TABLE A

OVERLAPPING ANTI-KICKBACK SAFE HARBORS AND STARK GENERAL EXCEPTIONS

Description of Safe Harbor/ General Exception	Anti-Kickback Safe Harbor Sources: 42 U.S.C. § 1320a-7b(b) and 42 C.F.R. § 1001.952	Stark General Exception Sources: 42 U.S.C. § 1395nn and 42 C.F.R. § 411.350 et seq.
1.           Publicly Traded Securities 42 C.F.R. § 1001.952(a)(1) and 42 C.F.R. § 411.356(a)	Returns on investments (e.g., dividends and interest) in securities of entities with net tangible assets related to the furnishing of health care items or services > $50 million provided: i.            the securities are registered with the Securities and Exchange Commission; ii.           referring investors’ securities are obtained at the same price as is available to the general public trading on a registered securities exchange through a broker and referring investors’ securities are not subject to restrictions on transferability; iii.         entity and referring investors do not favor passive investors over non-investors in promoting and/or furnishing the entity’s items or services; iv.         entity and its investors (and persons acting on their behalf) do not finance (or guarantee financing of) any purchase of the entity’s securities by a person who could make or influence referrals; and v.         returns (e.g., dividend payments) are directly proportional to capital investment.	A. Returns on investments (e.g., dividends and interest) in securities of corporations (ONLY) traded on recognized foreign, national or regional exchange and having > $75 million in stockholder equity. B. Returns on investments in mutual fund with total assets >$75 million.
2.           Space Rental 42 C.F.R. § 1001.952(b) and 42 C.F.R. § 411.357(a)	All of the following six standards: i.            lease in writing; ii.           the lease specifies the premises covered by the lease and it covers all of the premises leased between the parties for the term of the lease; iii.         terms for any periodic intervals specified; iv.         term of lease not less than one year (provided, however, the lease can provide for “for cause” termination prior to the expiration of one year so long as it absolutely prohibits renegotiation for the duration of the one-year term); v.          rent set in advance, consistent with fair market value and not tied to referrals; and vi.         space does not exceed that which is reasonable and necessary to accomplish the commercially reasonable business purpose of the rental.	Same six standards as Anti-Kickback.
3.           Equipment Rental 42 C.F.R. § 1001.952(c) and 42 C.F.R. § 411.357(b)	Six standards corresponding to those for Space Rental above.	Same six standards as Anti-Kickback.
4.           Personal Services and Management Contracts 42 C.F.R. § 1001.952(d) and 42 C.F.R. § 411.357(d)	Six standards corresponding to those for Space Rental and Equipment Rental above, and vii.        services performed under the arrangement do not involve the counseling or promotion of a business arrangement that violates state or federal law.	Same seven standards as Anti-Kickback.
5.           Sales of Physician Practices 42 C.F.R. § 1001.952(e) and 42 C.F.R. § 411.357(f)	Both of the following standards: i.            period from agreement to completion of sale does not exceed one year (however, a hospital located in a health professional shortage area (“HPSA”) can buy and “hold” the practice of a retiring physician for up to three years pending recruitment of a physician to replace the one retiring, provided the hospital engages in good faith efforts to recruit a new physician and its recruitment efforts comply with the Physician Recruitment safe harbor (Item 6 below)); and ii.           seller will not be in professional position to refer to purchaser after one year from date of first agreement to sell.	All of the following three standards: i.            remuneration is not related to referrals by seller to purchaser, except for productivity bonus for services personally performed by seller; ii.           remuneration would be commercially reasonable even if no referrals; and iii.          no additional transactions between seller and purchaser for six months after sale except for other transactions excepted from Stark.
6.           Physician Recruitment 42 C.F.R. § 1001.952(n) and 42 C.F.R. § 411.357(e)	Remuneration provided by a hospital: i.            directly to a new practitioner who has been practicing in her specialty for less than a year to induce such practitioner to locate in a HPSA; or ii.           directly to an established practitioner to relocate her primary place of practice to an HPSA, provided at least 75% of the revenues of the new practice come from patients who were not seen by the physician at her former practice. Note that this safe harbor limits the time period for recruitment payments to three years, but does not prescribe the nature of the payments (i.e., whether they include income guarantees, moving expenses, etc.), leaving that determination to negotiation by the parties.	Remuneration provided by hospital to physician to induce relocation if: i.            written agreement signed by each party; ii.           physician not required to refer to hospital; iii.          remuneration not determined by referrals; and iv.          physician not precluded from establishing privileges at another hospital or referring business to another entity.
