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