The HHS Office of Inspector General followed with a similar pronouncement with respect to the Anti-Kickback Statute

The Centers for Medicare and Medicaid Services (CMS) has issued a series of blanket waivers of provisions of the physician self-referral (Stark Law) on March 30, 2020 in response to the declaration of the COVID-19 Outbreak in the United States as a National Emergency and the declaration of a Public Health Emergency by the Secretary of Health and Human Services.

The CMS notice is effective retroactively to March 1, 2020. The Stark Law and its implementing regulations prohibit physicians from making referrals of Medicare and Medicaid patients to other providers for their receipt of certain categories of designated health services (DHS) if the physician or an immediate family member has a financial relationship with that DHS entity, unless a specific exception applies. Visit CMS’s Stark webpage for the complete text of the current statutes and regulations and other pertinent Stark-related guidance.

The newly issued CMS blanket waivers permit transactions that would otherwise fail to meet the applicable Stark Law exceptions, but only when those transactions are solely related to COVID-19 Purposes.

In 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 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.

Blanket Waivers and Examples

So long as the National Emergency and Public Health Emergency declarations are in effect, CMS will permit Medicare and Medicaid claims to be filed and will not impose penalties for the following illustrative transactions if they are related to COVID-19 Purposes:

• Hospitals and other DHS-furnishing providers can pay above or below fair market value for services personally performed by physicians or their family members. For example, hospitals may compensate physicians above their previously-contracted rate for furnishing professional services for COVID-19 patients in particularly hazardous or challenging environments.
• Physicians can pay below fair market value to rent office space or equipment from hospitals and other DHS-furnishing providers (and vice versa for leases from physicians to hospitals), or below fair market value to purchase other items or services from hospitals and other DHS-furnishing providers. For example, a physician practice or hospital may be willing to rent or sell needed equipment to the other party at a price that is below what the practice or hospital could charge another party. Or, a hospital may provide space on hospital grounds at no charge to a physician who is willing to treat patients who seek care at the hospital but are not appropriate for emergency department or inpatient care.
• Health care providers can support each other financially to ensure continuity of health care operations, such as through the issuance of favorable loans with below market interest rates on terms that are unavailable from a commercial lender. For example, a hospital may lend money to physician practice that provides exclusive anesthesia services at the hospital to offset lost income resulting from the cancellation of elective surgeries to ensure capacity for COVID-19 needs. Or, a physician owner of a hospital may make a personal loan to the hospital without charging interest at a fair market rate so that the hospital can make payroll or pay its vendors.
• Hospitals can provide benefits to their medical staffs, such as multiple daily meals, laundry service to launder soiled personal clothing, or child care services while the physicians are at the hospital and engaging in activities that benefit the hospital and its patients – even if the level of benefits exceeds the annual dollar limit under the Stark Law’s medical staff incidental benefits exception.
• Hospitals and other DHS-furnishing providers may provide certain non-monetary items and services to physicians that are solely related to COVID-19 Purposes (as defined in the waivers), even when the provision of the items or services would exceed the annual non-monetary compensation cap that is established under the Stark Law. For example, a home health agency may provide continuing medical education to physicians in the community on the latest care protocols for homebound patients with COVID-19, or a hospital may provide isolation shelter or meals to the family of a physician who was exposed to the novel coronavirus while working in the hospital’s emergency department.
• Physician-owned hospitals can temporarily increase the number of their licensed beds, operating rooms, and procedure rooms, even though such expansion would otherwise be prohibited under the Stark Law. For example, a physician-owned hospital may temporarily convert observation beds to inpatient beds to accommodate patient surge during the COVID-19 pandemic in the United States.
• Physician-owned ambulatory surgery centers can temporarily convert into hospitals during the National Emergency and the Public Health Emergency, notwithstanding their continued physician ownership, provided that the hospital’s Medicare enrollment is not inconsistent with its State’s Emergency Preparedness or Pandemic Plan.
• As a result of temporarily relaxed site of service requirements, group practices that do not traditionally provide patient home visits can furnish medically necessary DHS in a patient’s home, or in a assisted living facility or independent living facility. For example, any physician in the group may order medically necessary DHS that is furnished to a patient by a technician or nurse in the patient’s home contemporaneously with a physician service that is furnished via telehealth by the physician who ordered the DHS.
• Group practices can furnish medically necessary DHS such as radiology services or clinical laboratory services from locations like mobile vans in parking lots that the group practice rents on a part-time basis, and that do not qualify as a “same building” or “centralized building” for Stark Law purposes.
• In the case of patients who reside in rural areas, physicians may refer those patients to hospitals and other DHS-furnishing providers with which an immediate family member of the physician (but not the physician) maintains a financial relationship. Restrictions also are lifted in connection with the referral by a physician of a Medicare patient for DHS to a home health agency in which the physician or a family member maintains an ownership or investment interest.
• Under the Stark Law, most contractual arrangements and other financial relationships between physicians and hospitals and other DHS-furnishing providers must be signed and in writing to be permissible; however, the blanket waivers have relaxed the “in writing” and “signature” requirements for arrangements that satisfy the other requirements of an applicable exception. For example, a physician may start providing compensated call coverage to a hospital before the service arrangement is documented and signed, or a physician may establish an office in a hospital-owned medical office building and begin treating patients there who present at the hospital but do not need hospital-level care before the lease arrangement is documented and signed.

