“Stark Law Blanket Waivers Issued In Response to COVID-19”
April 3, 2020
Note: This has been printed for informational purposes only. TOA does not offer legal advice. Please consult your attorney.
April 8, 2020, update from Weaver, Johnston & Nelson:
Following the drafting of our recent Office of Inspector General (“OIG”) COVID-19 guidance email, which can be found here, the OIG issued a Policy Statement in response to COVID-19 and enforcement of the Anti-Kickback Statute. In the Policy Statement, OIG noted that it will not impose administrative sanctions under the Anti-Kickback Statute for certain remuneration related to COVID-19 blanket waivers of the Stark Law issued by the Secretary of the Department of Health and Human Services on March 30, 2020 (the “Blanket Waivers”). Our summary of the Blanket Waivers can be found here. Specifically, as of April 3, 2020 and through termination of the Blanket Waivers, OIG will not impose administrative sanctions under the Anti-Kickback Statute with respect to remuneration that is covered by the Blanket Waivers numbers 1 – 11, which focus on waiving certain fair market value requirements for COVID-19 focused arrangements. All conditions and definitions that apply to the Blanket Waivers apply to the Policy Statement. By taking this approach, OIG is seeking to avoid the need for parties to undertake a separate review under the Anti-Kickback Statue for arrangements protected by the Blanket Waivers. OIG notes that it may modify or terminate the Policy Statement at any time. We will continue to monitor OIG guidance on this matter.
OIG Guidance and Anti-Kickback Considerations in Response to COVID-19
April 4, 2020
In our most recent COVID-19 guidance which can be found here
, we outlined the blanket Stark Law waivers recently issued by the Centers for Medicare & Medicaid Services. It is worth noting that the Office of Inspector General (the “OIG”) has not issued similar Anti Kickback Statute waivers. However, on March 30, 2020, the OIG issued a letter which emphasizes the OIG’s stance that the health care industry should be provided flexibility to deliver patient care during the COVID-19 public health emergency. The OIG encourages health care organizations that need extensions to OIG deadlines, such as to produce data for an OIG review or to comply with a Corporate Integrity Agreement, to ask the appropriate OIG contact. While the OIG is providing increased flexibility for health care organizations, the OIG warns that it is aggressively investigating bad actors that are exploiting the COVID-19 crisis by stealing patients’ personal information and offering fake testing kits and unapproved therapies. During the COVID-19 public health emergency, the OIG will carefully consider the context and intent of parties that may be subject to OIG administrative enforcement when determining whether to proceed with enforcement action. Further, due to a majority of the OIG workforce teleworking, OIG encourages electronic submission of materials that would ordinarily require mailing.
The OIG has dedicated a Portal with up-to-date COVID-19 related work, where health care providers can submit questions. Future FAQs from the OIG may be published on the Portal. We are available to assist in submitting inquiries to the OIG’s Office of Counsel through the Portal as needed to address your needs.
Stark Law Blanket Waivers Issued in Response to COVID-19
April 3, 2020
On March 30, 2020, the Centers for Medicare & Medicaid Services (“CMS”) released a series of Section 1135 waivers eliminating certain requirements of the physician self-referral law (the “Stark Law”) in response to the COVID-19 pandemic. These blanket waivers, effective retroactively to March 1, 2020 and applicable nationwide, are intended to ensure sufficient health care items and services are available to meet the needs of individuals enrolled in Medicare, Medicaid and the Children’s Health Insurance Program (“CHIP”). Health care providers that furnish such health care items and services in good faith that are unable to comply with the requirements of the Stark Law as a result of COVID-19 may be reimbursed and exempted from sanctions for noncompliance, absent the government’s determination of fraud or abuse.
As background, generally, the Stark Law prohibits (a) a physician from making referrals for certain designated health services (“DHS”) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment or compensation), unless an exception applies; and (b) the entity from presenting or causing to be presented claims to Medicare (or billing another individual, entity or third-party payer) for those referred services. Clinical laboratory services, physical, occupational and outpatient speech-language pathology services, radiology and certain other imaging services, and inpatient and outpatient hospital services are among the categories considered DHS for purposes of the Stark Law.
