It Took A Pandemic To Push Through Stark Law Changes

On March 30, 2020, the CMS issued the Stark Blanket Waiver in response to the COVID-19 pandemic in order to facilitate Coronavirus related medical services. Retroactive to March 1, 2020, the circumstances and conditions under which the waivers apply are strictly and narrowly described as relating to the physician self-referral law (Stark Law).

Although temporary (at this time), health care providers, physicians and clinicians have a unique opportunity to take advantage of the Stark Blanket Waiver as it will protect financial relationships, remuneration and referrals (and the claims submitted as a result thereof) that are related to a broadly defined set of "COVID-19 Purposes."

The blanket waivers define “COVID-19 Purposes” broadly to include the following:

• “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;
• 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 the United States in order to maintain the availability of medical care and related services for patients and the community.”
 
The CMS provided the following examples of how the Stark Blanket Waiver will enable flexibility for physicians and DHS entities:

• Non-Fair Market Value (FMV) Compensation. Hospitals and other providers may pay physicians above or below fair market value to rent equipment or receive services from physicians (or vice versa). Hospitals may rent space in a physician office related to COVID-19 patients below FMV or free of charge.
• Flexible Financial Support. A physician owner of a hospital may make a personal loan to the hospital without charging interest at FMV so that the hospital can make payroll or pay vendors.
• Medical Staff Benefits. Hospitals can provide benefits to medical staff, such as daily meals, laundry service or child care services.
• Nonmonetary Compensation. Certain items and services that are related to the COVID-19 Purposes may be provided to physicians (e.g., continuing medical education regarding latest care protocols for COVID-19) without exceeding the annual non-monetary compensation cap.
• Hospital Capacity. Physician-owned hospitals may temporarily increase the number of licensed beds, operating rooms and procedure rooms, even if such increases would otherwise be prohibited under the Stark Law.
• Group Practice-Home Care. Any physician in a group practice may order medically necessary DHS that 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. • Relaxation of In-Office Requirement. Group practices can furnish medically necessary MRIs, CT scans or clinical laboratory services from locations such as mobile vans in parking lots that the group practice rents on a part-time basis. Physicians may provide clinical lab services related to Coronavirus detection and treatment because requirements that the DHS be provided in the same building as the physician office are waived; and financial relationship limitations between the physician (or family member) and the DHS provider are also waived.

These examples are merely illustrative, and each arrangement should be reviewed to ensure that it does not run afoul of other applicable state and federal laws including, specifically, applicable fraud, waste and abuse laws. Finally, although DHS entities and physician do not need to notify CMS to utilize the Stark Blanket Waiver, they "must make records relating to the use of the blanket waivers available to" CMS upon request.

We cannot stress strongly enough that the blanket waivers apply only if:

• Providers are acting in good faith to provide care in response to the COVID-19 pandemic;
• Financial relationships or referrals are protected by one of CMS’ 18 permitted relationships; and
• Financial relationships do not create fraud and abuse concerns.

Check out the more than 60 specific waivers and other changes announced in the Emergency Declaration: https://www.cms.gov/files/document/summary-covid-19-emergency-declaration-waivers.pdf.   

Healthcare providers, including DHS entities and physicians, should continue to monitor the CMS Coronavirus Waivers & Flexibilities website for any further developments in responding to the COVID-19 pandemic: https://www.cms.gov/about-cms/emergency-preparedness-response-operations/current-emergencies/coronavirus-waivers.  

REACH OUT TO US: These blanket waivers only temporarily permit payments and referrals between physicians and DHS entities if the relationship falls into one of CMS’ stated categories during the COVID-19 pandemic, even if such an arrangement would not meet a Stark Law exception. For now, the CMS is giving providers more freedom and flexibility as the COVID-19 pandemic continues, but keep in mind these blanket waivers will terminate at the end of the public health emergency. In the meantime we urge all physicians to examine their referral relationships, telemedicine practices, and hospital/surgery center connections for opportunities. Keep in mind, the Stark Law Waivers have no impact in the presence of fraud or abuse. Send your questions to This e-mail address is being protected from spambots. You need JavaScript enabled to view it or visit www.tfghealth.com. We can assist with cash flow, liquidity, loans, insurance, restructuring, Tax credits and much more to get you through this crisis.