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Advisory Opinions (AOs)

Section 1877(g)(6) of the Social Security Act (the Act) requires that the Centers for Medicare and Medicaid Services issue certain written advisory opinions. These opinions must discuss whether a physician's referrals relating to certain designated health services (other than clinical laboratory services) 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 meaningful advice on how section 1877 of the Act applies to specific factual situations.

On March 19, 2004, we announced that we also would use our advisory opinion procedures to issue determinations regarding whether a hospital was subject to the 18-month moratorium on physician ownership and investment interests in "specialty hospitals." The moratorium was established under section 507 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and was in effect from December 8, 2003 and through June 7, 2005.  (To view the specialty hospital advisory opinions, use the navigation tool in the left margin.)

Please note that advisory opinions are binding only on the individuals or entities that have requested them and only requestors may rely on an advisory opinion. In each opinion we apply legal standards to a set of facts involving certain known persons. These known persons 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.

In general, we have redacted 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, for reasons of personal privacy and protecting confidential business information. However, we might not redact this kind of information if the requestor has made it clear that the information need not be redacted and if there is no law prohibiting us from disclosing the information.


Advisory Opinion Rules – These regulations, republished on September 24, 2004, set forth the procedures for requesting an advisory opinion. [PDF, 66KB]

Notification Issued March 19, 2004 concerning specialty hospital moratorium [PDF, 280KB]

Non-Specialty Hospital Advisory Opinions

10/98 - Advisory Opinion 98-001 - Regarding a proposed ambulatory surgical treatment center [PDF, 38KB]

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, 42KB]

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, 34KB]

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 32KB]

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 35KB]

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, 30KB]

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, 45KB]
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