In January of 2019, the Centers for Medicare and Medicaid Services (“CMS”) implemented a helpful change to the signature exception to the Stark Law. In particular, the exception may now be used more than once during a 3-year period for compensation arrangements with the same referring physician.

History of Signature Exception

The signature exception to the Stark Law has undergone several revisions within the past few years. The original version of the exception was implemented by CMS effective October 1, 2008 in response to concerns regarding the potential for significant Stark Law penalties for mere “technical” violations of the statute. The original language in the signature exception provided for a grace period for noncompliance with the signature requirement of many of the compensation arrangement exceptions to the Stark Law, such as the personal service arrangements exception and fair market value exception. In particular, a 90-day grace period was permitted for late signatures that were inadvertent, and a 30-day grace period was permitted for late signatures that were “not inadvertent.” In addition, the exception could only be used once for the same referring physician during a 3-year period. In other words, after the exception was used once by a DHS entity for a late signature on a compensation agreement with a referring physician, any late signatures on other agreements entered into by the DHS entity and the same referring physician during the following 3-year period would trigger a violation of the Stark Law.
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