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Practical Tips and Guidance for Understanding and Using HHS's Stark Law Blanket Waivers and the OIG’s Policy Statement About Them

As many of our readers know, as a result of the public health emergency caused by COVID-19, effective March 1, 2020, the U.S. Department of Health and Human Services (“HHS”) issued blanket waivers of its authority under Section 1877(g) of the Social Security Act (which authorizes the imposition of certain sanctions for violations of the Stark Law) with respect to 18 categories of remuneration and/or referrals (the “Blanket Waivers”).

Not long thereafter, the Office of Inspector General for HHS (“OIG”) issued its own Policy Statement regarding the Blanket Waivers, clarifying that it would exercise enforcement discretion and not impose administrative sanctions under the Anti-Kickback Statute (“AKS”) with respect to 11 of the 18 categories of referrals and remuneration described in the Blanket Waivers (“OIG Enforcement Discretion”).  This Policy Statement applies to conduct that occurred on or after April 3, 2020.

Understandably, this misalignment in enforcement guidance and effective dates could cause some confusion, so we have provided below a summary chart of the Blanket Waivers and OIG Enforcement Discretion.

In addition, we understand that many health care companies and providers are primarily focused on trying to deal with the global health crisis, so we wanted to offer some practical tips and guidance for applying the Blanket Waivers and OIG Enforcement Discretion.

General Practice Tips

Regardless of whether you are considering the Blanket Waivers from a Stark Law or AKS enforcement perspective, consider the following suggestions:

  1. Remember that the Blanket Waivers and OIG Enforcement Discretion apply only to financial relationships and referrals between physicians and entities for the performance of designated health services (“DHS”) that are related to “COVID-19 Purposes.”  HHS has specifically defined “COVID-19 Purposes” in its guidance document (which you can access here).  Be careful to try and limit any referrals or relationships you seek to fit under the Blanket Waivers and/or OIG Enforcement Discretion to permitted purposes.
  1. Keep in mind that the Blanket Waivers and OIG Enforcement Discretion are limited to the circumstances described in each Blanket Waiver and parties must meet all criteria of a given Blanket Waiver to rely on it.
  1. Remember that the Blanket Waivers and OIG Enforcement Discretion are temporaryKeep track of any changes you have made or steps you have taken to rely on a Blanket Waiver and/or OIG Enforcement Discretion so that you can easily adjust as necessary when the Blanket Waivers and/or OIG Enforcement Discretion expire. 
  1. Save documentation and records relating to your reliance on the Blanket Waivers and/or OIG Enforcement Discretion - and keep a contemporaneous record of what you are doing and why.  For example, an email to yourself or memo to file that explains the details of an arrangement or referral under consideration and how it fits within a Blanket Waiver and/or OIG Enforcement Discretion may be very useful down the road if you need to revisit your decision or seek additional guidance.  (This is also important because HHS may ask parties for records relating to their use of the Blanket Waivers.)
  1. Consider whether reliance on a Blanket Waiver and/or OIG Enforcement Discretion is even necessary.  If you can fit your proposed arrangement within an existing Stark Law exception or AKS safe harbor, that might be a better approach.
  1. Continue to publicize, observe, and enforce your compliance policies, practices, and procedures during this time of upheaval.  We anticipate that government enforcement activities (and potential qui tam suits) will continue long after the immediacy of this global health crisis begins to wane.
  1. If you have questions or concerns about whether your proposed arrangement fits within a Blanket Waiver and/or OIG Enforcement Discretion, ask.  Ask your lawyer or contact the applicable agency for guidance.  HHS and OIG have said that they will answer questions.  A quick question now may save you additional time, resources, challenges, and money in the future. 

    You can submit questions to HHS and the OIG at the following email addresses:
    [email protected] (HHS)
    [email protected] (OIG)

Summary of the Stark Law Blanket Waivers and OIG AKS Enforcement Discretion

 

Description of Referrals/Remuneration

Stark Law Blanket Waiver

OIG AKS Enforcement Discretion

1)

Payments by an entity above or below fair market value (“FMV”) to a physician (or a physician’s immediate family member) for services personally performed by the physician (or his/her immediate family member).

Y

Y

2)

An entity paying a physician (or his/her immediate family member) rental rates that are below FMV for leasing office space from the physician (or his/her immediate family member). 

Y

Y

3)

An entity paying a physician (or his/her immediate family member) rental rates that are below FMV for leasing equipment from the physician (or his/her immediate family member).

