NEW MEXICO’S BUSINESS LAWYERS ®

Healthcare Law Updates Regarding COVID-19

April 6, 2020

Medical Malpractice Requirements During COVID-19 Emergency

The New Mexico Superintendent of Insurance issued a notice on April 8, 2020, addressing Medical Malpractice Act (“MMA”) requirements during the COVID-19 Public Health Emergency. The MMA sets forth requirements that a health care provider must meet in order to become a qualified health care provider under the MMA. The notice addressed questions that have arisen about the continued application of the statutory requirements of the MMA as a result of efforts to manage the Emergency. Examples of questions being asked are whether medical malpractice insurers who are providing free coverage to some providers must assess the surcharge required under the MMA so that the providers can become qualified health care providers and whether qualified health care providers changing or adding code classes to practice in specialized areas must pay additional surcharges to maintain qualified health care provider status. The Superintendent advised that the requirements of the MMA are mandatory and he has no authority to waive them. Thus, a health care provider seeking to become or remain a qualified health care provider under the MMA must comply with all requirements of the Act, including those related to collection and payment of surcharges. The Superintendent’s Notice applies only to health care providers who are or wish to become qualified health care providers under the Medical Malpractice Act. The full notice is available online.

 

COVID-19 Stark Law Waivers

On March 30, 2020, Alex Azar, the Secretary of the Department of Health & Human Services, announced a series of waivers of long-standing regulations. These changes are designed to increase the range and scope of permissible financial arrangements involving physicians and other entities (e.g. hospitals) with whom they have referral relationships during the course of the COVID-19 pandemic by waiving certain requirements of the Physician Self-Referral Law (aka the Stark Law).

The waivers are of importance because they make lawful, for the duration of the pandemic, certain financial arrangements that would otherwise violate the Stark Law. The waivers are retroactive to March 1, 2020 and will expire upon the President’s declaration of the ending of the COVID-19 state of emergency. Furthermore, the waivers are applicable only to specific types of arrangements.

It is important to recognize that the waivers apply only to arrangements entered into on or after March 1 and in which the arrangement was solely created to address the COVID-19 pandemic (the “COVID-19 Purpose”). CMS has identified six purposes that satisfy the waiver requirements. These are laid out in the following link: https://www.cms.gov/files/document/covid-19-blanket-waivers-section-1877g.pdf.

In addition, the CMS announcement identifies eighteen types of arrangements that qualify for the waivers. In order to qualify for a waiver, the arrangement must also fit within one of the eighteen identified by CMS. For example, the first type of waiver is for “remuneration from an entity to a physician (or an immediate family member of a physician) that is above or below the fair market value for services personally performed by the physician (or the immediate family member of the physician) to the entity.” The remaining seventeen waivers are identified in the aforementioned link.

Finally, the announcement provides more than twenty examples of the types of arrangements that will pass muster with CMS. These should prove useful in determining whether a particular arrangement will qualify for a waiver. CMS also has indicated that waiver arrangements do not need to be vetted by CMS prior to entering the arrangement. Given that the waivers may last only a few months (they expire on the date the President ends the state of emergency declaration), it is important that agreements relying upon a waiver contain language that the agreement will automatically terminate upon the termination of the public health emergency.

Skip to content