Clarifying regulations from Stark II rules

Contract Language. By Steven M. Harris, AMNews contributor. July 2, 2001.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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I receive numerous calls, letters and e-mails, typically inquiring about specific topics of interest discussed in previous issues. Following are a few such questions.

Remember that this column cannot serve as legal advice. Questions and answers are limited to discussions of general principles and should not be relied upon to resolve specific issues.

Question I read with great interest your article about ambulatory surgery centers (see column, May 7). I am part of a 13-member orthopedic specialty practice that is opening a single-specialty, surgeon-owned ASC. I am anticipating performing several procedures at the center that are not currently Medicare-approved ASC procedures. My question is: Can I become an investor although I do not meet the safe-harbor guidelines?

Answer Whether or not you can invest in the ASC would depend on its policies regarding investors, as well as an analysis of the fraud and abuse exposure that may arise under the federal anti-kickback statute and any relevant state law.

It does not appear that you will satisfy the ASC safe-harbor requirement that you receive at least one-third of your practice income from the performance of procedures appearing on the list of Medicare-covered procedures for ASCs. Failure to satisfy the safe harbor does not necessarily mean the investment is illegal or otherwise improper. But the investment terms as well as the structure and proposed business of the ASC would need to be reviewed to determine the level of exposure. [...]