The in-office ancillary services exception is one of the most commonly used Stark Law exceptions, allowing physician practices to provide designated health services—such as labs, imaging, and therapy—within the practice without violating self-referral rules. Compliance, however, depends on meeting several technical requirements where practices often get tripped up:
1. Three core requirements must be met
Services must be provided under appropriate physician supervision, furnished in the group’s office or a centralized patient-care location, and billed by the physician, group practice, or a wholly owned entity—not a third-party billing arrangement.
2. The practice must meet Stark’s “group practice” definition
Practices must function as a single, integrated clinical and financial entity, meet the 75% “substantially all” patient-care services test, and ensure compensation arrangements do not directly reflect the volume or value of designated health service referrals.
3. Subsidiaries are allowed—but structure alone isn’t enough
CMS has clarified that wholly owned subsidiaries may qualify if they are fully integrated into one unified enterprise, while entities that function mainly as billing pass-throughs or loosely connected operations are unlikely to meet compliance standards.
Resource: Stark law’s most used exception — and where practices get tripped up