CMS Withdraws Effort to Survey Hospitals on Stark Compliance/Financial Arrangements with Physicians
On April 10, 2008, CMS withdrew its request for Office of Management and Budget ("OMB") clearance of a proposed mandatory survey of hospitals intended to ascertain compliance with the federal Stark Law, 42 U.S.C. § 1395nn. CMS originally intended to direct the survey, known as the Disclosure of Financial Relationships Report ("DFRR"), to 500 hospitals. Although it has withdrawn its request for OMB clearance, CMS is now soliciting public comments on issues that it considers necessary for future implementation of the survey.

CMS withdrew its effort to implement the DFRR amid widespread industry concern over the burdens associated with this new reporting obligation. Although CMS had estimated that the 17-page survey could take as little as 4-6 hours to complete, the hospital industry considered that a gross underestimate, and the OMB apparently agreed. The American Hospital Association suggested that the number of hours involved to simply identify and collect the relevant contracts, exclusive of review time, could exceed 200 hours. In addition, the industry has questioned the statutory authority permitting CMS to implement such a broad and intrusive reporting obligation.

The agency's comments also reveal that the 500-hospital survey was intended to be a pilot project, and that it may attempt to expand the financial reporting to more hospitals, and may require regular (even annual) hospital reporting of physician financial relationships. Accordingly, hospitals may wish to weigh in on the agency's proposals by commenting on the following issues solicited by CMS:

• Whether DFRR collection efforts should be recurring, and, if so, whether it should be implemented on an annual or some other periodic basis;
  
  
• Whether CMS is collecting too much information, and whether the agency is collecting the correct (or incorrect) types of information;
  
  
• The amount of time it will take hospitals to complete the DFRR and the costs associated with completing the DFRR, and the amount of time CMS should give hospitals to complete and return their responses;
  
  
• Whether CMS should direct the DFRR to all hospitals, and, if so, whether the agency should stagger the collection so that only a certain number of hospitals are subject to it in any given year; and
  
  
• Whether hospitals, once having completed the DFRR, should be required to submit yearly updates and reports on changed information.

Comments are due by 5 PM EST June 13, 2008, and can be sent electronically at www.regulations.gov (enter file code CMS-1390-P), or via regular mail to CMS, DHHS, Attention: CMS-1390-P, P.O. Box 8011, Baltimore, MD 21244-1850. CMS's proposals and solicitation of comments regarding the DFRR will be printed in the Federal Register on April 30, 2008.

If you have any questions regarding this client alert or would like assistance with the submission of comments to CMS, please contact David Robbins, Lisa Dobson Gould or Renee Howard at 206-622-5511.