Stark Law COVID-19 Waivers Extended to the Anti-Kickback Statute

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April 28, 2020

The Centers for Medicare & Medicaid Services (CMS) issued Blanket Waivers of certain requirements of the Physician Self-Referral Law (Stark Law).  The purpose for the Blanket Waivers is to provide the flexibility providers need in the face of the COVID-19 pandemic. As long as the financial relationship pertains to at least one COVID-19 purpose, the Blanket Waivers provide protection from the Stark Law.

It was evident soon after the release of the Blanket Waivers, that many of the arrangements that might help providers in the face of the virus could also be impacted by the federal Anti-Kickback Statute.  Most Stark Law financial relationships will involve “remuneration,” which is the central requirement under the Anti-Kickback Statute.  The perceived gap was relatively short lived.  The Health and Human Services Office of Inspector General (OIG) issued a policy statement giving a general “thumbs up” to the concepts behind the Stark Law Blanket Waivers announcing “the OIG will exercise its enforcement discretion not to impose administrative sanctions under the federal Anti-Kickback Statute for remuneration related to the 2019 novel coronavirus (COVID-19).”

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.  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.

Arrangements that do not meet the safe harbors are exempt from the kickback statute as long as they satisfy one of the permissible forms of remuneration described in the Stark Law Blanket Waiver.  Note that the OIG statement does not adopt all of the Stark Law Blanket Waivers.  Specifically, the OIG includes Blanket Waiver items 1 – 11, but not 12 -18.  See a List of COVID-19 Stark Law Waivers. 

The OIG discretion will not extend to arrangements that are not for a COVID-19 purpose.  Although the definition of a COVID-19 purpose is relatively broad, it clearly does not extend to arrangements that are not related to or required by the virus.  See Article COVID-19 Purposes.

In order to take advantage of the exemptions, the providers involved must be “acting in good faith to provide care in response to the COVID-19 pandemic.”  The exemption is not available where the government determines that the financial relationship creates fraud and abuse concerns.   Providers are alerted to maintain documentation to support the necessity of arrangements that require protection under the Blanket Waivers.

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.  Application of the Waivers and consideration of Anti-Kickback issues is tricky because the two differ in some important ways and were not issued in a detailed form due to the urgency of the pandemic.  Be certain to consult with your health care lawyer in connection with application of the Blanket Waivers and the OIG policy statement.

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