Federal Anti-Referral (Stark I) Regulations

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[Code of Federal Regulations]
[Title 42, Volume 2, Parts 400 to 429]
[Revised as of October 1, 1996]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR411.350 et seq.]
 
 
  TITLE 42--PUBLIC HEALTH
 
CHAPTER IV--HEALTH CARE FINANCING ADMINISTRATION, DEPARTMENT OF
HEALTH AND HUMAN SERVICES
 
PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE
PAYMENT--Table of Contents
 
 Subpart J--Physician Ownership of, and Referral of Patients
or Laboratory Specimens to, Entities Furnishing Clinical
Laboratory or Other Health Services
 
Sec. 411.350 Scope of subpart.
 
 Source: 60 FR 41978, Aug. 14, 1995, unless otherwise noted.
 
[[Page 263]]
 
 (a) This subpart implements section 1877 of the Act, which
generally prohibits a physician from making a referral under
Medicare for clinical laboratory services to an entity with which
the physician or a member of the physician's immediate family has
a financial relationship.
 (b) This subpart does not provide for exceptions or immunity
from civil or criminal prosecution or other sanctions applicable
under any State laws or under Federal law other than section 1877
of the Act. For example, although a particular arrangement
involving a physician's financial relationship with an entity may
not prohibit the physician from making referrals to the entity
under this subpart, the arrangement may nevertheless violate
another provision of the Act or other laws administered by HHS,
the Federal Trade Commission, the Securities and Exchange
Commission, the Internal Revenue Service, or any other Federal
or State agency.
 (c) This subpart requires, with some exceptions, that certain
entities furnishing covered items or services under Part A or
Part B report information concerning their ownership, investment,
or compensation arrangements in the form, manner, and at the
times specified by HCFA.
 
Sec. 411.351 Definitions.
 
 As used in this subpart, unless the context indicates
otherwise:
  Clinical laboratory services means the biological,
microbiological, serological, chemical, immunohematological,
hematological, biophysical, cytological, pathological, or other
examination of materials derived from the human body for the
purpose of providing information for the diagnosis, prevention,
or treatment of any disease or impairment of, or the assessment
of the health of, human beings. These examinations also include
procedures to determine, measure, or otherwise describe the
presence or absence of various substances or organisms in the
body.
 Compensation arrangement means any arrangement involving any
remuneration, direct or indirect, between a physician (or a
member of a physician's immediate family) and an entity.
 Direct supervision means supervision by a physician who is
present in the office suite and immediately available to provide
assistance and direction throughout the time services are being
performed.
 Employee means any individual who, under the usual common law
rules that apply in determining the employer-employee
relationship (as applied for purposes of section 3121(d)(2) of
the Internal Revenue Code of 1986), is considered to be employed
by, or an employee of, an entity. (Application of these common
law rules is discussed at 20 CFR 404.1007 and 26 CFR
31.3121(d)-1(c).)
 Entity means a sole proprietorship, trust, corporation,
partnership, foundation, not-for-profit corporation, or
unincorporated association.
 Fair market value means the value in arm's-length
transactions, consistent with the general market value. With
respect to rentals or leases, fair market value means the value
of rental property for general commercial purposes (not taking
into account its intended use). In the case of a lease of space,
this value may not be adjusted to reflect the additional value
the prospective lessee or lessor would attribute to the
proximity or convenience to the lessor when the lessor is a
potential source of patient referrals to the lessee.
 Financial relationship refers to a direct or indirect
relationship between a physician (or a member of a physician's
immediate family) and an entity in which the physician or family
member has--
 (1) An ownership or investment interest that exists in the
entity through equity, debt, or other means and includes an
interest in an entity that holds an ownership or investment
interest in any entity providing laboratory services; or
 (2) A compensation arrangement with the entity.
 Group practice means a group of two or more physicians,
legally organized as a partnership, professional corporation,
foundation, not-for-profit corporation, faculty practice plan, or
similar association, that meets the following conditions:
 
