TITLE 42--PUBLIC HEALTH
CHAPTER IV--CENTERS FOR MEDICARE
& MEDICAID SERVICES,
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
PART 411_EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT
--Table of Contents
Subpart J_Financial Relationships Between Physicians and Entities
Furnishing Designated Health Services
Sec. 411.351 Definitions.
As used in this subpart, unless the context indicates otherwise:
Centralized building means all or part of a building, including,
for purposes of this subpart only, a mobile vehicle, van, or trailer
that is owned or leased on a full-time basis (that is, 24 hours per
day, 7 days per week, for a term of not less than 6 months) by a group
practice and that is used exclusively by the group practice. Space in a
building or a mobile vehicle, van, or trailer that is shared by more
than one group practice, by a group practice and one or more solo
practitioners, or by a group practice and another provider or supplier
(for example, a diagnostic imaging facility) is not a centralized
building for purposes of this subpart. This provision does not preclude
a group practice from providing services to other providers or
suppliers (for example, purchased diagnostic tests) in the group
practice's centralized building. A group practice may have more than
one centralized building.
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, including procedures to
determine, measure, or otherwise describe the presence or absence of
various substances or organisms in the body, as specifically identified
by the List of CPT/HCPCS Codes. All services so identified on the List
of CPT/HCPCS Codes are clinical laboratory services for purposes of
this subpart. Any service not specifically identified as a clinical
laboratory service on the List of CPT/HCPCS Codes is not a clinical
laboratory service for purposes of this subpart.
Consultation means a professional service furnished to a patient by
a physician if the following conditions are satisfied:
(1) The physician's opinion or advice regarding evaluation or
management or both of a specific medical problem is requested by
another physician.
(2) The request and need for the consultation are documented in the
patient's medical record.
(3) After the consultation is provided, the physician prepares a
written report of his or her findings, which is provided to the
physician who requested the consultation.
(4) With respect to radiation therapy services provided by a
radiation oncologist, a course of radiation treatments over a period of
time will be considered to be pursuant to a consultation, provided that
the radiation oncologist communicates with the referring physician on a
regular basis about the patient's course of treatment and progress.
Designated health services (DHS) means any of the following
services (other than those provided as emergency physician services
furnished outside of the U.S.), as they are defined in this section:
(1)(i) Clinical laboratory services.
(ii) Physical therapy, occupational therapy, and speech-language
pathology services.
(iii) Radiology and certain other imaging services.
(iv) Radiation therapy services and supplies.
(v) Durable medical equipment and supplies.
(vi) Parenteral and enteral nutrients, equipment, and supplies.
(vii) Prosthetics, orthotics, and prosthetic devices and supplies.
(viii) Home health services.
(ix) Outpatient prescription drugs.
(x) Inpatient and outpatient hospital services.
(2) Except as otherwise noted in this subpart, the term
``designated health services'' or DHS means only DHS payable, in whole
or in part, by Medicare. DHS do not include services that are
reimbursed by Medicare as part of a composite rate (for example,
ambulatory surgical center services or SNF Part A payments), except to
the extent the services listed in paragraphs (1)(i) through (1)(x) of
this definition are themselves payable through a composite rate (for
example, all services provided as home health services or inpatient and
outpatient hospital services are DHS).
Does not violate the anti-kickback statute, as used in this subpart
only, means that the particular arrangement--
(1)(i) Meets a safe harbor under the anti-kickback statute, as set
forth at Sec. 1001.952 of this title, ``Exceptions'';
(ii) Has been specifically approved by the OIG in a favorable
advisory opinion issued to a party to the particular arrangement (for
example, the entity furnishing DHS) with respect to the particular
arrangement (and not a similar arrangement), provided that the
arrangement is conducted in accordance with the facts certified by the
requesting party and the opinion is otherwise issued in accordance with
part 1008 of this title, ``Advisory Opinions by the OIG''; or
(iii) Does not violate the anti-kickback provisions in section
1128B(b) of the Act.
