On May 11, 2023, the federal Public Health Emergency (“PHE”) waivers put in place three years ago will expire. These waivers, enacted pursuant to Section 1135 of the Social Security Act, 42 USC § 1320b-5, provided hospitals and healthcare facilities with much-needed flexibility as they worked to respond to the public health crisis brought about by the COVID-19 pandemic. However, as the waivers expire, it is important for healthcare providers to be aware of the regulations coming back into effect to ensure compliance under healthcare laws.
Included in the PHE waivers were blanket waivers of sanctions under the physician self-referral law (or Stark Law). These blanket waivers of sanctions under Section 1877(g) of the Social Security Act, 42 USC § 1395nn, allowed previously prohibited financial referrals and relationships that were related to COVID-19. Under these blanket waivers, hospitals and health systems had the flexibility to enter into arrangements with physicians under terms that may not have been consistent with fair market value (“FMV”) in order to combat the health emergency. The intent was to allow hospitals to recruit much needed healthcare providers at competitive rates and retain them without having to engage in excessive paperwork.
Upon expiration of the blanket waivers, all applicable provisions of the Stark Law will go back into full force and effect. As such, any arrangements that may have been entered into without meeting an enumerated exception will need to be reviewed. Furthermore, for those arrangements to be supported under the FMV exception, supporting documentation from an outside valuator is advisable.
FMV – PITFALL
Over the last three years, hospitals and health systems have operated with greater latitude in contracting, and may have entered into numerous arrangements that, upon expiration of the PHE waivers, may run afoul of the Stark Law or related healthcare regulations. As such, healthcare providers should proactively review all existing arrangements to ensure compliance with applicable healthcare fraud and abuse laws.
As the leading experts in healthcare valuation services, HAI is uniquely poised to provide comprehensive healthcare valuation services. Our automated tools can provide you with FMV guidance at the click of a button – an invaluable benefit for those who may be scrambling to document FMV support otherwise absent during the PHE waiver. Contact us today to learn more.