§1307. Definitions
As used in this Part, the following terms shall have the following meanings unless
the context requires otherwise:
(1)"Commercially reasonable terms and conditions" means those terms and
conditions that would be reasonable to a prudent individual operating a business of similar
type and size as a rural hospital even in the absence of referrals to the rural hospital or
healthcare facility by a physician who owns, or whose immediate family member owns, an
interest in the healthcare facility in which the rural hospital has been offered the opportunity
to participate as an owner. The provisions of 42 U.S.C. 1395nn, also known as "Stark II",
the regulations promulgated by the Centers for Medicare and Medicaid Services, its
predecessor or successor, to implement Stark II, and Free access — add to your briefcase to read the full text and ask questions with AI
§1307. Definitions
As used in this Part, the following terms shall have the following meanings unless
the context requires otherwise:
(1) "Commercially reasonable terms and conditions" means those terms and
conditions that would be reasonable to a prudent individual operating a business of similar
type and size as a rural hospital even in the absence of referrals to the rural hospital or
healthcare facility by a physician who owns, or whose immediate family member owns, an
interest in the healthcare facility in which the rural hospital has been offered the opportunity
to participate as an owner. The provisions of 42 U.S.C. 1395nn, also known as "Stark II",
the regulations promulgated by the Centers for Medicare and Medicaid Services, its
predecessor or successor, to implement Stark II, and any regulatory guidance issued by the
Centers for Medicare and Medicaid Services, its predecessor or successor, shall be
considered in determining whether terms and conditions are commercially reasonable.
(2) "Department" means the Louisiana Department of Health.
(3) "Healthcare facility" means an independent diagnostic testing facility, magnetic
resonance imaging equipment or facility, computerized tomography equipment or facility,
Positron Emission Tomography scanner or facility, an ambulatory surgical center licensed
by the department, or any outpatient surgical facility required to be licensed by the
department as an ambulatory surgical center in order to obtain certification by Medicare as
an ambulatory surgical center. "Healthcare facility" shall not mean:
(a) A rural hospital that existed on April 1, 2006, or that replaces a rural hospital that
existed on April 1, 2006.
(b) A rural hospital that is a replacement facility of a rural hospital that was damaged
by Hurricane Rita or Hurricane Katrina.
(c) An entity owned or operated by the state of Louisiana or the United States.
(d) A physician's practice or a physician group practice, when such practice is owned
and operated exclusively by physicians, for the purpose of providing healthcare services, and
is not licensed or Medicare-certified as a rural health clinic.
(e) Any facility under development, including services provided by a mobile unit
which is part of an existing facility, as of April 1, 2006, or operating as of April 1, 2006. A
facility shall be considered under development if a representative of the facility has, prior to
April 1, 2006, filed a license application with the department for the establishment of the
proposed healthcare facility, or can demonstrate that a minimum of twenty-five thousand
dollars in architectural or engineering expenses have been incurred in connection with the
proposed facility prior to April 1, 2006, or has received a certificate of occupancy.
(f) Any community health care clinic or rural health clinic.
(4) "Healthcare services" means magnetic resonance imaging services, computerized
tomography services, Positron Emission Tomography scanner services, ultrasound services,
any other imaging services that have become generally accepted methods of providing
imaging services after April 17, 2006, as determined by the department, any services
rendered by an ambulatory surgical center licensed by the department, or any services
rendered by an outpatient surgical facility required to be licensed by the department as an
ambulatory surgical center in order to obtain certification by Medicare as an ambulatory
surgical center.
(5) "Immediate family member" means husband or wife; birth or adoptive parent,
child, or sibling; stepparent, stepchild, stepbrother or stepsister; father-in-law, mother-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law; grandparent or grandchild; and
spouse of grandparent or grandchild.
(6) "Primary service area" means the smaller of either a radius of twenty-five miles
from the rural hospital main campus or the number of postal zip codes, commencing with
the rural hospital's zip code, in which seventy-five percent of a rural hospital's patients reside,
as determined by using data derived from the hospital's most recent twelve month Medicare
cost reporting period. In determining the primary service area, each outpatient encounter and
each inpatient stay shall be viewed as a separate patient, and the zip code attributable to the
patient shall be the zip code of the patient at the time of the inpatient stay or outpatient
encounter. Notwithstanding any other provision contained herein to the contrary, the term
"primary service area" shall not include the cities of Alexandria, Baton Rouge, Bossier City,
Covington, Hammond, Houma, Kenner, Lafayette, Lake Charles, Mandeville, Monroe, New
Iberia, New Orleans, Opelousas, Ponchatoula, Ruston, Shreveport, Slidell, Thibodaux, or
West Monroe.
(7) "Proposing party" means a person or entity that offers to enter into a joint venture
with a rural hospital as well as any person or entity related to the proposing party by common
ownership or control as such terms are defined for purposes of 42 CFR 413.17, or its
successor provision.
(8) "Rural hospital" shall be defined as provided for in R.S. 40:1189.3, as such law
existed on April 1, 2006.