4 Key Highlights From the CMS Stark Law Blanket Waiver

On Monday, March, 30, 2020, CMS released a blanket waiver of the physician self-referral law under section 1135 of the Social Security Act to enable health care provider responses to the COVID-19 outbreak. Effective retroactively to March 1, 2020, the Waiver broadly eliminates certain key Stark Law requirements for direct financial relationships between entities that provided designated health services (“DHS”) and physicians and physician organizations (or immediate family members of physicians). The Waiver will provide tremendous comfort and flexibility to health care providers attempting to respond rapidly and effectively to the COVID-19 outbreak by lowering many administrative hurdles to and other restrictions on effectuating critical financial relationships.

This CMS decision offers great value to healthcare systems using the Blockit platform. They now have the incentive to increase patient access by extending Blockit utilization across their affiliated providers, a particularly valuable move for providers and patients in this challenging season.

The waiver helps ensure that “sufficient health care items and services are available to meet the needs of individuals” and that “health care providers that furnish such items and services in good faith... may be reimbursed for such items and services.”

Below you will find a few highlights of the waiver. To access the document in its entirety, please click here.

Recap of the Stark Law

The CMS website states that the Stark Law (AKA the physician self-referral law or Section 1877(g) of the Social Security Act) does three things:

  1. Prohibits a physician from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation) unless an exception applies.

  2. Prohibits the entity from presenting or causing to be presented claims to Medicare (or billing another individual, entity, or third-party payer) for those referred services.

  3. Establishes a number of specific exceptions and grants the Secretary the authority to create regulatory exceptions for financial relationships that do not pose a risk of program or patient abuse.

The declaration of a national emergency is considered one such exception mentioned in item 3, so this blanket waiver allows for flexibility in the prohibitions listed in items 1 and 2 above. In addition, the waiver allows for CMS to “pay claims for designated health services that, but for satisfying the conditions of a blanket waiver, would violate the physician self-referral law.”

What the Waiver Covers

The waiver applies to financial relationships and referrals related to the COVID-19 outbreak in the United States. Payments must be between the entity and the physician, physician organization, or the immediate family member of the physician and must be solely related to COVID-19 purposes.

“The waiver applies to financial relationships and referrals related to the COVID-19 outbreak in the United States.”

The blanket waiver considers the following as COVID-19 Purposes:

  • Ensuring and expanding the ability of health care providers to address patient and community needs due to the COVID-19 outbreak;

  • Diagnosis or medically necessary treatment of COVID-19 for any individual, regardless of whether or not that individual is diagnosed with COVID-19.

  • Securing the services of physicians or other health care practitioners and professionals to furnish medically necessary patient care services in response to the COVID-19 outbreak. This includes services that are not directly related to the diagnosis and treatment of COVID-19.

  • Expanding the capacity of health care providers to address patient and community needs due to the COVID-19 outbreak.

  • Shifting the diagnosis and care of patients to appropriate alternative settings due to the COVID-19 outbreak.

  • Addressing medical practice or business interruption due to the COVID-19 outbreak that helps maintain the availability of medical care and related services for patients and the community.

The document also lists various examples of applications of the waiver for illustrative purposes. A few of these specific examples are listed below but more are mentioned in the document:

  • A physician refers a Medicare beneficiary to a home health agency owned by the immediate family member of the physician because there are no other home health agencies with the capacity to provide medically necessary home health services to the beneficiary during the COVID-19 outbreak in the United States.

  • A hospital pays physicians above their previously-contracted rate for furnishing professional services for COVID-19 patients in particularly hazardous or challenging environments.

  • 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.

Timeline for the Waiver

The waiver has an issuance date of March 30, 2020, but has retroactive effect to March 1, 2020. They will end immediately after “the expiration of the Secretary’s authority to grant waiver for the COVID-19 outbreak in the United States.” In other words, the waiver will end once there is no longer sufficient reason for the exception granted by the Department of Public Health.

How to Request the Waiver

According to CMS.com, the waiver will be granted upon request, but a request must still be made.

Those seeking the waiver should send requests via email to 1877CallCenter@cms.hhs.gov and include the words “Request for 1877(g) Waiver” in the subject line. Requests should at least include the following information:

  • Name and address of requesting entity

  • Name, phone number and email address of person designated to represent the entity;

  • CMS Certification Number (CCN) or Taxpayer Identification Number (TIN) of the requesting entity; and

  • Nature of request.

The document also states that “parties utilizing the blanket waiver must make records relating to the use of the blanket waiver available to the Secretary upon request.”

We strongly recommend that larger provider groups and health systems take advantage of the waiver to quickly increase patient access during this challenging COVID-19 crisis. To learn more about how we can help, please contact us at info@blockitnow.com. To find out more about the waiver, please visit CMS.com or read the entire document here.


Joseph Honescko is Blockit’s content manager.

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