(2) For purposes of this definition, a favorable advisory opinion
means an opinion in which the OIG opines that--
(i) The party's specific arrangement does not implicate the anti-
kickback statute, does not constitute prohibited remuneration, or fits
in a safe harbor under Sec. 1001.952 of this title; or
(ii) The party will not be subject to any OIG sanctions arising
under the anti-kickback statute (for example, under sections
1128A(a)(7) and 1128(b)(7) of the Act) in connection with the party's
specific arrangement.
Downstream contractor means a ``first tier contractor'' as defined
at Sec. 1001.952(t)(2)(iii) or a ``downstream contractor'' as defined
at Sec. 1001.952(t)(2)(i).
Durable medical equipment (DME) and supplies has the meaning given
in section 1861(n) of the Act and Sec. 414.202 of this chapter.
Electronic health record means a repository of consumer health
status information in computer processable form used for clinical
diagnosis and treatment for a broad array of clinical conditions.
Employee means any individual who, under the 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 in 20 CFR 404.1007
and 26 CFR 31.3121(d)-1(c).)
Entity means--
(1) A physician's sole practice or a practice of multiple
physicians or any other person, sole proprietorship, public or private
agency or trust, corporation, partnership, limited liability company,
foundation, nonprofit corporation, or unincorporated association that
furnishes DHS. An entity does not include the referring physician
himself or herself, but does include his or her medical practice. A
person or entity is considered to be furnishing DHS if it--
(i) Is the person or entity to which CMS makes payment for the DHS,
directly or upon assignment on the patient's behalf; or
(ii) Is the person or entity to which the right to payment for the
DHS has been reassigned in accordance with Sec. 424.80(b)(1)
(employer) or (b)(2) (payment under a contractual arrangement) of this
chapter (other than a health care delivery system that is a health plan
(as defined at Sec. 1001.952(l) of this title), and other than any
managed care organization (MCO), provider-sponsored organization (PSO),
or independent practice association (IPA) with which a health plan
contracts for services provided to plan enrollees).
(2) A health plan, MCO, PSO, or IPA that employs a supplier or
operates a facility that could accept reassignment from a supplier
under Sec. 424.80(b)(1) and (b)(2) of this chapter, with respect to
any DHS provided by that supplier.
(3) For purposes of this subpart, ``entity'' does not include a
physician's practice when it bills Medicare for a diagnostic test in
accordance with Sec. 414.50 of this chapter (Physician billing for
purchased diagnostic tests) and section 30.2.9 of the CMS Internet-only
Manual, publication 100-04, Claims Processing Manual, Chapter 1
(general billing requirements), as amended or replaced from time to
time.
Fair market value means the value in arm's-length transactions,
consistent with the general market value. ``General market value''
means the price that an asset would bring as the result of bona fide
bargaining between well-informed buyers and sellers who are not
otherwise in a position to generate business for the other party, or
the compensation that would be included in a service agreement as the
result of bona fide bargaining between well-informed parties to the
agreement who are not otherwise in a position to generate business for
the other party, on the date of acquisition of the asset or at the time
of the service agreement. Usually, the fair market price is the price
at which bona fide sales have been consummated for assets of like type,
quality, and quantity in a particular market at the time of
acquisition, or the compensation that has been included in bona fide
service agreements with comparable terms at the time of the agreement,
where the price or compensation has not been determined in any manner
that takes into account the volume or value of anticipated or actual
referrals. With respect to rentals and leases described in Sec.
411.357(a), (b), and (l) (as to equipment leases only), ``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. For purposes of
this definition, a rental payment does not take into account intended
use if it takes into account costs incurred by the lessor in developing
or upgrading the property or maintaining the property or its
improvements.
Home health services means the services described in section
1861(m) of the Act and part 409, subpart E of this chapter.
Hospital means any entity that qualifies as a ``hospital'' under
section 1861(e) of the Act, as a ``psychiatric hospital'' under section
1861(f) of the Act, or as a ``critical access hospital'' under section
1861(mm)(1) of the Act, and refers to any separate legally organized
operating entity plus any subsidiary, related entity, or other entities
that perform services for the hospital's patients and for which the
hospital bills. However, a ``hospital'' does not include entities that
perform services for hospital patients ``under arrangements'' with the
hospital.
