<CFRTITLE> <LRH>42 CFR Ch. IV (10-1-02 Edition)</LRH> <RRH>Centers for Medicare & Medicaid Services, HHS</RRH> <TITLEHD> <PRTPAGE P="1"/> <HD SOURCE="HED">Title 42—Public Health</HD> (This book contains parts 400 to 429) </TITLEHD> <CFRTOC> <PTHD>Part</PTHD> <CHAPTI> <SUBJECT> <E T="04">chapter iv</E>— Centers for Medicare & Medicaid Services, Department of Health and Human Services</SUBJECT> <PG>400</PG> </CHAPTI> </CFRTOC> </CFRTITLE> <CHAPTER> <TOC> <TOCHD> <PRTPAGE P="3"/> <HD SOURCE="HED">CHAPTER IV—CENTERS FOR MEDICARE </HD> <HD SOURCE="HED">& MEDICAID SERVICES, </HD> <HD SOURCE="HED">DEPARTMENT OF HEALTH AND </HD> <HD SOURCE="HED">HUMAN SERVICES</HD> </TOCHD> <EDNOTE> <HD SOURCE="HED">Editorial Note:</HD> Nomenclature changes affecting chapter IV appear at 56 FR 8852, Mar. 1, 1991, 62 FR 46037, Aug. 29, 1997, 66 FR 39452, July 31, 2001, and 67 FR 36540, May 24, 2002. </EDNOTE> <SUBCHAP> <HD SOURCE="HED">SUBCHAPTER A—GENERAL PROVISIONS</HD> </SUBCHAP> <PTHD>Part</PTHD> <PGHD>Page</PGHD> <CHAPTI> <PT>400</PT> <SUBJECT>Introduction; definitions</SUBJECT> <PG>5</PG> <PT>401</PT> <SUBJECT>General administrative requirements</SUBJECT> <PG>9</PG> <PT>402</PT> <SUBJECT>Civil money penalties, assessments, and exclusions</SUBJECT> <PG>22</PG> <PT>403</PT> <SUBJECT>Special programs and projects</SUBJECT> <PG>36</PG> </CHAPTI> <SUBCHAP> <HD SOURCE="HED">SUBCHAPTER B—MEDICARE PROGRAM</HD> </SUBCHAP> <CHAPTI> <PT>405</PT> <SUBJECT>Federal health insurance for the aged and disabled</SUBJECT> <PG>65</PG> <PT>406</PT> <SUBJECT>Hospital insurance eligibility and entitlement</SUBJECT> <PG>172</PG> <PT>407</PT> <SUBJECT>Supplementary medical insurance (SMI) enrollment and entitlement</SUBJECT> <PG>188</PG> <PT>408</PT> <SUBJECT>Premiums for supplementary medical insurance</SUBJECT> <PG>198</PG> <PT>409</PT> <SUBJECT>Hospital insurance benefits</SUBJECT> <PG>215</PG> <PT>410</PT> <SUBJECT>Supplementary medical insurance (SMI) benefits</SUBJECT> <PG>241</PG> <PT>411</PT> <SUBJECT>Exclusions from Medicare and limitations on Medicare payment</SUBJECT> <PG>299</PG> <PT>412</PT> <SUBJECT>Prospective payment systems for inpatient hospital services</SUBJECT> <PG>367</PG> <PT>413</PT> <SUBJECT>Principles of reasonable cost reimbursement; payment for end-stage renal disease services; prospectively determined payment rates for skilled nursing facilities</SUBJECT> <PG>490</PG> <PT>414</PT> <SUBJECT>Payment for Part B medical and other health services</SUBJECT> <PG>622</PG> <PT>415</PT> <SUBJECT>Services furnished by physicians in providers, supervising physicians in teaching settings, and residents in certain settings</SUBJECT> <PG>654</PG> <PT>416</PT> <SUBJECT>Ambulatory surgical services</SUBJECT> <PG>672<PRTPAGE P="4"/> </PG> <PT>417</PT> <SUBJECT>Health maintenance organizations, competitive medical plans, and health care prepayment plans</SUBJECT> <PG>682</PG> <PT>418</PT> <SUBJECT>Hospice care</SUBJECT> <PG>775</PG> <PT>419</PT> <SUBJECT>Prospective payment system for hospital outpatient department services</SUBJECT> <PG>792</PG> <PT>420</PT> <SUBJECT>Program integrity: Medicare</SUBJECT> <PG>804</PG> <PT>421</PT> <SUBJECT>Intermediaries and carriers</SUBJECT> <PG>815</PG> <PT>422</PT> <SUBJECT>Medicare+Choice program</SUBJECT> <PG>827</PG> <PT>424</PT> <SUBJECT>Conditions for Medicare payment</SUBJECT> <PG>931</PG> </CHAPTI> </TOC> <SUBCHAP TYPE="N"> <PRTPAGE P="5"/> <HD SOURCE="HED">SUBCHAPTER A—GENERAL PROVISIONS</HD> <PART> <EAR>Pt. 400</EAR> <HD SOURCE="HED">PART 400—INTRODUCTION; DEFINITIONS</HD> <CONTENTS> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Definitions</HD> <SECHD>Sec.</SECHD> <SECTNO>400.200</SECTNO> <SUBJECT>General definitions.</SUBJECT> <SECTNO>400.202</SECTNO> <SUBJECT>Definitions specific to Medicare.</SUBJECT> <SECTNO>400.203</SECTNO> <SUBJECT>Definitions specific to Medicaid.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—OMB Control Numbers for Approved Collections of Information</HD> <SECTNO>400.300</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>400.310</SECTNO> <SUBJECT>Display of currently valid OMB control numbers.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35. </AUTH> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Definitions</HD> <SECTION> <SECTNO>§ 400.200</SECTNO> <SUBJECT>General definitions.</SUBJECT> In this chapter, unless the context indicates otherwise— <E T="03">Act</E> means the Social Security Act, and titles referred to are titles of that Act. <E T="03">Administrator</E> means the Administrator, Centers for Medicare & Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA). <E T="03">ALJ</E> stands for administrative law judge. <E T="03">Area</E> means the geographical area within the boundaries of a State, or a State or other jurisdiction, designated as constituting an area with respect to which a Professional Standards Review Organization or a Utilization and Quality Control Peer Review Organization has been or may be designated. <E T="03">CMP</E> stands for competitive medical plan. <E T="03">Conditions of participation</E> includes <E T="03">requirements for participation</E> as the latter term is used in part 483 of this chapter. <E T="03">Condition level</E> deficiencies includes deficiencies with respect to “level A requirements” as the latter term is used in parts 442 and 483 of this chapter. <E T="03">CORF</E> stands for comprehensive outpatient rehabilitation facility. <E T="03">CFR</E> stands for Code of Federal Regulations. <E T="03">CMS</E> stands for Centers for Medicare & Medicaid Services, formerly the Health Care Financing Administration (HCFA). <E T="03">CY</E> stands for calendar year. <E T="03">DAB</E> stands for Departmental Appeals Board. <E T="03">Department</E> means the Department of Health and Human Services (HHS), formerly the Department of Health, Education, and Welfare. <E T="03">ESRD</E> stands for end-stage renal disease. <E T="03">FDA</E> stands for the Food and Drug Administration. <E T="03">FQHC</E> means Federally qualified health center. <E T="03">FR</E> stands for <E T="04">Federal Register.</E> <E T="03">FY</E> stands for fiscal year. <E T="03">HCPP</E> stands for health care prepayment plan. <E T="03">HHS</E> stands for the Department of Health and Human Services. <E T="03">HHA</E> stands for home health agency. <E T="03">HMO</E> stands for health maintenance organization. <E T="03">ICF</E> stands for intermediate care facility. <E T="03">ICF/MR</E> stands for intermediate care facility for the mentally retarded. <E T="03">Medicaid</E> means medical assistance provided under a State plan approved under title XIX of the Act. <E T="03">Medicare</E> means the health insurance program for the aged and disabled under title XVIII of the Act. <E T="03">NCD</E> stands for national coverage determination. <E T="03">OASDI</E> stands for the Old Age, Survivors, and Disability Insurance program under title II of the Act. <E T="03">OIG</E> stands for the Department's Office of the Inspector General. <E T="03">QDWI</E> stands for Qualified Disabled and Working Individual. <E T="03">QIO</E> stands for quality improvement organization. <E T="03">QMB</E> stands for Qualified Medicare Beneficiary. <E T="03">Qualified Disabled and Working Individual</E> means an individual who—<PRTPAGE P="6"/> (1) Is eligible to enroll for Medicare Part A under section 1818A of the Act. (2) Has income, as determined in accordance with SSI methodologies, that does not exceed 200 percent of the Federal poverty guidelines (as defined and revised annually by the Office of Management and Budget) for a family of the size of the individual's family; (3) Has resources, as determined in accordance with SSI methodologies, that do not exceed twice the relevant maximum amount established, for SSI eligibility, for an individual or for an individual and his or her spouse; and (4) Is not otherwise eligible for Medicaid. <E T="03">Qualified Medicare Beneficiary</E> means an individual who— (1) Is entitled to Medicare Part A, with or without payment of premiums, but is not entitled solely because he or she is eligible to enroll as a QDWI; (2) Has resources, as determined in accordance with SSI methodologies, that do not exceed twice the maximum amount established for SSI eligibility; and (3) Has income, as determined in accordance with SSI methodologies, that does not exceed 100 percent of the Federal poverty guidelines. <E T="03">Quality improvement organization</E> means an organization that has a contract with CMS, under part B of title XI of the Act, to perform utilization and quality control review of the health care furnished, or to be furnished, to Medicare beneficiaries. <E T="03">Regional Administrator</E> means a Regional Administrator of CMS. <E T="03">Regional Office</E> means one of the regional offices of CMS. <E T="03">RHC</E> stands for rural health clinic. <E T="03">RRB</E> stands for Railroad Retirement Board. <E T="03">Secretary</E> means the Secretary of Health and Human Services. <E T="03">SNF</E> stands for skilled nursing facility. <E T="03">Social security benefits</E> means monthly cash benefits payable under section 202 or 223 of the Act. <E T="03">SSA</E> stands for Social Security Administration. <E T="03">United States</E> means the fifty States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. <E T="03">U.S.C.</E> stands for United States Code. <CITA>[48 FR 12534, Mar. 25, 1983, as amended at 49 FR 7206, Feb. 27, 1984; 50 FR 15326 and 15358, Apr. 17, 1985; 50 FR 41886, Oct. 16, 1985; 51 FR 43197, Dec. 1, 1986; 52 FR 27764, July 23, 1987; 56 FR 8852, Mar. 1, 1991; 56 FR 38077, Aug. 12, 1991; 57 FR 24975, June 12, 1992; 57 FR 55912, Nov. 25, 1992; 63 FR 35065, June 26, 1998; 63 FR 52611, Oct. 1, 1998; 63 FR 68690, Dec. 14, 1998; 66 FR 39452, July 31, 2001; 67 FR 36540, May 24, 2002]</CITA> </SECTION> <SECTION> <SECTNO>§ 400.202</SECTNO> <SUBJECT>Definitions specific to Medicare.</SUBJECT> As used in connection with the Medicare program, unless the context indicates otherwise— <E T="03">Beneficiary</E> means a person who is entitled to Medicare benefits. <E T="03">Carrier</E> means an entity that has a contract with CMS to determine and make Medicare payments for Part B benefits payable on a charge basis and to perform other related functions. <E T="03">Critical access hospital (CAH)</E> means a facility designated by HFCA as meeting the applicable requirements of section 1820 of the Act and of subpart F of part 485 of this chapter. <E T="03">Entitled</E> means that an individual meets all the requirements for Medicare benefits. <E T="03">Essential access community hospital (EACH)</E> means a hospital designated by CMS as meeting the applicable requirements of section 1820 of the Act and of subpart G of part 412 of this chapter, as in effect on September 30, 1997. <E T="03">GME</E> stands for graduate medical education. <E T="03">Hospital insurance benefits</E> means payments on behalf of, and in rare circumstances directly to, an entitled individual for services that are covered under Part A of title XVIII of the Act. <E T="03">Intermediary</E> means an entity that has a contract with CMS to determine and make Medicare payments for Part A or Part B benefits payable on a cost basis and to perform other related functions. <E T="03">Medicare Part A</E> means the hospital insurance program authorized under Part A of title XVIII of the Act. <E T="03">Medicare Part B</E> means the supplementary medical insurance program authorized under Part B of title XVIII of the Act.<PRTPAGE P="7"/> <E T="03">National coverage determination (NCD)</E> means a national policy determination regarding the coverage status of a particular service, that makes under section 1862(a)(1) of the Act, and publishes as a <E T="04">Federal Register</E> notice or CMS Ruling. (The term does not include coverage changes mandated by statute.) <E T="03">Nonparticipating supplier</E> means a supplier that does not have an agreement with CMS to participate in Part B of Medicare in effect on the date of the service. <E T="03">Participating supplier</E> means a supplier that has an agreement with CMS to participate in Part B of Medicare in effect on the date of the service. <E T="03">Payment on an assignment-related basis</E> means payment for Part B services— (1) To a physician or other supplier that accepts assignment from the beneficiary, in accordance with § 424.55 or § 424.56 of this chapter; (2) To a physician or other supplier after the beneficiary's death, in accordance with § 424.64(c)(1) of this chapter; or (3) To an entity that pays the physician or other supplier under a health benefit plan, in accordance with § 424.66 of this chapter. <E T="03">Provider</E> means a hospital, a CAH, a skilled nursing facility, a comprehensive outpatient rehabilitation facility, a home health agency, or a hospice that has in effect an agreement to participate in Medicare, or a clinic, a rehabilitation agency, or a public health agency that has in effect a similar agreement but only to furnish outpatient physical therapy or speech pathology services, or a community mental health center that has in effect a similar agreement but only to furnish partial hospitalization services. <E T="03">Railroad retirement benefits</E> means monthly benefits payable to individuals under the Railroad Retirement Act of 1974 (45 U.S.C. beginning at section 231). <E T="03">Services</E> means medical care or services and items, such as medical diagnosis and treatment, drugs and biologicals, supplies, appliances, and equipment, medical social services, and use of hospital, CAH, or SNF facilities. <E T="03">Supplementary medical insurance benefits</E> means payment to or on behalf of an entitled individual for services covered under Part B of title XVIII of the Act. <E T="03">Supplier</E> means a physician or other practitioner, or an entity other than a provider, that furnishes health care services under Medicare. <CITA>[48 FR 12534, Mar. 25, 1983, as amended at 48 FR 56024, Dec. 16, 1983; 49 FR 3658, Jan. 30, 1984; 51 FR 43197, Dec. 1, 1986; 52 FR 27764, July 23, 1987; 55 FR 24567, June 18, 1990; 56 FR 8852, Mar. 1, 1991; 58 FR 30666, May 26, 1993; 59 FR 6576, Feb. 11, 1994; 60 FR 63175, Dec. 8, 1995; 62 FR 46025, Aug. 29, 1997; 62 FR 59098, Oct. 31, 1997; 63 FR 35065, June 26, 1998]</CITA> </SECTION> <SECTION> <SECTNO>§ 400.203</SECTNO> <SUBJECT>Definitions specific to Medicaid.</SUBJECT> As used in connection with the Medicaid program, unless the context indicates otherwise— <E T="03">Applicant</E> means an individual whose written application for Medicaid has been submitted to the agency determining Medicaid eligibility, but has not received final action. This includes an individual (who need not be alive at the time of application) whose application is submitted through a representative or a person acting responsibly for the individual. <E T="03">Federal financial participation</E> (FFP) means the Federal Government's share of a State's expenditures under the Medicaid program. <E T="03">FMAP</E> stands for the Federal medical assistance percentage, which is used to calculate the amount of Federal share of State expenditures for services. <E T="03">Medicaid agency</E> or <E T="03">agency</E> means the single State agency administering or supervising the administration of a State Medicaid plan. <E T="03">Nursing facility (NF),</E> effective October 1, 1990, means an SNF or an ICF participating in the Medicaid program. <E T="03">PCCM</E> stands for primary care case manager. <E T="03">PCP</E> stands for primary care physician. <E T="03">Provider</E> means either of the following: (1) For the fee-for-service program, any individual or entity furnishing Medicaid services under an agreement with the Medicaid agency. (2) For the managed care program, any individual or entity that is engaged in the delivery of health care services and is legally authorized to do <PRTPAGE P="8"/>so by the State in which it delivers the services. <E T="03">Recipient</E> means an individual who has been determined eligible for Medicaid. <E T="03">Services</E> means the types of medical assistance specified in section 1905(a) of the Act and defined in subpart A of part 440 of this chapter. <E T="03">State</E> means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa and the Northern Mariana Islands. <E T="03">State plan</E> or <E T="03">the plan</E> means a comprehensive written commitment by a Medicaid agency, submitted under section 1902(a) of the Act, to administer or supervise the administration of a Medicaid program in accordance with Federal requirements. <CITA>[48 FR 12534, Mar. 25, 1983, as amended at 50 FR 33029, Aug. 16, 1985; 56 FR 8852, Mar. 1, 1991; 57 FR 29155, June 30, 1992; 67 FR 41094, June 14, 2002]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—OMB Control Numbers for Approved Collections of Information</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 49 FR 4477, Feb. 7, 1984, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 400.300</SECTNO> <SUBJECT>Scope.</SUBJECT> This subpart collects and displays control numbers assigned by the Office of Management and Budget (OMB) to collections of information contained in CMS regulations, in accordance with OMB's regulations for controlling paperwork burdens on the public, 5 CFR part 1320. CMS intends that the subpart comply with the requirements of section 3507(f) of the Paperwork Reduction Act of 1980, 44 U.S.C. chapter 35 which requires that agencies shall not engage in a “collection of information” without obtaining a control number from OMB. </SECTION> <SECTION> <SECTNO>§ 400.310</SECTNO> <SUBJECT>Display of currently valid OMB control numbers.</SUBJECT> <GPOTABLE CDEF="s10,11" COLS="2" OPTS="L2,i1"> <BOXHD> <CHED H="1">Sections in 42 CFR that contain collections of information</CHED> <CHED H="1">Current OMB control Nos.</CHED> </BOXHD> <ROW> <ENT I="01">403.510 </ENT> <ENT>0938—0641</ENT> </ROW> <ROW> <ENT I="01">405.509 </ENT> <ENT>0938—0666</ENT> </ROW> <ROW> <ENT I="01">405.512 </ENT> <ENT>0938—0008</ENT> </ROW> <ROW> <ENT I="01">405.2112, 405.2123, 405.2134, 405.2136-405.2140, 405.2171 </ENT> <ENT>0938—0386</ENT> </ROW> <ROW> <ENT I="01">409.43 </ENT> <ENT>0938—0365</ENT> </ROW> <ROW> <ENT I="01">410.105 </ENT> <ENT>0938—0267</ENT> </ROW> <ROW> <ENT I="01">411.25, 411.32 </ENT> <ENT>0938—0564</ENT> </ROW> <ROW> <ENT I="01">411.54 </ENT> <ENT>0938—0558</ENT> </ROW> <ROW> <ENT I="01">411.165 </ENT> <ENT>0938—0564</ENT> </ROW> <ROW> <ENT I="01">411.404, 411.406 </ENT> <ENT>0938—0465</ENT> </ROW> <ROW> <ENT I="01">411.408 </ENT> <ENT>0938—0566</ENT> </ROW> <ROW> <ENT I="01">412.42 </ENT> <ENT>0938—0666</ENT> </ROW> <ROW> <ENT I="01">412.92 </ENT> <ENT>0938—0477</ENT> </ROW> <ROW> <ENT I="01">412.105 </ENT> <ENT>0938—0456</ENT> </ROW> <ROW> <ENT I="01">412.230, 412.232, 412.234, 412.236, 412.254, 412.260, 412.266, 412.278 </ENT> <ENT>0938—0573</ENT> </ROW> <ROW> <ENT I="01">415.60 </ENT> <ENT>0938—0301</ENT> </ROW> <ROW> <ENT I="01">415.162 </ENT> <ENT>0938—0301</ENT> </ROW> <ROW> <ENT I="01">416.43 </ENT> <ENT>0938—0506</ENT> </ROW> <ROW> <ENT I="01">416.47 </ENT> <ENT>0938—0266 <LI O="oi0"> and </LI> <LI>0938—0506</LI> </ENT> </ROW> <ROW> <ENT I="01">417.126 </ENT> <ENT>0938—0472</ENT> </ROW> <ROW> <ENT I="01">417.436, 417.801 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">418.22, 418.24, 418.28, 418.56, 418.58, 418.70, 418.74 </ENT> <ENT>0938—0302</ENT> </ROW> <ROW> <ENT I="01">418.30, 418.82, 418.83, 418.96, 418.100 </ENT> <ENT>0938—0475</ENT> </ROW> <ROW> <ENT I="01">418.96, 418.100 </ENT> <ENT>0938—0302</ENT> </ROW> <ROW> <ENT I="01">421.117 </ENT> <ENT>0938—0542</ENT> </ROW> <ROW> <ENT I="01">424.3 </ENT> <ENT>0938—0008</ENT> </ROW> <ROW> <ENT I="01">424.5, 424.7, 424.20 </ENT> <ENT>0938—0454</ENT> </ROW> <ROW> <ENT I="01">424.22 </ENT> <ENT>0938—0489</ENT> </ROW> <ROW> <ENT I="01">424.32, 424.34 </ENT> <ENT>0938—0008</ENT> </ROW> <ROW> <ENT I="01">431.17 </ENT> <ENT>0938—0467</ENT> </ROW> <ROW> <ENT I="01">431.50, 431.52, 431.55 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">431.107 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">431.306 </ENT> <ENT>0938—0467</ENT> </ROW> <ROW> <ENT I="01">431.625 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">431.630 </ENT> <ENT>0938—0445</ENT> </ROW> <ROW> <ENT I="01">431.800 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">431.806, 431.830, 431.432, 431.834, 431.836 </ENT> <ENT>0938—0438</ENT> </ROW> <ROW> <ENT I="01">432.50 </ENT> <ENT>0938—0459</ENT> </ROW> <ROW> <ENT I="01">433.36, 433.37 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">433.68, 433.74 </ENT> <ENT>0938—0618</ENT> </ROW> <ROW> <ENT I="01">433.110, 433.112-433.114, 433.116, 433.117, 433.119-433.121, 433.123, 433.127, 433.130, 433.131, 433.135 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">433.138 </ENT> <ENT>0938—0502 <LI>0938—0553 </LI> <LI O="oi0"> and </LI> <LI>0938—0555</LI> </ENT> </ROW> <ROW> <ENT I="01">433.139 </ENT> <ENT>0938—0459 <LI>0938—0554 </LI> <LI O="oi0"> and </LI> <LI>0938—0555</LI> </ENT> </ROW> <ROW> <ENT I="01">434.27 </ENT> <ENT>0938—0572</ENT> </ROW> <ROW> <ENT I="01">434.28 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">435.1, 435.910, 435.919, 435.920, 435.940, 435.945, 435.948, 435.952, 435.953, 435.955, 435.960, 435.965, 435.1003, 441.11, 441.15, 441.20 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">441.56, 441.58, 441.60, 441.61 </ENT> <ENT>0938—0354</ENT> </ROW> <ROW> <ENT I="01">441.302 </ENT> <ENT>0938—0449</ENT> </ROW> <ROW> <ENT I="01">441.303 </ENT> <ENT>0938—0272 <LI O="oi0"> and </LI> <LI>0938—0449</LI> </ENT> </ROW> <ROW> <ENT I="01">441.351, 441.352, 441.353, 441.356, 441.365 </ENT> <ENT>0938—0613</ENT> </ROW> <ROW> <ENT I="01">442.505 </ENT> <ENT>0938—0366</ENT> </ROW> <ROW> <ENT I="01">447.31 </ENT> <ENT>0938—0287</ENT> </ROW> <ROW> <ENT I="01">447.45, 447.50, 447.51, 447.52 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">447.53 </ENT> <ENT>0938—0429</ENT> </ROW> <ROW> <ENT I="01">447.55 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">447.253 </ENT> <ENT>0938—0366 <LI>0938—0523 </LI> <LI O="oi0"> and </LI> <LI>0938—0556</LI> </ENT> </ROW> <ROW> <ENT I="01">447.255 </ENT> <ENT>0938—0193</ENT> </ROW> <ROW> <PRTPAGE P="9"/> <ENT I="01">447.272, 447.299 </ENT> <ENT>0938—0618</ENT> </ROW> <ROW> <ENT I="01">447.302, 447.331, 447.332, 447.333 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">456.80 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">456.654 </ENT> <ENT>0938—0445</ENT> </ROW> <ROW> <ENT I="01">456.700, 456.705, 456.709, 456.711, 456.712 </ENT> <ENT>0938—0659</ENT> </ROW> <ROW> <ENT I="01">462.102, 462.103 </ENT> <ENT>0938—0526</ENT> </ROW> <ROW> <ENT I="01">466.70, 466.72, 466.74 </ENT> <ENT>0938—0445</ENT> </ROW> <ROW> <ENT I="01">466.78 </ENT> <ENT>0938—0445 <LI O="oi0"> and </LI> <LI>0938—0665</LI> </ENT> </ROW> <ROW> <ENT I="01">466.80, 466.94 </ENT> <ENT>0938—0445</ENT> </ROW> <ROW> <ENT I="01">473.18, 473.34, 473.36, 473.42 </ENT> <ENT>0938—0443</ENT> </ROW> <ROW> <ENT I="01">476.104, 476.105, 476.116, 476.134 </ENT> <ENT>0938—0426</ENT> </ROW> <ROW> <ENT I="01">481.61 </ENT> <ENT>0938—0328</ENT> </ROW> <ROW> <ENT I="01">482.12, 482.21, 482.22, 482.27, 482.30, 482.41, 482.43, 482.53, 482.56, 482.57, 482.60, 482.62 </ENT> <ENT>0938—0328</ENT> </ROW> <ROW> <ENT I="01">483.10 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">483.410, 483.420, 483.440, 483.460, 483.470 </ENT> <ENT>0938—0366</ENT> </ROW> <ROW> <ENT I="01">484.1, 484.2 </ENT> <ENT>0938—0365</ENT> </ROW> <ROW> <ENT I="01">484.10 </ENT> <ENT>0938—0365 <LI O="oi0"> and </LI> <LI>0938—0610</LI> </ENT> </ROW> <ROW> <ENT I="01">484.12, 484.14, 484.16, 484.18, 484.30, 484.32, 484.34, 484.36, 484.48, 484.52 </ENT> <ENT>0938—0365</ENT> </ROW> <ROW> <ENT I="01">485.56, 485.58, 485.60, 485.64, 485.66 </ENT> <ENT>0938—0267 <LI O="oi0"> and </LI> <LI>0938—0538</LI> </ENT> </ROW> <ROW> <ENT I="01">485.709, 485.711, 485.717, 485.719, 485.721, 487.723, 485.725, 485.727 </ENT> <ENT>0938—0336</ENT> </ROW> <ROW> <ENT I="01">486.104, 486.106, 486.110 </ENT> <ENT>0938—0338</ENT> </ROW> <ROW> <ENT I="01">486.155, 486.161, 486.163 </ENT> <ENT>0938—0336</ENT> </ROW> <ROW> <ENT I="01">488.10 </ENT> <ENT>0938—0646</ENT> </ROW> <ROW> <ENT I="01">488.18 </ENT> <ENT>0938—0667</ENT> </ROW> <ROW> <ENT I="01">488.26 </ENT> <ENT>0938—0646</ENT> </ROW> <ROW> <ENT I="01">489.20 </ENT> <ENT>0938—0564 <LI O="oi0"> and </LI> <LI>0938—0667</LI> </ENT> </ROW> <ROW> <ENT I="01">489.24 </ENT> <ENT>0938—0334 <LI>0938—0663 </LI> <LI O="oi0">and </LI> <LI>0938—0667</LI> </ENT> </ROW> <ROW> <ENT I="01">489.102 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">491.9, 491.10 </ENT> <ENT>0938—0334</ENT> </ROW> <ROW> <ENT I="01">493.35, 493.37, 493.39, 493.43, 493.45, 493.47, 493.49, 493.51, 493.53,</ENT> </ROW> <ROW> <ENT I="01">493.55, 493.60, 493.61, 493.62, 493.63 </ENT> <ENT>0938—0612</ENT> </ROW> <ROW> <ENT I="01">493.614, 493.633, 494.634 </ENT> <ENT>0938—0607</ENT> </ROW> <ROW> <ENT I="01">493.801-493.1285, 493.1425, 493.1701, 493.1703, 493.1705, 493.1707, 493.1709, 493.1711, 493.1713, 493.1715, 493.1717, 493.1719, 493.1721, 493.1775, 493.1776, 493.1777, 493.1780, 493.2001 </ENT> <ENT>0938—0612</ENT> </ROW> <ROW> <ENT I="01">494.52, 494.54, 494.56, 494.58, 494.64 </ENT> <ENT>0938—0608</ENT> </ROW> <ROW> <ENT I="01">498.22, 498.40, 498.58, 498.82 </ENT> <ENT>0938—0508</ENT> </ROW> <ROW> <ENT I="01">1004.40, 1004.50, 1004.60, 1004.70 </ENT> <ENT>0938—0444</ENT> </ROW> </GPOTABLE> <CITA>[60 FR 50445, Sept. 29, 1995, as amended at 60 FR 63188, Dec. 8, 1995]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 401</EAR> <HD SOURCE="HED">PART 401—GENERAL ADMINISTRATIVE REQUIREMENTS</HD> <CONTENTS> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Confidentiality and Disclosure</HD> <SECHD>Sec.</SECHD> <SECTNO>401.101</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <SECTNO>401.102</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>401.105</SECTNO> <SUBJECT>Rules for disclosure.</SUBJECT> <SECTNO>401.106</SECTNO> <SUBJECT>Publication.</SUBJECT> <SECTNO>401.108</SECTNO> <SUBJECT>CMS rulings.</SUBJECT> <SECTNO>401.110</SECTNO> <SUBJECT>Publications for sale.</SUBJECT> <SECTNO>401.112</SECTNO> <SUBJECT>Availability of administrative staff manuals.</SUBJECT> <SECTNO>401.116</SECTNO> <SUBJECT>Availability of records upon request.</SUBJECT> <SECTNO>401.118</SECTNO> <SUBJECT>Deletion of identifying details.</SUBJECT> <SECTNO>401.120</SECTNO> <SUBJECT>Creation of records.</SUBJECT> <SECTNO>401.126</SECTNO> <SUBJECT>Information or records that are not available.</SUBJECT> <SECTNO>401.128</SECTNO> <SUBJECT>Where requests for records may be made.</SUBJECT> <SECTNO>401.130</SECTNO> <SUBJECT>Materials available at social security district offices and branch offices.</SUBJECT> <SECTNO>401.132</SECTNO> <SUBJECT>Materials in field offices of the Office of Hearings and Appeals, SSA.</SUBJECT> <SECTNO>401.133</SECTNO> <SUBJECT>Availability of official reports on providers and suppliers of services, State agencies, intermediaries, and carriers under Medicare.</SUBJECT> <SECTNO>401.134</SECTNO> <SUBJECT>Release of Medicare information to State and Federal agencies.</SUBJECT> <SECTNO>401.135</SECTNO> <SUBJECT>Release of Medicare information to the public.</SUBJECT> <SECTNO>401.136</SECTNO> <SUBJECT>Requests for information or records.</SUBJECT> <SECTNO>401.140</SECTNO> <SUBJECT>Fees and charges.</SUBJECT> <SECTNO>401.144</SECTNO> <SUBJECT>Denial of requests.</SUBJECT> <SECTNO>401.148</SECTNO> <SUBJECT>Administrative review.</SUBJECT> <SECTNO>401.152</SECTNO> <SUBJECT>Court review.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subparts C-E [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Claims Collection and Compromise</HD> <SECTNO>401.601</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SECTNO>401.603</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>401.605</SECTNO> <SUBJECT>Omissions not a defense.</SUBJECT> <SECTNO>401.607</SECTNO> <SUBJECT>Claims collection.</SUBJECT> <SECTNO>401.613</SECTNO> <SUBJECT>Compromise of claims.</SUBJECT> <SECTNO>401.615</SECTNO> <SUBJECT>Payment of compromise amount.</SUBJECT> <SECTNO>401.617</SECTNO> <SUBJECT>Suspension of collection action.</SUBJECT> <SECTNO>401.621</SECTNO> <SUBJECT>Termination of collection action.</SUBJECT> <SECTNO>401.623</SECTNO> <SUBJECT>Joint and several liability.</SUBJECT> <SECTNO>401.625</SECTNO> <SUBJECT>Effect of CMS claims collection decisions on appeals.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). Subpart F is also issued under the authority of the Federal Claims Collection Act (31 U.S.C. 3711). </AUTH> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Confidentiality and Disclosure</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 46 FR 55696, Nov. 12, 1981, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 401.101</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> (a) The regulations in this subpart:<PRTPAGE P="10"/> (1) Implement section 1106(a) of the Social Security Act as it applies to the Centers for Medicare & Medicaid Services (CMS). The rules apply to information obtained by officers or employees of CMS in the course of administering title XVIII of the Social Security Act (Medicare), information obtained by Medicare intermediaries or carriers in the course of carrying out agreements under sections 1816 and 1842 of the Social Security Act, and any other information subject to section 1106(a) of the Social Security Act; (2) Relate to the availability to the public, under 5 U.S.C. 552, of records of CMS and its components. They set out what records are available and how they may be obtained; and (3) Supplement the regulations of the Department of Health and Human Services relating to availability of information under 5 U.S.C. 552, codified in 45 CFR part 5, and do not replace or restrict them. (b) Except as authorized by the rules in this subpart, no information described in paragraph (a)(1) of this section shall be disclosed. The procedural rules in this subpart (§§ 401.106 through 401.152) shall be applied to requests for information which is subject to the rules for disclosure in this subpart. (c) Requests for information which may not be disclosed according to the provisions of this subpart shall be denied under authority of section 1106(a) of the Social Security Act and this subpart, and furthermore, such requests which have been made pursuant to the Freedom of Information Act shall be denied under authority of an appropriate Freedom of Information Act exemption, 5 U.S.C. 552(b). </SECTION> <SECTION> <SECTNO>§ 401.102</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart: <E T="03">Act</E> means the Social Security Act. <E T="03">Freedom of Information Act rules</E> means the substantive mandatory disclosure provisions of the Freedom of Information Act, 5 U.S.C. 552 (including the exemptions from mandatory disclosure, 5 U.S.C. 552(b), as implemented by the Department's public information regulation, 45 CFR part 5, subpart F and by §§ 401.106 to 401.152 of this subpart. <E T="03">Person</E> means a person as defined in the Administrative Procedure Act, 5 U.S.C. 551(2). This includes State or local agencies, but does not include Federal agencies or State or Federal courts. <E T="03">Record</E> has the same meaning as that provided in 45 CFR 5.5. <E T="03">Subject individual</E> means an individual whose record is maintained by the Department in a system of records, as the terms “individual,” “record”, and “system of records” are defined in the Privacy Act of 1974, 5 U.S.C. 552a(a). </SECTION> <SECTION> <SECTNO>§ 401.105</SECTNO> <SUBJECT>Rules for disclosure.</SUBJECT> (a) <E T="03">General rule.</E> The Freedom of Information Act rules shall be applied to every proposed disclosure of information. If, considering the circumstances of the disclosure, the information would be made available in accordance with the Freedom of Information Act rules, then the information may be disclosed regardless of whether the requester or recipient of the information has a statutory right to request the information under the Freedom of Information Act, 5 U.S.C. 552, or whether a request has been made. (b) <E T="03">Application of the general rule.</E> Pursuant to the general rule in paragraph (a) of this section, (1) Information shall be disclosed— (i) To a subject individual when required by the access provision of the Privacy Act, 5 U.S.C. 552a(d), as implemented by the Department Privacy Act regulation, 45 CFR part 5b; and (ii) To a person upon request when required by the Freedom of Information Act, 5 U.S.C. 552; (2) Unless prohibited by any other statute (e.g., the Privacy Act of 1974, 5 U.S.C. 552a(b), the Tax Reform Act of 1976, 26 U.S.C. 6103, or section 1106(d) and (e) of the Social Security Act), information may be disclosed to any requester or recipient of the information, including another Federal agency or a State or Federal court, when the information would not be exempt from mandatory disclosure under Freedom of Information Act rules or when the information nevertheless would be made available under the Department's public information regulation's criteria for disclosures which are in the public interest and consistent with obligations <PRTPAGE P="11"/>of confidentiality and administrative necessity, 45 CFR part 5, subpart F, as supplemented by §§ 401.106 to 401.152 of this subpart. <CITA>[42 FR 14704, Mar. 16, 1977. Redesignated at 45 FR 74913, 74914, Nov. 13, 1980, and correctly redesignated at 46 FR 24551, May 1, 1981, as amended at 46 FR 55697, Nov. 12, 1981]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.106</SECTNO> <SUBJECT>Publication.</SUBJECT> (a) <E T="03">Methods of publication.</E> Materials required to be published under the provisions of The Freedom of Information Act, 5 U.S.C. 552 (a)(1) and (2) are published in one of the following ways: (1) By publication in the <E T="04">Federal Register</E> of CMS regulations, and by their subsequent inclusion in the Code of Federal Regulations; (2) By publication in the <E T="04">Federal Register</E> of appropriate general notices; (3) By other forms of publication, when incorporated by reference in the <E T="04">Federal Register</E> with the approval of the Director of the Federal Register; and (4) By publication of indexes of precedential orders and opinions issued in the adjudication of claims, statements of policy and interpretations which have been adopted but have not been published in the <E T="04">Federal Register,</E> and of administrative staff manuals and instructions to staff that affect a member of the public. (b) <E T="03">Availability for inspection.</E> Those materials which are published in the <E T="04">Federal Register</E> pursuant to 5 U.S.C. 552(a)(1) shall, to the extent practicable and to further assist the public, be made available for inspection at the places specified in § 401.128. <CITA>[46 FR 55696, Nov. 12, 1981, as amended at 48 FR 22924, May 23, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.108</SECTNO> <SUBJECT>CMS rulings.</SUBJECT> (a) After September 1981, a precedent final opinion or order or a statement of policy or interpretation that has not been published in the <E T="04">Federal Register</E> as a part of a regulation or of a notice implementing regulations, but which has been adopted by CMS as having precedent, may be published in the <E T="04">Federal Register</E> as a CMS Ruling and will be made available in the publication entitled <E T="03">CMS Rulings.</E> (b) Precedent final opinions and orders and statements of policy and interpretation that were adopted by CMS before October, 1981, and that have not been published in the <E T="04">Federal Register</E> are available in <E T="03">CMS Rulings.</E> (c) CMS Rulings are published under the authority of the Administrator, CMS. They are binding on all CMS Components, and on the Social Security Administration to the extent that components of the Social Security Administration adjudicate matters under the jurisdiction of CMS. <CITA>[48 FR 22924, May 23, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.110</SECTNO> <SUBJECT>Publications for sale.</SUBJECT> The following publications containing information pertaining to the program, organization, functions, and procedures of CMS may be purchased from the Superintendent of Documents, Government Printing Office, Washington, DC 20402. (a) Titles 20, 42, and 45 of the Code of Federal Regulations. (b) <E T="04">Federal Register</E> issues. (c) Compilation of the Social Security Laws. (d) CMS Rulings. (e) Social Security Handbook. The information in the Handbook is not of precedent or interpretative force. (f) Medicare/Medicaid Directory of Medical Facilities. </SECTION> <SECTION> <SECTNO>§ 401.112</SECTNO> <SUBJECT>Availability of administrative staff manuals.</SUBJECT> All CMS administrative staff manuals and instructions to staff personnel which contain policies, procedures, or interpretations that affect the public are available for inspection and copying. A complete listing of such materials is published in CMS Rulings. These manuals are generally not printed in a sufficient quantity to permit sale or other general distribution to the public. Selected material is maintained at Social Security Administration district offices and field offices and may be inspected there. See §§ 401.130 and 401.132 for a listing of this material. </SECTION> <SECTION> <SECTNO>§ 401.116</SECTNO> <SUBJECT>Availability of records upon request.</SUBJECT> (a) <E T="03">General.</E> In addition to the records made available pursuant to §§ 401.106, <PRTPAGE P="12"/>401.108, 401.110 and 401.112, CMS will, upon request made in accordance with this subpart, make identified records available to any person, unless they are exempt from disclosure under the provisions of section 552(b) of title 5, United States Code (see § 401.126), or any other provision of law. (b) <E T="03">Misappropriation, alteration, or destruction of records.</E> No person may remove any record made available to him for inspection or copying under this part, from the place where it is made available. In addition, no person may steal, alter, mutilate, obliterate, or destroy in whole or in part, such a record. See sections 641 and 2071 of title 18 of the United States Code. </SECTION> <SECTION> <SECTNO>§ 401.118</SECTNO> <SUBJECT>Deletion of identifying details.</SUBJECT> When CMS publishes or otherwise makes available an opinion or order, statement of policy, or other record which relates to a private party or parties, the name or names or other identifying details will be deleted. </SECTION> <SECTION> <SECTNO>§ 401.120</SECTNO> <SUBJECT>Creation of records.</SUBJECT> Records will not be created by compiling selected items from the files, and records will not be created to provide the requester with such data as ratios, proportions, percentages, per capitas, frequency distributions, trends, correlations, and comparisons. If such data have been compiled and are available in the form of a record, the record shall be made available as provided in this subpart. </SECTION> <SECTION> <SECTNO>§ 401.126</SECTNO> <SUBJECT>Information or records that are not available.</SUBJECT> (a) <E T="03">Specific exemptions from disclosure.</E> Pursuant to paragraph (b) of 5 U.S.C. 552, certain classes of records are exempt from disclosure. For some examples of the kinds of materials which are exempt, see subpart F of the public information regulation of the Department of Health and Human Services (45 CFR part 5) and the appendix to that regulation. (b) <E T="03">Materials exempt from disclosure by statute.</E> Pursuant to paragraph (b)(3) of 5 U.S.C. 552, as amended, which exempts from the requirement for disclosure matters that are exempted from disclosure by statute, provided that such statute requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or establishes particular criteria for withholding or refers to particular types of matter to be withheld: (1) Reports described in sections 1106 (d) and (e) of the Social Security Act shall not be disclosed, except in accordance with the provisions of sections 1106 (d) and (e). Sections 1106 (d) and (e) provide for public inspection of certain official reports dealing with the operation of the health programs established by titles XVIII and XIX of the Social Security Act (Medicare and Medicaid), but require that program validation survey reports and other formal evaluations of providers of services shall not identify individual patients, individual health care practitioners, or other individuals. Section 1106(e) further requires that none of the reports shall be made public until the contractor or provider whose performance is being evaluated has had a reasonable opportunity to review that report and to offer comments. See § 401.133 (b) and (c); (2)(i) Except as specified in paragraph (b)(2)(ii) of this section, CMS may not disclose any accreditation survey or any information directly related to the survey (including corrective action plans) made by and released to it by the Joint Commission on Accreditation of Healthcare Organizations, the American Osteopathic Association or any other national accreditation organization that meets the requirements of § 488.6 or § 493.506 of this chapter. Materials that are confidential include accreditation letters and accompanying recommendations and comments prepared by an accreditation organization concerning the entities it surveys. (ii) <E T="03">Exceptions.</E> (A) CMS may release the accreditation survey of any home health agency; and (B) CMS may release the accreditation survey and other information directly related to the survey (including corrective action plans) to the extent the survey and information relate to an enforcement action (for example, denial of payment for new admissions, <PRTPAGE P="13"/>civil money penalties, temporary management and termination) taken by CMS; and (3) Tax returns and return information defined in section 6103 of the Internal Revenue Code, as amended by the Tax Reform Act of 1976, shall not be disclosed except as authorized by the Internal Revenue Code. (c) <E T="03">Effect of exemption.</E> Neither 5 U.S.C. 552 nor this regulation directs the withholding of any record or information, except to the extent of the prohibitions in paragraph (b) of this section. Except for material required to be withheld under the statutory provisions incorporated in paragraph (b) of this section or under another statute which meets the standards in 5 U.S.C. 552(b)(3), materials exempt from mandatory disclosure will nevertheless be made available when this can be done consistently with obligations of confidentiality and administrative necessity. The disclosure of materials or records under these circumstances in response to a specific request, however, is of no precedent force with respect to any other request. <CITA>[46 FR 55696, Nov. 12, 1981, as amended at 58 FR 61837, Nov. 23, 1993]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.128</SECTNO> <SUBJECT>Where requests for records may be made.</SUBJECT> (a) <E T="03">General.</E> Any request for any record may be made to— (1) Any CMS component; (2) Director, Office of Public Affairs, CMS 313-H, Hubert H. Humphrey Building, 200 Independence Avenue, Washington, DC 20201; or (3) Director of Public Affairs in any Regional Office of the Department of Health and Human Services. <FP>The locations and service areas of these offices are as follows:</FP> <EXTRACT> <FP SOURCE="FP-1">Region I—John F. Kennedy Federal Building, Boston, MA 02203. Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont.</FP> <FP SOURCE="FP-1">Region II—26 Federal Plaza, New York, NY 10007. New York, New Jersey, Puerto Rico, Virgin Islands.</FP> <FP SOURCE="FP-1">Region III—Gateway Building, 3535 Market Street, Philadelphia, PA 19101. Delaware, Maryland, Pennsylvania, Virginia, West Virginia, District of Columbia.</FP> <FP SOURCE="FP-1">Region IV—101 Marietta Street, Altanta, GA 30323. Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee.</FP> <FP SOURCE="FP-1">Region V—300 South Wacker Drive, Chicago, IL 60606. Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin.</FP> <FP SOURCE="FP-1">Region VI—1200 Main Tower Building, Dallas, TX 75202. Arkansas, Louisiana, New Mexico, Oklahoma, Texas.</FP> <FP SOURCE="FP-1">Region VII—601 East 12th Street, Kansas City, MO 64106. Iowa, Kansas, Missouri, Nebraska.</FP> <FP SOURCE="FP-1">Region VIII—Federal Office Building, 19th and Stout Streets, Denver, CO 80294. Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming.</FP> <FP SOURCE="FP-1">Region IX—Federal Office Building, 50 United Nations Plaza, San Francisco, CA 94102. Arizona, California, Hawaii, Nevada, Guam, Trust Territory of Pacific Islands, American Samoa.</FP> <FP SOURCE="FP-1">Region X—Arcade Plaza Building, 1321 Second Avenue, Seattle, WA 98101. Alaska, Idaho, Oregon, Washington.</FP> </EXTRACT> (b) <E T="03">Records pertaining to individuals.</E> CMS maintains some records pertaining to individuals. Disclosure of such records is generally prohibited by section 1106 of the Social Security Act (42 U.S.C. 1306), except as prescribed in § 401.105 (See also § 401.126(b)). Requests for records pertaining to individuals may be addressed to: <FP>Director, Office of Research, Demonstrations and Statistics, CMS, Baltimore, Maryland 21235, when information is sought from the record of a person who has participated in a research survey conducted by or for CMS, Office of Research, Demonstrations and Statistics; or whose records have been included by statistical sampling techniques in research and statistical studies authorized by the Social Security Act in the field of health care financing.</FP> (c) <E T="03">Requests for materials listed in § 401.130 or § 401.132 or indexed in the CMS Rulings.</E> A request to inspect and copy materials listed in § 401.130 or § 401.132 or indexed in CMS Rulings may be made to any district or branch office of the Social Security Administration. If the specific material requested is not available in the office receiving the request, the material will be obtained and made available promptly. </SECTION> <SECTION> <PRTPAGE P="14"/> <SECTNO>§ 401.130</SECTNO> <SUBJECT>Materials available at social security district offices and branch offices.</SUBJECT> (a) <E T="03">Materials available for inspection.</E> The following are available or will be made available for inspection at the social security district offices and branch offices: (1) Compilation of the Social Security Laws. (2) The Public Information Regulation of the Department of Health and Human Services (45 CFR part 5). (3) Medicare Program regulations issued by the Centers for Medicare & Medicaid Services. 42 CFR chapter IV . (4) CMS Rulings. (5) Social Security Handbook. (b) <E T="03">Materials available for inspection and copying.</E> The following materials are available or will be made available for inspection and copying at the social security district offices and branch offices: (1) Claims Manual of the Social Security Administration. (2) Department Staff Manual on Organization, Department of Health and Human Services, Part F, CMS. (3) Parts 2 and 3 of the Part A <FP>Intermediary Manual (Provider Services under Medicare CMS Pub. 13-2 and 13-3).</FP> (4) Parts 2 and 3 of the Part B Intermediary Manual (Physician and Supplier Services). (5) Intermediary Letters Related to Parts 2 and 3 of the Part A and Part B Intermediary Manuals. (6) State Buy-In Handbook (State Enrollment of Eligible Individuals under the Supplementary Medical Insurance Program) and Letters. (7) Group Practice Prepayment Plan Manual (HIM-8) and Letters. (8) State Operations Manual (HIM-7). (9) CMS Letters to State Agencies on Medicare. (10) Skilled Nursing Facility Manual (CMS Pub. 12). (11) Hearing Officers Handbook (Supplementary Medical Insurance Program—HIM-21). (12) Hospital Manual (HIM-10). (13) Home Health Agency Manual (HIM-11). (14) Outpatient Physical Therapy Provider Manual (HIM-9). (15) Provider Reimbursement Manual (HIM-15). (16) Audit Program Manuals for Hospital (HIM-16), Home Health Agency (HIM-17), and Extended Care Facilities (HIM-18). (17) Statements of deficiencies based upon survey reports of health care institutions or facilities prepared after January 31, 1973, by a State agency, and such reports (including pertinent written statements furnished by such institution or facility on such statements of deficiencies), as set forth in § 401.133(a). Except as otherwise provided for at §§ 401.133 and 488.325 of this chapter for SNFs, such statements of deficiencies, reports, and pertinent written statements shall be available or made available only at the social security district office and regional office servicing the area in which the institution or facility is located, except that such statements of deficiencies and pertinent written statements shall also be available at the local public assistance offices servicing such area. (18) Indexes to the materials listed in paragraph (a) of this section and in this paragraph (b) and an index to the Bureau of Hearings and Appeals Handbook. <CITA>[46 FR 55696, Nov. 12, 1981, as amended at 59 FR 56232, Nov. 10, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.132</SECTNO> <SUBJECT>Materials in field offices of the Office of Hearings and Appeals, SSA.</SUBJECT> (a) <E T="03">Materials available for inspection.</E> The following materials are available for inspection in the field offices of the Office of Hearings and Appeals, SSA. (1) Title 45 of the Code of Federal Regulations (including the public information regulation of the Department of Health and Human Services). (2) Regulations of the Social Security Administration and CMS. (3) Title 5, United States Code. (4) Compilation of the Social Security Laws. (5) CMS Rulings. (6) Social Security Handbook. (b) <E T="03">Handbook available for inspection and copying.</E> The Office of Hearings and Appeals Handbook is available for inspection and copying in the field offices of the Office of Hearings and Appeals. </SECTION> <SECTION> <PRTPAGE P="15"/> <SECTNO>§ 401.133</SECTNO> <SUBJECT>Availability of official reports on providers and suppliers of services, State agencies, intermediaries, and carriers under Medicare.</SUBJECT> Except as otherwise provided for in § 488.325 of this chapter for SNFs, the following must be made available to the public under the conditions specified: (a) <E T="03">Statements of deficiencies and survey reports on providers of services prepared by State agencies.</E> (1) Statements of deficiencies based upon official survey reports prepared after January 31, 1973, by a State agency pursuant to its agreement entered into under section 1864 of the Social Security Act and furnished to CMS, which relate to a State agency's findings on the compliance of a health care institution or facility with the applicable provisions in section 1861 of the Act and with the regulations, promulgated pursuant to those provisions, dealing with health and safety of patients in those institutions and facilities; and (2) State agency survey reports. The statement of deficiencies or report and any pertinent written statements furnished by the institution or facility on the statement of deficiencies shall be disclosed within 90 days following the completion of the survey by the State agency, but not to exceed 30 days following the receipt of the report by CMS. (See § 401.130(b)(17)) for places where statements of deficiencies, reports, and pertinent written statements will be available.) (b) <E T="03">CMS reports on providers of services.</E> Upon request in writing, official reports and other formal evaluations (including followup reviews), excluding references to internal tolerance rules and practices contained therein, internal working papers or other informal memoranda, prepared and completed after January 31, 1973, which relate to the performance of providers of services under Medicare: <E T="03">Provided,</E> That no information identifying individual patients, physicians, or other practitioners, or other individuals shall be disclosed under this paragraph. Those reports and other evaluations shall be disclosed within 30 days following the final preparation thereof by CMS during which time the providers of services shall be afforded a reasonable opportunity to offer comments, and there shall be disclosed with those reports and evaluations any pertinent written statements furnished CMS by those providers on those reports and evaluations. (c) <E T="03">Contractor performance review reports.</E> Upon request in writing, official contractor performance review reports and other formal evaluations (including followup reviews), excluding references to internal tolerance rules and practices contained therein, internal working papers or other informal memoranda, prepared and completed after January 31, 1973, which relate to the evaluation of the performance of (1) intermediaries and carriers under their agreements entered into pursuant to sections 1816 and 1842 of the Social Security Act and (2) State agencies under their agreements entered into pursuant to section 1864 of the Act (including comparative evaluations of the performance of those intermediaries, carriers, and State agencies). The latest Contract Performance Review Report pertaining to a particular intermediary or carrier, prepared prior to February 1, 1973, may also be disclosed to any person upon request in writing. Those reports and evaluations shall be disclosed within 30 days following their final preparation by CMS (or 30 days following the request therefor, in the case of the contract performance review report prepared prior to February 1, 1973), during which time those intermediaries, carriers, and State agencies, as the case may be, shall be afforded a reasonable opportunity to offer comments, and there shall be disclosed with those reports and evaluations any pertinent written statements furnished CMS by those intermediaries, carriers, on State agencies or those reports and evaluations. (d) <E T="03">Accreditation surveys.</E> Upon written request, CMS will release the accreditation survey and related information from an accreditation organization meeting the requirements of § 488.5, § 488.6 or § 493.506 of this chapter to the extent the survey and information relate to an enforcement action taken (for example, denial of payment for new admission, civil money penalties, temporary management and termination) by CMS;<PRTPAGE P="16"/> (e) Upon written request, CMS will release the accreditation survey of any home health agency. <CITA>[46 FR 55696, Nov. 12, 1981; 46 FR 59249, Dec. 4, 1981, as amended at 58 FR 61838, Nov. 23, 1993; 59 FR 56232, Nov. 10, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.134</SECTNO> <SUBJECT>Release of Medicare information to State and Federal agencies.</SUBJECT> (a) Except as provided in paragraph (b) of this section, the following information may be released to an officer or employee of an agency of the Federal or a State government lawfully charged with the administration of a program receiving grants-in-aid under title V and XIX of the Social Security Act for the purpose of administration of those titles, or to any officer or employee of the Department of Army, Department of Defense, solely for the administration of its Civilian Health and Medical Program of the Uniformed Services (CHAMPUS): (1) Information, including the identification number, concerning charges made by physicians, other practitioners, or suppliers, and amounts paid under Medicare for services furnished to beneficiaries by such physicians, other practioners, or suppliers, to enable the agency to determine the proper amount of benefits payable for medical services performed in accordance with those programs; or (2) Information as to physicians or other practioners that has been disclosed under § 401.105. (3) Information relating to the qualifications and certification status of hospitals and other health care facilities obtained in the process of determining whether, and certifying as to whether, institutions or agencies meet or continue to meet the conditions of participation of providers of services or whether other entities meet or continue to meet the conditions for coverage of services they furnish. (b) The release of such information shall not be authorized by a fiscal intermediary or carrier. (c) The following information may be released to any officer or employee of an agency of the Federal or a State government lawfully charged with the duty of conducting an investigation or prosecution with respect to possible fraud or abuse against a program receiving grants-in-aid under Medicaid, but only for the purpose of conducting such an investigation or prosecution, or to any officer or employee of the Department of the Army, Department of Defense, solely for the administration of its Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), provided that the agency has filed an agreement with CMS that the information will be released only to the agency's enforcement branch and that the agency will preserve the confidentiality of the information received and will not disclose that information for other than program purposes: (1) The name and address of any provider of medical services, organization, or other person being actively investigated for possible fraud in connection with Medicare, and the nature of such suspected fraud. An active investigation exists when there is significant evidence supporting an initial complaint but there is need for further investigation. (2) The name and address of any provider of medical services, organization, or other person found, after consultation with an appropriate professional association or a program review team, to have provided unnecessary services, or of any physician or other individual found to have violated the assignment agreement on at least three occasions. (3) The name and address of any provider of medical services, organization or other person released under paragraph (c)(1) or (2) of this section concerning which an active investigation is concluded with a finding that there is no fraud or other prosecutable offense. </SECTION> <SECTION> <SECTNO>§ 401.135</SECTNO> <SUBJECT>Release of Medicare information to the public.</SUBJECT> The following shall be made available to the public under the conditions specified: (a) Information as to amounts paid to providers and other organizations and facilities for services to beneficiaries under title XVIII of the Act: <E T="03">Provided,</E> That no information identifying any particular beneficiaries shall be disclosed under this paragraph.<PRTPAGE P="17"/> (b) The name of any provider of services or other person furnishing services to Medicare beneficiaries who— (1) Has been found by a Federal court to have been guilty of submitting false claims in connection with Medicare; or (2) Has been found by a carrier or intermediary, after consultation with a professional medical association functioning external to program administration or, if appropriate, the State medical authority, to have been engaged in a pattern of furnishing services to beneficiaries which are substantially in excess of their medical needs; except that the name of any provider or other person shall not be disclosed pursuant to a finding under this paragraph (b)(2) of this section, unless that provider or other person has first been afforded a reasonable opportunity to offer evidence on his behalf. (c) Upon request in writing, cost reports submitted by providers of services pursuant to section 1815 of the Act to enable the Secretary to determine amounts due the providers. </SECTION> <SECTION> <SECTNO>§ 401.136</SECTNO> <SUBJECT>Requests for information or records.</SUBJECT> (a) A request should reasonably identify the requested record by brief description. Requesters who have detailed information which would assist in identifying the records requested are urged to provide such information in order to expedite the handling of the request. Envelopes in which written requests are submitted should be clearly identified as Freedom of Information requests. The request should include the fee or request determination of the fee. When necessary, a written request will be promptly forwarded to the proper office, and the requester will be advised of the date of the receipt and identification and address of the proper office. (b) Determinations of whether records will be released or withheld will be made within 10 working days from date of receipt of the request in the office listed in § 401.128 except where CMS extends this time and sends notice of such extension to the requester. Such extension may not exceed 10 additional working days and shall apply only where the following unusual circumstances exist: (1) The need to search for and collect the requested records from field facilities or other establishments that are separate from the office processing the requests; (2) The need to search for, collect, and appropriately examine a voluminous amount of separate and distinct records which are requested in a single request; or (3) The need for consultation, which shall be conducted with all practicable speed, with another agency having a substantial interest in the request or among two or more components of CMS having a substantial interest in the subject matter of the request. (c) If an extension is made, the requester will be notified in writing before the expiration of 10 working days from receipt of the request and will be given an explanation of why the extension was necessary and the date on which a determination will be made. (d) Authority to extend the time limit with respect to any request for information or records is granted to the Director, Office of Public Affairs, CMS and to the Director of Public Affairs in any HHS Regional Office. Those officers and employees of CMS who are listed in § 401.144(a) as having authority to deny requests for information from records maintained on individuals are granted authority to extend the time limit for responding to requests for information from such records. </SECTION> <SECTION> <SECTNO>§ 401.140</SECTNO> <SUBJECT>Fees and charges.</SUBJECT> (a) <E T="03">Statement of policy.</E> It is CMS's policy to comply with certain requests for information services without charge. Except as otherwise determined pursuant to paragraph (c) of this section, fees will be charged for the following services with respect to all other requests for information from records which are reasonably identified by the requesters: (1) Reproduction, duplication, or copying of records; (2) Searches for records; and (3) Certification or authentication of records. (b) <E T="03">Fee schedules.</E> The fee schedule is as follows: (1) <E T="03">Search for records.</E> Three dollars per hour: <E T="03">Provided, however,</E> That no <PRTPAGE P="18"/>charge will be made for the first half hour. (2) <E T="03">Reproduction, duplication, or copying of records.</E> Ten cents per page where such reproduction can be made by commonly available photocopying machines. The cost of reproducing records which cannot be so photocopied will be determined on an individual basis at actual cost. (3) <E T="03">Certification or authentication of records.</E> Three dollars per certification or authentication. (4) <E T="03">Forwarding materials to destination.</E> Any special arrangements for forwarding which are requested shall be charged at actual cost; however, no charge will be made for postage. (5) No charge will be made when the total amount does not exceed five dollars. (c) <E T="03">Waiver or reduction of fees.</E> Waiver or reduction of the fees in paragraph (b) of this section may be made upon a determination that such waiver or reduction is in the public interest because furnishing the information can be considered as primarily benefiting the general public. Such determination may be made by the appropriate officer or employee identified in § 401.144. (d) <E T="03">Sale of documents.</E> On occasion, a previously printed document may be available for sale to the public; the cost of supplying the document is one cent per page unless the document is available for sale from the Superintendent of Documents, in which case the price shall be that determined by the Superintendent. </SECTION> <SECTION> <SECTNO>§ 401.144</SECTNO> <SUBJECT>Denial of requests.</SUBJECT> (a) <E T="03">General authority.</E> Only the Director, Office of Public Affairs, CMS, and the Regional Directors of Public Affairs, HHS, are authorized to deny written requests to obtain, inspect or copy any CMS information or record. (b) <E T="03">Forms of denials.</E> (1) Oral requests may be dealt with orally, but the requester should be advised that the oral response is not an official determination and that an official determination may be obtained only by submitting the request in writing. Appropriate available assistance will be offered. (2) Written Requests—Denials of written requests will be in writing and will contain the reasons for the denial including, as appropriate, a statement that a document requested is nonexistent or not reasonably described or is subject to one or more clearly described exemption(s). Denials will also provide the requester with appropriate information on how to exercise the right of appeal. </SECTION> <SECTION> <SECTNO>§ 401.148</SECTNO> <SUBJECT>Administrative review.</SUBJECT> (a) <E T="03">Review by the Administrator.</E> A person whose request has been denied may initiate a review by filing a request for review with the Administrator of CMS, 700 East High Rise Building, 6401 Security Boulevard, Baltimore, Maryland 21235, within 30 days of receipt of the determination to deny or within 30 days of receipt of records which are in partial response to his request if a portion of a request is granted and a portion denied, whichever is later. Upon receipt of a timely request for review, the Administrator will review the decision in question and the findings upon which it was based. Upon the basis of the data considered in connection with the decision and whatever other evidence and written argument is submitted by the person requesting the review or which is otherwise obtained, the Administrator or his designee will affirm or revise in whole or in part the findings and decision in question. A decision to affirm the denial will be made only upon concurrence of the Assistant Secretary for Public Affairs, or his designee, after consultation with the General Counsel or his or her designee, and the appropriate program policy official. Written notice of the decision of the Administrator will be mailed to the person who requested the review. A written decision will be made within 20 working days from receipt of the request for review. Extension of the time limit may be granted under the circumstances listed in § 401.136(b) to the extent that the maximum 10 days limit on extensions has not been exhausted on the initial determination. The decision will include the basis for it and will advise the requester of his right to judicial review. (b) <E T="03">Failure of the Administrator to comply with the time limits.</E> Failure of the Administrator to comply with the time <PRTPAGE P="19"/>limits set forth in § 401.136 and this section constitutes an exhaustion of the requester's administrative remedies. </SECTION> <SECTION> <SECTNO>§ 401.152</SECTNO> <SUBJECT>Court review.</SUBJECT> Where the Administrator upon review affirms the denial of a request for records, in whole or in part, the requester may seek court review in the district court of the United States pursuant to 5 U.S.C. 552(a)(4)(B). </SECTION> </SUBPART> <SUBPART> <RESERVED>Subparts C-E [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Claims Collection and Compromise</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 48 FR 39064, Aug. 29, 1983, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 401.601</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Basis.</E> This subpart implements for CMS the Federal Claims Collection Act (FCCA) of 1966 (31 U.S.C. 3711), and conforms to the regulations (4 CFR parts 101-105) issued jointly by the General Accounting Office and the Department of Justice that generally prescribe claims collection standards and procedures under the FCCA for the Federal government. (b) <E T="03">Scope.</E> Except as provided in paragraphs (c) through (f) of this section, the regulations in this subpart describe CMS's procedures and standards for the collection of claims in any amount, and the compromise of, or the suspension or termination of collection action on, all claims for money or property that do not exceed $100,000 or such higher amount as the Attorney General may from time to time prescribe, exclusive of interest, arising under any functions delegated to CMS by the Secretary. (c) <E T="03">Amount of claim.</E> CMS refers all claims that exceed $100,000 or such higher amount as the Attorney General may from time to time prescribe, exclusive of interest, to the Department of Justice or the General Accounting Office for the compromise of claims, or the suspension or termination of collection action. (d) <E T="03">Related regulations</E>—(1) <E T="03">Department regulations.</E> DHHS regulations applicable to CMS that generally implement the FCCA for the Department are located at 45 CFR part 30. These regulations apply only to the extent CMS regulations do not address a situation. (2) <E T="03">CMS regulations.</E> The following regulations govern specific debt management situations encountered by CMS and supplement this subpart: (i) Claims against Medicare beneficiaries for the recovery of overpayments are covered in 20 CFR 404.515. (ii) Adjustments in Railroad Retirement or Social Security benefits to recover Medicare overpayments to individuals are covered in §§ 405.350—405.358 of this chapter. (iii) Claims against providers, physicians, or other suppliers of services for overpayments under Medicare and for assessment of interest are covered in §§ 405.377 and 405.378 of this chapter, respectively. (iv) Claims against beneficiaries for unpaid hospital insurance or supplementary medical insurance premiums under Medicare are covered in § 408.110 of this chapter. (v) State repayment of Medicaid funds by installments is covered in § 430.48 of this chapter. (e) <E T="03">Collection and compromise under other statutes and at common law.