Medicare Compliance & Reimbursement

Enforcement:

Know These Stark and AKS Waiver Updates

Tip: Plan ahead for your post-COVID-19 compliance transition.

During the best of times, many find keeping compliant with fraud and abuse regulations and all their nuances challenging. In the midst of the COVID-19 crisis, the feds have lifted some sanctions related to providers and self-referrals.

Review These Temporary Stark Changes

Section 1877 of the Social Security Act (SSA) concerns the Physician Self-Referral Law — or Stark for short — which prohibits physicians from referring Medicare patients to an entity that provides designated health services (DHS) if the physician or an immediate family member has a financial relationship with that entity (unless an exception applies). On March 30, the Centers for Medicare & Medicaid Services (CMS) issued 1135 blanket waivers — applied retroactively to March 1 and in effect through the end of the pandemic — related specifically to the Stark Law.

Remember: Only after the Department of Health and Human Services (HHS) secretary issues a public health emergency (PHE) under the Public Health Services Act, which HHS Secretary Alex Azar did on Jan. 31, and the president declares an emergency under the Stafford Act, which President Trump did on March 13, can Section 1135 of the SSA be invoked and blanket waivers go into effect.

The 18 Stark Law blanket waivers offer Medicare, Medicaid, and CHIP providers and suppliers some relief, but there are some parameters within the flexibilities. For example, the Stark waivers apply only to financial relationships and referrals related specifically to the COVID-19 outbreak and subsequent national emergency in the United States; plus, they are only in effect for the duration of the pandemic.

“Any remuneration described in the blanket waivers must be directly between the entity and the physician or the physician organization in whose shoes the physician stands under 42 CFR 411.354(c) or the immediate family member of the physician,” noted CMS in its March 30 guidance.

“Specifically, remuneration and referrals described in the blanket waivers must be ‘solely related’ to COVID-19 purposes,” caution Memphis-based attorneys Kendra A. Lyons and Scott B. Shanker with Butler Snow LLP in online analysis. “Parties seeking to utilize a Stark Law blanket waiver should carefully assess whether a particular arrangement is sufficiently related to the COVID-19 public health emergency,” they warn.

Take a look at this condensed breakdown of the 18 Stark law blanket waivers:

Remuneration: Waivers 1 to 11 deal specifically with payment or repayment arrangements between a physician or an immediate family member of the physician and an entity. Topics covered in the waivers include service and item remuneration at fair market value, office and equipment leasing, staff benefits, nonmonetary compensation, purchases, and loans.

“The blanket waivers do not apply to indirect compensation arrangements as defined at 42 CFR 411.354(c)(2),” explains CMS in April 21 guidance. “Parties may request an individual waiver of the sanctions under section 1877(g) of the Act related to remuneration that constitutes an indirect compensation arrangement under section 42 CFR 411.354(c)(2).”

Referrals: The rest of the waivers focus on the following referrals:

  • Waivers 12 through 14 “relate to requirements in exceptions for ownership or investment interests” in hospitals and is covered at 42 CFR 411.356, the explanatory guidance says.
  • “Blanket waivers 15 through 17 waive the sanctions of section 1877(g) of the Act when the specified requirements of the ‘services’ exceptions at 42 CFR 411.355 are not satisfied,” CMS advises.
  • Blanket waiver 18 covers compensation arrangements not outlined in writing or signed by the involved parties and also concerns section 1877(g) of the SSA.

Feds Put COVID-19 Spin on AKS

To better align with CMS’ COVID-19 policies and the Stark Law blanket waivers, the HHS Office of Inspector General (OIG) issued its policy statement on the Anti-Kickback Statute (AKS) on April 3.

Reminder: “In some industries, it is acceptable to reward those who refer business to you,” notes OIG guidance. “However, in the federal healthcare programs, paying for referrals is a crime.”

In fact, “it is a felony to offer, provide, request, or accept any payment if one purpose is to influence payments under a federal healthcare program” under the AKS, warns attorney David Glaser with Fredrikson & Byron, PA in Minneapolis. “Paying referral sources is a big problem.”

Now: Often, there’s crossover between the Stark Law and the AKS. The implications of an improper financial relationship under Stark may result in an AKS violation, OIG suggests.

“Recognizing the unique circumstances of the COVID-19 outbreak, OIG will not impose administrative sanctions under sections 1128(b)(7) or 1128A(a)(7) of the Act, as those sections relate to the commission of acts described in the Federal Anti-Kickback Statute, with respect to remuneration that is covered by section II.B.(1)-(11) of the blanket waivers,” the statement says.

OIG adds, “All of the conditions and definitions that apply to the blanket waivers shall apply to this policy statement.”

“Existing exceptions and/or safe harbor provisions already provide useful protection covering many COVID-19 related payments between parties to referral relationships. But the OIG policy statement goes much further than the safe harbors,” indicates attorney John H. Fisher II with Ruder Ware LLSC in Wausau, Wisconsin, in online analysis. “The OIG is now saying that arrangements that do not meet the safe harbors are exempt to the extent the arrangement has a COVID-19 purpose.”

FAQs: On April 23, OIG issued a frequently-asked questions set, and then updated it again on April 24. As part of an outreach effort, OIG will field AKS, Civil Monetary Penalty Law (CMPL), and other financial arrangement questions, and then post in the FAQs, the site says. However, the “informal feedback” is not the same as an advisory opinion, though interested parties are invited to request those, too, OIG says.

Read the FAQs, submit questions, or request an advisory opinion at https://oig.hhs.gov/coronavirus/authorities-faq.asp.

Bottom line: “Although the OIG gives a wink and a nod to the Stark Law blanket waivers, it is important to note that not every item protected by the blanket waiver will necessarily receive favorable treatment when the OIG is exercising its prosecutorial discretion,” Fisher cautions.

In fact, the federal watchdog reminds that it reserves the right to “reconsider the issues” and/or “modify or terminate this policy statement.”

Tip: “There does not appear to be a grace period, however, to unwind temporary arrangements after the COVID-19 pandemic subsides,” Lyons and Shanker counsel. “Accordingly, entities and physicians should consider practical implications of using the blanket waivers, such as an automatic termination or reversion to prior contract terms.”

Resources: Review the Stark Law blanket waivers’ announcement from March 30 at www.cms.gov/files/document/covid-19-blanket-waivers-section-1877g.pdf.

See CMS’ April 21 explanatory guidance on Stark waivers at www.cms.gov/files/document/explanatory-guidance-march-30-2020-blanket-waivers-section-1877g-social-security-act.pdf.

Find the OIG policy statement at https://oig.hhs.gov/coronavirus/OIG-Policy-Statement-4.3.20.pdf.