HPSA means, for purposes of this subpart, 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 part 5 of this title).
Immediate family member or member of a physician's immediate family
means husband or wife; birth 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.
``Incident to'' services or services ``incident to'' means those
services and supplies that meet the requirements of section
1861(s)(2)(A) of the Act, Sec. 410.26 of this chapter, and sections
60, 60.1, 60.2, and 60.3 of the CMS Internet-only Manual, publication
100-02, Medicare Benefit Policy Manual, Chapter 15 (covered medical and
other health services), as amended or replaced from time to time.
Inpatient hospital services means those services defined in section
1861(b) of the Act and Sec. 409.10(a) and (b) of this chapter and
include inpatient psychiatric hospital services listed in section
1861(c) of the Act and inpatient critical access hospital services, as
defined in section 1861(mm)(2) of the Act. ``Inpatient hospital
services'' do not include emergency inpatient services provided by a
hospital located outside of the U.S. and covered under the authority in
section 1814(f)(2) of the Act and part 424, subpart H of this chapter,
or emergency inpatient services provided by a nonparticipating hospital
within the U.S., as authorized by section 1814(d) of the Act and
described in part 424, subpart G of this chapter. ``Inpatient hospital
services'' also do not include dialysis furnished by a hospital that is
not certified to provide end-stage renal dialysis (ESRD) services under
subpart U of part 405 of this chapter. ``Inpatient hospital services''
include services that are furnished either by the hospital directly or
under arrangements made by the hospital with others. ``Inpatient
hospital services'' do not include professional services performed by
physicians, physician assistants, nurse practitioners, clinical nurse
specialists, certified nurse midwives, and certified registered nurse
anesthetists and qualified psychologists if Medicare reimburses the
services independently and not as part of the inpatient hospital
service (even if they are billed by a hospital under an assignment or
reassignment).
Interoperable means able to communicate and exchange data
accurately, effectively, securely, and consistently with different
information technology systems, software applications, and networks, in
various settings; and exchange data such that the clinical or
operational purpose and meaning of the data are preserved and
unaltered.
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.
List of CPT/HCPCS Codes means the list of CPT and HCPCS codes that
identifies those items and services that are DHS under section 1877 of
the Act or that may qualify for certain exceptions under section 1877
of the Act. It is updated annually, as published in the Federal Register, and is posted on the
CMS Web site at
http://www.cms.hhs.gov/PhysicianSelfReferral/11_List_of_Codes.asp#TopOfPage.
Locum tenens physician means a physician who substitutes (that is,
``stands in the shoes'') in exigent circumstances for a physician, in
accordance with applicable reassignment rules and regulations,
including section 30.2.11 of the CMS Internet-only Manual, publication
100-04, Claims Processing Manual, Chapter 1 (general billing
requirements), as amended or replaced from time to time.
Member of the group or member of a group practice means, for
purposes of this subpart, a direct or indirect physician owner of a
group practice (including a physician whose interest is held by his or
her individual professional corporation or by another entity), a
physician employee of the group practice (including a physician
employed by his or her individual professional corporation that has an
equity interest in the group practice), a locum tenens physician (as
defined in this section), or an on-call physician while the physician
is providing on-call services for members of the group practice. A
physician is a member of the group during the time he or she furnishes
``patient care services'' to the group as defined in this section. An
independent contractor or a leased employee is not a member of the
group (unless the leased employee meets the definition of an
``employee'' under this Sec. 411.351).