Y

Y

4)

An entity paying a physician (or his/her immediate family member) an amount below FMV for items or services purchased from the physician (or his/her immediate family member).

Y

Y

5)

A physician (or his/her immediate family member) paying an entity rental rates that are below FMV for the physician (or his/her immediate family member) leasing office space.

Y

Y

6)

A physician (or his/her immediate family member) paying an entity rental rates that are below FMV for the physician (or his/her immediate family member) leasing equipment.

Y

Y

7)

A physician (or his/her immediate family member) paying an entity amounts below FMV for use of the entity's premises or for items or services purchased by the physician (or his/her immediate family member) from the entity.

Y

Y

8)

Remuneration from a hospital to a physician in the form of medical staff incidental benefits that exceeds the limit set forth in 42 CFR 411.357(m)(5).

Y

Y

9)

Remuneration from an entity to a physician (or his/her immediate family member) in the form of nonmonetary compensation that exceeds the limit set forth in 42 CFR 411.357(k)(1).

Y

Y

10)

Remuneration from an entity to a physician (or his/her immediate family member) resulting from a loan to the physician (or his/her immediate family member):

(1) with an interest rate below FMV; or

(2) on terms that are unavailable from a lender that is not a recipient of the physician’s referrals or business generated by the physician.

Y

Y

11)

Remuneration from a physician (or his/her immediate family member) to an entity resulting from a loan to the entity:

(1) with an interest rate below FMV; or

(2) on terms that are unavailable from a lender that is not in a position to generate business for the physician (or his/her immediate family member).

Y

Y

12)

Referral of DHS by a physician owner of a hospital that temporarily expands its facility capacity above the number of operating rooms, procedure rooms, and beds for which the hospital was licensed on March 23, 2010 (or, in the case of a hospital that did not have a provider agreement in effect as of March 23, 2010, but did have a provider agreement in effect on December 31, 2010, the effective date of such provider agreement) without prior application and approval of the expansion of facility capacity as required under section 1877(i)(1)(B) and (i)(3) of the Act and 42 CFR 411.362(b)(2) and (c).

Y

N

13)

Referrals of DHS by a physician owner of a hospital that converted from a physician-owned ambulatory surgical center to a hospital on or after March 1, 2020, provided that:

(i) the hospital does not satisfy one or more of the requirements of section 1877(i)(1)(A) through (E) of the Act;

(ii) the hospital enrolled in Medicare as a hospital during the period of the public health emergency described in Section II.A of CMS’s Blanket Waiver guidance document;

(iii) the hospital meets the Medicare conditions of participation and other requirements not waived by HHS during the period of the public health emergency described in Section II.A of CMS’s Blanket Waiver guidance document; and

(iv) the hospital’s Medicare enrollment is not inconsistent with the Emergency Preparedness or Pandemic Plan of the State in which it is located.

Y

N

14)

The referral by a physician of a Medicare beneficiary for the provision of DHS to a home health agency:

(1) that does not qualify as a rural provider under 42 CFR 411.356(c)(1); and

(2) in which the physician (or his/her immediate family member) has an ownership or investment interest.

Y

N

15)

The referral by a physician in a group practice for medically necessary DHS furnished by the group practice in a location that does not qualify as a “same building” or “centralized building” for purposes of 42 CFR 411.355(b)(2).

Y

N

16)

The referral by a physician in a group practice for medically necessary DHS furnished by the group practice to a patient in his or her private home, an assisted living facility, or independent living facility where the referring physician’s principal medical practice does not consist of treating patients in their private homes.

Y

N

17)

The referral of DHS 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.

Y

N

18)

Referrals by a physician of DHS to an entity with which the physician (or his/her immediate family member) has a compensation arrangement that does not satisfy the writing or signature requirement(s) of an applicable Stark Law exception but satisfies all of the other requirements of the applicable exception, unless a requirement is waived under one or more of the Blanket Waivers.

Y

N

 

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Authors

Samantha P. Kingsbury is a Mintz attorney who focuses on health care enforcement defense matters, representing clients in criminal and administrative actions. She also assists clients with internal investigations, and she has experience preparing self-disclosures and other enforcement reports.

Hope S. Foster

Member / Chair, Health Care Enforcement Defense Practice

Hope S. Foster is a health care enforcement defense lawyer with a national reputation. She's Chair of the Mintz Health Care Enforcement Practice, where she defends clients in governmental investigations. Hope also advises health care providers and manufacturers on enforcement issues.