In a March 19 , the American Hospital Association requested Alex Azar, the Secretary of Health and Human Services to:
(i) waive enforcement of provisions of the Stark Law “relating to compensation paid to a physician or immediate family member in return for a service necessary to the hospital’s response to the COVID-19 public health crisis” and
(ii) waive provisions under the federal anti-kickback statute related to “transactions between hospitals and physicians or other potential referral sources or vendors that deliver services or supplies necessary to the hospital’s response to the COVID-19 public health crisis or civil monetary penalties law (CMP).”
Although it is widely anticipated that CMS will suspend enforcement of some provisions of the fraud and abuse laws, the request is not all-encompassing and only relates to payments for items or services necessary for the facility to respond to the crisis.
Below are relationships to consider:
Physician Employment Agreements - A hospital or hospital-affiliated practice has flexibility with employment relationships under both the Stark Law and the anti-kickback statute. Many employment agreements have productivity bonuses obligating the employer to pay additional amounts for additional work RVUs or hours performed by the physician. If a physician is not in a specialty essential to responding to the crisis, or the physician performs elective procedures, then what can a hospital or hospital-affiliated practice do? First and foremost, the compensation must be fair market value for services rendered. If the employed physician is pitching in (because it is anticipated that all hands will be needed) and is performing services that are directly related to the crisis, but may not generate wRVUs, then it is reasonable to pay the physician as if the physician were performing billable services. No one should be required to work without pay, especially in these risky times.
Of course if the physician provides what has been , and is not reporting for work or stepping in to aid in the crisis in any way, then it would not be reasonable to pay a performance bonus.
Physician Medical Director and Call Compensation - It is likely these arrangements would be covered by an enforcement waiver requested by the AHA to allow a facility to pay for all the medical services needed to respond to the crisis. Until that time, the agreements can be amended to increase the number of hours of service by medical directors and specialists on call to respond to emergencies. It would be inadvisable, however, to increase the hourly rate without fair market value support, or guidance from the OIG regarding the deployment of additional resources to respond effectively. For example, a pulmonologist medical director may have an agreement to provide 10 hours of services per month. Currently, the number of hours can be increased to respond to the need, as no one would expect, in these times, for the physician to walk out after performing the 10 hours. Moreover, the physician would expect to be paid for hours devoted in excess of the 10 hours. Numerous revisions have been made to the Stark regulations over the last several years which provide flexibly to the requirements for a signed writing. Currently, the new Stark regulations allow a collection of documents, including emails, to be evidence of a signed writing.
Paying Physicians for Professional Services - Many states, including TN, have temporarily waived state licensing requirements if a physician holds a license to practice medicine from another state. As a result, physicians may be responding to the crisis outside their community presenting the question of whether a hospital can directly engage and compensate such physicians. Such compensation arrangements should be addressed by the CMS/OIG guidance. In the meantime, a hospital seeking to pay a physician to provide professional services should comply with the Stark Personal Services Exception 42 C.F.R. § 411.357(c), which requires a signed writing, describing the services with a fair market value compensation for a term of 12 months, which can be sooner terminated by the parties.
Action Items - It is a given that hospital personnel have very little spare time to address physician compliance issues. Nonetheless, it would be appropriate to identify and document those physicians and advanced practice professionals who provide essential services as well as existing and new arrangements needed to respond to the COVID-19 crisis. This business justification would provide a useful record should the arrangement subsequently be reviewed. Then the facility should prioritize the arrangements to be created or modified, including support for the compensation (especially if there is no time to obtain third party support for the compensation) and the amount of time needed by the essential professionals. Hospitals also should confirm supplemental staffing does not implicate existing exclusive arrangements, if so, seek a temporary waiver from the current provider.
- Physicians are routinely tenants on hospital-owned medical office buildings. The waiver request submitted does not address abating rent owed by such tenants. Given the increasingly strict quarantine measures, it is likely a physician practice will be unable to function normally, including the absence of back-office billing staff. Nonetheless, until there is a proven long-term business disruption for a physician practice tenant, or other guidance is issued by CMS or the OIG, it would not be reasonable to abate or waive rent.
- Non-physician tenants like oxygen suppliers, pharmacies, optometrist and surgery centers are also routinely tenants in hospital-owned medical office buildings. Although these entities often support the community and present less risk under the fraud and abuse laws, a waiver addressing rent abatement for these tenants should be carefully analyzed.
- Finally, cities, counties and other community agents may seek below market rents for COVID testing or shelters. If the space can be made available safely, is reasonable to offer space at below market rental rates.
Physician-Owned Vendors - At this time and until guidance from CMS or the OIG is issued, it would be reasonable to purchase items from a physician-owned vendor only at fair market value.
Beneficiary Inducement - On March 18, 2020 CMS issued an , consistent with an FAQ previously issued by the related to the waiver of co-payments for high deductible health plans. CMS’s FAQ made clear that the agency would not take enforcement action against any health issuer that amends its catastrophic plans to provide coverage without imposing cost-sharing requirements for COVID-19 related services before the enrollee meets the plan’s deductible.