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. We note that the Office of Inspector General (OIG) has a similar process for securing advisory opinions. Please visit the OIG website for further information about the OIG’s process and its requirements.
How to Submit a Request for an Advisory Opinion
A party or parties must submit a request for an advisory opinion electronically to CMS at: 1877AdvisoryOpinion@cms.hhs.gov.
The opinions below do not relate to specialty hospitals. For specialty hospital advisory opinions, see the menu in the left column.
October 1998
CMS-AO-98-001 - Regarding a proposed ambulatory surgical treatment center (PDF)
November 1998
CMS-AO-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)
August 2005
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)
November 2006
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)
September 2007
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)
May 2008
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)
June 2008
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)
June 2010
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)
May 2011
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)
October 2013
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)
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)
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)
December 2014
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)
March 2016
CMS-AO-2016-01 - Concerning whether a physician-owned hospital’s addition of certain observation beds, which are not licensed by 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)
September 2017
CMS-AO-2017-01 – Concerning whether the addition of certain information to a free web-based portal, which is used for ordering and communicating the results of diagnostic tests, would constitute “remuneration” that gives rise to a “compensation arrangement” under section 1877(h)(1) of the Social Security Act. (PDF)
August 2019
CMS-AO-2019-01 – Concerning whether certain of a physician-owned hospital’s operating rooms may be counted when determining the hospital’s aggregate number of licensed beds, procedure rooms, and operating rooms as of March 23, 2010 under section 1877(i)(1)(B) of the Social Security Act and 42 C.F.R. § 411.362(b)(2). (PDF)
March 2020
CMS-AO-2020-01 – Concerning whether certain of a physician-owned hospital’s operating rooms and inpatient beds may be counted when determining the hospital’s aggregate number of licensed beds, procedure rooms, and operating rooms as of March 23, 2010 under section 1877(i)(1)(B) of the Social Security Act and 42 C.F.R. § 411.362(b)(2) (PDF).
November 2020
CMS-AO-2020-02 – Concerning whether referrals to a nonprofit hospital from the physician owners of a physician practice that is the sole member of the hospital would be prohibited under section 1877(a) of the Social Security Act because the physicians would have an ownership or investment interest in the hospital (PDF)
June 2021
CMS-AO-2021-01 – Concerning whether a physician practice would fail to qualify as a group practice for purposes of section 1877(b)(4) of the Social Security Act and 42 C.F.R. 411.352 if it furnishes designated health services through a wholly-owned subsidiary entity that is a physician practice but does not itself qualify as a group practice. (PDF)
December 2021
CMS-AO-2021-02 - Concerning whether a physician-owned hospital’s addition of certain observation beds, which are not licensed by 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)