[[Page 264]]
 
 (1) Each physician who is a member of the group, as defined
in this section, furnishes substantially the full range of
patient care services that the physician routinely furnishes
including medical care, consultation, diagnosis, and treatment
through the joint use of shared office space, facilities,
equipment, and personnel.
 (2) Except as provided in paragraphs (2)(i) and (2)(ii) of
this definition, substantially all of the patient care services
of the physicians who are members of the group (that is, at least
75 percent of the total patient care services of the group
practice members) are furnished through the group and billed in
the name of the group and the amounts received are treated as
receipts of the group. ``Patient care services'' are measured by
the total patient care time each member spends on these services.
For example, if a physician practices 40 hours a week and spends
30 hours on patient care services for a group practice, the
physician has spent 75 percent of his or her time providing
countable patient care services.
 (i) The ``substantially all'' test does not apply to any
group practice that is located solely in an HPSA, as defined in
this section, and
 (ii) For group practices located outside of an HPSA (as
defined in this section) any time spent by group practice members
providing services in an HPSA should not be used to calculate
whether the group practice located outside the HPSA has met the
``substantially all'' test, regardless of whether the members'
time in the HPSA is spent in a group practice, clinic, or office
setting.
 (3) The practice expenses and income are distributed in
accordance with methods previously determined.
 
In the case of faculty practice plans associated with a hospital,
institution of higher education, or medical school that has an
approved medical residency training program in which faculty
practice plan physicians perform specialty and professional
services, both within and outside the faculty practice, as well
as perform other tasks such as research, this definition applies
only to those services that are furnished within the faculty
practice plan.
 Hospital means any separate legally organized operating
entity plus any subsidiary, related, or other entities that
perform services for the hospital's patients and for which the
hospital bills. A ``hospital'' does not include entities that
perform services for hospital patients ``under arrangements''
with the hospital.
 HPSA means, for purposes of this regulation, an area
designated as a health professional shortage area under section
332(a)(1)(A) of the Public Health Service Act for primary medical
care professionals (in accordance with the criteria specified in
42 CFR part 5, appendix A, part I--Geographic Areas). In
addition, with respect to dental, mental health, vision care,
podiatric, and pharmacy services, an HPSA means an area
designated as a health professional shortage area under section
332(a)(1)(A) of the Public Health Service Act for dental
professionals, mental health professionals, vision care
professionals, podiatric professionals, and pharmacy
professionals, respectively.
 Immediate family member or member of a physician's immediate
family means husband or wife; natural or adoptive parent, child,
or sibling; stepparent, stepchild, stepbrother, or stepsister;
father-in-law, mother-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law; grandparent or grandchild; and
spouse of a grandparent or grandchild.
 Laboratory means an entity furnishing biological,
microbiological, serological, chemical, immunohematological,
hematological, biophysical, cytological, pathological, or other
examination of materials derived from the human body for the
purpose of providing information for the diagnosis, prevention,
or treatment of any disease or impairment of, or the assessment
of the health of, human beings. These examinations also include
procedures to determine, measure, or otherwise describe the
presence or absence of various substances or organisms in the
body. Entities only collecting or preparing specimens (or both)
or only serving as a mailing service and not performing testing
are not considered laboratories.
 Members of the group means physician partners and full-time
and part-time
 