</E> The regulations in this subpart do not— (1) Preclude disposition by CMS of claims under statutes, other than the FCCA, that provide for the collection or compromise of a claim, or suspension or termination of collection action. (2) Affect any rights that CMS may have under common law as a creditor. (f) <E T="03">Fraud.</E> The regulations in this subpart do not apply to claims in which there is an indication of fraud, the presentation of a false claim, or misrepresentation on the part of a debtor or any other party having an interest in the claim. CMS forwards these claims to the Department of Justice for disposition under 4 CFR 105.1. (g) <E T="03">Enforced collection.</E> CMS refers claims to the Department of Justice for enforced collection through litigation in those cases which cannot be compromised or on which collection action cannot be suspended or terminated in accordance with this subpart or the regulations issued jointly by the <PRTPAGE P="20"/>Attorney General and the Comptroller General. <CITA>[48 FR 39064, Aug. 29, 1983, as amended at 52 FR 48123, Dec. 18, 1987; 57 FR 56998, Dec. 2, 1992; 61 FR 49271, Sept. 19, 1996; 61 FR 63748, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.603</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart— <E T="03">Claim</E> means any debt owed to CMS. <E T="03">Debtor</E> means any individual, partnership, corporation, estate, trust or other legal entity against which CMS has a claim. </SECTION> <SECTION> <SECTNO>§ 401.605</SECTNO> <SUBJECT>Omissions not a defense.</SUBJECT> The failure of CMS to comply with the regulations in this subpart, or with the related regulations listed in § 401.601(d), is not available as a defense to a debtor against whom CMS has a claim for money or property. </SECTION> <SECTION> <SECTNO>§ 401.607</SECTNO> <SUBJECT>Claims collection.</SUBJECT> (a) <E T="03">General policy.</E> CMS recovers amounts of claims due from debtors, including interest where appropriate, by— (1) Direct collections in lump sums or in installments; or (2) Offsets against monies owed to the debtor by the Federal government where possible. (b) <E T="03">Collection in lump sums.</E> Whenever possible, CMS attempts to collect claims in full in one lump sum. However, if CMS determines that a debtor is unable to pay the claim in one lump sum, CMS may instead enter into an agreement to accept regular installment payments. (c) <E T="03">Collection in installments.</E> Generally, CMS requires that all claims to be satisfied by installment payments must be liquidated in three years or less. If unusual circumstances exist, such as the possibility of debtor insolvency, an installment agreement that extends beyond three years may be approved. (1) <E T="03">Debtor request.</E> If a debtor desires to repay a claim in installments, the debtor must submit— (i) A request to CMS; and (ii) Any information required by CMS to make a decision regarding the request. (2) <E T="03">CMS decision.</E> CMS will determine the number, amount and frequency of installment payments based on the information submitted by the debtor and on other factors such as— (i) Total amount of the claim; (ii) Debtor's ability to pay; and (iii) Cost to CMS of administering an installment agreement. (d) <E T="03">Collection by offset.</E> (1) CMS may offset, where possible, the amount of a claim against the amount of pay, compensation, benefits or other monies that a debtor is receiving or is due from the Federal government. (2) Under regulations at § 405.350—405.358 of this chapter, CMS may initiate adjustments in program payments to which an individual is entitled under title II of the Act (Federal Old Age, Survivors, and Disability Insurance Benefits) or under the Railroad Retirement Act of 1974 (45 U.S.C. 231) to recover Medicare overpayments. <CITA>[48 FR 39064, Aug. 29, 1983, as amended at 61 FR 49271, Sept. 19, 1996; 61 FR 63748, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.613</SECTNO> <SUBJECT>Compromise of claims.</SUBJECT> (a) <E T="03">Amount of compromise.</E> HFCA requires that the amount to be recovered through a compromise of a claim must— (1) Bear a reasonable relation to the amount of the claim; and (2) Be recoverable through enforced collection procedures. (b) <E T="03">General factors.</E> After considering the bases for a decision to compromise a claim under paragraph (c) of this section, CMS may further consider factors such as— (1) The age and health of the debtor if the debtor is an individual; (2) Present and potential income of the debtor; and (3) Whether assets have been concealed or improperly transferred by the debtor. (c) <E T="03">Basis for compromise.</E> Bases on which CMS may compromise a claim include the following— (1) <E T="03">Inability to pay.</E> CMS may compromise a claim if it determines that the debtor, or the estate of a deceased debtor, does not have the present or prospective ability to pay the full amount of the claim within a reasonable time. (2) <E T="03">Litigative probabilities.</E> CMS may compromise a claim if it determines <PRTPAGE P="21"/>that it would be difficult to prevail in a case before a court of law as a result of the legal issues involved or inability of the parties to agree to the facts of the case. The amount that CMS accepts in compromise under this provision will reflect— (i) The likelihood that CMS would have prevailed on the legal question(s) involved; (ii) Whether and to what extent CMS would have obtained a full or partial recovery of a judgment, depending on the availability of witnesses, or other evidentiary support for CMS's claim; and (iii) The amount of court costs that would be assessed to CMS. (3) <E T="03">Cost of collecting the claim.</E> CMS may compromise a claim if it determines that the cost of collecting the claim does not justify the enforced collection of the full amount. In this case, CMS may adjust the amount it accepts as a compromise to allow an appropriate discount for the costs of collection it would have incurred but for the compromise. (d) <E T="03">Enforcement policy.</E> CMS may compromise statutory penalties, forfeitures, or debts established as an aid to enforcement or to compel compliance, if it determines that its enforcement policy, in terms of deterrence and securing compliance both present and future, is adequately served by acceptance of the compromise amount. </SECTION> <SECTION> <SECTNO>§ 401.615</SECTNO> <SUBJECT>Payment of compromise amount.</SUBJECT> (a) <E T="03">Time and manner of compromise.</E> Payment by the debtor of the amount that CMS has agreed to accept as a compromise in full settlement of a claim must be made within the time and in the manner prescribed by CMS. Accordingly, CMS will not settle a claim until the full payment of the compromise amount has been made. (b) <E T="03">Effect of failure to pay compromise amount.</E> Failure of the debtor to make payment, as provided by the compromise agreement, reinstates the full amount of the claim, less any amounts paid prior to the default. (c) <E T="03">Prohibition against grace periods.</E> CMS will not agree to inclusion of a provision in an installment agreement that would permit grace periods for payments that are late under the terms of the agreement. </SECTION> <SECTION> <SECTNO>§ 401.617</SECTNO> <SUBJECT>Suspension of collection action.</SUBJECT> (a) <E T="03">General conditions.</E> CMS may temporarily suspend collection action on a claim if the following general conditions are met— (1) <E T="03">Amount of future recovery.</E> CMS determines that future collection action may result in a recovery of an amount sufficient to justify periodic review and action on the claim by CMS during the period of suspension. (2) <E T="03">Statute of limitations.</E> CMS determines that— (i) The applicable statute of limitations has been tolled, waived or has started running anew; or (ii) Future collections may be made by CMS through offset despite an applicable statute of limitations. (b) <E T="03">Basis for suspension.</E> Bases on which CMS may suspend collection action on a particular claim include the following— (1) A debtor cannot be located; or (2) A debtor— (i) Owns no substantial equity in property; (ii) Is unable to make payment on CMS's claim or is unable to effect a compromise; and (iii) Has future prospects that justify retention of the claim. (c) <E T="03">Locating debtors.</E> CMS will make every reasonable effort to locate missing debtors sufficiently in advance of the bar of an applicable statute of limitations to permit timely filing of a lawsuit to recover the amount of the claim. (d) <E T="03">Effect of suspension on liquidation of security.</E> CMS will liquidate security, obtained in partial recovery of a claim, despite a decision under this section to suspend collection action against the debtor for the remainder of the claim. </SECTION> <SECTION> <SECTNO>§ 401.621</SECTNO> <SUBJECT>Termination of collection action.</SUBJECT> (a) <E T="03">General factors.</E> After considering the bases for a decision to terminate collection action under paragraph (b) of this section, CMS may further consider factors such as— (1) The age and health of the debtor if the debtor is an individual;<PRTPAGE P="22"/> (2) Present and potential income of the debtor; and (3) Whether assets have been concealed or improperly transferred by the debtor. (b) <E T="03">Basis for termination of collection action.</E> Bases on which CMS may terminate collection action on a claim include the following— (1) <E T="03">Inability to collect a substantial amount of the claim.</E> CMS may terminate collection action if it determines that it is unable to collect, or to enforce collection, of a significant amount of the claim. In making this determination, CMS will consider factors such as— (i) Judicial remedies available; (ii) The debtor's future financial prospects; and (iii) Exemptions available to the debtor under State or Federal law. (2) <E T="03">Inability to locate debtor.</E> In cases involving missing debtors, CMS may terminate collection action if— (i) There is no security remaining to be liquidated; (ii) The applicable statute of limitations has run; or (iii) The prospects of collecting by offset, whether or not an applicable statute of limitations has run, are considered by CMS to be too remote to justify retention of the claim. (3) <E T="03">Cost of collection exceeds recovery.</E> CMS may terminate collection action if it determines that the cost of further collection action will exceed the amount recoverable. (4) <E T="03">Legal insufficiency.</E> CMS may terminate collection action if it determines that the claim is legally without merit. (5) <E T="03">Evidence unavailable.</E> CMS may terminate collection action if— (i) Efforts to obtain voluntary payment are unsuccessful; and (ii) Evidence or witnesses necessary to prove the claim are unavailable. </SECTION> <SECTION> <SECTNO>§ 401.623</SECTNO> <SUBJECT>Joint and several liability.</SUBJECT> (a) <E T="03">Collection action.</E> CMS will liquidate claims as quickly as possible. In cases of joint and several liability among two or more debtors, CMS will not allocate the burden of claims payment among the debtors. CMS will proceed with collection action against one debtor even if other liable debtors have not paid their proportionate shares. (b) <E T="03">Compromise.</E> Compromise with one debtor does not release a claim against remaining debtors. Furthermore, CMS will not consider the amount of a compromise with one debtor to be a binding precedent concerning the amounts due from other debtors who are jointly and severally liable on the claim. </SECTION> <SECTION> <SECTNO>§ 401.625</SECTNO> <SUBJECT>Effect of CMS claims collection decisions on appeals.</SUBJECT> Any action taken under this subpart regarding the compromise of a claim, or suspension or termination of collection action on a claim, is not an initial determination for purposes of CMS appeal procedures. </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 402</EAR> <HD SOURCE="HED">PART 402—CIVIL MONEY PENALTIES, ASSESSMENTS, AND EXCLUSIONS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>402.1</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SECTNO>402.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>402.5</SECTNO> <SUBJECT>Right to a hearing before the final determination.</SUBJECT> <SECTNO>402.7</SECTNO> <SUBJECT>Notice of proposed determination.</SUBJECT> <SECTNO>402.9</SECTNO> <SUBJECT>Failure to request a hearing.</SUBJECT> <SECTNO>402.11</SECTNO> <SUBJECT>Notice to other agencies and other entities.</SUBJECT> <SECTNO>402.13</SECTNO> <SUBJECT>Penalty, assessment, and exclusion not exclusive.</SUBJECT> <SECTNO>402.15</SECTNO> <SUBJECT>Collateral estoppel.</SUBJECT> <SECTNO>402.17</SECTNO> <SUBJECT>Settlement.</SUBJECT> <SECTNO>402.19</SECTNO> <SUBJECT>Hearings and appeals.</SUBJECT> <SECTNO>402.21</SECTNO> <SUBJECT>Judicial review.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Civil Money Penalties and Assessments</HD> <SECTNO>402.105</SECTNO> <SUBJECT>Amount of penalty.</SUBJECT> <SECTNO>402.107</SECTNO> <SUBJECT>Amount of assessment.</SUBJECT> <SECTNO>402.109</SECTNO> <SUBJECT>Statistical sampling.</SUBJECT> <SECTNO>402.111</SECTNO> <SUBJECT>Factors considered determinations regarding the amount of penalties and assessments.</SUBJECT> <SECTNO>402.113</SECTNO> <SUBJECT>When a penalty and assessment are collectible.</SUBJECT> <SECTNO>402.115</SECTNO> <SUBJECT>Collection of penalty or assessment.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart C—Exclusions [Reserved]</RESERVED> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 63 FR 68690, Dec. 14, 1998, unless otherwise noted. </SOURCE> <SUBPART> <PRTPAGE P="23"/> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 402.1</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Basis</E>. This part is based on the sections of the Act that are specified in paragraph (c) of this section. (b) <E T="03">Scope.</E> This part— (1) Provides for the imposition of civil money penalties, assessments, and exclusions against persons that violate the provisions of the Act specified in paragraph (c), (d), or (e) of this section; and (2) Sets forth the appeal rights of persons subject to penalties, assessments, or exclusion and the procedures for reinstatement following exclusion. (c) <E T="03">Civil money penalties.</E> CMS or OIG may impose civil money penalties against any person or other entity specified in paragraphs (c)(1) through (c)(33) of this section under the identified section of the Act. (The authorities that also permit imposition of an assessment or exclusion are noted in the applicable paragraphs.) (1) Sections 1833(h)(5)(D) and 1842(j)(2)—Any person that knowingly and willfully, and on a repeated basis, bills for a clinical diagnostic laboratory test, other than on an assignment-related basis. This provision includes tests performed in a physician's office but excludes tests performed in a rural health clinic. (This violation may also include an assessment and cause exclusion.) (2) Section 1833(i)(6)—Any person that knowingly and willfully presents, or causes to be presented, a bill or request for payment for an intraocular lens inserted during or after cataract surgery for which the Medicare payment rate includes the cost of acquiring the class of lens involved. (3) Section 1833(q)(2)(B)—Any entity that knowingly and willfully fails to provide information about a referring physician, including the physician's name and unique physician identification number for the referring physician, when seeking payment on an unassigned basis. (This violation, if it occurs in repeated cases, may also cause an exclusion.) (4) Sections 1834(a)(11)(A) and 1842(j)(2)—Any durable medical equipment supplier that knowingly and willfully charges for a covered service that is furnished on a rental basis after the rental payments may no longer be made (except for maintenance and servicing) as provided in section 1834(a)(7)(A). (This violation may also include an assessment and cause exclusion.) (5) Sections 1834(a)(18)(B) and 1842(j)(2)—Any nonparticipating durable medical equipment supplier that knowingly and willfully, in violation of section 1834(a)(18)(A), fails to make a refund to Medicare beneficiaries for a covered service for which payment is precluded due to an unsolicited telephone contact from the supplier. (This violation may also include an assessment and cause exclusion.) (6) Sections 1834(b)(5)(C) and 1842(j)(2)—Any nonparticipating physician or supplier that knowingly and willfully charges a Medicare beneficiary more than the limiting charge, as specified in section 1834(b)(5)(B), for radiologist services. (This violation may also include an assessment and cause exclusion.) (7) Sections 1834(c)(4)(C) and 1842(j)(2)—Any nonparticipating physician or supplier that knowingly and willfully charges a Medicare beneficiary more than the limiting charge, as specified in section 1834(c)(4)(B), for mammography screening. (This violation may also include an assessment and cause exclusion.) (8) Sections 1834(h)(3) and 1842(j)(2)—Any supplier of prosthetic devices, orthotics, and prosthetics that knowingly and willfully charges for a covered prosthetic device, orthotic, or prosthetic that is furnished on a rental basis after the rental payment may no longer be made (except for maintenance and servicing). (This violation may also include an assessment and cause exclusion.) (9) Section 1834(j)(2)(A)(iii)—Any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, that knowingly and willfully distributes a certificate of medical necessity in violation of section 1834(j)(2)(A)(i) or fails to provide the information required under section 1834(j)(2)(A)(ii). (10) Sections 1834(j)(4) and 1842(j)(2)—<PRTPAGE P="24"/> (i) Any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, that knowingly and willfully fails to make refunds in a timely manner to Medicare beneficiaries for services billed other than on an assignment-related basis if— (A) The supplier does not possess a Medicare supplier number; (B) The service is denied in advance under section 1834(a)(15); or (C) The service is determined not to be medically necessary or reasonable. (ii) These violations may also include an assessment and cause exclusion. (11) Sections 1842(b)(18)(B) and 1842(j)(2)—Any practitioner specified in section 1842(b)(18)(C) (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives, clinical social workers, and clinical psychologists) or other person that knowingly and willfully bills or collects for any services by the practitioners on other than an assignment-related basis. (This violation may also include an assessment and cause exclusion.) (12) Sections 1842(k) and 1842(j)(2)—Any physician who knowingly and willfully presents, or causes to be presented, a claim or bill for an assistant at cataract surgery performed on or after March 1, 1987 for which payment may not be made because of section 1862(a)(15). (This violation may also include an assessment and cause exclusion.) (13) Sections 1842(l)(3) and 1842(j)(2)—Any nonparticipating physician who does not accept payment on an assignment-related basis and who knowingly and willfully fails to refund on a timely basis any amounts collected for services that are not reasonable or medically necessary or are of poor quality, in accordance with section 1842(l)(1)(A). (This violation may also include an assessment and cause exclusion.) (14) Sections 1842(m)(3) and 1842(j)(2)—(i) Any nonparticipating physician, who does not accept payment for an elective surgical procedure on an assignment-related basis and whose charge is at least $500, who knowingly and willfully fails to— (A) Disclose the information required by section 1842(m)(1) concerning charges and coinsurance amounts; and (B) Refund on a timely basis any amount collected for the procedure in excess of the charges recognized and approved by the Medicare program. (ii) This violation may also include an assessment and cause exclusion. (15) Sections 1842(n)(3) and 1842(j)(2)—Any physician who knowingly and willfully, in repeated cases, bills one or more beneficiaries, for purchased diagnostic tests, any amount other than the payment amount specified in section 1842(n)(1)(A) or section 1842(n)(1)(B). (This violation may also include an assessment and cause exclusion.) (16) Section 1842(p)(3)(A)—Any physician or practitioner who knowingly and willfully fails promptly to provide the appropriate diagnosis code or codes upon request by CMS or a carrier on any request for payment or bill not submitted on an assignment-related basis for any service furnished by the physician. (This violation, if it occurs in repeated cases, may also cause exclusion.) (17) Sections 1848(g)(1)(B) and 1842(j)(2)— (i) Any nonparticipating physician, supplier, or other person that furnishes physicians' services and does not accept payment on an assignment-related basis, that— (A) Knowingly and willfully bills or collects in excess of the limiting charge (as defined in section 1848(g)(2)) on a repeated basis; or (B) Fails to make an adjustment or refund on a timely basis as required by section 1848(g)(1)(A)(iii) or (iv). (ii) These violations may also include an assessment and cause exclusion. (18) Section 1848(g)(3)(B) and 1842(j)(2)—Any person that knowingly and willfully bills for State plan approved physicians' services, as defined in section 1848(j)(3), on other than an assignment-related basis for a Medicare beneficiary who is also eligible for Medicaid (these individuals include qualified Medicare beneficiaries). This provision applies to services furnished on or after April 1, 1990. (This violation may also include an assessment and cause exclusion.)<PRTPAGE P="25"/> (19) Section 1848(g)(4)(B)(ii), 1842(p)(3), and 1842(j)(2)(A)— (i) Any physician, supplier, or other person (except any person that has been excluded from the Medicare program) that, for services furnished after September 1, 1990, knowingly and willfully— (A) Fails to submit a claim on a standard claim form for services provided for which payment is made under Part B on a reasonable charge or fee schedule basis; or (B) Imposes a charge for completing and submitting the standard claims form. (ii) These violations, if they occur in repeated cases, may also cause exclusion. (20) Section 1862(b)(5)(C)—Any employer (other than a Federal or other governmental agency) that, before October 1, 1998, willfully or repeatedly fails to provide timely and accurate information requested relating to an employee's group health insurance coverage. (21) Section 1862(b)(6)(B)—Any entity that knowingly, willfully, and repeatedly— (i) Fails to complete a claim form relating to the availability of other health benefit plans in accordance with section 1862(b)(6)(A); or (ii) Provides inaccurate information relating to the availability of other health benefit plans on the claim form. (22) Section 1877(g)(5)—Any person that fails to report information required by HHS under section 1877(f) concerning ownership, investment, and compensation arrangements. (This violation may also include an assessment and cause exclusion.) (23) Sections 1879(h), 1834(a)(18), and 1842(j)(2)— (i) Any durable medical equipment supplier, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, that knowingly and willfully fails to make refunds in a timely manner to Medicare beneficiaries for services billed on an assignment-related basis if— (A) The supplier did not possess a Medicare supplier number; (B) The service is denied in advance under section 1834(a)(15) of the Act; or (C) The service is determined not to be payable under section 1834(a)(17)(b) because of unsolicited telephone contacts. (ii) These violations may also include an assessment and cause exclusion. (24) Section 1882(a)(2)—Any person that issues a Medicare supplemental policy that has not been approved by the State regulatory program or does not meet Federal standards on and after the effective date in section 1882(p)(1)(C). (This violation may also include an assessment and cause exclusion.) (25) Section 1882(p)(8)—Any person that sells or issues Medicare supplemental policies, on or after July 30, 1992, that fail to conform to the NAIC or Federal standards established under section 1882(p). (This violation may also include an assessment and cause exclusion.) (26) Section 1882(p)(9)(C)— (i) Any person that sells a Medicare supplemental policy and— (A) Fails to make available for sale the core group of basic benefits when selling other Medicare supplemental policies with additional benefits; or (B) Fails to provide the individual, before the sale of the policy, an outline of coverage describing the benefits provided by the policy. (ii) These violations may also include an assessment and cause exclusion. (27) Section 1882(q)(5)(C)— (i) Any person that fails to— (A) Suspend a Medicare supplemental policy at the policyholder's request, if the policyholder applies for and is determined eligible for medical assistance, and the policyholder provides notice within 90 days of the eligibility determination; or (B) Automatically reinstate the policy as of the date of termination of medical assistance if the policyholder loses eligibility for medical assistance and the policyholder provides notice within 90 days of loss of eligibility. (ii) These violations may also include an assessment and cause exclusion. (28) Section 1882(r)(6)(A)—Any person that fails to provide refunds or credits as required by section 1882(r)(1)(B). (This violation may also include an assessment and cause exclusion.) (29) Section 1882(s)(4)—<PRTPAGE P="26"/> (i) Any issuer of a Medicare supplemental policy that— (A) Does not waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods if the time periods were already satisfied under a preceding Medicare supplemental policy; or (B) Denies a policy, conditions the issuance or effectiveness of the policy, or discriminates in the pricing of the policy based on health status or other criteria as specified in section 1882(s)(2)(A). (ii) These violations may also include an assessment and cause exclusion. (30) Section 1882(t)(2)— (i) Any issuer of a Medicare supplemental policy that— (A) Fails substantially to provide medically necessary services to enrollees seeking the services through the issuer's network of entities; (B) Imposes premiums on enrollees in excess of the premiums approved by the State; (C) Acts to expel an enrollee for reasons other than nonpayment of premiums; or (D) Does not provide each enrollee at the time of enrollment with the specific information provided in section 1882(t)(1)(E)(i) or fails to obtain a written acknowledgment from the enrollee of receipt of the information (as required by section 1882(t)(1)(E)(ii)). (ii) These violations may also include an assessment and cause exclusion. (31) Sections 1834(k)(6) and 1842(j)(2)—Any person or entity who knowingly and willfully bills or collects for any outpatient therapy services or comprehensive outpatient rehabilitation services on other than an assignment-related basis. (This violation may also include an assessment and cause exclusion.) (32) Sections 1834(l)(6) and 1842(j)(2)—Any supplier of ambulance services who knowingly and willfully bills or collects for any services on other than an assignment-related basis. (This violation may also include an assessment and cause exclusion.) (33) Section 1806(b)(2)(B)—Any person who knowingly and willfully fails to furnish a beneficiary with an itemized statement of items or services within 30 days of the beneficiary's request. (d) <E T="03">Assessments</E>. CMS or OIG may impose assessments in addition to civil money penalties for violations of the following statutory sections: (1) Section 1833: Paragraph (h)(5)(D). (2) Section 1834: Paragraphs (a)(11)(A), (a)(18)(B), (b)(5)(C), (c)(4)(C), (h)(3), (j)(4), (k)(6), and (l)(6). (3) Section 1842: Paragraphs (k), (l)(3), (m)(3), and (n)(3). (4) Section 1848: Paragraph (g)(1)(B). (5) Section 1877: Paragraph (g)(5). (6) Section 1879: Paragraph (h). (7) Section 1882: Paragraphs (a)(2), (p)(8), (p)(9)(C), (q)(5)(C), (r)(6)(A), (s)(3), and (t)(2). (e) <E T="03">Exclusions</E>. (1) CMS or OIG may exclude any person from participation in the Medicare program on the basis of any of the following violations of the statute: (i) Section 1833: Paragraphs (h)(5)(D) and, in repeated cases, (q)(2)(B). (ii) Section 1834: Paragraphs (a)(11)(A), (a)(18)(B), (b)(5)(C), (c)(4)(C), (h)(3), (j)(4), (k)(6), and (l)(6). (iii) Section 1842: Paragraphs (b)(18)(B), (k), (l)(3), (m)(3), (n)(3), and, in repeated cases, (p)(3)(B). (iv) Section 1848: Paragraphs (g)(1)(B), (g)(3)(B), and, in repeated cases, (g)(4)(B)(ii). (v) Section 1877: Paragraph (g)(5). (vi) Section 1879: Paragraph (h). (vii) Section 1882: Paragraphs (a)(2), (p)(8), (p)(9)(C), (q)(5)(C), (r)(6)(A), (s)(4), and (t)(2). (2) CMS or OIG must exclude from participation in the Medicare program any of the following, under the identified section of the Act: (i) Section 1834(a)(17)(C)—Any supplier of durable medical equipment and supplies that are covered under section 1834(a)(13) that knowingly contacts Medicare beneficiaries by telephone regarding the furnishing of covered services in violation of section 1834(a)(17)(A) and whose conduct establishes a pattern of prohibited contacts as described under section 1834(a)(17)(A). (ii) Section 1834(h)(3)—Any supplier of prosthetic devices, orthotics, and prosthetics that knowingly contacts <PRTPAGE P="27"/>Medicare beneficiaries by telephone regarding the furnishing of prosthetic devices, orthotics, or prosthetics in the same manner as in the violation under section 1834(a)(17)(A) and whose conduct establishes a pattern of prohibited contacts in the same manner as described in section 1834(a)(17)(C). (f) <E T="03">Responsible persons</E>. (1) If CMS or OIG determines that more than one person is responsible for any of the violations described in paragraph (c) or paragraph (d) of this section, it may impose a civil money penalty or a civil money penalty and assessment against any one of those persons or jointly and severally against two or more of those persons. However, the aggregate amount of the assessments collected may not exceed the amount that could be assessed if only one person were responsible. (2) A principal is liable for penalties and assessments for the actions of his or her agent acting within the scope of the agency. (g) <E T="03">Time limits</E>. Neither CMS nor OIG initiates an action to impose a civil money penalty, assessment, or proceeding to exclude a person from participation in the Medicare program unless it begins the action within 6 years from the date on which the claim was presented, the request for payment was made, or the incident occurred. <CITA>[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 402.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this part: <E T="03">Assessment</E> means the amount described in § 402.107 and includes the plural of that term. <E T="03">Assignment-related basis</E> means that the claim submitted by a physician, supplier or other person is paid on the basis of an assignment, whereby the physician, supplier or other person agrees to accept the Medicare payment as payment in full for the services furnished to the beneficiary and is precluded from charging the beneficiary more than the deductible and coinsurance based upon the approved Medicare fee amount. Additional obligations, including obligations to make refunds in certain circumstances, are established at section 1842(b)(3) of the Act. <E T="03">Claim</E> means an application for payment for a service for which the Medicare or Medicaid program may pay. <E T="03">Covered</E> means that a service is described as reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. A service is not covered if it is specifically identified as excluded from Medicare Part B coverage or is not a defined Medicare Part B benefit. <E T="03">Exclusion</E> means the temporary or permanent barring of a person or other entity from participation in the Medicare or State health care program and that services furnished or ordered by that person are not paid for under either program. <E T="03">General Counsel</E> means the General Counsel of HHS or his or her designees. <E T="03">Knowingly</E> or <E T="03">knowingly and willfully</E> means that a person, with respect to information— (1) Has actual knowledge of the information; (2) Acts in deliberate ignorance of the truth or falsity of the information; or (3) Acts in reckless disregard of the truth or falsity of the information; and (4) No proof of specific intent is required. <E T="03">Medicare supplemental policy</E> means a policy guaranteeing that a health plan will pay a policyholder's coinsurance and deductible and will cover other limitations on payment imposed under title XVIII of the Act and will provide additional health plan or non-Medicare coverage for services up to a predefined benefit limit. <E T="03">NAIC</E> stands for the National Association of Insurance Commissioners. <E T="03">Nonparticipating</E> describes a physician, supplier, or other person (excluding any provider of services) that, at the time of furnishing the services to Medicare Part B beneficiaries, is not a participating physician or supplier. <E T="03">Participating</E> describes a physician or supplier (excluding any provider of services) that, before the beginning of any given year, enters into an agreement with HHS that provides that the physician or supplier will accept payment under the Medicare program on an assignment-related basis for all services furnished to Medicare Part B beneficiaries.<PRTPAGE P="28"/> <E T="03">Penalty</E> means the amount described in § 402.105 and includes the plural of that term. <E T="03">Person</E> means an individual, trust or estate, partnership, corporation, professional association or corporation, or other entity, public or private. <E T="03">Physicians' services</E> means the following Medicare covered professional services: (1) Surgery, consultation, home, office and institutional calls, and other professional services performed by physicians. (2) Services and supplies furnished “incident to” a physician's professional services. (3) Outpatient physical and occupational therapy services. (4) Diagnostic x-ray tests and other diagnostic tests (excluding clinical diagnostic laboratory tests). (5) X-ray, radium, and radioactive isotope therapy, including materials and services of technicians. (6) Antigens prepared by a physician. <E T="03">Radiologist service</E> means radiology services performed only by, or under the direction of, a physician who is certified, or eligible to be certified, by the American Board of Radiology or for whom radiology services account for at least 50 percent of the total amount of charges made under part B of title XVIII of the Act. <E T="03">Request for payment</E> means an application submitted by a person to any person for payment for a service. <E T="03">Respondent</E> means the person upon which CMS or OIG has imposed, or proposes to impose, a civil money penalty, assessment, or exclusion. <E T="03">Service</E> includes— (1) Any item, device, medical supply, or service claimed to have been furnished to a patient and listed in an itemized claim for program payment; or (2) In the case of a claim based on costs, any entry or omission in a cost report, books of account or other documents supporting the claim. <E T="03">State</E> includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and the Trust Territory of the Pacific Islands. <E T="03">Timely basis</E> means that the adjustment to a bill or a refund is considered “on a timely basis” if the physician, supplier, or other person makes the adjustment or refund to the appropriate party no later than 30 days after the date the physician, supplier, or other person is notified by the Medicare Part B contractor of the violation and the requirement to refund any excess collections. </SECTION> <SECTION> <SECTNO>§ 402.5</SECTNO> <SUBJECT>Right to a hearing before the final determination.</SUBJECT> CMS or OIG does not make a determination adverse to any person under this part until the person has been given a written notice and opportunity for the determination to be made on the record after a hearing at which the person is entitled to be represented by counsel, to present witnesses, and to cross-examine witnesses against the person. </SECTION> <SECTION> <SECTNO>§ 402.7</SECTNO> <SUBJECT>Notice of proposed determination.</SUBJECT> (a) If CMS or OIG proposes a penalty and, as applicable, an assessment, or proposes to exclude a respondent from participation in Medicare in accordance with this part, it sends the respondent written notice of its intent by certified mail, return receipt requested. The notice includes the following information: (1) Reference to the statutory basis or bases for the penalty, assessment, exclusion, or any combination, as applicable. (2)(i) A description of the claims, requests for payment, or incidents with respect to which the penalty, assessment, and exclusion are proposed; or (ii) If CMS or OIG is relying upon statistical sampling to project the number and types of claims or requests for payment and the dollar amount, a description of the claims and requests for payment comprising the sample and a brief description of the statistical sampling technique CMS or OIG used. (3) The reason why the claims, requests for payment, or incidents are subject to a penalty and assessment. (4) The amount of the proposed penalty and of any proposed assessment. (5) Any mitigating or aggravating circumstances that CMS or OIG considered when it determined the amount of <PRTPAGE P="29"/>the proposed penalty and any applicable assessment. (6) Information concerning response to the notice, including— (i) A specific statement of the respondent's right to a hearing; and (ii) A statement that failure to request a hearing within 60 days renders the proposed determination final and permits the imposition of the proposed penalty and any assessment. (iii) A statement that the debt may be collected through an administrative offset. (7) In the case of a respondent that has an agreement under section 1866 of the Act, notice that imposition of an exclusion may result in termination of the provider's agreement in accordance with section 1866(b)(2)(C) of the Act. </SECTION> <SECTION> <SECTNO>§ 402.9</SECTNO> <SUBJECT>Failure to request a hearing.</SUBJECT> (a) If the respondent does not request a hearing within 60 days of receipt of the notice of proposed determination specified in § 402.7, any civil money penalty, assessment, or exclusion becomes final and CMS or OIG may impose the proposed penalty, assessment, or exclusion, or any less severe penalty, assessment, or suspension. (b) CMS or OIG notifies the respondent by certified mail, return receipt requested, of any penalty, assessment, or exclusion that has been imposed and of the means by which the respondent may satisfy the judgment. (c) The respondent has no right to appeal a penalty, assessment, or exclusion for which he or she has not requested a hearing. </SECTION> <SECTION> <SECTNO>§ 402.11</SECTNO> <SUBJECT>Notice to other agencies and other entities.</SUBJECT> (a) Whenever a penalty, assessment, or exclusion becomes final, CMS or OIG notifies the following organizations and entities about the action and the reasons for it: (1) The appropriate State or local medical or professional association. (2) The appropriate quality improvement organization. (3) As appropriate, the State agency responsible for the administration of each State health care program (Medicaid, the Maternal and Child Health Services Block Grant Program, and the Social Services Block Grant Program). (4) The appropriate Medicare carrier or fiscal intermediary. (5) The appropriate State or local licensing agency or organization (including the Medicare and Medicaid State survey agencies). (6) The long-term care ombudsman. (b) For exclusions, CMS or OIG also notifies the public and specifies the effective date. </SECTION> <SECTION> <SECTNO>§ 402.13</SECTNO> <SUBJECT>Penalty, assessment, and exclusion not exclusive.</SUBJECT> Penalties, assessments, and exclusions imposed under this part are in addition to any other penalties prescribed by law. </SECTION> <SECTION> <SECTNO>§ 402.15</SECTNO> <SUBJECT>Collateral estoppel.</SUBJECT> (a) When a final determination that the respondent presented or caused to be presented a claim or request for payment falling within the scope of § 402.1 has been rendered in any proceeding in which the respondent was a party and had an opportunity to be heard, the respondent is bound by that determination in any proceeding under this part. (b) A person who has been convicted (whether upon a verdict after trial or upon a plea of guilty or nolo contendere) of a Federal crime charging fraud or false statements is barred from denying the essential elements of the criminal offense if the proceedings under this part involve the same transactions. </SECTION> <SECTION> <SECTNO>§ 402.17</SECTNO> <SUBJECT>Settlement.</SUBJECT> CMS or OIG has exclusive authority to settle any issues or case, without the consent of the ALJ or the Secretary, at any time before a final decision by the Secretary. Thereafter, the General Counsel has the exclusive authority. </SECTION> <SECTION> <SECTNO>§ 402.19</SECTNO> <SUBJECT>Hearings and appeals.</SUBJECT> The hearings and appeals procedures set forth in part 1005 of chapter V of this title are available to any person that receives an adverse determination under this part. For an appeal of a civil money penalty, assessment, or exclusion imposed under this part, either CMS or OIG may represent the government in the hearing and appeals process. </SECTION> <SECTION> <PRTPAGE P="30"/> <SECTNO>§ 402.21</SECTNO> <SUBJECT>Judicial review.</SUBJECT> After exhausting all available administrative remedies, a respondent may seek judicial review of a penalty, assessment, or exclusion that has become final. The respondent may seek review only with respect to a penalty, assessment, or exclusion with respect to which the respondent filed an exception under § 1005.21(c) of this title unless the court excuses the failure or neglect to urge the exception in accordance with section 1128A(e) of the Act because of extraordinary circumstances. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Civil Money Penalties and Assessments</HD> <SECTION> <SECTNO>§ 402.105</SECTNO> <SUBJECT>Amount of penalty.</SUBJECT> (a) <E T="03">$2,000.</E> Except as provided in paragraphs (b) through (g) of this section, CMS or OIG may impose a penalty of not more than $2,000 for each service, bill, or refusal to issue a timely refund that is subject to a determination under this part and for each incident involving the knowing, willful, and repeated failure of an entity furnishing a service to submit a properly completed claim form or to include on the claim form accurate information regarding the availability of other health insurance benefit plans (§ 402.1(c)(21)). (b) <E T="03">$1,000.</E> CMS or OIG may impose a penalty of not more than $1,000 for the following: (1) Per certificate of medical necessity knowingly and willfully distributed to physicians on or after December 31, 1994 that— (i) Contains information concerning the medical condition of the patient; or (ii) Fails to include cost information. (2) Per individual about whom information is requested, for willful or repeated failure of an employer to respond to an intermediary or carrier about coverage of an employee or spouse under the employer's group health plan (§ 402.1(c)(20)). (c) <E T="03">$5,000</E>. CMS or OIG may impose a penalty of not more than $5,000 for each violation resulting from the following: (1) The failure of a Medicare supplemental policy issuer, on a replacement policy, to waive any time periods applicable to pre-existing conditions, waiting periods, elimination periods, or probationary periods that were satisfied under a preceding policy (§ 402.1(c)(29)); and (2) Any issuer of any Medicare supplemental policy denying a policy, conditioning the issuance or effectiveness of the policy, or discriminating in the pricing of the policy based on health status or other criteria as specified in section 1882(s)(2)(A). (§ 402.1(c)(29)). (d) <E T="03">$10,000</E>. (1) CMS or OIG may impose a penalty of not more than $10,000 for each day that reporting entity ownership arrangements is late (§ 402.1(c)(22)). (2) CMS or OIG may impose a penalty of not more than $10,000 for the following violations that occur on or after January 1, 1997: (i) Knowingly and willfully, and on a repeated basis, billing for a clinical diagnostic laboratory test, other than on an assignment-related basis (§ 402.1(c)(1)). (ii) By any durable medical equipment supplier, knowingly and willfully charging for a covered service that is furnished on a rental basis after the rental payments may no longer be made (except for maintenance and servicing) as provided in section 1834(a)(7)(A) (§ 402.1(c)(4)). (iii) By any durable medical equipment supplier, knowingly and willfully, in violation of section 1834(a)(18)(A), failing to make a refund to Medicare beneficiaries for a covered service for which payment is precluded due to an unsolicited telephone contact from the supplier (§ 402.1(c)(5)). (iv) By any nonparticipating physician or supplier, knowingly and willfully charging a Medicare beneficiary more than the limiting charge, as specified in section 1834(b)(5)(B), for radiologist services (§ 402.1(c)(6)). (v) By any nonparticipating physician or supplier, knowingly and willfully charging a Medicare beneficiary more than the limiting charge, as specified in section 1834(c)(3), for mammography screening (§ 402.1(c)(7)). (vi) By any supplier of prosthetic devices, orthotics, and prosthetics, knowingly and willfully charging for a covered prosthetic device, orthotic, or prosthetic that is furnished on a rental <PRTPAGE P="31"/>basis after the rental payment may no longer be made (except for maintenance and servicing) (§ 401.2(c)(8)). (vii) By any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, knowingly and willfully failing to make refunds in a timely manner to Medicare beneficiaries for services billed other than on an assigned-related basis if— (A) The supplier does not possess a Medicare supplier number; (B) The service is denied in advance; or (C) The service is determined not to be medically necessary or reasonable (§ 402.1(c)(10)). (viii) Knowingly and willfully billing or collecting for any services on other than an assignment-related basis for practitioners specified in section 1842(b)(18)(B) (§ 402.1(c)(11)). (xix) By any physician, knowingly and willfully presenting, or causing to be presented, a claim or bill for an assistant at cataract surgery performed on or after March 1, 1987 for which payment may not be made because of section 1862(a)(15) (§ 402.1(c)(12)). (x) By any nonparticipating physician who does not accept payment on an assignment-related basis, knowingly and willfully failing to refund on a timely basis any amounts collected for services that are not reasonable or medically necessary or are of poor quality, in accordance with section 1842(l)(1)(A) (§ 402.1(c)(13)). (xi) By any nonparticipating physician, who does not accept payment for an elective surgical procedure on an assignment-related basis and whose charge is at least $500, knowingly and willfully failing to— (A) Disclose the information required by section 1842(m)(1) concerning charges and coinsurance amounts; and (B) Refund on a timely basis any amount collected for the procedure in excess of the charges recognized and approved by the Medicare program (§ 402.1(c)(14)). (xii) By any physician, in repeated cases, knowingly and willfully billing one or more beneficiaries, for purchased diagnostic tests, any amount other than the payment amount specified in section 1842(n)(1)(A) or section 1842(n)(1)(B) (§ 402.1(c)(15)). (xiii) By any nonparticipating physician, supplier, or other person that furnishes physicians' services and does not accept payment on an assignment-related basis— (A) Knowingly and willfully billing or collecting in excess of the limiting charge (as defined in section 1843(g)(2)) on a repeated basis; or (B) Failing to make an adjustment or refund on a timely basis as required by section 1848(g)(1)(A)(iii) or (iv) (§ 402.1(c)(17)). (xiv) Knowingly and willfully billing for State plan approved physicians' services on other than an assignment-related basis for a Medicare beneficiary who is also eligible for Medicaid (§ 402.1(c)(18)). (xv) By any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, knowingly and willfully failing to make refunds in a timely manner to Medicare beneficiaries for services billed on an assignment-related basis if— (A) The supplier did not possess a Medicare supplier number; (B) The service is denied in advance; or (C) The service is determined not to be medically necessary or reasonable (§ 402.1(c)(23)). (3) CMS or OIG may impose a penalty of not more than $10,000 for each violation, if a person or entity knowingly and willfully bills or collects for outpatient therapy or comprehensive rehabilitation services other than on an assignment-related basis. (4) CMS or OIG may impose a penalty of not more than $10,000 for each violation, if a person or entity knowingly and willfully bills or collects for outpatient ambulance services other than on an assignment-related basis. (e) <E T="03">$15,000</E>. CMS or OIG may impose a penalty of not more than $15,000 if the seller of a Medicare supplemental policy is not the issuer, for each violation described in paragraphs (f)(2) and (f)(3) of this section (§ 402.1 (c)(25) and (c)(26)). (f) <E T="03">$25,000</E>. CMS or OIG may impose a penalty of not more than $25,000 for each of the following violations:<PRTPAGE P="32"/> (1) Issuance of a Medicare supplemental policy that has not been approved by an approved State regulatory program or does not meet Federal standards on and after the effective date in section 1882(p)(1)(C) of the Act (§ 402.1(c)(23)). (2) Sale or issuance after July 30, 1992, of a Medicare supplemental policy that fails to conform with the NAIC or Federal standards established under section 1882(p) of the Act (§ 402.1(c)(25)). (3) Failure to make the core group of basic benefits available for sale when selling other Medicare supplemental plans with additional benefits (§ 402.1(c)(26)). (4) Failure to provide, before sale of a Medicare supplemental policy, an outline of coverage describing the benefits provided by the policy (§ 402.1(c)(26)). (5) Failure of an issuer of a policy to suspend or reinstate a policy, based on the policy holder's request, during entitlement to or upon loss of eligibility for medical assistance (§ 402.1(c)(27)). (6) Failure to provide refunds or credits for Medicare supplemental policies as required by section 1882(r)(1)(B) (§ 402.1(c)(28)). (7) By an issuer of a Medicare supplemental policy— (i) Substantial failure to provide medically necessary services to enrollees seeking the services through the issuer's network of entities; (ii) Imposition of premiums on enrollees in excess of the premiums approved by the State; (iii) Action to expel an enrollee for reasons other than nonpayment of premiums; or (iv) Failure to provide each enrollee, at the time of enrollment, with the specific information provided in section 1882(t)(1)(E)(i) or failure to obtain a written acknowledgment from the enrollee of receipt of the information (as required by section 1882(t)(1)(E)(ii)) (section 1882(t)(2)). (g) <E T="03">$100.</E> CMS or OIG may impose a penalty of not more than $100 for each violation if the person or entity does not furnish an itemized statement to a Medicare beneficiary within 30 days of the beneficiary's request. <CITA>[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 402.107</SECTNO> <SUBJECT>Amount of assessment.</SUBJECT> A person subject to civil money penalties specified in § 402.1(c) may be subject, in addition, to an assessment. An assessment is a monetary payment in lieu of damages sustained by HHS or a State agency. (a) The assessment may not be more than twice the amount claimed for each service that was a basis for the civil money penalty, except for the violations specified in paragraph (b) of this section that occur before January 1, 1997. (b) For the violations specified in this paragraph occurring after January 1, 1997, the assessment may not be more than three times the amount claimed for each service that was the basis for a civil money penalty. The violations are the following: (1) Knowingly and willfully billing, and on a repeated basis, for a clinical diagnostic laboratory test, other than on an assignment-related basis (§ 402.1(c)(1)). (2) By any durable medical equipment supplier, knowingly and willfully charging for a covered service that is furnished on a rental basis after the rental payments may no longer be made (except for maintenance and servicing) as provided in section 1834(a)(7)(A) (§ 402.1(c)(4)). (3) By any durable medical equipment supplier, knowingly and willfully failing, in violation of section 1834(a)(18)(A), to make a refund to Medicare beneficiaries for a covered service for which payment is precluded due to an unsolicited telephone contact from the supplier (§ 402.1(c)(5)). (4) By any nonparticipating physician or supplier, knowingly and willfully charging a Medicare beneficiary more than the limiting charge, as specified in section 1834(b)(5)(B), for radiologist services (§ 402.1(c)(6)). (5) By any nonparticipating physician or supplier, knowingly and willfully charging a Medicare beneficiary more than the limiting charge as specified in section 1834(c)(3), for mammography screening (§ 402.1(c)(7)). (6) By any supplier of prosthetic devices, orthotics, and prosthetics, knowingly and willfully charging for a covered prosthetic device, orthotic, or prosthetic that is furnished on a rental <PRTPAGE P="33"/>basis after the rental payment may no longer be made (except for maintenance and servicing) (§ 401.2(c)(8)). (7) By any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, knowingly and willfully failing to make refunds in a timely manner to Medicare beneficiaries for services billed other than on an assignment-related basis if— (i) The supplier does not possess a Medicare supplier number; (ii) The service is denied in advance; or (iii) The service is determined not to be medically necessary or reasonable (§ 402.1(c)(10)). (8) Knowingly and willfully billing or collecting for any services on other than an assignment-related basis for a person or entity specified in sections 1834(k)(6), 1834(l)(6), or 1842(b)(18)(B) (§ 402.1(c)(11), (c)(31), or (c)(32)). (9) By any physician, knowingly and willfully presenting, or causing to be presented, a claim or bill for an assistant at cataract surgery performed on or after March 1, 1987 for which payment may not be made because of section 1862(a)(15) (§ 402.1(c)(12)). (10) By any nonparticipating physician who does not accept payment on an assignment-related basis, knowingly and willfully failing to refund on a timely basis any amounts collected for services that are not reasonable or medically necessary or are of poor quality, in accordance with section 1842(l)(1)(A) (§ 402.1(c)(13)). (11) By any nonparticipating physician, who does not accept payment for an elective surgical procedure on an assignment-related basis and whose charge is at least $500, knowingly and willfully failing to— (i) Disclose the information required by section 1842(m)(1) concerning charges and coinsurance amounts; and (ii) Refund on a timely basis any amount collected for the procedure in excess of the charges recognized and approved by the Medicare program (§ 402.1(c)(14)). (12) By any physician, in repeated cases, knowingly and willfully billing one or more beneficiaries, for purchased diagnostic tests, any amount other than the payment amount specified in section 1842(n)(1)(A) or section 1842(n)(1)(B) (§ 402.1(c)(15)). (13) By any nonparticipating physician, supplier, or other person that furnishes physicians' services and does not accept payment on an assignment-related basis— (i) Knowingly and willfully billing or collecting in excess of the limiting charge (as defined in section 1843(g)(2)) on a repeated basis; or (ii) Failing to make an adjustment or refund on a timely basis as required by section 1848(g)(1)(A) (iii) or (iv) (§ 402.1(c)(17)). (14) Knowingly and willfully billing for State plan approved physicians' services on other than an assignment-related basis for a Medicare beneficiary who is also eligible for Medicaid (§ 402.1(c)(18)). (15) By any supplier of durable medical equipment, including suppliers of prosthetic devices, prosthetics, orthotics, or supplies, knowingly and willfully failing to make refunds in a timely manner to Medicare beneficiaries for services billed on an assignment-related basis if— (i) The supplier did not possess a Medicare supplier number; (ii) The service is denied in advance; or (iii) The service is determined not to be medically necessary or reasonable (§ 402.1(c)(23)). <CITA>[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 402.109</SECTNO> <SUBJECT>Statistical sampling.</SUBJECT> (a) <E T="03">Purpose.</E> CMS or OIG may introduce the results of a statistical sampling study to show the number and amount of claims subject to sanction under this part that the respondent presented or caused to be presented. (b) <E T="03">Prima facie evidence.</E> The results of the statistical sampling study, if based upon an appropriate sampling and computed by valid statistical methods, constitute prima facie evidence of the number and amount of claims or requests for payment subject to sanction under § 402.1. (c) <E T="03">Burden of proof.</E> Once CMS or OIG has made a prima facie case, the burden is on the respondent to produce evidence reasonably calculated to rebut the findings of the statistical <PRTPAGE P="34"/>sampling study. CMS or OIG then has the opportunity to rebut this evidence. </SECTION> <SECTION> <SECTNO>§ 402.111</SECTNO> <SUBJECT>Factors considered in determinations regarding the amount of penalties and assessments.</SUBJECT> (a) <E T="03">Basic factors.</E> In determining the amount of any penalty or assessment, CMS or OIG takes into account the following: (1) The nature of the claim, request for payment, or information given and the circumstances under which it was presented or given. (2) The degree of culpability, history of prior offenses, and financial condition of the person submitting the claim or request for payment or giving the information. (3) The resources available to the person submitting the claim or request for payment or giving the information. (4) Such other matters as justice may require. (b) <E T="03">Criteria to be considered.</E> As guidelines for taking into account the factors listed in paragraph (a) of this section, CMS or OIG considers the following circumstances: (1) <E T="03">Aggravating circumstances of the incident.</E> An aggravating circumstance is any of the following: (i) The services or incidents were of several types, occurring over a lengthy period of time. (ii) There were many of these services or incidents or the nature and circumstances indicate a pattern of claims or requests for payment for these services or a pattern of incidents. (iii) The amount claimed or requested for these services was substantial. (iv) Before the incident or presentation of any claim or request for payment subject to imposition of a civil money penalty, the respondent was held liable for criminal, civil, or administrative sanctions in connection with a program covered by this part or any other public or private program of payment for medical services. (v) There is proof that a respondent engaged in wrongful conduct, other than the specific conduct upon which liability is based, relating to government programs or in connection with the delivery of a health care service. (The statute of limitations governing civil money penalty proceedings does not apply to proof of other wrongful conduct as an aggravating circumstance.) (2) <E T="03">Mitigating circumstances.</E> The following circumstances are mitigating circumstances: (i) All the services or incidents subject to a civil money penalty were few in number and of the same type, occurred within a short period of time, and the total amount claimed or requested for the services was less than $1,000. (ii) The claim or request for payment for the service was the result of an unintentional and unrecognized error in the process of presenting claims or requesting payment and the respondent took corrective steps promptly after discovering the error. (iii) Imposition of the penalty or assessment without reduction would jeopardize the ability of the respondent to continue as a health care provider. (3) <E T="03">Other matters as justice may require.</E> Other circumstances of an aggravating or mitigating nature are taken into account if, in the interests of justice, they require either a reduction of the penalty or assessment or an increase in order to ensure the achievement of the purposes of this part. (c) <E T="03">Effect of aggravating or mitigating circumstances.</E> In determining the amount of the penalty and assessment to be imposed for every service or incident subject to a determination under § 402.1(c)— (1) If there are substantial or several mitigating circumstances, the aggregate amount of the penalty and assessment is set at an amount sufficiently below the maximum permitted by §§ 402.105(a) and 402.107 to reflect that fact. (2) If there are substantial or several aggravating circumstances, the aggregate amount of the penalty and assessment is set at an amount at or sufficiently close to the maximum permitted by §§ 402.105(a) and 402.107 to reflect that fact. (d)(1) The standards set forth in this section are binding, except to the extent that their application would result in imposition of an amount that would exceed limits imposed by the United States Constitution.<PRTPAGE P="35"/> (2) The amount imposed is not less than the approximate amount required to fully compensate the United States, or any State, for its damages and costs, tangible and intangible, including but not limited to the costs attributable to the investigation, prosecution, and administrative review of the case. (3) Nothing in this section limits the authority of CMS or OIG to settle any issue or case as provided by § 402.19 or to compromise any penalty and assessment as provided by § 402.115. </SECTION> <SECTION> <SECTNO>§ 402.113</SECTNO> <SUBJECT>When a penalty and assessment are collectible.</SUBJECT> A civil money penalty and assessment become collectible after the earliest of the following: (a) Sixty days after the respondent receives CMS's or OIG's notice of proposed determination under § 402.7, if the respondent has not requested a hearing before an ALJ. (b) Immediately after the respondent abandons or waives his or her appeal right at any administrative level. (c) Thirty days after the respondent receives the ALJ's decision imposing a civil money penalty or assessment under § 1005.20(d) of this title, if the respondent has not requested a review before the DAB. (d) If the DAB grants an extension of the period for requesting the DAB's review, the day after the extension expires if the respondent has not requested the review. (e) Immediately after the ALJ's decision denying a request for a stay of the effective date under § 1005.22(b) of this title. (f) If the ALJ grants a stay under § 1005.22(b) of this title, immediately after the judicial ruling is completed. (g) Sixty days after the respondent receives the DAB's decision imposing a civil money penalty if the respondent has not requested a stay of the decision under § 1005.22(b) of this title. </SECTION> <SECTION> <SECTNO>§ 402.115</SECTNO> <SUBJECT>Collection of penalty or assessment.</SUBJECT> (a) Once a determination by HHS has become final, CMS is responsible for the collection of any penalty or assessment. (b) The General Counsel may compromise a penalty or assessment imposed under this part, after consultation with CMS or OIG, and the Federal government may recover the penalty or assessment in a civil action brought in the United States district court for the district where the claim was presented or where the respondent resides. (c) The United States or a State agency may deduct the amount of a penalty and assessment when finally determined, or the amount agreed upon in compromise, from any sum then or later owing to the respondent. (d) Matters that were raised or that could have been raised in a hearing before an ALJ or in an appeal under section 1128A(e) of the Act may not be raised as a defense in a civil action by the United States to collect a penalty under this part. </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart C—Exclusions [Reserved]</RESERVED> </SUBPART> </PART> <PART> <EAR>Pt. 403</EAR> <HD SOURCE="HED">PART 403—SPECIAL PROGRAMS AND PROJECTS</HD> <CONTENTS> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Medicare Supplemental Policies</HD> <SECHD>Sec.</SECHD> <SECTNO>403.200</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTNO>403.201</SECTNO> <SUBJECT>State regulation of insurance policies.</SUBJECT> <SECTNO>403.205</SECTNO> <SUBJECT>Medicare supplement policy.</SUBJECT> <SECTNO>403.206</SECTNO> <SUBJECT>General standards for Medicare supplemental policies.</SUBJECT> <SECTNO>403.210</SECTNO> <SUBJECT>NAIC model standards.</SUBJECT> <SECTNO>403.215</SECTNO> <SUBJECT>Loss ratio standards.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">State Regulatory Programs</HD> <SECTNO>403.220</SECTNO> <SUBJECT>Supplemental Health Insurance Panel.</SUBJECT> <SECTNO>403.222</SECTNO> <SUBJECT>State with an approved regulatory program.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Voluntary Certification Program: General Provisions</HD> <SECTNO>403.231</SECTNO> <SUBJECT>Emblem.</SUBJECT> <SECTNO>403.232</SECTNO> <SUBJECT>Requirements and procedures for obtaining certification.</SUBJECT> <SECTNO>403.235</SECTNO> <SUBJECT>Review and certification of policies.</SUBJECT> <SECTNO>403.239</SECTNO> <SUBJECT>Submittal of material to retain certification.</SUBJECT> <SECTNO>403.245</SECTNO> <SUBJECT>Loss of certification.</SUBJECT> <SECTNO>403.248</SECTNO> <SUBJECT>Administrative review of CMS determinations.</SUBJECT> </SUBJGRP> <SUBJGRP> <PRTPAGE P="36"/> <HD SOURCE="HED">Voluntary Certification Program: Loss Ratio Provisions</HD> <SECTNO>403.250</SECTNO> <SUBJECT>Loss ratio calculations: General provisions.</SUBJECT> <SECTNO>403.251</SECTNO> <SUBJECT>Loss ratio date and time frame provisions.</SUBJECT> <SECTNO>403.253</SECTNO> <SUBJECT>Calculation of benefits.</SUBJECT> <SECTNO>403.254</SECTNO> <SUBJECT>Calculation of premiums.</SUBJECT> <SECTNO>403.256</SECTNO> <SUBJECT>Loss ratio supporting data.</SUBJECT> <SECTNO>403.258</SECTNO> <SUBJECT>Statement of actuarial opinion.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Recognition of State Reimbursement Control Systems</HD> <SECTNO>403.300</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> <SECTNO>403.302</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>403.304</SECTNO> <SUBJECT>Minimum requirements for State systems—discretionary approval.</SUBJECT> <SECTNO>403.306</SECTNO> <SUBJECT>Additional requirements for State systems—mandatory approval.</SUBJECT> <SECTNO>403.308</SECTNO> <SUBJECT>State systems under demonstration projects—mandatory approval.</SUBJECT> <SECTNO>403.310</SECTNO> <SUBJECT>Reduction in payments.</SUBJECT> <SECTNO>403.312</SECTNO> <SUBJECT>Submittal of application.</SUBJECT> <SECTNO>403.314</SECTNO> <SUBJECT>Evaluation of State systems.</SUBJECT> <SECTNO>403.316</SECTNO> <SUBJECT>Reconsideration of certain denied applications.</SUBJECT> <SECTNO>403.318</SECTNO> <SUBJECT>Approval of State systems.</SUBJECT> <SECTNO>403.320</SECTNO> <SUBJECT>CMS review and monitoring of State systems.</SUBJECT> <SECTNO>403.321</SECTNO> <SUBJECT>State systems for hospital outpatient services.</SUBJECT> <SECTNO>403.322</SECTNO> <SUBJECT>Termination of agreements for Medicare recognition of State systems.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart D [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Beneficiary Counseling and Assistance Grants</HD> <SECTNO>403.500</SECTNO> <SUBJECT>Basis, scope, and definition.</SUBJECT> <SECTNO>403.501</SECTNO> <SUBJECT>Eligibility for grants.</SUBJECT> <SECTNO>403.502</SECTNO> <SUBJECT>Availability of grants.</SUBJECT> <SECTNO>403.504</SECTNO> <SUBJECT>Number and size of grants.</SUBJECT> <SECTNO>403.508</SECTNO> <SUBJECT>Limitations.</SUBJECT> <SECTNO>403.510</SECTNO> <SUBJECT>Reporting requirements.</SUBJECT> <SECTNO>403.512</SECTNO> <SUBJECT>Administration.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart F [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Religious Nonmedical Health Care Institutions—Benefits, Conditions of Participation, and Payment</HD> <SECTNO>403.700</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> <SECTNO>403.702</SECTNO> <SUBJECT>Definitions and terms.</SUBJECT> <SECTNO>403.720</SECTNO> <SUBJECT>Conditions for coverage.</SUBJECT> <SECTNO>403.724</SECTNO> <SUBJECT>Valid election requirements.</SUBJECT> <SECTNO>403.730</SECTNO> <SUBJECT>Condition of participation: Patient rights.</SUBJECT> <SECTNO>403.732</SECTNO> <SUBJECT>Condition of participation: Quality assessment and performance improvement.</SUBJECT> <SECTNO>403.734</SECTNO> <SUBJECT>Condition of participation: Food services.</SUBJECT> <SECTNO>403.736</SECTNO> <SUBJECT>Condition of participation: Discharge planning.</SUBJECT> <SECTNO>403.738</SECTNO> <SUBJECT>Condition of participation: Administration.</SUBJECT> <SECTNO>403.740</SECTNO> <SUBJECT>Condition of participation: Staffing.</SUBJECT> <SECTNO>403.742</SECTNO> <SUBJECT>Condition of participation: Physical environment.</SUBJECT> <SECTNO>403.744</SECTNO> <SUBJECT>Condition of participation: Life safety from fire.</SUBJECT> <SECTNO>403.746</SECTNO> <SUBJECT>Condition of participation: Utilization review.