The federal and state governments have imposed significant regulations on health care generally and on ancillary services in particular. This article focuses on how state and federal laws shape the ability of an orthopedic physician to offer ancillary services, whether as an individual, through a group practice, or as part of a joint venture. It focuses on how the Stark law, the Medicare anti-kickback statute, state anti-kickback, fee-splitting provisions, certificate of need laws, and various Medicare billing and supervision requirements impact the provision of ancillary services. It also briefly discusses how physicians should prepare for and respond to government investigations.