The Biden Administration recently announced that the COVID-19 public health emergency (“PHE”) will end on May 11, 2023. All current waivers that have not already been extended by Congress beyond the PHE (e.g., telehealth and Hospital at Home) will terminate along with the PHE. This includes the Stark Law blanket waivers related to COVID-19 physician arrangements (“Waivers”) and corresponding Anti-Kickback Statute (“AKS”) flexibilities issued at the onset of the pandemic. Please visit our previous articles for a more detailed overview of the Waivers and AKS enforcement discretion for arrangements covered by said Waivers.
End of Certain Flexibilities
Waiver protections for certain arrangements will come to an end upon termination of the PHE. Some examples include compensation arrangements that otherwise satisfy an applicable Stark Law exception but are not memorialized in writing, the ability to pay in excess of fair market value for services provided, rental charges for equipment or office space that is below fair market value, etc. The Stark Law waiver document provides over 20 examples of specific arrangements that could fall within the scope of the identified Waivers. It is imperative that health care organizations that currently have such arrangements in place take measures to bring them into compliance under an existing Stark Law exception prior to the PHE’s conclusion to avoid sanctions.
Steps to Prepare
Health care organizations relying upon the Waivers should take immediate steps to ensure their current arrangements are compliant in preparation for the PHE’s termination. Specifically, providers should undertake the following actions:
- Wind down or amend any arrangement still relying on a Waiver as needed to satisfy the requirements of applicable Stark Law exceptions;
- Reassess any arrangements entered into during the PHE to ensure Stark Law compliance;
- Review internal records to ensure any reliance on Waivers is properly documented. Such documentation should be maintained separately in a form that justifies the proper purpose and scope of the arrangement; and
- Verify that any disbursements of remuneration (e.g., loan proceeds, additional payments for services, space, equipment, or other items) after the termination of the Waivers will satisfy all requirements of an applicable Stark Law exception.
Amendments
Following the Waivers’ termination, remuneration terms of a compensation arrangement may be modified to return to the original terms of the arrangement or to make additional necessary adjustments to the arrangement. The below criteria must be met each time remuneration terms are modified:
- All requirements of an applicable exception are satisfied;
- The amended remuneration is determined before the amendment is implemented; and
- The formula for the amended remuneration does not take into account the volume or value of referrals or other business generated by the referring physician.
Furthermore, any modification to an existing compensation arrangement that is treated as a separate additional compensation arrangement between or among the same parties during the PHE (e.g., an opportunity to offer some type of financial relief under a new arrangement instead of amending the remuneration terms of a current arrangement) will expire upon termination of the Waivers.
Practical Takeaways
With the end of the PHE in sight, health care organizations relying upon the Waivers should take immediate action to verify that their arrangements are compliant with existing Stark Law exceptions. Any arrangements entered into during the PHE should be assessed and brought into compliance as needed. Providers should further ensure that they maintain proper documentation relating to the use of the Waivers, including justification for the arrangement’s proper purpose and scope.
If you have any questions or would like any additional information about this topic, please contact:
- Gregg M. Wallander at (317) 977-1431 or gwally@hallrender.com;
- Jennifer Skeels at (317) 977-1497 or jskeels@hallrender.com;
- Joe Wolfe at (414) 721-0482 or jwolfe@hallrender.com;
- Keith Dugger at (214) 615-2051 or kdugger@hallrender.com;
- Alyssa C. James at (317) 429-3640 or ajames@hallrender.com;
- Katherine M. Schwartz at (317) 977-1432 or kschwartz@hallrender.com; or
- Your regular Hall Render attorney.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