Outpatient hospital services means the therapeutic, diagnostic, and
partial hospitalization services listed under sections 1861(s)(2)(B)
and (s)(2)(C) of the Act; outpatient services furnished by a
psychiatric hospital, as defined in section 1861(f) of the Act; and
outpatient critical access hospital services, as defined in section
1861(mm)(3) of the Act. ``Outpatient hospital services'' do not include
emergency services furnished by nonparticipating hospitals and covered
under the conditions described in section 1835(b) of the Act and
subpart G of part 424 of this chapter. ``Outpatient hospital services''
include services that are furnished either by the hospital directly or
under arrangements made by the hospital with others. ``Outpatient
hospital services'' do not include professional services performed by
physicians, physician assistants, nurse practitioners, clinical nurse
specialists, certified nurse midwives, certified registered nurse
anesthetists, and qualified psychologists if Medicare reimburses the
services independently and not as part of the outpatient hospital
service (even if they are billed by a hospital under an assignment or
reassignment).
Outpatient prescription drugs means all drugs covered by Medicare
Part B or Part D.
Parenteral and enteral nutrients, equipment, and supplies means the
following services (including all HCPCS level 2 codes for these
services):
(1) Parenteral nutrients, equipment, and supplies, meaning those
items and supplies needed to provide nutriment to a patient with
permanent, severe pathology of the alimentary tract that does not allow
absorption of sufficient nutrients to maintain strength commensurate
with the patient's general condition, as described in section 108.2 of
the National Coverage Determinations Manual, as amended or replaced
from time to time; and
(2) Enteral nutrients, equipment, and supplies, meaning items and
supplies needed to provide enteral nutrition to a patient with a
functioning gastrointestinal tract who, due to pathology to or
nonfunction of the structures that normally permit food to reach the
digestive tract, cannot maintain weight and strength commensurate with
his or her general condition, as described in section 108.2 of the
National Coverage Determinations Manual, as amended or replaced from
time to time.
Patient care services means any task(s) performed by a physician in
the group practice that address the medical needs of specific patients
or patients in general, regardless of whether they involve direct
patient encounters or generally benefit a particular practice. Patient
care services can include, for example, the services of physicians who
do not directly treat patients, such as time spent by a physician
consulting with other physicians or reviewing laboratory tests, or time
spent training staff members, arranging for equipment, or performing
administrative or management tasks.
Physical therapy, occupational therapy, and speech-language
pathology services means those particular services so identified on the
List of CPT/HCPCS Codes. All services so identified on the List of CPT/
HCPCS Codes are physical therapy, occupational therapy, and speech-
language pathology services for purposes of this subpart. Any service
not specifically identified as physical therapy, occupational therapy
or speech-language pathology on the List of CPT/HCPCS Codes is not a
physical therapy, occupational therapy, or speech-language pathology
service for purposes of this subpart. The list of codes identifying
physical therapy, occupational therapy, and speech-language pathology
services for purposes of this regulation includes the following:
(1) Physical therapy services, meaning those outpatient physical
therapy services (including speech-language pathology services)
described in section 1861(p) of the Act that are covered under Medicare
Part A or Part B, regardless of who provides them, if the services
include--
(i) Assessments, function tests, and measurements of strength,
balance, endurance, range of motion, and activities of daily living;
(ii) Therapeutic exercises, massage, and use of physical medicine
modalities, assistive devices, and adaptive equipment;
(iii) Establishment of a maintenance therapy program for an
individual whose restoration potential has been reached; however,
maintenance therapy itself is not covered as part of these services; or
(iv) Speech-language pathology services that are for the diagnosis
and treatment of speech, language, and cognitive disorders that include
swallowing and other oral-motor dysfunctions.
(2) Occupational therapy services, meaning those services described
in section 1861(g) of the Act that are covered under Medicare Part A or
Part B, regardless of who provides them, if the services include--
(i) Teaching of compensatory techniques to permit an individual
with a physical or cognitive impairment or limitation to engage in
daily activities;
(ii) Evaluation of an individual's level of independent
functioning;
(iii) Selection and teaching of task-oriented therapeutic
activities to restore sensory-integrative function; or
(iv) Assessment of an individual's vocational potential, except
when the assessment is related solely to vocational rehabilitation.
Physician means a doctor of medicine or osteopathy, a doctor of
dental surgery or dental medicine, a doctor of podiatric medicine, a
doctor of optometry, or a chiropractor, as defined in section 1861(r)
of the Act.
