Insights & Resources

Medicare/Medicaid Fraud & Abuse Resource Center

    Back To Medicare/Medicaid Fraud & Abuse Resource Center

    Comparison Chart of Anti-Kickback Safe Harbors and Stark Exceptions -- Publicly Traded Securities/Large Investment Interests

    Large Investment Interests  – Current as of November 2017

    Stark
    Stark exception to the referral prohibition related to ownership or investment interests for publicly traded securities  Click the above link to see how this section was amended in January 2016.  The amendments are also incorporated in the text below.

    Anti-Kickback
    Safe harbor for certain investment interests

    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.

    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.

    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; b) traded under an automated interdealer quotation system operated by the National Association of Securities Dealers or c) listed for trading on an electronic stock market or over-the-counter quotation system in which quotations are published on a daily basis and trades are standardized and publicly transparent.

    With respect to an investment interest that is an equity security, the equity security must be registered with the Securities and Exchange Commission.

    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.

    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.

     

    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.

     

    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.

     

    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.

    Special rule for mutual funds: Investment or 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.