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    Stark Law: Rental of Equipment -- 411.357(b)

    (b) Rental of equipment. Payments made by a lessee to a lessor for the use of equipment under the following conditions:

    (1) The lease arrangement is set out in writing, is signed by the parties, and specifies the equipment it covers.

    (2) The equipment leased does not exceed that which is reasonable and necessary for the legitimate business purposes of the lease arrangement and is used exclusively by the lessee when being used by the lessee (and is not shared with or used by the lessor or any person or entity related to the lessor). For purposes of this paragraph (b), exclusive use means that the lessee (and any other lessees of the same equipment) uses the equipment to the exclusion of the lessor (or any person or entity related to the lessor). The lessor (or any person or entity related to the lessor) may not be an invitee of the lessee to use the equipment.

    (3) The duration of the lease arrangement is at least 1 year. To meet this requirement, if the lease arrangement is terminated with or without cause, the parties may not enter into a new lease arrangement for the same equipment during the first year of the original lease arrangement.

    (4) The rental charges over the term of the lease arrangement are set in advance, are consistent with fair market value, and are not determined -

    (i) In any manner that takes into account the volume or value of referrals or other business generated between the parties; or

    (ii) Using a formula based on -

    (A) A percentage of the revenue raised, earned, billed, collected, or otherwise attributable to the services performed on or business generated through the use of the equipment; or

    (B) Per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee.

    (5) The lease arrangement would be commercially reasonable even if no referrals were made between the parties.

    (6) If the lease arrangement expires after a term of at least 1 year, a holdover lease arrangement immediately following the expiration of the lease arrangement satisfies the requirements of this paragraph (b) if the following conditions are met:

    (i) The lease arrangement met the conditions of paragraphs (b)(1) through (5) of this section when the arrangement expired;

    (ii) The holdover lease arrangement is on the same terms and conditions as the immediately preceding lease arrangement; and

    (iii) The holdover lease arrangement continues to satisfy the conditions of paragraphs (b)(1) through (5) of this section.