</SUBJECT> <SECTNO>403.750</SECTNO> <SUBJECT>Estimate of expenditures and adjustments.</SUBJECT> <SECTNO>403.752</SECTNO> <SUBJECT>Payment provisions.</SUBJECT> <SECTNO>403.754</SECTNO> <SUBJECT>Monitoring expenditure level.</SUBJECT> <SECTNO>403.756</SECTNO> <SUBJECT>Sunset provision.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Medicare-Endorsed Prescription Drug Card Assistance Initiative</HD> <SECTNO>403.800</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SECTNO>403.802</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>403.804</SECTNO> <SUBJECT>General rules for Medicare endorsement.</SUBJECT> <SECTNO>403.806</SECTNO> <SUBJECT>Requirements for eligibility for endorsement.</SUBJECT> <SECTNO>403.807</SECTNO> <SUBJECT>Application process.</SUBJECT> <SECTNO>403.808</SECTNO> <SUBJECT>Agreement terms and conditions.</SUBJECT> <SECTNO>403.810</SECTNO> <SUBJECT>Administrative consortium responsibilities and oversight.</SUBJECT> <SECTNO>403.811</SECTNO> <SUBJECT>Beneficiary enrollment.</SUBJECT> <SECTNO>403.812</SECTNO> <SUBJECT>Withdrawal of endorsement.</SUBJECT> <SECTNO>403.820</SECTNO> <SUBJECT>Oversight and beneficiary education. </SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). <EXT-XREF HREF="20020904" REFID="14">Link to an amendment published at 67 FR 56682, Sept. 4, 2002.</EXT-XREF> </AUTH> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Medicare Supplemental Policies</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 47 FR 32400, July 26, 1982, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 403.200</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Provisions of the legislation.</E> This subpart implements, in part, section 1882 of the Social Security Act. The intent of that section is to enable Medicare beneficiaries to identify Medicare supplemental policies that do not duplicate Medicare, and that provide adequate, fairly priced protection against expenses not covered by Medicare. The legislation establishes certain standards for Medicare supplemental policies and provides two methods for informing Medicare beneficiaries which policies meet those standards:<PRTPAGE P="37"/> (1) Through a State approved program, that is, a program that a Supplemental Health Insurance Panel determines to meet certain minimum requirements for the regulation of Medicare supplemental policies; and (2) In a State without an approved program, through certification by the Secretary of policies voluntarily submitted by insuring organizations for review against the standards. (b) <E T="03">Scope of subpart.</E> This subpart sets forth the standards and procedures CMS will use to implement the voluntary certification program. </SECTION> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 403.201</SECTNO> <SUBJECT>State regulation of insurance policies.</SUBJECT> (a) The provisions of this subpart do not affect the right of a State to regulate policies marketed in that State. (b) Approval of a policy under the voluntary certification program, as provided for in § 403.235(b), does not authorize the insuring organization to market a policy that does not conform to applicable State laws and regulations. </SECTION> <SECTION> <SECTNO>§ 403.205</SECTNO> <SUBJECT>Medicare supplemental policy.</SUBJECT> (a) Except as specified in paragraph (d) of this section, <E T="03">Medicare supplemental policy</E> (policy) means a health insurance policy or other health benefit plan— (1) That a private entity offers to a Medicare beneficiary; and (2) That is primarily designed, or is advertised, marketed, or otherwise purported to provide payment for expenses incurred for services and items that are not reimbursed under the Medicare program because of deductibles, coinsurance, or other limitations under Medicare. (b) Unless otherwise specified in this subpart, the term <E T="03">policy</E> includes both policy form and policy. (1) <E T="03">Policy form</E> means the form of health insurance contract that is approved by and on file with the State agency for the regulation of insurance. (2) <E T="03">Policy</E> means the contract— (i) Issued under the policy form; and (ii) Held by the policyholder. (c) Medicare supplemental policy includes the following— (1) An individual policy. (2) A group policy. (d) Medicare supplemental policy does not include a Medicare+Choice plan or any of the following health insurance policies or health benefit plans: (1) A policy or plan of one or more employers for employees, former employees, or any combination thereof. (2) A policy or plan of one or more labor organizations for members, former members, or any combination thereof. (3) A policy or plan of the trustees of a fund established by one or more labor organizations, one or more employers, or any combination, for any one or combination of the following— (i) Employees. (ii) Former employees. (iii) Members. (iv) Former members. (4) A policy or plan of a profession, trade, or occupational association, if the association— (i) Is composed of individuals all of whom are actively engaged in the same profession, trade, or occupation; (ii) Has been maintained in good faith for a purpose other than obtaining insurance; and (iii) Has been in existence for at least two years before the date of its initial offering of a Medicare supplemental health insurance policy to its members. (5) For purposes of the voluntary certification program, a policy issued to an employee or to a member of a labor organization as an addition to a franchise plan (a plan that enables members of the same entity to purchase an individual policy marketed to them under group underwriting procedures), if the plan is in existence on July 1, 1982. <CITA>[47 FR 32400, July 26, 1982, as amended at 63 FR 35066, June 26, 1998]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.206</SECTNO> <SUBJECT>General standards for Medicare supplemental policies.</SUBJECT> (a) For purposes of the voluntary certification program described in this subpart, a policy must meet— (1) The National Association of Insurance Commissioners (NAIC) model standards as defined in § 405.210; and<PRTPAGE P="38"/> (2) The loss ratio standards specified in § 403.215. (b) Except as specified in paragraph (c) of this section, the standards specified in paragraph (a) of this section must be met in a single policy. (c) In the case of a nonprofit hospital or a medical association where State law prohibits the inclusion of all benefits in a single policy, the standards specified in paragraph (a) of the section must be met in two or more policies issued in conjunction with one another. </SECTION> <SECTION> <SECTNO>§ 403.210</SECTNO> <SUBJECT>NAIC model standards.</SUBJECT> (a) <E T="03">NAIC model standards</E> means the National Association of Insurance Commissioners (NAIC) “Model Regulation to Implement the Individual Accident and Insurance Minimum Standards Act” (as amended and adopted by the NAIC on June 6, 1979, as it applies to Medicare supplemental policies). Copies of the NAIC model standards can be purchased from the National Association of Insurance Commissioners at 350 Bishops Way, Brookfield, Wisconsin 53004, and from the NIARS Corporation, 318 Franklin Avenue, Minneapolis, Minnesota 55404. (b) The policy must comply with the provisions of the NAIC model standards, except as follows— (1) <E T="03">Policy</E>, for purposes of this paragraph, means individual and group policy, as specified in § 403.205. The NAIC model standards limit “policy” to individual policy. (2) The policy must meet the loss ratio standards specified in § 403.215. <CITA>[47 FR 32400, July 26, 1982; 49 FR 44472, Nov. 7, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.215</SECTNO> <SUBJECT>Loss ratio standards.</SUBJECT> (a) The policy must be expected to return to the policyholders, in the form of aggregate benefits provided under the policy— (1) At least 75 percent of the aggregate amount of premiums in the case of group policies; and (2) At least 60 percent of the aggregate amount of premiums in the case of individual policies. (b) For purposes of loss ratio requirements, policies issued as a result of solicitation of individuals through the mail or by mass media advertising are considered individual policies. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">State Regulatory Programs</HD> <SECTION> <SECTNO>§ 403.220</SECTNO> <SUBJECT>Supplemental Health Insurance Panel.</SUBJECT> (a) <E T="03">Membership.</E> The Supplemental Health Insurance Panel (Panel) consists of— (1) The Secretary or a designee, who serves as chairperson, and (2) Four State Commissioners or Superintendents of Insurance appointed by the President. (The terms Commissioner or Superintendent of Insurance include persons of similar rank.) (b) <E T="03">Functions.</E> (1) The Panel determines whether or not a State regulatory program for Medicare supplemental health insurance policies meets and continues to meet minimum requirements specified in section 1882 of the Social Security Act. (2) The chairperson of the Panel informs the State Commissioners and Superintendents of Insurance of all determinations made under paragraph (b)(1) of this section. </SECTION> <SECTION> <SECTNO>§ 403.222</SECTNO> <SUBJECT>State with an approved regulatory program.</SUBJECT> (a) A State has an approved regulatory program if the Panel determines that the State has in effect under State law a regulatory program that provides for the application of standards, with respect to each Medicare supplemental policy issued in that State, that are equal to or more stringent than those specified in section 1882 of the Social Security Act. (b) <E T="03">Policy issued in that State</E> means— (1) A group policy, if the holder of the master policy resides in that State; and (2) An individual policy, if the policy is— (i) Issued in that State; or (ii) Issued for delivery in that State. (c) A policy issued in a State with an approved regulatory program is considered to meet the NAIC model standards in § 403.210 and loss ratio standards in § 403.215. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Voluntary Certification Program: General Provisions</HD> <SECTION> <SECTNO>§ 403.231</SECTNO> <SUBJECT>Emblem.</SUBJECT> (a) The emblem is a graphic symbol, approved by HHS, that indicates that <PRTPAGE P="39"/>CMS has certified a policy as meeting the requirements of the voluntary certification program, specified in § 403.232. (b) Unless prohibited by the State in which the policy is marketed, the insuring organization may display the emblem on policies certified under the voluntary certification program. (c) The manner in which the emblem may be displayed and the conditions and restrictions relating to its use will be stated in the letter with which CMS notifies the insuring organization that a policy has been certified. The insuring organization must comply with these conditions and restrictions. (d) If a certified policy is issued in a State that later has an approved regulatory program, as provided for in § 403.222, the insuring organization may display the emblem on the policy until the earliest of the following— (1) When prohibited by State law or regulation. (2) When the policy no longer meets the requirements for Medicare supplemental policies specified in § 403.206. (3) The date the insuring organization would be required to submit material to CMS for annual review in order to retain certification, if the State did not have an approved program (see § 403.239). </SECTION> <SECTION> <SECTNO>§ 403.232</SECTNO> <SUBJECT>Requirements and procedures for obtaining certification.</SUBJECT> (a) To be certified by CMS, a policy must meet— (1) The NAIC model standards specified in § 403.210; (2) The loss ratio standards specified in § 403.215; and (3) Any State requirements applicable to a policy— (i) Issued in that State; or (ii) Marketed in that State. (b) An insuring organization requesting certification of a policy must submit the following to CMS for review— (1) A copy of the policy form (including all the documents that would constitute the contract of insurance that is proposed to be marketed as a certified policy). (2) A copy of the application form including all attachments. (3) A copy of the uniform certificate issued under a group policy. (4) A copy of the outline of coverage, in the form prescribed by the NAIC model standards. (5) A copy of the Medicare supplement buyers' guide to be provided to all applicants if the buyers' guide is not the CMS/NAIC buyers' guide. (6) A statement of when and how the outline of coverage and the buyers' guide will be delivered and copies of applicable receipt forms. (7) A copy of the notice of replacement and statement as to when and how that notice will be delivered. (8) A list of States in which the policy is authorized for sale. If the policy was approved under a deemer provision in any State, the conditions involved must be specified. (9) A copy of the loss ratio calculations, as specified in § 403.250. (10) Loss ratio supporting data, as specified in § 403.256. (11) A statement of actuarial opinion, as specified in § 403.258. (12) A statement that the insuring organization will notify the policyholders in writing, within the period of time specified in § 403.245(c), if the policy is identified as a certified policy at the time of sale and later loses certification. (13) A signed statement in which the president of the insuring organization, or a designee, attests that— (i) The policy meets the requirements specified in paragraph (a) of this section; and (ii) The information submitted to CMS for review is accurate and complete and does not misrepresent any material fact. </SECTION> <SECTION> <SECTNO>§ 403.235</SECTNO> <SUBJECT>Review and certification of policies.</SUBJECT> (a) CMS will review policies that the insuring organization voluntarily submits, except that CMS will not review a policy issued in a State with an approved regulatory program under § 403.222. (b) If the requirements specified in § 403.232 are met, CMS will— (1) Certify the policy; and (2) Authorize the insuring organization to display the emblem on the policy, as provided for in § 403.231. (c) If CMS certifies a policy, it will inform all State Commissioners and <PRTPAGE P="40"/>Superintendents of Insurance of that fact. </SECTION> <SECTION> <SECTNO>§ 403.239</SECTNO> <SUBJECT>Submittal of material to retain certification.</SUBJECT> (a) CMS certification of a policy that continues to meet the standards will remain in effect, if the insuring organization files the following material with CMS no later than the date specified in paragraph (b) or (c) of this section— (1) Any changes in the material, specified in § 403.232(b), that was submitted for previous certification. (2) The loss ratio supporting data specified in § 403.256(b). (3) A signed statement in which the president of the insuring organization, or a designee, attests that— (i) The policy continues to meet the requirements specified in § 403.232(a); and (ii) The information submitted to CMS for review is accurate and complete and does not misrepresent any material fact. (b) Except as specified in paragraph (c) of this section, the insuring organization must file the material with CMS no later than June 30 of each year. The first time the insuring organization must file the material is no later than June 30 of the calendar year that follows the year in which CMS— (1) Certifies a new policy; or (2) Certifies a policy that lost certification as provided in § 403.245. (c) If the loss ratio calculation period, used to calculate the expected loss ratio for the last actuarial certification submitted to CMS, ends before the June 30 date of paragraph (b) of this section, the insuring organization must file the material with CMS no later then the last day of that rate calculation period. </SECTION> <SECTION> <SECTNO>§ 403.245</SECTNO> <SUBJECT>Loss of certification.</SUBJECT> (a) A policy loses certification if— (1) The insuring organization withdraws the policy from the voluntary certification program; or (2) CMS determines that— (i) The policy fails to meet the requirements specified in § 403.232(a); or (ii) The insuring organization has failed to meet the requirements for submittal of material specified in § 403.239. (b) If a policy loses its certification, CMS will inform all State Commissioners and Superintendents of Insurance of that fact. (c) If a policy that displays the emblem, or that has been marketed as a certified policy without the emblem, loses certification, the insuring organization must notify each holder of the policy, or of a certificate issued under the policy, of that fact. The notice must be in writing and sent by the earlier of— (1) The date of the first regular premium notice after the date the policy loses its certification; or (2) 60 days after the date the policy loses its certification. </SECTION> <SECTION> <SECTNO>§ 403.248</SECTNO> <SUBJECT>Administrative review of CMS determinations.</SUBJECT> (a) This section provides for administrative review if CMS determines— (1) Not to certify a policy; or (2) That a policy no longer meets the standards for certification. (b) If CMS makes a determination specified in paragraph (a) of this section, it will send a notice to the insuring organization containing the following information: (1) That CMS has made such a determination. (2) The reasons for the determination. (3) That the insuring organization has 30 days from the date of the notice to— (i) Request, in writing, an administrative review of the CMS determination; and (ii) Submit additional information to CMS for review. (4) That, if the insuring organization requests an administrative review, CMS will conduct the review, as provided for in paragraph (c) of this section. (5) That, in a case involving loss of certification, the CMS determination will go into effect 30 days from the date of the notice, unless the insuring organization requests an administrative review. If the insuring organization requests an administrative review, the policy retains its certification until CMS makes a final determination.<PRTPAGE P="41"/> (c) If the insuring organization requests an administrative review, CMS will conduct the review as follows— (1) A CMS official, not involved in the initial CMS determination, will initiate and complete an administrative review within 90 days of the date of the notice provided for in paragraph (b) of this section. (2) The official will consider— (i) The original material submitted to CMS for review, as specified in § 403.232(b) or § 403.239(a); and (ii) Any additional information, that the insuring organization submits to CMS. (3) Within 15 days after the administrative review is completed, CMS will inform the insuring organization in writing of the final decision, with an explanation of the final decision. (4) If the final decision is that a policy lose its certification, the loss of certification will go into effect 15 days after the date of CMS's notice informing the insuring organization of the final decision. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Voluntary Certification Program: Loss Ratio Provisions</HD> <SECTION> <SECTNO>§ 403.250</SECTNO> <SUBJECT>Loss ratio calculations: General provisions.</SUBJECT> (a) <E T="03">Basic formula.</E> The expected loss ratio is calculated by determining the ratio of benefits to premiums. (b) <E T="03">Calculations.</E> The insuring organization must calculate loss ratios according to the provisions of §§ 403.251, 403.253, and 403.254. </SECTION> <SECTION> <SECTNO>§ 403.251</SECTNO> <SUBJECT>Loss ratio date and time frame provisions.</SUBJECT> (a) <E T="03">Initial calculation date</E> means the first date of the period that the insuring organization uses to calculate the policy's expected loss ratio. (1) The initial calculation date may be before, the same as, or after the date the insuring organization sends the policy to CMS for review, except— (2) The initial calculation date must not be earlier than January 1 of the calendar year in which the policy is sent to CMS. (b) <E T="03">Loss ratio calculation period</E> means the period beginning with the initial calculation date and ending with the last day of the period for which the insuring organization calculates the policy's scale of premiums. (c) To calculate “present values”, the insuring organization may ignore discounting (an actuarial procedure that provides for the impact of a variety of factors, such as lapse of policies) for loss ratio calculation periods not exceeding 12 months. </SECTION> <SECTION> <SECTNO>§ 403.253</SECTNO> <SUBJECT>Calculation of benefits.</SUBJECT> (a) <E T="03">General provisions.</E> (1) Except as provided for in paragraph (a)(2) of this section, calculate the amount of “benefits” by— (i) Adding the present values on the initial calculation date of— (A) Expected incurred benefits in the loss ratio calculation period, to— (B) The total policy reserve at the last day of the loss ratio calculation period: and (ii) Subtracting the total policy reserve on the initial calculation date from the sum of these values. (2) To calculate the amount of “benefits” in the case of community or pool rated individual or group policies rerated on an annual basis, calculate the expected incurred benefits in the loss ratio calculation period. (b) <E T="03">Calculation of total policy reserve—</E>(1) <E T="03">Option for calculation.</E> The insuring organization must calculate “total policy reserve” according to the provisions of paragraph (b) (2) or (3) of this section. (2) <E T="03">Total policy reserve: Federal provisions.</E> (i) “Total policy reserve” means the sum of— (A) Additional reserve; and (B) The reserve for future contingent benefits. (ii) <E T="03">Additional reserve</E> means the amount calculated on a net level reserve basis, using appropriate values to account for lapse, mortality, morbidity, and interest, that on the valuation date represents— (A) The present value of expected incurred benefits over the loss ratio calculation period; less— (B) The present value of expected net premiums over the loss ratio calculation period. (iii) <E T="03">Net premium</E> means the level portion of the gross premium used in calculating the additional reserve. On the day the policy is issued, the present <PRTPAGE P="42"/>value of the series of those portions equals the present value of the expected incurred claims over the period that the gross premiums are computed to provide coverage. (iv) <E T="03">Reserve for future contingent benefits</E> means the amounts, not elsewhere included, that provide for the extension of benefits after insurance coverage terminates. These benefits— (A) Are predicated on a health condition existing on the date coverage ends; (B) Accrue after the date coverage ends; and (C) Are payable after the valuation date. (3) <E T="03">Total policy reserve: State provisions.</E> “Total policy reserve” means the total policy reserve calculated according to appropriate State law or regulation. </SECTION> <SECTION> <SECTNO>§ 403.254</SECTNO> <SUBJECT>Calculation of premiums.</SUBJECT> (a) <E T="03">General provisions.</E> To calculate the amount of “premiums”, calculate the present value on the initial calculation date of expected earned premiums for the loss ratio calculation period. (b) <E T="03">Specific provisions.</E> (1) <E T="03">Earned premium</E> for a given period means— (i) Written premiums for the period; plus— (ii) The total premium reserve at the beginning of the period; less— (iii) The total premium reserve at the end of the period. (2) <E T="03">Written premiums in a period</E> means— (i) Premiums collected in that period; plus— (ii) Premiums due and uncollected at the end of that period; less— (iii) Premiums due and uncollected at the beginning of that period. (3) <E T="03">Total premium reserve</E> means the sum of— (i) The unearned premium reserve; (ii) The advance premium reserve; and (iii) The reserve for rate credits. (4) <E T="03">Unearned premium reserve</E> means the portion of gross premiums due that provide for days of insurance coverage after the valuation date. (5) <E T="03">Advance premium reserve</E> means premiums received by the insuring organization that are due after the valuation date. (6) <E T="03">Reserve for rate credits</E> means rate credits on a group policy that— (i) Accrue by the valuation date of the policy; and (ii) Are paid or credited after the valuation date. </SECTION> <SECTION> <SECTNO>§ 403.256</SECTNO> <SUBJECT>Loss ratio supporting data.</SUBJECT> (a) For purposes of requesting CMS certification under § 403.232, the insuring organization must submit the following loss ratio data to CMS for review— (1) A statement of why the policy is to be considered, for purposes of the loss ratio standards, an individual or a group policy. (2) The earliest age at which policyholders can purchase the policy. (3) The general marketing method and the underwriting criteria used for the selection of applicants to whom coverage is offered. (4) What policies are to be included under the one policy form, by the dates the policies are issued. (5) The loss ratio calculation period. (6) The scale of premiums for the loss ratio calculation period. (7) The expected level of earned premiums in the loss ratio calculation period. (8) The expected level of incurred claims in the loss ratio calculation period. (9) A description of how the following assumptions were used in calculating the loss ratio. (i) Morbidity. (ii) Mortality. (iii) Lapse. (iv) Assumed increases in the Medicare deductible. (v) Impact of inflation on reimbursement per service. (vi) Interest. (vii) Expected distribution, by age and sex, of persons who will purchase the policy in the coming year. (viii) Expected impact on morbidity by policy duration of— (A) The process used to select insureds from among those that apply for a policy; and (B) Pre-existing condition clauses in the policy.<PRTPAGE P="43"/> (b) For purposes of requesting continued CMS certification under § 403.239(a), the insuring organization must submit the following to CMS— (1) A description of all changes in the loss ratio data, specified in paragraph (a) of this section, that occurred since CMS last reviewed the policy. (2) The past loss ratio experience for the policy, including the experience of all riders and endorsements issued under the policy. The loss ratio experience data must include earned premiums, incurred claims, and total policy reserves that the insuring organization calculates— (i) For all years of issue combined; and (ii) Separately for each calendar year since CMS first certified the policy. </SECTION> <SECTION> <SECTNO>§ 403.258</SECTNO> <SUBJECT>Statement of actuarial opinion.</SUBJECT> (a) For purposes of certification requests submitted under § 403.232(b) and subsequent review as specified in § 403.239(a), <E T="03">statement of actuarial opinion</E> means a signed declaration in which a qualified actuary states that the assumptions used in calculating the expected loss ratio are appropriate and reasonable, taking into account actual policy experience, if any, and reasonable expectations. (b) <E T="03">Qualified actuary</E> means— (1) A member in good standing of the American Academy of Actuaries; or (2) A person who has otherwise demonstrated his or her actuarial competence to the satisfaction of the Commissioner or Superintendent of Insurance of the domiciliary State of the insuring organization. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Recognition of State Reimbursement Control Systems</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 51 FR 15492, Apr. 24, 1986, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 403.300</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> (a) <E T="03">Basis.</E> This subpart implements section 1886(c) of the Act, which authorizes payment for Medicare inpatient hospital services in accordance with a State's reimbursement control system rather than under the Medicare reimbursement principles as described in CMS's regulations and instructions. (b) <E T="03">Purpose.</E> Contained in this subpart are— (1) The basic requirements that a State reimbursement control system must meet in order to be approved by CMS; (2) A description of CMS's review and evaluation procedures; and (3) The conditions that apply if the system is approved. </SECTION> <SECTION> <SECTNO>§ 403.302</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart— <E T="03">Chief executive officer of a State</E> means the Governor of the State or the Governor's designee. <E T="03">Existing demonstration project</E> refers to demonstration projects approved by CMS under the authority of section 402(a) of the Social Security Amendments of 1967 (42 U.S.C. 1395b-1) or section 222(a) of the Social Security Amendments of 1972 (42 U.S.C. 1395b-1 (note)) and in effect on April 20, 1983 (the date of the enactment of Pub. L. 98-21 (Social Security Amendments of 1983)). <E T="03">Federal hospital</E> means a hospital that is administered by, or that is under exclusive contract with, the Department of Defense, the Veterans Administration, or the Indian Health Service. <E T="03">State system</E> or <E T="03">system</E> refers to a State reimbursement control system that is approved by CMS under the authority of section 1886(c) of the Act and that satisfies the requirements described in this subpart. </SECTION> <SECTION> <SECTNO>§ 403.304</SECTNO> <SUBJECT>Minimum requirements for State systems—discretionary approval.</SUBJECT> (a) <E T="03">Discretionary approval by CMS.</E> CMS may approve Medicare payments under a State system, if CMS determines that the system meets the requirements in paragraphs (b) and (c) of this section and, if applicable paragraph (d) of this section. (b) <E T="03">Requirements for State system.</E> (1) An application for approval of the system must be submitted to CMS by the Chief Executive Officer of the State. (2) The State system must apply to substantially all non-Federal acute care hospitals in the State.<PRTPAGE P="44"/> (3) All hospitals covered by the system must have and maintain a utilization and quality control review agreement with a Quality Improvement Organization, as required under section 1866(a)(1)(F) of the Act and § 466.78(a) of this chapter. (4) Federal hospitals must be excluded from the State system. (5) Nonacute care or specialty hospital (such as rehabilitation, psychiatric, or children's hospitals) may, at the option of the State, be excluded from the State system. (6) The State system must apply to at least 75 percent of all revenues or expenses— (i) For inpatient hospital services in the State; and (ii) For inpatient hospital services under the State's Medicaid plan. (7) Under the system, HMOs and competitive medical plans (CMPs), as defined by section 1876(b) of the Act and part 417 of this chapter, must be allowed to negotiate payment rates with hospitals. (8) The system must limit hospital charges for Medicare beneficiaries to deductibles, coinsurance or non-covered services. (9) Unless a waiver is granted by CMS under § 489.23 of this chapter, the system must prohibit payment, as required under section 1862(a)(14) of the Act and § 405.310(m) of this chapter, for nonphysician services provided to hospital inpatients under Part B of Medicare. (10) The system must require hospitals to submit Medicare cost reports or approved reports in lieu of Medicare cost reports as required. (11) The system must require— (i) Preparation, collection, or retention by the State of reports (such as financial, administrative, or statistical reports) that may be necessary, as determined by CMS, to review and monitor the State's assurances; and (ii) Submission of the reports to CMS upon request. (12) The system must provide hospitals an opportunity to appeal errors that they believe have been made in the determination of their payment rates. The system, if it is prospective may not permit providers to file administrative appeals that would result in a retroactive revision of prospectively determined payment rates. (c) <E T="03">Satisfactory assurances.</E> The State must provide to CMS satisfactory assurance as to the following: (1) The system provides for equitable treatment of hospital patients and hospital employees. (2) The system provides for equitable treatment of all entities that pay hospitals for inpatient hospital services, including Federal and State programs. Under the requirement, the following conditions must be met: (i) Both the Medicare and Medicaid programs must participate under the system. (ii) The State must assure equitable and uniform treatment under the system of third-party payors of inpatient hospital services in terms of opportunity. Equitable opportunity must include, but need not be limited to, participation in the system and availability of discounts. Criteria under which discounts are made available must be equitably and uniformly applied to all payors, except for discounts negotiated by HMOs and CMPs. Discounts available to HMOs and CMPs as result of their statutory right to negotiate payment rates independently of a State system, as described in paragraph (b)(7) of this section, need not be available to other payors. (iii) The State must assure that all third-party payors that participate under the system share in the system's risks and benefits. (3) The amount of Medicare payments made under the system over 36-month periods may not exceed the amount of Medicare payment that would otherwise have been made under the Medicare principles of reimbursement for Medicare items and services had the State system not been in effect. States must submit the assurance and supporting data as required by § 403.320 to document that the payment limit is not exceeded. States that have an existing Medicare demonstration project in effect on April 20, 1983, and that have requested approval of a State system under section 1886(c)(4) of the Act, may elect to have the effectiveness of the State system under this paragraph judged on the basis of the State system's rate of increase or inflation in <PRTPAGE P="45"/>Medicare inpatient hospital payments as compared to the national rate of increase or inflation for such payments during the three cost reporting periods of the hospitals in the State beginning on or after October 1, 1983. (d) <E T="03">Additional cost-effectiveness assurance.</E> If the assurances and supporting data required under paragraph (c)(3) of this section are insufficient to provide assurance satisfactory to CMS regarding the cost-effectiveness of a State system, the State may additionally submit one of the following assurances in order to meet the cost-effectiveness test: (1) <E T="03">State responsibility for excess payments.</E> The State must agree that each month Medicare intermediaries will disburse to the State's hospital Federal funds that in the aggregate equal no more than would have been disbursed in the absence of the State system. Any additional funds necessary to pay hospitals for Medicare services required by the State system will be paid to the intermediaries by the State. These additional amounts will be refunded to the State by the intermediaries to the extent that, in subsequent months, the State system requires a smaller aggregate payment for Medicare services than would have been paid in the absence of the State system. (2) <E T="03">Limitations on payments.</E> (i) The State must agree that if its projections exceed what Medicare would pay in any particular period, the State and CMS will establish and agreed upon payment schedule that will limit payments under the State system based on a predetermined percentage relationship between projected State payments and what payments would have been under Medicare. (ii) If deviation from the predetermined relationship described in paragraph (d)(2)(i) of this section occurs, the State must further agree that— (A) Medicare payments would be capped automatically at payment levels based on the rates used for the Medicare prospective payment system and the State would be required to pay the difference to individual hospitals in its system; or (B) The State may provide by legislation or legally binding regulations that any reduced payments to hospitals under the system that result from this cost-effectiveness assurance will constitute full and final payment for hospital services furnished to Medicare beneficiaries for the period covered by these reduced payments. </SECTION> <SECTION> <SECTNO>§ 403.306</SECTNO> <SUBJECT>Additional requirements for State systems—mandatory approval.</SUBJECT> (a) <E T="03">General policy</E>—(1) <E T="03">Mandatory approval.</E> HFCA will approve an application for Medicare reimbursement under a State system if the system meets all of the requirements of § 403.304 and of paragraph (b) of this section. (2) <E T="03">Exception.</E> CMS may approve an application if the State system meets all of the requirements of § 403.304 but only some of the requirements of paragraph (b) of this section. (b) <E T="03">Additional requirements</E>—(1) <E T="03">Operation of system.</E> The system must— (i) Be operated directly by the State or by entity designated under State law; (ii) Provide for payments to hospitals using a methodology under which— (A) Prospectively determined payment rates are established; and (B) Exceptions, adjustments, and methods for changes in methodology are set forth; (iii) Provide that a change by the State in the system that has the effect of materially changing payments to hospitals can take effect only upon 60 days notice to CMS and to the hospitals likely to be materially affected by the change and upon CMS's approval of the change. (2) <E T="03">Satisfactory assurances</E>—(i) <E T="03">Admissions practice.</E> The State must assure that the operation of the system will not result in any change in hospital admission practices that result in— (A) A significant reduction in the proportion of patients receiving hospital services covered under the system who have no third-party coverage and who are unable to pay for hospital services; (B) A significant reduction in the proportion of individuals admitted to hospitals for inpatient hospital services for which payment is less, or is likely to be less, than the anticipated charges for or cost of the services;<PRTPAGE P="46"/> (C) A refusal to admit patients who would be expected to require unusually costly or prolonged treatment for reasons other than those related to the appropriateness of the care available at the hospital; or (D) A refusal to provide emergency services to any person who is in need of emergency services, if the hospital provides the services. (ii) <E T="03">Consultation with local government officials.</E> The State must provide documentation that it has consulted with local government officials concerning the impact of the system on publicly owned or operated hospitals. </SECTION> <SECTION> <SECTNO>§ 403.308</SECTNO> <SUBJECT>State systems under demonstration projects—mandatory approval.</SUBJECT> CMS will approve an application from a State for a State system if— (a) The system was in effect prior to April 20, 1983 under an existing demonstration project; and (b) The minimum requirements and assurances for approval of a State system are met under § 403.304 (b)(1)-(10) and § 403.304(c), and, if appropriate § 403.304(d). </SECTION> <SECTION> <SECTNO>§ 403.310</SECTNO> <SUBJECT>Reduction in payments.</SUBJECT> (a) <E T="03">General rule.</E> If CMS determines that the satisfactory assurances required of a State under § 403.304(c) and, if applicable, § 403.304(d) have not been met, or will not be met, with respect to any 36-month period, CMS will reduce Medicare payments to individual hospitals being reimbursed under the State's system or, if applicable, under the Medicare payment system, in an amount equal to the amount by which the Medicare payments under the system exceed the amount of Medicare payments to such hospitals that otherwise would have been made not using the State system. The amount of the recoupment will include, when appropriate, interest charges computed in accordance with § 405.378 of this chapter. (b) <E T="03">Recoupment procedures.</E> The amount of the overpayment will be recouped on a proportionate basis from each of those hospitals that received payments under the State system that exceeded the payments they would have received under the Medicare payment system. Each hospital's share of the aggregate excess payment will be determined on the basis of a comparison of the hospital's proportionate share of the aggregate payment received under the State system that is in excess of what the aggregate payment would have been under the Medicare payment system. Recoupments may be accomplished by a hospital's direct payment to the Medicare program or by offsets to future payments made to the hospital. (c) <E T="03">Alternative recoupment procedures.</E> As an alternative to the recoupment procedures described in paragraph (b) of this section and subject to CMS's acceptance, the State may provide, by legislation or legally binding regulations, procedures for the recoupment of the amount of payments that exceed the amount of payments that otherwise would have been paid by Medicare if the State system had not been in effect. (d) <E T="03">Rule for existing Medicare demonstration projects.</E> In cases of existing Medicare demonstration projects where the expenditure test is to be applied by a rate of increase factor, the amount of the excess payment will be determined, for the three hospital cost reporting periods beginning before October 1, 1986, by a comparison of the State system's rate of increase to the national rate of increase. Recoupment of excessive payments will be assessed and recouped as described in this section. <CITA>[51 FR 15492, Apr. 24, 1986, as amended at 61 FR 63748, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.312</SECTNO> <SUBJECT>Submittal of application.</SUBJECT> The Chief Executive Officer of the State is responsible for— (a) Submittal of the application to CMS for approval; and (b) Supplying the assurances and necessary documentation as required under §§ 403.304 through 403.308. </SECTION> <SECTION> <SECTNO>§ 403.314</SECTNO> <SUBJECT>Evaluation of State systems.</SUBJECT> CMS will evaluate all State applications for approval of State systems and notify the State of its determination within 60 days. </SECTION> <SECTION> <PRTPAGE P="47"/> <SECTNO>§ 403.316</SECTNO> <SUBJECT>Reconsideration of certain denied applications.</SUBJECT> (a) <E T="03">Request for reconsideration.</E> If CMS denies an application for a State system, the State may request that CMS reconsider the denial if the State believes that its system meets all of the requirements for mandatory approval under §§ 403.304 and 403.306 or, in the case of a State with a system operating under an existing demonstration project, the applicable requirements of §§ 403.304 and 403.308. (b) <E T="03">Time limit.</E> (1) The State must submit its request for reconsideration within 60 days after the date of CMS's notice that the application was denied. (2) CMS will notify the State of the results of its reconsideration within 60 days after it receives the request for reconsideration. </SECTION> <SECTION> <SECTNO>§ 403.318</SECTNO> <SUBJECT>Approval of State systems.</SUBJECT> (a) <E T="03">Approval agreement.</E> If CMS approves a State system, a written agreement will be executed between CMS and the Chief Executive Officer of the State. The agreement must incorporate any terms of the State's application for approval of the system as agreed to by the parties and, as a minimum, must contain provisions that require the following: (1) The system is operated directly by the State or an entity designated by State law. (2) For purposes of the Medicare program, the State's system applies only to Medicare payments for inpatient, and if applicable, outpatient hospital services. (3) The system conforms to applicable Medicare law and regulations other than those relating to the amount of reimbursement for inpatient hospital services, or for inpatient and outpatient services, whichever the State system covers. Applicable regulations include, for example, those describing Medicare benefits and entitlement requirements for program beneficiaries, as explained in parts 406 and 409 of this chapter; the requirements at part 405, subpart J of this chapter specifying conditions of participation for hospitals; the requirements at part 405, subparts A, G, and S of this chapter on Medicare program administration; and all applicable fraud and abuse regulations contained in titles 42 and 45 of the CFR. (4) The State must obtain CMS's approval of the State's reporting forms and of provider cost reporting forms or other forms that have not been approved by CMS but that are necessary for the collection of required information. (b) <E T="03">Effective date.</E> An approved State system may not be effective earlier than the date of the approval agreement, which may not be retroactive. </SECTION> <SECTION> <SECTNO>§ 403.320</SECTNO> <SUBJECT>CMS review and monitoring of State systems.</SUBJECT> (a) <E T="03">General rule.</E> The State must submit an assurance and detailed and quantitative studies of provider cost and financial data and projections to support the effectiveness of its system, as required by paragraphs (b) and (c) of this section. (b) <E T="03">Required information.</E> (1) Under § 403.304(c)(3) an assurance is required that the system will not result in greater payments over a 36-month period than would have otherwise been made under Medicare not using such system. If a State that has an existing demonstration project in effect on April 20, 1983 elects under § 403.304(c)(3) to have the effectiveness of its system judged on the basis of a rate of increase factor, the State must submit an assurance that its rate of increase or inflation in inpatient hospital payments does not exceed, for that portion of the 36-month period that is subject to this test, the national rate of increase or inflation in Medicare inpatient hospital payments. The election of the rate of increase test applies only to the three cost reporting periods beginning on or after October 1, 1983. At the end of these cost reporting periods, the State must assure, beginning with the first month after the expiration of the third cost reporting period beginning after October 1, 1983, that payments under its system will not exceed over the remainder of the 36-month period what Medicare payments would have been. (2) Estimates and data are required to support the State's assurance, required under § 403.304(c)(3), that expenditures under the State system will not exceed what Medicare would have paid <PRTPAGE P="48"/>over a 36-month period. The estimates and projections of what Medicare would have otherwise paid must take into account all the Medicare reimbursement principles in effect at the time and, for any period in which payments either exceed or are less than Medicare levels, the values of interest the Medicare Trust Fund earned, or would have earned, on these amounts. Upon application for approval, the State must submit projections for each hospital for the first 12-month period covered by the assurance, in both the aggregate and on a per discharge basis, of Medicare inpatient expenditures under Medicare principles of reimbursement and parallel projections of Medicare inpatient expenditures under the State's system and the resulting cost or savings to Medicare. The State must also submit separate statewide projections for each year of the 36-month period, in both the aggregate and on a weighted average discharge basis, of inpatient expenditures under the State system and under the Medicare principles of reimbursement. (3) The projection submitted under paragraph (b)(2) of this section must include a detailed description of the methodology and assumptions used to derive the expenditure amounts under both systems. In instances where the assumptions are different under the projections cited in paragraph (b)(2) of this section, the State must provide a detailed explanation of the reasons for the differences. At a minimum, the following separate data and assumptions are to be included in the projections for the Medicare principles and for the State's system. (i) The State system base year and the Medicare allowable and reimbursable cost of each hospital that the State used to develop the projections, including the amount of estimated pass through costs. (ii) The categories of costs that are included in the State system and are reimbursed differently under the State system than under the Medicare system. (iii) The number of Medicare and total base year discharges and admissions for each hospital. (iv) The rate of change factor (and the method of application of this factor) used to project the base year costs over the 36-month period to which the assurance would apply. (v) Any allowance for anticipated growth in the amount of services from the base year (if applicable, the allowance must be presented in separate estimates for population increases or for increases in rates of admissions or both). (vi) Any adjustment in which the State is permitted by CMS to take into account previous reductions in the Medicare payment amounts that were the result of the effectiveness of the State's system even though Medicare was not a part of that system. (vii) Appropriate recognition and projection of the time value of trust fund expenditures for the period the State system expenditures were either less than or exceeded the Medicare system payments. (viii) States applying under a rate of increase effectiveness test under § 403.304(c)(3) must also submit data projecting the parallel rates of increase during the requisite period. (4) The projections must include both the aggregate payments and the payments per discharge for the individual hospitals and for the State as a whole. (5) On a case-by-case basis. CMS may require additional data and documentation as needed to complete its review and monitoring. (6) For existing Medicare demonstration projects in effect on April 20, 1983, the assurance and data as required by paragraphs (a) and (b) of this section, if appropriate, may be based on aggregate payments or payments per inpatient admission or discharge. CMS will judge the effectiveness of these systems on the basis of the rate of increase or inflation in Medicare inpatient hospital payments compared to the national rate of increase or inflation for such payments during the State's hospitals' three cost reporting periods beginning on or after October 1, 1983. The data submitted by the State for the period subject to the rate of increase test must include the rate of increase projection for that particular period of time. For the subsequent period of time, the State must assure that payments under its system will not exceed <PRTPAGE P="49"/>what Medicare payments would have been, as described in § 403.304(c)(3). (7) If the amount of Medicare payments under the State system exceeds what would have been paid under the Medicare reimbursement principles in any given year, the State must also submit quantitative evidence that the system will result in expenditures that do not exceed what Medicare expenditures would have been over the 36 month period beginning with the first month that the State system is operating. For a State that has an existing demonstration project in effect on April 20, 1983, and that elects under § 403.304(c)(3) to have a rate of increase test apply, if the State's rate of increase or inflation exceeds the national rate of increase or inflation in a given year, the State must submit quantitative evidence that, over 36 months, its payments will not exceed the national rate of increase or inflation. Furthermore, if payments under the State's system must be compared to actual Medicare expenditures, at the end of the third cost reporting period, as described in paragraph (b)(1) of this section, and payments under the State's system exceed what Medicare would have paid in a given year, the State must submit quantitative evidence that, over 36 months, payments under its system will not exceed what Medicare would have paid. (c) <E T="03">Review of assurances regarding expenditures.</E> CMS will review the State's assurances and data submitted under this section, as a prerequisite to the approval of the State's system. CMS will compare the State's projections of payment amounts to CMS data in order to determine if the State's assurance is reasonable and fully supportable. If the CMS data indicate that the State's system would result in payment amounts that would be more then that which would have been paid under the Medicare principles, the State's assurances would not be acceptable. For States applying in accordance with § 403.308, if CMS data indicate that the State's system would result in a rate of increase or inflation that would be more than the national rate of increase or inflation, the State's assurances would not be acceptable. (d) <E T="03">Medicaid upper limit.</E> In accordance with § 447.253 of this chapter, the State system may not result in aggregate payments for Medicaid inpatient hospital services that would exceed the amount that would have otherwise have been paid under the Medicare principles as applied through the State system. (e) <E T="03">Monitoring of Medicare expenditures.</E> CMS will monitor on a quarterly basis expenditures under the State's system as compared to what Medicare expenditures would have been if the system had not been in effect. If CMS determines at any time that the payments made under the State's system exceed the States' projections, as established by the satisfactory assurances required under § 403.304(c) and, if appropriate, the predetermined percentage relationship of the payments as required under § 403.304(d). CMS will— (1) Conclude that payments under the State system over a 36-month period will exceed what Medicare would have paid: (2) Terminate the waiver; and (3) Recoup overpayments to the affected hospitals in accordance with the procedures described in § 403.310. </SECTION> <SECTION> <SECTNO>§ 403.321</SECTNO> <SUBJECT>State systems for hospital outpatient services.</SUBJECT> CMS may approve a State's application for approval of an outpatient system if the following conditions are met: (a) The State's inpatient system is approved. (b) The State's outpatient application meets the requirements and assurances for an inpatient system described in § 403.304 (b) and (c), and § 403.306 (b)(1) and (b)(2)(ii). (c) The State submits a separate application that provides separate assurances and estimates and data in further support of its assurance submitted under paragraph (b)(1) of § 403.320, as follows: (1) Upon application for approval, the State must submit estimates and data that include, but are not limited to, projections for the first 12-month period covered by the assurance for each hospital, in both the aggregate and on <PRTPAGE P="50"/>an average cost per service and payment basis, of Medicare outpatient expenditures under Medicare principles of reimbursement; parallel projections of Medicare outpatient expenditures under the State system; and the resulting cost or savings to Medicare independent of the State system for hospital inpatient services. (2) The State must submit separate statewide projections for each year of the 36-month period of the aggregate outpatient expenditures for each system. The projections submitted under this paragraph must— (i) Comply with the requirements of paragraphs (b) (3) and (5) of § 403.320 regarding a detailed description of the methodology used to derive the expenditure amounts: (ii) Include the data and assumptions set forth in paragraphs (b)(3) (i), (ii), (iii), (iv), and (v) of § 403.320; and (iii) Include any assumption the State has adopted for establishing the number of Medicare and total base year outpatient services for each hospital. (3) The State must provide a detailed explanation of the reasons for any difference between the data or assumptions used for the separate projections. </SECTION> <SECTION> <SECTNO>§ 403.322</SECTNO> <SUBJECT>Termination of agreements for Medicare recognition of State systems.</SUBJECT> (a) <E T="03">Termination of agreements.</E> (1) CMS may terminate any approved agreement if it finds, after the procedures described in this paragraph are followed that the State system does not satisfactorily meet the requirements of section 1886(c) of the Act or the regulations in this subpart. A termination must be effective on the last day of a calendar quarter. (2) CMS will give the State reasonable notice of the proposed termination of an agreement and of the reasons for the termination at least 90 days before the effective date of the termination. (3) CMS will give the State the opportunity to present evidence to refute the finding. (4) CMS will issue a final notice of termination upon a final review and determination on the State's evidence. (b) <E T="03">Termination by State.</E> A State may voluntarily terminate a State system by giving CMS notice of its intent to terminate. A termination must be effective on the last day of a calendar quarter. The State must notify CMS of its intent to terminate at least 90 days before the effective date of the termination. </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart D [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Beneficiary Counseling and Assistance Grants</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 59 FR 51128, Oct. 7, 1994, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 403.500</SECTNO> <SUBJECT>Basis, scope, and definition.</SUBJECT> (a) <E T="03">Basis.</E> This subpart implements, in part, the provisions of section 4360 of Public Law 101-508 by establishing a minimum level of funding for grants made to States for the purpose of providing information, counseling, and assistance relating to obtaining adequate and appropriate health insurance coverage to individuals eligible to receive benefits under the Medicare program. (b) <E T="03">Scope of subpart.</E> This subpart sets forth the following: (1) Conditions of eligibility for the grant. (2) Minimum levels of funding for those States qualifying for the grants. (3) Reporting requirements. (c) <E T="03">Definition.</E> For purposes of this subpart, the term “State” includes (except where otherwise indicated by the context) the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa. </SECTION> <SECTION> <SECTNO>§ 403.501</SECTNO> <SUBJECT>Eligibility for grants.</SUBJECT> To be eligible for a grant under this subpart, the State must have an approved Medicare supplemental regulatory program under section 1882 of the Act and submit a timely application to CMS that meets the requirements of— (a) Section 4360 of Public Law 101-508 (42 USC 1395b-4); (b) This subpart; and (c) The applicable solicitation for grant applications issued by CMS. </SECTION> <SECTION> <PRTPAGE P="51"/> <SECTNO>§ 403.502</SECTNO> <SUBJECT>Availability of grants.</SUBJECT> CMS awards grants to States subject to availability of funds, and if applicable, subject to the satisfactory progress in the State's project during the preceding grant period. The criteria by which progress is evaluated and the performance standards for determining whether satisfactory progress has been made are specified in the terms and conditions included in the notice of grant award sent to each State. CMS advises each State as to when to make application, what to include in the application, and provides information as to the timing of the grant award and the duration of the grant award. CMS also provides an estimate of the amount of funds that may be available to the State. <CITA>[65 FR 34985, June 1, 2000]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.504</SECTNO> <SUBJECT>Number and size of grants.</SUBJECT> (a) <E T="03">General.</E> For available grant funds, up to and including $10,000,000, grants will be made to States according to the terms and formula in paragraphs (b) and (c) of this section. For any available grant funds in excess of $10,000,000, distribution of grants will be at the discretion of CMS, and will be made according to criteria that CMS will communicate to the States via grant solicitation. CMS will provide information to each State as to what must be included in the application for grant funds. CMS awards the following type of grants: (1) New program grants. (2) Existing program enhancement grants. (b) <E T="03">Grant Award.</E> Subject to the availability of funds, each eligible State that submits an acceptable application receives a grant that includes a fixed amount (minimum funding level) and a variable amount. (1) A fixed portion is awarded to States in the following amounts: (i) Each of the 50 States, $75,000. (ii) The District of Columbia, $75,000. (iii) Puerto Rico, $75,000. (iv) American Samoa, $25,000. (v) Guam, $25,000. (vi) The Virgin Islands, $25,000. (2) A variable portion, which is based on the number and location of Medicare beneficiaries residing in the State is awarded to each State. The variable amount a particular State receives is determined as set forth in paragraph (c) of this section. (c) <E T="03">Calculation of variable portion of the grant.</E> (1) CMS bases the variable portion of the grant on— (i) The amount of available funds, and (ii) A comparison of each State with the average of all of the States (except the State being compared) with respect to three factors that relate to the size of the State's Medicare population and where that population resides. (2) The factors CMS uses to compare States' Medicare populations comprise separate components of the variable amount. These factors, and the extent to which they each contribute to the variable amount, are as follows: (i) Approximately 75 percent of the variable amount is based on the number of Medicare beneficiaries living in the State as a percentage of all Medicare beneficiaries nationwide. (ii) Approximately 10 percent of the variable amount is based on the percentage of the State's total population who are Medicare beneficiaries. (iii) Approximately 15 percent of the variable amount is based on the percentage of the State's Medicare beneficiaries that reside in rural areas (“rural areas” are defined as all areas not included within a Metropolitan Statistical Area). (3) Based on the foregoing four factors (that is, the amount of available funds and the three comparative factors), CMS determines a variable rate for each participating State for each grant period. (d) <E T="03">Submission of revised budget</E>. A State that receives an amount of grant funds under this subpart that differs from the amount requested in the budget submitted with its application must submit a revised budget to CMS, along with its acceptance of the grant award, that reflects the amount awarded. <CITA>[59 FR 51128, Oct. 7, 1994, as amended at 65 FR 34986, June 1, 2000]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.508</SECTNO> <SUBJECT>Limitations.</SUBJECT> (a) <E T="03">Use of grants.</E> Except as specified in paragraph (b) of this section, and in the terms and conditions in the notice <PRTPAGE P="52"/>of grant award, a State that receives a grant under this subpart may use the grant for any reasonable expenses for planning, developing, implementing, and/or operating the program for which the grant is made as described in the solicitation for application for the grant. (b) <E T="03">Maintenance of effort.</E> A State that receives a grant to supplement an existing program (that is, an existing program enhancement grant)— (1) Must not use the grant to supplant funds for activities that were conducted immediately preceding the date of the initial award of a grant made under this subpart and funded through other sources (including in-kind contributions). (2) Must maintain the activities of the program at least at the level that those activities were conducted immediately preceding the initial award of a grant made under this subpart. <CITA>[59 FR 51128, Oct. 7, 1994, as amended at 65 FR 34986, June 1, 2000]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.510</SECTNO> <SUBJECT>Reporting requirements.</SUBJECT> A State that receives a grant under this subpart must submit at least one annual report to CMS and any additional reports as CMS may prescribe in the notice of grant award. CMS advises the State of the requirements concerning the frequency, timing, and contents of reports in the notice of grant award that it sends to the State. </SECTION> <SECTION> <SECTNO>§ 403.512</SECTNO> <SUBJECT>Administration.</SUBJECT> (a) <E T="03">General.</E> Administration of grants will be in accordance with the provisions of this subpart, 45 CFR part 92 (“Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments”), 45 CFR 74.4, the terms of the solicitation, and the terms of the notice of grant award. Except for the minimum funding levels established by § 403.504(b)(1), in the event of conflict between a provision of the notice of grant award, any provision of the solicitation, or of any regulation enumerated in 45 CFR 74.4 or in part 92, the terms of the notice of grant award control. (b) <E T="03">Notice.</E> CMS provides notice to each applicant regarding CMS's decision on an application for grant funding under § 403.504. (c) <E T="03">Appeal.</E> Any applicant for a grant under this subpart has the right to appeal CMS's determination regarding its application. Appeal procedures are governed by the regulations at 45 CFR part 16 (Procedures of the Departmental Grant Appeals Board). </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart F [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Religious Nonmedical Health Care Institutions—Benefits, Conditions of Participation, and Payment</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 64 FR 67047, Nov. 30, 1999, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 403.700</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> This subpart implements sections 1821; 1861(e), (y), and (ss); 1869; and 1878 of the Act regarding Medicare payment for inpatient hospital or posthospital extended care services furnished to eligible beneficiaries in religious nonmedical health care institutions. </SECTION> <SECTION> <SECTNO>§ 403.702</SECTNO> <SUBJECT>Definitions and terms.</SUBJECT> For purposes of this subpart, the following definitions and terms apply: <E T="03">Election</E> means a written statement signed by the beneficiary or the beneficiary's legal representative indicating the beneficiary's choice to receive nonmedical care or treatment for religious reasons. <E T="03">Excepted medical care</E> means medical care that is received involuntarily or required under Federal, State, or local laws. <E T="03">FFY</E> stands for Federal fiscal year. <E T="03">Medical care or treatment</E> means health care furnished by or under the direction of a licensed physician that can involve diagnosing, treating, or preventing disease and other damage to the mind and body. It may involve the use of pharmaceuticals, diet, exercise, surgical intervention, and technical procedures. <E T="03">Nonexcepted medical care</E> means medical care (other than excepted medical care) that is sought by or for a beneficiary who has elected religious nonmedical health care institution services.<PRTPAGE P="53"/> <E T="03">Religious nonmedical care or religious method of healing</E> means health care furnished under established religious tenets that prohibit conventional or unconventional medical care for the treatment of a beneficiary, and the sole reliance on these religious tenets to fulfill a beneficiary's total health care needs. <E T="03">RNHCI</E> stands for “religious nonmedical health care institution,” as defined in section 1861(ss)(1) of the Act. <E T="03">Religious nonmedical nursing personnel</E> means individuals who are grounded in the religious beliefs of the RNHCI, trained and experienced in the principles of nonmedical care, and formally recognized as competent in the administration of care within their religious nonmedical health care group. </SECTION> <SECTION> <SECTNO>§ 403.720</SECTNO> <SUBJECT>Conditions for coverage.</SUBJECT> Medicare covers services furnished in an RNHCI if the following conditions are met: (a) The provider meets the definition of an RNHCI as defined in section 1861(ss)(1) of the Act. That is, it is an institution that: (1) Is described in section 501(c)(3) of the Internal Revenue Code of 1986 and is exempt from taxes under section 501(a). (2) Is lawfully operated under all applicable Federal, State, and local laws and regulations. (3) Furnishes only nonmedical nursing items and services to beneficiaries who choose to rely solely upon a religious method of healing and for whom the acceptance of medical services would be inconsistent with their religious beliefs. (4) Furnishes nonmedical items and services exclusively through nonmedical nursing personnel who are experienced in caring for the physical needs of nonmedical patients. (5) Furnishes nonmedical items and services to inpatients on a 24-hour basis. (6) Does not furnish, on the basis of religious beliefs, through its personnel or otherwise medical items and services (including any medical screening, examination, diagnosis, prognosis, treatment, or the administration of drugs) for its patients. (7) Is not owned by, is not under common ownership with, or does not have an ownership interest of 5 percent or more in, a provider of medical treatment or services and is not affiliated with a provider of medical treatment or services or with an individual who has an ownership interest of 5 percent or more in, a provider of medical treatment or services. (Permissible affiliations are described at § 403.738(c).) (8) Has in effect a utilization review plan that sets forth the following: (i) Provides for review of the admissions to the institution, the duration of stays, and the need for continuous extended duration of stays in the institution, and the items and services furnished by the institution. (ii) Requires that reviews be made by an appropriate committee of the institution that included the individuals responsible for overall administration and for supervision of nursing personnel at the institution. (iii) Provides that records be maintained of the meetings, decisions, and actions of the review committee. (iv) Meets other requirements as the Secretary finds necessary to establish an effective utilization review plan. (9) Provides information CMS may require to implement section 1821 of the Act, including information relating to quality of care and coverage decisions. (10) Meets other requirements CMS finds necessary in the interest of the health and safety of the patients who receive services in the institution. These requirements are the conditions of participation in this subpart. (b) The provider meets the conditions of participation cited in §§ 403.730 through 403.746. (A provider may be deemed to meet conditions of participation in accordance with part 488 of this chapter.) (c) The provider has a valid provider agreement as a hospital with CMS in accordance with part 489 of this chapter and for payment purposes is classified as an extended care hospital. (d) The beneficiary has a condition that would make him or her eligible to receive services covered under Medicare Part A as an inpatient in a hospital or SNF.