Stark Rental of Office Space Exception (42 CFR 411.357(a))
Stark exception for rental payments for office space with conditions on lease form, term, fair market value, and exclusive use of rented space.
Primary source
42 CFR 411.357(a) — eCFR →https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-411/subpart-J/section-411.357#p-411.357(a)
Verified May 23, 2026 · This is the authoritative regulator URL. The summary below is a research aid; the linked source controls.
42 CFR 411.357(a)) is the Stark exception for rental of office space. Conditions:
- Written agreement signed by the parties specifying the premises.
- Term: at least one year.
- Space rented: does not exceed that which is reasonable and necessary for the legitimate business purposes of the lease.
- Exclusive use: rented space is used exclusively by the lessee when being used by the lessee (no common areas during the rental periods).
- Rental charges: set in advance, consistent with fair market value, and not determined in a manner that takes into account the volume or value of referrals or other business generated.
- Commercially reasonable: would be commercially reasonable even if no referrals were made.
- Holdover: a holdover on the same terms is permitted indefinitely as of 2021 changes.
Part-time and timeshare arrangements (specialist using PCP space on certain days) are common Stark exposures because the "exclusive use" condition is read tightly. The 2020 Sprint to Coordinated Care rule added clarity on holdover and exclusivity but did not relax the strict-compliance posture.
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Related across the archive
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- RegulationAKS Space Rental Safe Harbor (42 CFR 1001.952(b))Safe harbor for rental payments for office space when six conditions are met, including written lease, at least one-year term, and aggregate rent set in advance at fair market value.
- RegulationStark Group Practice Definition (42 CFR 411.352)Strict structural and operational definition of 'group practice' for purposes of the in-office ancillary services exception and physician services exception.
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Last reviewed May 23, 2026 · Citation verified May 23, 2026
Research aid, not legal advice. This summary is an administrative research aid prepared by D3rx. It does not certify compliance, provide legal advice, replace counsel, or guarantee an audit outcome. For authoritative regulatory text follow the primary source link at the top of this page. The practice remains responsible for reviewing, adopting, and maintaining its compliance program.