General Comments and Observations:

• CMS expressly reserves the right to issue additional blanket waivers or to revise the existing blanket waivers at any time; however, CMS assures providers that all revisions will be posted on the CMS website and that any revisions that narrow or terminate a blanket waiver will be effective on a prospective basis only.
• Unless the blanket waiver expressly applies only to a specific type of entity, CMS advises that the blanket waiver examples including hospitals also will apply to all other categories of DHS-furnishing providers.
• CMS specifies that any remuneration described in the blanket waivers must be directly between a hospital or other DHS-furnishing provider and (i) a physician or “physician organization” in whose shoes the physician stands under the Stark Law’s “stand in the shoes” rules, or (ii) an immediate family member of that physician.
• CMS expressly states that remuneration and referrals described in the blanket waivers “must be solely related to COVID-19 Purposes.” While the term “COVID-19 Purposes” is defined, the CMS notice announcing the blanket waivers does not provide any indication as to whether the phrase “solely related to” is intended to establish additional limitations on an arrangement that is for COVID-19 Purposes. For example, what if the over-riding primary purpose or motivation of an arrangement is for COVID-19 Purposes, but there is also a secondary purpose or motivation that is not entirely related to the COVID-19 pandemic? Does that take the arrangement out of the blanket waivers?
• The CMS notice suggests that the blanket waivers will not be considered absolute if the government makes a “determination of fraud and abuse,” and parties utilizing the blanket waivers must make records relating to the use of the blanket waivers available to CMS or the Secretary of Health and Human Services upon request.
• Although the submission of specific documentation or notice to CMS or the Secretary in advance of the use of a blanket waiver is not required, providers are encouraged to develop and maintain records in a timely manner as a best practice (and to ensure that such records will be available in the case of a future regulatory compliance audit or inspection).
• In addition to documenting all other elements of compliance with the pertinent Stark Law exception, as well as the specific COVID-19 Purpose for which the arrangement under the blanket waiver has been consummated, providers should develop a blanket waiver documentation checklist/questionnaire that memorializes their responses to critical questions that will help support their reliance on a blanket waiver. Suggested questions and responses that providers should document include items such as: Is the physician or medical group’s services essential to the treatment of COVID-19 patients? Does the hospital or other DHS-furnishing entity expect a significant number of elective or non-essential medical procedures to be canceled or postponed on account of COVID-19, and is the physician or medical group in question personally impacted by the cancellation or postponement of elective and non-essential cases? Is it possible or feasible to temporarily redeploy the affected physician or medical group to other services or service lines? Will the loss of the physician or group’s services adversely impact or disrupt the hospital or other DHS-furnishing entity’s operations, or lead to other defaults? What other financial support is available to the physician or group (e.g., third party payor advances or subsidies, Cares Act loans and loan forgiveness programs, etc.), and is there any risk that the financial support furnished by the hospital or other DHS-furnishing entity under the blanket waiver could be construed as duplicating the financial support that is available from other sources?
• The blanket waivers under the Stark Law are welcome relief to health care providers dealing with the effects of the COVID-19 pandemic, and should be of great use and benefit to physicians, hospitals and other DHS-furnishing entities across the country. However, the blanket waivers are not a license to ignore the numerous substantive and technical requirements under the Stark Law, many of which remain in place and the violations of which will continue to be at the offending provider’s own legal peril.

OIG Reciprocal Action Under the Anti-Kickback Statute

On April 3, 2020, the Office of Inspector General of the Department of Health and Human Services (OIG), the federal agency that is charged with administering the Medicare and Medicaid Anti-Kickback Statute, issued a policy statement advising that in light of the unique circumstances of the COVID-19 outbreak, OIG will not impose administrative sanctions under the Anti-Kickback Statute with respect to any remuneration that is covered by Section II.B.(1)-(11) of the blanket waivers issued by CMS under the Stark Law. The policy statement applies to conduct occurring on or after April 3, 2020, and OIG reserves the right to modify or terminate the policy statement at any time.

In a footnote, OIG advises that interested parties who have questions about the applicability under the Anti-Kickback Statute to remuneration that is covered by Section II.B.(12)-(17) of the blanket waivers issued by CMS under the Stark Law should submit such questions to OIG at:  OIGComplianceSuggestions@oig.hhs.gov , providing sufficient facts to allow for an understanding of the key parties and terms of the arrangement at issue. The OIG notice is silent as to remuneration that is covered by Section II.B.(18) of the blanket waivers issued by CMS under the Stark law, which is the blanket waiver that relaxes the “in writing” and “signature” requirements for arrangements that satisfy the other requirements of an applicable Stark law exception.