On March 30, 2020, the U.S. Department of Health and Human Services (HHS) issued blanket waivers of sanctions under the federal physician self-referral law (Stark Law) for certain financial relationships and referrals related to the COVID-19 outbreak.  The waivers are retroactive, effective March 1, 2020. 

Under section 1135 of the Social Security Act (SSA), HHS is authorized to waive certain Medicare requirements in an emergency area and during an emergency period.  Relying on this authority, HHS issued waivers of sanctions under the Stark Law, on a nationwide basis, for 18 categories of arrangements. 

The waivers apply “only to financial relationships and referrals that are related to the national emergency that is the COVID-19 outbreak in the United States.”  More specifically, the arrangement at issue must “solely relate to” at least one of six “COVID-19 Purposes,” such as “[s]ecuring the services of physicians and other health care practitioners and professionals to furnish medically necessary patient care services, including services not related to the diagnosis and treatment of COVID-19, in response to the COVID-19 outbreak in the United States.”  (Emphasis added.) 

The 18 categories of waivers include, for example (1) remuneration from an entity to a physician “that is above or below the fair market value for services personally performed by the physician,” (2) “[r]ental charges paid by a physician . . . to an entity that are below fair market value for the physician’s . . . lease of office space from the entity,” (3) remuneration from a hospital to a physician in the form of medical staff incidental benefits or nonmonetary compensation that exceeds the limits that would otherwise apply, and (4) remuneration from an entity to a physician resulting from a loan to the physician with an interest rate below fair market value or “on terms that are unavailable from a lender that is not a recipient of the physician’s referrals or business generated by the physician.”

Finally, HHS provides a number of examples of the application of the blanket waivers.  For example, the waivers would apply where a “hospital pays physicians above their previously-contracted rate for furnishing professional services for COVID-19 patients in particularly hazardous or challenging environments,” or an “entity provides free telehealth equipment to a physician practice to facilitate telehealth visits for patients who are observing social distancing or in isolation or quarantine.”  Please note, however, that in all instances the waivers apply only if the financial relationship at issue “relates solely to” one of the six COVID-19 Purposes.  It also is worth noting that none of the waivers appears to apply to indirect compensation arrangements, as defined at 42 C.F.R. § 411.354(c)(2).

The full text of the waivers is available here.