Advisory Opinions (AOs)
Section 1877(g)(6) of the Social Security Act (the Act) requires that CMS issue certain written advisory opinions. These opinions provide guidance on whether a physician's referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship are prohibited under the Medicare program by section 1877 of the Act. We are making these advisory opinions available to the general public through this CMS website, as specified in our regulations at 42 CFR §411.384(b). The purpose of the advisory opinion process is to provide a binding opinion concerning the application of section 1877 of the Act to specific factual situations.
The requestor, who must be a party to the existing or proposed arrangement, is the only individual or entity that may rely on the advisory opinion. In each opinion, we apply legal standards to a set of facts involving certain known persons and/or entities that have provided specific statements about key factual issues. Because each opinion applies to specific individuals or entities in specific situations, no third parties are bound by, nor may they legally rely on, an advisory opinion.
Before publication of the advisory opinion, we redact specific information about the requesting individuals or entities, and about any individuals or entities associated with the requestor, to the extent that it is appropriate. In addition, we intend to protect from public disclosure, to the fullest extent permitted by Exemptions 4 and 6 of the Freedom of Information Act, 5 U.S.C. §552(b)(4) and (b)(6), any confidential business information and any individual-specific information collected. We note that CMS is prevented by the Trade Secrets Act, 18 U.S.C. §1905, from releasing confidential business information, except as authorized by law.
More detailed information on CMS Advisory Opinions can be found in 42 CFR §411.370-§411.389 (see the download below).
These opinions do not relate to specialty hospitals. For specialty hospital advisory opinions, see the menu in the left column.
We note that the Office of the Inspector General has a similar process for securing advisory opinions. For further information about their process and its requirements, see the link below. (Related Links Outside CMS)
- Advisory Opinion Rules – §411.370-§411.389, republished on September 24, 2004, set forth the procedures for requesting an advisory opinion [PDF, 65KB]
- 10/98 - Advisory Opinion 98-001 - Regarding a proposed ambulatory surgical treatment center [PDF, 40KB]
- 11/98 - Advisory Opinion 98-002 - Whether the partners and physician employees of a proposed partnership may, under the "in-office ancillary services" exception in section 1877(b)(2) of the Social Security Act, refer Medicare and/or Medicaid patients to the partnership for eyeglass prescriptions filled subsequent to cataract surgery with the insertion of an intraocular lens. [PDF, 41KB]
- 8/05 - Advisory Opinion CMS-AO-2005-08-01 - Concerning whether stock held by physicians in a nonprofit, tax-exempt multi-specialty group practice is an ownership or investment interest. [PDF, 74KB]
- 11/06 - CMS-AO-2006-01 - Concerning whether a recruitment arrangement would meet the requirements of the exception set forth in section 1877(e)(5) of the Social Security Act and 42 C.F.R. § 411.357(e) if the recruited physician were required to practice no more than 10 to 20 percent of his or her time in an office of the group practice that is not located in the hospital's geographic service area. [PDF, 71KB]
- 09/07 - CMS-AO-2007-01 - Concerning whether a recruitment arrangement would meet the requirements of the exception set forth in section 1877(e)(5) of the Social Security Act and 42 C.F.R. § 411.357(e) if the income guarantee loan agreement portion of the arrangement was modified after the inception of the arrangement to eliminate an excess receipts provision. [PDF, 34KB]
- 05/08 - CMS-AO-2008-01 - Concerning whether an arrangement under which a hospital licenses a custom software interface for use by medical staff physicians in their private offices to order or communicate the results of tests and procedures furnished by the hospital would constitute a compensation arrangement under section 1877(h)(1)(A) of the Social Security Act. [PDF, 39KB]
- 06/08 – CMS-AO-2008-02 – Concerning whether a physician's investment in a diagnostic center meets the requirements of the rural provider exception set forth in section 1877(d)(2) of the Social Security Act and 42 C.F.R. § 411.356(c)(1). [PDF, 44KB]
- 6/10 – CMS-AO-2010-01 – Concerning whether an arrangement under which an independent clinical laboratory provides single-use disposable specula to physicians would constitute a compensation arrangement under section 1877(h) (1)(A) of the Social Security Act. [PDF, 64KB]
- 5/11 CMS-AO-2011-01 – Concerning whether a proposed physician recruitment arrangement with a non-competition provision would meet the physician recruitment exception to the physician self-referral statute set forth in section 1877(e)(5) of the Social Security Act and 42 C.F.R. § 411.357(e). [PDF, 84KB]
- 10/13 CMS-AO-2013-01 - Concerning whether the provision of free Devices constitutes “remuneration” that gives rise to a “compensation arrangement” under section 1877(h)(1) of the Social Security Act (the “Act”) [PDF, 237KB]
- 10/13 CMS-AO-2013-02 - Concerning whether the provision of free Devices constitutes “remuneration” that gives rise to a “compensation arrangement” under section 1877(h)(1) of the Social Security Act (the “Act”) [PDF, 227KB]
- CMS-AO-2013-03 - Concerning whether a physician-owned hospital’s addition of certain observation beds, which are not licensed in the state where the hospital is located, would violate the limitation on expansion of facility capacity set forth in section 1877(i)(1)(B) of the Social Security Act [PDF, 190KB]
- CMS-AO-2014-01 – Concerning whether the value of any ownership or investment interests attributable to assets that were committed for contribution but not transferred to a physician-owned hospital (or an entity whose assets would include the hospital) should be included when determining the hospital’s aggregate physician ownership or investment interests as of March 23, 2010 under section 1877(i)(1)(D)(i) of the Social Security Act. [PDF, 162KB]
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