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physician contractors and employees during the time they furnish
services to patients of the group practice that are furnished
through the group and are billed in the name of the group.
 Patient care services means any tasks performed by a group
practice member that address the medical needs of specific
patients, regardless of whether they involve direct patient
encounters. They can include, for example, the services of
physicians who do not directly treat patients, time spent by a
physician consulting with other physicians, or time spent
reviewing laboratory tests.
 Physician incentive plan means any compensation arrangement
between an entity and a physician or physician group that may
directly or indirectly have the effect of reducing or limiting
services furnished with respect to individuals enrolled with the
entity.
 Plan of care means the establishment by a physician of a
course of diagnosis or treatment (or both) for a particular
patient, including the ordering of items or services.
 Referral--
 (1) Means either of the following:
 (i) Except as provided in paragraph (2) of this definition,
the request by a physician for, or ordering of, any item or
service for which payment may be made under Medicare Part B,
including a request for a consultation with another physician and
any test or procedure ordered by or to be performed by (or under
the supervision of) that other physician.
 (ii) Except as provided in paragraph (2) of this definition,
a request by a physician that includes the provision of
laboratory services or the establishment of a plan of care by a
physician that includes the provision of laboratory services.
 (2) Does not include a request by a pathologist for clinical
diagnostic laboratory tests and pathological examination services
if--
 (i) The request is part of a consultation initiated by
another physician; and
 (ii) The tests or services are furnished by or under the
supervision of the pathologist.
 Referring physician means a physician (or group practice) who
makes a referral as defined in this section.
 Remuneration means any payment, discount, forgiveness of
debt, or other benefit made directly or indirectly, overtly or
covertly, in cash or in kind, except that the following are not
considered remuneration:
 (1) The forgiveness of amounts owed for inaccurate tests or
procedures, mistakenly performed tests or procedures, or the
correction of minor billing errors.
 (2) The furnishing of items, devices, or supplies that are
used solely to collect, transport, process, or store specimens
for the entity furnishing the items, devices, or supplies or are
used solely to order or communicate the results of tests or
procedures for the entity.
 (3) A payment made by an insurer or a self-insured plan to a
physician to satisfy a claim, submitted on a fee-for-service
basis, for the furnishing of health services by that physician to
an individual who is covered by a policy with the insurer or by
the self-insured plan, if--
 (i) The health services are not furnished, and the payment is
not made, under a contract or other arrangement between the
insurer or the plan and the physician;
 (ii) The payment is made to the physician on behalf of the
covered individual and would otherwise be made directly to the
individual; and
 (iii) The amount of the payment is set in advance, does not
exceed fair market value, and is not determined in a manner that
takes into account directly or indirectly the volume or value of
any referrals.
 Transaction means an instance or process of two or more
persons doing business. An isolated transaction is one involving
a single payment between two or more persons. A transaction that
involves long-term or installment payments is not considered an
isolated transaction.
 
Sec. 411.353 Prohibition on certain referrals by physicians and
limitations on billing.
 
 (a) Prohibition on referrals. Except as provided in this
subpart, a physician
 
[[Page 266]]
 
who has a financial relationship with an entity, or who has an
immediate family member who has a financial relationship with the
entity, may not make a referral to that entity for the furnishing
of clinical laboratory services for which payment otherwise may
be made under Medicare.
 (b) Limitations on billing. An entity that furnishes clinical
laboratory services under a referral that is prohibited by
paragraph (a) of this section may not present or cause to be
presented a claim or bill to the Medicare program or to any
individual, third party payer, or other entity for the clinical
laboratory services performed under that referral.
 (c) Denial of payment. No Medicare payment may be made for a
clinical laboratory service that is furnished under a prohibited
referral.
 (d) Refunds. An entity that collects payment for a laboratory
service that was performed under a prohibited referral must
refund all collected amounts on a timely basis.
 
Sec. 411.355 General exceptions to referral prohibitions related
to both ownership/investment and compensation.
 