The blanket waivers may be revised as determined necessary by the Secretary of the Department of Health and Human Services (the “Secretary”), but any revisions that narrow or terminate a blanket waiver will be effective only on a prospective basis. Each individual wavier is limited to the circumstances described by CMS and all conditions must be met. Parties may not use the blanket waivers after the expiration of the Secretary’s authority to grant waivers in response to COVID-19. Individual waivers for arrangements that do not meet the criteria of the issued blanket waivers can be requested from CMS. The blanket waivers do not apply to the Federal Anti-Kickback Statute.
As best practice, CMS recommends parties relying on the blanket waivers to develop and maintain records in a timely manner. Parties utilizing the blanket waivers must make records available upon request from the Secretary. CMS and the Secretary do not require any specific documentation or notice to be submitted in order to take advantage of the blanket waivers.
The Blanket Stark Law Waivers Must Meet Certain Conditions and be Related to COVID-19 Purposes
The blanket waivers apply only to financial relationships and referrals related to the national COVID-19 emergency. Any remuneration described must be directly between the DHS entity and the physician or the physician organization in whose shoes the physician stands, or an immediate family member of the physician. Further, the remuneration and referrals described in the blanket waivers must be solely related to “COVID-19 Purposes,” meaning:
- Diagnosis or the provision of medically necessary treatment of COVID-19 for any patient or individual, whether or not the patient or individual is diagnosed with a confirmed case of COVID-19;
- Securing the services of physicians and other health care practitioners and professionals to furnish medically necessary patient care services, including services not related to the diagnosis and treatment of COVID-19, in response to the COVID-19 emergency;
- Ensuring the ability of health care providers to address patient and community needs in response to the COVID-19 emergency;
- Expanding the capacity of health care providers to address patient and community needs due to the COVID-19 emergency;
- Shifting the diagnosis and care of patients to appropriate alternative settings due to the COVID-19 emergency; or
- Addressing medical practice or business interruption due to the COVID-19 emergency to maintain the availability of medical care and related services for patients and the community.
The 18 Blanket Stark Law Waivers
CMS issued blanket waivers for 18 types of arrangements. Providers should refer to CMS’s exact wording of each waiver in its blanket wavier document. For purposes of the blanket waivers described below, references to the term “physician” should be read to include “or an immediate family member of a physician,” where appropriate. Absent a determination of fraud and abuse, and so long as for COVID-19 Purposes, providers may be reimbursed for such items and services and CMS will not impose Stark Law sanctions for noncompliance for the following:
Waivers of Fair Market Value Requirements
- Remuneration above or below the fair market value (“FMV”) paid by an entity to a physician for services personally performed by the physician;
- Rental charges below FMV paid by an entity to a physician for the entity’s lease of office space from the physician;
- Rental charges below FMV paid by an entity to a physician for the entity’s lease of equipment from the physician;
- Remuneration below FMV from an entity to a physician for items or services purchased by the entity from the physician;
- Rental charges below FMV paid by a physician to an entity for the physician’s lease of office space from the entity;
- Rental charges below FMV paid by a physician to an entity that are below FMV for the physician’s lease of equipment from the entity;
- Remuneration from a physician to an entity that is below FMV for the use of the entity’s premises or for items or services purchased by the physician from the entity;
- Remuneration from an entity to a physician resulting from a loan to the entity: (a) with an interest rate below FMV; or (b) on terms that are unavailable from a lender that is not a recipient of the physician’s referrals or business generated by the physician;
- Remuneration from a physician to an entity resulting from a loan to the entity: (a) with an interest rate below FMV; or (b) on terms that are unavailable from a lender that is not in a position to generate business for the physician;
Waivers Related to Incidental Benefits and Non-Monetary Compensation
- Remuneration from a hospital to a physician in the form of medical staff incidental benefits that exceeds the limit set forth in Federal regulations, which is $36 per occurrence for 2020;
