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Return to
Stark Exception/Anti-Kickback Safe Harbor Index
STARK LAW EXCEPTIONS AND ANTI-KICKBACK LAW SAFE HARBORS
Large Investment Interests
Stark
Stark exception to the referral prohibition related to
ownership or investment interests
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Anti-Kickback
Safe harbor for
certain investment interests
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| The ownership of must be of investment securities (including shares or
bonds, debentures, notes, or other debt instruments) that at the time the designated health service
referral was made could be
purchased on the open market.
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The investment is in an entity
with more than $50,000,000 in undepreciated net tangible assets (based on the net acquisition cost of purchasing such assets from an unrelated entity)
related to the furnishing of health care items and services.
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| The investment securities are a) 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 b) traded under an automated interdealer quotation system
operated by the National Association of Securities Dealers.
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With respect to an investment interest
that is an equity security, the equity security must be registered with the Securities and Exchange Commission.
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| The investment securities
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.
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The investment interest of an investor in a
position to make or influence referrals to, furnish items or services to, or otherwise generate business for the entity must be
obtained on terms (including any direct or indirect transferability restrictions) and at a price equally available to the public when
trading on a registered securities exchange, such as the New York Stock Exchange or the American Stock Exchange, or in accordance with the
National Association of Securities Dealers Automated Quotation System.
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The entity or any investor must not
market or furnish the entity's items or services (or those of another entity as part of a
cross referral agreement) to passive investors differently than to non- investors.
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The entity or any investor (or other individual or
entity acting on behalf of the entity or any investor in the entity) must not loan funds to or guarantee a loan for an investor who is in a position to make or
influence referrals to, furnish items or services to, or otherwise generate business for the entity if the investor uses any part of such loan to
obtain the investment interest.
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The amount of payment to an
investor in return for the investment interest must be directly proportional to the amount of the
capital investment of that investor.
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Mutual Funds
Investment Interests in Entity With Investment Interests Held by Either Active or Passive Investors
Stark
[No comparable exception] |
Anti-Kickback
Safe harbor for
certain investment interests
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The investment is in an entity which
possesses investment interests that are held by either active or passive investors.
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No more than 40 percent of the value of the
investment interests of each class of investment interests may be held in the previous fiscal year or previous 12 month period by investors who
are in a position to make or influence referrals to, furnish items or services to, or otherwise generate business for the entity.
Equivalent classes of equity investments may be combined, and equivalent classes of debt instruments may be combined.
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The terms on which an investment interest is
offered to a passive investor, if any, who is in a position to make or influence referrals to, furnish
items or services to, or otherwise generate business for the entity must be no different from the terms
offered to other passive investors.
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The terms on which an
investment interest is offered to an investor who is in a position to make or influence referrals to,
furnish items or services to, or otherwise generate business for the entity must not be related to the
previous or expected volume of referrals, items or services furnished, or the amount of business
otherwise generated from that investor to the entity.
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There is no requirement that a passive
investor, if any, make referrals to, be in a position to make or influence referrals to,
furnish items or services to, or otherwise generate business for the entity as a condition for remaining as an investor.
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The entity or any investor must not
market or furnish the entity's items or services (or those of another entity as part of a cross referral
agreement) to passive investors differently than to non- investors.
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No more than 40 percent of
the entity's gross revenue related to the furnishing of health care items and
services in the previous fiscal year or previous 12-month period may come from referrals or
business otherwise generated from investors.
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The entity or any investor
(or other individual or entity acting on behalf of the entity or any investor in the entity)
must not loan funds to or guarantee a loan for an investor who is in a position to make or
influence referrals to, furnish items or services to, or otherwise generate business for the
entity if the investor uses any part of such loan to obtain the investment interest.
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The amount of payment to an investor
in return for the investment interest must be directly proportional to the amount of the capital investment
(including the fair market value of any pre- operational services rendered) of that investor.
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Investment Interests in Entity Located in a Rural or Underserved Area
Stark
Stark exception to the referral prohibition related to
ownership or investment interests
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Anti-Kickback
Safe harbor for
certain investment interests
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| An investment or ownership interest in
an entity that furnishes
substantially all (not less than 75 percent) of the designated health services 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. A rural area is an area that is not an urban area as defined
in Sec. 412.62(f)(1)(ii) of this chapter.
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The investment is in an entity which
possesses investment interests that are held by either active or passive investors and is located in an underserved area.
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No more than 50 percent of the value of the
investment interests of each class of investments may be held in the previous fiscal year or previous 12-month period by investors who are in a
position to make or influence referrals to, furnish items or services to, or otherwise generate business for, the entity.
Equivalent classes of equity investments may be combined, and equivalent classes of debt instruments may be combined.
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The terms on which an investment interest
is offered to a passive investor, if any, who is in a position to make or influence referrals to,
furnish items or services to, or otherwise generate business for the entity must be no different from the terms
offered to other passive investors.
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The terms on which an investment interest
is offered to an investor who is in a position to make or influence referrals to, furnish items or services to, or otherwise generate business for
the entity must not be related to the previous or expected volume of referrals, items or services furnished, or the amount of business otherwise
generated from that investor to the entity.
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There is no requirement that a
passive investor, if any, make referrals to, be in a position to make or influence referrals to,
furnish items or services to, or otherwise generate business for the entity as a condition for remaining as an investor.
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The entity or any investor must not
market or furnish the entity's items or services (or those of another entity as part of a
cross-referral agreement) to passive investors differently than to non- investors.
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At least 75 percent of the
dollar volume of the entity's business in the previous fiscal year or previous 12-month period
must be derived from the service of persons who reside in an underserved area or are members of
medically underserved populations.
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The entity or any investor (or other
individual or entity acting on behalf of the entity or any investor in the entity) must not loan funds to or
guarantee a loan for an investor who is in a position to make or influence referrals to, furnish items or
services to, or otherwise generate business for the entity if the investor uses any part of such
loan to obtain the investment interest.
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The amount of payment to an
investor in return for the investment interest must be directly proportional to the amount of the capital
investment (including the fair market value of any pre- operational services rendered) of that investor.
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If an entity that otherwise meets all of the
above standards is located in an area that was an underserved area at the time of the initial investment, but subsequently ceases to be an
underserved area, the entity will be deemed to comply with this section for a period equal to the lesser of: a) the current term of the investment
remaining after the date upon which the area ceased to be an underserved area; or b) three years from the date the area
ceased to be an underserved area.
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Hospital Investment or Ownership
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