring compliance with aspects of the Stark Law that may result in harm to the Medicare program, he adds.
The Stark Administrative Simplification Act also seeks to simplify the self-referral disclosure protocol. Under the current scheme, hospitals can self-disclose potential violations of the Stark Law to the government, but many times it takes years for a disclosure to go through all of the self-disclosure protocols. If the Act were adopted, hospitals would no longer have to set aside large cash reserves for potential technical violations of the Stark Law for an extended period of time, says Mr. Williams.
The Stark Law Correction Coalition also believes the language of the Stark Law needs to be clarified because both "CMS and healthcare providers deserve a law that is sufficiently clear to allow for a more efficient process for compliance and enforcement," says Mr. Williams.
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