A bipartisan bill (H.R. 3776) to correct the disproportionate nature of the penalties a hospital can incur for technical violations of the Stark Law was introduced in the House of Representatives on Monday by Rep. Charles Boustany (R-LA). The measure was drafted with assistance from attorneys at Hall, Render, Killian, Heath and Lyman. Ways and Means Health Subcommittee member Rep. Ron Kind (D-WI) will serve as the lead Democrat sponsor. Rep. Larry Bucshon (R-IN) and Rep. Marc Veasey (D-TX) have signed on to serve as original co-sponsors.
The legislation defines “technical violation” as an unwritten, unsigned or lapsed agreement that is otherwise compliant with federal fraud and abuse law. Technical violations disclosed within one year of the date of noncompliance would be subject to a $5,000 penalty. Those disclosed more than one year from the date of noncompliance would be subject to a $10,000 penalty. The measure would give the Centers for Medicare and Medicaid Services (“CMS”) 90 days to reject the disclosure of a technical violation but only if it fails to meet the criteria set forth in the legislation. If CMS fails to reject a technical violations disclosure within 90 days, it would be deemed to be accepted.
“A hospital shouldn’t face millions of dollars in Stark Law penalties for a missing signature on an agreement that is otherwise compliant with federal fraud and abuse law,” Rep. Boustany said. “Especially when the missing signature resulted in no overutilization of health care services or harm to the Medicare program,” he added.
The bill has been submitted to the Congressional Budget Office (“CBO”) for an estimation of its total cost. However, a private industry analysis performed by Dobson DaVanzo and Associates shows the measure could generate almost $1.2 billion in new revenue over a 10-year period. This is significant because most legislation is paid for through cuts or “savings” to other federal programs. Consequently, the proposal will be an attractive off-set to lawmakers looking for ways to pay for other legislation, such as the repeal of the Sustainable Growth Rate formula, early next year.
“The prolonged period of time it takes a hospital to resolve the disclosure of a technical violation has delayed or prevented important clinical integration that will help control health care costs and improve efficiency. This minor correction to the Stark Law will give hospitals more certainty and predictability regarding the outcome of a technical violations disclosure while freeing CMS resources to pursue more egregious fraud and abuse law violations,” Rep. Kind said.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@hallrender.com.
Please visit the Hall Render Blog at http://blogs.hallrender.com for more information on topics related to health care law.
