The COVID-19 pandemic has created the need for flexibility in physician arrangements during the public health emergency. In response to that need, the Centers for Medicare and Medicaid Services (“CMS”) issued Stark waivers, effective March 1, 2020, applicable to certain physician arrangements. A summary of that waiver document can be found here. Since issuing that document on March 30, CMS has fielded numerous questions from industry stakeholders regarding how the waivers should be utilized. CMS responded on April 21, 2020 by issuing an Explanatory Guidance memo, which addresses common inquiries CMS has received since issuing the Stark waivers. A summary of that memo is below.
A. Compliance with Non-Waived Requirements of an Applicable Exception
B. Amendment of Compensation Arrangements
C. Applicability of Blanket Waivers to Indirect Compensation Arrangements
D. Repayment Options for Loans between a DHS Entity and a Physician
E. Repayment of Loans, Rent Abatement, or Other Amounts Due Following the End of the Emergency Period
F. Restructuring of Existing Recruitment Arrangements with Income Guarantees
This explanatory guidance from CMS addresses the most common inquiries it received related to the Stark waivers for COVID-19 Purposes, but probably does not address every outstanding question. CMS stated, “the Secretary will work with the Department of Justice to address False Claims Act relator suits where parties using the blanket waivers have a good faith belief that their remuneration or referrals are covered by a blanket waiver.” This statement may be in response to worry from stakeholders that, in the need to move quickly to address issues from the COVID-19 pandemic, a Stark compliance issue may have been created or overlooked. Despite CMS’ assurances in this regard, there remains a whistleblower risk with regard to the use of these waivers, keeping in mind that the Department of Justice may decline to intervene in a whistleblower suit but the relator can push the case forward without the government. In order to prevent that, the Department of Justice would have to use its authority to dismiss the case to prevent this occurrence. That tool is not often used so caution and careful analysis is required in relying on a Stark law waiver.