 The prohibition on referrals set forth in Sec. 411.353 does
not apply to the following types of services:
 (a) Physicians' services, as defined in Sec. 410.20(a), that
are furnished personally by (or under the personal supervision
of) another physician in the same group practice as the referring
physician.
 (b) In-office ancillary services. Services that meet the
following conditions:
 (1) They are furnished personally by one of the following
individuals:
 (i) The referring physician.
 (ii) A physician who is a member of the same group practice
as the referring physician.
 (iii) Individuals who are directly supervised by the
referring physician or, in the case of group practices, by
another physician in the same group practice as the referring
physician.
 (2) They are furnished in one of the following locations:
 (i) A building in which the referring physician (or another
physician who is a member of the same group practice) furnishes
physicians' services unrelated to the furnishing of clinical
laboratory services.
 (ii) A building that is used by the group practice for the
provision of some or all of the group's clinical laboratory
services.
 (3) They are billed by one of the following:
 (i) The physician performing or supervising the service.
 (ii) The group practice of which the performing or
supervising physician is a member.
 (iii) An entity that is wholly owned by the physician or the
physician's group practice.
 (c) Services furnished to prepaid health plan enrollees by
one of the following organizations:
 (1) An HMO or a CMP in accordance with a contract with HCFA
under section 1876 of the Act and part 417, subparts J through M,
of this chapter.
 (2) A health care prepayment plan in accordance with an
agreement with HCFA under section 1833(a)(1)(A) of the Act and
part 417, subpart U, of this chapter.
 (3) An organization that is receiving payments on a prepaid
basis for the enrollees through a demonstration project under
section 402(a) of the Social Security Amendments of 1967 (42
U.S.C. 1395b-1) or under section 222(a) of the Social Security
Amendments of 1972 (42 U.S.C. 1395b-1 note).
 (4) A qualified health maintenance organization (within the
meaning of section 1310(d) of the Public Health Service Act).
 (d) Services furnished in an ambulatory surgical center (ASC)
or end stage renal disease (ESRD) facility, or by a hospice if
payment for those services is included in the ASC rate, the ESRD
composite rate, or as part of the per diem hospice charge,
respectively.
 
Sec. 411.356 Exceptions to referral prohibitions related to
ownership or investment interests.
 
 For purposes of Sec. 411.353, the following ownership or
investment interests do not constitute a financial relationship:
 (a) Publicly traded securities. Ownership of investment
securities (including shares or bonds, debentures, notes, or
other debt instruments) that may be
 
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purchased on terms generally available to the public and that
meet the requirements of paragraphs (a)(1) and (a)(2) of this
section.
 (1) They are either--
 (i) Listed for trading on the New York Stock Exchange, the
American Stock Exchange, or any regional exchange in which
quotations are published on a daily basis, or foreign securities
listed on a recognized foreign, national, or regional exchange in
which quotations are published on a daily basis; or
 (ii) Traded under an automated interdealer quotation system
operated by the National Association of Securities Dealers.
 (2) In a corporation that had--
 (i) Until January 1, 1995, total assets at the end of the
corporation's most recent fiscal year exceeding $100 million; or
 (ii) Stockholder equity exceeding $75 million at the end of
the corporation's most recent fiscal year or on average during
the previous 3 fiscal years.
 (b) Mutual funds. Ownership of shares in a regulated
investment company as defined in section 851(a) of the Internal
Revenue Code of 1986, if the company had, at the end of its most
recent fiscal year, or on average during the previous 3 fiscal
years, total assets exceeding $75 million.
 (c) Specific providers. Ownership or investment interest in
the following entities:
 (1) A laboratory that is located in a rural area (that is, a
laboratory that is not located in an urban area as defined in
Sec. 412.62(f)(1)(ii) of this chapter) and that meets the
following criteria:
 (i) The laboratory testing that is referred by a physician
who has (or whose immediate family member has) an ownership or
investment interest in the rural laboratory is either--
 (A) Performed on the premises of the rural laboratory; or
 (B) If not performed on the premises, the laboratory
performing the testing bills the Medicare program directly for
the testing.
 (ii) Substantially all of the laboratory tests furnished by
the entity are furnished to individuals who reside in a rural
area. Substantially all means no less than 75 percent.
 (2) A hospital that is located in Puerto Rico.
 (3) A hospital that is located outside of Puerto Rico if one
of the following conditions is met:
 (i) The referring physician is authorized to perform services
at the hospital, and the physician's ownership or investment
interest is in the entire hospital and not merely in a distinct
part or department of the hospital.
 (ii) Until January 1, 1995, the referring physician's
ownership or investment interest does not relate (directly or
indirectly) to the furnishing of clinical laboratory services.
 
