To the Editor:

In your September 1999 issue, an Ask FPM question addressed Stark regulations and a potential relationship between two physicians with ultrasound equipment.

In this question, the author said he had a rural office. My understanding of the Stark regulations in the Federal Register (Jan. 9, 1998) is that if the parties are located outside of a Metropolitan Statistical Area they are exempt from Stark. Has something changed since then, or am I incorrect?

Response:

There is a rural exception in the Stark law and regulations. Specifically, section 1877(d)(2) of the Social Security Act provides that designated health services furnished by an entity in a rural area are not considered to be an ownership or investment interest otherwise prohibited under Stark if substantially all of the designated health services furnished by the entity are to individuals residing in a rural area.

Section 1886(d)(2)(D) of the Social Security Act defines the term “rural area” as any area outside a Metropolitan Statistical Area (as defined by the U.S. Office of Management and Budget). Thus, your understanding of the exception is generally correct.

It should be noted that there are other exceptions beyond the group practice exception mentioned in FPM and the rural exception mentioned above.