Today and tomorrow: Maximizing benefits of Stark Law waivers

Note: This article is not intended as legal or regulatory advice.

Offer help and take good notes.

That’s the abbreviated recommendation by Carol Carden for hospitals and health systems looking to take advantage of new Stark Law waivers during COVID-19 and in preparation for what follows.  As managing principal of valuation services at PYA, Carden has been closely watching what HHS activity means for physician compensation.

The waivers, implemented in March, were designed to allow providers far more flexibility to enter into new physician agreements or modify existing ones in ways that wouldn’t otherwise comply with Stark. Normally, Carden said, money must be exchanged at fair market value. With the waiver, hospitals now have freedom to go outside of fair market value, if it is part of their response the pandemic.

Like everything with this current moment in healthcare, there are a lot of moving parts, which could cause concern among providers looking to create the best possible agreement with their physicians.

Carden offers a few tips to mitigate that worry and set your organization up for success – now and later:

  • Read the rule: It’s worth reviewing again. Unlike most CMS rules, this one only runs a few pages. It also includes numerous examples of how hospitals could modify agreements under the blanket waiver.
  • Keep good records: Language in the waiver directs health systems to keep records of their “use of the blanket waivers […] in a timely manner” yet it doesn’t describe what the record should look like. Despite the ambiguity, document why and how decisions were made in case the hospital gets challenged on any modification or new arrangement. “That’s a wise thing to do because things are so chaotic right now,” Carden said. “A lot is changing simultaneously and six months or a year from now it might be hard to remember exactly what your thought process was.” (See PYA’s checklist to help with this process here.)
  • Offer help: COVID-19 in general and Stark Law blanket waiver specifically, create a significant opportunity for providers to help their physicians and communities in new ways.

“For example, if a hospital has a medical office building with physicians renting in it, they could waive the rent for a time as a gesture of goodwill towards their medical staff,” Carden said. This obviously provides tangible financial support to the physicians; it also is a chance to build a positive story around the organization.

For more, listen to the conversation above. In addition to details about the above tips, Carden provides ideas on how to structure physician compensation right now. She also discusses potential long-term effects of the pandemic on the physician-provider relationship.

In addition, check out PYA’s extensive COVID-19 resource hub to learn more.

David Shifrin