Sec. 411.357 Exceptions to referral prohibitions related to
compensation arrangements.
 
 For purposes of Sec. 411.353, the following compensation
arrangements do not constitute a financial relationship:
 (a) Rental of office space. Payments for the use of office
space made by a lessee to a lessor if there is a rental or lease
agreement that meets the following requirements:
 (1) The agreement is set out in writing and is signed by the
parties and specifies the premises covered by the lease.
 (2) The term of the agreement is at least 1 year.
 (3) The space rented or leased does not exceed that which is
reasonable and necessary for the legitimate business purposes of
the lease or rental and is used exclusively by the lessee when
being used by the lessee, except that the lessee may make
payments for the use of space consisting of common areas if the
payments do not exceed the lessee's pro rata share of expenses
for the space based upon the ratio of the space used exclusively
by the lessee to the total amount of space (other than common
areas) occupied by all persons using the common areas.
 (4) The rental charges over the term of the lease are set in
advance and are consistent with fair market value.
 (5) The charges are not determined in a manner that takes
into account the volume or value of any referrals or other
business generated between the parties.
 (6) The agreement would be commercially reasonable even if no
referrals
 
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were made between the lessee and the lessor.
 (b) Rental of equipment. Payments made by a lessee to a
lessor for the use of equipment under the following conditions:
 (1) A rental or lease agreement is set out in writing and
signed by the parties and specifies the equipment covered by the
lease.
 (2) The equipment rented or leased does not exceed that which
is reasonable and necessary for the legitimate business purposes
of the lease or rental and is used exclusively by the lessee when
being used by the lessee.
 (3) The lease provides for a term of rental or lease of at
least 1 year.
 (4) The rental charges over the term of the lease are set in
advance, are consistent with fair market value, and are not
determined in a manner that takes into account the volume or
value of any referrals or other business generated between the
parties.
 (5) The lease would be commercially reasonable even if no
referrals were made between the parties.
 (c) Bona fide employment relationships. Any amount paid by an
employer to a physician (or immediate family member) who has a
bona fide employment relationship with the employer for the
provision of services if the following conditions are met:
 (1) The employment is for identifiable services.
 (2) The amount of the remuneration under the employment is--
 (i) Consistent with the fair market value of the services;
and
 (ii) Except as provided in paragraph (c)(4) of this section,
is not determined in a manner that takes into account (directly
or indirectly) the volume or value of any referrals by the
referring physician.
 (3) The remuneration is provided under an agreement that
would be commercially reasonable even if no referrals were made
to the employer.
 (4) Paragraph (c)(2)(ii) of this section does not prohibit
payment of remuneration in the form of a productivity bonus based
on services performed personally by the physician (or immediate
family member of the physician).
 (d) Personal service arrangements. (1) General. Remuneration
from an entity under an arrangement to a physician or immediate
family member of the physician, including remuneration for
specific physicians' services furnished to a nonprofit blood
center, if the following conditions are met:
 (i) The arrangement is set out in writing, is signed by the
parties, and specifies the services covered by the arrangement.
 (ii) The arrangement covers all of the services to be
furnished by the physician (or an immediate family member of the
physician) to the entity.
 (iii) The aggregate services contracted for do not exceed
those that are reasonable and necessary for the legitimate
business purposes of the arrangement.
 (iv) The term of the arrangement is for at least 1 year.
 (v) The compensation to be paid over the term of the
arrangement is set in advance, does not exceed fair market value,
and, except in the case of a physician incentive plan, is not
determined in a manner that takes into account the volume or
value of any referrals or other business generated between the
parties.
 (vi) The services to be furnished under the arrangement do
not involve the counseling or promotion of a business arrangement
or other activity that violates any State or Federal law.
 (2) Physician incentive plan exception. In the case of a
physician incentive plan between a physician and an entity, the
compensation may be determined in a manner (through a withhold,
capitation, bonus, or otherwise) that takes into account directly
or indirectly the volume or value of any referrals or other
business generated between the parties, if the plan meets the
following requirements:
 (i) No specific payment is made directly or indirectly under
the plan to a physician or a physician group as an inducement to
reduce or limit medically necessary services furnished with
respect to a specific individual enrolled in the entity.
 (ii) In the case of a plan that places a physician or a
physician group at substantial financial risk as determined by
the Secretary under section 1876(i)(8)(A)(ii) of the Act, the
plan complies with any requirements the
 
