Tag Archives: health

Temporary Blanket Waivers for Certain Stark Law Penalties

Among the many federal agency actions taken in response to the health and economic consequences of the COVID-19 outbreak is an interesting and much unpublicized one related to the Stark Law, a healthcare fraud and abuse law that prohibits physicians from referring patients for certain designated health services paid for by Medicare to any entity in which they have a “financial relationship.”

On March 30, 2020, the Centers for Medicare and Medicaid Services (“CMS”) unexpectedly announced temporary nationwide Section 1135 blanket waivers (retroactive to March 1, 2020) for certain Stark Law penalties of the Social Security Act. By relaxing some restrictions on payments and referrals, hospitals and healthcare providers should find it easier to collaborate during this time when the healthcare system is confronting an unprecedented pandemic.

The blanket waivers are narrowly tailored and require entities to act in good faith to provide care in response to the United States national emergency declared due to the COVID-19 outbreak. The blanket waivers do not excuse any otherwise illegal  fraud or abuse and those using the blanket waivers must be satisfying one of the six explicitly defined COVID-19 purposes. A further requirement is that the otherwise illegal relationship must fall into the one of the eighteen permitted relationships. Because of these complex requirements the potential use of any waiver will require fact-intensive analysis of each relationships’ circumstances and conditions. Continue reading

Final Section 199A Regulations Provide Little Guidance for Skilled Nursing and Assisted Living Facilities

The final Section 199A regulations, which were promulgated on January 18, 2019, make several clarifications to the rules regarding specified service trades or businesses (“SSTB”). Over certain taxable income thresholds, SSTBs are not eligible for the Section 199A deduction. The performance of services in the field of health is an SSTB and is defined in Section 1.199A-5(b)(2) of the final regulations as “the provision of medical services by individuals, such as physicians, pharmacists, nurses, dentists, veterinarians, physical therapists, psychologists, another similar healthcare professionals performing services in their capacity as such.” The operation of health clubs or health spas, payment processing, or the research, testing, manufacture and sales of pharmaceuticals or medical devices are not within the field of health.

Many commentators to the proposed regulations, including Williams Parker, noted that many of the services provided by skilled nursing facilities and assisted living facilities are unrelated to health care, including housing, meals, laundry, security, and socialization activities. Unfortunately, Treasury declined to issue specific guidance as to whether the owners of skilled nursing, assisted living, and similar facilities are performing services within the field of health, and noted that the issue “requires a facts and circumstances inquiry that is beyond the scope of these final regulations.”

However, the final regulations added an example in Section 1.199A-5(b)(3)(ii) of a senior housing facility that is not engaged in the field of health. In the example, the senior housing facility provides its residents with standard domestic services (including housing management and maintenance, meals, laundry, and entertainment), but all medical and health services (including skilled nursing, physical and occupational therapy, speech-language pathology, medications, medical supplies and equipment, and ambulance transportation) are provided through separate professional healthcare organizations. All of the health and medical services are billed directly by the healthcare providers to the senior citizens even though the services are provided at the facility. Unfortunately, the final regulations do not address a scenario where the facility invoices the senior citizens for the health and medical services on behalf of the healthcare providers.

View the final regulations.

This post is one in a series of posts on the 199A regulations. 

Michael J. Wilson
mwilson@williamsparker.com
941-536-2043