<PRTPAGE P="54"/> (e) The beneficiary has a valid election as described in § 403.724 in effect for Medicare covered services furnished in an RNHCI. </SECTION> <SECTION> <SECTNO>§ 403.724</SECTNO> <SUBJECT>Valid election requirements.</SUBJECT> (a) <E T="03">General requirements.</E> An election statement must be made by the Medicare beneficiary or his or her legal representative. (1) The election must be a written statement that must include the following statements: (i) The beneficiary is conscientiously opposed to acceptance of nonexcepted medical treatment. (ii) The beneficiary acknowledges that the acceptance of nonexcepted medical treatment is inconsistent with his or her sincere religious beliefs. (iii) The beneficiary acknowledges that the receipt of nonexcepted medical treatment constitutes a revocation of the election and may limit further receipt of services in an RNHCI. (iv) The beneficiary acknowledges that the election may be revoked by submitting a written statement to CMS. (v) The beneficiary acknowledges that revocation of the election will not prevent or delay access to medical services available under Medicare Part A in facilities other than RNHCIs. (2) The election must be signed and dated by the beneficiary or his or her legal representative. (3) The election must be notarized. (4) The RNHCI must keep a copy of the election statement on file and submit the original to CMS with any information obtained regarding prior elections or revocations. (5) The election becomes effective on the date it is signed. (6) The election remains in effect until revoked. (b) <E T="03">Revocation of election.</E> (1) A beneficiary's election is revoked by one of the following: (i) The beneficiary receives nonexcepted medical treatment for which Medicare payment is requested. (ii) The beneficiary voluntarily revokes the election and notifies CMS in writing. (2) The receipt of excepted medical treatment as defined in § 403.702 does not revoke the election made by a beneficiary. (c) <E T="03">Limitation on subsequent elections.</E> (1) If a beneficiary's election has been made and revoked twice, the following limitations on subsequent elections apply: (i) The third election is not effective until 1 year after the date of the most recent revocation. (ii) Any succeeding elections are not effective until 5 years after the date of the most recent revocation. (2) CMS will not accept as the basis for payment of any claim any elections executed on or after January 1 of the calendar year in which the sunset provision described in § 403.756 becomes effective. </SECTION> <SECTION> <SECTNO>§ 403.730</SECTNO> <SUBJECT>Condition of participation: Patient rights.</SUBJECT> An RNHCI must protect and promote each patient's rights. (a) <E T="03">Standard: Notice of rights.</E> The RNHCI must do the following: (1) Inform each patient of his or her rights in advance of furnishing patient care. (2) Have a process for prompt resolution of grievances, including a specific person within the facility whom a patient may contact to file a grievance. In addition, the facility must provide patients with information about the facility's process as well as with contact information for appropriate State and Federal resources. (b) <E T="03">Standard: Exercise of rights.</E> The patient has the right to: (1) Be informed of his or her rights and to participate in the development and implementation of his or her plan of care. (2) Make decisions regarding his or her care, including transfer and discharge from the RNHCI. (See § 403.736 for discharge and transfer requirements.) (3) Formulate advance directives and expect staff who furnish care in the RNHCI to comply with those directives, in accordance with part 489, subpart I of this chapter. For purposes of conforming with the requirement in § 489.102 that there be documentation in the patient's medical records concerning advanced directives, the patient care records of a beneficiary in an <PRTPAGE P="55"/>RNHCI are equivalent to medical records held by other providers. (c) <E T="03">Standard: Privacy and safety</E>. The patient has the right to the following: (1) Personal privacy. (2) Care in a safe setting. (3) Freedom from verbal, psychological, and physical abuse, and misappropriation of property. (4) Freedom from the use of restraints. (5) Freedom from involuntary seclusion. (d) <E T="03">Standard: Confidentiality of patient records.</E> For any patient care records or election information it maintains on patients, the RNHCI must establish procedures to do the following: (1) Safeguard the privacy of any information that identifies a particular patient. Information from, or copies of, records may be released only to authorized individuals, and the RNHCI must ensure that unauthorized individuals cannot gain access to or alter patient records. Original patient care records must be released only in accordance with Federal or State laws, court orders, or subpoenas. (2) Maintain the records and information in an accurate and timely manner. (3) Ensure timely access by patients to the records and other information that pertains to that patient. (4) Abide by all Federal and State laws regarding confidentiality and disclosure for patient care records and election information. </SECTION> <SECTION> <SECTNO>§ 403.732</SECTNO> <SUBJECT>Condition of participation: Quality assessment and performance improvement.</SUBJECT> The RNHCI must develop, implement, and maintain a quality assessment and performance improvement program. (a) <E T="03">Standard: Program scope.</E> (1) The quality assessment and performance improvement program must include, but is not limited to, measures to evaluate: (i) Access to care. (ii) Patient satisfaction. (iii) Staff performance. (iv) Complaints and grievances. (v) Discharge planning activities. (vi) Safety issues, including physical environment. (2) In each of the areas listed in paragraph (a)(1) of this section, and any other areas the RNHCI includes, the RNHCI must do the following: (i) Define quality assessment and performance improvement measures. (ii) Describe and outline quality assessment and performance improvement activities appropriate for the services furnished by or in the RNHCI. (iii) Measure, analyze, and track performance that reflect care and RNHCI processes. (iv) Inform all patients, in writing, of the scope and responsibilities of the quality assessment and performance improvement program. (3) The RNHCI must set priorities for performance improvement, considering the prevalence of and severity of identified problems. (4) The RNHCI must act to make performance improvements and must track performance to assure that improvements are sustained. (b) <E T="03">Standard: Program responsibilities.</E> (1) The governing body, administration, and staff are responsible for ensuring that the quality assessment and performance improvement program addresses identified priorities in the RNHCI and are responsible for the development, implementation, maintenance, and performance improvement of assessment actions. (2) The RNHCI must include all programs, departments, functions, and contracted services when developing, implementing, maintaining, and evaluating the program of quality assessment and performance improvement. </SECTION> <SECTION> <SECTNO>§ 403.734</SECTNO> <SUBJECT>Condition of participation: Food services.</SUBJECT> The RNHCI must have an organized food service that is directed and adequately staffed by qualified personnel. (a) <E T="03">Standard: Sanitary conditions.</E> The RNHCI must furnish food to the patient that is obtained, stored, prepared, distributed, and served under sanitary conditions. (b) <E T="03">Standard: Meals.</E> The RNHCI must serve meals that furnish each patient with adequate nourishment in accordance with the recommended dietary allowances of the Food and Nutrition <PRTPAGE P="56"/>Board of the National Research Council, National Academy of Sciences. The RNHCI must do the following: (1) Furnish food that is palatable, attractive, and at the proper temperature and consistency. (2) Offer substitutes of similar nourishment to patients who refuse food served or desire alternative choices. (3) Furnish meals at regular times comparable to normal mealtimes in the community. There must be no more than 14 hours between a substantial evening meal and breakfast the following day. (4) The RNHCI must offer snacks at bedtime. </SECTION> <SECTION> <SECTNO>§ 403.736</SECTNO> <SUBJECT>Condition of participation: Discharge planning.</SUBJECT> The RNHCI must have in effect a discharge planning process that applies to all patients. The process must assure that appropriate post-institution services are obtained for each patient, as necessary. (a) <E T="03">Standard: Discharge planning evaluation.</E> (1) The RNHCI must assess the need for a discharge plan for any patient identified as likely to suffer adverse consequences if there is no planning and for any other patient upon his or her request or at the request of his or her legal representative. This discharge planning evaluation must be initiated at admission and must include the following: (i) An assessment of the possibility of a patient needing post-RNHCI services and of the availability of those services. (ii) An assessment of the probability of a patient's capacity for self-care or of the possibility of the patient being cared for in the environment from which he or she entered the RNHCI. (2) The staff must complete the assessment on a timely basis so that arrangements for post-RNHCI care are made before discharge and so that unnecessary delays in discharge are avoided. (3) The discharge planning evaluation must be included in the patient's rights record for use in establishing an appropriate discharge plan and must discuss the results of the evaluation with the patient or a legal representative acting on his or her behalf. (b) <E T="03">Standard: Discharge plan.</E> (1) If the discharge planning evaluation indicates a need for a discharge plan, qualified and experienced personnel must develop or supervise the development of the plan. (2) In the absence of a finding by the RNHCI that the beneficiary needs a discharge plan, the beneficiary or his or her legal representative may request a discharge plan. In this case, the RNHCI must develop a discharge plan for the beneficiary. (3) The RNHCI must arrange for the initial implementation of the beneficiary's discharge plan. (4) If there are factors that may affect continuing care needs or the appropriateness of the discharge plan, the RNHCI must reevaluate the beneficiary's discharge plan. (5) The RNHCI must inform the beneficiary or legal representative about the beneficiary's post-RNHCI care requirements. (6) The discharge plan must inform the beneficiary or his or her legal representative about the freedom to choose among providers of care when a variety of providers is available that are willing to respect the discharge preferences of the beneficiary or legal representative. (c) <E T="03">Standard: Transfer or referral.</E> The RNHCI must transfer or refer patients in a timely manner to another facility (including a medical facility if requested by the beneficiary, or his or her legal representative) in accordance with § 403.730(b)(2). (d) <E T="03">Standard: Reassessment.</E> The RNHCI must reassess its discharge planning process on an ongoing basis. The reassessment must include a review of discharge plans to ensure that they are responsive to discharge needs. </SECTION> <SECTION> <SECTNO>§ 403.738</SECTNO> <SUBJECT>Condition of participation: Administration.</SUBJECT> An RNHCI must have written policies regarding its organization, services, and administration. (a) <E T="03">Standard: Compliance with Federal, State, and local laws.</E> The RNHCI must operate in compliance with all applicable Federal, State, and local laws, regulations, and codes including, but not limited to, those pertaining to the following:<PRTPAGE P="57"/> (1) Protection against discrimination on the basis of race, color, national origin, age, or handicap (45 CFR parts 80, 84, and 91). (2) Protection of human research subjects (45 CFR part 46). (3) Application of all safeguards to protect against the possibility of fraud and abuse (42 CFR part 455). (b) <E T="03">Standard: Governing body.</E> (1) The RNHCI must have a governing body, or a person designated to function as a governing body, that is legally responsible for establishing and implementing all policies regarding the RNHCI's management and operation. (2) The governing body must appoint the administrator responsible for the management of the RNHCI. (c) <E T="03">Standard: Affiliations and disclosure.</E> (1) An affiliation is permissible if it is between one of the following: (i) An individual serving as an uncompensated director, trustee, officer, or other member of the governing body of an RNHCI and a provider of medical treatment or services. (ii) An individual who is a director, trustee, officer, employee, or staff member of an RNHCI and another individual, with whom he or she has a family relationship, who is affiliated with (or has an ownership interest in) a provider of medical treatment or services. (iii) The RNHCI and an individual or entity furnishing goods or services as a vendor to both providers of medical treatment or services and RNHCIs. (2) The RNHCI complies with the disclosure requirements of §§ 420.206 and 455.104 of this chapter. (3) The RNHCI furnishes written notice, including the identity of each new individual or company, to CMS at the time of a change, if a change occurs in any of the following: (i) Persons with an ownership or control interest, as defined in §§ 420.201 and 455.101 of this chapter. (ii) The officers, directors, agents, or managing employees. (iii) The religious entity, corporation, association, or other company responsible for the management of the RNHCI. (iv) The RNHCI's administrator or director of nonmedical nursing services. </SECTION> <SECTION> <SECTNO>§ 403.740</SECTNO> <SUBJECT>Condition of participation: Staffing.</SUBJECT> The RNHCI must be staffed with qualified experienced personnel who are present in sufficient numbers to meet the needs of the patients. (a) <E T="03">Standard: Personnel qualifications.</E> The RNHCI must ensure that staff who supervise or furnish services to patients are qualified to do so and that staff allowed to practice without direct supervision have specific training to furnish these services. (b) <E T="03">Standard: Education, training, and performance evaluation.</E> (1) The RNHCI must ensure that staff (including contractors and other individuals working under arrangement) have the necessary education and training concerning their duties so that they can furnish services competently. This education includes, but is not limited to, training related to the individual job description, performance expectations, applicable organizational policies and procedures, and safety responsibilities. (2) Staff must demonstrate, in practice, the skills and techniques necessary to perform their duties and responsibilities. (3) The RNHCI must evaluate the performance of staff and implement measures for improvement. </SECTION> <SECTION> <SECTNO>§ 403.742</SECTNO> <SUBJECT>Condition of participation: Physical environment.</SUBJECT> A RNHCI must be designed, constructed, and maintained to ensure the safety of the patients, staff, and the public. (a) <E T="03">Standard: Buildings.</E> The physical plant and the overall environment must be maintained in a manner that ensures the safety and well-being of the patients. The RNHCI must have the following: (1) Emergency power for emergency lights, for fire detection and alarm systems, and for fire extinguishing systems. (2) Procedures for the proper storage and disposal of trash. (3) Proper ventilation and temperature control and appropriate lighting levels to ensure a safe and secure environment. (4) A written disaster plan to address loss of power, water, sewage, and other emergencies.<PRTPAGE P="58"/> (5) Facilities for emergency gas and water supply. (6) An effective pest control program. (7) A preventive maintenance program to maintain essential mechanical, electrical, and fire protection equipment operating in an efficient and safe manner. (8) A working call system for patients to summon aid or assistance. (b) <E T="03">Standard: Patient rooms.</E> Patient rooms must be designed and equipped for adequate care, comfort, and privacy of the patient. (1) Patient rooms must meet the following conditions: (i) Accommodate no more than four patients. (ii) Measure at least 80 square feet per patient in multiple patient rooms and at least 100 square feet in single patient rooms. (iii) Have direct access to an exit corridor. (iv) Be designed or equipped to assure full visual privacy for each patient. (v) Have at least one window to the outside. (vi) Have a floor at or above grade level. (2) The RNHCI must furnish each patient with the following: (i) A separate bed of proper size and height for the convenience of the patient. (ii) A clean, comfortable mattress. (iii) Bedding appropriate to the weather and climate. (iv) Functional furniture appropriate to the patient's needs and individual closet space with clothes racks and shelves accessible to the patient. (3) CMS may permit variances in requirements specified in paragraphs (b)(1)(i) and (ii) of this section relating to rooms on an individual basis when the RNHCI adequately demonstrates in writing that the variances meet the following: (i) Are in accordance with the special needs of the patients. (ii) Will not adversely affect patients’ health and safety. </SECTION> <SECTION> <SECTNO>§ 403.744</SECTNO> <SUBJECT>Condition of participation: Life safety from fire.</SUBJECT> (a) <E T="03">General.</E> An RNHCI must meet the following conditions: (1) Except as provided in paragraph (b) of this section, the RNHCI must meet the new or existing health care occupancies provisions of the 1997 edition of the Life Safety Code of the National Fire Protection Association (NFPA 101), which is incorporated by reference. Incorporation by reference of NFPA 101, the Life Safety Code, 1997 edition, was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.<SU>1</SU> <FTREF/> (See § 483.70). <FTNT> <SU>1</SU> The 1997 edition of the Life Safety Code (NFPA 101) is available for inspection at the CMS Information Resource Center, 7500 Security Boulevard, Central Building, Baltimore, MD, and at the Office of the Federal Register, 800 North Capitol Street, NW, suite 700, Washington, DC. Copies of this publication may be purchased from the National Fire Protection Association, 1 Batterymarch Park, P.O. Box 9101, Quincy, MA 02263-9101. </FTNT> (2) The RNHCI must have written fire control plans that contain provisions for prompt reporting of fires; extinguishing fires; protection of patients, staff, and the public; evacuation; and cooperation with fire fighting authorities. (3) The RNHCI must maintain written evidence of regular inspection and approval by State or local fire control agencies. (b) <E T="03">Exceptions.</E> (1) If application of the Life Safety Code required under paragraph (a)(1) of this section would result in unreasonable hardship upon the RNHCI, CMS may waive specific provisions of the Life Safety Code, but only if the waiver does not adversely affect the health and safety of patients. (2) If CMS finds that the fire and safety code imposed by State law adequately protects patients in the institution, the provisions of the Life Safety Code required in paragraph (a)(1) of this section do not apply in that State. </SECTION> <SECTION> <SECTNO>§ 403.746</SECTNO> <SUBJECT>Condition of participation: Utilization review.</SUBJECT> The RNHCI must have in effect a written utilization review plan to assess the necessity of services furnished. The plan must provide that records be maintained of all meetings, decisions, and actions by the utilization review committee.<PRTPAGE P="59"/> (a) <E T="03">Standard: Utilization review plan.</E> The utilization review plan must contain written procedures for evaluating the following: (1) Admissions. (2) Duration of care. (3) Continuing care of an extended duration. (4) Items and services furnished. (b) <E T="03">Standard: Utilization review committee.</E> The committee is responsible for evaluating each admission and ensuring that the admission is necessary and appropriate. The utilization review plan must be carried out by the utilization review committee, consisting of the governing body, administrator or other individual responsible for the overall administration of the RNHCI, the supervisor of nursing staff, and other staff as appropriate. </SECTION> <SECTION> <SECTNO>§ 403.750</SECTNO> <SUBJECT>Estimate of expenditures and adjustments.</SUBJECT> (a) <E T="03">Estimates.</E> CMS estimates the level of expenditures for services provided under this subpart before the start of each FFY beginning with FFY 2000. (b) <E T="03">Adjustments to payments.</E> When the level of estimated expenditures is projected to exceed the FFY trigger level as described in paragraph (d) of this section, for the year of the projection, payments to RNHCIs will be reduced by a proportional percentage to prevent estimated expenditures from exceeding the trigger level. In addition to reducing payments proportionally, CMS may impose alternative adjustments. (c) <E T="03">Notification of adjustments.</E> CMS notifies participating RNHCIs before the start of the FFY of the type and level of expenditure reductions to be made and when these adjustments will apply. (d) <E T="03">Calculation of trigger level.</E> The trigger level for FFY 1998 is $20,000,000. For subsequent FFYs, the trigger level is the unadjusted trigger level increased or decreased by the carry forward as described in § 403.754(b). The unadjusted trigger level is the base year amount (the unadjusted trigger level dollar amount for the prior FFY) increased by the average consumer price index (the single numerical value published monthly by the Bureau of Labor Statistics that presents the relationship in United States urban areas for the current cost of goods and services compared to a base year, to represent the change in spending power) for the 12-month period ending on July 31 preceding the beginning of the FFY. </SECTION> <SECTION> <SECTNO>§ 403.752</SECTNO> <SUBJECT>Payment provisions.</SUBJECT> (a) <E T="03">Payment to RNHCIs.</E> Payment for services may be made to an RNHCI that meets the conditions for coverage described in § 403.720 and the conditions of participation described in §§ 403.730 through 403.746. Payment is made in accordance with § 413.40 of this chapter to an RNHCI meeting these conditions. (b) <E T="03">Review of estimates and adjustments.</E> There is no administrative or judicial review of the level of estimated expenditures or the adjustments in payments described in §§ 403.750(a) and (b). (c) <E T="03">Effect on beneficiary liability.</E> When payments are reduced in accordance with § 403.750(b), the RNHCI may bill the beneficiary the amount of the Medicare reduction attributable to his or her covered services. (d) <E T="03">Notification of beneficiary liability.</E> (1) The RNHCI must notify the beneficiary in writing at the time of admission of any proposed or current proportional Medicare adjustment. A beneficiary currently receiving care in the RNHCI must be notified in writing at least 30 days before the Medicare reduction is to take effect. The notification must inform the beneficiary that the RNHCI can bill him or her for the proportional Medicare adjustment. (2) The RNHCI must, at time of billing, provide the beneficiary with his or her liability for payment, based on a calculation of the Medicare reduction pertaining to the beneficiary's covered services permitted by § 403.750(b). </SECTION> <SECTION> <SECTNO>§ 403.754</SECTNO> <SUBJECT>Monitoring expenditure level.</SUBJECT> (a) <E T="03">Tracking expenditures.</E> Starting in FFY 1999 CMS begins monitoring Medicare payments to RNHCIs. (b) <E T="03">Carry forward.</E> The difference between the trigger level and Medicare expenditures for a FFY results in a carry forward that either increases or decreases the unadjusted trigger level described in § 403.750(d). In no case may the carry forward exceed $50,000,000 for an FFY. </SECTION> <SECTION> <PRTPAGE P="60"/> <SECTNO>§ 403.756</SECTNO> <SUBJECT>Sunset provision.</SUBJECT> (a) <E T="03">Effective date.</E> Beginning with FFY 2002, if the level of estimated expenditures for all RNHCIs exceeds the trigger level for 3 consecutive FFYs, CMS will not accept as the basis for payment of any claim any election executed on or after January 1 of the following calendar year. (b) <E T="03">Notice of activation.</E> A notice in the <E T="04">Federal Register</E> will be published at least 60 days before January 1 of the calendar year that the sunset provision becomes effective. (c) <E T="03">Effects of sunset provision.</E> Only those beneficiaries who have a valid election in effect before January 1 of the year in which the sunset provision becomes effective will be able to claim Medicare payment for care in an RNHCI, and only for RNCHI services furnished during that election. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Medicare-Endorsed Prescription Drug Card Assistance Initiative</HD> <EFFDNOT> <HD SOURCE="HED">Effective Date Note:</HD> At 67 FR 56682, Sept. 4, 2002, §§ 403.800—403.820 (Subpart H) were added effective November 4, 2002. </EFFDNOT> <SECTION> <SECTNO>§ 403.800</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Provisions of the legislation.</E> This subpart implements, in part, the provisions of section 4359 of the Omnibus Budget Reconciliation Act of 1990 (OBRA). Section 4359 of OBRA requires the Secretary to establish a health insurance advisory service program (the beneficiary assistance program) to assist Medicare beneficiaries with the receipt of services (including both covered and uncovered benefits) under the Medicare and Medicaid programs and other health insurance programs. The subpart is also based on sections 1102 and 1871 of the Act. (b) <E T="03">Scope of subpart.</E> This subpart sets forth the standards and procedures CMS uses to implement the Medicare-Endorsed Prescription Drug Card Assistance Initiative. </SECTION> <SECTION> <SECTNO>§ 403.802</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">For purposes of this subpart, the following definitions apply:</E> <E T="03">Administrative consortium</E> means a private entity established and financed by the Medicare-endorsed prescription drug card program sponsors to carry out a set of specific administrative tasks required under the Medicare-Endorsed Prescription Drug Card Assistance Initiative. <E T="03">Applicant</E> means the organization or entity (along with any subcontractors or others with whom it has legal arrangements for the purpose of meeting the requirements for endorsement) that is applying for Medicare endorsement of its prescription drug discount card program. <E T="03">Application</E> means the document submitted to CMS by an applicant that demonstrates compliance with the requirements specified in this subpart in order to obtain Medicare endorsement of the applicant's drug card program. <E T="03">Formulary</E> means the list of specific drugs for which the Medicare-endorsed prescription drug card program offers discounts to Medicare beneficiaries enrolled in the Medicare-endorsed prescription drug card program. <E T="03">Medicare-Endorsed Prescription Drug Card Assistance Initiative</E> means an effort whereby CMS provides information, counseling, and assistance to Medicare beneficiaries by soliciting applications for Medicare endorsement of prescription drug card programs, reviewing them, offering agreements to program sponsors that meet all of the requirements for endorsement, awarding Medicare endorsements to program sponsors who sign the agreement, and educating beneficiaries about the options available to them in the private marketplace. <E T="03">Medicare-endorsed prescription drug card program</E> means a program developed by an organization or group of organizations, endorsed by CMS under the Medicare-Endorsed Prescription Drug Card Assistance Initiative, to educate Medicare beneficiaries about tools to lower their prescription drug costs and to offer prescription drug discount cards to Medicare beneficiaries. <E T="03">Medicare-endorsed prescription drug card program sponsor</E> means any applicant that has received endorsement from Medicare for its prescription drug card program. <E T="03">Solicitation</E> means a notice published in the <E T="04">Federal Register</E> announcing a <PRTPAGE P="61"/>request for applications from applicants seeking Medicare endorsement for their prescription drug card programs. </SECTION> <SECTION> <SECTNO>§ 403.804</SECTNO> <SUBJECT>General rules for Medicare endorsement.</SUBJECT> (a) <E T="03">Applications.</E> Applicants must submit applications by the deadline announced in the solicitation to participate in the Medicare-Endorsed Prescription Drug Card Assistance Initiative and become a Medicare-endorsed prescription drug card program sponsor. (b) <E T="03">Number of programs sponsored.</E> An organization or entity may sponsor no more than two drug card programs. The same organization or entity may have operational responsibilities in multiple drug card programs. (c) <E T="03">Requirements.</E> In order to be eligible for endorsement, applicants must submit applications and meet all of the requirements specified in § 403.806. (d) <E T="03">Eligibility to receive endorsement.</E> Any applicant that submits an application by the deadline announced in the solicitation that contains all information necessary for CMS to determine whether the applicant meets all of the requirements in § 403.806, and whose application meets all of the requirements in § 403.806, will be eligible to enter into an agreement with CMS to receive a Medicare endorsement. (e) <E T="03">Period of endorsement.</E> In Year One of the initiative, the Medicare endorsement will be effective for a period of at least 12 months but fewer than 24 months. Beginning in Year Two, the endorsement will be effective at least 12 months, but fewer than 15 months. CMS will consider card program sponsor performance under an existing Medicare endorsement as a factor in determining eligibility for endorsement in future annual cycles. (f) <E T="03">Termination of endorsement by CMS.</E> CMS may terminate the endorsement at any time. (g) <E T="03">Termination of participation by Medicare-endorsed drug card sponsor.</E> A Medicare-endorsed prescription drug card program sponsor may choose not to continue participation in the Medicare-Endorsed Prescription Drug Card Assistance Initiative. (h) <E T="03">Notification to beneficiaries of termination of participation.</E> (1) In the event of termination of participation in the initiative by the drug card program sponsor, or termination by CMS, the Medicare-endorsed prescription drug card program sponsor must notify all of its Medicare beneficiary enrollees in writing that they may enroll in an alternative Medicare-endorsed prescription drug card program. This notice must be provided by United States mail within 10 days of providing CMS with notice of termination or within 10 days of receiving notice of termination from CMS. (2) In the event of termination by the drug card program sponsor, or termination by CMS, drug card programs must remain available to beneficiaries for 90 days after beneficiaries are provided with notice of termination. In the event of termination by the drug card program sponsor, or termination by CMS, drug card program sponsors must suspend information and outreach and enrollment of beneficiaries once beneficiaries have been notified of the termination. </SECTION> <SECTION> <SECTNO>§ 403.806</SECTNO> <SUBJECT>Requirements for eligibility for endorsement.</SUBJECT> (a) <E T="03">General.</E> To be eligible for Medicare endorsement, an applicant must submit an application by the deadline announced in the solicitation, demonstrating that it meets and will comply with the requirements described in this section. (b) <E T="03">Applicant structure, experience, and participation in administrative consortium.</E> (1) A single organization or entity that is either the applicant or a subcontractor or under other legal arrangement with the applicant must have no less than 3 years experience in pharmacy benefit management, in administering a prescription drug discount program, or in administering a low income drug assistance program that provides prescription drugs at low or no cost; (2) A single organization or entity that is either the applicant or a subcontractor or under other legal arrangement with the applicant must, at <PRTPAGE P="62"/>the time of application for endorsement, manage at least 1 million covered lives in an insured pharmacy benefit, prescription drug discount program, or a low income drug assistance program that provides prescription drugs at low or no cost. (3) A single organization or entity that is either the applicant or a subcontractor or under other legal arrangement with the applicant must— (i) Have a pharmacy network serving all 50 States and the District of Columbia to qualify as a national program; or (ii) Have a regional pharmacy network serving at least 2 contiguous States (with the exception of Hawaii and Alaska, which can partner with 2 or more contiguous States) to qualify as a regional program. (4) The applicant must demonstrate that it is financially solvent. (5) The applicant must have a satisfactory record of integrity and business ethics. (6) The applicant must agree to, and demonstrate the ability to, jointly administer, abide by the guidelines of, and fund a private administrative consortium with other Medicare-endorsed prescription drug card program sponsors in accordance with the requirements of this subpart. (7) The applicant must comply with all applicable Federal and State laws. (c) <E T="03">Customer service.</E> The applicant must comply with the following customer service requirements: (1) Limit its one time enrollment fee in Year One to no more than $25. In future years, CMS may adjust the fee based on a determination of what is a reasonable amount to defray costs of the applicant's administrative activities. (2) Enroll only Medicare beneficiaries, and all Medicare beneficiaries who wish to participate in its Medicare-endorsed prescription drug card program. (3) Provide information and outreach materials regarding its Medicare-endorsed prescription drug card program to all enrolled Medicare beneficiaries. (4) Maintain a toll free customer call center that is open during usual business hours and that provides customer telephone service, including to pharmacists, in accordance with standard business practices. (d) <E T="03">Privacy and confidentiality of beneficiary-specific information.</E> (1) The applicant must comply, beginning at the time of Medicare endorsement, with 45 CFR 160.103, 160.202, 164.501 through 164.514, and 164.520, subject to the following modifications: (i) All references to covered entities will be applicable to the drug card sponsor, and health care operations means the routine activities, including providing information and outreach, as provided under the Medicare endorsement; and (ii) For the purpose of authorization in 45 CFR 164.508, marketing means any use or disclosure of protected health information to be outside the scope of Medicare endorsement. (2) The applicant must develop and implement a written data security plan for protected health information. (3) The requirements of this paragraph (d) are enforceable by CMS under the provisions of § 403.812. (4) Nothing in this paragraph (d) modifies the applicability of 45 CFR 160.103, 160.202, 164.501 through 164.514, and 164.520 to organizations or entities independently subject to the mandates of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). (e) <E T="03">Discounts, rebates, and access.</E> The applicant must comply with the following discount, rebate, and access requirements: (1) Offer a discount on at least one brand name or generic prescription drug in each of the therapeutic drug classes, groups, or subgroups representing the prescription drugs commonly needed by Medicare beneficiaries. (2) Obtain pharmaceutical manufacturer drug rebates or discounts on brand name or generic drugs or both, and ensure that a substantial share is provided to beneficiaries either directly or indirectly through pharmacies. (3) Ensure that a specific drug offered under the program is not dropped from the formulary nor its price increased for periods of at least 60 days, starting on the first day of the program's operation, and notify CMS, the consortium, <PRTPAGE P="63"/>and the network pharmacies of these changes 30 days before the change becomes effective. (4) Guarantee that for the drugs for which the applicant will offer discounts, Medicare beneficiaries enrolled in its Medicare-endorsed prescription drug discount card program will receive the lower of the discounted price available through the program, or the price the pharmacy would charge a cash paying customer. (5) Have a national or regional contracted pharmacy network sufficient to ensure that pharmacies are locally accessible to beneficiaries where the drug discount card will be offered. At least 90 percent of Medicare beneficiaries, on average, in all Metropolitan Statistical Areas (MSAs) served by the program must live within 5 miles of a contracted pharmacy; and at least 90 percent of Medicare beneficiaries, on average, in all non-MSAs served by the program must live within 10 miles of a contracted pharmacy. (6) Provide to the administrative consortium information on drugs and their pricing included in the applicant's formularies. </SECTION> <SECTION> <SECTNO>§ 403.807</SECTNO> <SUBJECT>Application process.</SUBJECT> (a) CMS will solicit applications through an application process. (b) CMS will review applications and determine whether the applicant has met and is able to comply with all of the requirements set forth in § 403.806 to become Medicare-endorsed. (c) All applications that are submitted by the deadline announced in the solicitation and that demonstrate that the applicant has met and is able to comply with all of the requirements to become Medicare-endorsed will be eligible to enter into an agreement to receive Medicare endorsement from CMS. </SECTION> <SECTION> <SECTNO>§ 403.808</SECTNO> <SUBJECT>Agreement terms and conditions.</SUBJECT> In order to receive a Medicare endorsement, an applicant that complies with all of the application procedures and meets all of the requirements described in this subpart must enter into a written agreement with CMS. The agreement must include a statement by the applicant that it has met the requirements of this subpart and will continue to meet all requirements as long as the agreement is in effect. The agreement must include a statement that the applicant will comply with information and outreach guidelines established by CMS. </SECTION> <SECTION> <SECTNO>§ 403.810</SECTNO> <SUBJECT>Administrative consortium responsibilities and oversight.</SUBJECT> (a) The administrative consortium will be responsible for— (1) Ensuring that beneficiaries are not enrolled in more than one Medicare-endorsed prescription drug card program at the same time; (2) Facilitating the publication of, or publishing, information, including comparative price information on discounted drugs, that assists beneficiaries in determining which Medicare-endorsed prescription drug card program is the most appropriate for their needs; (3) Ensuring the integrity of the information distributed by the Medicare-endorsed prescription drug card programs; and (4) Developing and implementing a written data security plan for protected health information; and (5) Abiding by applicable Federal and State laws. (b) In order to facilitate the formation of the administrative consortium and ensure that all functions are performed in a timely manner, CMS may assist in the start-up of the administrative consortium and perform any of the functions in this section for a transitional period of time. </SECTION> <SECTION> <SECTNO>§ 403.811</SECTNO> <SUBJECT>Beneficiary enrollment.</SUBJECT> (a) <E T="03">Individual enrollment.</E> (1) Medicare beneficiaries who are enrolling in a Medicare-endorsed prescription drug card program for the first time may enroll at any time. (2) Once enrolled, a Medicare beneficiary may belong to only one Medicare-endorsed prescription drug card program at a time. (3) Once enrolled, and except as provided in paragraph (a)(4) of this section, enrollees may change enrollment to a different Medicare-endorsed prescription drug card program, to be effective the first day of the following <PRTPAGE P="64"/>January or July following the request for change, whichever comes first. (4) If the Medicare endorsement of a prescription drug card program is terminated, either by CMS or by the sponsor, enrolled Medicare beneficiaries may enroll in a different Medicare-endorsed prescription drug card program to become effective immediately. (b) <E T="03">Group enrollment.</E> (1) The prescription drug card program sponsor may accept group enrollment from health insurers and must ensure— (i) Disclosure to Medicare beneficiaries of the intent to enroll them as a group; (ii) Disclosure to beneficiaries of the enrollment exclusivity restrictions and other enrollment rules of the initiative; (2) Medicare+Choice (M+C) organizations may subsidize the enrollment fee and offer the drug card program as part of their Adjusted Community Rate filing, but may not require enrollment in a drug card program as a condition of enrollment in any of their M+C plans. </SECTION> <SECTION> <SECTNO>§ 403.812</SECTNO> <SUBJECT>Withdrawal of endorsement.</SUBJECT> If CMS obtains evidence that a Medicare-endorsed prescription drug card program or its sponsor has failed to meet any of the requirements for endorsement or has not complied with the agreement necessary to receive endorsement under this subpart, CMS may withdraw the endorsement. CMS may also take appropriate intermediate actions and may also refer the card program sponsor to appropriate Federal or State authorities, including the Office of Inspector General, for sanctions or prosecution under section 1140 of the Act. </SECTION> <SECTION> <SECTNO>§ 403.820</SECTNO> <SUBJECT>Oversight and beneficiary education.</SUBJECT> (a) The Medicare-endorsed prescription drug card program sponsor must report to CMS on a periodic basis on major features of its programs that correspond to the qualifications for endorsement, including savings to beneficiaries, customer service, and discount card program operations. Card program sponsors must certify the validity of their reported data. (b) The Medicare-endorsed prescription drug card program sponsor must establish and maintain a customer complaints process. This process must be designed to track and address in a timely manner enrollees' complaints about any aspect of the drug card program. (c) CMS will conduct beneficiary education about, and oversight of, the Medicare-endorsed prescription drug card programs, as determined by CMS. </SECTION> </SUBPART> </PART> </SUBCHAP> <SUBCHAP TYPE="P"> <PRTPAGE P="65"/> <HD SOURCE="HED">SUBCHAPTER B—MEDICARE PROGRAM</HD> <PART> <EAR>Pt. 405</EAR> <HD SOURCE="HED">PART 405—FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED</HD> <CONTENTS> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Medical Services Coverage Decisions That Relate to Health Care Technology</HD> <SECHD>Sec.</SECHD> <SECTNO>405.201</SECTNO> <SUBJECT>Scope of subpart and definitions.</SUBJECT> <SECTNO>405.203</SECTNO> <SUBJECT>FDA categorization of investigational devices.</SUBJECT> <SECTNO>405.205</SECTNO> <SUBJECT>Coverage of a non-experimental/investigational (Category B) device.</SUBJECT> <SECTNO>405.207</SECTNO> <SUBJECT>Services related to a noncovered device.</SUBJECT> <SECTNO>405.209</SECTNO> <SUBJECT>Payment for a non-experimental/investigational (Category B) device.</SUBJECT> <SECTNO>405.211</SECTNO> <SUBJECT>Procedures for Medicare contractors in making coverage decisions for a non-experimental/investigational (Category B) device.</SUBJECT> <SECTNO>405.213</SECTNO> <SUBJECT>Re-evaluation of a device categorization.</SUBJECT> <SECTNO>405.215</SECTNO> <SUBJECT>Confidential commercial and trade secret information.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Suspension of Payment, Recovery of Overpayments, and Repayment of Scholarships and Loans</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTNO>405.301</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Liability for Payments to Providers and Suppliers, and Handling of Incorrect Payments</HD> <SECTNO>405.350</SECTNO> <SUBJECT>Individual's liability for payments made to providers and other persons for items and services furnished the individual.</SUBJECT> <SECTNO>405.351</SECTNO> <SUBJECT>Incorrect payments for which the individual is not liable.</SUBJECT> <SECTNO>405.352</SECTNO> <SUBJECT>Adjustment of title XVIII incorrect payments.</SUBJECT> <SECTNO>405.353</SECTNO> <SUBJECT>Certification of amount that will be adjusted against individual title II or railroad retirement benefits.</SUBJECT> <SECTNO>405.354</SECTNO> <SUBJECT>Procedures for adjustment or recovery—title II beneficiary.</SUBJECT> <SECTNO>405.355</SECTNO> <SUBJECT>Waiver of adjustment or recovery.</SUBJECT> <SECTNO>405.356</SECTNO> <SUBJECT>Principles applied in waiver of adjustment or recovery.</SUBJECT> <SECTNO>405.357</SECTNO> <SUBJECT>Notice of right to waiver consideration.</SUBJECT> <SECTNO>405.358</SECTNO> <SUBJECT>When waiver of adjustment or recovery may be applied.</SUBJECT> <SECTNO>405.359</SECTNO> <SUBJECT>Liability of certifying or disbursing officer.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Suspension and Recoupment of Payment to Providers and Suppliers and Collection and Compromise of Overpayments</HD> <SECTNO>405.370</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>405.371</SECTNO> <SUBJECT> Suspension, offset, and recoupment of Medicare payments to providers and suppliers of services.</SUBJECT> <SECTNO>405.372</SECTNO> <SUBJECT> Proceeding for suspension of payment.</SUBJECT> <SECTNO>405.373</SECTNO> <SUBJECT>Proceeding for offset or recoupment.</SUBJECT> <SECTNO>405.374</SECTNO> <SUBJECT>Opportunity for rebuttal.</SUBJECT> <SECTNO>405.375</SECTNO> <SUBJECT>Time limits for, and notification of, administrative determination after receipt of rebuttal statement.</SUBJECT> <SECTNO>405.376</SECTNO> <SUBJECT>Suspension and termination of collection action and compromise of claims for overpayment.</SUBJECT> <SECTNO>405.377</SECTNO> <SUBJECT>Withholding Medicare payments to recover Medicaid overpayments.</SUBJECT> <SECTNO>405.378</SECTNO> <SUBJECT>Interest charges on overpayment and underpayments to providers, suppliers, and other entities.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Repayment of Scholarships and Loans</HD> <SECTNO>405.380</SECTNO> <SUBJECT>Collection of past-due amounts on scholarship and loan programs.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Private Contracts</HD> <SECTNO>405.400</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>405.405</SECTNO> <SUBJECT>General rules.</SUBJECT> <SECTNO>405.410</SECTNO> <SUBJECT>Conditions for properly opting-out of Medicare.</SUBJECT> <SECTNO>405.415</SECTNO> <SUBJECT>Requirements of the private contract.</SUBJECT> <SECTNO>405.420</SECTNO> <SUBJECT>Requirements of the opt-out affidavit.</SUBJECT> <SECTNO>405.425</SECTNO> <SUBJECT>Effects of opting-out of Medicare.</SUBJECT> <SECTNO>405.430</SECTNO> <SUBJECT>Failure to properly opt-out.</SUBJECT> <SECTNO>405.435</SECTNO> <SUBJECT>Failure to maintain opt-out.</SUBJECT> <SECTNO>405.440</SECTNO> <SUBJECT>Emergency and urgent care services.</SUBJECT> <SECTNO>405.445</SECTNO> <SUBJECT>Renewal and early termination of opt-out.</SUBJECT> <SECTNO>405.450</SECTNO> <SUBJECT>Appeals.</SUBJECT> <SECTNO>405.455</SECTNO> <SUBJECT>Application to Medicare+Choice contracts.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Criteria for Determining Reasonable Charges</HD> <SECTNO>405.500</SECTNO> <SUBJECT>Basis.</SUBJECT> <SECTNO>405.501</SECTNO> <SUBJECT>Determination of reasonable charges.</SUBJECT> <SECTNO>405.502</SECTNO> <SUBJECT>Criteria for determining reasonable charges.</SUBJECT> <SECTNO>405.503</SECTNO> <SUBJECT>Determining customary charges.</SUBJECT> <SECTNO>405.504</SECTNO> <SUBJECT>Determining prevailing charges.</SUBJECT> <SECTNO>405.505</SECTNO> <SUBJECT>Determination of locality</SUBJECT> <SECTNO>405.506</SECTNO> <SUBJECT>Charges higher than customary or prevailing charges or lowest charge levels.<PRTPAGE P="66"/> </SUBJECT> <SECTNO>405.507</SECTNO> <SUBJECT>Illustrations of the application of the criteria for determining reasonable charges.</SUBJECT> <SECTNO>405.508</SECTNO> <SUBJECT>Determination of comparable circumstances; limitation.</SUBJECT> <SECTNO>405.509</SECTNO> <SUBJECT>Determining the inflation-indexed charge.</SUBJECT> <SECTNO>405.511</SECTNO> <SUBJECT>Reasonable charges for medical services, supplies, and equipment.</SUBJECT> <SECTNO>405.512</SECTNO> <SUBJECT>Carriers' procedural terminology and coding systems.</SUBJECT> <SECTNO>405.515</SECTNO> <SUBJECT>Reimbursement for clinical laboratory services billed by physicians.</SUBJECT> <SECTNO>405.517</SECTNO> <SUBJECT>Payment for drugs and biologicals that are not paid on a cost or prospective payment basis.</SUBJECT> <SECTNO>405.520</SECTNO> <SUBJECT>Payment for a physician assistant's, nurse practitioner's, and clinical nurse specialists' services and services furnished incident to their professional services.</SUBJECT> <SECTNO>405.534</SECTNO> <SUBJECT>Limitation on payment for screening mammography services.</SUBJECT> <SECTNO>405.535</SECTNO> <SUBJECT> Special rule for nonparticipating physicians and suppliers furnishing screening mammography services before January 1, 2002.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart F [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Reconsiderations and Appeals Under Medicare Part A</HD> <SECTNO>405.701</SECTNO> <SUBJECT>Basis, purpose and definitions.</SUBJECT> <SECTNO>405.702</SECTNO> <SUBJECT>Notice of initial determination.</SUBJECT> <SECTNO>405.704</SECTNO> <SUBJECT>Actions which are initial determinations.</SUBJECT> <SECTNO>405.705</SECTNO> <SUBJECT>Actions which are not initial determinations.</SUBJECT> <SECTNO>405.706</SECTNO> <SUBJECT>Decisions of utilization review committees.</SUBJECT> <SECTNO>405.708</SECTNO> <SUBJECT>Effect of initial determination.</SUBJECT> <SECTNO>405.710</SECTNO> <SUBJECT>Right to reconsideration.</SUBJECT> <SECTNO>405.711</SECTNO> <SUBJECT>Time and place of filing request for reconsideration.</SUBJECT> <SECTNO>405.712</SECTNO> <SUBJECT>Extension of time to request reconsideration.</SUBJECT> <SECTNO>405.714</SECTNO> <SUBJECT>Withdrawal of request for reconsideration.</SUBJECT> <SECTNO>405.715</SECTNO> <SUBJECT>Reconsidered determination.</SUBJECT> <SECTNO>405.716</SECTNO> <SUBJECT>Notice of reconsidered determination.</SUBJECT> <SECTNO>405.717</SECTNO> <SUBJECT>Effect of a reconsidered determination.</SUBJECT> <SECTNO>405.718</SECTNO> <SUBJECT>Expedited appeals process.</SUBJECT> <SECTNO>405.720</SECTNO> <SUBJECT>Hearing; right to hearing.</SUBJECT> <SECTNO>405.722</SECTNO> <SUBJECT>Time and place of filing request for a hearing.</SUBJECT> <SECTNO>405.724</SECTNO> <SUBJECT>Departmental Appeals Board (DAB) review.</SUBJECT> <SECTNO>405.730</SECTNO> <SUBJECT>Court review.</SUBJECT> <SECTNO>405.732</SECTNO> <SUBJECT>Review of national coverage decisions (NCDs).</SUBJECT> <SECTNO>405.740</SECTNO> <SUBJECT>Principles for determining the amount in controversy.</SUBJECT> <SECTNO>405.745</SECTNO> <SUBJECT>Amount in controversy ascertained after reconsideration.</SUBJECT> <SECTNO>405.747</SECTNO> <SUBJECT>Dismissal of request for hearing; amount in controversy less than $100.</SUBJECT> <SECTNO>405.750</SECTNO> <SUBJECT>Time period for reopening initial, revised, or reconsidered determinations and decisions or revised decisions of an ALJ or the Departmental Appeals Board (DAB); binding effect of determination and decisions.</SUBJECT> <SECTNO>405.753</SECTNO> <SUBJECT>Appeal of a categorization of a device.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Appeals Under the Medicare Part B Program</HD> <SECTNO>405.801</SECTNO> <SUBJECT>Part B appeals—general description.</SUBJECT> <SECTNO>405.802</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>405.803</SECTNO> <SUBJECT>Initial determination.</SUBJECT> <SECTNO>405.804</SECTNO> <SUBJECT>Notice of initial determination.</SUBJECT> <SECTNO>405.805</SECTNO> <SUBJECT>Parties to the initial determination.</SUBJECT> <SECTNO>405.806</SECTNO> <SUBJECT>Effect of initial determination.</SUBJECT> <SECTNO>405.807</SECTNO> <SUBJECT>Request for review of initial determination.</SUBJECT> <SECTNO>405.808</SECTNO> <SUBJECT>Parties to the review.</SUBJECT> <SECTNO>405.809</SECTNO> <SUBJECT>Opportunity to submit evidence.</SUBJECT> <SECTNO>405.810</SECTNO> <SUBJECT>Review determination.</SUBJECT> <SECTNO>405.811</SECTNO> <SUBJECT>Notice of review determination.</SUBJECT> <SECTNO>405.812</SECTNO> <SUBJECT>Effect of review determination.</SUBJECT> <SECTNO>405.815</SECTNO> <SUBJECT>Amount in controversy for carrier hearing, ALJ hearing and judicial review.</SUBJECT> <SECTNO>405.817</SECTNO> <SUBJECT>Principles for determining amount in controversy.</SUBJECT> <SECTNO>405.821</SECTNO> <SUBJECT>Request for carrier hearing.</SUBJECT> <SECTNO>405.822</SECTNO> <SUBJECT>Parties to a carrier hearing.</SUBJECT> <SECTNO>405.823</SECTNO> <SUBJECT>Carrier hearing officer.</SUBJECT> <SECTNO>405.824</SECTNO> <SUBJECT>Disqualification of carrier hearing officer.</SUBJECT> <SECTNO>405.825</SECTNO> <SUBJECT>Location of carrier hearing.</SUBJECT> <SECTNO>405.826</SECTNO> <SUBJECT>Notice of carrier hearing.</SUBJECT> <SECTNO>405.830</SECTNO> <SUBJECT>Conduct of the carrier hearing.</SUBJECT> <SECTNO>405.831</SECTNO> <SUBJECT>Waiver of right to appear at carrier hearing and present evidence.</SUBJECT> <SECTNO>405.832</SECTNO> <SUBJECT>Dismissal of request for carrier hearing.</SUBJECT> <SECTNO>405.833</SECTNO> <SUBJECT>Record of carrier hearing.</SUBJECT> <SECTNO>405.834</SECTNO> <SUBJECT>Carrier hearing officer's decision.</SUBJECT> <SECTNO>405.835</SECTNO> <SUBJECT>Effect of carrier hearing officer's decision.</SUBJECT> <SECTNO>405.836</SECTNO> <SUBJECT>Authority of the carrier hearing officer.</SUBJECT> <SECTNO>405.841</SECTNO> <SUBJECT>Reopening initial or review determination of the carrier, and decision of a carrier hearing officer.</SUBJECT> <SECTNO>405.842</SECTNO> <SUBJECT>Notice of reopening and revision.</SUBJECT> <SECTNO>405.850</SECTNO> <SUBJECT>Change of ruling or legal precedent.</SUBJECT> <SECTNO>405.853</SECTNO> <SUBJECT>Expedited appeals process.</SUBJECT> <SECTNO>405.855</SECTNO> <SUBJECT>ALJ hearing.</SUBJECT> <SECTNO>405.856</SECTNO> <SUBJECT>Departmental Appeals Board (DAB) review.</SUBJECT> <SECTNO>405.857</SECTNO> <SUBJECT>Court review.</SUBJECT> <SECTNO>405.860</SECTNO> <SUBJECT>Review of national coverage decisions (NCDs).</SUBJECT> <SECTNO>405.870</SECTNO> <SUBJECT>Appointment of representative.</SUBJECT> <SECTNO>405.871</SECTNO> <SUBJECT>Qualifications of representatives.</SUBJECT> <SECTNO>405.872</SECTNO> <SUBJECT>Authority of representatives.</SUBJECT> <SECTNO>405.874</SECTNO> <SUBJECT>Appeals of carrier decisions that supplier standards are not met.<PRTPAGE P="67"/> </SUBJECT> <SECTNO>405.877</SECTNO> <SUBJECT>Appeal of a categorization of a device.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subparts I-Q [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart R—Provider Reimbursement Determinations and Appeals</HD> <SECTNO>405.1801</SECTNO> <SUBJECT>Introduction.</SUBJECT> <SECTNO>405.1803</SECTNO> <SUBJECT>Intermediary determination and notice of amount of program reimbursement.</SUBJECT> <SECTNO>405.1804</SECTNO> <SUBJECT>Matters not subject to administrative or judicial review under prospective payment.</SUBJECT> <SECTNO>405.1805</SECTNO> <SUBJECT>Parties to intermediary determination.</SUBJECT> <SECTNO>405.1807</SECTNO> <SUBJECT>Effect of intermediary determination.</SUBJECT> <SECTNO>405.1809</SECTNO> <SUBJECT>Intermediary hearing procedures.</SUBJECT> <SECTNO>405.1811</SECTNO> <SUBJECT>Right to intermediary hearing; time, place, form, and content of request for intermediary hearing.</SUBJECT> <SECTNO>405.1813</SECTNO> <SUBJECT>Failure to timely request an intermediary hearing.</SUBJECT> <SECTNO>405.1815</SECTNO> <SUBJECT>Parties to the intermediary hearing.</SUBJECT> <SECTNO>405.1817</SECTNO> <SUBJECT>Hearing officer or panel of hearing officers authorized to conduct intermediary hearing; disqualification of officers.</SUBJECT> <SECTNO>405.1819</SECTNO> <SUBJECT>Conduct of intermediary hearing.</SUBJECT> <SECTNO>405.1821</SECTNO> <SUBJECT>Prehearing discovery and other proceedings prior to the intermediary hearing.</SUBJECT> <SECTNO>405.1823</SECTNO> <SUBJECT>Evidence at intermediary hearing.</SUBJECT> <SECTNO>405.1825</SECTNO> <SUBJECT>Witnesses at intermediary hearing.</SUBJECT> <SECTNO>405.1827</SECTNO> <SUBJECT>Record of intermediary hearing.</SUBJECT> <SECTNO>405.1829</SECTNO> <SUBJECT>Authority of hearing officer(s) at intermediary hearing.</SUBJECT> <SECTNO>405.1831</SECTNO> <SUBJECT>Intermediary hearing decision and notice.</SUBJECT> <SECTNO>405.1833</SECTNO> <SUBJECT>Effect of intermediary hearing decision.</SUBJECT> <SECTNO>405.1835</SECTNO> <SUBJECT>Right to Board hearing.</SUBJECT> <SECTNO>405.1837</SECTNO> <SUBJECT>Group appeal.</SUBJECT> <SECTNO>405.1839</SECTNO> <SUBJECT>Amount in controversy.</SUBJECT> <SECTNO>405.1841</SECTNO> <SUBJECT>Time, place, form, and content of request for Board hearing.</SUBJECT> <SECTNO>405.1842</SECTNO> <SUBJECT>Expediting Board proceedings.</SUBJECT> <SECTNO>405.1843</SECTNO> <SUBJECT>Parties to Board hearing.</SUBJECT> <SECTNO>405.1845</SECTNO> <SUBJECT>Composition of Board.</SUBJECT> <SECTNO>405.1847</SECTNO> <SUBJECT>Disqualification of Board members.</SUBJECT> <SECTNO>405.1849</SECTNO> <SUBJECT>Establishment of time and place of hearing by the Board.</SUBJECT> <SECTNO>405.1851</SECTNO> <SUBJECT>Conduct of Board hearing.</SUBJECT> <SECTNO>405.1853</SECTNO> <SUBJECT>Prehearing discovery and other proceedings prior to the Board hearing.</SUBJECT> <SECTNO>405.1855</SECTNO> <SUBJECT>Evidence at Board hearing.</SUBJECT> <SECTNO>405.1857</SECTNO> <SUBJECT>Subpoenas.</SUBJECT> <SECTNO>405.1859</SECTNO> <SUBJECT>Witnesses.</SUBJECT> <SECTNO>405.1861</SECTNO> <SUBJECT>Oral argument and written allegations.</SUBJECT> <SECTNO>405.1863</SECTNO> <SUBJECT>Administrative policy at issue.</SUBJECT> <SECTNO>405.1865</SECTNO> <SUBJECT>Record of Board hearing.</SUBJECT> <SECTNO>405.1867</SECTNO> <SUBJECT>Sources of Board's authority.</SUBJECT> <SECTNO>405.1869</SECTNO> <SUBJECT>Scope of Board's decision-making authority.</SUBJECT> <SECTNO>405.1871</SECTNO> <SUBJECT>Board hearing decision and notice.</SUBJECT> <SECTNO>405.1873</SECTNO> <SUBJECT>Board's jurisdiction.</SUBJECT> <SECTNO>405.1875</SECTNO> <SUBJECT>Administrator's review.</SUBJECT> <SECTNO>405.1877</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <SECTNO>405.1881</SECTNO> <SUBJECT>Appointment of representative.</SUBJECT> <SECTNO>405.1883</SECTNO> <SUBJECT>Authority of representative.</SUBJECT> <SECTNO>405.1885</SECTNO> <SUBJECT>Reopening a determination or decision.</SUBJECT> <SECTNO>405.1887</SECTNO> <SUBJECT>Notice of reopening.</SUBJECT> <SECTNO>405.1889</SECTNO> <SUBJECT>Effect of a revision.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subparts S-T [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart U—Conditions for Coverage of Suppliers of End-Stage Renal Disease (ESRD) Services</HD> <SECTNO>405.2100</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> <SECTNO>405.2101</SECTNO> <SUBJECT>Objectives of the end-stage renal disease (ESRD) program.</SUBJECT> <SECTNO>405.2102</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>405.2110</SECTNO> <SUBJECT>Designation of ESRD networks.</SUBJECT> <SECTNO>405.2111</SECTNO> <RESERVED>[Reserved]</RESERVED> <SECTNO>405.2112</SECTNO> <SUBJECT>ESRD network organizations.</SUBJECT> <SECTNO>405.2113</SECTNO> <SUBJECT>Medical review board.</SUBJECT> <SECTNO>405.2114</SECTNO> <RESERVED>[Reserved]</RESERVED> <SECTNO>405.2120</SECTNO> <SUBJECT>Minimum utilization rates: general.</SUBJECT> <SECTNO>405.2121</SECTNO> <SUBJECT>Basis for determining minimum utilization rates.</SUBJECT> <SECTNO>405.2122</SECTNO> <SUBJECT>Types and duration of classification according to utilization rates.</SUBJECT> <SECTNO>405.2123</SECTNO> <SUBJECT>Reporting of utilization rates for classification.</SUBJECT> <SECTNO>405.2124</SECTNO> <SUBJECT>Calculation of utilization rates for comparison with minimal utilization rates(s) and notification of status.</SUBJECT> <SECTNO>405.2130</SECTNO> <SUBJECT>Condition: Minimum utilization rates.</SUBJECT> <SECTNO>405.2131</SECTNO> <SUBJECT>Condition: Provider status: Renal transplantation center or renal dialysis center.</SUBJECT> <SECTNO>405.2132</SECTNO> <RESERVED>[Reserved]</RESERVED> <SECTNO>405.2133</SECTNO> <SUBJECT>Condition: Furnishing data and information for ESRD program administration.</SUBJECT> <SECTNO>405.2134</SECTNO> <SUBJECT>Condition: Participation in network activities.</SUBJECT> <SECTNO>405.2135</SECTNO> <SUBJECT>Condition: Compliance with Federal, State, and local laws and regulations.</SUBJECT> <SECTNO>405.2136</SECTNO> <SUBJECT>Condition: Governing body and management.</SUBJECT> <SECTNO>405.2137</SECTNO> <SUBJECT>Condition: Patient long-term program and patient care plan.</SUBJECT> <SECTNO>405.2138</SECTNO> <SUBJECT>Condition: Patients' rights and responsibilities.</SUBJECT> <SECTNO>405.2139</SECTNO> <SUBJECT>Condition: Medical records.</SUBJECT> <SECTNO>405.2140</SECTNO> <SUBJECT>Condition: Physical environment.</SUBJECT> <SECTNO>405.2150</SECTNO> <SUBJECT>Condition: Reuse of hemodialyzers and other dialysis supplies.</SUBJECT> <SECTNO>405.2160</SECTNO> <SUBJECT>Condition: Affiliation agreement or arrangement.</SUBJECT> <SECTNO>405.2161</SECTNO> <SUBJECT>Condition: Director of a renal dialysis facility or renal dialysis center.<PRTPAGE P="68"/> </SUBJECT> <SECTNO>405.2162</SECTNO> <SUBJECT>Condition: Staff of a renal dialysis facility or renal dialysis center.</SUBJECT> <SECTNO>405.2163</SECTNO> <SUBJECT>Condition: Minimal service requirements for a renal dialysis facility or renal dialysis center.</SUBJECT> <SECTNO>405.2164</SECTNO> <SUBJECT>Conditions for coverage of special purpose renal dialysis facilities.</SUBJECT> <SECTNO>405.2170</SECTNO> <SUBJECT>Condition: Director of a renal transplantation center.</SUBJECT> <SECTNO>405.2171</SECTNO> <SUBJECT>Condition: Minimal service requirements for a renal transplantation center.</SUBJECT> <SECTNO>405.2180</SECTNO> <SUBJECT>Termination of Medicare coverage.</SUBJECT> <SECTNO>405.2181</SECTNO> <SUBJECT>Alternative sanctions.</SUBJECT> <SECTNO>405.2182</SECTNO> <SUBJECT>Notice of sanction and appeal rights: Termination of coverage.</SUBJECT> <SECTNO>405.2184</SECTNO> <SUBJECT>Notice of appeal rights: Alternative sanctions.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subparts V-W [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart X—Rural Health Clinic and Federally Qualified Health Center Services</HD> <SECTNO>405.2400</SECTNO> <SUBJECT>Basis.</SUBJECT> <SECTNO>405.2401</SECTNO> <SUBJECT>Scope and definitions.</SUBJECT> <SECTNO>405.2402</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> <SECTNO>405.2403</SECTNO> <SUBJECT>Content and terms of the agreement with the Secretary.</SUBJECT> <SECTNO>405.2404</SECTNO> <SUBJECT>Terminations of agreements.</SUBJECT> <SECTNO>405.2410</SECTNO> <SUBJECT>Application of Part B deductible and coinsurance.</SUBJECT> <SECTNO>405.2411</SECTNO> <SUBJECT>Scope of benefits.</SUBJECT> <SECTNO>405.2412</SECTNO> <SUBJECT>Physicians' services.</SUBJECT> <SECTNO>405.2413</SECTNO> <SUBJECT>Services and supplies incident to a physician's services.</SUBJECT> <SECTNO>405.2414</SECTNO> <SUBJECT>Nurse practitioner and physician assistant services.</SUBJECT> <SECTNO>405.2415</SECTNO> <SUBJECT>Services and supplies incident to nurse practitioner and physician assistant services.</SUBJECT> <SECTNO>405.2416</SECTNO> <SUBJECT>Visiting nurse services.</SUBJECT> <SECTNO>405.2417</SECTNO> <SUBJECT>Visiting nurse services: Determination of shortage of agencies.</SUBJECT> <HD SOURCE="HD1">Federally Qualified Health Center Services</HD> <SECTNO>405.2430</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> <SECTNO>405.2434</SECTNO> <SUBJECT>Content and terms of the agreement.</SUBJECT> <SECTNO>405.2436</SECTNO> <SUBJECT>Termination of agreement.</SUBJECT> <SECTNO>405.2440</SECTNO> <SUBJECT>Conditions for reinstatement after termination by CMS.</SUBJECT> <SECTNO>405.2442</SECTNO> <SUBJECT>Notice to the public.</SUBJECT> <SECTNO>405.2444</SECTNO> <SUBJECT>Change of ownership.</SUBJECT> <SECTNO>405.2446</SECTNO> <SUBJECT>Scope of services.</SUBJECT> <SECTNO>405.2448</SECTNO> <SUBJECT>Preventive primary services.</SUBJECT> <SECTNO>405.2450</SECTNO> <SUBJECT>Clinical psychologist and clinical social worker services.</SUBJECT> <SECTNO>405.2452</SECTNO> <SUBJECT>Services and supplies incident to clinical psychologist and clinical social worker services.</SUBJECT> <HD SOURCE="HD1">Payment for Rural Health Clinic and Federally Qualified Health Center Services</HD> <SECTNO>405.2460</SECTNO> <SUBJECT>Applicability of general payment exclusions.</SUBJECT> <SECTNO>405.2462</SECTNO> <SUBJECT>Payment for rural health clinic and Federally qualified health center services.</SUBJECT> <SECTNO>405.2463</SECTNO> <SUBJECT>What constitutes a visit.</SUBJECT> <SECTNO>405.2464</SECTNO> <SUBJECT>All-inclusive rate.</SUBJECT> <SECTNO>405.2466</SECTNO> <SUBJECT>Annual reconciliation.</SUBJECT> <SECTNO>405.2468</SECTNO> <SUBJECT>Allowable costs.</SUBJECT> <SECTNO>405.2470</SECTNO> <SUBJECT>Reports and maintenance of records.</SUBJECT> <SECTNO>405.2472</SECTNO> <SUBJECT>Beneficiary appeals.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1861, 1862(a), 1871, 1874, 1881, and 1886(k) of the Social Security Act (42 U.S.C. 1302, 1395x, 1395y(a), 1395hh, 1395kk, 1395rr and 1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C. 263a). </AUTH> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Medical Services Coverage Decisions That Relate to Health Care Technology</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1862 and 1871 of the Social Security Act as amended (42 U.S.C.1302, 1395y, and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 60 FR 48423, Sept. 19, 1995, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 405.201</SECTNO> <SUBJECT>Scope of subpart and definitions.</SUBJECT> (a) <E T="03">Scope.</E> This subpart establishes that— (1) CMS uses the FDA categorization of a device as a factor in making Medicare coverage decisions; and (2) CMS may consider for Medicare coverage certain devices with an FDA-approved investigational device exemption (IDE) that have been categorized as non-experimental/investigational (Category B). (b) <E T="03">Definitions.</E> As used in this subpart— <E T="03">Class I</E> refers to devices for which the general controls of the Food, Drug, and Cosmetic Act, such as adherence to good manufacturing practice regulations, are sufficient to provide a reasonable assurance of safety and effectiveness. <E T="03">Class II</E> refers to devices that, in addition to general controls, require special controls, such as performance standards or postmarket surveillance, to provide a reasonable assurance of safety and effectiveness. <E T="03">Class III</E> refers to devices that cannot be classified into Class I or Class II because insufficient information exists to <PRTPAGE P="69"/>determine that either special or general controls would provide reasonable assurance of safety and effectiveness. Class III devices require premarket approval. <E T="03">Contractors</E> refers to carriers, fiscal intermediaries, and other entities that contract with CMS to review and adjudicate claims for Medicare services. <E T="03">Experimental/investigational (Category A) device</E> refers to an innovative device believed to be in Class III for which “absolute risk” of the device type has not been established (that is, initial questions of safety and effectiveness have not been resolved and the FDA is unsure whether the device type can be safe and effective). <E T="03">IDE</E> stands for investigational device exemption. An FDA-approved IDE application permits a device, which would otherwise be subject to marketing clearance, to be shipped lawfully for the purpose of conducting a clinical trial in accordance with 21 U.S.C. 360j(g) and 21 CFR parts 812 and 813. <E T="03">Non-experimental/investigational (Category B) device</E> refers to a device believed to be in Class I or Class II, or a device believed to be in Class III for which the incremental risk is the primary risk in question (that is, underlying questions of safety and effectiveness of that device type have been resolved), or it is known that the device type can be safe and effective because, for example, other manufacturers have obtained FDA approval for that device type. <E T="03">PMA</E> stands for “premarket approval” and refers to a marketing application for a Class III device, which includes all information submitted with or incorporated by reference in the application in accordance with 21 U.S.C. 360e and 360j and 21 CFR 814.3(e). <E T="03">Sponsor</E> refers to a person or entity that initiates, but does not conduct, an investigation under an IDE. </SECTION> <SECTION> <SECTNO>§ 405.203</SECTNO> <SUBJECT>FDA categorization of investigational devices.