CMS issued new Stark waivers on Monday evening, March 30, giving providers unprecedented flexibility to manage arrangements through the COVID-19 pandemic. While regulatory requirements are still in effect and these waivers must be used cautiously, this brand new guidance provides much needed latitude for providers to support one another during this novel crisis.
These waivers come after the Secretary of the Department of Health and Human Services utilized his authority under Section 1135 of the Social Security Act to waive or modify certain federal health care program and Health Insurance Portability and Accountability Act of 1996 (HIPAA) requirements – these are commonly referred to as “1135 waivers”. The most recent waivers of Section 1877(g) of the Social Security Act, also known as the physician self-referral law or Stark law, are blanket waivers – they apply nationwide. The waivers have a retroactive effect to March 1, 2020. Providers who utilize these blanket waivers must make records relating to the use of the blanket waivers available to the Secretary upon request. CMS recommends developing and maintaining records of blanket waiver use in a timely manner. The blanket waivers relate to Stark financial relationships and referrals related to COVID-19 Purposes, which generally mean diagnosing or providing treatment of COVID-19 patients, securing services for the same, ensuring the availability of providers to address patient and community needs due to COVID-19, shifting the diagnosis and care of patients to appropriate alternative settings due to COVID-19 or addressing medical practice or business interruption due to the COVID-19 in order to maintain the availability of medical care and related services for patients and the community.
The Stark law prohibits a physician from making a referral for certain designated health services payable by Medicare to an entity with which (s)he, or an immediate family member, has a financial relationship, unless an applicable exception is satisfied. It also prohibits that entity from submitting a claim for that designated health service furnished pursuant to the prohibited referral.
Applying specifically to remuneration directly between an entity and physician, or physician who stands in the shoes or family member, Secretary Azar has waived sanctions for referrals and claims submitted for items furnished in good faith that were unable to comply with one or more requirements of the Stark law and regulations. Financial relationship and referrals must be related to COVID-19 Purposes, as defined above, to be eligible for the blanket waivers. Below are the waivers (all mentions of a physician also include mention of an immediate family member of the physician):
CMS provided an illustrative list of scenarios that might qualify for waiver use during this time. Example situations range from a hospital paying a physician above their previously-contracted rate for furnishing professional services for COVID-19 patients in particularly hazardous or challenging environments, to a loan to a physician group with an exclusive contract to provide anesthesia services at a hospital that is suffering a loss of revenue due to cancellations of non-emergent surgeries. CMS clarified that the list of examples were not exhaustive, and instead meant to provide some guidance regarding application of the waivers. Application to certain common scenarios was absent, such as those physician compensation arrangements based on wRVUs in which physicians are unable to perform normal levels of wRVUs due to the COVID-19 pandemic. Judgment should be exercised going forward as providers seek to use the blanket waivers in arrangements in response to the COVID-19 pandemic.
The CMS waiver document may be found here.
If a specific scenario is not covered by the blanket waivers, providers may email the CMS waiver inbox at firstname.lastname@example.org or also at 1877CallCenter@cms.hhs.gov and request a specific, individual waiver. Responses are normally within a couple days, and no longer than 1 week depending on the complexity of the request. Please note that there are additional waivers beyond the Stark waivers described above – those may generally be found using the CMS Coronavirus Waivers and Flexibilities page.