42 C.F.R. 411.353 is one of the Stark Law’s implementing regulations, discussed more fully below. In essence, this means that if conduct violates the Stark Law or its implementing regulations, it will violate the CMPL too.Stark LawThe Stark Law, 42 U.S.C. 1395nn, and its implementing regulations place certain limitations on physician referrals and prohibit physician referrals of Medicare and Medicaid patients to designated health service providers (DHSP) with which the physician has an existing financial relationship. 42 U.S.C. 1395nn(a); 42 C.F.R. 411.353(a).

952(d)(4): “The term of the agreement is for not less than one year.” 42 U.S.C. 1395nn(e)(3)(A)(i): “the arrangement is set out in writing, signed by the parties, and specifies the services covered by the arrangement.” 42 U.S.C. 1395nn(e)(3)(A)(iv): “the term of the arrangement is for at least 1 year.”

[co-author: Myatt McClure]On Dec. 29, 2022, the Consolidated Appropriations Act (the “CAA”) was signed into law. The CAA provides for a new exception to the Stark Law and Anti-Kickback Statute (the “AKS”). Section 4126 of the CAA introduces a new exception (the “Exception”) for physician wellness programs that allow healthcare entities to provide mental and behavioral health programs to physicians and other clinicians.The Exception as Applied to the Stark LawThe Stark Law exception, located at 42 U.S.C. § 1395nn(e)(9), is not considered to be a compensation arrangement under subsection (a)(2)(B) and permits certain healthcare entities to offer mental or behavioral health improvement programs to referring physicians. The primary purpose of this exception is to prevent suicide, improve mental health, and provide training to promote the mental health of physicians. Importantly, the exception conforms with the Lorna Breen Health Care Provider Protection Act (the “Lorna Act”). The Lorna Act authorizes the U.S. Department of Health and Human Services (the “HHS”) to award hospitals and other healthcare entities with grants for evidence-based programs to improve mental health and resiliency for healthcare professionals. Thus, the CAA ensures that healthcare entities can utilize the funds provided under the Lorna Act to address the needs of their physicians without violating the Stark Law or AKS. Unlike other Stark Law exceptions, there is no cap on the dollar value of these programs, which allows entities

’ future purchases.(OIG Special Advisory Bulletin, Offering Gifts and Other Inducements to Beneficiaries (8/02), available at https://oig.hhs.gov/fraud/docs/alertsandbulletins/SABGiftsandInducements.pdf). Violations of the CMPL may result in administrative penalties ranging from $5,000+ to $100,000+ per violation depending on the conduct involved. (42 U.S.C. § 1320a-7a; 42 C.F.R. part 1003; 45 C.F.R. § 102.3).Ethics in Patient Referrals Act (“Stark”). If the patient happens to be a referring physician or the family member of a referring physician, offering free or discounted items or services or other inducements (e.g., professional courtesies) may also implicate the federal Stark law. Stark generally prohibits physicians from referring certain designated health services payable by Medicare or Medicaid to an entity with which the physician, or a member of the physician’s family, has a financial relationship unless the relationship is structured to fit within a regulatory safe harbor. (42 U.S.C. § 1395nn(a)(1); 42 C.F.R. § 411.353(a)). Gifts, discounted items or services, and other inducements likely create a financial relationship that would trigger Stark. (42 U.S.C. § 1395nn(a)(2); 42 C.F.R. § 411.354(a)). As with AKS violations, Stark violations may result in repayment obligations; civil and administrative penalties; and False Claims Act liability. (42 U.S.C. § 1395nn(g); 42 C.F.R. §§ 1003.300 and 1003.310; 45 C.F.R. § 102.3).State Fraud and Abuse Laws. In addition to the foregoing federal statutes, healthcare providers must beware potentially relevant state laws. Like their federal counterparts, most states have anti-kickback statutes that prohibit offering inducements to patients who are covered by Medicaid or other government healthcare programs. Some state anti-kickback statutes are broader and extend to private payors as well as government payment programs. State licensing acts often prohibit physicians and other healthcare providers from offering rebates, splitting fees, or otherwi

Within HHS, CMS is responsible for exercising the delegated authority. In its commentary, CMS addressed three provisions from Section 50404 of the Bipartisan Budget Act: Holdover provisions to permit a lease arrangement or personal service arrangement to continue beyond the stated expiration of the arrangement (42 U.S.C. 1395nn(e)), The writing requirements in certain compensation arrangement exceptions (42 U.S.C. 1395nn(h)(1)), and Signature requirements for certain compensation arrangement exceptions involving temporary noncompliance (42 U.S.C. 1395nn(h)(1)).The New Statutory Holdover Provisions The existing regulations that set forth the exceptions for “rental of office space,” “rental of equipment,” and “personal services” arrangements already permit, under certain circumstances, the arrangement to continue indefinitely beyond the stated expiration of the written documentation describing the arrangement.