</SUBJECT> (a) The FDA assigns a device with an FDA-approved IDE to one of two categories: (1) Experimental/Investigational (Category A) Devices. (2) Non-Experimental/Investigational (Category B) Devices. (b) The FDA notifies CMS, when it notifies the sponsor, that the device is categorized by FDA as experimental/investigational (Category A) or non-experimental/investigational (Category B). (c) CMS uses the categorization of the device as a factor in making Medicare coverage decisions. </SECTION> <SECTION> <SECTNO>§ 405.205</SECTNO> <SUBJECT>Coverage of a non-experimental/investigational (Category B) device.</SUBJECT> (a) For any device that meets the requirements of the exception at § 411.15(o) of this chapter, the following procedures apply: (1) The FDA notifies CMS, when it notifies the sponsor, that the device is categorized by FDA as non-experimental/investigational (Category B). (2) CMS uses the categorization of the device as a factor in making Medicare coverage decisions. (b) If the FDA becomes aware that a categorized device no longer meets the requirements of the exception at § 411.15(o) of this chapter, the FDA notifies the sponsor and CMS and the procedures described in paragraph (a)(2) of this section apply. </SECTION> <SECTION> <SECTNO>§ 405.207</SECTNO> <SUBJECT>Services related to a noncovered device.</SUBJECT> (a) <E T="03">When payment is not made.</E> Medicare payment is not made for medical and hospital services that are related to the use of a device that is not covered because CMS determines the device is not “reasonable” and “necessary” under section 1862(a)(1)(A) of the Act or because it is excluded from coverage for other reasons. These services include all services furnished in preparation for the use of a noncovered device, services furnished contemporaneously with and necessary to the use of a noncovered device, and services furnished as necessary after-care that are incident to recovery from the use of the device or from receiving related noncovered services. (b) <E T="03">When payment is made.</E> Medicare payment may be made for services, ordinarily covered by Medicare, to treat a condition or complication that arises <PRTPAGE P="70"/>because of the use of a noncovered device or from the furnishing of related noncovered services. </SECTION> <SECTION> <SECTNO>§ 405.209</SECTNO> <SUBJECT>Payment for a non-experimental/investigational (Category B) device.</SUBJECT> Payment under Medicare for a non-experimental/investigational (Category B) device is based on, and may not exceed, the amount that would have been paid for a currently used device serving the same medical purpose that has been approved or cleared for marketing by the FDA. </SECTION> <SECTION> <SECTNO>§ 405.211</SECTNO> <SUBJECT>Procedures for Medicare contractors in making coverage decisions for a non-experimental/investigational (Category B) device.</SUBJECT> (a) <E T="03">General rule.</E> In their review of claims for payment, Medicare contractors are bound by the statute, regulations, and all CMS administrative issuances, including all national coverage decisions. (b) <E T="03">Potentially covered non-experimental/investigational (Category B) devices.</E> Medicare contractors may approve coverage for any device with an FDA-approved IDE categorized as a non-experimental/investigational (Category B) device if all other coverage requirements are met. (c) <E T="03">Other considerations.</E> Medicare contractors must consider whether any restrictions concerning site of service, indications for use, or any other list of conditions for coverage have been placed on the device's use. </SECTION> <SECTION> <SECTNO>§ 405.213</SECTNO> <SUBJECT>Re-evaluation of a device categorization.</SUBJECT> (a) <E T="03">General rules.</E> (1) Any sponsor that does not agree with an FDA decision that categorizes its device as experimental/investigational (Category A) may request re-evaluation of the categorization decision. (2) A sponsor may request review by CMS only after the requirements of paragraph (b) of this section are met. (3) No reviews other than those described in paragraphs (b) and (c) of this section are available to the sponsor. (4) Neither the FDA original categorization or re-evaluation (described in paragraph (b) of this section) nor CMS's review (described in paragraph (c) of this section) constitute an initial determination for purposes of the Medicare appeals processes under part 405, subpart G or subpart H, or parts 417, 473, or 498 of this chapter. (b) <E T="03">Request to FDA.</E> A sponsor that does not agree with the FDA's categorization of its device may submit a written request to the FDA at any time requesting re-evaluation of its original categorization decision, together with any information and rationale that it believes support recategorization. The FDA notifies both CMS and the sponsor of its decision. (c) <E T="03">Request to CMS.</E> If the FDA does not agree to recategorize the device, the sponsor may seek review from CMS. A device sponsor must submit its request in writing to CMS. CMS obtains copies of relevant portions of the application, the original categorization decision, and supplementary materials. CMS reviews all material submitted by the sponsor and the FDA's recommendation. CMS reviews only information in the FDA record to determine whether to change the categorization of the device. CMS issues a written decision and notifies the sponsor of the IDE and the FDA. </SECTION> <SECTION> <SECTNO>§ 405.215</SECTNO> <SUBJECT>Confidential commercial and trade secret information.</SUBJECT> To the extent that CMS relies on confidential commercial or trade secret information in any judicial proceeding, CMS will maintain confidentiality of the information in accordance with Federal law. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Suspension of Payment, Recovery of Overpayments, and Repayment of Scholarships and Loans</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1815, 1833, 1842, 1866, 1870, 1871, 1879, and 1892 of the Social Security Act (42 U.S.C. 1302, 1395g, 1395l, 1395u, 1395cc, 1395gg, 1395hh, 1395pp, and 1395ccc) and 31 U.S.C. 3711. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 31 FR 13534, Oct. 20, 1966, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SUBJGRP> <PRTPAGE P="71"/> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 405.301</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> This subpart sets forth the policies and procedures for handling of incorrect payments and recovery of overpayments. <CITA>[54 FR 41733, Oct. 11, 1989]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Liability for Payments To Providers or Suppliers and Handling of Incorrect Payments</HD> <SECTION> <SECTNO>§ 405.350</SECTNO> <SUBJECT>Individual's liability for payments made to providers and other persons for items and services furnished the individual.</SUBJECT> Any payment made under title XVIII of the Act to any provider of services or other person with respect to any item or service furnished an individual shall be regarded as a payment to the individual, and adjustment shall be made pursuant to §§ 405.352 through 405.358 where: (a) More than the correct amount is paid to a provider of services or other person and the Secretary determines that: (1) Within a reasonable period of time, the excess over the correct amount cannot be recouped from the provider of services or other person, or (2) The provider of services or other person was without fault with respect to the payment of such excess over the correct amount, or (b) A payment has been made under the provisions described in section 1814(e) of the Act, to a provider of services for items and services furnished the individual. (c) For purposes of paragraph (a)(2) of this section, a provider of services or other person shall, in the absence of evidence to the contrary, be deemed to be without fault if the determination of the carrier, the intermediary, or the Centers for Medicare & Medicaid Services that more than the correct amount was paid was made subsequent to the third year following the year in which notice was sent to such individual that such amount had been paid. <CITA>[41 FR 1492, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 61 FR 49271, Sept. 19, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.351</SECTNO> <SUBJECT>Incorrect payments for which the individual is not liable.</SUBJECT> Where an incorrect payment has been made to a provider of services or other person, the individual is liable only to the extent that he has benefited from such payment. </SECTION> <SECTION> <SECTNO>§ 405.352</SECTNO> <SUBJECT>Adjustment of title XVIII incorrect payments.</SUBJECT> Where an individual is liable for an incorrect payment (i.e., a payment made under § 405.350(a) or § 405.350(b)) adjustment is made (to the extent of such liability) by: (a) Decreasing any payment under title II of the Act, or under the Railroad Retirement Act of 1937, to which the individual is entitled; or (b) In the event of the individual's death before adjustment is completed, by decreasing any payment under title II of the Act, or under the Railroad Retirement Act of 1937 payable to the estate of the individual or to any other person, that are based on the individual's earnings record (or compensation). <CITA>[31 FR 13534, Oct. 20, 1966, as amended by 41 FR 1492, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.353</SECTNO> <SUBJECT>Certification of amount that will be adjusted against individual title II or railroad retirement benefits.</SUBJECT> As soon as practicable after any adjustment is determined to be necessary, the Secretary, for purposes of this subpart, shall certify the amount of the overpayment or payment (see § 405.350) with respect to which the adjustment is to be made. If the adjustment is to be made by decreasing subsequent payments under the Railroad Retirement Act of 1937, such certification shall be made to the Railroad Retirement Board. </SECTION> <SECTION> <SECTNO>§ 405.354</SECTNO> <SUBJECT>Procedures for adjustment or recovery—title II beneficiary.</SUBJECT> The procedures applied in making an adjustment or recovery in the case of a title II beneficiary are the applicable procedures of 20 CFR 404.502. <CITA>[31 FR 13534, Oct. 20, 1966, as amended at 32 FR 18027, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <PRTPAGE P="72"/> <SECTNO>§ 405.355</SECTNO> <SUBJECT>Waiver of adjustment or recovery.</SUBJECT> (a) The provisions of § 405.352 may not be applied and there may be no adjustment or recovery of an incorrect payment (i.e., a payment made under § 405.350(a) or § 405.350(b)) in any case where such incorrect payment has been made with respect to an individual who is without fault, or where such adjustment or recovery would be made by decreasing payments to which another person who is without fault is entitled as provided in section 1870(b) of the Act where such adjustment or recovery would defeat the purpose of title II or title XVIII of the Act or would be against equity and good conscience. (See 20 CFR 404.509 and 404.512.) (b) Adjustment or recovery of an incorrect payment (or only such part of an incorrect payment as may be determined to be inconsistent with the purposes of Title XVIII of the Act) against an individual who is without fault shall be deemed to be against equity and good conscience if the determination that such payment was incorrect was made subsequent to the third year following the year in which notice of such payment was sent to such individual. (See §§ 405.330-405.332 for conditions under which payment may be made for items or services furnished after October 30, 1972 which are noncovered by reasons of § 405.310 (g) and (k).) <CITA>[41 FR 1493, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.356</SECTNO> <SUBJECT>Principles applied in waiver of adjustment or recovery.</SUBJECT> The principles applied in determining waiver of adjustment or recovery (§ 405.355) are the applicable principles of § 405.358 and 20 CFR 404.507-404.509, 404.510a, and 404.512. <CITA>[61 FR 49271, Sept. 19, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.357</SECTNO> <SUBJECT>Notice of right to waiver consideration.</SUBJECT> Whenever an initial determination is made that more than the correct amount of payment has been made, notice of the provisions of section 1870(c) of the Act regarding waiver of adjustment or recovery shall be sent to the overpaid individual and to any other individual against whom adjustment or recovery of the overpayment is to be effected (see § 405.358). <CITA>[61 FR 49271, Sept. 19, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.358</SECTNO> <SUBJECT>When waiver of adjustment or recovery may be applied.</SUBJECT> Section 1870(c) of the Act provides that there shall be no adjustment or recovery in any case where an incorrect payment under title XVIII (hospital and supplementary medical insurance benefits) has been made (including a payment under section 1814(e) of the Act with respect to an individual: (a) Who is without fault, and (b) Adjustment or recovery would either: (1) Defeat the purposes of title II or title XVIII of the Act, or (2) Be against equity and good conscience. <CITA>[61 FR 49271, Sept. 19, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.359</SECTNO> <SUBJECT>Liability of certifying or disbursing officer.</SUBJECT> No certifying or disbursing officer shall be held liable for any amount certified or paid by him to any provider of services or other person: (a) Where the adjustment or recovery of such amount is waived (see § 405.355), or (b) Where adjustment (see § 405.352) or recovery is not completed prior to the death of all persons against whose benefits such adjustment is authorized. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Suspension and Recoupment of Payment to Providers and Suppliers and Collection and Compromise of Overpayments</HD> <SECTION> <SECTNO>§ 405.370</SECTNO> <SUBJECT> Definitions.</SUBJECT> For purposes of this subpart, the following definitions apply: <E T="03">Offset.</E> The recovery by Medicare of a non-Medicare debt by reducing present or future Medicare payments and applying the amount withheld to the indebtedness. (Examples are Public Health Service debts or Medicaid debts recovered by CMS). <E T="03">Recoupment.</E> The recovery by Medicare of any outstanding Medicare debt by reducing present or future Medicare payments and applying the amount withheld to the indebtedness. <E T="03">Suspension of payment.</E> The withholding of payment by an intermediary <PRTPAGE P="73"/>or carrier from a provider or supplier of an approved Medicare payment amount before a determination of the amount of the overpayment exists. <CITA>[61 FR 63745, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.371</SECTNO> <SUBJECT> Suspension, offset, and recoupment of Medicare payments to providers and suppliers of services.</SUBJECT> (a) <E T="03">General.</E> Medicare payments to providers and suppliers, as authorized under this subchapter (excluding payments to beneficiaries), may be— (1) Suspended, in whole or in part, by CMS, an intermediary, or a carrier if CMS, the intermediary, or the carrier possesses reliable information that an overpayment or fraud or willful misrepresentation exists or that the payments to be made may not be correct, although additional evidence may be needed for a determination; or (2) Offset or recouped, in whole or in part, by an intermediary or a carrier if the intermediary, carrier, or CMS has determined that the provider or supplier to whom payments are to be made has been overpaid. (b) <E T="03">Steps necessary for suspension of payment, offset, and recoupment.</E> Except as provided in paragraph (c) of this section, CMS, the intermediary, or carrier suspends payments only after it has complied with the procedural requirements set forth at § 405.372. The intermediary or carrier offsets or recoups payments only after it has complied with the procedural requirements set forth at § 405.373. (c) <E T="03">Suspension of payment in the case of unfiled cost reports.</E> If a provider has failed to timely file an acceptable cost report, payment to the provider is immediately suspended until a cost report is filed and determined by the intermediary to be acceptable. In the case of an unfiled cost report, the provisions of § 405.372 do not apply. (See § 405.372(a)(2) concerning failure to furnish other information.) <CITA>[61 FR 63746, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.372</SECTNO> <SUBJECT> Proceeding for suspension of payment.</SUBJECT> (a) <E T="03">Notice of intention to suspend</E>—(1) <E T="03">General rule.</E> Except as provided in paragraphs (a)(2) through (a)(4) of this section, if the intermediary, carrier, or CMS has determined that a suspension of payments under § 405.371(a)(1) should be put into effect, the intermediary or carrier must notify the provider or supplier of the intention to suspend payments, in whole or in part, and the reasons for making the suspension. (2) <E T="03">Failure to furnish information.</E> The notice requirement of paragraph (a)(1) of this section does not apply if the intermediary or carrier suspends payments to a provider or supplier in accordance with section 1815(a) or section 1833(e) of the Act, respectively, because the provider or supplier has failed to submit information requested by the intermediary or carrier that is needed to determine the amounts due the provider or supplier. (See § 405.371(c) concerning failure to file timely acceptable cost reports.) (3) <E T="03">Harm to Trust Funds.</E> A suspension of payment may be imposed without prior notice if CMS, the intermediary, or carrier determines that the Medicare Trust Funds would be harmed by giving prior notice. CMS may base its determination on an intermediary's or carrier's belief that giving prior notice would hinder the possibility of recovering the money. (4) <E T="03">Fraud or misrepresentation.</E> If the intended suspension of payment involves suspected fraud or misrepresentation, CMS determines whether to impose the suspension and if prior notice is appropriate. CMS directs the intermediary or carrier as to the timing and content of the notification to the provider or supplier. CMS is the real party in interest and is responsible for the decision. CMS may base its decision on information from the intermediary, carrier, law enforcement agencies, or other sources. CMS determines whether the information is reliable. (b) <E T="03">Rebuttal</E>—(1) <E T="03">If prior notice is required.</E> If prior notice is required under paragraph (a) of this section, the intermediary or carrier must give the provider or supplier an opportunity for rebuttal in accordance with § 405.374. If a rebuttal statement is received within the specified time period, the suspension of payment goes into effect on the date stated in the notice, and the procedures and provisions set forth in <PRTPAGE P="74"/>§ 405.375 apply. If by the end of the period specified in the notice no statement has been received, the suspension goes into effect automatically, and the procedures set forth in paragraph (c) of this section are followed. (2) <E T="03">If prior notice is not required.</E> If, under the provisions of paragraphs (a)(2) through (a)(4) of this section, a suspension of payment is put into effect without prior notice to the provider or supplier, the intermediary or carrier must, once the suspension is in effect, give the provider or supplier an opportunity to submit a rebuttal statement as to why the suspension should be removed. (c) <E T="03">Subsequent action.</E> If a suspension of payment is put into effect, the intermediary, carrier, or CMS takes timely action after the suspension to obtain the additional evidence it may need to make a determination as to whether an overpayment exists or the payments may be made. The intermediary, carrier, or CMS makes all reasonable efforts to expedite the determination. As soon as the determination is made, the intermediary or carrier informs the provider or supplier and, if appropriate, the suspension is rescinded or any existing recoupment or offset is adjusted to take into account the determination. (d) <E T="03">Duration of suspension of payment</E>—(1) <E T="03">General rule.</E> Except as provided in paragraphs (d)(2) and (d)(3) of this section, a suspension of payment is limited to 180 days, starting with the date the suspension begins. (2) <E T="03">180-day extension.</E> (i) An intermediary, a carrier, or, in cases of fraud and misrepresentation, OIG or a law enforcement agency, may request a one-time only extension of the suspension period for up to 180 additional days if it is unable to complete its examination of the information or investigation, as appropriate, within the 180-day time limit. The request must be submitted in writing to CMS. (ii) Upon receipt of a request for an extension, CMS notifies the provider or supplier of the requested extension. CMS then either extends the suspension of payment for up to an additional 180 days or determines that the suspended payments are to be released to the provider or supplier. (3) <E T="03">Exceptions to the time limits.</E> (i) The time limits specified in paragraphs (d)(1) and (d)(2) of this section do not apply if the case has been referred to, and is being considered by, the OIG for administrative action (for example, civil money penalties). (ii) CMS may grant an extension in addition to the extension provided under paragraph (d)(2) of this section if the Department of Justice submits a written request to CMS that the suspension of payment be continued based on the ongoing investigation and anticipated filing of criminal and/or civil actions. At a minimum, the request must include the following: (A) Identification of the entity under suspension. (B) The amount of time needed for continued suspension in order to implement the criminal and/or civil proceedings. (C) A statement of why and/or how criminal and/or civil actions may be affected if the requested extension is not granted. (e) <E T="03">Disposition of suspended payments.</E> Payments suspended under the authority of § 405.371(b) are first applied to reduce or eliminate any overpayments determined by the intermediary, carrier, or CMS, including any interest assessed under the provisions of § 405.378, and then applied to reduce any other obligation to CMS or to HHS. In the absence of a legal requirement that the excess be paid to another entity, the excess is released to the provider or supplier. <CITA>[61 FR 63746, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.373</SECTNO> <SUBJECT>Proceeding for offset or recoupment.</SUBJECT> (a) <E T="03">General rule.</E> Except as specified in paragraph (b) of this section, if the intermediary, carrier, or CMS has determined that an offset or recoupment of payments under § 405.371(a)(2) should be put into effect, the intermediary or carrier must— (1) Notify the provider or supplier of its intention to offset or recoup payment, in whole or in part, and the reasons for making the offset or recoupment; and (2) Give the provider or supplier an opportunity for rebuttal in accordance with § 405.374.<PRTPAGE P="75"/> (b) Paragraph (a) of this section does not apply if the intermediary, after furnishing a provider a written notice of the amount of program reimbursement in accordance with § 405.1803, recoups payment under paragraph (c) of § 405.1803. (For provider rights in this circumstance, see §§ 405.1809, 405.1811, 405.1815, 405.1835, and 405.1843.) (c) <E T="03">Actions following receipt of rebuttal statement.</E> If a provider or supplier submits, in accordance with § 405.374, a statement as to why an offset or recoupment should not be put into effect on the date specified in the notice, the intermediary or carrier must comply with the time limits and notification requirements of § 405.375. (d) <E T="03">No rebuttal statement received.</E> If, by the end of the time period specified in the notice, no statement has been received, the recoupment or offset goes into effect automatically. (e) <E T="03">Duration of recoupment or offset.</E> If a recoupment or offset is put into effect, it remains in effect until the earliest of the following: (1) The overpayment and any assessed interest are liquidated. (2) The intermediary or carrier obtains a satisfactory agreement from the provider or supplier for liquidation of the overpayment. (3) The intermediary or carrier, on the basis of subsequently acquired evidence or otherwise, determines that there is no overpayment. <CITA>[61 FR 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.374</SECTNO> <SUBJECT>Opportunity for rebuttal.</SUBJECT> (a) <E T="03">General rule.</E> If prior notice of the suspension of payment, offset, or recoupment is given under § 405.372 or § 405.373, the intermediary or carrier must give the provider or supplier an opportunity, before the suspension, offset, or recoupment takes effect, to submit any statement (to include any pertinent information) as to why it should not be put into effect on the date specified in the notice. Except as provided in paragraph (b) of this section, the provider or supplier has at least 15 days following the date of notification to submit the statement. (b) <E T="03">Exception.</E> The intermediary or carrier may for cause— (1) Impose a shorter period for rebuttal; or (2) Extend the time within which the statement must be submitted. <CITA>[61 FR 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.375</SECTNO> <SUBJECT>Time limits for, and notification of, administrative determination after receipt of rebuttal statement.</SUBJECT> (a) <E T="03">Submission and disposition of evidence.</E> If the provider or supplier submits a statement, under § 405.374, as to why a suspension of payment, offset, or recoupment should not be put into effect, or, under § 405.372(b)(2), why a suspension should be terminated, CMS, the intermediary, or carrier must within 15 days, from the date the statement is received, consider the statement (including any pertinent evidence submitted), together with any other material bearing upon the case, and determine whether the facts justify the suspension, offset, or recoupment or, if already initiated, justify the termination of the suspension, offset, or recoupment. Suspension, offset, or recoupment is not delayed beyond the date stated in the notice in order to review the statement. (b) <E T="03">Notification of determination.</E> The intermediary or carrier must send written notice of the determination made under paragraph (a) of this section to the provider or supplier. The notice must— (1) In the case of offset or recoupment, contain rationale for the determination; and (2) In the case of suspension of payment, contain specific findings on the conditions upon which the suspension is initiated, continued, or removed and an explanatory statement of the determination. (c) <E T="03">Determination is not appealable.</E> A determination made under paragraph (a) of this section is not an initial determination and is not appealable. <CITA>[61 FR 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.376</SECTNO> <SUBJECT>Suspension and termination of collection action and compromise of claims for overpayment.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section contains requirements and procedures for the compromise of, or suspension or termination of collection action on, claims for overpayments against a provider or a supplier under the Medicare <PRTPAGE P="76"/>program. It is adopted under the authority of the Federal Claims Collection Act (31 U.S.C. 3711). Collection and compromise of claims against Medicare beneficiaries are explained at 20 CFR 404.515. (b) <E T="03">Definitions.</E> As used in this section, <E T="03">debtor</E> means a provider of services or a physician or other supplier of services that has been overpaid under title XVIII of the Social Security Act. It includes an individual, partnership, corporation, estate, trust, or other legal entity. (c) <E T="03">Basic conditions.</E> A claim for recovery of Medicare overpayments against a debtor may be compromised, or collection action on it may be suspended or terminated, by the Centers for Medicare & Medicaid Services (CMS) if; (1) The claim does not exceed $100,000, or such higher amount as the Attorney General may from time to time prescribe, exclusive of interest; and (2) There is no indication of fraud, the filing of a false claim, or misrepresentation on the part of the debtor or any director, partner, manager, or other party having an interest in the claim. (d) <E T="03">Basis for compromise.</E> A claim may be compromised for one or more of the following reasons: (1) The debtor, or the estate of a deceased debtor, does not have the present or prospective ability to pay the full amount within a reasonable time; (2) The debtor refuses to pay the claim in full and the United States is unable to collect the full amount within a reasonable time by legal proceedings; (3) There is real doubt the United States can prove its case in court; or (4) The cost of collecting the claim does not justify enforced collection of the full amount. (e) <E T="03">Basis for termination of collection action.</E> Collection action may be terminated for one or more of the following reasons: (1) The United States cannot enforce collection of any significant sum; (2) The debtor cannot be located, there is no security to be liquidated, the statute of limitations has run, and the prospects of collecting by offset are too remote to justify retention of the claim; (3) The cost of further collection action is likely to exceed any recovery; (4) It is determined the claim is without merit; or (5) Evidence to substantiate the claim is no longer available. (f) <E T="03">Basis for suspension of collection action.</E> Collection action may be suspended for either of the following reasons if future collection action is justified based on potential productivity, including foreseeable ability to pay, and size of claim: (1) The debtor cannot be located; or (2) The debtor is unable to make payments on the claim or to fulfill an acceptable compromise. (g) <E T="03">Factors considered.</E> In determining whether a claim will be compromised, or collection action terminated or suspended, CMS will consider the following factors: (1) Age and health of the debtor, present and potential income, inheritance prospects, possible concealment or fraudulent transfer of assets, and the availability of assets which may be reached by enforced collection proceedings, for compromise under paragraph (d)(1) of this section, termination under paragraph (e)(1) of this section, and suspension under paragraph (f)(2) of this section; (2) Applicable exemptions available to a debtor and uncertainty concerning the price of the property in a forced sale, for compromise under paragraph (d)(2) of this section and termination under paragraph (e)(1) of this section; and (3) The probability of proving the claim in court, the probability of full or partial recovery, the availability of necessary evidence, and related pragmatic considerations, for compromise under paragraph (d)(3) of this section. (h) <E T="03">Amount of compromise.</E> The amount accepted in compromise will be reasonable in relation to the amount that can be recovered by enforced collection proceedings. <FP>Consideration shall be given to the following:</FP> (1) The exemptions available to the debtor under State or Federal law; (2) The time necessary to collect the overpayment;<PRTPAGE P="77"/> (3) The litigative probabilities involved; and (4) The administrative and litigative costs of collection where the cost of collecting the claim is a basis for compromise. (i) <E T="03">Payment of compromise—</E>(1) <E T="03">Time and manner.</E> Payment of the amount that CMS has agreed to accept as a compromise in full settlement of a Medicare overpayment claim must be made within the time and in the manner prescribed by CMS. An overpayment claim is not compromised or settled until the full payment of the compromised amount has been made within the time and in the manner prescribed by CMS. (2) <E T="03">Failure to pay compromised amount.</E> Failure of the debtor or the estate to make payment as provided by the comprise reinstates the full amount of the overpayment claim, less any amounts paid prior to the default. (j) <E T="03">Effect of compromise, or suspension, or termination of collection action.</E> Any action taken by CMS under this section regarding the compromise of an overpayment claim, or termination or suspension of collection action on an overpayment claim, is not an initial determination for purposes of the appeal procedures under subparts G, H, and R of this part. <CITA>[43 FR 59381, Dec. 20, 1978, as amended at 57 56998, Dec. 2, 1992. Redesignated and amended at 61 FR 63745, 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.377</SECTNO> <SUBJECT>Withholding Medicare payments to recover Medicaid overpayments.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section implements section 1885 of the Act, which provides for withholding Medicare payments to certain Medicaid providers that have not arranged to repay Medicaid overpayments as determined by the Medicaid State agency or have failed to provide information necessary to determine the amount (if any) of overpayments. (b) <E T="03">When withholding may be used.</E> CMS may withhold Medicare payment to offset Medicaid overpayments that a Medicaid agency has been unable to collect if— (1) The Medicaid agency has followed the procedure specified in § 447.31 of this chapter; and (2) The institution or person is one described in paragraph (c) of this section and either— (i) Has not made arrangements satisfactory to the Medicaid agency to repay the overpayment; or (ii) Has not provided information to the Medicaid agency necessary to enable the agency to determine the existence or amount of Medicaid overpayment. (c) <E T="03">Institutions or persons affected.</E> Withholding under paragraph (b) of this section may be made with respect to any of the following entities that has or had in effect an agreement with a Medicaid agency to furnish services under an approved Medicaid State plan: (1) An institutional provider that has in effect an agreement under section 1866 of the Act. (Part 489 (Provider and Supplier Agreements) implements section 1866 of the Act.) (2) A physician or supplier that has accepted payment on the basis of an assignment under section 1842(b)(3)(B)(ii) of the Act. (Section 424.55 sets forth the conditions a supplier agrees to in accepting assignment.) (d) <E T="03">Amount to be withheld.</E> (1) CMS contacts the appropriate intermediary or carrier to determine the amount of Medicare payment to which the institution or person is entitled. (2) CMS may require the intermediary or carrier to withhold Medicare payments to the institution or person by the lesser of the following amounts: (i) The amount of the Medicare payments to which the institution or person would otherwise be entitled. (ii) The total Medicaid overpayment to the institution or person. (e) <E T="03">Notice of withholding.</E> If CMS intends to withhold payments under this section, it notifies by certified mail, return receipt requested, the institution or person and the appropriate intermediary or carrier of the intention to withhold Medicare payments and follows the procedure in § 405.374. The notice includes— (1) Identification of the institution or person; and (2) The amount of Medicaid overpayment to be withheld from payments to which the institution or person would otherwise be entitled under Medicare.<PRTPAGE P="78"/> (f) <E T="03">Termination of withholding.</E> CMS terminates the withholding if— (1) The Medicaid overpayment is completely recovered; (2) The institution or person enters into an agreement satisfactory to the Medicaid agency to repay the overpayment; or (3) The Medicaid agency determines that there is no overpayment based on newly acquired evidence or a subsequent audit. (g) <E T="03">Disposition of funds withheld.</E> CMS releases amounts withheld under this section to the Medicaid agency to be applied against the Medicaid overpayment made by the State agency. <CITA>[61 FR 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.378</SECTNO> <SUBJECT>Interest charges on overpayment and underpayments to providers, suppliers, and other entities.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section, which implements sections 1815(d) and 1833(j) of the common law and Act, and authority granted under the Federal Claims Collection Act, provides for the charging and payment of interest on overpayments and underpayments to Medicare providers, suppliers, HMOs, competitive medical plans (CMPs), and health care prepayment plans (HCPPs). (b) <E T="03">Basic rules.</E> (1) CMS will charge interest on overpayments, and pay interest on underpayments, to providers and suppliers of services (including physicians and other practitioners), except as specified in paragraphs (f) and (h) of this section. (2) Interest will accrue from the date of the final determination as defined in paragraph (c) of this section, and will either be charged on the overpayment balance or paid on the underpayment balance for each 30-day period that payment is delayed. (Periods of less than 30 days will be treated as a full 30-day period, and the 30-day interest charge will be applied to any balance.) (c) <E T="03">Definition of final determination.</E> (1) For purposes of this section, any of the following constitutes a final determination: (i) A Notice of Amount of Program Reimbursement (NPR) is issued, as discussed in §§ 405.1803, 417.576, and 417.810, and either— (A) A written demand for payment is made; or (B) A written determination of an underpayment is made by the intermediary after a cost report is filed. (ii) In cases in which an NPR is not used as a notice of determination (that is, primarily under part B), one of the following determinations is issued— (A) A written determination that an overpayment exists and a written demand for payment; (B) A written determination of an underpayment; or (C) An Administrative Law Judge (ALJ) decision that reduces the amount of an overpayment below the amount that CMS has already collected. (iii) Other examples of cases in which an NPR is not used are carrier reasonable charge determinations under subpart E of this part, interim cost settlements made for HMOs, CMPs, and HCPPs under §§ 417.574 and 417.810(e) of this chapter, and initial retroactive adjustment determinations under § 413.64(f)(2) of this chapter. In the case of interim cost settlements and initial retroactive adjustment determinations, if the debtor does not dispute the adjustment determination within the timeframe designated in the notice of the determination (generally at least 15 days), a final determination is deemed to have been made. If the provider or supplier does dispute portions of the determination, a final determination is deemed to have been made on those portions when the intermediary issues a new determination in response to the dispute. (iv) The due date of a timely-filed cost report that indicates an amount is due CMS, and is not accompanied by payment in full. (If an additional overpayment or underpayment is determined by the carrier or intermediary, a final determination on the additional amount is made in accordance with paragraphs (c)(1)(i), (c)(1)(ii), or (c)(1)(iii), of this section.) (v) With respect to a cost report that is not filed on time, the day following the date the cost report was due (plus a single extension of time not to exceed 30 days if granted for good cause), until the time as a cost report is filed. (When the cost report is subsequently filed, there is an additional determination as <PRTPAGE P="79"/>specified in paragraphs (c)(1) (i), (ii), (iii), or (iv) of this section.) (2) Except as required by any subsequent administrative or judicial reversal, interest accrues from the date of final determination as specified in this subsection. (d) <E T="03">Rate of interest</E>. (1) The interest rate on overpayments and underpayments is the higher of— (i) The rate as fixed by the Secretary of the Treasury after taking into consideration private consumer rates of interest prevailing on the date of final determination as defined in paragraph (c) of this section (this rate is published quarterly in the <E T="04">Federal Register</E> by the Department under 45 CFR 30.13(a)); or (ii) The current value of funds rate (this rate is published annually in the <E T="04">Federal Register</E> by the Secretary of the Treasury, subject to quarterly revisions). (2) [Reserved] (e) <E T="03">Accrual of interest.</E> (1) If a cost report is filed that does not indicate an amount is due CMS but the intermediary makes a final determination that an overpayment exists, or if a carrier makes a final determination that an overpayment to a physician or supplier exists, interest will accrue beginning with the date of such final determination. Interest will continue to accrue during periods of administrative and judicial appeal and until final disposition of the claim. (2)(i) If a cost report is filed and indicates that an amount is due CMS, interest on the amount due will accrue from the due date of the cost report unless— (A) Full payment on the amount due accompanies the cost report; or (B) The provider and the intermediary agree in advance to liquidate the overpayment through a reduction in interim payments over the next 30-day period. (ii) If the intermediary determines an additional overpayment during the cost settlement process, interest will accrue from the date of each determination. (iii) The interest rate on each of the final determinations of an overpayment will be the rate of interest in effect on the date the determination is made. (3) In the case of a cost report that is not filed on time, interest also will accrue on a determined overpayment from the day following the due date of the report (plus a single extension of time not to exceed 30 days if granted for good cause, as specified in § 413.24(f)) of this chapter, to the time the cost report is filed. (4) If an intermediary or a carrier makes a final determination that an underpayment exists, interest to the provider or the supplier will accrue from the date of notification of the underpayment. (f) <E T="03">Waiver of interest charges.</E> (1) When an intermediary or a carrier makes a final determination that an overpayment or underpayment exists, as specified in paragraphs (e)(1), (e)(2)(ii), and (e)(4)— (i) Interest charges will be waived if the overpayment or underpayment is completely liquidated within 30 days from the date of the final determination. (ii) CMS may waive interest charges if it determines that the administrative cost of collecting them exceeds the interest charges. (2) Interest will not be waived for that period of time during which the cost report was due but remained unfiled for more than 30 days, as specified in paragraph (e)(3) of this section. (g) <E T="03">Rules applicable to partial payments.</E> If an overpayment is repaid in installments or recouped by withholding from several payments due the provider or supplier of services— (1) Each payment or recoupment will be applied first to accrued interest and then to the principal; and (2) After each payment or recoupment, interest will accrue on the remaining unpaid balance. (h) <E T="03">Exceptions to applicability.</E> (1) The provisions of this section do not apply to the time period for which interest is payable under § 413.64(j) of this chapter because the provider seeks judicial review of a decision of the Provider Reimbursement Review Board, or a subsequent reversal, affirmance, or modification of that decision by the Administrator. Prior to that time, until the provider seeks judicial review, interest <PRTPAGE P="80"/>accrues at the rate specified in this section on outstanding unpaid balances resulting from final determinations as defined in paragraph (c) of this section. (2) If an overpayment or an underpayment determination is reversed administratively or judicially, and the reversal is no longer subject to appeal, appropriate adjustments will be made with respect to the overpayment or underpayment and the amount of interest charged. (i) <E T="03">Nonallowable cost.</E> As specified in §§ 412.113 and 413.153 of this chapter, interest accrued on overpayments and interest on funds borrowed specifically to repay overpayments are not considered allowable costs, up to the amount of the overpayment, unless the provider had made a prior commitment to borrow funds for other purposes (for example, capital improvements). <FP>(See § 413.153(a)(2) of this chapter for exceptions based on administrative or judicial reversal.)</FP> <CITA>[47 FR 54814, Dec. 6, 1982, as amended at 49 FR 36102, Sept. 14, 1984; 49 FR 44472, Nov. 7, 1984; 51 FR 34792, Sept. 30, 1986; 56 FR 31336, July 10, 1991. Redesignated at 61 FR 63745, Dec. 2, 1996]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Repayment of Scholarships and Loans</HD> <SECTION> <SECTNO>§ 405.380</SECTNO> <SUBJECT>Collection of past-due amounts on scholarship and loan programs.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section implements section 1892 of the Act, which authorizes the Secretary to deduct from Medicare payments for services amounts considered as past-due obligations under the National Health Service Corps Scholarship program, the Physician Shortage Area Scholarship program, and the Health Education Assistance Loan program. (b) <E T="03">Offsetting against Medicare payment.</E> (1) Medicare carriers and intermediaries offset against Medicare payments in accordance with the signed repayment agreement between the Public Health Service and individuals who have breached their scholarship or loan obligations and who— (i) Accept Medicare assignment for services; (ii) Are employed by or affiliated with a provider, HMO, or Competitive Medical Plan (CMP) that receives Medicare payment for services; or (iii) Are members of a group practice that receives Medicare payment for services. (2) For purposes of this section, “provider” includes all entities eligible to receive Medicare payment in accordance with an agreement under section 1866 of the Act. (c) <E T="03">Beginning of offset.</E> (1) The Medicare carrier offsets Medicare payments beginning six months after it notifies the individual or the group practice of the amount to be deducted and the particular individual to whom the deductions are attributable. (2) The Medicare intermediary offsets payments beginning six months after it notifies the provider, HMO, CMP or group practice of the amount to be deducted and the particular individuals to whom the deductions are attributable. Offset of payments is made in accordance with the terms of the repayment agreement. If the individual ceases to be employed by the provider, HMO, or CMP, or leaves the group practice, no deduction is made. (d) <E T="03">Refusal to offset against Medicare payment.</E> If the individual refuses to enter into a repayment agreement, or breaches any provision of the agreement, or if Medicare payment is insufficient to maintain the offset collection according to the agreed upon formula, then— (1) The Department, within 30 days if feasible, informs the Attorney General; and (2) The Department excludes the individual from Medicare until the entire past due obligation has been repaid, unless the individual is a sole community practitioner or the sole source of essential specialized services in a community and the State requests that the individual not be excluded. <CITA>[57 FR 19092, May 4, 1992]</CITA> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Private Contracts</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1802, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395a, and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 63 FR 58901, Nov. 2, 1998, unless otherwise noted. </SOURCE> <SECTION> <PRTPAGE P="81"/> <SECTNO>§ 405.400</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart, the following definitions apply: <E T="03">Beneficiary</E> means an individual who is enrolled in Part B of Medicare. <E T="03">Emergency care services</E> means services furnished to an individual for treatment of an “emergency medical condition” as that term is defined in § 422.2 of this chapter. <E T="03">Legal representative</E> means one or more individuals who, as determined by applicable State law, has the legal authority to enter into the contract with the physician or practitioner on behalf of the beneficiary. <E T="03">Opt-out</E> means the status of meeting the conditions specified in § 405.410. <E T="03">Opt-out period</E> means the 2-year period beginning on the effective date of the affidavit as specified by § 405.410(c)(1) or § 405.410(c)(2), as applicable. <E T="03">Participating physician</E> means a “physician” as defined in this section who has signed an agreement to participate in Part B of Medicare. <E T="03">Physician</E> means a doctor of medicine or a doctor of osteopathy who is currently licensed as that type of doctor in each State in which he or she furnishes services to patients. <E T="03">Practitioner</E> means a physician assistant, nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, certified nurse midwife, clinical psychologist, or clinical social worker, who is currently legally authorized to practice in that capacity by each State in which he or she furnishes services to patients or clients. <E T="03">Private contract</E> means a document that meets the criteria specified in § 405.415. <E T="03">Properly opt-out</E> means to complete, without defect, the requirements for opt-out as specified in § 405.410. <E T="03">Properly terminate opt-out</E> means to complete, without defect, the requirements for terminating opt-out as specified in § 405.445. <E T="03">Urgent care services</E> means services furnished to an individual who requires services to be furnished within 12 hours in order to avoid the likely onset of an emergency medical condition. </SECTION> <SECTION> <SECTNO>§ 405.405</SECTNO> <SUBJECT>General rules.</SUBJECT> (a) A physician or practitioner may enter into one or more private contracts with Medicare beneficiaries for the purpose of furnishing items or services that would otherwise be covered by Medicare, provided the conditions of this subpart are met. (b) A physician or practitioner who enters into at least one private contract with a Medicare beneficiary under the conditions of this subpart, and who submits one or more affidavits in accordance with this subpart, opts-out of Medicare for a 2-year period unless the opt-out is terminated early according to § 405.445. The physician's or practitioner's opt-out may be renewed for subsequent 2-year periods. (c) Both the private contracts described in paragraph (a) of this section and the physician's or practitioner's opt-out described in paragraph (b) of this section are null and void if the physician or practitioner fails to properly opt-out in accordance with the conditions of this subpart. (d) Both the private contracts described in paragraph (a) of this section and the physician's or practitioner's opt-out described in paragraph (b) of this section are null and void for the remainder of the opt-out period if the physician or practitioner fails to remain in compliance with the conditions of this subpart during the opt-out period. (e) Services furnished under private contracts meeting the requirements of this subpart are not covered services under Medicare, and no Medicare payment will be made for such services either directly or indirectly, except as permitted in accordance with § 405.435(c). </SECTION> <SECTION> <SECTNO>§ 405.410</SECTNO> <SUBJECT>Conditions for properly opting-out of Medicare.</SUBJECT> The following conditions must be met for a physician or practitioner to properly opt-out of Medicare: (a) Each private contract between a physician or a practitioner and a Medicare beneficiary that is entered into prior to the submission of the affidavit described in paragraph (b) of this section must meet the specifications of § 405.415.<PRTPAGE P="82"/> (b) The physician or practitioner must submit an affidavit that meets the specifications of § 405.420 to each Medicare carrier with which he or she would file claims absent completion of opt-out. (c) A nonparticipating physician or a practitioner may opt-out of Medicare at any time in accordance with the following: (1) The 2-year opt-out period begins the date the affidavit meeting the requirements of § 405.420 is signed, provided the affidavit is filed within 10 days after he or she signs his or her first private contract with a Medicare beneficiary. (2) If the physician or practitioner does not timely file any required affidavit, the 2-year opt-out period begins when the last such affidavit is filed. Any private contract entered into before the last required affidavit is filed becomes effective upon the filing of the last required affidavit and the furnishing of any items or services to a Medicare beneficiary under such contract before the last required affidavit is filed is subject to standard Medicare rules. (d) A participating physician may properly opt-out of Medicare at the beginning of any calendar quarter, provided that the affidavit described in § 405.420 is submitted to the participating physician's Medicare carriers at least 30 days before the beginning of the selected calendar quarter. A private contract entered into before the beginning of the selected calendar quarter becomes effective at the beginning of the selected calendar quarter and the furnishing of any items or services to a Medicare beneficiary under such contract before the beginning of the selected calendar quarter is subject to standard Medicare rules. </SECTION> <SECTION> <SECTNO>§ 405.415</SECTNO> <SUBJECT>Requirements of the private contract.</SUBJECT> A private contract under this subpart must: (a) Be in writing and in print sufficiently large to ensure that the beneficiary is able to read the contract. (b) Clearly state whether the physician or practitioner is excluded from Medicare under sections 1128, 1156, or 1892 or any other section of the Social Security Act. (c) State that the beneficiary or his or her legal representative accepts full responsibility for payment of the physician's or practitioner's charge for all services furnished by the physician or practitioner. (d) State that the beneficiary or his or her legal representative understands that Medicare limits do not apply to what the physician or practitioner may charge for items or services furnished by the physician or practitioner. (e) State that the beneficiary or his or her legal representative agrees not to submit a claim to Medicare or to ask the physician or practitioner to submit a claim to Medicare. (f) State that the beneficiary or his or her legal representative understands that Medicare payment will not be made for any items or services furnished by the physician or practitioner that would have otherwise been covered by Medicare if there was no private contract and a proper Medicare claim had been submitted. (g) State that the beneficiary or his or her legal representative enters into this contract with the knowledge that he or she has the right to obtain Medicare-covered items and services from physicians and practitioners who have not opted-out of Medicare, and that the beneficiary is not compelled to enter into private contracts that apply to other Medicare-covered services furnished by other physicians or practitioners who have not opted-out. (h) State the expected or known effective date and expected or known expiration date of the opt-out period. (i) State that the beneficiary or his or her legal representative understands that Medigap plans do not, and that other supplemental plans may elect not to, make payments for items and services not paid for by Medicare. (j) Be signed by the beneficiary or his or her legal representative and by the physician or practitioner. (k) Not be entered into by the beneficiary or by the beneficiary's legal representative during a time when the beneficiary requires emergency care services or urgent care services. (However, a physician or practitioner may <PRTPAGE P="83"/>furnish emergency or urgent care services to a Medicare beneficiary in accordance with § 405.440.) (l) Be provided (a photocopy is permissible) to the beneficiary or to his or her legal representative before items or services are furnished to the beneficiary under the terms of the contract. (m) Be retained (original signatures of both parties required) by the physician or practitioner for the duration of the opt-out period. (n) Be made available to CMS upon request. (o) Be entered into for each opt-out period. </SECTION> <SECTION> <SECTNO>§ 405.420</SECTNO> <SUBJECT>Requirements of the opt-out affidavit.</SUBJECT> An affidavit under this subpart must: (a) Be in writing and be signed by the physician or practitioner. (b) Contain the physician's or practitioner's full name, address, telephone number, national provider identifier (NPI) or billing number, if one has been assigned, uniform provider identification number (UPIN) if one has been assigned, or, if neither an NPI nor a UPIN has been assigned, the physician's or practitioner's tax identification number (TIN). (c) State that, except for emergency or urgent care services (as specified in § 405.440), during the opt-out period the physician or practitioner will provide services to Medicare beneficiaries only through private contracts that meet the criteria of paragraph § 405.415 for services that, but for their provision under a private contract, would have been Medicare-covered services. (d) State that the physician or practitioner will not submit a claim to Medicare for any service furnished to a Medicare beneficiary during the opt-out period, nor will the physician or practitioner permit any entity acting on his or her behalf to submit a claim to Medicare for services furnished to a Medicare beneficiary, except as specified in § 405.440. (e) State that, during the opt-out period, the physician or practitioner understands that he or she may receive no direct or indirect Medicare payment for services that he or she furnishes to Medicare beneficiaries with whom he or she has privately contracted, whether as an individual, an employee of an organization, a partner in a partnership, under a reassignment of benefits, or as payment for a service furnished to a Medicare beneficiary under a Medicare+Choice plan. (f) State that a physician or practitioner who opts-out of Medicare acknowledges that, during the opt-out period, his or her services are not covered under Medicare and that no Medicare payment may be made to any entity for his or her services, directly or on a capitated basis. (g) State a promise by the physician or practitioner to the effect that, during the opt-out period, the physician or practitioner agrees to be bound by the terms of both the affidavit and the private contracts that he or she has entered into. (h) Acknowledge that the physician or practitioner recognizes that the terms of the affidavit apply to all Medicare-covered items and services furnished to Medicare beneficiaries by the physician or practitioner during the opt-out period (except for emergency or urgent care services furnished to the beneficiaries with whom he or she has not previously privately contracted) without regard to any payment arrangements the physician or practitioner may make. (i) With respect to a physician who has signed a Part B participation agreement, acknowledge that such agreement terminates on the effective date of the affidavit. (j) Acknowledge that the physician or practitioner understands that a beneficiary who has not entered into a private contract and who requires emergency or urgent care services may not be asked to enter into a private contract with respect to receiving such services and that the rules of § 405.440 apply if the physician furnishes such services. </SECTION> <SECTION> <SECTNO>§ 405.425</SECTNO> <SUBJECT>Effects of opting-out of Medicare.</SUBJECT> If a physician or practitioner opts-out of Medicare in accordance with this subpart for the 2-year period for which the opt-out is effective, the following results obtain: (a) Except as provided in § 405.440, no payment may be made directly by <PRTPAGE P="84"/>Medicare or by any Medicare+Choice plan to the physician or practitioner or to any entity to which the physician or practitioner reassigns his right to receive payment for services. (b) The physician or practitioner may not furnish any item or service that would otherwise be covered by Medicare (except for emergency or urgent care services) to any Medicare beneficiary except through a private contract that meets the requirements of this subpart. (c) The physician or practitioner is not subject to the requirement to submit a claim for items or services furnished to a Medicare beneficiary, as specified in § 424.5(a)(6) of this chapter, except as provided in § 405.440. (d) The physician or practitioner is prohibited from submitting a claim to Medicare for items or services furnished to a Medicare beneficiary except as provided in § 405.440. (e) In the case of a physician, he or she is not subject to the limiting charge provisions of § 414.48 of this chapter, except for services provided under § 405.440. (f) The physician or practitioner is not subject to the prohibition-on-reassignment provisions of § 414.80 of this chapter, except for services provided under § 405.440. (g) In the case of a practitioner, he or she is not prohibited from billing or collecting amounts from beneficiaries (as provided in 42 U.S.C. 1395u(b)(18)(B)). (h) The death of a beneficiary who has entered into a private contract (or whose legal representative has done so) does not invoke § 424.62 or § 424.64 of this chapter with respect to the physician or practitioner with whom the beneficiary (or legal representative) has privately contracted. (i) The physician or practitioner who has not been excluded under sections 1128, 1156, or 1892 of the Social Security Act may order, certify the need for, or refer a beneficiary for Medicare-covered items and services, provided the physician or practitioner is not paid, directly or indirectly, for such services (except as provided in § 405.440). (j) The physician or practitioner who is excluded under sections 1128, 1156, or 1892 of the Social Security Act may not order, prescribe, or certify the need for Medicare-covered items and services except as provided in § 1001.1901 of this title, and must otherwise comply with the terms of the exclusion in accordance with § 1001.1901 effective with the date of the exclusion. </SECTION> <SECTION> <SECTNO>§ 405.430</SECTNO> <SUBJECT>Failure to properly opt-out.</SUBJECT> (a) A physician or practitioner fails to properly opt-out if— (1) Any private contract between the physician or practitioner and a Medicare beneficiary, that was entered into before the affidavit described in § 405.420 was filed, does not meet the specifications of § 405.415; or (2) He or she fails to submit the affidavit(s) in accordance with § 405.420. (b) If a physician or practitioner fails to properly opt-out in accordance with paragraph (a) of this section, the following results obtain: (1) The physician's or practitioner's attempt to opt-out of Medicare is nullified, and all of the private contracts between the physician or practitioner and Medicare beneficiaries for the two-year period covered by the attempted opt-out are deemed null and void. (2) The physician or practitioner must submit claims to Medicare for all Medicare-covered items and services furnished to Medicare beneficiaries, including the items and services furnished under the nullified contracts. A nonparticipating physician is subject to the limiting charge provisions of § 414.48 of this chapter. A participating physician is subject to the limitations on charges of the participation agreement he or she signed. (3) The practitioner may not reassign any claim except as provided in § 424.80 of this chapter. (4) The practitioner may neither bill nor collect an amount from the beneficiary except for applicable deductible and coinsurance amounts. (5) The physician or practitioner may make another attempt to properly opt-out at any time. </SECTION> <SECTION> <SECTNO>§ 405.435</SECTNO> <SUBJECT>Failure to maintain opt-out.</SUBJECT> (a) A physician or practitioner fails to maintain opt-out under this subpart if, during the opt-out period— (1) He or she knowingly and willfully—<PRTPAGE P="85"/> (i) Submits a claim for Medicare payment (except as provided in § 405.440); or (ii) Receives Medicare payment directly or indirectly for Medicare-covered services furnished to a Medicare beneficiary (except as provided in § 405.440). (2) He or she fails to enter into private contracts with Medicare beneficiaries for the purpose of furnishing items and services that would otherwise be covered by Medicare, or enters into contracts that fail to meet the specifications of § 405.415; or (3) He or she fails to comply with the provisions of § 405.440 regarding billing for emergency care services or urgent care services; or (4) He or she fails to retain a copy of each private contract that he or she has entered into for the duration of the opt-out period for which the contracts are applicable or fails to permit CMS to inspect them upon request. (b) If a physician or practitioner fails to maintain opt-out in accordance with paragraph (a) of this section, and fails to demonstrate, within 45 days of a notice from the carrier of a violation of paragraph (a) of this section, that he or she has taken good faith efforts to maintain opt-out (including by refunding amounts in excess of the charge limits to beneficiaries with whom he or she did not sign a private contract), the following results obtain, effective 46 days after the date of the notice, but only for the remainder of the opt-out period: (1) All of the private contracts between the physician or practitioner and Medicare beneficiaries are deemed null and void. (2) The physician's or practitioner's opt-out of Medicare is nullified. (3) The physician or practitioner must submit claims to Medicare for all Medicare-covered items and services furnished to Medicare beneficiaries. (4) The physician or practitioner or beneficiary will not receive Medicare payment on Medicare claims for the remainder of the opt-out period, except as provided in paragraph (c) of this section. (5) The physician is subject to the limiting charge provisions of § 414.48 of this chapter. (6) The practitioner may not reassign any claim except as provided in § 424.80 of this chapter. (7) The practitioner may neither bill nor collect any amount from the beneficiary except for applicable deductible and coinsurance amounts. (8) The physician or practitioner may not attempt to once more meet the criteria for properly opting-out until the 2-year opt-out period expires. (c) Medicare payment may be made for the claims submitted by a beneficiary for the services of an opt-out physician or practitioner when the physician or practitioner did not privately contract with the beneficiary for services that were not emergency care services or urgent care services and that were furnished no later than 15 days after the date of a notice by the carrier that the physician or practitioner has opted-out of Medicare. </SECTION> <SECTION> <SECTNO>§ 405.440</SECTNO> <SUBJECT>Emergency and urgent care services.</SUBJECT> (a) A physician or practitioner who has opted-out of Medicare under this subpart need not enter into a private contract to furnish emergency care services or urgent care services to a Medicare beneficiary. Accordingly, a physician or practitioner will not be determined to have failed to maintain opt-out if he or she furnishes emergency care services or urgent care services to a Medicare beneficiary with whom the physician or practitioner has not previously entered into a private contract, provided the physician or practitioner complies with the billing requirements specified in paragraph (b) of this section. (b) When a physician or practitioner who has not been excluded under sections 1128, 1156, or 1892 of the Social Security Act furnishes emergency care services or urgent care services to a Medicare beneficiary with whom the physician or practitioner has not previously entered into a private contract, he or she: (1) Must submit a claim to Medicare in accordance with both 42 CFR part 424 and Medicare instructions (including but not limited to complying with proper coding of emergency or urgent care services furnished by physicians <PRTPAGE P="86"/>and practitioners who have opted-out of Medicare). (2) May collect no more than— (i) The Medicare limiting charge, in the case of a physician; or (ii) The deductible and coinsurance, in the case of a practitioner. (c) Emergency care services or urgent care services furnished to a Medicare beneficiary with whom the physician or practitioner has previously entered into a private contract (that is, entered into before the onset of the emergency medical condition or urgent medical condition), are furnished under the terms of the private contract. (d) Medicare may make payment for emergency care services or urgent care services furnished by a physician or practitioner who has properly opted-out when the services are furnished and the claim for services is made in accordance with this section. A physician or practitioner who has been excluded must comply with the regulations at § 1001.1901 (Scope and effect of exclusion) of this title when he or she furnishes emergency services to beneficiaries and may not bill and be paid for urgent care services. </SECTION> <SECTION> <SECTNO>§ 405.445</SECTNO> <SUBJECT>Renewal and early termination of opt-out.