CMS Issues Blanket Waivers Under Stark Law

On March 30, 2020, the Centers for Medicare and Medicaid Services (CMS) announced that it will issue blanket waivers from sanctions imposed under section 1877 of the Social Security Act (SSA), often referred to as the Physician Self-Referral (Stark) Law, to healthcare providers responding to the COVID-19 pandemic.

By way of background, the Stark Law generally prohibits physicians from making referrals for certain designated health services (DHS) payable by Medicare to an entity in which the physician, or one of the physician’s immediate family members, has a financial relationship. The Stark Law also prohibits physicians from filing claims with Medicare or billing another individual/entity/third party payor for DHS furnished pursuant to a prohibited referral.

THE STARK LAW WAIVERS

The blanket waivers issued by CMS grant physicians, hospitals, physician organizations and other entities flexibility to adjust their financial arrangements to best respond to the COVID-19 pandemic and the burden it has imposed on the healthcare industry. CMS intends for these blanket waivers to ensure that sufficient health care items and services are available to meet the needs of Medicare, Medicaid and CHIP program beneficiaries during the COVID-19 pandemic. Additionally, CMS wants to ensure that health care providers providing services in good faith, that are unable to comply with the specified requirements under the Stark Law, may be exempted from sanctions and properly reimbursed for items and services provided during the pandemic.

CMS has issued a total of eighteen (18) blanket waivers, which apply nationwide. The 18 blanket waivers include the following:

• Waiver for personally performed services:
  1. Remuneration from an entity to a physician (or an immediate family member of a physician) that is above or below the fair market value for services personally performed by the physician (or the immediate family member of the physician) to the entity.
• Waivers for certain rental rates:

1. 2. Rental charges paid by an entity to a physician (or an immediate family member of a physician) that are below fair market value for the entity’s lease of office space from the physician (or the immediate family member of the physician).
   3. Rental charges paid by an entity to a physician (or an immediate family member of a physician) that are below fair market value for the entity’s lease of equipment from the physician (or the immediate family member of the physician).
   4. Rental charges paid by a physician (or an immediate family member of a physician) to an entity that are below fair market value for the physician’s (or immediate family member’s) lease of office space from the entity.
   5. Rental charges paid by a physician (or an immediate family member of a physician) to an entity that are below fair market value for the physician’s (or immediate family member’s) lease of equipment from the entity.

• Waivers for purchase of items and/or services:

1. 6. Remuneration from an entity to a physician (or an immediate family member of a physician) that is below fair market value for items or services purchased by the entity from the physician (or the immediate family member of the physician).
   7. Remuneration from a physician (or an immediate family member of a physician) to an entity that is below fair market value for the use of the entity’s premises or for items or services purchased by the physician (or the immediate family member of the physician) from the entity.

• Waivers for certain physician compensation agreements:

1. 8. Remuneration from a hospital to a physician in the form of medical staff incidental benefits that exceeds the limit set forth in 42 CFR 411.357(m)(5).
   9. Remuneration from an entity to a physician (or the immediate family member of a physician) in the form of nonmonetary compensation that exceeds the limit set forth in 42 CFR 411.357(k)(1).
   10. Remuneration from an entity to a physician (or the immediate family member of a physician) resulting from a loan to the physician (or the immediate family member of the physician): (1) with an interest rate below fair market value; or (2) on terms that are unavailable from a lender that is not a recipient of the physician’s referrals or business generated by the physician.
   11. Remuneration from a physician (or the immediate family member of a physician) to an entity resulting from a loan to the entity: (1) with an interest rate below fair market value; or (2) on terms that are unavailable from a lender that is not in a position to generate business for the physician (or the immediate family member of the physician).

• Waivers based on type of facility:

1. 12. 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 the effective date of such provider agreement) without prior application and approval of the expansion of facility capacity as required under section 1877(i)(1)(B) and (i)(3) of the Act and 42 CFR 411.362(b)(2) and (c).
   13. 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: (i) the hospital does not satisfy one or more of the requirements of section 1877(i)(1)(A) through (E) of the Act; (ii) the hospital enrolled in Medicare as a hospital during the period of the public health emergency described in section II.A of this blanket waiver document; (iii) the hospital meets the Medicare conditions of participation and other requirements not waived by CMS during the period of the public health emergency described in section II.A of this blanket waiver document; and (iv) the hospital’s Medicare enrollment is not inconsistent with the Emergency Preparedness or Pandemic Plan of the State in which it is located.
   14. The referral by a physician of a Medicare beneficiary for the provision of designated health services to a home health agency: (1) that does not qualify as a rural provider under 42 CFR 411.356(c)(1); and (2) in which the physician (or an immediate family member of the physician) has an ownership or investment interest.
   15. 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.

• Waivers to group practices related to in-office ancillary services:

1. 16. The referral by a physician in a group practice for medically necessary designated health services furnished by the group practice in a location that does not qualify as a “same building” or “centralized building” for purposes of 42 CFR 411.355(b)(2).
   17. The referral by a physician in a group practice for medically necessary designated health services 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.

• Waiver for failure to satisfy written requirement:

1. 18. Referrals by a physician to an entity with whom the physician (or an immediate family member of 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 set forth above.

WAIVER REQUIREMENTS

In order to take advantage of the blanket waivers, the following conditions precedent must be met:

• Any remuneration described in a blanket waiver must be directly between the entity and either (1) the physician or the physician organization in whose shoes the physician stands or (2) the immediate family member of the physician;
• Remuneration and referrals must be solely related to “COVID-19 purposes”; and
• All conditions in a blanket waiver description must be met.

For purposes of the blanket waivers, “COVID-19 purposes” means:

• Diagnosis or medically necessary treatment of COVID-19 for any patient or individual, whether or not the patient/individual has been diagnosed with a confirmed case of COVID-19;
• Securing the services of physicians and other health care practitioners 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 pandemic;
• Ensuring the ability of health care providers to address patient and community needs due to the COVID-19 pandemic;
• Expanding the capacity of health care providers to address patient and community needs due to the COVID-19 pandemic;
• Shifting the diagnosis and care of patients to appropriate alternative settings due to the COVID-19 pandemic; or
• Addressing medical practice or business disruption due to the COVID-19 pandemic to maintain the availability of medical care and related services for patients.

TIMEFRAME

These waivers are retroactively effective to March 1, 2020. The waivers will terminate upon the earlier of one of the following: (1) the President’s declaration of an emergency terminates; (2) the HHS Secretary’s declaration of a Public Health Emergency terminates; or (3) the expiration of a 60-day period from the date the waiver is first published. Note that the waivers may be extended for subsequent 60-day periods. If extended, the HHS Secretary will provide notice of the extension to the public. Therefore, providers should periodically check for any updates to the waiver period from CMS and HHS.

For any questions regarding waivers from the Physician Self-Referral Law, please contact Adrienne Dresevic, Esq. at (248) 996-8510 or by email at adresevic@thehlp.com.