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Secretary has imposed under that section.
 (iii) Upon request by the Secretary, the entity provides the
Secretary with access to descriptive information regarding the
plan, in order to permit the Secretary to determine whether the
plan is in compliance with the requirements of paragraph (d)(2)
of this section.
 (3) Until January 1, 1995, the provisions in paragraph (d)(1)
and (2) of this section do not apply to any arrangements that
meet the requirements of section 1877(e)(2) or section 1877(e)(3)
of the Act as they read before they were amended by the Omnibus
Budget Reconciliation Act of 1993 (Public Law 103-66).
 (e) Physician recruitment. Remuneration provided by a
hospital to recruit a physician that is intended to induce the
physician to relocate to the geographic area served by the
hospital in order to become a member of the hospital's medical
staff, if all of the following conditions are met:
 (1) The arrangement and its terms are in writing and signed
by both parties.
 (2) The arrangement is not conditioned on the physician's
referral of patients to the hospital.
 (3) The hospital does not determine (directly or indirectly)
the amount or value of the remuneration to the physician based on
the volume or value of any referrals the physician generates for
the hospital.
 (4) The physician is not precluded from establishing staff
privileges at another hospital or referring business to another
entity.
 (f) Isolated transactions. Isolated financial transactions,
such as a one-time sale of property or a practice, if all of the
conditions set forth in paragraphs (c)(2) and (c)(3) of this
section are met with respect to an entity in the same manner as
they apply to an employer. There can be no additional
transactions between the parties for 6 months after the isolated
transaction, except for transactions which are specifically
excepted under the other provisions in Secs. 411.355 through
411.357.
 (g) Arrangements with hospitals. (1) Until January 1, 1995,
any compensation arrangement between a hospital and a physician
or a member of a physician's immediate family if the arrangement
does not relate to the furnishing of clinical laboratory
services; or
 (2) Remuneration provided by a hospital to a physician if
the remuneration does not relate to the furnishing of clinical
laboratory services.
 (h) Group practice arrangements with a hospital. An
arrangement between a hospital and a group practice under which
clinical laboratory services are provided by the group but are
billed by the hospital if the following conditions are met:
 (1) With respect to services provided to an inpatient of the
hospital, the arrangement is pursuant to the provision of
inpatient hospital services under section 1861(b)(3) of the Act.
 (2) The arrangement began before December 19, 1989, and has
continued in effect without interruption since then.
 (3) With respect to the clinical laboratory services covered
under the arrangement, substantially all of these services
furnished to patients of the hospital are furnished by the group
under the arrangement.
 (4) The arrangement is in accordance with an agreement that
is set out in writing and that specifies the services to be
furnished by the parties and the compensation for services
furnished under the agreement.
 (5) The compensation paid over the term of the agreement is
consistent with fair market value, and the compensation per unit
of services is fixed in advance and is not determined in a manner
that takes into account the volume or value of any referrals or
other business generated between the parties.
 (6) The compensation is provided in accordance with an
agreement that would be commercially reasonable even if no
referrals were made to the entity.
 (i) Payments by a physician. Payments made by a physician--
 (1) To a laboratory in exchange for the provision of clinical
laboratory services; or
 (2) To an entity as compensation for other items or services
that are furnished at a price that is consistent with fair market
value.
 
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Sec. 411.360 Group practice attestation.
 
