Comparison Chart of Anti-Kickback Safe Harbors and Stark Exceptions -- Equipment and Space Leases

Stark
Stark exception to the referral prohibition related to compensation arrangements for rental of equipment 42 CR 411.357(b) 

Anti-Kickback
Safe harbor for payments made by a lessee to a lessor for the use of equipment 42 CFR 1001.952(c)

The lease agreement is set out in writing and signed by the parties and specifies the equipment covered by the lease.

The lease agreement is set out in writing and signed by the parties and covers all of the equipment leased between the parties for the term of the lease and specifies the equipment covered by the lease.  If the lease is intended to provide the lessee with use of the equipment for periodic intervals of time, rather than on a full-time basis for the term of the lease, the lease specifies exactly the schedule of such intervals, their precise length, and the exact rent for such interval.

The equipment leased does not exceed that which is reasonable and necessary for the legitimate business purposes of the lease 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. 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.

The aggregate equipment rental does not exceed that which is reasonably necessary to accomplish the commercially reasonable business purpose of the rental.

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 during the first year of the original lease arrangement.

The term of the lease is for not less than one year.

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 by 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 between the parties.

The aggregate rental charge is set in advance, is consistent with fair market value in arms-length transactions and is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or in part under Medicare or a State health care program.

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

The term fair market value means the value of the equipment when obtained from a manufacturer or professional distributor, but shall not be adjusted to reflect the additional value one party (either the prospective lessee or lessor) would attribute to the equipment as a result of its proximity or convenience to sources of referrals or business otherwise generated for which payment may be made in whole or in part under Medicare or a State health care program.

Stark
Stark exception to the referral prohibition related to compensation arrangements for rental of office space 42 CFR 411.357(a)

Anti-Kickback
Safe harbor for payments made by a lessee to a lessor for the use of space 42 CFR 1001.952(b)

The lease arrangement is set out in writing, is signed by the parties, and specifies the premises it covers.

The lease agreement is set out in writing and signed by the parties. The lease covers all of the premises leased between the parties for the term of the lease and specifies the premises covered by the lease.  If the lease is intended to provide the lessee with access to the premises for periodic intervals of time, rather than on a full-time basis for the term of the lease, the lease specifies exactly the schedule of such intervals, their precise length, and the exact rent for such intervals.

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 during the first year of the original term of the lease arrangement. 

The term of the lease is for not less than one year.

The space rented or 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), except that the lessee may make payments for the use of space consisting of common areas if the payments do not exceed the lessee's pro rata share of expenses for the space based upon the ratio of the space used exclusively by the lessee to the total amount of space (other than common areas) occupied by all persons using the common areas.

Exclusive use means that the lessee (and any other lessees of the same equipment) uses the office space 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 office space.

The rental charges over the term of the lease arrangement are set in advance and are consistent with fair market value.

The aggregate rental charge is set in advance, is consistent with fair market value in arms-length transactions and is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or in part under Medicare or a State health care program.

The rental charges over the term of the agreement 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 or business generated in the office space; or (B) Per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred between the parties.

The aggregate space rented does not exceed that which is reasonably necessary to accomplish the commercially reasonable business purpose of the rental.

If the lease arrangement expires after a term of at least 1 year, a holdover immediately following the expiration of the lease arrangement satisfies the requirements of this section, if the following conditions are met: (i) The lease arrangement met all the conditions of this section when the arrangement expired; (ii) The holdover lease arrangement is on the same terms and conditions as the immediately preceding arrangement; and (iii) The holdover lease arrangement continues to satisfy all the conditions of this section.

The term fair market value means the value of the rental property for general commercial purposes, but shall not be adjusted to reflect the additional value that one party (either the prospective lessee or lessor) would attribute to the property as a result of its proximity or convenience to sources of referrals or business otherwise generated for which payment may be made in whole or in part under Medicare or a State health care program.