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CMS Blanket Stark Waivers will Terminate Upon End of COVID-19 Emergency

Earlier this year, the U.S. Department of Health and Human Services (“HHS”) announced the expiration of the COVID-19 public health emergency declarations effective May 11, 2023.  As a result, many of the regulatory waivers and flexibilities available to health care providers, including the blanket waivers applicable to many Stark Law requirements (the “Stark Waivers”), will terminate on that date.

As we discussed at the pandemic’s outset, CMS issued the Stark Waivers in March 2020 under the authority provided to the Secretary of HHS through Social Security Act Section 1135.  The Stark Waivers were implemented to help providers respond to the then new COVID-19 pandemic and to ensure the availability of sufficient health care resources to address the emergency.  The Stark Waivers applied to a wide variety of arrangements between entities and physicians so long as the remuneration and referrals were related to broadly defined “COVID-19 Purposes.”  Arrangements protected under the Stark Waivers included rental arrangements, some non-FMV services arrangements, certain loans, and others.  The Stark Waivers were understandably welcomed by providers already struggling to address the COVID-19 pandemic.

While the OIG did not issue specific Anti-Kickback Statute waivers, in April 2020 it did release a Policy Statement setting forth the OIG’s policy that, in light of the unique circumstances of the COVID-19 emergency, it would “exercise its enforcement discretion not to impose administrative sanctions under the Federal anti-kickback statue for certain remuneration “covered by Stark Waivers. In its Policy Statement, the OIG set this policy to terminate on the same date as the Stark Waivers’ termination.  Thus, providers will no longer be able to rely on the assurance provided by the Policy Statement after May 11.

In light of the May 11 termination date, providers who have structured agreements relying on the Stark Waivers and OIG Policy Statement should act now to either confirm that such arrangements will remain compliant with the Stark Law and Anti-Kickback Statute as of that date, reform such arrangements to bring them into compliance, or possibly terminate some arrangements. 

© Copyright 2023 Squire Patton Boggs (US) LLPNational Law Review, Volume XIII, Number 90

About this Author

Robert Nauman Health Care Attorney Squire Patton Boggs Columbus, OH

Robert Nauman focuses his practice on healthcare, health insurance and corporate matters.

Robert has extensive experience counselling healthcare clients, including hospitals and health systems, physicians, physician groups, ambulatory surgery centers, insurers, health plans and management companies, in a variety of regulatory and transactional matters.

Robert’s areas of expertise include healthcare fraud and abuse laws, Medicare reimbursement issues, provider alignment strategies, provider enrollment, accreditation and licensure, Accountable Care Organizations, provider...

John E. Wyand, Squire Patton Boggs, Healthcare Lawyer, UK

John Wyand, a Partner in our Healthcare policy practice group in Washington DC, focuses on advising healthcare and life sciences companies and providers on legal, policy and regulatory issues. Additionally, he regularly assists hospitals and physician groups in developing strategies for hospital/physician alignment, mergers and acquisitions, and fraud and abuse compliance.

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