On March 30, 2020, pursuant to Section 1135 of the Social Security Act, the Centers for Medicare & Medicaid Services (“CMS”) issued “blanket waivers” concerning several Stark Law requirements in response to the COVID-19 public health emergency. The blanket waivers apply nationwide and are intended to: (1) ensure the availability of healthcare services for Medicare and Medicaid beneficiaries during the current public health emergency; and (2) allow healthcare providers to receive payment for certain claims that, without a blanket waiver, would violate the Stark Law.

Generally, the Stark Law prohibits a physician from making patient referrals for certain designated health services (“DHS”) payable by Medicare to an entity that the physician (or the physician’s immediate family member) has a financial relationship with, unless a Stark Law exception applies. The blanket waivers announced on March 30 waive sanctions for certain items and services provided in good faith under arrangements that are unable to comply with an available Stark Law exception as a result of the COVID-19 pandemic. The blanket waivers apply to various financial arrangements and referrals between physicians and DHS entities.  As outlined in the blanket waiver document, the waivers apply to relationships including, but not limited to, personal service arrangements, equipment and office space leases, medical staff incidental benefits, nonmonetary compensation, certain loan arrangements, physician-owned hospitals and group practices.

However, the blanket waivers only apply to arrangements linked to COVID-19 Purposes, which CMS defines 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 healthcare practitioners and professionals, to furnish medically necessary services in response to the COVID-19 outbreak in the United States;
• Ensuring the ability of healthcare providers to address patient and community needs due to the COVID-19 outbreak;
• Expanding the capacity of healthcare 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.

Parties seeking to enter arrangements that fall within the blanket waivers should document use and satisfaction of the blanket waivers. Parties should also be prepared to make such documentation available to CMS upon request. The blanket waiver document also includes an illustrative, nonexclusive list of example arrangements and conduct that may fall within the scope of the blanket waivers. These examples may help in evaluating a particular arrangement or financial relationship. Even with the blanket waivers, parties should remember that reliance on a blanket waiver is not needed when an arrangement or financial relationship satisfies an existing Stark Law exception.

The blanket waivers are retroactive to March 1, 2020, and will remain in place until the expiration or termination of the declared public health emergency. CMS may also revise the blanket waivers and issue additional blanket waivers, as necessary, in the future. Revisions and updates to the blanket waivers will be posted on the CMS website.

Because the blanket waivers remain in place only through the declared public emergency, they are not permanent. Without extension or grandfathering by CMS, the blanket waivers will expire when the public emergency is over. At that time, parties will need to be prepared to terminate the arrangements or restructure them to comply with an appropriate Stark Law exception.