In-Office Ancillary Services Exception
Stark Law exception (42 CFR 411.355(b)) permitting referrals for designated health services furnished in the referring physician's office.
1 min read · Last reviewed May 23, 2026
At a glance
- Category
- Compliance Program
- Primary sources
- 1
- Workspace handoff
- compliance binder →
Where this comes up
Compliance committees and practice managers operate at this level — written policy, workforce training, sanction policy, monitoring and auditing cadence, response and corrective action. The seven elements of an effective compliance program (OIG) are the scaffolding; this term lives somewhere on that scaffold.
Full definition
What it is in practice
The exception requires the services to be furnished personally by or under the supervision of the referring physician or a member of the same group practice, in the same building, and billed by the entity furnishing the services.
How it shows up in your practice
Many practice imaging, lab, and PT arrangements rely on this exception. Confirm the supervision, location, and billing elements; missing one element voids the exception.
Sources
- 42 CFR Part 411 Subpart J — Starkhttps://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-411/subpart-J
Document IOAS analysis in the Compliance Binder
Open compliance binder →Related terms
- Compliance ProgramStark LawFederal statute (42 USC 1395nn) prohibiting physicians from referring Medicare/Medicaid patients for designated health services to entities with which the physician has a financial relationship, unless an exception applies.
- DocumentationDesignated Health Service (DHS)Categories of services subject to the physician self-referral prohibition under the Stark Law.
- Compliance ProgramGroup Practice (Stark)A defined-term group of physicians who share specific operational characteristics making them eligible for certain Stark Law exceptions.
D3rx is a healthcare-billing and compliance research aid maintained by D3rx Inc. Articles are drafted by an LLM (Anthropic Claude) against primary HHS, OCR, CMS, eCFR, NIST, and state-regulator publications, and reviewed for restraint and source fidelity by the D3rx team.
Reviewer status: a named credentialed reviewer (CHC, CHPC, or healthcare attorney) is being engaged. Until that engagement is finalized, this page does not claim credentialed review.
Related across the archive
- GlossaryGroup Practice (Stark)A defined-term group of physicians who share specific operational characteristics making them eligible for certain Stark Law exceptions.
- GlossaryStark LawFederal statute (42 USC 1395nn) prohibiting physicians from referring Medicare/Medicaid patients for designated health services to entities with which the physician has a financial relationship, unless an exception applies.
- GlossaryDesignated Health Service (DHS)Categories of services subject to the physician self-referral prohibition under the Stark Law.
- ComplianceStark Law (Physician Self-Referral): Compliance Basics for Designated Health ServicesThe Stark Law is strict-liability, civil-only, and triggers on Medicare claims for designated health services where a financial relationship exists. Here is what Stark actually prohibits, how the exceptions work, and where practices misread the in-office ancillary services exception.
- RegulationStark Law Overview (42 USC 1395nn)Strict-liability prohibition on physician referrals to entities for designated health services payable by Medicare when the physician (or immediate family member) has a financial relationship with the entity, unless an exception applies.
- BillingWhat to Do When a Payer Says You're UnderbillingGot a letter saying you're underbilling? Here's what it actually means, whether you should worry, and what action to take.
- RegulationStark In-Office Ancillary Services Exception (42 CFR 411.355(b))Ownership/investment and compensation exception permitting many group-practice ancillary services (lab, imaging, PT) when furnished in the same building or centralized building under defined conditions.
- ComplianceAmbulatory Surgery Center Compliance: CMS + State + Infection Control42 CFR Part 416 Conditions for Coverage, CMS State Operations Manual Appendix L, the ASC Infection Control Surveyor Worksheet, and where state ASC licensure tightens the standard.
This glossary entry is a research aid for billing and compliance staff. It does not provide legal, medical, or financial advice and does not replace counsel. References cited link to primary sources at HHS, OCR, CMS, eCFR, NIST, and the relevant payer or industry body.