</SUBJECT> (a) A physician or practitioner may renew opt-out by filing an affidavit with each carrier with which he or she would file claims absent completion of opt-out, provided the affidavits are filed within 30 days after the current opt-out period expires. (b) To properly terminate opt-out a physician or practitioner must: (1) Not have previously opted out of Medicare. (2) Notify all Medicare carriers, with which he or she filed an affidavit, of the termination of the opt-out no later than 90 days after the effective date of the opt-out period. (3) Refund to each beneficiary with whom he or she has privately contracted all payment collected in excess of: (i) The Medicare limiting charge (in the case of physicians); or (ii) The deductible and coinsurance (in the case of practitioners). (4) Notify all beneficiaries with whom the physician or practitioner entered into private contracts of the physician's or practitioner's decision to terminate opt-out and of the beneficiaries' right to have claims filed on their behalf with Medicare for the services furnished during the period between the effective date of the opt-out and the effective date of the termination of the opt-out period. (c) When the physician or practitioner properly terminates opt-out in accordance with paragraph (b), he or she will be reinstated in Medicare as if there had been no opt-out, and the provision of § 405.425 shall not apply unless the physician or practitioner subsequently properly opts out. (d) A physician or practitioner who has completed opt-out on or before January 1, 1999 may terminate opt-out during the 90 days following January 1, 1999 if he or she notifies all carriers to whom he or she would otherwise submit claims of the intent to terminate opt-out and complies with paragraphs (b)(3) and (4) of this section. Paragraph (c) of this section applies in these cases. </SECTION> <SECTION> <SECTNO>§ 405.450</SECTNO> <SUBJECT>Appeals.</SUBJECT> (a) A determination by CMS that a physician or practitioner has failed to properly opt-out, failed to maintain opt-out, failed to timely renew opt-out, failed to privately contract, or failed to properly terminate opt-out is an initial determination for purposes of § 405.803. (b) A determination by CMS that no payment can be made to a beneficiary for the services of a physician who has opted-out is an initial determination for purposes of § 405.803. </SECTION> <SECTION> <SECTNO>§ 405.455</SECTNO> <SUBJECT>Application to Medicare+Choice contracts.</SUBJECT> An organization that has a contract with CMS to provide one or more Medicare+Choice (M+C) plans to beneficiaries (part 422 of this chapter): (a) Must acquire and maintain information from Medicare carriers on physicians and practitioners who have opted-out of Medicare. (b) Must make no payment directly or indirectly for Medicare covered services furnished to a Medicare beneficiary by a physician or practitioner who has opted-out of Medicare.<PRTPAGE P="87"/> (c) May make payment to a physician or practitioner who furnishes emergency or urgent care services to a beneficiary who has not previously entered into a private contract with the physician or practitioner in accordance with § 405.440. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Criteria for Determining Reasonable Charges</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 32 FR 12599, Aug. 31, 1967, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.500</SECTNO> <SUBJECT>Basis.</SUBJECT> Subpart E is based on the provisions of the following sections of the Act: Section 1814(b) provides for Part A payment on the basis of the lesser of a provider's reasonable costs or customary charges. Section 1832 establishes the scope of benefits provided under the Part B supplementary medical insurance program. Section 1833(a) sets forth the amounts of payment for supplementary medical insurance services on the basis of the lesser of a provider's reasonable costs or customary charges. Section 1834(a) specifies how payments are made for the purchase or rental of new and used durable medical equipment for Medicare beneficiaries. Section 1834(b) provides for payment for radiologist services on a fee schedule basis. Section 1834(c) provides for payments and standards for screening mammography. Section 1842(b) sets forth the provisions for a carrier to enter into a contract with the Secretary and to make determinations with respect to Part B claims. Section 1842(h) sets forth the requirements for a physician or supplier to voluntarily enter into an agreement with the Secretary to become a participating physician or supplier. Section 1842(i) sets forth the provisions for the payment of Part B claims. Section 1848 establishes a fee schedule for payment of physician services. Section 1861(b) sets forth the inpatient hospital services covered by the Medicare program. Section 1861(s) sets forth medical and other health services covered by the Medicare program. Section 1861(v) sets forth the general authority under which CMS may establish limits on provider costs recognized as reasonable in determining Medicare program payments. Section 1861(aa) sets forth the rural health clinic services and Federally qualified health center services covered by the Medicare program. Section 1861(jj) defines the term “covered osteoporosis drug.” Section 1862(a)(14) lists services that are excluded from coverage. Section 1866(a) specifies the terms for provider agreements. Section 1881 authorizes special rules for the coverage of and payment for services furnished to patients with end-stage renal disease. Section 1886 sets forth the requirements for payment to hospitals for inpatient hospital services. Section 1887 sets forth requirements for payment of provider-based physicians and payment under certain percentage arrangements. Section 1889 provides for Medicare and Medigap information by telephone. <CITA>[60 FR 63175, Dec. 8, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.501</SECTNO> <SUBJECT>Determination of reasonable charges.</SUBJECT> (a) Except as specified in paragraphs (b), (c), and (d) of this section, Medicare pays no more for Part B medical and other health services than the “reasonable charge” for such service. The reasonable charge is determined by the carriers (subject to any deductible and coinsurance amounts as specified in §§ 410.152 and 410.160 of this chapter). (b) Part B of Medicare pays on the basis of “reasonable cost” (see part 413 of this chapter) for certain institutional services, certain services furnished under arrangements with institutions, and services furnished by entities that elect to be paid on a cost basis (including health maintenance organizations, rural health clinics, Federally qualified health centers and end-stage renal disease facilities). (c) Carriers will determine the reasonable charge on the basis of the criteria specified in § 405.502, and the customary and prevailing charge screens in effect when the service was furnished. (Also see §§ 415.55 through 415.70 and §§ 415.100 through 415.130 of this chapter, which pertain to the determination of reimbursement for services <PRTPAGE P="88"/>performed by hospital-based physicians.) However, when services are furnished more than 12 months before the beginning of the fee screen year (January 1 through December 30) in which a request for payment is made, payment is based on the customary and prevailing charge screens in effect for the fee screen year that ends immediately preceding the fee screen year in which the claim or request for payment is made. (d) Payment under Medicare Part B for durable medical equipment and prosthetic and orthotic devices is determined in accordance with the provisions of subpart D of part 414 of this chapter. <CITA>[47 FR 63274, Dec. 31, 1981, as amended at 51 FR 34978, Oct. 1, 1986; 51 FR 37911, Oct. 27, 1986; 54 FR 9003, Mar. 2, 1989; 57 FR 24975, June 12, 1992; 57 FR 33896, July 31, 1992; 57 FR 57688, Dec. 7, 1992; 60 FR 63176, Dec. 8, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.502</SECTNO> <SUBJECT>Criteria for determining reasonable charges.</SUBJECT> (a) Criteria. The law allows for flexibility in the determination of reasonable charges to accommodate reimbursement to the various ways in which health services are furnished and charged for. The criteria for determining what charges are reasonable include: (1) The customary charges for similar services generally made by the physician or other person furnishing such services. (2) The prevailing charges in the locality for similar services. (3) In the case of physicians' services, the prevailing charges adjusted to reflect economic changes as provided under § 405.504 of this subpart. (4) In the case of medical services, supplies, and equipment that are reimbursed on a reasonable charge basis (excluding physicians' services), the inflation-indexed charge as determined under § 405.509. (5) [Reserved] (6) In the case of medical services, supplies, and equipment (including equipment servicing) that the Secretary judges do not generally vary significantly in quality from one supplier to another, the lowest charge levels at which such services, supplies, and equipment are widely and consistently available in a locality. (7) Other factors that may be found necessary and appropriate with respect to a category of service to use in judging whether the charge is inherently reasonable. This includes special reasonable charge limits (which may be either upper or lower limits) established by CMS or a carrier if it determines that the standard rules for calculating reasonable charges set forth in this subpart result in the grossly deficient or excessive charges. The determination of these limits is described in paragraphs (g) and (h) of this section. (8) In the case of laboratory services billed by a physician but performed by an outside laboratory, the payment levels established in accordance with the criteria stated in § 405.515. (9) Except as provided in paragraph (a)(10) of this section, in the case of services of assistants-at-surgery as defined in § 405.580 in teaching and non-teaching settings, charges that are not more than 16 percent of the prevailing charge in the locality, adjusted by the economic index, for the surgical procedure performed by the primary surgeon. Payment is prohibited for the services of an assistant-at-surgery in surgical procedures for which CMS has determined that assistants-at-surgery on average are used in less than 5 percent of such procedures nationally. (10) In the case of services of assistants at surgery that meet the exception under § 415.190(c)(2) or (c)(3) of this chapter because the physician is performing a unique, necessary, specialized medical service in the total care of a patient during surgery, reasonable charges consistent with prevailing practice in the carrier's service area rather than the special assistant at surgery rate. (b) <E T="03">Comparable services limitation.</E> The law also specifies that the reasonable charge cannot be higher than the charge applicable for a comparable service under comparable circumstances to the carriers' own policyholders and subscribers. (c) <E T="03">Application of criteria.</E> In applying these criteria, the carriers are to exercise judgment based on factual data on the charges made by physicians to patients generally and by other persons <PRTPAGE P="89"/>to the public in general and on special factors that may exist in individual cases so that determinations of reasonable charge are realistic and equitable. (d) <E T="03">Responsibility of Administration and carriers.</E> Determinations by carriers of reasonable charge are not reviewed on a case-by-case basis by the Centers for Medicare & Medicaid Services, although the general procedures and performance of functions by carriers are evaluated. In making determinations, carriers apply the provisions of the law under broad principles issued by the Centers for Medicare & Medicaid Services. These principles are intended to assure overall consistency among carriers in their determinations of reasonable charge. The principles in §§ 405.503 through 405.507 establish the criteria for making such determinations in accordance with the statutory provisions. (e) <E T="03">Determination of reasonable charges under the End-Stage Renal Disease (ESRD) Program—</E>(1) <E T="03">General.</E> Reasonable charges for renal-related items and services (furnished in connection with transplantation or dialysis) must be related to costs and allowances that are reasonable when the treatments are furnished in an effective and economical manner. (2) <E T="03">Nonprovider (independent) dialysis facilities.</E> Reasonable charges for renal-related items and services furnished before August 1, 1983 must be determined related to costs and charges prior to July, 1973, in accordance with the regulations at § 405.541. Items and services related to outpatient maintenance dialysis that are furnished after that date are paid for in accordance with §§ 405.544 and 413.170 of this chapter. (3) <E T="03">Provider services and (hospital-based) dialysis facilities.</E> Renal-related items and services furnished by providers, or by ESRD facilities based in hospitals, before August 1, 1983 are paid for under the provider reimbursement provisions found generally in part 413 of this chapter. Items and services related to outpatient maintenance dialysis that are furnished after that date are paid for in accordance with §§ 405.544 and 413.170 of this chapter. (4) <E T="03">Physicians' services.</E> Reasonable charges for renal-related physicians' services must be determined considering charges made for other services involving comparable physicians' time and skill requirements, in accordance with regulations at §§ 405.542 and 405.543. (5) <E T="03">Health maintenance organizations (HMOs).</E> For special rules concerning the reimbursement of ESRD services furnished by risk-basis HMOs, or by facilities owned or operated by or related to such HMOs by common ownership or control, see §§ 405.2042(b)(14) and 405.2050(c). (f) <E T="03">Determining payments for certain physician services furnished in outpatient hospital settings—</E>(1) <E T="03">General rule.</E> If physician services of the type routinely furnished in physicians' offices are furnished in outpatient hospital settings before January 1, 1992, carriers determine the reasonable charge for those services by applying the limits described in paragraph (f)(5) of this section. (2) <E T="03">Definition.</E> As used in this paragraph (f), <E T="03">outpatient settings</E> means— (i) Hospital outpatient departments, including clinics and emergency rooms; and (ii) Comprehensive outpatient rehabilitation facilities. (3) <E T="03">Services covered by limits.</E> The carrier establishes a list of services routinely furnished in physicians' offices in the area. The carrier has the discretion to determine which professional services are routinely furnished in physicians' offices, based on current medical practice in the area. Listed below are some examples of routine services furnished by office-based physicians. <HD SOURCE="HD2">Examples</HD> <EXTRACT> Review of recent history, determination of blood pressure, ausculation of heart and lungs, and adjustment of medication. Brief history and examination, and initiation of diagnostic and treatment programs. Treatment of an acute respiratory infection. </EXTRACT> (4) <E T="03">Services excluded from limits.</E> The limits established under this paragraph do not apply to the following: (i) Rural health clinic services. (ii) Surgical services included on the ambulatory surgical center list of procedures published under § 416.65(c) of this chapter.<PRTPAGE P="90"/> (iii) Services furnished in a hospital emergency room after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in— (A) Placing the patient's health in serious jeopardy; (B) Serious impairment to bodily functions; or (C) Serious dysfunction of any bodily organ or part. (iv) Anesthesiology services and diagnostic and therapeutic radiology services. (v) Federally qualified health center services paid under the rules in part 405 subpart X. (5) <E T="03">Methodology for developing limits—</E>(i) <E T="03">Development of a charge base.</E> The carrier establishes a charge base for each service identified as a routine office-based physician service. The charge base consists of the prevailing charge in the locality for each such service adjusted by the economic index. The carrier uses the prevailing charges that apply to services by nonspecialists in office practices in the locality in which the outpatient setting is located. (ii) <E T="03">Calculation of the outpatient limits.</E> The carrier calculates the charge limit for each service by multiplying the charge base amount for each service by .60. (6) <E T="03">Application of limits.</E> The reasonable charge for physician services of the type described in paragraph (f)(3) of this section that are furnished in an outpatient setting is the lowest of the actual charges, the customary charges in accordance with § 405.503, the prevailing charges applicable to these services in accordance with § 405.504, or the charge limits calculated in paragraph (f)(5)(ii) of this section. (g) <E T="03">Determination of payment amounts in special circumstances</E>—(1) <E T="03">General.</E> (i) For purposes of this paragraph, a “category of items or services” may consist of a single item or service or any number of items or services. (ii) CMS or a carrier may determine that the standard rules for calculating Part B payment amounts for a category of items or services identified in section 1861(s) of the Act (other than physician services paid under section 1848 of the Act) will result in grossly deficient or excessive amounts. (iii) If CMS or the carrier determines that the standard rules for calculating payment amounts for a category of items or services set forth in this subpart will result in grossly deficient or excessive amounts, CMS or the carrier may establish special payment limits that are realistic and equitable for a category of items or services. (iv) The limit on the payment amount is either an upper limit to correct a grossly excessive payment amount or a lower limit to correct a grossly deficient payment amount. (v) The limit is either a specific dollar amount or is based on a special method to be used in determining the payment amount. (vi) Except as provided in paragraph (h) of this section, a payment limit for a given year may not vary by more than 15 percent from the payment amount established for the preceding year. (vii) <E T="03">Examples of excessive or deficient payment amounts.</E> Examples of the factors that may result in grossly deficient or excessive payment amounts include, but are not limited to, the following: (A) The marketplace is not competitive. This includes circumstances in which the marketplace for a category of items or services is not truly competitive because a limited number of suppliers furnish the item or service. (B) Medicare and Medicaid are the sole or primary sources of payment for a category of items or services. (C) The payment amounts for a category of items or services do not reflect changing technology, increased facility with that technology, or changes in acquisition, production, or supplier costs. (D) The payment amounts for a category of items or services in a particular locality are grossly higher or lower than payment amounts in other comparable localities for the category of items or services, taking into account the relative costs of furnishing the category of items or services in the different localities.<PRTPAGE P="91"/> (E) Payment amounts for a category of items or services are grossly higher or lower than acquisition or production costs for the category of items or services. (F) There have been increases in payment amounts for a category of items or services that cannot be explained by inflation or technology. (G) The payment amounts for a category of items or services are grossly higher or lower than the payments made for the same category of items or services by other purchasers in the same locality. (2) <E T="03">Establishing a limit.</E> In establishing a payment limit for a category of items or services, CMS or a carrier considers the available information that is relevant to the category of items or services and establishes a payment amount that is realistic and equitable. The factors CMS or a carrier consider in establishing a specific dollar amount or special payment method for a category of items or services may include, but are not limited to, the following: (i) <E T="03">Price markup.</E> This is the relationship between the retail and wholesale prices or manufacturer's costs of a category of items or services. If information on a particular category of items or services is not available, CMS or a carrier may consider the markup on a similar category of items or services and information on general industry pricing trends. (ii) <E T="03">Differences in charges.</E> CMS or a carrier may consider the differences in charges for a category of items or services made to non-Medicare and Medicare patients or to institutions and other large volume purchasers. (iii) <E T="03">Costs.</E> CMS or a carrier may consider resources (for example, overhead, time, acquisition costs, production costs, and complexity) required to produce a category of items or services. (iv) <E T="03">Utilization.</E> CMS or a carrier may impute a reasonable rate of use for a category of items or services and consider unit costs based on efficient utilization. (v) <E T="03">Payment amounts in other localities.</E> CMS or a carrier may consider payment amounts for a category of items or services furnished in another locality. (3) <E T="03">Notification of limits</E>—(i) <E T="03">National limits.</E> CMS publishes in the <E T="04">Federal Register</E> proposed and final notices announcing a special payment limit described in this paragraph (g) before it adopts the limit. The notices set forth the criteria and circumstances, if any, under which a carrier may grant an exception to a payment limit for a category of items or services. (ii) <E T="03">Carrier-level limits.</E> A carrier proposing to establish a special payment limit for a category of items or services must inform the affected suppliers and State Medicaid agencies of the factors it considered in determining and in establishing the limit, as described in paragraphs (g)(1) through (g)(3) of this section, and solicit comments. The carrier must evaluate the comments it receives and inform the affected suppliers, State Medicaid agencies, and CMS of any final limits it establishes. CMS acknowledges in writing to the carrier that it received the carrier's notification. After the carrier has received CMS's acknowledgement, the limit may be effective for services furnished at least 30 days after the date of the carrier's notification. (h) <E T="03">Special payment limit adjustments greater than 15 percent of the payment amount.</E> In addition to applying the general rules under paragraphs (g)(1) through (g)(3) of this section, CMS applies the following rules in determining and establishing a payment adjustment greater than 15 percent of the payment amount for a category of items or services within a year: (1) <E T="03">Potential impact of special limit.</E> CMS considers the potential impact on quality, access, beneficiary liability, assignment rates, and participation of suppliers. (2) <E T="03">Supplier consultation.</E> Before making a determination that a payment amount for a category of items or services is not inherently reasonable by reason of its grossly excessive or deficient amount, CMS consults with representatives of the suppliers likely to be affected by the change in the payment amount. (3) <E T="03">Publication of national limits.</E> If CMS determines under this paragraph (h) to establish a special payment limit for a category of items or services, it publishes in the <E T="04">Federal Register</E> <PRTPAGE P="92"/>proposed and final notices of a special payment limit before it adopts the limit. The notice sets forth the criteria and circumstances, if any, under which a carrier may grant an exception to the limit for the category of items or services. (i) <E T="03">Proposed notice.</E> The proposed notice— (A) Explains the factors and data that CMS considered in determining that the payment amount for a category of items or services is grossly excessive or deficient; (B) Specifies the proposed payment amount or methodology to be established with respect to a category of items or services; (C) Explains the factors and data that CMS considered in determining the payment amount or methodology, including the economic justification for a uniform fee or payment limit if it is proposed; (D) Explains the potential impacts of a limit on a category of items or services as described in paragraph (h)(1) of this section; and (E) Allows no less than 60 days for public comment on the proposed payment limit for the category of items or services. (ii) <E T="03">Final notice.</E> The final notice— (A) Explains the factors and data that CMS considered, including the economic justification for any uniform fee or payment limit established; and (B) Responds to the public comments. (i) <E T="03">Paramedic intercept ambulance services.</E> (1) CMS establishes its payment allowance on a carrier-wide basis by using the median allowance from all localities within an individual carrier's jurisdiction. (2) CMS's payment allowance is equal to the advanced life support rate minus 40 percent of the basic life support rate. (3) CMS bases payment on the lower of the actual charge or the amount described in paragraph (i)(1) and (i)(2) of this section. <SECAUTH>(Secs. 1102, 1814(b), 1833(a), 1842(b), and (h), and 1871, 1903(i)(1) of the Social Security Act; 49 Stat. 647, as amended, 79 Stat. 296, 302, 310, 331; 86 Stat. 1395, 1454; 42 U.S.C. 1302, 1395u(b), 1395hh, 1396b(i)(1).</SECAUTH> <CITA>[32 FR 12599, Aug. 31, 1967]</CITA> <EDNOTE> <HD SOURCE="HED">Editorial Note:</HD> For <E T="04">Federal Register</E> citations affecting § 405.502, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and on GPO Access. </EDNOTE> </SECTION> <SECTION> <SECTNO>§ 405.503</SECTNO> <SUBJECT>Determining customary charges.</SUBJECT> (a) <E T="03">Customary charge defined.</E> The term “customary charges” will refer to the uniform amount which the individual physician or other person charges in the majority of cases for a specific medical procedure or service. In determining such uniform amount, token charges for charity patients and substandard charges for welfare and other low income patients are to be excluded. The reasonable charge cannot, except as provided in § 405.506, be higher than the individual physician's or other person's customary charge. The customary charge for different physicians or other persons may, of course, vary. Payment for covered services would be based on the actual charge for the service when, in a given instance, that charge is less than the amount which the carrier would otherwise have found to be within the limits of acceptable charges for the particular service. Moreover, the income of the individual beneficiary is not to be taken into account by the carrier in determining the amount which is considered to be a reasonable charge for a service rendered to him. There is no provision in the law for a carrier to evaluate the reasonableness of charges in light of an individual beneficiary's economic status. (b) <E T="03">Variation of charges.</E> If the individual physician or other person varies his charges for a specific medical procedure or service, so that no one amount is charged in the majority of cases, it will be necessary for the carrier to exercise judgment in the establishment of a “customary charge” for such physician or other person. In making this judgment, an important guide, to be utilized when a sufficient volume of data on the physician's or other person's charges is available, would be the median or midpoint of his charges, excluding token and substandard charges as well as exceptional charges on the high side. A significant clustering of charges in the vicinity of the median amount might indicate that a point of such clustering should be taken as the physician's or other person's “customary” charge. Use of <PRTPAGE P="93"/>relative value scales will help in arriving at a decision in such instances. (c) <E T="03">Use of relative value scales.</E> If, for a particular medical procedure or service, the carrier is unable to determine the customary charge on the basis of reliable statistical data (for example, because the carrier does not yet have sufficient data or because the performance of the particular medical procedure or service by the physician or other person is infrequent), the carrier may use appropriate relative value scales to determine the customary charge for such procedure or service in relation to customary charges of the same physician or person for other medical procedures and services. (d) <E T="03">Revision of customary charge.</E> A physician's or other person's customary charge is not necessarily a static amount. Where a physician or other person alters his charges, a revised pattern of charges for his services may develop. Where on the basis of adequate evidence, the carrier finds that the physician or other person furnishing services has changed his charge for a service to the public in general, the customary charge resulting from the revised charge for the service should be recognized as the customary charge in making determinations of reasonable charges for such service when rendered thereafter to supplementary insurance beneficiaries. If the new customary charge is not above the top of the range of prevailing charges (see § 405.504(a)), it should be deemed to be reasonable by the carrier, subject to the provisions of § 405.508. </SECTION> <SECTION> <SECTNO>§ 405.504</SECTNO> <SUBJECT>Determining prevailing charges.</SUBJECT> (a) <E T="03">Ranges of charges.</E> (1) In the case of physicians' services furnished beginning January 1, 1987, the prevailing charges for a nonparticipating physician as defined in this paragraph will be no higher than the same level that was set for services furnished during the previous calendar year for a physician who was a participating physician during that year. A nonparticipating physician is a physician who has not entered into an agreement with the Medicare program to accept payment on an assignment-related basis (in accordance with § 424.55 of this chapter) for all items and services furnished to individuals enrolled under Part B of Medicare during a given calendar year. (2) No charge for Part B medical or other health services may be considered to be reasonable if it exceeds the higher of: (i) The prevailing charge for similar services in the same locality in effect on December 31, 1970, provided such prevailing charge had been found acceptable by CMS; or (ii) The prevailing charge that, on the basis of statistical data and methodology acceptable to CMS, would cover: (A) 75 percent of the customary charges made for similar services in the same locality during the 12-month period of July 1 through June 30 preceding the fee screen year (January 1 through December 31) in which the service was furnished; or (B) In the case of services furnished more than 12 months before the beginning of the fee screen year (January 1 through December 31) in which the claim or request for payment is submitted, 75 percent of the customary charges made for similar services in the same locality during the 12 month period of July 1 through June 30 preceding the fee screen year that ends immediately preceding the fee screen year in which the claim or request for payment is submitted. (3)(i) In the case of physicians' services, furnished before January 1, 1992, each prevailing charge in each locality may not exceed the prevailing charge determined for the FY ending June 30, 1973 (without reference to the adjustments made in accordance with the economic stabilization program then in effect), except on the basis of appropriate economic index data that demonstrate the higher prevailing charge level is justified by: (A) Changes in general earnings levels of workers that are attributable to factors other than increases in their productivity; and (B) changes in expenses of the kind incurred by physicians in office practice. The office-expense component and the earnings component of such index shall be given the relative weights shown in data on self-employed physicians' gross incomes. <EXTRACT> <PRTPAGE P="94"/> <E T="03">Example.</E> The available data indicate the office-expense and earnings components of the index should be given relative weights of 40 percent and 60 percent, respectively, and it is calculated that the aggregate increase in expenses of practice for a particular July through June period was 112 percent over the expenses of practice for calendar year 1971 and the increase in earnings (less increases in workers' productivity was 110 percent over the earnings for calendar year 1971. The allowable increase in any prevailing charge that could be recognized during the next fee screen year would be 110.8 percent ((.40×112)+(.60)×110)=110.8) above the prevailing charge recognized for fiscal year 1973. </EXTRACT> (ii)(A) If the increase in the prevailing charge in a locality for a particular physician service resulting from an aggregate increase in customary charges for that service does not exceed the index determined under paragraph (a)(3)(i) of this section, the increase is permitted and any portion of the allowable increase not used is carried forward and is a basis for justifying increases in that prevailing charge in the future. However, if the increase in the prevailing charge exceeds the allowable increase, the increase will be reduced to the allowable amount. Further increases will be justified only to the degree that they do not exceed further rises in the economic index. The prevailing charge for physicians' services furnished during the 15-month period beginning July 1, 1984 may not exceed the prevailing charge for physicians' services in effect for the 12-month period beginning July 1, 1983. The increase in prevailing charges for physicians' services for subsequent fee screen years similarly may not reflect the rise in the economic index that would have otherwise been provided for the period beginning July 1, 1984, and must be treated as having fully provided for the rise in the economic index which would have been otherwise taken into account. (B) Notwithstanding the provisions of paragraphs (a)(3)(i) and (ii)(A) of this section, the prevailing charge in the case of a physician service in a particular locality determined pursuant to paragraphs (a)(2) and (3)(i) of this section for the fiscal year beginning July 1, 1975, and for any subsequent fee screen years, if lower than the prevailing charge for the fiscal year ending June 30, 1975, by reason of the application of economic index data, must be raised to such prevailing charge which was in effect for the fiscal year ending June 30, 1975. (If the amount paid on any claim processed by a carrier after the original reasonable charge update for the fiscal year beginning July 1, 1975, and prior to the adjustments required by the preceding sentence, was at least $1 less than the amount due pursuant to the preceding sentence, the difference between the amount previously paid and the amount due shall be paid within 6 months after December 31, 1975; however, no payment shall be made on any claim where the difference between the amount previously and the amount due shall be paid within 6 months after December 31, 1975; however, no payment shall be made on any claim where the difference between the amount previously paid and the amount due is less than $1.) (iii) If, for any reason, a prevailing charge for a service in a locality has no precise counterpart in the carrier's charge data for calendar year 1971 (the data on which the prevailing charge calculations for fiscal year 1973 were based), the limit on the prevailing charge will be estimated, on the basis of data and methodology acceptable to CMS, to seek to produce the effect intended by the economic index criterion. The allowance or reduction of an increase in a prevailing charge for any individual medical item or service may affect the allowance or reduction of an increase in the prevailing charges for other items or services if, for example, the limit on the prevailing charge is estimated, or if the prevailing charges for more than one item or service are established through the use of a relative value schedule and dollar conversion factors. (b) <E T="03">Variation in range of prevailing charges.</E> The range of prevailing charges in a locality may be different for physicians or other persons who engage in a specialty practice or service than for others. Existing differentials in the level of charges between different kinds of practice or service could, in some localities, lead to the development of more than one range of prevailing charges for application by <PRTPAGE P="95"/>the carrier in its determinations of reasonable charges. Carrier decisions in this respect should be responsive to the existing patterns of charges by physicians and other persons who render covered services, and should establish differentials in the levels of charges between different kinds of practice or service only where in accord with such patterns. (c) <E T="03">Re-evaluation and adjustment of prevailing charges.</E> Determinations of prevailing charges by the carrier are to be re-evaluated and adjusted from time to time on the basis of factual information about the charges made by physicians and other persons to the public in general. This information should be obtained from all possible sources including a carrier's experience with its own programs as well as with the supplementary medical insurance program. (d) <E T="03">Computation and issuance of the MEI after CY 1992—</E>(1) For update years after CY 1992, the MEI is a physician input price index, in which the annual percent changes for the direct-labor price components are adjusted by an annual percent change in a 10-year moving average index of labor productivity in the nonfarm business sector. (2) The MEI is constructed, using as a base year, CY 1989 weights and annual percent changes in the economic price proxies as shown on the following chart: <GPOTABLE CDEF="s100,12,r100" COLS="3" OPTS="L2,i1"> <TTITLE>Medicare Economic Index Expenditure Categories, Weights, and Price Proxies</TTITLE> <BOXHD> <CHED H="1">Expense category</CHED> <CHED H="1">1989 weights <SU>1</SU>,<SU>2</SU> (percent)</CHED> <CHED H="1">Price proxy <SU>3</SU> </CHED> </BOXHD> <ROW> <ENT I="03">Total </ENT> <ENT>100.0</ENT> </ROW> <ROW> <ENT I="01">1. Physician's Own Time (net income, general earnings)</ENT> <ENT>54.2</ENT> </ROW> <ROW> <ENT I="03">a. Wages and Salaries</ENT> <ENT>45.3</ENT> <ENT>Average hourly earnings, total private non-farm.<SU>4</SU> </ENT> </ROW> <ROW> <ENT I="03">b. Fringe Benefits</ENT> <ENT>8.8</ENT> <ENT>Employment Cost Index, fringe benefits, private non-farm.<SU>4</SU> </ENT> </ROW> <ROW> <ENT I="01">2. Physician Practice Expense</ENT> <ENT>45.8</ENT> </ROW> <ROW> <ENT I="03">a. Non-physician Employee Compensation</ENT> <ENT>16.3</ENT> </ROW> <ROW> <ENT I="05">(1) Wages and Salaries</ENT> <ENT>13.8</ENT> <ENT>Employment Cost Index, wages and salaries weighted for occupational mix of non-physician employees.<SU>4</SU> </ENT> </ROW> <ROW> <ENT I="05">(2) Fringe Benefits</ENT> <ENT>2.5</ENT> <ENT>Employment Cost Index, fringe benefits, white collar.<SU>4</SU> </ENT> </ROW> <ROW> <ENT I="03">b. Office Expense</ENT> <ENT>10.3</ENT> <ENT>CPI-U, housing.</ENT> </ROW> <ROW> <ENT I="03">c. Medical Materials and Supplies</ENT> <ENT>5.2</ENT> <ENT>PPI, ethical drugs; PPI, surgical appliances and supplies; and CPI-U medical equipment and supplies (equally weighted).</ENT> </ROW> <ROW> <ENT I="03">d. Professional Liability Insurance</ENT> <ENT>4.8</ENT> <ENT>CMS survey of change in average liability premiums for $100,000/$300,000 liability coverage among 9 major insurers.</ENT> </ROW> <ROW> <ENT I="03">e. Medical Equipment</ENT> <ENT>2.3</ENT> <ENT>PPI, medical instruments and equipment.</ENT> </ROW> <ROW> <ENT I="03">f. Other Professional Expense</ENT> <ENT>6.9</ENT> </ROW> <ROW> <ENT I="05">(1) Professional Car</ENT> <ENT>1.4</ENT> <ENT>CPI-U, private transportation.</ENT> </ROW> <ROW> <ENT I="05">(2) Other</ENT> <ENT>5.5</ENT> <ENT>CPI-U, all items less food and energy.</ENT> </ROW> <TNOTE> <SU>1</SU> Sources: Martin L. Gonzalez, ed.: <E T="03">Physician Marketplace Statistics, Fall, 1990.</E> Center for Health Policy Research, Chicago, American Medical Association, 1990; Mark Holoweiko, “Practice Expenses Take the Leap of the Decade,” <E T="03">Medical Economics,</E> November 12, 1990; and CMS, OACT special study.</TNOTE> <TNOTE> <SU>2</SU> Due to rounding, weights may not sum to 100.0%</TNOTE> <TNOTE> <SU>3</SU> All price proxies are for <E T="03">annual</E> percent changes for the 12 months ending June 30th.</TNOTE> <TNOTE> <SU>4</SU> Annual percent change values for Physicians' Own Time and Non-physician Employee Compensation are net of the change in the 10-year moving average of output per man-hour to exclude changes in non-farm business sector labor productivity.</TNOTE> </GPOTABLE> (3) If there is no methodological change, CMS publishes a notice in the <E T="04">Federal Register</E> to announce the annual increase in the MEI before the beginning of the update year to which it applies. If there are changes in the base year weights or price proxies, or if there are any other MEI methodological changes, they are published in the <E T="04">Federal Register</E> with an opportunity for public comment. <CITA>[32 FR 12600, Aug. 31, 1967, as amended at 40 FR 25447, June 16, 1975; 42 FR 18275, Apr. 6, 1977. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 4430, Feb. 2, 1978; 47 FR 63274, Dec. 31, 1982; 51 FR 34978, Oct. 1, 1986; 53 FR 6648, Mar. 2, 1988; 57 FR 55912, Nov. 25, 1992]</CITA> </SECTION> <SECTION> <PRTPAGE P="96"/> <SECTNO>§ 405.505</SECTNO> <SUBJECT>Determination of locality.</SUBJECT> “Locality” is the geographical area for which the carrier is to derive the reasonable charges or fee schedule amounts for services or items. Usually, a locality may be a State (including the District of Columbia, a territory, or a Commonwealth), a political or economic subdivision of a State, or a group of States. It should include a cross section of the population with respect to economic and other characteristics. Where people tend to gravitate toward certain population centers to obtain medical care or service, localities may be recognized on a basis constituting medical services areas (interstate or otherwise), comparable in concept to “trade areas.” Localities may differ in population density, economic level, and other major factors affecting charges for services. Carriers therefore shall delineate localities on the basis of their knowledge of local conditions. However, distinctions between localities are not to be so finely made that a locality includes only a very limited geographic area whose population has distinctly similar income characteristics (e.g., a very rich or very poor neighborhood within a city). <CITA>[57 FR 27305, June 18, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.506</SECTNO> <SUBJECT>Charges higher than customary or prevailing charges or lowest charge levels.</SUBJECT> A charge which exceeds the customary charge of the physician or other person who rendered the medical or other health service, or the prevailing charge in the locality, or an applicable lowest charge level may be found to be reasonable, but only where there are unusual circumstances, or medical complications requiring additional time, effort or expense which support an additional charge, and only if it is acceptable medical or medical service practice in the locality to make an extra charge in such cases. The mere fact that the physician's or other person's customary charge is higher than prevailing would not justify a determination that it is reasonable. <SECAUTH>(Secs. 1102, 1842(b) and 1871, 1903(i)(1) of the Social Security Act; 49 Stat. 647, 79 Stat. 302, 310, 331; 86 Stat. 1395, 1454; (42 U.S.C. 1302, 1395u(b), 1395hh, 1396b(i)(1)))</SECAUTH> <CITA>[43 FR 32300, July 26, 1978]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.507</SECTNO> <SUBJECT>Illustrations of the application of the criteria for determining reasonable charges.</SUBJECT> The following examples illustrate how the general criteria on customary charges and prevailing charges might be applied in determining reasonable charges under the supplementary medical insurance program. Basically, these examples demonstrate that, except where the actual charge is less, reasonable charges will reflect current customary charges of the particular physician or other person within the ranges of the current prevailing charges in the locality for that type and level of service: <EXTRACT> The prevailing charge for a specific medical procedure ranges from $80 to $100 in a certain locality. Doctor A's bill is for $75 although he customarily charges $80 for the procedure. Doctor B's bill is his customary charge of $85 Doctor C's bill is his customary charge of $125 Doctor D's bill is for $100, although he customarily charges $80, and there are no special circumstances in the case. The reasonable charge for Doctor A would be limited to $75 since under the law the reasonable charge cannot exceed the actual charge, even if it is lower than his customary charge and below the prevailing charges for the locality. The reasonable charge for Doctor B would be $85, because it is his customary charge and it falls within the range of prevailing charges for that locality. The reasonable charge for Doctor C could not be more than $100, the top of the range of prevailing charges. The reasonable charge for Doctor D would be $80, because that is his customary charge. Even though his actual charge of $100 falls within the range of prevailing charges, the reasonable charge cannot exceed his customary charge in the absence of special circumstances. </EXTRACT> </SECTION> <SECTION> <PRTPAGE P="97"/> <SECTNO>§ 405.508</SECTNO> <SUBJECT>Determination of comparable circumstances; limitation.</SUBJECT> (a) <E T="03">Application of limitation.</E> The carrier may not in any case make a determination of reasonable charge which would be higher than the charge upon which it would base payment to its own policyholders for a comparable service in comparable circumstances. The charge upon which it would base payment, however, does not necessarily mean the amount the carrier would be obligated to pay. Under certain circumstances, some carriers pay amounts on behalf of individuals who are their policyholders, which are below the customary charges of physicians or other persons to other individuals. Payment under the supplementary medical insurance program would not be limited to these lower amounts. (b) <E T="03">When comparability exists.</E> “Comparable circumstances,” as used in the Act and this subpart, refers to the circumstances under which services are rendered to individuals and the nature of the carrier's health insurance programs and the method it uses to determine the amounts of payments under these programs. Generally, comparability would exist where: (1) The carrier bases payment under its program on the customary charges, as presently constituted, of physicians or other persons and on current prevailing charges in a locality, and (2) The determination does not preclude recognition of factors such as speciality status and unusual circumstances which affect the amount charged for a service. (c) <E T="03">Responsibility for determining comparability.</E> Responsibility for determining whether or not a carrier's program has comparability will in the first instance fall upon the carrier in reporting pertinent information about its programs to the Centers for Medicare & Medicaid Services. When the pertinent information has been reported, the Centers for Medicare & Medicaid Services will advise the carrier whether any of its programs have comparability. </SECTION> <SECTION> <SECTNO>§ 405.509</SECTNO> <SUBJECT>Determining the inflation-indexed charge.</SUBJECT> (a) <E T="03">Definition.</E> For purposes of this section, <E T="03">inflation-indexed charge</E> means the lowest of the fee screens used to determine reasonable charges (as determined in § 405.503 for the customary charge, § 405.504 for the prevailing charge, this section for the inflation-indexed charge, and § 405.511 for the lowest charge level) for services, supplies, and equipment reimbursed on a reasonable charge basis (excluding physicians' services), that is in effect on December 31 of the previous fee screen year, updated by the inflation adjustment factor, as described in paragraph (b) of this section. (b) <E T="03">Application of inflation adjustment factor to determine inflation-indexed charge.</E> (1) For fee screen years beginning on or after January 1, 1987, the inflation-indexed charge is determined by updating the fee screen used to determine the reasonable charges in effect on December 31 of the previous fee screen year by application of an inflation adjustment factor, that is, the annual change in the level of the consumer price index for all urban consumers, as compiled by the Bureau of Labor Statistics, for the 12-month period ending on June 30 of each year. (2) For services, supplies, and equipment furnished from October 1, 1985 through December 31, 1986 the inflation adjustment factor is zero. (c) The inflation-indexed charge does not apply to any services, supplies, or equipment furnished after December 31, 1991, that are covered under or limited by the fee schedule for physicians' services established under section 1848 of the Act and part 415 of this chapter. These services are subject to the Medicare Economic Index described in § 415.30 of this chapter. <CITA>[51 FR 34979, Oct. 1, 1986; 51 FR 37911, Oct. 27, 1986, as amended at 56 FR 59621, Nov. 25, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.511</SECTNO> <SUBJECT>Reasonable charges for medical services, supplies, and equipment.</SUBJECT> (a) <E T="03">General rule.</E> (1) A charge for any medical service, supply, or equipment (including equipment servicing) that in the judgment of CMS generally does not vary significantly in quality from one supplier to another (and that is <PRTPAGE P="98"/>identified by a notice published in the <E T="04">Federal Register</E>) may not be considered reasonable if it exceeds: (i) The customary charge of the supplier (see § 405.503); (ii) The prevailing charge in the locality (see § 405.504); (iii) The charge applicable for a comparable service and under comparable circumstances to the policyholders or subscribers of the carrier (see § 405.508); (iv) The lowest charge level at which the item or service is widely and consistently available in the locality (see paragraph (c) of this section); or (v) The inflation-indexed charge, as determined under § 405.509, in the case of medical services, supplies, and equipment that are reimbursed on a reasonable charge basis (excluding physicians' services). (2) In the case of laboratory services, paragraph (a)(1) of this section is applicable to services furnished by physicians in their offices, by independent laboratories (see § 405.1310(a)) and to services furnished by a hospital laboratory for individuals who are neither inpatients nor outpatients of a hospital. Allowance of additional charges exceeding the lowest charge level can be approved by the carrier on the basis of unusual circumstances or medical complications in accordance with § 405.506. (b) <E T="03">Public notice of items and services subject to the lowest charge level rule.</E> Before the Secretary determines that lowest charge levels should be established for an item or service, notice of the proposed determination will be published with an opportunity for public comment. The descriptions or specifications of items or services in the notice will be in sufficient detail to permit a determination that items or services conforming to the descriptions will not vary significantly in quality. (c) <E T="03">Calculating the lowest charge level.</E> The lowest charge level at which an item or service is widely and consistently available in a locality is calculated by the carrier in accordance with instructions from CMS as follows: (1) <E T="03">For items or services furnished on or before December 31, 1986.</E> (i) A lowest charge level is calculated for each identified item or service in January and July of each year. (ii) The lowest charge level for each identified item or service is set at the 25th percentile of the charges (incurred or submitted on claims processed by the carrier) for that item or service, in the locality designated by the carrier for this purpose, during the second calendar quarter preceding the determination date. Accordingly, the January calculations will be based on charges for the July through September quarter of the previous calendar year, and the July calculations will be based on charges for the January through March quarter of the same calendar year. (2) <E T="03">For items or services furnished on or after January 1, 1987</E>. (i) A lowest charge level is calculated for each identified item or service in January of each year. (ii) The lowest charge level for each identified item or service is set at the 25th percentile of the charges (incurred or submitted on claims processed by the carrier) for that item or service, in the locality designated by the carrier for this purpose, during the 3-month period of July 1 through September 30 preceding the fee screen year (January 1 through December 31) for which the item or service was furnished. (3) <E T="03">Lowest charge levels for laboratory services.</E> In setting lowest charge levels for laboratory services, the carrier will consider only charges made for laboratory services performed by physicians in their offices, by independent laboratories which meet coverage requirements, and for services furnished by a hospital laboratory for individuals who are neither inpatients nor outpatients of a hospital. (d) <E T="03">Locality.</E> Subject to the approval of the Secretary, the carrier may designate its entire service area as the locality for purposes of this section, or may otherwise modify the localities used for calculating prevailing charges. (The modified locality for an item or service will also be used for calculating the prevailing charge for that item or service.) <SECAUTH>(Secs. 1102, 1842(b) and 1871, 1903(i)(1) of the Social Security Act; 49 Stat. 647, 79 Stat. 302, 310, 331, 86 Stat. 1395, 1454 (42 U.S.C. 1302, 1395u(b), 1395hh, 1396b(i)(1)))</SECAUTH> <CITA>[43 FR 32300, July 26, 1978, as amended at 50 FR 40174, Oct. 1, 1985; 51 FR 34979, Oct. 1, 1986]</CITA> </SECTION> <SECTION> <PRTPAGE P="99"/> <SECTNO>§ 405.512</SECTNO> <SUBJECT>Carriers' procedural terminology and coding systems.</SUBJECT> (a) <E T="03">General.</E> Procedural terminology and coding systems are designed to provide physicians and third party payers with a common language that accurately describes the kinds and levels of services provided and that can serve as a basis for coverage and payment determinations. (b) <E T="03">Modification of terminology and/or coding systems.</E> A carrier that wishes to modify its system of procedural terminology and coding shall submit its request to the Centers for Medicare & Medicaid Services with all pertinent data and information for approval before the revision is implemented. The Centers for Medicare & Medicaid Services will evaluate the proposal in the light of the guidelines specified in paragraph (c) of this section and such other considerations as may be pertinent, and consult with the Assistant Secretary for Health. The Centers for Medicare & Medicaid Services will approve such a revision if it determines that the potential advantages of the proposed new system, outweigh the disadvantages. (c) <E T="03">Guidelines.</E> The following considerations and guidelines are taken into account in evaluating a carrier's proposal to change its system of procedural terminology and coding: (1) The rationale for converting to the new terminology and coding; (2) The estimated short-run and long-run impact on the cost of the health insurance program, other medical care costs, administrative expenses, and the reliability of the estimates; (3) The degree to which the conversion to the proposed new terminology and coding can be accomplished in a way that permits full implementation of the reasonable charge criteria in accordance with the provisions of this subpart; (4) The degree to which the proposed new terminology and coding are accepted by physicians in the carrier's area (physician acceptance is assumed only if a majority of the Medicare and non-Medicare bills and claims completed by physicians in the area and submitted to the carrier can reasonably be expected to utilize the proposed new terminology and coding); (5) The extent to which the proposed new terminology and coding system is used by the carrier in its non-Medicare business; (6) The clarity with which the proposed system defines its terminology and whether the system lends itself to: (i) Accurate determinations of coverage; (ii) Proper assessment of the appropriate level of payment; and (iii) Meeting the carrier's or Professional Standards Review Organizations' review needs and such other review needs as may be appropriate; (7) Compatibility of the new terminology and coding system with other systems that the carrier and other carriers may utilize in the administration of the Medicare program—e.g., its compatibility with systems and statistical requirements and with the historical data in the carrier's processing system; and (8) Compatibility of the proposed system with the carriers methods for determining payment under the fee schedule for physicians' services for services which are identified by a single element of terminology but which may vary in content. <CITA>[40 FR 7639, Feb. 21, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 10298, Mar. 4, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.515</SECTNO> <SUBJECT>Reimbursement for clinical laboratory services billed by physicians.</SUBJECT> This section implements section 1842(h) of the Social Security Act, which places a limitation on reimbursement for markups on clinical laboratory services billed by physicians. If a physician's bill, or a request for payment for a physician's services, includes a charge for a laboratory test for which payment may be made under this part, the amount payable with respect to the test shall be determined as follows (subject to the coinsurance and deductible provisions at §§ 410.152 and 410.160 of this chapter): (a) If the bill or request for payment indicates that the test was personally performed or supervised either by the physician who submitted the bill (or for whose services the request for payment was made), or by another physician with whom that physician shares <PRTPAGE P="100"/>his or her practice, the payment will be based on the physician's reasonable charge for the test (as determined in accordance with § 405.502). (b) If the bill or request for payment indicates that the test was performed by an outside laboratory, and identifies both the laboratory and the amount the laboratory charged, payment for the test will be based on the lower of— (1) The laboratory's reasonable charge for the service (as determined in accordance with § 405.502), or (2) The amount that the laboratory charged the physician for the service. (c) If the bill or request for payment does not indicate that the conditions specified in paragraph (a) of this section were met, and does not identify both the laboratory and the amount the laboratory charged, payment will be based on the lowest charge at which the carrier estimates the test could have been secured from a laboratory serving the physician's locality. The carrier will estimate this lowest amount twice a year by (i) obtaining lists of charges laboratories make to physicians from as many commercial laboratories serving the carrier's area as possible (including laboratories in other States from which tests may be obtained by physicians in the carrier's service area) and (ii) establishing a schedule of lowest prices based on this information. The carrier will take into consideration specific circumstances, such as a need for emergency services that may be costlier than routine services, in making the estimate in a particular case. However, in no case may this estimate be higher than the lowest customary charge for commercial laboratories, or when applicable to the laboratory service, the lowest charge level determined in accordance with § 405.511, in the carrier's service area. (d) When a physician bills, in accordance with paragraph (b) or (c) of this section, for a laboratory test and indicates that it was performed by an independent laboratory, a nominal payment will also be made to the physician for collecting, handling, and shipping the specimen to the laboratory, if the physician bills for such a service. <CITA>[46 FR 42672, Aug. 24, 1981, as amended at 51 FR 41351, Nov. 14, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.517</SECTNO> <SUBJECT>Payment for drugs and biologicals that are not paid on a cost or prospective payment basis.</SUBJECT> (a) <E T="03">Applicability.</E> Payment for a drug or biological that is not paid on a cost or prospective payment basis is determined by the standard methodology described in paragraph (b) of this section. Examples of when this procedure applies include a drug or biological furnished incident to a physician's service, a drug or biological furnished by an independent dialysis facility that is not included in the ESRD composite rate set forth in § 413.170(c) of this chapter, and a drug or biological furnished as part of the durable medical equipment benefit. (b) <E T="03">Methodology.</E> Payment for a drug or biological described in paragraph (a) of this section is based on the lower of the actual charge on the Medicare claim for benefits or 95 percent of the national average wholesale price of the drug or biological. (c) <E T="03">Multiple-source drugs.</E> For multiple-source drugs and biologicals, for purposes of this regulation, the average wholesale price is defined as the lesser of the median average wholesale price for all sources of the generic forms of the drug or biological or the lowest average wholesale price of the brand name forms of the drug or biological. <CITA>[63 FR 58905, Nov. 2, 1998]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.520</SECTNO> <SUBJECT>Payment for a physician assistant's, nurse practitioner's, and clinical nurse specialists' services and services furnished incident to their professional services.</SUBJECT> (a) <E T="03">General rule.</E> A physician assistant's, nurse practitioner's, and clinical nurse specialists' services, and services and supplies furnished incident to their professional services, are paid in accordance with the physician fee schedule. The payment for a physician assistants' services may not exceed the limits at § 414.52 of this chapter. The payment for a nurse practitioners' and clinical nurse specialists' services may not exceed the limits at § 414.56 of this chapter. (b) <E T="03">Requirements.</E> Medicare payment is made only if all claims for payment are made on an assignment-related basis in accordance with § 424.55 of this chapter, that sets forth, respectively, <PRTPAGE P="101"/>the conditions for coverage of physician assistants' services, nurse practitioners' services and clinical nurse specialists' services, and services and supplies furnished incident to their professional services. (c) <E T="03">Civil money penalties.</E> Any person or entity who knowingly and willingly bills a Medicare beneficiary amounts in excess of the appropriate coinsurance and deductible is subject to a civil money penalty as described in §§ 402.1(c)(11), 402.105(d)(2)(viii), and 402.107(b)(8) of this chapter. <CITA>[63 FR 58905, Nov. 2, 1998, as amended at 66 FR 49547, Sept. 28, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.534</SECTNO> <SUBJECT>Limitation on payment for screening mammography services.</SUBJECT> The provisions in paragraphs (a), (b), and (c) of this section apply for services provided from January 1, 1991 until December 31, 2001. Screening mammography services provided after December 31, 2001 are paid under the physician fee schedule in accordance with § 414.2 of this chapter. (a) <E T="03">Basis and scope.</E> This section implements section 1834(c) of the Act by establishing a limit on payment for screening mammography examinations. There are three categories of billing for screening mammography services. Those categories and the payment limitations on each are set forth in paragraphs (b) through (d) of this section. (b) <E T="03">Global or complete service billing representing both the professional and technical components of the procedure.</E> If a fee is billed for a global service, the amount of payment subject to the deductible is equal to 80 percent of the least of the following: (1) The actual charge for the service. (2) The amount established for the global procedure for a diagnostic bilateral mammogram under the fee schedule for physicians' services set forth at part 414, subpart A. (3) The payment limit for the procedure. For screening mammography services furnished in CY 1994, the payment limit is $59.63. On January 1 of each subsequent year, the payment limit is updated by the percentage increase in the Medicare Economic Index (MEI) and reflects the relationship between the relative value units for the professional and technical components of a diagnostic bilateral mammogram under the fee schedule for physicians' services. (c) <E T="03">Professional component billing representing only the physician's interpretation for the procedure.</E> If the professional component of screening mammography services is billed separately, the amount of payment for that professional component, subject to the deductible, is equal to 80 percent of the least of the following: (1) The actual charge for the professional component of the service. (2) The amount established for the professional component of a diagnostic bilateral mammogram under the fee schedule for physicians' services. (3) The professional component of the payment limit for screening mammography services described in paragraph (b)(3) of this section. (d) <E T="03">Technical component billing representing other resources involved in furnishing the procedure.</E> If the technical component of screening mammography services is billed separately, the amount of payment, subject to the deductible, is equal to 80 percent of the least of the following: (1) The actual charge for the technical component of the service. (2) The amount established for the technical component of a diagnostic bilateral mammogram under the fee schedule for physicians' services. (3) The technical component of the payment limit for screening mammography services described in paragraph (b)(3) of this section. <CITA>[55 FR 53521, Dec. 31, 1990, as amended at 59 FR 49833, Sept. 30, 1994; 66 FR 55328, Nov. 1, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.535</SECTNO> <SUBJECT>Special rule for nonparticipating physicians and suppliers furnishing screening mammography services before January 1, 2002.</SUBJECT> The provisions in this section apply for screening mammography services provided from January 1, 1991 until December 31, 2001. Screening mammography services provided after December 31, 2001 are physician services pursuant to § 414.2 of this chapter paid under the physician fee schedule. If screening mammography services are furnished to a beneficiary by a nonparticipating <PRTPAGE P="102"/>physician or supplier that does not accept assignment, a limiting charge applies to the charges billed to the beneficiary. The limiting charge is the lesser of the following: (a) 115 percent of the payment limit set forth in § 405.534(b)(3), (c)(3), and (d)(3) (limitations on the global service, professional component, and technical component of screening mammography services, respectively). (b) The limiting charge for the global service, professional component, and technical component of a diagnostic bilateral mammogram under the fee schedule for physicians' services set forth at § 414.48(b) of this chapter. <CITA>[59 FR 49833, Sept. 30, 1994, as amended at 62 FR 59098, Oct. 31, 1997; 66 FR 55328, Nov. 1, 2001]</CITA> </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart F [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Reconsiderations and Appeals Under Medicare Part A</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1155, 1869(b), 1871, 1872, and 1879 of the Social Security Act (42 U.S.C. 1302, 1320c-4, 1395ff(b), 1395hh, 1395ii, and 1395pp). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 37 FR 5814, Mar. 22, 1972, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.701</SECTNO> <SUBJECT>Basis, purpose and definitions.