The Centers for Medicare & Medicaid Services and the US Department of Health and Human Services Office of Inspector General have provided additional guidance and clarification on the application of Stark Law blanket waivers and enforcement of the Anti-Kickback Statute amid the coronavirus (COVID-19) pandemic, helping providers establish new arrangements or modify existing arrangements to accommodate unprecedented demands.
The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General of the US Department of Health and Human Services (OIG) have recognized the need for regulatory flexibility for the healthcare provider community in addressing the COVID-19 pandemic. CMS issued blanket waivers of the Physician Self-Referral Law, known as the Stark Law on March 30, and on April 3, the OIG issued a policy statement regarding its decision not to enforce administrative sanctions under the federal Anti-Kickback Statute (AKS) in certain circumstances. Both the OIG and CMS have provided further guidance related to the application of these laws, as well as the federal beneficiary inducement provision of the Civil Monetary Penalties Law (Beneficiary CMP).
On April 21, CMS issued explanatory guidance on the scope and application of the Stark Law blanket waivers. First, CMS advised readers that the blanket waivers waive only certain requirements of an applicable Stark Law exception, and financial relationships must continue to satisfy all nonwaived requirements of an applicable exception. For example, while blanket waiver No. 6 permits the payment of below fair market value rental charges by a physician to an entity for the physician’s lease of equipment from the entity, the lease arrangement must continue to satisfy the other requirements of the equipment lease Stark Law exception (e.g., the arrangement must be commercially reasonable). CMS notes that the failure of a financial relationship to satisfy one or more of the other requirements of an applicable exception would trigger the Stark Law’s referral and billing prohibitions.
Next, CMS addressed amendments to compensation arrangements. In the explanatory guidance, CMS appears to clarify its view that remuneration terms can be amended multiple times in the same year, so long as each time the remuneration terms are amended, all requirements of an applicable exception are satisfied, the amended remuneration is determined before the amendment is implemented, the formula for the amended remuneration does not take into account the volume or value referrals or other business generated by the referring physician, and the overall arrangement remains in place for at least one year following the amendment.
CMS stated that following the expiration of the emergency period, the remuneration terms of a compensation arrangement may be modified to return to the original terms of the arrangement or to effectuate additional necessary modifications to the arrangement, provided that, each time the remuneration terms are amended, the requirements set forth in the explanatory guidance (as noted above) are satisfied. CMS also noted that parties may not need to amend an existing arrangement, but they may rather enter into an additional compensation arrangement to cover the unique COVID-19-related arrangement.
Finally, CMS provided the following additional points of consideration in connection with the blanket waivers:
In furtherance of the goal of regulatory flexibility, the OIG is now accepting informal inquiries regarding the application of administrative enforcement under the AKS and Beneficiary CMP to arrangements directly related to the COVID-19 public health emergency. The process is informal but the OIG notes that the more formal OIG Advisory Opinion process remains available. Questions submitted to the OIG must include sufficient facts to identify key parties to the arrangement and the terms of the arrangement. Answers to the inquiries are published as FAQs on the OIG website.
Inquiries considered by the OIG to date include the following:
In all instances, the OIG stated that the arrangement presented a low risk of fraud and abuse under the AKS and Beneficiary CMP. The analysis in each case was based on factors specific to the arrangement, although several inquiries noted common themes, including the medical necessity of the services furnished under the arrangement in general and as related to the COVID-19 pandemic; the absence of a connection between the receipt of the remuneration and the volume or value of referrals or self-referral by the recipient; and the absence of marketing or advertising of the arrangement, e.g., the availability of free transportation in the case of the oncology services.
The OIG identified several limitations to the FAQs. First, they are not binding on the OIG or any other governmental agency, and no prospective immunity or protection from administrative or criminal enforcement is granted in the event of favorable answers. Second, no opinion is offered regarding application to other laws, including the Stark Law or the False Claims Act. Finally, the informal feedback is applicable to arrangements solely during the time period subject to the COVID-19 public health emergency.
CMS and the OIG should be commended for their willingness to provide additional guidance and clarification surrounding the application of the blanket waivers and enforcement of the AKS and Beneficiary CMP during the COVID-19 public health emergency. This willingness to engage with the provider community has helped providers establish new arrangements or modify existing arrangements to accommodate the unprecedented demands created by the pandemic. Among the many lessons learned from the pandemic, perhaps CMS and the OIG will recognize the benefits of this increased dialogue and consider ways to continue this practice beyond the expiration of this public health emergency.
Providers entering into financial arrangements with referrals sources to address COVID-19-related matters should be mindful of the following:
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