The case alleged that bonus arrangements with six oncologists did not fit into the employment agreement exception of the Stark Law, which prohibits physicians from making referrals for designated health services (DHS) payable by Medicare to an entity with which the physician (or an immediate family member) has a financial relationship, unless an exception applies. 42 U.S.C. 1395nn(a)(1)(A). The Stark Law also prohibits billing for DHS provided as a result of an improper referral.

CMS states that settlements under the SRDP do not include a release of liability under the federal antikickback statute or False Claims Act, which are authorities belonging to the OIG and Department of Justice. Moreover, CMS states that it cannot issue a release from potential civil monetary penalties or exclusion for the knowing submission of claims for which payment is not permitted under the Stark law, or for circumvention schemes, as set forth in 42 U.S.C. § 1395nn(g)(3)-(4). CMS states that enforcement of the CMP and exclusion authorities lies with the OIG, which is not a signatory to the SRDP settlement.

The electronic prescribing and electronic health records (“EHR”) exceptions to the federal physician self-referral law known as the Stark Law (42 U.S.C. § 1395nn) were first published in the Federal Register in 2006, yet they remain important considerations for compensation arrangements subject to the harsh provisions of the Stark law. These exceptions may prove helpful for hospitals that want to donate certain health information technology items or services to a referring group practice or individual physician.

). 42 U.S.C. § 1395m(x)(2); see also MLN Fact Sheet: Rural Emergency Hospitals, Medicare Learning Network MLN2259384 (Oct. 2022), available at https://www.cms.gov/files/document/mln2259384-rural-emergency-hospitals.pdf. 42 U.S.C. § 1395m(x)(2)(D). 42 C.F.R. § 419.92(c). Those services excluded from payment under the OPPS, and which cannot therefore be considered REH services, are set forth at 42 C.F.R. § 419.22. See also 87 Fed. Reg. 71748, 72164 (Nov. 23, 2022) (“However, section 125 of the CAA is silent on how CMS should pay for other services furnished by an REH, such as services paid under the Clinical Laboratory Fee Schedule (CLFS) or outpatient therapy services, that may be provided on an outpatient basis by hospital outpatient departments, but that are not covered OPD services. . . .”).Id. Stark Law generally prohibits a physician from making referrals to an entity for certain “designated health services” (“DHS”) when the physician has a financial relationship with that entity. 42 U.S.C. § 1395nn(a). Following the Affordable Care Act, the “whole hospital exception,” which previously allowed for physician investment in an entire hospital, was amended to prohibit any physician investment or ownership in hospitals if such investment did not occur before or within 18 months after March 23, 2010. See 42 U.S.C. § 1395nn(d)(3)(D), (i)(1). For purposes of Stark, an REH is an “entity” which provides DHS, and Stark is therefore applicable to investing physicians who refer to the REH for DHS. See 42 C.F.R. § 411.354. 42 C.F.R. § 411.356(c)(1) (allowing for ownership or investment in a “rural” provider which furnishes 75% or more of its DHS to residents of a rural area). Such ownership does not constitute a “financial relationship” for purposes of Stark.New rural hospital model a lifeline for some, a gamble for others, Arielle Dreher, Axios (Jan. 23, 2023), available at https://www.axios.com/2023/01/23/rural-hospital-payments-risky-gamble.Problems and Solutions for Rural Hospitals, Center fo

des an estimation of the cost of the program, the content and duration of the program, the evidence-based support for the program’s design, the personnel conducting the program and the method for evaluating the success of the programConsist of counseling, mental health services, a suicide prevention program or a substance use disorder prevention and treatment programThe new Stark Law exception and AKS safe harbor provide an additional mechanism for health care entities to address burnout and mental health issues within their provider populations. Furthermore, regulations pertaining to these new statutory exceptions may come in the summer or early fall, which may provide additional requirements or additional guidance on these programs. 42 U.S.C. §§ 294n – 294t.See 42 U.S.C. § 294t. “Health care entities” under Section 294t mean entities that “provide health care services, such as hospitals, community health centers, and rural health clinics, or to medical professional associations.”See 42 USC § 1395nn(e)(9) for Stark Law exception and 42 U.S.C. § 1320a-7b(b)(3)(L) for Anti-Kickback Statute safe harbor. 42 USC § 1395nn. 42 U.S.C. § 1320a-7b. Both “remuneration” under the AKS and “financial relationship” under Stark Law are construed broadly in the statutes to encompass a wide variety of benefits that could occur in a transaction or agreement between health care providers and their employers.