7.          Employees 42 C.F.R. § 1001.952(i) and 42 C.F.R. § 411.357(c)	Any amount paid to an employee, who has a bona fide employment relationship, for employment in the furnishing of any item or service.	Same as Anti-Kickback plus: i.            employment is for identifiable services; ii.           remuneration is consistent with fair market value of services; and iii.          remuneration is not related to referrals by employee to purchaser, except for productivity bonus for services personally performed by employee.
8.          Physician Investments in Their Own Practices/Physician Services 42 C.F.R. § 1001.952(p) and 42 C.F.R. § 411.355(a)	Remuneration received by a physician as a return on investment (e.g., dividends and interest) in their own group practice,* provided all of the following four standards are met: i.            the group is fully owned by licensed healthcare professionals; ii.           the equity interests are in the group itself, and not a subdivision of the group; iii.          the group meets the Stark law definition of a “group practice”; and iv.          revenues from ancillary services qualify under the Stark law’s in-office ancillary services test. *This safe harbor also protects investments in solo practices where the practice is conducted through the solo practitioner’s professional corporation or other separate legal entity. Note that this safe harbor does not protect investments by group practices or members of group practices in other entities (e.g., laboratories, imaging centers, etc.).	Remuneration for physicians’ services that are furnished by or under the supervision—at a level that satisfies applicable Medicare supervision requirements—of the referring physician herself, another physician in the referring physician’s group practice, or an independent contractor physician who is furnishing patient care services to the referring physician’s group practice if: i.            each physician who is a member of the referring physician’s group practice furnishes the full range of patient care services she routinely provides through the group’s joint facilities;* ii.           at least 75% of the total patient care services furnished by each of the members of the group are furnished inside the group; iii.          at least 75% of the referring physician’s group’s physician-patient encounters are conducted by members of the referring physician’s group (the group doesn’t have too many independent contractor physicians); and iv.          expenses and income of the referring physician’s group are distributed in accordance with a method set and in place prior to the receipt of payment for the services giving rise to the overhead expenses or producing the income. *New groups are allowed a 12-month “start-up” period to come into compliance with this requirement.
9.        Physician Investments in Their Own Practices/In-office Ancillary Services 42 C.F.R. § 1001.952(p) and 42 C.F.R. § 411.355(b)	Remuneration received by a physician as a return on investment (e.g., dividends and interest) in their own group practice,* provided all of the following four standards are met: v.           the group is fully owned by licensed healthcare professionals; vi.          the equity interests are in the group itself, and not a subdivision of the group; vii.         the group meets the Stark law definition of a “group practice”; and viii.        revenues from ancillary services qualify under the Stark law’s in-office ancillary services test. *This safe harbor also protects investments in solo practices where the practice is conducted through the solo practitioner’s professional corporation or other separate legal entity. Note that this safe harbor does not protect investments by group practices or members of group practices in other entities (e.g., laboratories, imaging centers, etc.).	Remuneration for furnishing DHS which are ancillary to the referring physician’s core medical practice (excluding most but not all DME) if: i.            furnished by or under the supervision—at a level that satisfies applicable Medicare supervision requirements—of the referring physician herself, a member of the referring physician’s group practice, or an independent contractor physician who is furnishing patient care services to the referring physician’s group; ii.           furnished in a building that has the same mailing address as that in which the referring physician or the referring physician’s group furnishes its core (i.e., non-DHS) services, or in an off-site location (e.g., a mobile trailer) that is owned or leased and used exclusively on a full-time basis by the referring physician’s group; and iii.          billed by the referring physician, the referring physician’s group, an entity wholly owned by the referring physician or by her group, or by an independent third-party billing company acting as an agent for any of the foregoing (provided Medicare reassignment rules are followed).
