Stark General Exception

Ownership or investment interest in the following entities, for purposes of the services specified:

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  1. A rural provider, in the case of DHS furnished in a rural area (as defined at § 411.351 of this subpart) by the provider. A “rural provider” is an entity that furnishes substantially all (not less than 75 percent) of the DHS that it furnishes to residents of a rural area and, for the 18–month period beginning on December 8, 2003 (or such other period as Congress may specify), is not a specialty hospital, and in the case where the entity is a hospital, the hospital meets the requirements of § 411.362 no later than September 23, 2011.

  2. A hospital that is located in Puerto Rico, in the case of DHS furnished by such a hospital.

  3. A hospital that is located outside of Puerto Rico, in the case of DHS furnished by such a hospital, if:

(i) The referring physician is authorized to perform services at the hospital;

(ii) Effective for the 18–month period beginning on December 8, 2003 (or such other period as Congress may specify), the hospital is not a specialty hospital;

(iii) The ownership or investment interest is in the entire hospital and not merely in a distinct part or department of the hospital; and

(iv) The hospital meets the requirements described in § 411.362 not later than September 23, 2011.

 

Section 6001(a)(2) of PPACA provides that a physician-owned hospital must meet the requirements described in a new Section 1877(i)(1) of the Social Security Act (the “Act”) (as implemented in Regulations at § 411.362) no later than September 23, 2011.  However, certain provisions under Section 1877(i)(1) specify other dates for compliance -- in particular, (i) a hospital must have physician ownership and a provider agreement in effect on December 31, 2010, (ii) a hospital may not expand capacity beyond the number of operating rooms, procedures rooms and beds for which it was licensed as of March 23, 2010, (iii) a hospital may not have been converted from an ambulatory surgery center on or after March 23, 2010, and (iv) physician ownership may not exceed the percentage of the total value of physician ownership in the hospital as of March 23, 2010.

1. Investment Interests in Specified Types of Entities

Sources: 42 C.F.R. § 411.356(c)