The Centers for Medicare & Medicaid Services (CMS) recently released data on its 2024 settlements of voluntary self-disclosures related to past violations or potential violations of the physician self-referral law (the Stark Law). In 2024, CMS settled an agency record 314 self-disclosures (an amount that the following chart shows towering over other years), with settlement amounts totaling over $24,700,000 in the aggregate.
In settling this record number of disclosures, CMS collected nearly double its prior annual record of aggregate settlement dollars collected in 2023 ($24.7 million compared with $12.5 million). See, again, the next chart showing this aggregate settlement value is far greater than the amount in any other year.
As further context, CMS settled more self-disclosures in 2024 (314) than they had settled over their previous two record years of 2023 and 2022 combined (279), and nearly as many as it had in total in the entire first decade of the protocol (326). 2024’s settlements represent over a third of all Stark Law self-disclosure settlements from the 14 years of this program and nearly 30 percent of the aggregate dollars collected from that same period. (We discuss the average amount calculated from these settlements further below).
In reaching these new records, CMS is demonstrating continued focus and efforts to work through self-referral disclosure protocol (SRDP) submissions more expeditiously than in the past. Our anecdotal experience reinforces this trend, as we have seen responses to submissions and settlements occurring on a more rapid basis than in prior years. In fact, some settlements are offered to clients the same calendar year as the SRDP submission. This is a material change from earlier in the decade when a historic backlog led many providers to experience significant waiting periods.
SRDP submissions stem from the highly technical Stark Law, which generally prohibits a physician from making a referral for designated health services (which include clinical laboratory services, radiology and certain other imaging services, and durable medical equipment and supplies) payable by Medicare to an entity with which the physician (or an immediate family member of the physician) has a financial relationship, unless an exception is satisfied. The Stark Law has strict liability consequences and violations are often inadvertent. Therefore, at the direction of Congress, CMS created the voluntary SRDP for healthcare providers and suppliers to self-disclose actual or potential violations of the Stark Law to resolve overpayment liability for the disclosed conduct.
As CMS does not report on individual settlements, we closely monitor the annual information related to SRDP settlements to determine if there are trends or other information that can be helpful when advising on how best to address technical Stark Law concerns.
This year, in addition to the records described above, we note that the average settlement number $78,781.39 in 2024 is well within the trend we have seen from 2016 to 2023 (or a range of average settlement numbers from about $67,000 to $120,0000) as reflected in the chart above. Indeed, this is very close to the 2021 and 2023 averages, suggesting that the range of settlements may be converging (although we recognize that a settlement number is fact-dependent, and these averages may just be coincidental based on specific submissions).
We also briefly note two additional interesting tidbits from the CMS update.
- First, 51 additional SRDP submissions were withdrawn in 2024, bringing the total of withdrawn SRDPs to 318 total as of December 31, 2024. Particularly for earlier SRDP submissions, updated regulatory text and CMS clarifications, such as around arrangements needing to be in writing but not necessarily in a single contract, can lead parties to withdraw their submissions after filing.
- Second, CMS updated its information with respect to 2023, reducing the smallest settlement on record from $26 to $2. Had CMS not made this change in its release, 2024 would have had a third record—the lowest settlement reported—as at least one 2024 SRDP submission settled for $4. The largest settlement on record remains from 2018 ($1,196,188).
The record settlement numbers, first in 2022 and 2023, and now in 2024, give those considering the SRDP process further context that settlement may come quicker than a decade ago. Further, the settlement amounts, at least on average, are not inconsistent with past years.
We will continue to monitor CMS statements on SRDP settlements in future years to examine what other trends the provider community may be able to glean from these announcements, as we have in each of the past posts:
- June 22, 2020: Stark Law 2019 Settlements Continue Downward Trend
- April 28, 2021: Stark Law 2020 Settlements Return to Pre-2019 Trend
- September 18, 2023: CMS Settles Record Number of Stark Self-Disclosures (reporting on 2021 and 2022 settlements)
- April 4, 2024: CMS Again Settles Record Stark Self-Disclosures in 2023