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. 411.353  Prohibition on certain referrals by physicians and 
limitations on billing.

    (a) Prohibition on referrals. Except as provided in this subpart, a 
physician who has a direct or indirect financial relationship with an 
entity, or who has an immediate family member who has a direct or 
indirect financial relationship with the entity, may not make a 
referral to that entity for the furnishing of DHS for which payment 
otherwise may be made under Medicare. A physician's prohibited 
financial relationship with an entity that furnishes DHS is not imputed 
to his or her group practice or its members or its staff. However, a 
referral made by a physician's group practice, its members, or its 
staff may be imputed to the physician if the physician directs the 
group practice, its members, or its staff to make the referral or if 
the physician controls referrals made by his or her group practice, its 
members, or its staff.
    (b) Limitations on billing. An entity that furnishes DHS pursuant 
to 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 DHS performed pursuant to the prohibited referral.
    (c) Denial of payment. Except as provided in paragraph (e) of this 
section, no Medicare payment may be made for a designated health 
service that is furnished pursuant to a prohibited referral.
    (d) Refunds. An entity that collects payment for a designated 
health service that was performed pursuant to a prohibited referral 
must refund all collected amounts on a timely basis, as defined at 
Sec.  1003.101 of this title.
    (e) Exception for certain entities. Payment may be made to an 
entity that submits a claim for a designated health service if--
    (1) The entity did not have actual knowledge of, and did not act in 
reckless disregard or deliberate ignorance of, the identity of the 
physician who made the referral of the designated health service to the 
entity; and
    (2) The claim otherwise complies with all applicable Federal and 
State laws, rules, and regulations.
    (f) Exception for certain arrangements involving temporary 
noncompliance. (1) Except as provided in paragraphs (f)(2), (f)(3), and 
(f)(4) of this section, an entity may submit a claim or bill and 
payment may be made to an entity that submits a claim or bill for a 
designated health service if--
    (i) The financial relationship between the entity and the referring 
physician fully complied with an applicable exception under Sec.  
411.355, Sec.  411.356, or Sec.  411.357 for at least 180 consecutive 
calendar days immediately preceding the date on which the financial 
relationship became noncompliant with the exception;
    (ii) The financial relationship has fallen out of compliance with 
the exception for reasons beyond the control of the entity, and the 
entity promptly takes steps to rectify the noncompliance; and
    (iii) The financial relationship does not violate the anti-kickback 
statute (section 1128B(b) of the Act), and the claim or bill otherwise 
complies with all applicable Federal and State laws, rules, and 
regulations.
    (2) Paragraph (f)(1) of this section applies only to DHS furnished 
during the period of time it takes the entity to rectify the 
noncompliance, which must not exceed 90 consecutive calendar days 
following the date on which the financial relationship became 
noncompliant with an exception.
    (3) Paragraph (f)(1) may be used by an entity only once every 3 
years with respect to the same referring physician.
    (4) Paragraph (f)(1) does not apply if the exception with which the 
financial relationship previously complied was Sec.  411.357(k) or (m).