What You Need to Know About Stark Law Blanket Waivers, Anti-Kickback Statute Discretion During COVID-19

As health care providers continue to administer services during the Coronavirus (COVID-19) pandemic, the Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) have made temporary adjustments to Stark Law and the Anti-Kickback Statute (AKS), respectively.

These waivers and exceptions from sanctions are meant to allay physicians, nurses and others in the health care field — as they could find themselves, while treating patients during COVID-19, in situations that would otherwise constitute health care fraud.

Here’s what you should know.

Stark Law Blanket Waivers

What Do the Stark Law Blanket Waivers Allow For?

On March 30, 2020, CMS announced a series of nationwide Section 1135 blanket waivers under Stark Law. These allow for remuneration and referrals limited solely to the duration of the COVID-19 public health emergency (retroactive to March 1, 2020), for the following “COVID-19 Purposes”:

  • 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 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 outbreak in the United States;
  • Ensuring the ability of health care providers to address patient and community needs due to the COVID-19 outbreak in the United States;
  • Expanding the capacity of health care providers to address patient and community needs due to the COVID-19 outbreak in the United States;
  • Shifting the diagnosis and care of patients to appropriate alternative settings due to the COVID-19 outbreak in the United States; or
  • Addressing medical practice or business interruption due to the COVID-19 outbreak in the United States in order to maintain the availability of medical care and related services for patients and the community.

What Arrangements Are Covered?

The waivers would exempt providers from sanctions for noncompliance with the Stark Law — “absent the government’s determination of fraud or abuse” — for these types of arrangements:

  • Compensation for personally performed services
  • Office space and equipment rent payments
  • Payments for the purchase of items or services
  • Provision of additional incidental benefits to medical staff
  • Provision of nonmonetary compensation
  • Provision of low-interest or interest-free loans
  • Referrals by owners of physician-owned hospitals
  • Referrals by owners of ambulatory surgery centers that temporarily convert to hospitals
  • Referrals by owners in home health agencies
  • Referrals for in-office ancillary services at additional locations
  • Rural referrals to immediate family members
  • Waiving in-writing requirements

What Are Some Situations That Fall Within the Scope?

In its blanket waiver document, the CMS provides examples of remuneration, referrals or conduct that would qualify for the waiver of sanctions:

  • In order to accommodate patient surge, a hospital rents office space or equipment from an independent physician practice at below fair market value or at no charge.
  • A hospital or home health agency purchases items or supplies from a physician practice at below fair market value or receives such items or supplies at no charge.
  • An entity provides free telehealth equipment to a physician practice to facilitate telehealth for patients who are observing social distancing or in isolation or quarantine. 
  • A physician refers a Medicare beneficiary who resides in a rural area for physical therapy furnished by the medical practice that is owned by the physician’s spouse and located within one mile of the beneficiary’s residence.
  • A hospital sends a hospital employee to an independent physician practice to assist with  staff training on COVID-19, intake and treatment of patients most appropriately seen in a physician office, and care coordination between the hospital and the practice.
  • A physician refers a Medicare beneficiary to a home health agency owned by the immediate family member of the physician, because there are no other home health agencies with capacity to provide medically necessary home health services to the beneficiary during the COVID-19 outbreak in the United States.

OIG’s Anti-Kickback Statute Enforcement Discretion

On April 3, 2020, the OIG announced that it will not impose administrative sanctions for potential AKS violations for Coronavirus-related arrangements that are covered by some of the Stark Law blanket waivers. In order for a health care provider to receive this enforcement discretion, all conditions and definitions applicable to the blanket waivers must be satisfied.

Why Was This Issued Following the Stark Law Blanket Waivers?

In its statement, the OIG explains:

“Ordinarily, some financial relationships that implicate the physician self-referral law also may implicate, and potentially violate, the Federal anti-kickback statute. However, recognizing the unique circumstances of the COVID-19 outbreak, OIG will not impose administrative sanctions under sections 1128(b)(7) or 1128A(a)(7) of the Act, as those sections relate to the commission of acts described in the Federal anti-kickback statute, with respect to remuneration that is covered by section II.B.(1)-(11) of the Blanket Waivers.”

What Are the Differences Between the OIG Policy Statement and the Stark Law Blanket Waivers?

The OIG’s order has two key differences from the Stark Law blanket waivers:

  1. No retroactivity: Whereas Stark Law blanket waivers are retroactive to conduct on or after March 1, 2020, the OIG order applies to conduct occurring on or after April 3, 2020. (It will, however, end the same date that the Stark Law blanket waivers end.)
  2. The OIG policy statement only protects remuneration: The Stark Law blanket waivers protect both renumeration and certain referral relationships, but the OIG policy statement would only protect the former, allowing for:
  • Compensation for personally performed services
  • Office space and equipment rent payments
  • Payments for the purchase of items or services
  • Provision of additional incidental benefits to medical staff
  • Provision of nonmonetary compensation
  • Provision of low-interest or interest-free loans

The Healthcare Lawyers at Chapman Law Are Here to Keep You and Your Practice Informed During COVID-19

With the COVID-19 national emergency, there have been a virtual flurry of exceptions, exemptions and adjustments issued for health care providers, in the regulatory, compliance and health care fraud arenas. These temporary changes to Stark Law and AKS are only the latest — and they probably won’t be the last.

As your health care practice continues to treat patients during the Coronavirus pandemic, the health care fraud attorneys at Chapman Law Group are here to make sure you’re in the know about not running afoul of the provisional rules in place. Contact us today so we can review what you need to know.

For 35 years, we have provided compliance consultation and representation for clients all over Michigan, including the Detroit, Ann Arbor, Grand Rapids, Dearborn and Troy areas; in Florida (Miami, Tampa, Jacksonville, West Palm Beach, Orlando and other regions), and nationally in regions including Los Angeles and Southern CaliforniaChicago, Pittsburgh, and Washington, D.C.

Our extensive experience in key areas of regulatory compliance in healthcare include:

We represent licensed medical professionals across the U.S., including:

Our offices are in DetroitMiami and Sarasota, Florida; Los Angeles/Southern California; and ChicagoContact us today for a consultation and to show what we can do for you.

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