10.        Managed Care Arrangements 42 C.F.R. § 1001.952(m) and 42 C.F.R. § 411.355(c) 42 C.F.R. § 411.357(n) 42 C.F.R. § 411.357(d)(2) 42 C.F.R. § 1001.952(t) 42 C.F.R. § 1001.952(n) 42 C.F.R. § 1001.952(l)	A. Price reductions offered by a contract health provider to a health plan pursuant to a written agreement between the parties, provided: i.            the term of the agreement is not less than one year; ii.           the agreement specifies the items and services covered; iii.          fee schedule remains in effect throughout term; iv.          no claims to Medicare or Medicaid in excess of fee schedule; v.           price reductions are reported on cost report; vi.          no claims to Medicare or Medicaid by contract health providers under health plan. B. Financial arrangements (involving price reductions) between an Eligible Managed Care Organization (“EMCO”) and any of its direct contracting providers, and also any of their next tier “downstream” direct contracting sub-providers, pursuant to a written agreement between the EMCO and provider or provider and sub-provider, provided standards corresponding to those in A. above are satisfied C. Price reductions offered by contract health provider (and/or sub-contractors) with “substantial financial risk” to Qualified Managed Care Plan (“QMCP”), provided standards corresponding to those in A. and B. above are satisfied. “Substantial financial risk” is defined in two ways, i.e., by payment methodology (e.g., capitation, percentage of premium and DRG payments, etc.), and by a numeric standard (i.e., if a certain percentage of the provider’s compensation is subject to withhold.) D. Increased coverage, reduced cost-sharing amounts, or reduced premium amounts offered by health plans to enrollees, provided the plan complieswith certain specified standards.	A. All prepaid health plans and HMOs qualified under the Social Security Act. Covers contractors and subcontractors of prepaid health plans. B. Compensation pursuant to a risk-sharing arrangement (including, but not limited to, withholds, bonuses and risk pools) between a physician and a health plan, provided the arrangement does not violate the anti-kickback statute or any laws or regulations governing billing or claims submission. C. Physician incentive plan (withhold, capitation, bonus, or otherwise) that does take into account volume of referrals if: i.            no payment induces reducing or limiting medically necessary services; ii.           physician is at financial risk; and iii.          disclosure to Secretary upon request.
11.        Ambulatory Surgical Centers (“ASCs”), End Stage Renal Disease (“ESRD”) facilities, and Hospices 42 C.F.R. § 1001.952(r) and 42 C.F.R. § 411.355(d), (f)	Returns on investments in 4 categories of ASCs-- (1) surgeon-owned ASCs; (2) single-specialty ASCs (e.g., those owned by gastroenterologists); (3) multi-specialty ASCs (e.g., mix of surgeons and gastroenterologists); and (4) hospital/physician owned--provided all of the following standards are met: i.            the ASC is certified as such under Medicare regulations; ii.           loans from the entity to investors for the purpose of investing are prohibited; iii.          investment interests are offered on terms not related to the volume or value of referrals; iv.          all ancillary services are directly and integrally related to primary procedures performed at the ASC and none are separately billed to Medicare or other federal health care programs; v.           neither the ASC nor physicians practicing at the ASC discriminate against federal health care program beneficiaries; and vi.          each investor meets one of the following criteria: a. a physician who is in a position to refer patients directly to the ASC and perform procedures for those patients; b. a group practice that meets the requirements of the group practice safe harbor and that is composed entirely of physicians that meet the requirements of (vi.)(a) above; or c. an investor who does not provide items or services to the ASC or its investors, is not employed by the ASC or any investor, and is not in a position to refer patients to the ASC or any of its investors.	Remuneration for: A. Implanted prosthetics and prosthetic devices and implanted DME furnished by the referring physician or a member of her group in a Medicare-certified ASC if: i.            the implant is implanted during a surgical procedure performed in the ASC; ii.           billing and claims submission for the implants complies with all federal and state laws and regulations; and iii.          the arrangement does not violate the anti-kickback statute. B. Clinical laboratory services furnished in an ASC, ESRD, or by a hospice, if payment for those services is included in the ASC or ESRD composite rate or as part of the per diem hospice charge. C. EPO and other dialysis related outpatient prescription drugs furnished in or by an ESRD facility, provided the drugs are administered or dispensed to the patient in or by the ESRD facility, and provided the arrangement does not violate the anti-kickback statute or any laws or regulations governing billing or claims submission.

© 1997-2004 Scott C. Withrow. All rights reserved.

NOTE: This site includes a summary of certain compliance issues facing health care providers today. This site does not, and is not intended to, give legal advice. Reference should be made to full text of the statutes and regulations for complete analysis. Consultation with competent counsel is strongly recommended.