Exceptions to the Stark Act under the Federal Regulations

42 CFR § 411.350 et seq. are the regulations that implement the Stark Act.  42 CFR § 411.350 requires, with some exceptions, that certain entities furnishing covered services under Medicare report information concerning ownership, investment, or compensation arrangements in the form, in the manner, and at the times specified by the Center for Medicare and Medicaid Services. Id. 

42 CFR § 411.353 prohibits certain referrals by physicians and puts limitations on billing.  According to this section, a physician’s prohibited financial relationship with an entity that furnishes DHS is not imputed to his or her group practice or its members or its staff.  Id.  However, a referral made by a physician’s group practice, its members, or its staff may be imputed to the physician if the physician directs the group practice, its members, or its staff to make the referral or if the physician controls referrals made by his or her group practice, its members, or its staff. Id.

Under 42 CFR § 411.356, ownership or investment interests like publicly-traded securities, mutual funds, or certain specific providers under subsection (c) do not constitute a financial relationship.  42 CFR § 411.357 provides the exceptions to the referral prohibition related to compensation arrangements.  Accordingly, payments for the use of office space made by a lessee to a lessor in case of a rental or lease agreement does not constitute a financial relationship for the purpose of Stark Act if it meets the requirements under subsections 1-6 of 42 CFR § 411.357 (a).

Similarly, exceptions to the referral prohibition related to compensation arrangements include rental of equipment (42 CFR § 411.357 (b)(1)-(6)), bona fide employment relationships (42 CFR § 411.357 (c)(1)-(4)), personal service arrangements (42 CFR § 411.357 (d)(1)-(2)), physician recruitments (42 CFR § 411.357 (e) (1)-(6)), isolated transactions (42 CFR § 411.357 (f) (1)-(3)), certain arrangements with hospitals (42 CFR § 411.357 (g) (1)-(6)), group practice arrangements with a hospital (42 CFR § 411.357 (h) (1)-(3)), payments by a physician (42 CFR § 411.357 (i) (1)-(2)), charitable donations by a physician (42 CFR 411.357 (j) (1)-(3)), non-monetary compensation (42 CFR § 411.357 (k) (1)-(64)), fair market value compensation (42 CFR § 411.357 (l) (1)-(6)), medical staff incidental benefits (42 CFR § 411.357 (m) (1)-(8)), risk-sharing arrangements (42 CFR § 411.357 (n)), compliance training (42 CFR § 411.357 (0)), indirect compensation arrangements (42 CFR § 411.357 (p) (1)-(3)), referral services (42 CFR § 411.357 (q)),  obstetrical malpractice insurance subsidies (42 CFR § 411.357 (r)), professional courtesy (42 CFR§ 411.357 (s) (1)-(5)), retention payments in underserved areas (42 CFR § 411.357 (t) (1)-(5)), community-wide health information systems (42 CFR § 411.357 (u) (1)-(3)),  electronic prescribing items and services (42 CFR § 411.357 (v) (1)-(8)) and electronic health records items and services (42 CFR § 411.357 (w) (1)-(13)).


Inside Exceptions to the Stark Act under the Federal Regulations