MD Ranger Bullseye

Stark Law Waivers: What’s Changed, What’s Staying the Same

 

On March 30th, Department of Health and Human Services Secretary Alex Azar issued a blanket waiver to portions of the Stark regulations to help health care organizations respond to the pandemic. They are retroactive to March 1, 2020.  The waivers cover remuneration “solely related to COVID-19 purposes,” and DHHS stated that they may be revised at any time and that they will remain in effect during the national COVID emergency. However, the announcement states that changes to the waivers will be prospective, not retroactive.

The emergency waiver requires providers to maintain documentation supporting reliance on the applicable waiver and HHS reserves the right to audit and ensure that an entity’s waivers are only for COVID-19 specific activities. This means it is crucial to document your organization’s rationale and decision-making as it relates to COVID-19 contract changes, as well as continue to require time tracking of physician activities. Designating a team member to document, track and monitor these arrangements will facilitate compliance and help to “unwind” these COVID-related contract changes when the blanket waivers end.

18 distinct waivers were issued. Any waiver is required to meet all of the defined requirements in order to qualify for protection under the waiver. Note that if there is later a determination of fraud and abuse, these waivers will not protect your organization. Even in times of national emergency, it is still illegal to commit fraud.

The remuneration and referrals described in the blanket waivers must be solely related to COVID-19 purposes which are defined 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 COVID19
  • 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
  • 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
  • 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 a list of the contract-related waivers that healthcare organizations are most likely to use during this time:

  • In-writing contract requirements
    • Arrangements can commence prior to writing and signature, as long as all other elements of the blanket waiver are satisfied
    • While providers using a blanket waiver must make available, upon request, records relating to the use of the waiver, no specific documentation is required and no advance notice is required
    • Payments above or below FMV for employment and professional services
  • Other compensation to physicians
    • Medical staff incidental benefit $36 per item cap is waived
      • DHS entity can provide free services like childcare, clothing, and meals
    • Non-monetary compensation exception of $423 is waived, which could be used for things like COVID-19 training and education, PPE; isolation needs such as a hotel room, transportation, childcare, meals
  • Office space and equipment rentals paid to or by a physician may be below FMV
  • Loans
    • Permits loans to a physician or group at an interest rate that is below FMV and on terms that aren’t available from other lenders
    • Permits loans from a physician to a DHS entity
  • Physician-owned hospitals and ASCs may expand rooms or beds or convert to temporary hospitals

The scope of the waivers make clear that the vast majority of Stark remains in effect and that the waiver is temporary and limited to COVID-related situations. In particular, the announcement specified that these waivers do not change the rules that require:

  • No fraud and abuse
  • Agreements to be set in advance
  • Commercial reasonableness
  • No payments for volume or value
  • Physician recruitment deals
  • Contract rights or legal obligations under employment contracts or PSAs

MD Ranger recommends that your team handle all physician arrangement requests in relation to COVID-19 consistently to ensure they are documented appropriately and can be monitored during and following the state of emergency. Furthermore, defining your criteria for exceptions to your standard contracting guidelines and seeking appropriate board and management approvals specific to the crisis and your organization’s plans will position your organization well to avoid potential compliance risks. 

mdr content1017 banners3c

 

  Product
  MD Ranger Subscription    
  Our Benchmarks    
  Online Platform    
  For Physicians    
  For Post Acute Facilities    
  For Trauma Centers    
  
For Consulting Firms    
      
Company
Team    
Database and Security    
In the News    
Events    
History    
Careers at MD Ranger    
Contact Us    
            
Insights
Contracting    
Compliance    
Commercial Reasonableness    
Blog    
      
© 2020 MD Ranger, Inc.
1601 Old Bayshore Hwy, Suite 107
Burlingame, CA 94010
650-692-8873
info@mdranger.com
Privacy Policy