- Remuneration from an entity to a physician in the form of nonmonetary compensation that exceeds the limit set forth in Federal regulations, which is $423 per calendar year for 2020;
Waiver Related to Writing and Signature Requirements
- Referrals by a physician to an entity with whom the physician has a compensation arrangement that does not satisfy the writing or signature requirement(s) of an applicable exception but satisfies each other requirement of the applicable exception, unless such requirement is waived under one or more of the blanket waivers;
Waivers Related to Group Practices
- The referral by a physician in a group practice for medically necessary DHS furnished by the group practice in a location that does not qualify as a “same building” or “centralized building” for purposes of the in-office ancillary services exception to the Stark Law;
- The referral by a physician in a group practice for medically necessary DHS furnished by the group practice to a patient in his or her private home, an assisted living facility, or independent living facility where the referring physician’s principal medical practice does not consist of treating patients in their private homes;
Waivers Based on Type of Facility / Location
- The referral by a physician owner of a hospital that temporarily expands its facility capacity above the number of operating rooms, procedure rooms, and beds for which the hospital was licensed on March 23, 2010 (or, in the case of a hospital that did not have a provider agreement in effect as of March 23, 2010, but did have a provider agreement in effect on December 31, 2010, the effective date of such provider agreement) without prior application and approval of the expansion of facility capacity as required under the Stark Law;
- Referrals by a physician owner of a hospital that converted from a physician-owned ambulatory surgical center to a hospital on or after March 1, 2020, provided that: (a) the hospital does not satisfy one or more of the requirements of the referenced Stark Law section; (b) the hospital enrolled in Medicare as a hospital during the period of the public health emergency described; (c) the hospital meets the Medicare conditions of participation and other requirements not waived by CMS during the period of the public health emergency; and (d) the hospital’s Medicare enrollment is not inconsistent with the Emergency Preparedness or Pandemic Plan of the State in which it is located;
- The referral by a physician of a Medicare beneficiary for the provision of DHS to a home health agency: (a) that does not qualify as a rural provider; and (b) in which the physician has an ownership or investment interest; and
- The referral by a physician to an entity with which the physician’s immediate family member has a financial relationship if the patient who is referred resides in a rural area.
While the above-described waivers may provide relief from certain Stark Law related-requirements, such as FMV requirements, these blanket waivers do not appear to waive other elements of potentially applicable Stark Law exceptions. If considering use of a blanket waiver, it is important to consider the non-waived elements or requirements needed to satisfy the relevant exception to the Stark Law for a specific arrangement.
Examples of Application of the Blanket Stark Law Waivers
CMS provided a non-exhaustive list of remuneration, referrals or conduct that could fall within the scope of the blanket waivers. Some of the examples include:
- A hospital pays physicians above their previously-contracted rate for furnishing professional services for COVID-19 patients in particularly hazardous or challenging environments.
- To accommodate patient surge, a hospital rents office space and/or equipment from an independent physician practice at below FMV or at no charge.
- An entity provides free telehealth equipment to a physician practice to facilitate telehealth visits for patients who are observing social distancing or in isolation or quarantine.
- A hospital provides meals, comfort items (for example, a change of clothing), or onsite child care with a value greater than $36 per instance to medical staff physicians who spend long hours at the hospital during the COVID-19 outbreak.
- With state approval (if required), a physician-owned hospital temporarily converts observation beds to inpatient beds or otherwise increases its inpatient bed count to accommodate patient surge during the COVID-19 outbreak.
- A physician in a group practice whose principal medical practice is office-based orders radiology services that are furnished by the group practice to a Medicare beneficiary who is isolated or observing social distancing in the beneficiary’s home, provided that the group practice satisfies all of the requirements of the Stark Law’s definition of “group practice.”
For more information or to view the blanket waivers and examples of application of such waivers, please visit here