</SUBJECT> (a) This subpart implements section 1869 of the Social Security Act. Section 1869(a) provides that the Secretary will make determinations about the following matters, and section 1869(b) provides for a hearing for an individual who is dissatisfied with the Secretary's determination as to: (1) Whether the individual is entitled to hospital insurance (part A) or supplementary medical insurance (part B) under title XVIII of the Act; or (2) The amount payable under hospital insurance. (b) This subpart establishes the procedures governing initial determinations, reconsidered determinations, hearings, and final agency review, and the reopening of determinations and decisions that are applicable to matters arising under paragraph (a) of this section. (c) Subparts J and R of 20 CFR part 404 (dealing with determinations, the administrative review process and representation of parties) are also applicable to matters arising under paragraph (a) of this section, except to the extent that specific provisions are contained in this subpart. (d) <E T="03">Definitions.</E> As used in subpart G of this part, the term— <E T="03">Appellant</E> designates the beneficiary, provider or other person or entity that has filed an appeal concerning a particular determination of benefits under Medicare part A. Designation as an appellant does not in itself convey standing to appeal the determination in question. <E T="03">Common issues of law and fact,</E> with respect to the aggregation of claims by two or more appellants to meet the minimum amount in controversy needed for a hearing, occurs when the claims sought to be aggregated are denied or reduced for similar reasons and arise from a similar fact pattern material to the reason the claims are denied. <E T="03">Delivery of similar or related services,</E> with respect to the aggregation of claims by two or more provider appellants to meet the minimum amount in controversy needed for a hearing, means like or coordinated services or items provided to the same beneficiary by the appellants. <CITA>[55 FR 11020, Mar. 26, 1990, as amended at 59 FR 12181, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.702</SECTNO> <SUBJECT>Notice of initial determination.</SUBJECT> After a request for payment under part A of title XVIII of the Act is filed with the intermediary by or on behalf of the individual who received inpatient hospital services, extended care services, or home health services, and the intermediary has ascertained whether the items and services furnished are covered under part A of title XVIII, and where appropriate, ascertained and made payment of amounts due or has ascertained that no payments were due, the individual will be notified in writing of the initial determination in his case. In addition, if the items or services furnished such individual are not covered under part A of title XVIII by reason of § 411.15(g) or <PRTPAGE P="103"/>§ 411.15(k) and payment may not be made for such items or services under § 411.400 only because the requirements of § 411.400(a)(2) are not met, the provider of services which furnished such items or services will be notified in writing of the initial determination in such individual's case. These notices shall be mailed to the individual and the provider of services at their last known addresses and shall state in detail the basis for the determination. Such written notices shall also inform the individual and the provider of services of their right to reconsideration of the determination if they are dissatisfied with the determination. <CITA>[55 FR 11020, Mar. 26, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.704</SECTNO> <SUBJECT>Actions which are initial determinations.</SUBJECT> (a) <E T="03">Applications and entitlement of individuals.</E> An initial determination with respect to an individual includes the following— (1) A determination with respect to entitlement to hospital insurance or supplementary medical insurance; (2) A disallowance of an individual's application for entitlement to hospital or supplementary medical insurance, if the individual fails to submit evidence requested by SSA to support the application. (SSA will specify in the initial determination the conditions of entitlement that the applicant failed to establish by not submitting the requested evidence); (3) A denial of a request for withdrawal of an application for hospital or supplementary medical insurance; (4) A denial of a request for cancellation of a “request for withdrawal”; and (5) A determination as to whether an individual, previously determined to be entitled to hospital or supplementary medical insurance, is no longer entitled to such benefits, including a determination based on nonpayment of premiums. (b) <E T="03">Requests for payment by or on behalf of individuals.</E> An initial determination with respect to an individual includes any determination made on the basis of a request for payment by or on behalf of the individual under part A of Medicare, including a determination with respect to: (1) The coverage of items and services furnished; (2) The amount of an applicable deductible; (3) The application of the coinsurance feature; (4) The number of days of inpatient hospital benefits utilized during a spell of illness or for purposes of the inpatient psychiatric hospital 190-day lifetime maximum; (5) The number of days of the 60-day lifetime reserve utilized for inpatient hospital coverage; (6) The number of days of posthospital extended care benefits utilized; (7) The number of home health visits utilized; (8) The physician certification requirement; (9) The request for payment requirement; (10) The beginning and ending of a spell of illness, including a determination made under the presumptions established under § 409.60(c)(2) of this chapter, as specified in § 409.60(c)(4) of this chapter. (11) The medical necessity of services (See parts 466 and 473 of this chapter for provisions pertaining to initial and reconsidered determinations made by a QIO); (12) When services are excluded from coverage as custodial care (§ 411.15(g)) or as not reasonable and necessary (§ 411.15(k)), whether the individual or the provider of services who furnished the services, or both, knew or could reasonably have been expected to know that the services were excluded from coverage (see § 411.402); (13) Any other issues having a present or potential effect on the amount of benefits to be paid under part A of Medicare, including a determination as to whether there has been an overpayment or underpayment of benefits paid under part A, and if so, the amount thereof; and (14) Whether a waiver of adjustment or recovery under sections 1870 (b) and (c) of the Act is appropriate when an overpayment of hospital insurance benefits or supplementary medical insurance benefits (including a payment under section 1814(e) of the Act) has <PRTPAGE P="104"/>been made with respect to an individual. (c) <E T="03">Initial determination with respect to a provider of services.</E> An initial determination with respect to a provider of services shall be a determination made on the basis of a request for payment filed by the provider under part A of Medicare on behalf of an individual who was furnished items or services by the provider, but only if the determination involves the following: (1) A finding by the intermediary that such items or services are not covered by reason of § 411.15(g) or § 411.15(k); and (2) A finding by the intermediary that either such individual or such provider of services, or both, knew or could reasonably have been expected to know that such items or services were excluded from coverage under the program. <CITA>[55 FR 11020, Mar. 26, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.705</SECTNO> <SUBJECT>Actions which are not initial determinations.</SUBJECT> An initial determination under Part A of Medicare does not include determinations relating to: (a) The reasonable cost of items or services furnished under Part A of Medicare; (b) Whether an institution or agency meets the conditions for participation in the program; (c) Whether an individual is qualified for use of the expedited appeals process as provided in § 405.718; (d) An action regarding compromise of a claim arising under the Medicare program, or termination or suspension of collection action on such a claim under the Federal Claims Collection Act of 1966 (31 U.S.C. 3711). See 20 CFR 404.515 for overpayment claims against an individual, § 405.376 for overpayment claims against a provider, physician or other supplier, and § 408.110 for claims concerning unpaid Medicare premiums; (e) The transfer or discharge of residents of skilled nursing facilities in accordance with § 483.12 of this chapter; or (f) The preadmission screening and annual resident review processes required by part 483 subparts C and E of this chapter. <CITA>[45 FR 73932, Nov. 7, 1980; 46 FR 24565, May 1, 1981, as amended at 52 FR 22454, June 12, 1987; 52 FR 48123, Dec. 18, 1987; 57 FR 56504, Nov. 30, 1992; 61 FR 63749, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.706</SECTNO> <SUBJECT>Decisions of utilization review committees.</SUBJECT> (a) <E T="03">General rule.</E> A decision of a utilization review committee is a medical determination by a staff committee of the provider or a group similarly composed and does not constitute a determination by the Secretary within the meaning of section 1869 of the Act. The decision of a utilization review committee may be considered by CMS along with other pertinent medical evidence in determining whether or not an individual has the right to have payment made under Part A of title XVIII. (b) <E T="03">Applicability under the prospective payment system.</E> CMS may consider utilization review committee decisions related to inpatient hospital services paid for under the prospective payment system (see part 412 of this chapter) only as those decisions concern: (1) The appropriateness of admissions resulting in payments under subparts D, E and G of part 412 of this chapter. (2) The covered days of care involved in determinations of outlier payments under § 412.80(a)(1)(i) of this chapter; and (3) The necessity of professional services furnished in high cost outliers under § 412.80(a)(1)(ii) of this chapter. <CITA>[48 FR 39831, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.708</SECTNO> <SUBJECT>Effect of initial determination.</SUBJECT> (a) The initial determination under § 405.704 (a) or (b) shall be binding upon the individual on whose behalf payment under part A has been requested or, if such individual is deceased, upon the representative of such individual's estate, unless it is reconsidered in accordance with §§ 405.710 through 405.717 or revised in accordance with § 405.750. Such individual (or the representative of such individual's estate if the individual is deceased) shall be the party to such initial determination. (b) The initial determination under § 405.704(c) shall be binding upon the <PRTPAGE P="105"/>provider of services unless it is reconsidered in accordance with §§ 405.710 through 405.717 or revised in accordance with § 405.750. Such provider of services shall be the party to such initial determination. <CITA>[55 FR 11021, Mar. 26, 1990, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.710</SECTNO> <SUBJECT>Right to reconsideration.</SUBJECT> (a) An individual who is a party to an initial determination, as specified in § 405.704 (a) and (b), (or if such individual is deceased, the representative of such individual's estate) and who is dissatisfied with the initial determination may request a reconsideration of such determination in accordance with § 405.711 regardless of the amount in controversy. (b) A provider of services who is a party to an initial determination (as specified in § 405.704(c)) and who is dissatisfied with such initial determination may request a reconsideration of such determination in accordance with § 405.711, regardless of the amount in controversy, but only if the individual on whose behalf the request for payment was made has indicated in writing that he does not intend to request reconsideration of the intermediary's initial determination on such request for payment, or if the intermediary has made a finding (see § 405.704(c)) that such individual did not know or could not reasonably have been expected to know that the expenses incurred for the items or services for which such request for payment was made were not reimbursable by reason of § 411.15(g) or § 411.15(k). <CITA>[55 FR 11021, Mar. 26, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.711</SECTNO> <SUBJECT>Time and place of filing request for reconsideration.</SUBJECT> The request for reconsideration shall be made in writing and filed at an office of the SSA or the CMS or, in the case of a qualified railroad retirement beneficiary (see 20 CFR 404.368) filed at an office of the Railroad Retirement Board, within 60 days after the date of receipt of notice of initial determination, unless such time is extended as provided in § 405.712. A request for reconsideration which is filed with the intermediary which received the request for payment submitted on behalf of the individual is considered to have been filed with the CMS as of the date it is filed with the intermediary. For purposes of this section, the date of receipt of notice of the initial determination shall be presumed to be 5 days after the date of such notice, unless there is a reasonable showing to the contrary. <CITA>[41 FR 47917, Nov. 1, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.712</SECTNO> <SUBJECT>Extension of time to request reconsideration.</SUBJECT> If a party to an initial determination desires to file a request for reconsideration after the time for filing such request in accordance with § 405.711 has passed, such party may file a petition with the SSA or the CMS or, in the case of a qualified railroad retirement beneficiary, with the Railroad Retirement Board, for an extension of time for the filing of such request. Such petition shall be in writing and shall state the reasons why the request for reconsideration was not filed within the required time. For good cause shown, the CMS may extend the time for filing the request for reconsideration. <CITA>[37 FR 5814, Mar. 22, 1972. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.714</SECTNO> <SUBJECT>Withdrawal of request for reconsideration.</SUBJECT> A request for reconsideration may be withdrawn by the party to the initial determination who filed the request or by his representative provided that the withdrawal is made in writing and filed at an office of the SSA or the CMS or, in the case of a qualified railroad retirement beneficiary, with the Railroad Retirement Board prior to the date of the mailing of the notice of reconsidered determination. A withdrawal filed with the intermediary which received the request for payment submitted on behalf of the individual is considered to have been filed with the CMS as of the date it is filed with the intermediary. <CITA>[40 FR 1025, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <PRTPAGE P="106"/> <SECTNO>§ 405.715</SECTNO> <SUBJECT>Reconsidered determination.</SUBJECT> (a) In reconsidering an initial determination, the CMS shall review such initial determination, the evidence and findings upon which such determination was based, and any additional evidence submitted to the SSA or the CMS or otherwise obtained by the intermediary or the CMS; and shall make a determination affirming or revising, in whole or in part, such initial determination. (b) If the request for reconsideration is filed by an individual with respect to an initial determination specified in § 405.704(b)(12), the provider of services who furnished the items or services shall, prior to the making of the reconsidered determination, be made a party thereto. If pursuant to § 405.710(b) a request for reconsideration is filed by a provider of services with respect to an individual determination under § 405.704(c), the individual who was furnished the items or services shall, prior to the making of the reconsidered determination, be made a party thereto. <CITA>[55 FR 11021, Mar. 26, 1990, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.716</SECTNO> <SUBJECT>Notice of reconsidered determination.</SUBJECT> Written notice of the reconsidered determination shall be mailed by the CMS to the parties and their representatives at their last known addresses. Such notice shall state the specific reasons for the reconsidered determination and shall advise the parties of their right to a hearing if the amount in controversy is $100 or more, or, if appropriate, advise them of the requirements for use of the expedited appeals process (see § 405.718). <CITA>[40 FR 53387, Nov. 18, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.717</SECTNO> <SUBJECT>Effect of a reconsidered determination.</SUBJECT> The reconsidered determination is binding upon all parties unless— (a) A request for a hearing is filed with SSA or CMS within 60 days after the date of receipt of notice of the reconsidered determination by the parties (for purposes of this section, the date of receipt of notice of the reconsidered determination is presumed to be 5 days after the date of the notice, unless it is shown that the notice was received earlier or later); or (b) The reconsidered determination is revised in accordance with § 405.750; or (c) The expedited appeals process is used in accordance with § 405.718. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.718</SECTNO> <SUBJECT>Expedited appeals process.</SUBJECT> (a) <E T="03">Conditions for use of expedited appeals process (EAP).</E> A party may use the EAP to request court review in place of an administrative law judge (ALJ) hearing or Departmental Appeals Board (DAB) review if the following conditions are met: (1) CMS has made a reconsideration determination; an ALJ has made a hearing decision; or DAB review has been requested, but a final decision has not been issued. (2) The filing entity is a party referred to in § 405.718(d). (3) The party has filed a request for an ALJ hearing in accordance with § 405.722, or DAB review in accordance with 20 CFR 404.968. (4) The amount remaining in controversy is $1,000 or more. (5) If there is more than one party to the reconsideration determination or hearing decision, each party concurs, in writing, with the request for the EAP. (b) <E T="03">Content of the request for EAP.</E> The request for the EAP: (1) Alleges that there are no material issues of fact in dispute; and (2) Asserts that the only factor precluding a decision favorable to the party is a statutory provision that is unconstitutional or a regulation, national coverage decision under section 1862(a)(1) of the Act, or CMS Ruling that is invalid. (c) <E T="03">Place and time for requesting an EAP</E>—(1) <E T="03">Place for filing request.</E> The person must file a written request— (i) At an office of SSA or CMS; or (ii) If the person is in the Philippines, at the Veterans Administration Regional Office or with an ALJ; or (iii) If the person is a qualified railroad retirement beneficiary, at an office of the Railroad Retirement Board. (2) <E T="03">Time of filing request.</E> The party may file a request for the EAP—<PRTPAGE P="107"/> (i) If the party has requested a hearing, at any time prior to receipt of the notice of the ALJ's decision; (ii) Within 60 days after the date of receipt of notice of the ALJ's decision or dismissal, unless the time is extended in accordance with the standards set out in 20 CFR 404.925(c). For purposes of this section, the date of receipt of the notice is presumed to be 5 days after the date on the notice, unless it is shown that the notice was received later; or (iii) If the party has requested DAB review, at any time prior to receipt of notice of the Board's decision. (d) <E T="03">Parties to the EAP.</E> The parties to the EAP are the persons who were parties to the reconsideration determination and, if appropriate, to the hearing. (e) <E T="03">Determination on request for EAP.</E> (1) For EAP requests initiated at the ALJ level, an ALJ determines whether all conditions of paragraphs (a) and (b) of this section are met. (2) If a hearing decision has been issued, the DAB determines whether all conditions of paragraphs (a) and (b) of this section are met. (f) <E T="03">ALJ or DAB certification for the EAP.</E> If the party meets the requirements for the EAP, the ALJ or the DAB, as appropriate, certifies the case in writing stating that: (1) The facts involved in the claim are not in dispute; (2) Except as indicated in paragraph (f)(3) of this section, CMS's interpretation of the law is not in dispute; (3) The sole issue(s) in dispute is the constitutionality of a statutory provision or the validity of a regulation, CMS Ruling, or national coverage decision based on section 1862(a)(1) of the Act. (4) Except for the provision challenged, the right(s) of the party is established; and (5) The determination or decision made by the ALJ or DAB is final for purposes of seeking judicial review. (g) <E T="03">Effect of ALJ or DAB certification.</E> (1) Following the issuance of the certification described in paragraph (f) of this section, the party waives completion of the remaining steps of the administrative appeals process. (2) The 60-day period for filing a civil suit in a Federal district court begins on the date of receipt of the ALJ or DAB certification. (h) <E T="03">Effect of a request for EAP that does not result in certification.</E> If a request for the EAP does not meet all the conditions for use of the process, the ALJ or DAB so advises the party and treats the request as a request for hearing or DAB review, as appropriate. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.720</SECTNO> <SUBJECT>Hearing; right to hearing.</SUBJECT> A person has a right to a hearing regarding any initial determination made under § 405.704 if: (a) Such initial determination has been reconsidered by the CMS; (b) Such person was a party to the reconsidered determination; (c) Such person or his representative has filed a written request for a hearing in accordance with the procedure described in § 405.722; and (d) The amount in controversy is $100 or more. <CITA>[40 FR 1025, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.722</SECTNO> <SUBJECT>Time and place of filing request for a hearing.</SUBJECT> The request for a hearing shall be made in writing and filed at an office of the SSA or the CMS or with a ALJ, or, in the case of a qualified railroad retirement beneficiary, at an office of the Railroad Retirement Board. Such request must be filed within 60 days after the date of receipt of notice of the reconsidered determination by such individual, except where the time is extended as provided in 20 CFR 404.933(c). For purposes of this section, the date of receipt of notice of the reconsidered determination shall be presumed to be 5 days after the date of such notice, unless there is a reasonable showing to the contrary. <CITA>[45 FR 73933, Nov. 7, 1980, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.724</SECTNO> <SUBJECT>Departmental Appeals Board (DAB) review.</SUBJECT> Regulations beginning at 20 CFR 404.967 regarding SSA Appeals Council <PRTPAGE P="108"/>Review are also applicable to DAB review of matters addressed by this subpart. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.730</SECTNO> <SUBJECT>Court review.</SUBJECT> (a) To the extent authorized by sections 1869, 1876(c)(5)(B), and 1879(d) of the Act, a party to a Departmental Appeals Board (DAB) decision or an ALJ decision if the DAB does not review the ALJ decision, may obtain a court review if the amount remaining in controversy is $1,000 or more. A party may obtain court review by filing a civil action in a district court of the United States in accordance with the provisions of section 205(g) of the Act. The filing procedure is set forth at 20 CFR 422.210. (b) A party to a reconsidered determination or an ALJ hearing decision may obtain a court review if the amount in controversy is $1,000 or more, and he or she requests and meets the conditions for the expedited appeals process set forth in § 405.718. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.732</SECTNO> <SUBJECT>Review of national coverage decisions (NCDs).</SUBJECT> (a) <E T="03">General.</E> (1) CMS makes NCDs either granting, limiting, or excluding Medicare coverage for a specific medical service, procedure or device. NCDs are made under section 1862(a)(1) of the Act or other applicable provisions of the Act. An NCD is binding on all Medicare carriers, fiscal intermediaries, QIOs, HMOs, CMPs, and HCPPs when published in CMS program manuals or the <E T="04">Federal Register</E>. (2) Under section 1869(b)(3) of the Act, only NCDs made under section 1862(a)(1) of the Act are subject to the conditions of paragraphs (b) through (d) of this section. (b) <E T="03">Review by ALJ.</E> (1) An ALJ may not disregard, set aside, or otherwise review an NCD. (2) An ALJ may review the facts of a particular case to determine whether an NCD applies to a specific claim for benefits and, if so, whether the NCD has been applied correctly to the claim. (c) <E T="03">Review by Court.</E> (1) A court's review of an NCD is limited to whether the record is incomplete or otherwise lacks adequate information to support the validity of the decision, unless the case has been remanded to the Secretary to supplement the record regarding the NCD. The court may not invalidate an NCD except upon review of the supplemented record. (2) A Federal court may not hold unlawful or set aside an NCD because it was not issued in accordance with the notice and comment procedures of the Administrative Procedure Act (5 U.S.C. 553) or section 1871(b) of the Act. (d) <E T="03">Remands</E>—(1) <E T="03">Secretary's action.</E> When a court remands an NCD matter to the Secretary because the record in support of the NCD is incomplete or otherwise lacks adequate information, the Secretary remands the case to CMS in order to supplement the record. (2) <E T="03">Remand to CMS.</E> CMS supplements the record with new or updated evidence, including additional information from other sources, and may issue a revised NCD. (3) <E T="03">Final Actions.</E> (i) The proceedings to supplement the record are expedited. (ii) When CMS does not issue a revised NCD, it returns the supplemented record to the court for review. (iii) When CMS issues a revised NCD, it forwards the case to an ALJ who issues a new decision applying the revised NCD to the facts of the claim(s) under consideration. The ALJ's decision is subject to DAB review and, ultimately, judicial review. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.740</SECTNO> <SUBJECT>Principles for determining the amount in controversy.</SUBJECT> (a) <E T="03">Individual appellants.</E> For the purpose of determining whether an individual appellant meets the minimum amount in controversy needed for a hearing ($100), the following rules apply: (1) The amount in controversy is computed as the actual amount charged the individual for the items and services in question, less any amount for which payment has been made by the intermediary and less any deductible and coinsurance amounts applicable in the particular case.<PRTPAGE P="109"/> (2) A single beneficiary may aggregate claims from two or more providers to meet the $100 hearing threshold and a single provider may aggregate claims for services provided to one or more beneficiaries to meet the $100 hearing threshold. (3) In either of the circumstances specified in paragraph (a)(2) of this section, two or more claims may be aggregated by an individual appellant only if the claims have previously been reconsidered and a request for hearing has been made within 60 days after receipt of the reconsideration determination(s). (4) When requesting a hearing, the appellant must specify in his or her appeal request the specific claims to be aggregated. (b) <E T="03">Two or more appellants.</E> As specified below, under section 1869(b)(2) of the Act, two or more appellants may aggregate their claims together to meet the minimum amount in controversy needed for a hearing ($100). The right to aggregate under this statutory provision applies to claims for items and services furnished on or after January 1, 1987. (1) The aggregate amount in controversy is computed as the actual amount charged the individual(s) for the items and services in question, less any amount for which payment has been made by the intermediary and less any deductible and coinsurance amounts applicable in the particular case. (2) In determining the amount in controversy, two or more appellants may aggregate their claims together under the following circumstances: (i) Two or more beneficiaries may combine claims representing services from the same or different provider(s) if the claims involve common issues of law and fact; (ii) Two or more providers may combine their claims if the claims involve the delivery of similar or related services to the same beneficiary; or (iii) Two or more providers may combine their claims if the claims involve common issues of law and fact with respect to services furnished to two or more beneficiaries. (iv) In any of the circumstances specified in paragraphs (b)(2)(i) through (b)(2)(iii) of this section, the claims may be aggregated only if the claims have previously been reconsidered and a request for hearing has been made within 60 days after receipt of the reconsideration determination(s). Moreover, in the request for hearing, the appellants must specify the claims that they seek to aggregate. (c) The determination as to whether the amount in controversy is $100 or more is made by the administrative law judge (ALJ). (d) In determining the amount in controversy under paragraph (b) of this section, the ALJ also makes the determination as to what constitutes “similar or related services” or “common issues of law and fact.” (e) When a civil action is filed by either an individual appellant or two or more appellants, the Secretary may assert that the aggregation principles contained in this subpart may be applied to determine the amount in controversy for judicial review ($1000). (f) Notwithstanding the provisions of paragraphs (a)(1) and (b)(1) of this section, when payment is made for certain excluded services under § 411.400 of this chapter or the liability of the beneficiary for those services is limited under § 411.402 of this chapter, the amount in controversy is computed as the amount that would have been charged the beneficiary for the items or services in question, less any deductible and coinsurance amounts applicable in the particular case, had such expenses not been paid pursuant to § 411.400 of this chapter or had such liability not been limited pursuant to § 411.402 of this chapter. (g) Under this subpart, an appellant may not combine part A and part B claims together to meet the requisite amount in controversy for a hearing. HMO, CMP and HCPP appellants under part 417 of this chapter may combine part A and part B claims together to meet the requisite amounts in controversy for a hearing. <CITA>[59 FR 12181, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.745</SECTNO> <SUBJECT>Amount in controversy ascertained after reconsideration.</SUBJECT> For the purpose of determining whether a party to a reconsidered determination is entitled to a hearing, <PRTPAGE P="110"/>the amount in controversey after the reconsideration action rather than the amount in controversy initially at issue shall be controlling. <CITA>[40 FR 1026, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.747</SECTNO> <SUBJECT>Dismissal of request for hearing; amount in controversy less than $100.</SUBJECT> The ALJ shall, without holding a hearing, dismiss the request for hearing if the request for hearing plainly shows that less than $100 is in controversy. If a hearing is held and the ALJ finds that the amount in controversy is less than $100, the ALJ shall dismiss the request for hearing and will not rule on the substantive issues involved in the appeal. <CITA>[37 FR 5814, Mar. 23, 1972. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.750</SECTNO> <SUBJECT>Time period for reopening initial, revised, or reconsidered determinations and decisions or revised decisions of an ALJ or the Departmental Appeals Board (DAB); binding effect of determination and decisions.</SUBJECT> (a) <E T="03">Reopenings concerning applications and entitlement.</E> A determination, or decision, or revised determination or decision made by the SSA concerning any matter under § 405.704(a), may be reopened and revised under 20 CFR 404.988 (Conditions for reopening). (b) <E T="03">Reopenings concerning a request for payment.</E> An initial, revised, or reconsidered determination of CMS, or a decision or revised decision of an ALJ or of the DAB, with respect to an individual's right concerning a request for payment under Medicare Part A, which is otherwise binding under 20 CFR 404.955 or 404.981 and §§ 405.708 or 405.717 of this subpart may be reopened: (1) Within 12 months from the date of the notice of the initial or reconsidered determination to the party to such determination; (2) After such 12-month period, but within 4 years after the date of the notice of the initial determination to the individual, upon establishment of good cause for reopening such determination or decision (see 20 CFR 404.988(b) and 404.989); or (3) At any time, when: (i) Such initial, revised, or reconsidered determination or such decision or revised decision is unfavorable, in whole or in part, to the party thereto, but only for the purpose of correcting clerical error or error on the face of the evidence on which such determination or decision was based; or (ii) Such initial, revised, or reconsidered determination or such decision or revised decision was procured by fraud or similar fault of the beneficiary or some other person. <CITA>[45 FR 73933, Nov. 7, 1980, as amended at 61 FR 32348, June 24, 1996; 62 FR 25853, 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.753</SECTNO> <SUBJECT>Appeal of a categorization of a device.</SUBJECT> (a) CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 is a national coverage decision under section 1862(a)(1) of the Act. (b) CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 is an aspect of an initial determination that, under section 1862 of the Act, payment may not be made. (c) In accordance with section 1869(b)(3)(A) of the Act, CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 may not be reviewed by an administrative law judge. <CITA>[60 FR 48424, Sept. 19, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Appeals Under the Medicare Part B Program</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1842(b)(3)(C), 1869(b), and 1871 of the Social Security Act (42 U.S.C. 1302, 1395u(b)(3)(C), 1395ff(b), and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 32 FR 18028, Dec. 16, 1967, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.801</SECTNO> <SUBJECT>Part B appeals—general description.</SUBJECT> (a) The Medicare carrier makes an initial determination when a request for payment for Part B benefits is submitted. If an individual beneficiary is <PRTPAGE P="111"/>dissatisfied with the initial determination, he or she may request, and the carrier will perform, a review of the claim. Following the carrier's review determination, the beneficiary may obtain a carrier hearing if the amount remaining in controversy is at least $100. The beneficiary is also entitled to a carrier hearing without the benefit of a review determination when the initial request for payment is not being acted upon with reasonable promptness (as defined in § 405.802). Following the carrier hearing, the beneficiary may obtain a hearing before an ALJ if the amount remaining in controversy is at least $500. If the beneficiary is dissatisfied with the decision of the ALJ, he or she may request the Departmental Appeals Board (DAB) to review the case. Following the action of the DAB, the beneficiary may file suit in Federal district court if the amount remaining in controversy is at least $1,000. (b) The rights of a beneficiary under paragraph (a) of this section to appeal the carrier's initial determination are granted also to— (1) A physician or supplier that furnishes services to a beneficiary and that accepts an assignment from the beneficiary, or (2) A physician who meets the conditions of section 1842(l)(1)(A) of the Act pertaining to refund requirements for nonparticipating physicians who have not taken assignment on the claim(s) at issue. (c) Procedures governing the determinations by SSA as to whether an individual has met basic Part B entitlement requirements are covered in subpart G of this part and 20 CFR part 404, subpart J. Subparts J and R of 20 CFR part 404 are also applicable to ALJ, DAB, and judicial review conducted under subpart H, except to the extent that specific provisions are contained in this subpart. <CITA>[62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.802</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in subpart H of this part, the term— <E T="03">After receipt of the notice</E> means 5 days after the date on the notice, unless it is shown that the notice was received earlier or later. <E T="03">Appellant</E> designates the beneficiary, assignee or other person or entity that has filed an appeal concerning a particular determination of benefits under Medicare part B. Designation as an appellant does not in itself convey standing to appeal the determination in question. <E T="03">Assignee</E> means a physician or supplier who furnishes services to a beneficiary under Medicare part B and who has accepted a valid assignment executed by the beneficiary. <E T="03">Assignment</E> means the transfer by the assignor of his or her claim for payment to the assignee in return for the latter's promise not to charge more for his or her services than the carrier finds to be the reasonable charge or other approved amount. <E T="03">Assignor</E> means a beneficiary under Medicare part B whose physician or supplier has taken assignment of a claim. <E T="03">Carrier</E> means an organization which has entered into a contract with the Secretary pursuant to section 1842 of the Act and which is authorized to make determinations with respect to part B of title XVIII of the Act. For purposes of this subpart, the term carrier also refers to an intermediary that has entered into a contract with the Secretary under section 1816 of the Act and is authorized to make determinations with respect to part B provider services, as specified in § 421.5(c) of this chapter. <E T="03">Common issues of law and fact,</E> with respect to the aggregation of claims by two or more appellants to meet the minimum amount in controversy needed for an ALJ hearing, occurs when the claims sought to be aggregated are denied or reduced for similar reasons and arise from a similar fact pattern material to the reason the claims are denied. <E T="03">Delivery of similar or related services,</E> with respect to the aggregation of claims by two or more physician/supplier appellants to meet the minimum amount in controversy needed for an ALJ hearing, means like or coordinated services or items provided to the same beneficiary by the appellants. <E T="03">Representative</E> means an individual meeting the conditions described in §§ 405.870 through 405.871.<PRTPAGE P="112"/> <E T="03">With reasonable promptness</E> means within a period of 60 consecutive days after the receipt by the carrier of a request for payment. <CITA>[59 FR 12182, Mar. 16, 1994, as amended at 62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.803</SECTNO> <SUBJECT>Initial determination.</SUBJECT> (a) Carriers make initial determinations regarding claims for benefits under Medicare Part B. (b) An initial determination for purposes of this subpart includes determinations such as the following: (1) Whether services furnished are covered. (2) Whether the deductible has been met. (3) Whether the receipted bill or other evidence of payment is acceptable. (4) Whether the charges for services furnished are reasonable. (5) If the services furnished to a beneficiary by a physician or a supplier pursuant to an assignment under § 424.55 of this chapter are not covered because they are determined to be not reasonable and necessary under § 411.15(k) of this chapter, whether the beneficiary, physician or supplier, or a physician who meets the requirements of § 411.408, knew or could reasonably have been expected to know at the time the services were furnished that the services were not covered. (c) The following are not initial determinations for purposes of this subpart: (1) Any issue or factor for which SSA or CMS has sole responsibility, for example, whether an independent laboratory meets the conditions for coverage of services; whether a Medicare overpayment claim should be compromised, or collection action terminated or suspended. (2) Any issue or factor which relates to hospital insurance benefits under Medicare Part A. <CITA>[62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.804</SECTNO> <SUBJECT>Notice of initial determination.</SUBJECT> After a carrier has made an initial determination on a request for payment written notice of this determination shall be mailed to each party to the determination at his last known address. The notice of the determination shall inform each party to the determination of his right to have such determination reviewed. </SECTION> <SECTION> <SECTNO>§ 405.805</SECTNO> <SUBJECT>Parties to the initial determination.</SUBJECT> The parties to the initial determination (see § 405.803) may be any party described in § 405.802. <CITA>[64 FR 52670, Sept. 30, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.806</SECTNO> <SUBJECT>Effect of Initial Determination.</SUBJECT> The initial determination is binding upon all parties to the claim for benefits unless the determination is— (a) Reviewed in accordance with §§ 405.810 through 405.812; or (b) Revised as a result of a reopening in accordance with § 405.841. <CITA>[62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.807</SECTNO> <SUBJECT>Request for review of initial determination.</SUBJECT> (a) <E T="03">General.</E> A party to an initial determination by a carrier, that is dissatisfied with the initial determination and wants to appeal the matter, may request that the carrier review the determination. The request for review by the party to an initial determination must clearly indicate that he or she is dissatisfied with the initial determination and wants to appeal the matter. The request for review does not constitute a waiver of the party's right to a hearing (under § 405.815) after the review. (b) <E T="03">Place and method of filing a request.</E> A request by a party for a carrier to review the initial determination may be made in one of the following ways: (1) In writing and filed at an office of the carrier, SSA, or CMS. (2) By telephone to the telephone number designated by the carrier as the appropriate number for the receipt of requests for review. (c) <E T="03">Time of filing request.</E> (1) The carrier must provide a period of 6 months after the date of the notice of the initial determination within which the party to the initial determination may request a review.<PRTPAGE P="113"/> (2) The carrier may, upon request by the party, extend the period for requesting the review of the initial determination. <CITA>[64 FR 52670, Sept. 30, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.808</SECTNO> <SUBJECT>Parties to the review.</SUBJECT> The parties to the review (as provided for in § 405.807(a)) shall be the persons who were parties to the carrier's initial determination as described in § 405.805, and any other party whose rights with respect to the particular claim being reviewed may be affected by such review. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.809</SECTNO> <SUBJECT>Opportunity to submit evidence.</SUBJECT> The parties to the review (as provided for in § 405.807(a)) shall have a reasonable opportunity to submit written evidence and contentions as to fact or law relative to the claim at issue. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.810</SECTNO> <SUBJECT>Review determination.</SUBJECT> Subject to the provisions of §§ 405.807 through 405.809, the carrier shall review the claim in dispute and, upon the basis of the evidence of record, shall make a separate determination affirming or revising in whole or in part the findings and determination in question. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.811</SECTNO> <SUBJECT>Notice of review determination.</SUBJECT> Written notice of the review determination is mailed to a party at his or her last known address. The review determination states the basis of the determination and advises the party of his or her right to a carrier hearing when the amount in controversy is $100 or more as determined in accordance with § 405.817. The notice states the place and manner of requesting a carrier hearing as well as the time limit under which a hearing must be requested (see § 405.821). <CITA>[59 FR 12182, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.812</SECTNO> <SUBJECT>Effect of review determination.</SUBJECT> The review determination is binding upon all parties to the review unless a carrier hearing decision is issued pursuant to a request for hearing made in accordance with § 405.821 or is revised as a result of reopening in accordance with § 405.841. <CITA>[59 FR 12182, Mar. 16, 1994, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.815</SECTNO> <SUBJECT>Amount in controversy for carrier hearing, ALJ hearing and judicial review.</SUBJECT> Any party designated in § 405.822 is entitled to a carrier hearing after a review determination has been made by the carrier if the amount remaining in controversy is $100 or more and the party meets the requirements of § 405.821 of this subpart. To be entitled to a hearing before an ALJ following the carrier hearing, the amount remaining in controversy must be $500 or more, and for judicial review following the ALJ hearing and Departmental Appeals Board Review, the amount remaining in controversy must be $1000 or more. <CITA>[59 FR 12182, Mar. 16, 1994, as amended at 61 FR 32348, June 24, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.817</SECTNO> <SUBJECT>Principles for determining amount in controversy.</SUBJECT> (a) <E T="03">Individual appellants.</E> For the purpose of determining whether an individual appellant meets the minimum amount in controversy needed for a carrier hearing ($100) or ALJ hearing ($500), the following rules apply: (1) The amount in controversy is computed as the actual amount charged the individual for the items and services in question, less any amount for which payment has been made by the carrier and less any deductible and coinsurance amounts applicable in the particular case. (2) A single beneficiary may aggregate claims from two or more physicians/suppliers to meet the $100 or $500 thresholds. A single physician/supplier may aggregate claims from two or more beneficiaries to meet the $100 or $500 threshold levels of appeal.<PRTPAGE P="114"/> (3) In either of the circumstances specified in paragraph (a)(2) of this section, two or more claims may be aggregated by an individual appellant to meet the amount in controversy for a carrier hearing only if the claims have previously been reviewed and a request for hearing has been made within six months after the date of the review determination(s). (4) In either of the circumstances specified in paragraph (a)(2) of this section, two or more claims may be aggregated by an individual appellant to meet the amount in controversy for an ALJ hearing only if the claims have previously been decided by a carrier hearing officer and a request for an ALJ hearing has been made within 60 days after receipt of the carrier hearing officer decision(s). (5) When requesting a carrier hearing or an ALJ hearing, the appellant must specify in his or her appeal request the specific claims to be aggregated. (b) <E T="03">Two or more appellants.</E> As specified in this paragraph, under section 1869(b)(2) of the Act, two or more appellants may aggregate their claims together to meet the minimum amount in controversy needed for an ALJ hearing ($500). The right to aggregate under this statutory provision applies to claims for items and services furnished on or after January 1, 1987. (1) The aggregate amount in controversy is computed as the actual amount charged the individual(s) for the items and services in question, less any amount for which payment has been made by the carrier and less any deductible and coinsurance amounts applicable in the particular case. (2) In determining the amount in controversy, two or more appellants may aggregate their claims together under the following circumstances: (i) Two or more beneficiaries may combine claims representing services from the same or different physician(s) or supplier(s) if the claims involve common issues of law and fact; (ii) Two or more physicians/suppliers may combine their claims if the claims involve the delivery of similar or related services to the same beneficiary; (iii) Two or more physicians/suppliers may combine their claims if the claims involve common issues of law and fact with respect to services furnished to two or more beneficiaries. (iv) In any of the circumstances specified in paragraphs (b)(2)(i) through (b)(2)(iii) of this section, the claims may be aggregated only if the claims have previously been decided by a carrier hearing officer(s) and a request for ALJ hearing has been made within 60 days after receipt of the carrier hearing officer decision(s). Moreover, in a request for ALJ hearing, the appellants must specify the claims that they seek to aggregate. (c) The determination as to whether the amount in controversy is $100 or more is made by the carrier hearing officer. The determination as to whether the amount in controversy is $500 or more is made by the ALJ. (d) In determining the amount in controversy under paragraph (b) of this section, the ALJ will also make the determination as to what constitutes “similar or related services” or “common issues of law and fact.” (e) When a civil action is filed by either an individual appellant or two or more appellants, the Secretary may assert that the aggregation principles contained in this subpart may be applied to determine the amount in controversy for judicial review ($1000). (f) Notwithstanding the provisions of paragraphs (a)(1) and (b)(1) of this section, when payment is made for certain excluded services under § 411.400 of this chapter or the liability of the beneficiary for those services is limited under § 411.402 of this chapter, the amount in controversy is computed as the amount that would have been charged the beneficiary for the items or services in question, less any deductible and coinsurance amounts applicable in the particular case, had such expenses not been paid under § 411.400 of this chapter or had such liability not been limited under § 411.402 of this chapter. (g) Under this subpart, an appellant may not combine part A and part B claims together to meet the requisite amount in controversy for a carrier hearing or ALJ hearing. HMO, CMP and HCPP appellants under part 417 of this chapter may combine part A and <PRTPAGE P="115"/>part B claims together to meet the requisite amount in controversy for a hearing. <CITA>[59 FR 12182, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.821</SECTNO> <SUBJECT>Request for carrier hearing.</SUBJECT> (a) A request for a carrier hearing is any clear expression in writing by a claimant asking for a hearing to adjudicate a claim when not acted upon with reasonable promptness or by a party to a review determination who states, in effect, that he or she is dissatisfied with the carrier's review determination and wants further opportunity to appeal the matter to the carrier. (b) The hearing request must be filed at an office of the carrier or at an office of SSA or CMS. (c) Except when a carrier hearing is held because the carrier did not act upon a claim with reasonable promptness, a party to the review determination may request a carrier hearing within six months after the date of the notice of the review determination. The carrier may, upon request by the party affected, extend the period for filing the request for hearing. <CITA>[59 FR 12183, Mar. 16, 1994, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.822</SECTNO> <SUBJECT>Parties to a carrier hearing.</SUBJECT> The parties to a hearing shall be the persons who were parties to the carrier's review determination (§ 405.808) which is in question. Any other person may be made a party if that person's rights with respect to supplementary medical insurance benefits may be prejudiced by the decision. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.823</SECTNO> <SUBJECT>Carrier hearing officer.</SUBJECT> Any hearing provided for in this subpart shall be conducted by a hearing officer designated by the appropriate official of the carrier. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, and amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.824</SECTNO> <SUBJECT>Disqualification of carrier hearing officer.</SUBJECT> A hearing officer shall not conduct a hearing in any case in which he is prejudiced or partial with respect to any party, or if he has any interest in the matter before him. Notice of any objection with respect to the hearing officer who will conduct the hearing shall be made by the objecting party at his earliest opportunity. The hearing officer shall consider such objection and shall, at his discretion, withdraw. If the hearing officer withdraws, the appropriate official of the carrier shall designate another hearing officer to conduct the hearing. If the hearing officer does not withdraw, the objecting party may present his objections to the carrier for consideration at any time prior to the issuance of a decision. The carrier shall review the request and take appropriate action. The fact that a hearing officer is an employee of the carrier may not serve as prima facie cause for disqualification. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.825</SECTNO> <SUBJECT>Location of carrier hearing.</SUBJECT> (a) <E T="03">Time and place.</E> The hearing officer shall fix a time and place for the hearing reasonably convenient to the requesting party and not inconsistent with the public interest. (b) <E T="03">Adjournment or postponement.</E> The hearing officer may, for a good and sufficient reason, fix a new time and/or place for the hearing; he may change the time and place for the hearing or adjourn the hearing on his own motion upon reasonable notification to the parties. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.826</SECTNO> <SUBJECT>Notice of carrier hearing.</SUBJECT> The notice of hearing is to include notice of the time and place of the hearing; information as to the specific issues to be determined; and the matters on which findings will be made and conclusions will be reached. The notice is to contain sufficient information about the hearing procedure (including <PRTPAGE P="116"/>the party's right to representation) for effective preparation for the hearing. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.830</SECTNO> <SUBJECT>Conduct of the carrier hearing.</SUBJECT> (a) <E T="03">General.</E> Hearings shall be open to the parties and to such other persons as the hearing officer deems necessary and proper for the orderly and efficient conduct of the hearing. The hearing officer shall inquire fully into the matters at issue and shall receive in evidence the testimony of witnesses and any documents which are relevant and material to such matters. The parties shall be provided an opportunity to enter any objection to the inclusion of any document. The order in which evidence and allegations shall be presented and the procedure at the hearing, except as this subpart otherwise expressly provides, shall be at the discretion of the hearing officer and of such nature as to afford the parties a proper hearing. (b) <E T="03">Evidence.</E> Evidence may be received at the hearing even though inadmissible under rules of evidence applicable to court procedures. (c) <E T="03">Witnesses.</E> The hearing officer may examine the witnesses and shall allow the parties or their representatives to do so. If the hearing officer conducts the examination of a witness, he may allow the parties to suggest matters upon which they desire the witness to be questioned, and the hearing officer shall question the witness with respect to such matters if they are relevant and material to any issue pending for decision before him. (d) <E T="03">Oral argument and written allegations.</E> The parties, upon their request shall be allowed a reasonable time for the presentation of oral argument or for the filing of briefs or other written statements or allegations of facts or law. (e) <E T="03">Consolidated issues.</E> When one or more new issues are raised at any time after a request for hearing has been made, but before the mailing of notice of the decision, the hearing officer may, at his discretion, consider the issues along with the other issues pending before him on the same request for hearing. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.831</SECTNO> <SUBJECT>Waiver of right to appear at carrier hearing and present evidence.</SUBJECT> If all parties waive their right to appear before the hearing officer and present evidence and contentions personally or by representative, it shall not be necessary for the hearing officer to give notice of or conduct a formal hearing as provided in §§ 405.825 through 405.830. A waiver of the right to appear is to be in writing and filed with the hearing officer or the carrier. Such waiver may be withdrawn by a party at any time prior to the mailing of notice of the decision in the case. Even though all of the parties have filed a waiver of the right to appear and present evidence and contentions at a hearing before the hearing officer, the hearing officer may, nevertheless, give notice of a time and place and conduct a hearing as provided in §§ 405.825 through 405.830, if he believes that the personal appearance and testimony of the party or parties would assist him to ascertain the facts at issue in the case. For purposes of this section, failure of the parties to appear shall not be cause for a finding of abandonment and the hearing officer shall make his decision on the basis of all evidence adduced. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.832</SECTNO> <SUBJECT>Dismissal of request for carrier hearing.</SUBJECT> (a) <E T="03">By application of party.</E> With the approval of the hearing officer, a request for a hearing may be withdrawn or dismissed at any time prior to the mailing of notice of the decision upon the application of the party or parties filing the request for such hearing. A party may request a dismissal by filing a written notice of such request with the carrier, the hearing officer or orally stating such request at the hearing. The dismissal of a request for hearing shall be binding unless vacated (see paragraph (d) of this section).<PRTPAGE P="117"/> (b) <E T="03">Dismissal by abandonment of party.</E> A hearing officer may dismiss a request for hearing upon abandonment by the party or parties who filed the request. A party shall be deemed to have abandoned a request for hearing, other than where personal appearance is waived in accordance with § 405.831, if neither the party nor his representative appears at the time and place fixed for the hearing and within 10 days after the mailing of a notice to him by the hearing officer to show cause, such party does not show good and sufficient cause for such failure to appear and failure to notify the hearing officer prior to the time fixed for hearing that he cannot appear. (c) <E T="03">Dismissal for cause.</E> The hearing officer may, on his own motion, dismiss a hearing request, either entirely or as to any stated issue, under either of the following circumstances: (1) Where the party requesting a hearing is not a proper party under § 405.822 or does not otherwise have a right to a hearing under section 1842(b)(3)(C) of the Act; or (2) Where the party who filed the hearing request dies and there is no information before the hearing officer showing that an individual who is not a party may be prejudiced by the carrier's determination. (d) <E T="03">Dismissal without prejudice.</E> The hearing officer may on his own motion dismiss without prejudice a hearing request where the amount in controversy is less than $100. (e) <E T="03">Vacation of dismissal.</E> A hearing officer may, on request of a party and for good and sufficient cause shown, vacate any dismissal of a request for hearing at any time within 6 months from the date of mailing notice of the dismissal to the party requesting the hearing at his last known address. <CITA>[32 FR 18028, Dec. 16, 1967, as amended at 39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994; 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.833</SECTNO> <SUBJECT>Record of carrier hearing.</SUBJECT> A complete record of the proceedings at the carrier hearing is made. The testimony is transcribed and copies of other documentary evidence are reproduced in any case when directed by the hearing officer, the carrier, or CMS. The record will also be transcribed and reproduced at the request of any party to the hearing provided the requesting party bears the cost. <CITA>[62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.834</SECTNO> <SUBJECT>Carrier hearing officer's decision.</SUBJECT> (a) As soon as practicable after the close of a carrier hearing, the carrier hearing officer issues a decision in the case based upon the evidence presented at the hearing or otherwise included in the hearing record. The decision is issued as a written notice to the parties and contains— (1) Findings of fact, (2) A statement of reasons, and (3) Notification to the parties of their right to an ALJ hearing when the amount remaining in controversy is at least $500. (b) A copy of the decision is mailed to the parties to the hearing at their last known addresses. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.835</SECTNO> <SUBJECT>Effect of carrier hearing officer's decision.</SUBJECT> The carrier hearing officer's decision is binding upon all parties to the hearing unless— (a) A request for an ALJ hearing is filed in accordance with § 405.855, or (b) The decision is revised in accordance with § 405.841. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.836</SECTNO> <SUBJECT>Authority of the carrier hearing officer.</SUBJECT> The carrier hearing officer, in adjudicating Medicare Part B claims, complies with all of the provisions of, and regulations issued under, title XVIII of the Act, as well as with CMS Rulings, national coverage decisions, and other policy statements, instructions, and guides issued by CMS. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.841</SECTNO> <SUBJECT>Reopening initial or review determination of the carrier, and decision of a carrier hearing officer.</SUBJECT> An initial or review determination of a carrier or a decision of a hearing officer may be reopened by such carrier or hearing officer:<PRTPAGE P="118"/> (a) Within 12 months from the date of the notice of such initial or review determination or decision to the party to such determination or decision; or (b) After such 12-month period, but within 4 years from the date of the notice of the initial determination to the party to such determination, upon establishment of good cause for reopening such determination or decision (see 20 CFR 404.988(b) and 404.989); or (c) At any time, when: (1) Such initial or review determination or decision was procured by fraud or similar fault of the beneficiary or some other person, or (2) Such initial or review determination or decision is unfavorable, in whole or in part, to the party thereto, but only for the purpose of correcting a clerical error or error on the face of the evidence on which such determination or decision was based. <CITA>[39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994; 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.842</SECTNO> <SUBJECT>Notice of reopening and revision.</SUBJECT> (a) <E T="03">Notice.</E> When any determination or decision is reopened as provided in § 405.841, notice of such reopening shall be mailed to the parties to such determination or decision at their last known addresses. A notice of revision following a reopening of a decision, shall be mailed to the parties and shall state the basis for the revised determination or decision. (b) <E T="03">Effect of revised determination.</E> The revision of a determination (see § 405.841) shall be binding upon all parties thereto unless a party files a written request for a hearing with respect to a revised determination when the amount in controversy is $100 or more. <CITA>[32 FR 18028, Dec. 16, 1967, as amended at 39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977; 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.850</SECTNO> <SUBJECT>Change of ruling or legal precedent.</SUBJECT> Change of a legal interpretation or administrative ruling upon which a determination or decision was made shall not be considered as good and sufficient reason for reopening the determination or decision. </SECTION> <SECTION> <SECTNO>§ 405.853</SECTNO> <SUBJECT>Expedited appeals process.</SUBJECT> (a) <E T="03">Conditions for use of expedited appeals process (EAP).</E> A party may use the EAP set forth in § 405.718 of this chapter to request court review in place of the ALJ hearing or Departmental Appeals Board (DAB) review if the following conditions are met: (1) The carrier hearing officer has made a decision; an ALJ has made a hearing decision; or DAB review has been requested, but a final decision has not been issued. (2) The filing entity is a party referred to in § 405.718(d) of this chapter. (3) The party has filed a request for an ALJ hearing in accordance with § 405.855, or DAB review in accordance with 20 CFR 404.968. (4) The amount remaining in controversy is $1,000 or more. (5) If there is more than one party to the hearing decision, each party concurs, in writing, with the request for an EAP. (b) <E T="03">Content of the request for EAP.</E> The request for an EAP: (1) Alleges that there are no material issues of fact in dispute; and (2) Asserts that the only factor precluding a decision favorable to the party is a statutory provision that is unconstitutional or a regulation, national coverage decision under section 1862(a)(1) of the Act, or CMS Ruling that is invalid. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.855</SECTNO> <SUBJECT>ALJ hearing.</SUBJECT> (a) <E T="03">Right to hearing.</E> A party to the carrier hearing has a right to a hearing before an ALJ if— (1) The party files a written request for an ALJ hearing within 60 days after receipt of the notice of the carrier hearing decision; and (2) The amount remaining in controversy is $500 or more. (b) <E T="03">Place of filing hearing request.</E> The request for an ALJ hearing must be made in writing and filed with the carrier that issued the decision, a Social Security office, or, in the case of a qualified railroad retirement beneficiary, an office of the Railroad Retirement Board.<PRTPAGE P="119"/> (c) <E T="03">Effect of ALJ hearing decision.</E> (1) An ALJ's decision is binding on all parties to the hearing unless— (i) The DAB reviews the ALJ decision; (ii) The DAB does not review the ALJ decision, and the party requests judicial review; (iii) The decision is revised by the DAB or an ALJ in accordance with the provisions of § 405.750 of this chapter; or (iv) The expedited appeals process is used. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.856</SECTNO> <SUBJECT>Departmental Appeals Board (DAB) review.</SUBJECT> Regulations beginning at 20 CFR 404.967 regarding SSA Appeals Council Review are applicable to DAB review of matters addressed by this subpart. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.857</SECTNO> <SUBJECT>Court review.</SUBJECT> (a) <E T="03">General rule.</E> To the extent authorized by sections 1869, 1876(c)(5)(B), and 1879(d) of the Act, a party to a DAB decision, or an ALJ decision if the DAB does not review the ALJ's decision, may obtain a court review if the amount remaining in controversy is $1,000 or more. A party may obtain court review by filing a civil action in a district court of the United States in accordance with the provisions of section 205(g) of the Act. The filing procedure is set forth in 20 CFR 422.210. (b) <E T="03">Prohibition against court review of certain Part B regulations or instructions.</E> Under section 1869(b)(4) of the Act, a court may not review a regulation or instruction that relates to a method of payment under Part B if the regulation was promulgated, or the instruction issued, before January 1, 1981. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.860</SECTNO> <SUBJECT>Review of national coverage decisions (NCDs).</SUBJECT> (a) <E T="03">General.</E> (1) CMS makes NCDs either granting, limiting, or excluding Medicare coverage for a specific medical service, procedure or device. NCDs are made under section 1862(a)(1) of the Act or other applicable provisions of the Act. An NCD is binding on all Medicare carriers, fiscal intermediaries, QIOs, HMOs, CMPs, and HCPPs when published in CMS program manuals or the <E T="04">Federal Register</E>. (2) Under section 1869(b)(3) of the Act, only NCDs made under section 1862(a)(1) of the Act are subject to the conditions of paragraphs (b) through (d) of this section. (b) <E T="03">Review by ALJ.</E> (1) An ALJ may not disregard, set aside, or otherwise review an NCD. (2) An ALJ may review the facts of a particular case to determine whether an NCD applies to a specific claim for benefits and, if so, whether the NCD has been applied correctly to the claim. (c) <E T="03">Review by Court.</E> (1) A court's review of an NCD is limited to whether the record is incomplete or otherwise lacks adequate information to support the validity of the decision, unless the case has been remanded to the Secretary to supplement the record regarding the NCD. The court may not invalidate an NCD except upon review of the supplemented record. (2) A Federal court may not hold unlawful or set aside an NCD because it was not issued in accordance with the notice and comment procedures of the Administrative Procedure Act (5 U.S.C. 553) or section 1871(b) of the Act. (d) <E T="03">Remands—</E>(1) <E T="03">Secretary's action.