COVID-19 Waivers: An Overview

by Apr 29, 2020

Much has been written about CMS’s issuance of Blanket Waivers for certain referrals and/or remuneration arrangements under the Stark Law that would otherwise be sanctioned but for the good faith reliance on and compliance with the Waivers. The issuance of these Blanket Waivers was followed by the OIG’s release of a Policy Statement advising that the OIG will exercise its enforcement discretion and not impose administrative sanctions under the Anti-Kickback Statute with respect to many (but not all) of the same remuneration arrangements that are covered by the Blanket Waivers. But what does this mean for compliance professionals and what should compliance professionals do to help their organizations determine if their arrangements comply with the Blanket Waivers and Policy Statement? This article describes the recent guidance issued by CMS and the OIG and provides practical guidance to help compliance professionals navigate these unchartered waters.

 

CMS Blanket Waiver:

 

As a result of the public health emergency caused by COVID-19, on March 30, 2020, CMS issued Blanket Waivers with respect to 18 categories of referrals and/or remuneration arrangements (see below). The Waivers were designed to ensure that there are sufficient health care items and services available during the pandemic and that health care providers who furnish these items and services in good faith but who cannot meet one or more requirements of a Stark exception will not be sanctioned for any such noncompliance and will still be reimbursed.

Although CMS released the Blanket Waivers on March 30, 2020, they are effective retroactively to March 1, 2020. The Waivers apply to a wide array of referrals and arrangements that would otherwise violate the Stark Law because they fail to satisfy one or more of the requirements of a Stark exception. The Waivers may only be relied on, however, only if all of the conditions of the applicable Waiver are met and there is no government determination of fraud or abuse. For example, one Waiver would permit an entity that furnishes designated health services (DHS), such as a hospital, to pay a physician compensation in an amount that is above the fair market value for services personally performed by the physician (e.g., “hazard pay”). Another Waiver would permit a DHS entity to provide free telehealth equipment to a physician practice to facilitate telehealth visits. Yet another would allow a compensation arrangement to begin before the parties were able to satisfy the documentation requirements of having a signed written agreement if the arrangement otherwise satisfies all of the other requirements of a Stark exception.

Importantly, the Blanket Waivers only apply to financial relationships and referrals that are related the COVID-19 pandemic. Accordingly, the remuneration and/or referrals must be solely related to COVID-19 purposes. CMS lists six such “purposes” including, without limitation, diagnosing or providing 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, ensuring the ability of health care providers to address patient and community needs due to the COVID-19 outbreak in the United States, and shifting the diagnosis and care of patients to appropriate alternative settings due to the COVID-19 outbreak in the United States.

 

OIG Policy Statement:

 

On April 3, 2020, the OIG issued a Policy Statement setting forth its determination to exercise its enforcement discretion not to impose administrative sanctions under the Anti-Kickback Statute for financial arrangements that implicate the Stark Law and are covered by certain of the Blanket Waivers. Some important things to note about the Policy Statement:

 

    1. The Policy Statement only applies to conduct occurring on or after April 3, 2020 and is not retroactively effective to a prior date like the Blanket Waivers.
    2. The Policy Statement only applies to remuneration properly covered by Blanket Waivers 1-11, which relate to requirements for remuneration in Stark exceptions for compensation arrangements. The Policy Statement does not apply to Waivers 12-18 or any other arrangement.
    3. The Policy Statement does not apply to criminal conduct.

 

Practical Guidance

 

In seeking to determine whether a Waiver and the Policy Statement may be relied on with respect to a particular arrangement, compliance professionals should consider the following:

 