Physician in the group practice means a member of the group
practice, as well as an independent contractor physician during the
time the independent contractor is furnishing patient care services (as
defined in this section) for the group practice under a contractual
arrangement directly with the group practice to provide services to the
group practice's patients in the group practice's facilities. The
contract must
contain the same restrictions on compensation that apply to members of
the group practice under Sec. 411.352(g) (or the contract must satisfy
the requirements of the personal service arrangements exception in
Sec. 411.357(d)), and the independent contractor's arrangement with
the group practice must comply with the reassignment rules in Sec.
424.80(b)(2) of this chapter (see also section 30.2.11 of the CMS
Internet-only Manual, publication 100-04, Claims Processing Manual,
Chapter 1 (general billing requirements), as amended or replaced from
time to time). Referrals from an independent contractor who is a
physician in the group practice are subject to the prohibition on
referrals in Sec. 411.353(a), and the group practice is subject to the
limitation on billing for those referrals in Sec. 411.353(b).
Physician incentive plan means any compensation arrangement between
an entity (or downstream contractor) 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.
Physician organization means a physician (including a professional
corporation of which the physician is the sole owner), a physician
practice, or a group practice that complies with the requirements of
Sec. 411.352.
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 services.
Professional courtesy means the provision of free or discounted
health care items or services to a physician or his or her immediate
family members or office staff.
Prosthetics, Orthotics, and Prosthetic Devices and Supplies means
the following services (including all HCPCS level 2 codes for these
items and services that are covered by Medicare):
(1) Orthotics, meaning leg, arm, back, and neck braces, as listed
in section 1861(s)(9) of the Act.
(2) Prosthetics, meaning artificial legs, arms, and eyes, as
described in section 1861(s)(9) of the Act.
(3) Prosthetic devices, meaning devices (other than a dental
device) listed in section 1861(s)(8) of the Act that replace all or
part of an internal body organ, including colostomy bags, and one pair
of conventional eyeglasses or contact lenses furnished subsequent to
each cataract surgery with insertion of an intraocular lens.
(4) Prosthetic supplies, meaning supplies that are necessary for
the effective use of a prosthetic device (including supplies directly
related to colostomy care).
Radiation therapy services and supplies means those particular
services and supplies, including (effective January 1, 2007)
therapeutic nuclear medicine services and supplies, so identified on
the List of CPT/HCPCS Codes. All services and supplies so identified on
the List of CPT/HCPCS Codes are radiation therapy services and supplies
for purposes of this subpart. Any service or supply not specifically
identified as radiation therapy services or supplies on the List of
CPT/HCPCS Codes is not a radiation therapy service or supply for
purposes of this subpart. The list of codes identifying radiation
therapy services and supplies is based on section 1861(s)(4) of the Act
and Sec. 410.35 of this chapter.
Radiology and certain other imaging services means those particular
services so identified on the List of CPT/HCPCS Codes. All services so
identified on the List of CPT/HCPCS Codes are radiology and certain
other imaging services for purposes of this subpart. Any service not
specifically identified as radiology and certain other imaging services
on the List of CPT/HCPCS Codes is not a radiology or certain other
imaging service for purposes of this subpart. The list of codes
identifying radiology and certain other imaging services includes the
professional and technical components of any diagnostic test or
procedure using x-rays, ultrasound, computerized axial tomography,
magnetic resonance imaging, nuclear medicine (effective January 1,
2007), or other imaging services. All codes identified as radiology and
certain other imaging services are covered under section 1861(s)(3) of
the Act and Sec. 410.32 and Sec. 410.34 of this chapter, but do not
include--
(1) X-ray, fluoroscopy, or ultrasound procedures that require the
insertion of a needle, catheter, tube, or probe through the skin or
into a body orifice; and
(2) Radiology procedures that are integral to the performance of a
nonradiological medical procedure and performed)--
(i) During the nonradiological medical procedure; or
(ii) Immediately following the nonradiological medical procedure
when necessary to confirm placement of an item placed during the
nonradiological medical procedure.