 (a) Except as provided in paragraph (b) of this section, a
group practice (as defined in section 1877(h)(4) of the Act and
Sec. 411.351) must submit a written statement to its carrier
annually to attest that, during the most recent 12-month period
(calendar year, fiscal year, or immediately preceding 12-month
period) 75 percent of the total patient care services of group
practice members was furnished through the group, was billed
under a billing number assigned to the group, and the amounts
so received were treated as receipts of the group.
 (b) A newly-formed group practice (one in which physicians
have recently begun to practice together) or any group practice
that has been unable in the past to meet the requirements of
section 1877(h)(4) of the Act must--
 (1) Submit a written statement to attest that, during the
next 12-month period (calendar year, fiscal year, or next 12
months), it expects to meet the 75-percent standard and will take
measures to ensure the standard is met; and
 (2) At the end of the 12-month period, submit a written
statement to attest that it met the 75-percent standard during
that period, billed for those services under a billing number
assigned to the group, and treated amounts received for those
services as receipts of the group. If the group did not meet the
standard, any Medicare payments made for clinical laboratory
services furnished by the group during the 12-month period that
were conditioned upon the standard being met are overpayments.
 (c) Once any group has chosen whether to use its fiscal year,
the calendar year, or some other 12-month period, the group
practice must adhere to this choice.
 (d) The attestation must contain a statement that the
information furnished in the attestation is true and accurate and
must be signed by a group representative.
 (e) A group that intends to meet the definition of a group
practice in order to qualify for an exception described in Secs.
411.355 through 411.357, must submit the attestation required by
paragraph (a) or paragraph (b)(1) of this section, as applicable,
to its carrier no later than 60 days after receipt of the
attestation instructions from its carrier.
 
[60 FR 41978, Aug. 14, 1995, as amended at 60 FR 63440, Dec. 11,
1995]
 
Sec. 411.361 Reporting requirements.
 
 (a) Basic rule. Except as provided in paragraph (b) of this
section, all entities furnishing items or services for which
payment may be made under Medicare must submit information to
HCFA concerning their financial relationships (as defined in
paragraph (d) of this section), in such form, manner, and at such
times as HCFA specifies.
 (b) Exception. The requirements of paragraph (a) of this
section do not apply to entities that provide 20 or fewer Part A
and Part B items and services during a calendar year, or to
designated health services provided outside the United States.
 (c) Required information. The information submitted to HCFA
under paragraph (a) of this section must include at least the
following:
 (1) The name and unique physician identification number
(UPIN) of each physician who has a financial relationship with
the entity;
 (2) The name and UPIN of each physician who has an immediate
relative (as defined in Sec. 411.351) who has a financial
relationship with the entity;
 (3) The covered items and services provided by the entity;
and
 (4) With respect to each physician identified under
paragraphs (c)(1) and (c)(2) of this section, the nature of the
financial relationship (including the extent and/or value of the
ownership or investment interest or the compensation arrangement,
if requested by HCFA).
 (d) Reportable financial relationships. For purposes of this
section, a financial relationship is any ownership or investment
interest or any compensation arrangement, as described in section
1877 of the Act.
 (e) Form and timing of reports. Entities that are subject to
the requirements of this section must submit the required
information on a HCFA-prescribed form within the time period
specified by the servicing carrier or intermediary. Entities are
given at
 
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least 30 days from the date of the carrier's or intermediary's
request to provide the initial information. Thereafter, an entity
must provide updated information within 60 days from the date of
any change in the submitted information. Entities must retain
documentation sufficient to verify the information provided on
the forms and, upon request, must make that documentation
available to HCFA or the OIG.
 (f) Consequences of failure to report. Any person who is
required, but fails, to submit information concerning his or her
financial relationships in accordance with this section is
subject to a civil money penalty of up to $10,000 for each day of
the period beginning on the day following the applicable deadline
established under paragraph (e) of this section until the
information is submitted. Assessment of these penalties will
comply with the applicable provisions of part 1003 of this title.
 (g) Public disclosure. Information furnished to HCFA under
this section is subject to public disclosure in accordance with
the provisions of part 401 of this chapter.