  1. The first step in this process is to determine if an arrangement was entered into on or after March 1, 2020, the effective date of the Blanket Waivers. Arrangements entered into before this time will not be covered by the Waivers. Similarly, if the AKS is a potential concern, the arrangement has to have been entered into on or after April 3, 2020. Arrangements entered into before this time will not be covered by the Policy Statement.
  2. Next, a determination must be made whether the remuneration or referral is covered by an existing Stark exception.
  3. If it is not covered by an existing Stark exception, a determination needs to be made as to whether any Waver potentially applies.
  4. If a Waiver potentially applies, it must be determined if the remuneration and/or referral is solely related to one of the 6 enumerated COVID-19 purposes.
  5. If a proper COIVD-19 purpose has been established, a determination must be made as to whether or not the remuneration and/or referral meets the Waiver criteria.
    • Remember that if the AKS is a possible concern, only Waivers 1-11 are potentially applicable.
  6. It is very important to prepare and maintain contemporaneously-created documentation of the above 5-step analysis. Documentation should include, without limitation, a description of the arrangement, the parties to the arrangement, the COVID-19-related purpose and the analysis of and reliance on the applicable Waiver. Working with the senior management team will likely be important to obtain and prepare this documentation. The documentation must be available to the government upon request.
    • A tracking tool is very useful to outline when the financial arrangement and/or referral occurred, with whom it occurred, what specifically was done (e.g., rent was abated for a physician in this MOB), and, importantly, when the arrangement ended.
  7. Although written documentation between the parties to the financial arrangement and/or referral is not required since a signed, written agreement is the subject of one of the Stark waivers, it is recommended that some, brief documentation between the parties (e.g., invoices, template letter) should be created and maintained in the file with the above-noted items.
  8. Remember that the Waivers and Policy Statement are only temporary and will generally end when the public health emergency is over. Therefore, any arrangements and/or referrals that relied on a Waiver or the Policy Statement will have to come into compliance with the Stark Law and Anti-Kickback Statute when the Waivers and Policy Statement expire or are terminated. It is important to keep track of any and all remuneration and/or referrals that relied on a Waiver or Policy Statement and have a plan for terminating them or bringing them into compliance with the Stark Law and/or Anti-Kickback Statute on a timely basis.
  9. Remember that the Blanket Waivers are limited in scope and that the failure of an arrangement or referral to satisfy one or more of the other requirements of an applicable Stark exception will trigger the Stark prohibitions. That is, an arrangement or referral that qualifies for a Waiver must still meet all of the non-waived requirements of an applicable Stark exception.
  10. If the noted Stark waivers do not appear to cover an arrangement that is being contemplated, the opportunity exists to request an individualized waiver from CMS.
  11. CMS has indicated that it may revise the Blanket Waivers and/or may issue additional waivers. If it does, we plan to update this guidance document.

 

CMS Blanket Waivers

 

  1. Remuneration from an entity to a physician (or an immediate family member of a physician) that is above or below the fair market value for services personally performed by the physician (or the immediate family member of the physician) to the entity.
  2. Rental charges paid by an entity to a physician (or an immediate family member of a physician) that are below fair market value for the entity’s lease of office space from the physician (or the immediate family member of the physician).
  3. Rental charges paid by an entity to a physician (or an immediate family member of a physician) that are below fair market value for the entity’s lease of equipment from the physician (or the immediate family member of the physician).
  4. Remuneration from an entity to a physician (or an immediate family member of a physician) that is below fair market value for items or services purchased by the entity from the physician (or the immediate family member of the physician).
  5. Rental charges paid by a physician (or an immediate family member of a physician) to an entity that are below fair market value for the physician’s (or immediate family member’s) lease of office space from the entity.
  6. Rental charges paid by a physician (or an immediate family member of a physician) to an entity that are below fair market value for the physician’s (or immediate family member’s) lease of equipment from the entity.
  7. Remuneration from a physician (or an immediate family member of 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 (or the immediate family member of the physician) from the entity.
  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).
  9. Remuneration from an entity to a physician (or the immediate family member of a physician) in the form of nonmonetary compensation that exceeds the limit set forth in 42 CFR 411.357(k)(1).
  10. Remuneration from an entity to a physician (or the immediate family member of a physician) resulting from a loan to the physician (or the immediate family member of the physician): (1) with an interest rate below fair market value; 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.
  11. Remuneration from a physician (or the immediate family member of a physician) to an entity resulting from a loan to the entity: (1) with an interest rate below fair market value; or (2) on terms that are unavailable from a lender that is not in a position to generate business for the physician (or the immediate family member of the physician).
  12. The referral 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).
  13. Referrals 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 this blanket waiver document; (iii) the hospital meets the Medicare conditions of participation and other requirements not waived by CMS during the period of the public health emergency described in section II.A of this blanket waiver 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.
  14. The referral by a physician of a Medicare beneficiary for the provision of designated health services 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 an immediate family member of the physician) has an ownership or investment interest.
  15. 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 as a “same building” or “centralized building” for purposes of 42 CFR 411.355(b)(2).
  16. The referral by a physician in a group practice for medically necessary designated health services 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.
  17. 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.
  18. Referrals by a physician to an entity with whom the physician (or an immediate family member of 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 waived under one or more of the blanket waivers set forth

 

If you need help beyond this guidance in navigating the waivers, advising your organization on waivers, or reconciling the waivers with state laws, contact us at 703-683-7916 or info@healthethicstrust.com for help.

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