COVID-19 Task Force E-lert: Much Needed COVID-19 Blanket Waivers to Stark are Issued and Retroactive to March 1st

On Monday, CMS issued blanket waivers of the Physician Self-Referral law commonly known as Stark, titled "Blanket Waivers of Section 1877(g) of the Social Security Act Due to Declaration of COVID-19 Outbreak in the United States as a National Emergency."

The waivers go into effect *retroactively as of the date of March 1, 2020. This was a critical action that was imminently needed to waive laws and regulations which otherwise might have created legal roadblocks to access to necessary healthcare to treat COVID-19 pandemic, even though the facilities were otherwise available. A perfect example of the type of activity this waiver allows to occur more freely is the provision of free or under cost face masks (PPE) to health care providers on the front lines of this battle against COVID-19.

Among other things, the language in the waiver reminds Physicians "… that reliance on the waivers may be unnecessary because many financial relationships related to COVID-19 Purposes …may satisfy the requirements of existing exceptions to the physician self-referral law."

There are certain conditions application to all blanket waivers:

  • They only apply in geographic areas covered by the U.S. President’s proclamation of a national emergency and DHHS Secretary Azar’s determination pursuant to the Public Health Services act that a public health emergency has existed nationwide since January 27, 2020 due to confirmed cases of COVID-19.
  • The blanket waivers apply only to financial relationships and referrals that are related to the COVID-19 pandemic.
  • Any payments made or received for services performed and described in the blanket waivers must be directly between the entity and: (1) the physician or the physician organization in whose shoes the physician stands under 42 CFR 411.354(c); or (2) the immediate family member of the physician. These payments and referrals described in the blanket waivers must be solely related to COVID-19 Purposes.

Here are some examples of the type of COVID-19 related healthcare services in the United States to which this waiver applies:

  • Securing the services of health care practitioners and professionals to provide medically necessary patient care services, including services not related to the diagnosis and treatment of COVID-19, in response to the COVID-19 outbreak;
  • Addressing patient and community needs due to the COVID-19 outbreak;
  • Expanding the capacity of health care providers to address patient and community needs due to the COVID-19 outbreak;
  • Shifting the diagnosis and care of patients to appropriate alternative settings due to the COVID-19 outbreak; or
  • Addressing medical practice or business interruption due to the COVID-19 outbreak in order to maintain the availability of medical care and related services for patients and the community.

The following is an excerpt of a few of the illustrative examples provided within the waiver, that highlight those types of Stark prohibited payments, referrals and claims, which due to this blanket waiver would not be subject to sanctions under § 1877(g).

  • 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 physician owner of a hospital lends money to the hospital to assist with operating expenses of the hospital, including staff overtime compensation, related to the COVID-19 outbreak in the United States.
  • A compensation arrangement that commences prior to the required documentation of the arrangement in writing and the signatures of the parties, but that satisfies all other requirements of the applicable exception, for example:

(i) A physician provides call coverage services to a hospital before the arrangement is documented and signed by the parties;

(ii) A physician with in-office surgical capability delivers masks and gloves to the hospital before the purchase arrangement is documented and signed by the parties;

(iii) A physician establishes an office in a medical office building owned by the hospital and begins treating patients who present at the hospital for health care services but do not need hospital-level care before the lease arrangement is documented and signed by the parties; or

(iv) The daughter of a physician begins working as the hospital’s paid COVID-19 outbreak coordinator before the arrangement is documented and signed by the parties.

  • Hospital’s employed physicians use the medical office space and supplies of independent physicians in order to treat patients who are not suspected of exposure to COVID-19 away from their usual medical office space on the campus of the hospital in order to isolate patients suspected of COVID-19 exposure.
  • A hospital pays physicians above their previously-contracted rate for furnishing professional services for COVID-19 patients in particularly hazardous or challenging environments.
  • A hospital provides free use of medical office space on its campus to allow physicians to provide timely and convenient services to patients who come to the hospital but do not need inpatient care.
  • 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 in the United States.

Rupa S. Lloyd
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