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In-office ancillary services exception

Physicians and medical practices rely on the Stark law’s in-office ancillary services exception and physician services exceptions to allow “within-practice” referrals of designated health services. Of these, the in-office ancillary services exception is used most frequently as it allows physicians in medical practices to:

  • Make referrals for certain designated health services within the medical practice;
  • Furnish those designated health services to practice patients;
  • Bill Medicare and Medicaid for the services;
  • Retain and use the revenues earned from providing the services within the group practice for payment of practice expenses and physician compensation

The in-office ancillary services exception has several essential requirements and restrictions relating to:

  1. The designated health services that can be provided in the medical practice (because only certain specific types of designated health services are allowed to be furnished under this exception) – referred to here as “   Service Restrictions”;
  2. Who provides or supervises the services in the practice -- the “Performance and Supervision Test”;
  3. Where the services are furnished -- the “Building” or “Site-of-Service” Test;
  4. How the designated health services are billed -- the “Billing Test”; and
  5. The additional requirement that any medical practice other than a true solo physician practice must qualify as a bona fide “Group Practice” for Stark law purposes -- the “Group Practice Requirements”.
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