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, or the certifying or
recertifying of the need for, any designated health 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, but not including any designated health service personally
performed or provided by the referring physician. A designated health
service is not personally performed or provided by the referring
physician if it is performed or provided by any other person,
including, but not limited to, the referring physician's employees,
independent contractors, or group practice members.
(ii) Except as provided in paragraph (2) of this definition, a
request by a physician that includes the provision of any designated
health service for which payment may be made under Medicare, the
establishment of a plan of care by a physician that includes the
provision of such a designated health service, or the certifying or
recertifying of the need for such a designated health service, but not
including any designated health service personally performed or
provided by the referring physician. A designated health service is not
personally performed or provided by the referring physician if it is
performed or provided by any other person including, but not limited
to, the referring physician's employees, independent contractors, or
group practice members.
(2) Does not include a request by a pathologist for clinical
diagnostic laboratory tests and pathological examination services, by a
radiologist for diagnostic radiology services, and by a radiation
oncologist for radiation therapy or ancillary services necessary for,
and integral to, the provision of radiation therapy, if--
(i) The request results from a consultation initiated by another
physician (whether the request for a consultation was made to a
particular physician or to an entity with which the physician is
affiliated); and
(ii) The tests or services are furnished by or under the
supervision of the pathologist, radiologist, or radiation oncologist,
or under the supervision of a pathologist, radiologist, or radiation
oncologist, respectively, in the same group practice as the
pathologist, radiologist, or radiation oncologist.
(3) Can be in any form, including, but not limited to, written,
oral, or electronic.
Referring physician means a physician who makes a referral as
defined in this section or who directs another person or entity to make
a referral or who controls referrals made
by another person or entity. A referring physician and the professional
corporation of which he or she is a sole owner are the same for
purposes of this subpart.
Remuneration means any payment or other benefit made directly or
indirectly, overtly or covertly, in cash or in kind, except that the
following are not considered remuneration for purposes of this section:
(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 (not including
surgical 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 (or a
subcontractor of the insurer or 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
self-insured plan (or a subcontractor of the insurer or self-insured
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.
Rural area means an area that is not an urban area as defined at
Sec. 412.62(f)(1)(ii) of this chapter.
Same building means a structure with, or combination of structures
that share, a single street address as assigned by the U.S. Postal
Service, excluding all exterior spaces (for example, lawns, courtyards,
driveways, parking lots) and interior loading docks or parking garages.
For purposes of this section, the ``same building'' does not include a
mobile vehicle, van, or trailer.
Specialty hospital means a subsection (d) hospital (as defined in
section 1886(d)(1)(B) of the Act) that is primarily or exclusively
engaged in the care and treatment of one of the following:
(1) Patients with a cardiac condition;
(2) Patients with an orthopedic condition;
(3) Patients receiving a surgical procedure; or
(4) Any other specialized category of services that the Secretary
designates as inconsistent with the purpose of permitting physician
ownership and investment interests in a hospital. A ``specialty
hospital'' does not include any hospital--
(1) Determined by the Secretary to be in operation before or under
development as of November 18, 2003;
(2) For which the number of physician investors at any time on or
after such date is no greater than the number of such investors as of
such date;
(3) For which the type of categories described above is no
different at any time on or after such date than the type of such
categories as of such date;
(4) For which any increase in the number of beds occurs only in the
facilities on the main campus of the hospital and does not exceed 50
percent of the number of beds in the hospital as of November 18, 2003,
or 5 beds, whichever is greater; and
(5) That meets such other requirements as the Secretary may
specify.
Transaction means an instance or process of two or more persons or
entities doing business. An isolated financial transaction means one
involving a single payment between two or more persons or entities or a
transaction that involves integrally related installment payments
provided that--
(1) The total aggregate payment is fixed before the first payment
is made and does not take into account, directly or indirectly, the
volume or value of referrals or other business generated by the
referring physician; and
(2) The payments are immediately negotiable or are guaranteed by a
third party, or secured by a negotiable promissory note, or subject to
a similar mechanism to ensure payment even in the event of default by
the purchaser or obligated party.