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. 411.356  Exceptions to the referral prohibition related to ownership 
or investment interests.

    For purposes of Sec.  411.353, the following ownership or 
investment interests do not constitute a financial relationship:

    (a) Publicly-traded securities. Ownership of investment securities 
(including shares or bonds, debentures, notes, or other debt 
instruments) that at the time the DHS referral was made could be 
purchased on the open market and that meet the requirements of 
paragraphs (a)(1) and (a)(2) of this section.
    (1) They are either--
    (i) Listed for trading on the New York Stock Exchange, the American 
Stock Exchange, or any regional exchange in which quotations are 
published on a daily basis, or foreign securities listed on a 
recognized foreign, national, or regional exchange in which quotations 
are published on a daily basis; or
    (ii) Traded under an automated interdealer quotation system 
operated by the National Association of Securities Dealers.
    (2) They are in a corporation that had stockholder equity exceeding 
$75 million at the end of the corporation's most recent fiscal year or 
on average during the previous 3 fiscal years. ``Stockholder equity'' 
is the difference in value between a corporation's total assets and 
total liabilities.

    (b) Mutual funds. Ownership of shares in a regulated investment 
company as defined in section 851(a) of the Internal Revenue Code of 
1986, if the company had, at the end of its most recent fiscal year, or 
on average during the previous 3 fiscal years, total assets exceeding 
$75 million.
    (c) Specific providers. Ownership or investment interest in the 
following entities, for purposes of the services specified:

    (1) A rural provider, in the case of DHS furnished in a rural area 
(as defined at Sec.  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.
    (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; and
    (iii) The ownership or investment interest is in the entire 
hospital and not merely in a distinct part or department of the 
hospital.