On March 30, 2020, the Secretary of the Department of Health and Human Services (HHS) acted pursuant to the declared COVID-19 public health emergency and granted blanket waivers—effective March 1, 2020—of certain provisions of Section 1877(g) of the Social Security Act, otherwise known as the Physician Self-Referral (or “Stark”) Law.

The Stark Law prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship, and further prohibits the entity from filing claims with Medicare for such services furnished pursuant to a prohibited referral. The law’s numerous exceptions and strict liability make compliance especially complicated. As a welcome relief to the health law industry, HHS has issued blanket waivers for certain otherwise-prohibited relationships in order to ensure sufficient health care services during the COVID-19 pandemic. These waivers are valid only when the referrals and financial relationships are “solely related” to COVID-19 purposes within the United States, defined for this purpose to include:

• diagnosis or treatment of COVID-19 for any individual, regardless of a confirmed COVID-19 diagnosis;
• securing the services of health care practitioners and professionals to furnish medically necessary patient care services, including services not related to COVID-19, in response to the COVID-19 outbreak;
• ensuring the ability and 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 to maintain the availability of medical care and related services.

Furthermore, the remuneration at issue must be directly between the entity and the physician or physician organization in whose shoes the physician stands or a physician’s immediate family member.

HHS set forth 18 specific instances in which it will waive Stark Law sanctions and permit reimbursement, including the following:

1. remuneration from an entity to a physician that is above or below the fair market value for services personally performed by the physician to the entity, or that is below fair market value for items or services purchased by the entity from the physician;
2. rental charges paid by an entity to a physician that are below fair market value for the entity’s lease of office space or equipment from the physician, or vice versa;
3. remuneration from a physician to an entity that is below fair market value for the use of the entity’s premises or for items or services purchased by the physician from the entity;
4. remuneration from a hospital to a physician in the form of medical staff incidental benefits, or remuneration from an entity to a physician in the form of nonmonetary compensation, that exceeds the limit set forth in existing regulations;
5. remuneration from an entity to a physician resulting from a loan to the physician: (a) with an interest rate below fair market value, or (b) on terms that are unavailable from a lender that is not a recipient of the physician’s referrals or business generated by the physician, or vice versa;
6. the referral by a physician of a Medicare beneficiary for the provision of designated health services to a home health agency: (a) that does not qualify as a rural provider under applicable regulations, and (b) in which the physician has an ownership or investment interest;
7. the referral by a physician in a group practice for medically necessary designated health services furnished by the group practice in a location that does not qualify with certain specified provisions related to the “same building” or “centralized building” requirements of the in-office ancillary services exception;
8. the referral by a physician to an entity with which the physician’s immediate family member has a financial relationship if the patient who is referred resides in a rural area; or
9. referrals by a physician to an entity with whom the physician has a compensation arrangement that does not satisfy the writing or signature requirement(s) of an applicable exception but satisfies each other requirement of the applicable exception, unless such requirement is otherwise waived under one or more of these blanket waivers.

HHS provided a number of helpful, non-exhaustive examples that may fall within the new COVID-19 waivers. It cautioned that providers and practitioners must fully satisfy all conditions of the applicable waiver and be able to provide records on request to demonstrate compliance.

Please contact Lisa C. Keenan, Molly E.G. Ferraioli, or Christopher J. Tully for assistance or additional information regarding the Stark Law waivers and compliance.

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