Client Alert: HHS Blanket Waivers for Financial Relationships Subject to the Stark Law


By Patrick Formato, Ayman Soliman, Michael Gurman and Frank Mazzagatti

COVID-19 UPDATE

BLANKET WAIVERS FOR CERTAIN FINANCIAL RELATIONSHIPS SUBJECT TO THE STARK LAW

The Secretary of the United States Department of Health and Human Services (“HHS”) issued nationwide “blanket waivers” of the federal Stark Law (Section 1877 of the Social Security Act, 42 U.S.C. § 1395nn). These waivers are to be retroactively applied to March 1, 2020.

HHS is waiving sanctions under the Stark Law to ensure, among other things, that sufficient health care items and services are available to meet the needs of individuals enrolled in federal healthcare programs and health care providers that furnish such items and services in good faith, but are unable to comply fully with the Stark Law’s requirements as a result of the COVID-19 pandemic, may be reimbursed for such items and services and exempted from sanctions for noncompliance.

THE WAIVERS ARE AVAILABLE TO PROTECT FINANCIAL RELATIONSHIPS THAT SATISFY TWO CRITERIA: (1) THE REMUNERATION AND REFERRALS MUST BE SOLELY RELATED TO “COVID-19 PURPOSES”; AND (2) THE REFERRALS AND CLAIMS MUST BE RELATED TO A DEFINED SET OF FINANCIAL RELATIONSHIPS (SEE BELOW).

COVID-19 PURPOSES include:

  • Diagnosis or 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 or other health care practitioners and professionals to furnish medically necessary patient care services.
  • Ensuring the capacity and availability 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.

AVAILABLE FINANCIAL RELATIONSHIPS:

Personally Performed Services: A waiver for above or below fair market value compensation from an entity to a physician for services personally performed by the physician.

Below FMV Compensation: Waivers for compensation that is below fair market value with respect to: 1) rental charges paid by an entity to a physician for lease of space or equipment; 2) rental charges paid by a physician to an entity for lease of space or equipment; and 3) remuneration from an entity to a physician, or from a physician to an entity, for purchased items or services.

Medical Staff Incidental Benefits: A waiver for medical staff incidental benefits provided by a hospital to a physician with a value that exceeds $36.00 per occurrence.

Nonmonetary Compensation: A waiver for nonmonetary compensation provided by an entity to a physician that exceeds $423.00 in the calendar year 2020.

Loans with Favorable Terms: Waivers for remuneration resulting from loans by an entity to a physician, or by a physician to an entity, that include an interest rate that is below FMV OR terms that are not available from a lender that is not a recipient of referrals, or in a position to generate business for, the lender.

Physician-Owned Home Care Agencies: A waiver for a physician’s referral of a Medicare beneficiary for designated health services to a home health agency in which the physician has an ownership or investment interest and does not qualify as a rural provider under 42 C.F.R 411.356(c)(1).

Location of Group Physician Services: Waivers for referrals 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” under 42 C.F.R. 411.355(b)(2); OR to a patient in the patient’s 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.

Immediate Family Members and Rural Area: A waiver for referrals 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.

Lack of Writing: A waiver for referrals by a physician to an entity with whom the physician has a compensation arrangement that does not satisfy the writing requirement of an applicable exception but satisfies every other requirement of an applicable exception.

The healthcare attorneys at Abrams Fensterman are committed to providing you with the most current and accurate information and guidance from CMS, the CDC, the New York State Department of Health and via Executive Orders issued by the Governor. When updated information is made available, we will provide you with additional or revised Client Updates. Should you have specific concerns or questions about the HHS Blanket Waivers for Financial Relationships Subject to the Stark Law, feel free to contact Patrick Formato, Esq., Ayman Soliman, Esq., Michael Gurman, Esq., Frank A. Mazzagatti, Esq., or any other attorney in our health law practice group.

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