Sources: 42 U.S.C. § 1395nn(b)(4) and 42 C.F.R. § 411.357(g)

2. Remuneration Unrelated to Provision of Designated Health Services

CMS interprets this exception narrowly. To qualify as “unrelated,” remuneration must be wholly unrelated to the furnishing of DHS and must not in any way take into account the volume or value of a physician's referrals. Remuneration relates to the furnishing of DHS if it:

  1. Is an item, service, or cost that could be allocated in whole or in part to Medicare or Medicaid under cost reporting principles;

  2. Is furnished, directly or indirectly, explicitly or implicitly, in a selective, targeted, preferential, or conditioned manner to medical staff or other persons in a position to make or influence referrals; or

  3. Otherwise takes into account the volume or value of referrals or other business generated by the referring physician.

Stark General Exception