Katrina Stark Waiver
by Daniel A. Cody, Reed Smith, LLP, San Francisco, CA and C. Joyce Hall, Watkins & Eager, Jackson, MS.
On August 29, 2005, Hurricane Katrina became one of the worst natural disasters in United States history. The destruction left in her wake created a public health emergency in thirteen states. In an effort to ensure the provision of sufficient healthcare items and services in the affected areas, Michael O. Leavitt, Secretary of the Department of Health and Human Services (the Secretary), has issued a special waiver regarding the delivery of healthcare services in those areas.
On September 29, 2005, pursuant to Section 1135 of the Social Security Act, the Secretary waived sanctions for non-compliance with the Stark self-referral law in states declared disaster areas because of Hurricane Katrina, subject to two conditions. First, the waiver is valid only to the extent necessary to provide healthcare services to beneficiaries of the Medicare, Medicaid, and State Children’s Health Insurance Programs. Second, the waiver is valid absent any determination of fraud or abuse. The waiver is effective October 1, 2005, but has retroactive effect to certain dates in August and September throughout the region.
Because of the destruction of many of the facilities where designated health services had previously been provided, and the loss of physician medical offices and practices, the waiver should allow functioning providers in the area to continue and/or begin providing much-needed healthcare services in the emergency area without regard to certain of the Stark law’s requirements. Importantly, as noted above, there must be no determination of fraud or abuse. Further, the waiver has no impact upon provisions of the federal anti-kickback statute and applicable state anti-kickback and/or fee splitting provisions. The waiver is in effect for the duration of the emergency period, unless terminated sooner by the Secretary. Additionally, the Secretary has stated that entities regaining their ability to comply with a waived requirement before the end of the declared emergency period may no longer rely upon the Section 1135 waiver. The text of the waiver is available at www.cms.hhs.gov/katrina/stark1135.pdf.
The Stark Law and accompanying regulations may be downloaded at the Physician Self-Referral Educational Resource Web Guide maintained by the Centers for Medicare & Medicaid Services ("CMS") located at www.cms.hhs.gov/medlearn/refphys.asp.