Member Article

On March 30, 2020, the Secretary of the Department of Health and Human Services ("Secretary") announced a blanket waiver ("Waiver") of sanctions for violations of Section 1877 of the Social Security Act, also known as the physician self-referral law or Stark law ("Stark Law"). Waivers such as this one may be granted by the Secretary to ensure that during an emergency period, to the maximum extent feasible, 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, and that health care providers that furnish such items and services in good faith, but that cannot comply with one or more requirements described in the law, may be reimbursed for such items and services and exempted from sanctions for noncompliance, absent any determination of fraud and abuse. This article summarizes the key requirements of the Waiver and examples of applications of the Waiver that may help health care providers grappling with the COVID-19 national emergency. Providers are encouraged to review the Waiver as published on the Centers for Medicare and Medicaid Services website here, and discuss its application to the provider's specific needs with a member of Spilman's COVID-19 Task Force or Health Care Practice Group.
 
The Waiver identifies 18 different circumstances in which sanctions under the Stark Law and regulations will be waived for remuneration, referrals, and conduct that would otherwise violate the Stark Law and regulations. These examples, among others, are also provided in the Waiver to illustrate types of remuneration, referrals, and conduct that may fall within the scope of the Waiver:

• 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 or equipment from an independent physician practice at below fair market value or at no charge.
• A hospital's employed physicians use the medical office space and supplies of independent physicians to treat patients not suspected of exposure to COVID-19 away from their usual medical office space on the campus of the hospital to isolate patients suspected of COVID-19 exposure.
• An entity sells personal protective equipment to a physician, or permits the physician to use space in a tent or other makeshift location, at below fair market value (or provides the items or permits the use of the premises at no charge).
• 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 in the United States.
• An entity provides nonmonetary compensation to a physician or an immediate family member of a physician in excess of the $423 per year limit (per physician or immediate family member), such as continuing medical education related to the COVID-19 outbreak in the United States, supplies, food, or other grocery items, isolation-related needs (for example, hotel rooms and meals), child care, or transportation.
  
  

For a complete list of the waivers, along with additional examples of remuneration, referrals, or conduct that may fall within the scope of the Waiver, review here. 
 
The Waiver is limited to the circumstances described in the Waiver, and health care providers must satisfy all conditions of the Waiver to rely on its provisions, including a requirement that remuneration and referrals be solely related to "COVID-19 Purposes." The term "COVID-19 Purposes" is defined in the Waiver as:

• 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.
• Addressing medical practice or business interruption due to the COVID-19 outbreak in the United States to maintain the availability of medical care and related services for patients and the community.

 
The Waiver does not require submission of any specific documentation or notice to the Secretary or Centers for Medicare and Medicaid Services before reliance on the Waiver. However, providers relying on the Waiver must keep records documenting their use of the Waiver and be prepared to make those records available to the Secretary upon request. The Secretary encourages providers to develop and maintain these records in a timely manner.
 
The Waiver, which was issued on March 30, 2020, has a retroactive effective date to March 1, 2020, and applies nationwide. It will remain in effect until the earlier of the termination of the President's declaration of emergency, the termination of the Secretary's declaration of public health emergency, or the termination of a period of 60 days from the date the Waiver was first published, unless extended by the Secretary. Providers may not rely on the Waiver after it expires or is terminated.
 
This communication is intended to be only a summary of the Waiver provisions. It is not intended to be advice to any person or entity. If you have additional questions, please contact our COVID-19 Task Force or a member of our Health Care Practice Group. 
 
 

 

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