</E> When a court remands an NCD matter to the Secretary because the record in support of the NCD is incomplete or otherwise lacks adequate information, the Secretary remands the case to CMS in order to supplement the record. (2) <E T="03">Remand to CMS.</E> CMS supplements the record with new or updated evidence, including additional information from other sources, and may issue a revised NCD. (3) <E T="03">Final Actions.</E> (i) The proceedings to supplement the record, are expedited. (ii) When CMS does not issue a revised NCD, it returns the supplemented record to the court for review. (iii) When CMS issues a revised NCD, it forwards the case to an ALJ who issues a new decision applying the revised NCD to the facts of the claim(s) under consideration. The ALJ's decision is subject to DAB review and, ultimately, judicial review. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <PRTPAGE P="120"/> <SECTNO>§ 405.870</SECTNO> <SUBJECT>Appointment of representative.</SUBJECT> A party to an initial determination, informal review or hearing as provided in §§ 405.803 through 405.934, may appoint as his representative in any such proceeding any person qualified under § 405.871. Where the representative is an attorney, in the absence of information to the contrary, his representation that he has such authority shall be accepted as evidence of the attorney's authority to represent a party. </SECTION> <SECTION> <SECTNO>§ 405.871</SECTNO> <SUBJECT>Qualifications of representatives.</SUBJECT> Any individual may be appointed to act as representative in accordance with § 405.870, unless he is disqualified or suspended from acting as a representative in proceedings before the SSA or the CMS or unless otherwise prohibited by law. <CITA>[39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.872</SECTNO> <SUBJECT>Authority of representatives.</SUBJECT> A representative, appointed and qualified as provided in §§ 405.870 and 405.871, may make or give, on behalf of the party he represents, any request or notice relative to any proceeding before the carrier including review and hearing. A representative shall be entitled to present evidence and allegations as to facts and law in any proceeding affecting the party he represents and to obtain information with respect to the claim of such party to the same extent as such party. Notice to any party or any action, determination, or decision, or request to any party for the production of evidence, shall be sent to the representative of such party. </SECTION> <SECTION> <SECTNO>§ 405.874</SECTNO> <SUBJECT>Appeals of carrier decisions that supplier standards are not met.</SUBJECT> (a) An entity serving as a National Supplier Clearinghouse must act promptly to determine if any entity submitting a request for a billing number as a Medicare supplier of part B items meets the standards set forth in part 424. Effective July 1, 1993, the National Supplier Clearinghouse must accept, reject or request additional information within 15 days of the receipt of an enrollment application. (b) If the National Supplier Clearinghouse disallows an entity's request for a billing number or revokes, with the concurrence of CMS, an entity's billing number, the National Supplier Clearinghouse notifies the entity by certified mail. Revocation is effective 15 days after the National Supplier Clearinghouse mails notice of its determination. The carrier disallows payment for items furnished by the supplier beginning with that effective date. The notice must inform the entity of the reason for the rejection or revocation, its right to appeal, the date by which it must file that appeal (90 days after the postmark of the notice) and the address to which the appeal must be sent in writing. (c) A fair hearing officer not involved in the original determination to disallow an entity's request for a billing number, or to revoke an entity's billing number, must schedule a hearing to be held within one week of receipt of an appeal, or later at the request of the entity. Both the entity and carrier may offer evidence. The hearing officer issues notice of his/her decision within 2 weeks of the hearing. The notice is sent by certified letter to CMS, the carrier, and the appealing entity. This notice must include information about the supplier's further right to appeal, the carrier's right to appeal, the date by which the appeal must be filed (90 days after the postmark of the notice) and the address to which the appeals must be sent in writing. Either the carrier or entity may appeal the hearings officer's decision to CMS. (d) A CMS official, designated by the Administrator of CMS, must make an appeal decision based on the evidence presented to the fair hearing officer and his or her decision. The CMS official requests any additional information he or she deems necessary from either the carrier or the entity within two weeks of receipt by the CMS of the appeal. Notice of the CMS official's decision— (1) Is issued within two weeks of when the last information is received is received by the CMS official, or four weeks of when the information is requested, whichever is shorter, unless <PRTPAGE P="121"/>the party appealing the fair hearing decision requests a delay; (2) Is sent by the CMS official by certified mail to both the carrier and the entity; and (3) Contains information on any further appeals the entity and carrier may have. (e) A billing number is not issued, or remains revoked, and payment is not made, for items or services furnished by any entity which a carrier determines does not qualify for a billing number, until the carrier (upon reapplication of the entity), a fair hearing officer, or a CMS official designated to hear such appeals, determines that the entity qualifies for a billing number. Any claims for items or services furnished after revocation of the supplier's billing number and submitted by the entity during the appeals period are held and not processed, i.e., are neither approved, denied or developed, until all administrative appeals have been exhausted. If an entity is determined not to have qualified for a billing number in one period but to have qualified in another, the carrier pays for claims for items sold or rented to beneficiaries during the period the entity qualified as a supplier. If there is evidence of an overpayment, see subpart C of part 405 of this Chapter. (f) A billing number may be reinstated after revocation when an entity completes a corrective action plan, to which CMS has agreed, and provided sufficient assurance of its intent to comply fully with the supplier standards. <CITA>[57 FR 27305, June 18, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.877</SECTNO> <SUBJECT>Appeal of a categorization of a device.</SUBJECT> (a) CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 is a national coverage decision under section 1862(a)(1) of the Act. (b) CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 is an aspect of an initial determination that, under section 1862 of the Act, payment may not be made. (c) In accordance with section 1869(b)(3)(A) of the Act, CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 may not be reviewed by an administrative law judge. <CITA>[60 FR 48424, Sept. 19, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <RESERVED>Subparts I-Q [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart R—Provider Reimbursement Determinations and Appeals</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 205, 1102, 1814(b), 1815(a), 1833, 1861(v), 1871, 1872, 1878, and 1886 of the Social Security Act (42 U.S.C. 405, 1302, 1395f(b), 1395g(a), 1395l, 1395x(v), 1395hh, 1395ii, 1395oo, and 1395ww). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 39 FR 34515, Sept. 26, 1974, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.1801</SECTNO> <SUBJECT>Introduction.</SUBJECT> (a) <E T="03">Definitions.</E> As used in this subpart: <E T="03">Administrator</E> means the Administrator or Deputy Administrator of CMS. <E T="03">Administrator's review</E> means that review provided for in section 1878(f) of the Act (42 U.S.C. 1395oo(f)) and § 405.1875. <E T="03">Board</E> means the Provider Reimbursement Review Board established in accordance with section 1878 of the Act (42 U.S.C. 1395oo) and § 405.1845. <E T="03">Board hearing</E> means that hearing provided for in section 1878(a) of the Act (42 U.S.C. 1395oo(a)), and § 405.1835. <E T="03">Date of filing</E> and <E T="03">date of submission of materials</E> mean the day of the mailing (as evidenced by the postmark) or hand-delivery of materials, unless otherwise defined in this subpart. <E T="03">Date of receipt</E> means the date on the return receipt of “return receipt requested” mail, unless otherwise defined in this subpart. <E T="03">Intermediary determination</E> means the following: (1) With respect to a provider of services that has filed a cost report under §§ 413.20 and 413.24(f) of this chapter, the term means a determination of the amount of total reimbursement due the <PRTPAGE P="122"/>provider, pursuant to § 405.1803 following the close of the provider's cost reporting period, for items and services furnished to beneficiaries for which reimbursement may be made on a reasonable cost basis under Medicare for the period covered by the cost report. (2) With respect to a hospital that receives payments for inpatient hospital services under the prospective payment system (part 412 of this chapter), the term means a determination of the total amount of payment due the hospital, pursuant to § 405.1803 following the close of the hospital's cost reporting period, under that system for the period covered by the determination. (3) For purposes of appeal to the Provider Reimbursement Review Board, the term is synonymous with the phrases “intermediary's final determination” and “final determination of the Secretary”, as those phrases are used in section 1878(a) of the Act. (4) For purposes of § 405.376 concerning claims collection activities, the term does not include an action by CMS with respect to a compromise of a Medicare overpayment claim, or termination or suspension of collection action on an overpayment claim, against a provider or physician or other supplier. <E T="03">Intermediary hearing</E> means that hearing provided for in § 405.1809. (b) <E T="03">General rule—</E>(1) <E T="03">Providers.</E> The principles of reimbursement for determining reasonable cost and prospective payment are contained in parts 413 and 412, respectively, of this chapter. In order to be reimbursed for covered services furnished to Medicare beneficiaries, providers of services are obliged to file cost reports with their intermediaries as specified in § 413.24(f) of this chapter. Where the term “provider” appears in this subpart, it includes hospitals paid under the prospective payment system for purposes of applying the appeal procedures described in this subpart to those hospitals. (2) <E T="03">Other entities participating in Medicare Part A.</E> In addition to providers of services whose status as such is indicated in the Act, there are entities (such as health maintenance organizations) that do not meet the statutory test for providers of services, which may also participate in Medicare. These entities are required to file periodic cost reports and are reimbursed on the basis of information furnished in the reports. Although the entities do not qualify for Board review, the rules as set forth in this subpart with respect to intermediary hearings are applicable to the entities to the maximum extent possible, for cost-reporting periods ending on or after December 31, 1971, where the amount of program reimbursement in controversy is at least $1,000. (c) <E T="03">Effective dates.</E> (1) Except as provided in paragraphs (c)(2) and (c)(3) of this section or in § 405.1885(e), this subpart applies to all cost reporting periods ending on or after December 31, 1971, for which reimbursement may be made on a reasonable cost basis. (2) Sections 405.1835 to 405.1877 apply only to cost reporting periods ending on or after June 30, 1973, for which reimbursement may be made on a reasonable cost basis. (3) With respect to hospitals under the prospective payment system (see part 412 of this chapter), the appeals procedures in §§ 405.1811 to 405.1877 that apply become applicable with the hospital's first cost reporting period beginning on or after October 1, 1983. <CITA>[39 FR 34515, Sept. 26, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 48 FR 39834, Sept. 1, 1983; 48 FR 45773, Oct. 7, 1983; 49 FR 322, Jan. 3, 1984; 49 FR 23013, June 1, 1984; 51 FR 34793, Sept. 30, 1986; 61 FR 63749, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1803</SECTNO> <SUBJECT>Intermediary determination and notice of amount of program reimbursement.</SUBJECT> (a) <E T="03">General requirement.</E> Upon receipt of a provider's cost report, or amended cost report where permitted or required, the intermediary must within a reasonable period of time (see § 405.1835(b)), furnish the provider and other parties as appropriate (see § 405.1805) a written notice reflecting the intermediary's determination of the total amount of reimbursement due the provider. The intermediary must include the following information in the notice, as appropriate: (1) <E T="03">Reasonable cost.</E> The notice must—<PRTPAGE P="123"/> (i) Explain the intermediary's determination of total program reimbursement due the provider on the basis of reasonable cost for the reporting period covered by the cost report or amended cost report; and (ii) Relate this determination to the provider's claimed total program reimbursement due the provider for this period. (2) <E T="03">Prospective payment.</E> With respect to a hospital that receives payments for inpatient hospital services under the prospective payment system (see part 412 of this chapter), the intermediary must include in the notice its determination of the total amount of the payments due the hospital under that system for the cost reporting period covered by the notice. The notice must explain (with appropriate use of the applicable money amounts) any difference in the amount determined to be due, and the amounts received by the hospital during the cost reporting period covered by the notice. (b) <E T="03">Requirements for intermediary notices.</E> The intermediary must include in each notice appropriate references to law, regulations, CMS Rulings, or program instructions to explain why the intermediary's determination of the amount of program reimbursement for the period differs from the amount the provider claimed. The notice must also inform the provider of its right to an intermediary or Board hearing (see §§ 405.1809, 405.1811, 405.1815, 405.1835, and 405.1843) and that the provider must request the hearing within 180 days after the date of the notice. (c) <E T="03">Use of notice as basis for recoupment of overpayments.</E> The intermediary's determination contained in its notice is the basis for making the retroactive adjustment (required by § 413.64(f) of this chapter) to any program payments made to the provider during the period to which the determination applies, including recoupment under § 405.373 from ongoing payments to the provider of any overpayments to the provider identified in the determination. Recoupment is made notwithstanding any request for hearing on the determination the provider may make under § 405.1811 or § 405.1835. <CITA>[48 FR 39834, Sept. 1, 1983, as amended at 49 FR 322, Jan 3, 1984; 51 FR 34793, Sept. 30, 1986; 61 FR 63748, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1804</SECTNO> <SUBJECT>Matters not subject to administrative and judicial review under prospective payment.</SUBJECT> Neither administrative nor judicial review is available for controversies about the following matters: (a) The determination of the requirement, or the proportional amount, of any budget neutrality adjustment in the prospective payment rates. (b) The establishment of— (1) Diagnosis related groups (DRGs); (2) The methodology for the classification of inpatient discharges within the DRGs; or (3) Appropriate weighting factors that reflect the relative hospital resources used with respect to discharge within each DRG. <CITA>[49 FR 322, Jan. 1, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1805</SECTNO> <SUBJECT>Parties to intermediary determination.</SUBJECT> The parties to the intermediary's determination are the provider and any other entity found by the intermediary to be a related organization of the provider under § 413.17 of this chapter. <CITA>[48 FR 39835, Sept. 1, 1983, as amended at 51 FR 34793, Sept. 30, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1807</SECTNO> <SUBJECT>Effect of intermediary determination.</SUBJECT> The determination shall be final and binding on the party or parties to such determination unless: (a) An intermediary hearing is requested in accordance with § 405.1811 and an intermediary hearing decision rendered in accordance with § 405.1831; or (b) The intermediary determination is revised in accordance with § 405.1885; or (c) A Board hearing is requested in accordance with § 405.1835 and a hearing decision rendered pursuant thereto. </SECTION> <SECTION> <PRTPAGE P="124"/> <SECTNO>§ 405.1809</SECTNO> <SUBJECT>Intermediary hearing procedures.</SUBJECT> (a) <E T="03">Hearings.</E> Each intermediary must establish and maintain written procedures for intermediary hearings, in accordance with the regulations in this subpart, for resolving issues that may arise between the intermediary and a provider concerning the amount of reasonable cost reimbursement, or prospective payment due the provider (except as provided in § 405.1804) under the Medicare program. The procedures must provide for a hearing on the intermediary determination contained in the notice of program reimbursement (§ 405.1803), if the provider files a timely request for a hearing. (b) <E T="03">Amount in controversy.</E> In order for an intermediary to grant a hearing, the following dates and amounts in controversy apply: (1) For cost reporting periods ending prior to June 30, 1973, the amount of program reimbursement in controversy must be at least $1000. (2) For cost reporting periods ending on or after June 30, 1973, the amount of program reimbursement in controversy must be at least $1000 but less than $10,000. <CITA>[48 FR 39835, Sept. 1, 1983, as amended at 49 FR 323, Jan. 1, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1811</SECTNO> <SUBJECT>Right to intermediary hearing; time, place, form, and content of request for intermediary hearing.</SUBJECT> (a) A provider that has been furnished a notice of amount of program reimbursement may request an intermediary hearing if it is dissatisfied with the intermediary's determination contained in the notice and the amount in controversy requirement described in § 405.1809 is met. The request must be in writing and be filed with the intermediary within 180 calendar days after the date of the notice. (See § 405.1835(c)). No other individual, entity, or party has the right to an intermediary hearing. (b) The request must (1) identify the aspect(s) of the determination with which the provider is dissatisfied, and (2) explain why the provider believes the determination on these matters is incorrect, and (3) be submitted with any documentary evidence the provider considers necessary to support its position. (c) Following the timely filing of the request for hearing, the provider may identify in writing, prior to the onset of the hearing proceedings, additional aspects of the determination with which it is dissatisfied and furnish any documentary evidence in support thereof. If such additional aspects are submitted, the hearing officer may postpone the hearing to allow for his examination of such additional aspects. <CITA>[39 FR 34515, Sept. 26, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 48 FR 39835, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1813</SECTNO> <SUBJECT>Failure to timely request an intermediary hearing.</SUBJECT> If a provider requests an intermediary hearing on an intermediary's determination after the time limit prescribed in § 405.1811, the designated intermediary hearing officer or panel of hearing officers will dismiss the request and furnish the provider a written notice that explains the time limitation, except that for good cause shown, the time limit prescribed in § 405.1811 may be extended. However, an extension may not be granted if the extension request is filed more than 3 years after the date of the original notice of the intermediary determination. <CITA>[48 FR 39835, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1815</SECTNO> <SUBJECT>Parties to the intermediary hearing.</SUBJECT> The parties to the intermediary hearing shall be the parties to the intermediary determination and any other entity determined by the intermediary to be a related organization of such provider. Said parties shall be given reasonable notice of the time, date, and place of such hearing. Neither the intermediary nor the Centers for Medicare & Medicaid Services are parties (see § 405.1819). </SECTION> <SECTION> <SECTNO>§ 405.1817</SECTNO> <SUBJECT>Hearing officer or panel of hearing officers authorized to conduct intermediary hearing; disqualification of officers.</SUBJECT> The intermediary hearing provided for in § 405.1809 shall be conducted by a hearing officer or panel of hearing officers designated by the intermediary. <PRTPAGE P="125"/>Such hearing officer or officers shall be persons knowledgeable in the field of health care reimbursement. The hearing officer or officers shall not have had any direct responsibility for the program reimbursement determination with respect to which a request for hearing is filed; no hearing officer (or officers) shall conduct a hearing in a case in which he is prejudiced or partial with respect to any party, or where he has any interest in the matter pending for determination before him. Notice of any objection which a party may have with respect to a hearing officer shall be presented in writing to such officer by the objecting party at the party's earliest opportunity. The hearing officer shall consider the objection and shall, at his discretion, either proceed in the conduct of the hearing or withdraw. If the hearing officer does not withdraw, the objecting party may, after the hearing, present his objections to an executive official of the intermediary, who shall rule promptly on the objection. </SECTION> <SECTION> <SECTNO>§ 405.1819</SECTNO> <SUBJECT>Conduct of intermediary hearing.</SUBJECT> The hearing shall be open to all parties thereto (see § 405.1815) and to representatives of the intermediary and of the Centers for Medicare & Medicaid Services (see § 405.1815). The hearing officer(s) shall inquire fully into all of the matters at issue and shall receive into evidence the testimony and any documents which are relevant and material to such matters. If the hearing officer(s) believes that there is relevant and material evidence available which has not been presented at the hearing, he (they) may, at any time prior to the mailing of notice of the decision, reopen the hearing record for the receipt of such evidence. The order in which the evidence and the allegations shall be presented and the conduct of the hearing shall be at the discretion of the hearing officer(s). </SECTION> <SECTION> <SECTNO>§ 405.1821</SECTNO> <SUBJECT>Prehearing discovery and other proceedings prior to the intermediary hearing.</SUBJECT> (a) Prehearing discovery shall be permitted upon timely request of any party. To be timely, a request for discovery and inspection shall be made before the beginning of the hearing. A reasonable time for inspection and reproduction of documents shall be provided by order of the hearing officer(s). (b) If, in the discretion of the hearing officer(s), the purpose of defining the issues more clearly would be served, the hearing officer(s) may schedule a prehearing conference. For this purpose, a single member of a panel of hearing officers, when such is the case, may be appointed to act for the panel with respect to prehearing activities. </SECTION> <SECTION> <SECTNO>§ 405.1823</SECTNO> <SUBJECT>Evidence at intermediary hearing.</SUBJECT> Evidence may be received at the intermediary hearing even though inadmissible under the rules of evidence applicable to court procedure. The hearing officer(s) shall give the parties opportunity for submission and consideration of facts and arguments, and during the course of the hearing, should in ruling upon admissibility of evidence, exclude irrelevant, immaterial, or unduly repetitious evidence. The hearing officer(s) shall render a final ruling on the admissibility of evidence. </SECTION> <SECTION> <SECTNO>§ 405.1825</SECTNO> <SUBJECT>Witnesses at intermediary hearing.</SUBJECT> The hearing officer(s) may examine the witnesses and shall allow the parties and their representatives to do so. Parties to the proceedings may also cross-examine witnesses. </SECTION> <SECTION> <SECTNO>§ 405.1827</SECTNO> <SUBJECT>Record of intermediary hearing.</SUBJECT> A complete recordation of the proceedings at the intermediary hearing shall be made and transcribed in all cases. It shall be made available to any party upon request. The record will not be closed until a decision (see § 405.1831) has been issued. </SECTION> <SECTION> <SECTNO>§ 405.1829</SECTNO> <SUBJECT>Authority of hearing officer(s) at intermediary hearing.</SUBJECT> (a) The hearing officer(s) in exercising his authority must comply with all the provisions of title XVIII of the Act and regulations issued thereunder, as well as with CMS Rulings issued under the authority of the Administrator of the Centers for Medicare & Medicaid Services (see 42 CFR 401.108), <PRTPAGE P="126"/>and with the general instructions issued by the Centers for Medicare & Medicaid Services in accordance with the Secretary's agreement with the intermediary. (b) The determination of a fiscal intermediary that no payment may be made under title XVIII of the Act for any expense incurred for items and services furnished to an individual because such items and services are excluded from coverage pursuant to section 1862 of the Act, 42 U.S.C. 1395y (see subpart C of this part), shall not be reviewed by the hearing officer(s). Such determination shall be reviewed only in accordance with the applicable provisions of subparts G and H of this part. </SECTION> <SECTION> <SECTNO>§ 405.1831</SECTNO> <SUBJECT>Intermediary hearing decision and notice.</SUBJECT> The hearing officer(s) shall, on a timely basis, render a decision in writing based on the evidence in the record; such decision shall constitute the final determination of the intermediary. In such decision, he will cite applicable law, regulations, CMS Rulings, and general instructions of the Centers for Medicare & Medicaid Services, as well as findings on all the matters in issue at the hearing. A copy of the decision will be mailed to all parties to the hearing at their last known addresses. </SECTION> <SECTION> <SECTNO>§ 405.1833</SECTNO> <SUBJECT>Effect of intermediary hearing decision.</SUBJECT> The intermediary hearing decision provided for in § 405.1831 shall be final and binding upon all parties to the hearing unless such intermediary determination is revised in accordance with § 405.1885. </SECTION> <SECTION> <SECTNO>§ 405.1835</SECTNO> <SUBJECT>Right to Board hearing.</SUBJECT> (a) <E T="03">Criteria.</E> The provider (but no other individual, entity, or party) has a right to a hearing before the Board about any matter designated in § 405.1801(a)(1), if: (1) An intermediary determination has been made with respect to the provider; and (2) The provider has filed a written request for a hearing before the Board under the provisions described in § 405.1841(a)(1); and (3) The amount in controversy (as determined in § 405.1839(a)) is $10,000 or more. (b) <E T="03">Prospective payment exceptions.</E> Except with respect to matters for which administrative or judicial review is not permitted as specified in § 405.1804, hospitals that are paid under the prospective payment system are entitled to hearings before the Board under this section if they otherwise meet the criteria described in paragraph (a) of this section. (c) <E T="03">Right to hearing based on late intermediary determination about reasonable cost.</E> Notwithstanding the provisions of paragraph (a)(1) of this section, the provider also has a right to a hearing before the Board if an intermediary's determination concerning the amount of reasonable cost reimbursement due a provider is not rendered within 12 months after receipt by the intermediary of a provider's perfected cost report or amended cost report (as permitted or as required to furnish sufficient data for purposes of making such determination—see § 405.1803(a)) provided such delay was not occasioned by the fault of the provider. <CITA>[48 FR 39835, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1837</SECTNO> <SUBJECT>Group appeal.</SUBJECT> (a) <E T="03">Criteria for group appeals.</E> Subject to paragraph (b) of this section, a group of providers may bring an appeal before the Board but only if— (1) Each provider in the group is identified as one which would, upon the filing of a request for a hearing before the Board, but without regard to the $10,000 amount in controversy requirement, be entitled to a hearing under § 405.1835; (2) The matters at issue involve a common question of fact or of interpretation of law, regulations or CMS Rulings; and (3) The amount in controversy is, in the aggregate, $50,000 or more. (b) <E T="03">Providers under common ownership or control.</E> Effective April 20, 1983, any appeal filed by providers that are under common ownership or control must be brought by the providers as a group appeal in accordance with the provisions of paragraph (a) of this section with respect to any matters involving an issue common to the providers and for which the amount in controversy is, in the <PRTPAGE P="127"/>aggregate, $50,000 or more (see § 405.1841(a)(2)). A single provider involved in a group appeal that also wishes to appeal issues that are not common to the other providers in the group must file a separate hearing request (see § 405.1841(a)(1)) and must separately meet the requirements in § 405.1811 or § 405.1835, as applicable. <CITA>[48 FR 39836, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1839</SECTNO> <SUBJECT>Amount in controversy.</SUBJECT> (a) <E T="03">Single appeals.</E> The $1,000 amount in controversy required under § 405.1809 for an intermediary hearing and the $10,000 amount in controversy required under § 405.1835 for a Board hearing is, as applicable to the matters for which the provider has requested a hearing, the combined total of the amounts computed as follows: (1) <E T="03">Providers under prospective payment.</E> For providers that are paid under the prospective payment system, by deducting— (i) The total of the payment due the provider on other than a reasonable cost basis under the prospective payment system from the total amount that would be payable after a recomputation that takes into account any exclusion, exception, adjustment, or additional payment denied the provider under part 412 of this chapter, as applicable; (ii) The total of the payment due the provider on a reasonable cost basis under the prospective payment system from the total reimbursable costs claimed by the provider; and (iii) The adjusted total reimbursable costs due the provider on a reasonable cost basis under other than the prospective payment system from the total reimbursable costs claimed by the provider. (2) <E T="03">Providers not under prospective payment.</E> For providers that are not paid under the prospective payment system, by deducting the adjusted total reimbursable program costs due the provider on a reasonable cost basis from the total reimbursable costs claimed by the provider. (b) <E T="03">Group appeals.</E> The $50,000 amount in controversy required under § 405.1837 for group appeals to the Board is, as applicable to the common matters for which the group of providers have requested a hearing, the combined total of the amounts computed as follows: (1) <E T="03">Providers under prospective payment.</E> For providers that are paid under the prospective payment system, by deducting— (i) The total of the payment due the providers (in the aggregate) on other than a reasonable cost basis under the prospective payment system from the total amount that would be payable to the providers (in the aggregate) after a recomputation that takes into account any applicable exception, exclusion, adjustment, or additional payment denied the providers under part 412 of this chapter. (ii) The total of the payment due the providers (in the aggregate) on a reasonable cost basis under the prospective payment system from the total reimbursable costs claimed in the aggregate by the providers; and (iii) The adjusted total reimbursable costs due the providers (in the aggregate) on a reasonable cost basis under other than the prospective payment system from the total reimbursable costs claimed in the aggregate by the providers. (2) <E T="03">Providers not under prospective payment.</E> For providers that are not paid under the prospective payment system, by deducting the adjusted total reimbursable program costs due the providers (in the aggregate) on a reasonable cost basis from the total reimbursable costs claimed in the aggregate by the providers. <CITA>[49 FR 323, Jan. 3, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1841</SECTNO> <SUBJECT>Time, place, form, and content of request for Board hearing.</SUBJECT> (a) <E T="03">General requirements.</E> (1) The request for a Board hearing must be filed in writing with the Board within 180 days of the date the notice of the intermediary's determination was mailed to the provider or, where notice of the determination was not timely rendered, within 180 days after the expiration of the period specified in § 405.1835(c). Such request for Board hearing must identify the aspects of the determination with which the provider is dissatisfied, explain why the provider believes the determination is incorrect in such particulars, and be <PRTPAGE P="128"/>accompanied by any documenting evidence the provider considers necessary to support its position. Prior to the commencement of the hearing proceedings, the provider may identify in writing additional aspects of the intermediary's determination with which it is dissatisfied and furnish any documentary evidence in support thereof. (2) Effective April 20, 1983, any request for a Board hearing by providers that are under common ownership or control (see § 413.17 of this chapter) must be brought by the providers as a group appeal (see § 405.1837(b)) with respect to any matters at issue involving a question of fact or of interpretation of law, regulations, or CMS Rulings common to the providers and for which the amount in controversy is $50,000 or more in the aggregate. If a group appeal is filed, the provider seeking the appeal must be separately identified in the request for hearing, which must be prepared and filed consistently with the requirements of paragraph (a)(1) of this section. (b) <E T="03">Extension of time limit for good cause.</E> A request for a Board hearing filed after the time limit prescribed in paragraph (a) of this section shall be dismissed by the Board, except that for good cause shown, the time limit may be extended. However, no such extension shall be granted by the Board if such request is filed more than 3 years after the date the notice of the intermediary's determination is mailed to the provider. <CITA>[48 FR 39836, Sept. 1, 1983, as amended at 51 FR 34793, Sept. 30, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1842</SECTNO> <SUBJECT>Expediting Board proceedings.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section implements section 1878(f)(1) of the Social Security Act, as amended by section 955 of Public Law 96-499 (42 U.S.C. 1395oo(f)(1)). The amendment provides an opportunity for providers to obtain expedited administrative review when the Board determines that it does not have the authority to decide a question of law, regulation, or CMS Ruling relevant to the case (see § 405.1867). (b) <E T="03">Basic rule.</E> (1) Except as provided in paragraph (b)(4) of this section, a provider may submit a written request to the Board, with supporting documentation, to determine whether the Board has the authority to decide a question of law, regulations, or CMS Rulings relevant to and controlling upon an issue to be reviewed by the Board. The Board is required to make an expedited review determination in writing, either denying or granting the request, within 30 days after the date of receipt of the request, as defined in paragraph (1) of this section. The Board may also issue a determination on its own motion that it lacks authority to decide a question of law, regulations or CMS Rulings. (2) The Board must determine that the provider (including each provider in a group appeal) is entitled to a hearing under section 1878(a) of the Act before making the determination described in paragraph (b)(1) of this section. Thus, the provider must file (or have already filed) a written request for a Board hearing that meets the requirements in § 405.1841. The information and documentation required with respect to the filing of a request for a hearing is used by the Board to determine jurisdiction under section 1878(a) of the Act. (3) A provider's request for an expedited review determination cannot be considered to be filed with the Board, nor can the 30-day time period during which the Board is required to make an expedited review determination begin, until such time as the Board accepts jurisdiction of the case. (4) Proceedings conducted by the Board under an authority other than section 1878(a) of the Act and §§ 405.1835 through 405.1873 of this subpart are not hearings for purposes of this section and are not subject to the expedited Board proceedings set forth in this section. For example, proceedings concerning reimbursement for capital expenditures conducted under section 1122(f) of the Act and § 405.1890 of this subpart are not hearings for purposes of this section. (Section 1122(f) specifically bars any administrative or judicial review.) (c) <E T="03">“Own motion” review.</E> If the Board is considering issuing a determination on its own motion that it lacks the authority to decide a question of law, regulations, or CMS Rulings, it will notify <PRTPAGE P="129"/>the provider and intermediary of its proposed determination and allow them a reasonable period of time to file evidence or arguments either to support or oppose the proposed determination. (d) <E T="03">Provider requests.</E> (1) If a provider seeks an expedited Board proceeding, it must—(i) File its appropriately documented request in writing with the Board; and (ii) Send a copy of the request and documentation simultaneously to the intermediary. (2) The request to the Board for an expedited review determination must—(i) Identify the issues and the controlling law, regulation or CMS Ruling for which the Board is to make a determination; (ii) Allege and demonstrate that there are no factual issues in dispute; (iii) Contain an explanation of why the provider believes the Board cannot decide the legal issue or issues that are in dispute; and (iv) Include all other information or details that support the request. (3) If the information in the provider request is insufficient for the Board to determine whether it has the authority to decide an issue, the Board will request more information from the provider. Such a request will affect the 30-day time limit as provided in paragraph (i) of this section. If the provider does not send more information or sends inadequate information, the Board will determine that it has the authority to decide the issue and will begin the regular procedure for a hearing. (e) <E T="03">Intermediary participation.</E> (1) After receiving a copy of the provider's request for an expedited review determination, the intermediary may send comments to the Board on the provider's request and supporting documentation. The intermediary will send a copy of its comments to the provider simultaneously. (2) If the intermediary's comments raise questions about the provider's request for expedited review, the Board may request additional information from the provider as provided in paragraph (d)(3) of this section. (f) <E T="03">Criteria for a Board determination.</E> The Board will review all documentation forwarded by the provider and the intermediary relevant to the request for a Board determination concerning the Board's authority to decide an issue. In its review, the Board will consider— (1) The controlling facts in the case; (2) The applicability of law, regulations, or CMS rulings; (3) Whether there are factual issues for the Board to resolve; and (4) Whether there are legal issues within the authority of the Board to decide. (g) <E T="03">Board determination.</E> (1) Within 30 days after the date of receipt (as defined in paragraph (i) of this section) of a provider's request and all necessary documentation the Board will issue a determination concerning its authority to decide the question of law, regulations, or CMS Rulings relevant to the issues identified by the provider in its request. (2) If there are factual or legal issues in dispute on an issue within the authority of the Board to decide, the Board will not make an expedited review determination on the particular issue but will proceed with a hearing. The Board has the authority to decide when two or more issues are sufficiently related to preclude separation for purposes of an expedited review determination on one or more of them and a hearing on the other or others. (3) The Board will promptly notify the provider in writing of its determination and will send a copy of the determination to the intermediary. (4) The Board's determination concerning its authority or its lack of a determination is not subject to the Secretary's review under § 405.1875. (h) <E T="03">Effect of a Board decision.</E> (1) The Board's determination, issued on its own motion or at the request of a provider, that it lacks authority to decide a question of law, regulations or CMS Rulings is a final decision permitting a provider to seek judicial review with respect to the matter or matters in controversy contained in the determination, within 60 days of the date of the Board's determination. (2) After the Board has determined that it does not have the authority to decide an issue, the provider will not be granted a hearing on the same issue.<PRTPAGE P="130"/> (3) If the Board fails to issue an expedited review determination within 30 days of the date of receipt of a complete request (as determined under paragraph (i) of this section), the provider may, within 60 days from the end of that period, seek judicial review of the matters for which it requested the Board's determination. (4) If the Board fails to make an expedited review determination within the required 30 days, it will begin regular hearing procedures as though it has the authority to decide the issue. (5) If the provider seeks judicial review because the Board fails to make a determination as provided in paragraph (g)(1) of this section, it should notify the Board at the time it files for judicial review. The Board will not hold a hearing, even if one has been scheduled, on the matter or matters for which the provider is seeking judicial review. (6) The Board's determination does not affect the right of the provider to a Board hearing for issues for which the provider did not request expedited review, or for which the Board determines it does have the authority to decide, or for which the Board did not make a determination and the provider did not request judicial review. (i) <E T="03">Date of receipt.</E> For purposes of this section, the date of receipt of the provider's request is the later of— (1) The actual date of receipt by the Board of the information required under paragraph (d)(2) of this section, or of additional information requested by the Board under paragraph (d)(3) of this section, whichever the Board receives later; or (2) The date indicated on the Board's written notification to the provider that the Board has accepted jurisdiction of the case. (j) <E T="03">Examples.</E> Below are examples showing when a provider may expect to receive an expedited review determination, in relation to various circumstances affecting its request for the determination. (1) The provider requests a hearing and expedited review at or about the same time. If all information is complete, the Board could send notification that it has accepted jurisdiction of the case and the expedited review determination simultaneously. (2) The provider requests both a hearing and an expedited review determination, and supplies complete information. The Board accepts jurisdiction but, for example, because of the complexity of the case, the Board makes its expedited review determination within 30 days after it has accepted jurisdiction. (3) The provider requests both a hearing and an expedited review determination, but the request for a hearing does not contain enough information for the Board to determine jurisdiction. The Board would request more information to determine jurisdiction and would make its expedited review determination within 30 days after it has accepted jurisdiction. (4) The provider requests both a hearing and an expedited review determination, but does not send enough information for the Board to make an expedited review determination. Assuming the Board accepts jurisdiction, the Board would request more information about the request for expedited review and make its determination within 30 days after it receives the additional information. (5) The provider requests an expedited review determination after the Board has accepted jurisdiction. The Board would make its determination within 30 days after receipt of an appropriately documented request for an expedited review determination. <CITA>[47 FR 31690, July 22, 1982, as amended at 48 FR 22925, May 23, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1843</SECTNO> <SUBJECT>Parties to Board hearing.</SUBJECT> (a) The parties to the Board hearing shall be the provider, the intermediary (including the Centers for Medicare & Medicaid Services when acting directly as intermediary) that rendered the determination being appealed (see § 405.1833), and any other entity found by the intermediary to be a related organization of such provider. (b) Except as provided in paragraph (a), neither the Secretary nor the Centers for Medicare & Medicaid Services may be made a party to the hearing. <PRTPAGE P="131"/>However, the Board may call as a witness any employee or officer of the Department of Health and Human Services having personal knowledge of the facts and the issues in controversy in a hearing pending before the Board and may call as a consultant to the Board in connection with any such hearing any individual designated by the Secretary for such purpose. (See § 405.1863.) </SECTION> <SECTION> <SECTNO>§ 405.1845</SECTNO> <SUBJECT>Composition of Board.</SUBJECT> (a) The Board will consist of five members appointed by the Secretary. All shall be knowledgeable in the field of cost reimbursement. At least one shall be a certified public accountant. Two Board members shall be representative of providers of services. (b) The term of office for Board members shall be 3 years, except that initial appointments may be for such shorter terms as the Secretary may designate to permit staggered terms of office. No member shall serve more than two consecutive 3-year terms of office. The Secretary shall have the authority to terminate a Board member's term of office for good cause. (c) One member of the Board shall be designated by the Secretary as Chairman thereof and shall coordinate and direct the administrative activities of the Board, and shall have such other authority which may be granted to him by the Board. (d) A quorum shall be required for the rendering of Board decisions. Three members, at least one of whom is representative of providers of services, shall be required to constitute a quorum. The Chairman of the Board, with approval of the provider, may designate one or more Board members to conduct any hearing and to prepare a recommended decision (where less than a quorum conducts the hearing). (See § 405.1869.) <CITA>[39 FR 34515, Sept. 26, 1974, as amended at 41 FR 52051, Nov. 26, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1847</SECTNO> <SUBJECT>Disqualification of Board members.</SUBJECT> No Board member shall join in the conduct of a hearing in a case in which he is prejudiced or partial with respect to any party or in which he has any interest in the matter pending for decision before him. Notice of any objection which a party may have with respect to a Board member shall be presented in writing to such Board member by the objecting party at its earliest opportunity. The Board member shall consider the objection and shall, in his discretion, either proceed to join in the conduct of the hearing or withdraw. If he does not withdraw, the objecting party may petition the Board, presenting its objection and reasons therefor, and be entitled to a ruling thereon before the hearing can proceed. </SECTION> <SECTION> <SECTNO>§ 405.1849</SECTNO> <SUBJECT>Establishment of time and place of hearing by the Board.</SUBJECT> The Board shall fix the time and place for the hearing and shall mail written notice thereof to the parties at their last known addresses, not less than 30 days prior to the scheduled time. Either on its own motion or for good cause shown by a party, the Board may, as appropriate, reschedule, adjourn, postpone, or reopen the hearing, provided that reasonable written notice is given to the parties. </SECTION> <SECTION> <SECTNO>§ 405.1851</SECTNO> <SUBJECT>Conduct of Board hearing.</SUBJECT> The Board hearing shall be open to the parties, to representatives of the Centers for Medicare & Medicaid Services, and to such other persons as the Board deems necessary and proper. The Board shall inquire fully into all of the matters at issue and shall receive into evidence the testimony of witnesses and any documents which are relevant and material to such matters. If the Board believes that there is relevant and material evidence available which has not been presented at the hearing, it may at any time prior to the mailing of notice of the decision, reconvene the hearing for the receipt of such evidence. The order in which the evidence and the allegations shall be presented and the conduct of the hearing shall be at the discretion of the Board. </SECTION> <SECTION> <SECTNO>§ 405.1853</SECTNO> <SUBJECT>Prehearing discovery and other proceedings prior to the Board hearing.</SUBJECT> (a) Upon notification that a request for Board hearing has been filed, the intermediary shall forthwith review <PRTPAGE P="132"/>the materials submitted by the provider in accordance with § 405.1841. Simultaneously, the intermediary shall review the information which formed the basis for its determination of the amount of program reimbursement. Based on the findings of such review, the intermediary shall expeditiously attempt to join with the provider in written stipulations setting forth the issues that said review has resolved and designating the issues that remain for Board resolution. Having obtained such stipulations and being satisfied that no further agreements can be negotiated, the intermediary shall ensure that all available documentary evidence in support of each party's position is part of the record. Such evidence will ordinarily include a position paper from the provider, a position paper from the intermediary, and any documents which support the issues addressed in the stipulations. These materials, in addition to all relevant documents which formed the basis for its determination of the amount of program reimbursement, shall be forwarded to the Board within 60 days after the date of the provider's request for Board review. (b) Prehearing discovery shall be permitted upon timely request of a party. To be timely, a request for discovery and inspection shall be made before the beginning of the hearing. A reasonable time for inspection and reproduction of documents shall be provided by order of the Board. The Board's order on all discovery matters shall be final. (c) If, in the discretion of the Board, the purpose of defining the issues more clearly would be served, the Board may schedule a prehearing conference. For this purpose, a single member of the Board may be appointed to act for the Board with respect to prehearing activities. </SECTION> <SECTION> <SECTNO>§ 405.1855</SECTNO> <SUBJECT>Evidence at Board hearing.</SUBJECT> Evidence may be received at the Board hearing even though inadmissible under the rules of evidence applicable to court procedure. The Board shall give the parties opportunity for submission and consideration of facts and arguments and during the course of the hearing should, in ruling upon admissibility of evidence, exclude irrelevant, immaterial, or unduly repetitious evidence. The Board shall render a final ruling on the admissibility of evidence. </SECTION> <SECTION> <SECTNO>§ 405.1857</SECTNO> <SUBJECT>Subpoenas.</SUBJECT> When reasonably necessary for the full presentation of a case, the Board may, either upon its own motion or upon the request of a party, issue subpoenas for the attendance and testimony of witnesses and for the production of books, records, correspondence, papers, or other documents which are relevant and material to any matter in issue at the hearing. Parties who desire the issuance of a subpoena shall, not less than 10 days prior to the time fixed for the hearing, file with the Board a written request therefor, designating the witnesses or documents to be produced, and describing the address, or location thereof with sufficient particularity to permit such witnesses or documents to be found. The request for a subpoena shall state the pertinent facts which the party expects to establish by such witnesses or documents and whether such facts could be established by other evidence without the use of a subpoena. Subpoenas, as provided for above, shall be issued in the name of the Board, and the Centers for Medicare & Medicaid Services shall assume the cost of the issuance and the fees and mileage of any witness so subpoenaed, as provided in section 205(d) of the Act, 42 U.S.C. 405(d). </SECTION> <SECTION> <SECTNO>§ 405.1859</SECTNO> <SUBJECT>Witnesses.</SUBJECT> Witnesses at the hearing shall testify under oath or affirmation, unless excused by the Board for cause. The Board may examine the witnesses and shall allow the parties or their representatives to do so. Parties to the proceeding may also cross-examine witnesses. </SECTION> <SECTION> <SECTNO>§ 405.1861</SECTNO> <SUBJECT>Oral argument and written allegations.</SUBJECT> The parties, upon their request, shall be allowed a reasonable time for the presentation of oral argument or for the filing of briefs or other written statements of allegations as to facts or law. Copies of any brief or other written statement shall be filed in sufficient number that they may be made <PRTPAGE P="133"/>available to all parties and to the Centers for Medicare & Medicaid Services. </SECTION> <SECTION> <SECTNO>§ 405.1863</SECTNO> <SUBJECT>Administrative policy at issue.</SUBJECT> Where a party to the Board hearing puts into issue an administrative policy which is interpretative of the law or regulations, the Board will promptly notify to the Centers for Medicare & Medicaid Services. </SECTION> <SECTION> <SECTNO>§ 405.1865</SECTNO> <SUBJECT>Record of Board hearing.</SUBJECT> A complete record of the proceedings at the hearing shall be made and transcribed in all cases. It shall be made available to the parties upon request. The record will not be closed until a decision has been issued. </SECTION> <SECTION> <SECTNO>§ 405.1867</SECTNO> <SUBJECT>Sources of Board's authority.</SUBJECT> In exercising its authority to conduct the hearings described herein, the Board must comply with all the provisions of title XVIII of the Act and regulations issued thereunder, as well as CMS Rulings issued under the authority of the Administrator of the Centers for Medicare & Medicaid Services (see § 401.108 of this subchapter). The Board shall afford great weight to interpretive rules, general statements of policy, and rules of agency organization, procedure, or practice established by CMS. <CITA>[48 FR 22925, May 23, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1869</SECTNO> <SUBJECT>Scope of Board's decision-making authority.</SUBJECT> The Board shall have the power to affirm, modify, or reverse a determination of an intermediary with respect to a cost report and to make any other modifications on matters covered by such cost report (including modifications adverse to the provider or other parties) even though such matters were not considered in the intermediary's determination. The opinion of the majority of those Board members deciding the case will constitute the Board's decision. </SECTION> <SECTION> <SECTNO>§ 405.1871</SECTNO> <SUBJECT>Board hearing decision and notice.</SUBJECT> (a) The Board shall, as soon as practicable after the conclusion of its hearing, render a written decision based upon the record made at such hearing, the record established in support of the determination of the intermediary (see § 405.1803), and such other evidence as may be obtained or received by the Board. Such Board decision shall be supported by substantial evidence when the record of the Board hearing is viewed as a whole and shall cite applicable law, regulations, and CMS Rulings. A copy of the decision shall be mailed to all parties to the hearing at their last known addresses and, at the same time, to the Administrator and CMS. (b) The decision of the Board provided for in paragraph (a) of this section shall be final and binding upon all parties to the hearing before the Board unless it is reviewed by the Secretary in accordance with § 405.1875, or revised in accordance with § 405.1885. <CITA>[39 FR 34515, Sept. 26, 1974, as amended at 41 FR 52051, Nov. 26, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 48 FR 45773, Oct. 7, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1873</SECTNO> <SUBJECT>Board's jurisdiction.</SUBJECT> (a) <E T="03">Board decides jurisdiction.</E> The Board decides questions relating to its jurisdiction to grant a hearing, including (1) the timeliness of an intermediary determination (see § 405.1835(c)), and (2) the right of a provider to a hearing before the Board when the amount in controversy is in issue (see §§ 405.1835(a)(3) and 405.1837). (b) <E T="03">Matters not subject to board review.</E> (1) The determination of a fiscal intermediary that no payment may be made under title XVIII of the Act for any expenses incurred for items and services furnished to an individual because such items and services are excluded from coverage pursuant to section 1862 of the Act, 42 U.S.C. 1395y (see subpart C of this part), may not be reviewed by the Board. (Such determination shall be reviewed only in accordance with the applicable provisions of subpart G or H of this part.) (2) The Board may not review certain matters affecting payments to hospitals under the prospective payment system as provided in § 405.1804. <CITA>[48 FR 39836, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <PRTPAGE P="134"/> <SECTNO>§ 405.1875</SECTNO> <SUBJECT>Administrator's review.</SUBJECT> (a) <E T="03">General rule.</E> (1) Except for a Board determination under § 405.1842 that it lacks the authority to decide an issue, the Administrator, at his or her discretion, may review any final decision of the Board, including a decision under § 405.1873 about the Board's jurisdiction to grant a hearing. The Administrator may exercise this discretion on his or her own motion, in response to a request from a party to a Board hearing or in response to a request from CMS. (2) The Office of the Attorney Advisory will examine the Board's decisions, the requests made by a party or CMS and any submission made in accordance with the provisions of this section in order to assist the Administrator in deciding whether to exercise this review authority. (b) <E T="03">Request for review.</E> A party or CMS requesting the Administrator to review a Board decision must file a written request with the Administrator within 15 days of the receipt of the Board decision. (c) <E T="03">Criteria for deciding whether to review.</E> In deciding whether to review a Board decision, either on his or her own motion or in response to a request from a party to the hearing or CMS, the Administrator will normally consider whether it appears that: (1) The Board made an erroneous interpretation of law, regulation or CMS Ruling; (2) The Board's decision is not supported by substantial evidence; or (3) The case presents a significant policy issue having a basis in law and regulations, and review is likely to lead to the issuance of a CMS Ruling or other directive needed to clarify a statutory or regulatory provision; (4) The Board has incorrectly assumed or denied jurisdiction or extended its authority to a degree not provided for by statute, regulation or CMS Ruling; and (5) The decision of the Board requires clarification, amplification, or an alternative legal basis for the decision. (d) <E T="03">Decision to review.</E> (1) Whether or not a party or CMS has requested review, the Administrator will promptly notify the parties and CMS whether he or she has decided to review a decision of the Board and, if so, will indicate the particular issues he or she will consider. (2) The Administrator may decline to review a case or any issue in a case even if a party has filed a written request for review under paragraph (b) of this section. (e) <E T="03">Written submissions.</E> (1) Within 15 days of receipt of a notice that the Administrator has decided to review a Board decision, a party or CMS may submit to the Administrator, in writing: (i) Proposed findings and conclusions; (ii) Supporting views or exceptions to the Board decision; (iii) Supporting reasons for the exceptions and proposed findings; and (iv) A rebuttal of the other party's request for review or other submissions already filed with the Administrator. (2) These submissions shall be limited to issues the Administrator has decided to review and confined to the record of the Board hearing. (3) A party or CMS, within 15 days of receipt of a notice that the Administrator has decided to review a decision, may also request that the decision be remanded and state reasons for doing so. Reasons for a request to remand may include new, substantial evidence concerning— (i) Issues presented to the Board; and (ii) New issues that have arisen since the case was presented to the Board. (4) A copy of any written submission made under this paragraph shall be sent simultaneously to each other party to the Board hearing and to CMS, if CMS has previously— (i) Requested that the Administrator review a Board decision or filed a written submission in response to a party's request for review. (ii) Responded to a party's request for review; or (iii) Submitted material after the Administrator has announced that he or she will review a Board decision. (f) <E T="03">Ex parte communications prohibited.</E> All communications from any of the parties or CMS about a Board decision being reviewed by the Administrator must be in writing and must contain a certification that copies have been served on the parties and CMS, as appropriate. The Administrator will not <PRTPAGE P="135"/>consider any communication that does not meet these requirements or is not submitted within the required time limits. (g) <E T="03">Administrator's decision.</E> (1) If the Administrator has notified the parties and CMS that he or she has decided to review a Board decision, the Administrator will affirm, reverse, modify or remand the case. (2) The Administrator will make this decision within 60 days after the provider received notification of the Board decision and will promptly mail a copy of the decision to each party and to CMS. (3) Any decision other than to remand will be confined to— (i) The record of the Board, as forwarded by the Board; (ii) Any materials submitted under paragraphs (b) or (e) of this section; and (iii) Generally known facts that are not subject to reasonable dispute. (4) The Administrator may rely on prior decisions of the Board, the Administrator and the courts, and other applicable law, whether or not cited by the parties and CMS. (h) <E T="03">Remand.</E> (1) A remand to the Board by the Administrator vacates the Board's decision. (2) The Administrator may direct the Board to take further action with respect to the development of additional facts or new issues, or to consider the applicability of laws or regulations other than those considered by the Board. The following are not acceptable bases for remand— (i) Presentation of evidence existing at the time of the Board hearing that was known or reasonably could have been known; (ii) Introduction of a favorable court case that was either not available in print at the time of the Board hearing or was decided after the Board hearing; (iii) Change of a party's representation before the Board; (iv) Presentation of an alternative legal basis concerning an issue in dispute; or (v) Attempted retraction of a waiver of a right made before or at the Board hearing. (3) After remand, the Board will take the action requested in the remand action and issue a new decision. (4) The new decision will be final unless the Administrator reverses, affirms, modifies, or again remands the decision in accordance with the provisions of the section. <CITA>[48 FR 45773, Oct. 7, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1877</SECTNO> <SUBJECT>Judicial review.</SUBJECT> (a) <E T="03">General rule.</E> Section 1878(f) of the Act permits a provider to obtain judicial review of a final decision of the Board, or of a reversal, affirmation, or modification by the Administrator of a Board decision, by filing a civil action pursuant to the Federal Rules of Civil Procedure within 60 days of the date on which the provider received notice of— (1) A final decision by the Board; or (2) Any reversal, affirmance, or modification by the Administrator. <FP>The Board's decision is not final if the Administrator reverses, affirms or modifies the decision within 60 days of the date on which the provider received notice of the decision.</FP> (b) <E T="03">Administrator declines to review a Board decision.</E> If the Administrator declines to review a Board decision, the provider must file its appeal within 60 days of receipt of the decision of the Board. (c) <E T="03">Administrator does not act after reviewing a Board decision.</E> If the Administrator notifies the parties that he or she has decided to review a Board decision and then does not make a decision within the 60 days allotted for his or her review, this subsequent inaction constitutes an affirmance allowing a provider an additional 60 days in which to file for judicial review, beginning with the date the Administrator's time expires for taking action under § 405.1875(g)(2). (d) <E T="03">Matters not subject to judicial review.</E> Certain matters affecting payments to hospital under the prospective payment system are not subject to judicial review, as provided in section 1886(d)(7) of the Act and § 405.1804. (e) <E T="03">Group appeals.</E> Any action under this section by providers that are under common ownership or control (see § 413.17 of this chapter) must be brought by the providers as a group <PRTPAGE P="136"/>with respect to any matter involving an issue common to the providers. (f) <E T="03">Venue for appeals.</E> An action for judicial review must be brought in the District Court of the United States for the judicial district in which the provider is located (or, effective April 20, 1983, in an action brought jointly by several providers, the judicial district in which the greatest number of such providers are located) or in the District Court for the District of Columbia. Effective April 20, 1983, any action for judicial review by providers under common ownership or control (§ 413.17 of this chapter), must be brought by such providers as a group with respect to any matter involving an issue common to the providers. (g) <E T="03">Service of process.</E> Process must be served as described under 45 CFR part 4. <CITA>[48 FR 39836, Sept. 1, 1983, as amended at 48 FR 45774, Oct. 7, 1983; 51 FR 34793, Sept. 30, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1881</SECTNO> <SUBJECT>Appointment of representative.</SUBJECT> A provider or other party may be represented by legal counsel or any other person it appoints to act as its representative at the proceedings, conducted in accordance with §§ 405.1819 and 405.1851. </SECTION> <SECTION> <SECTNO>§ 405.1883</SECTNO> <SUBJECT>Authority of representative.</SUBJECT> A representative appointed by a provider or other party may accept or give on behalf of the provider or other party any request or notice relative to any proceeding before a hearing officer or the Board. A representative shall be entitled to present evidence and allegations as to facts and law in any proceeding affecting the party he represents and to obtain information with respect to a request for an intermediary hearing or a Board hearing made in accordance with §§ 405.1811, 405.1835, or 405.1837 to the same extent as the party he represents. Notice to a provider or other party of any action, determination, or decision, or a request for the production of evidence by a hearing officer or the Board sent to the representative of the provider or other party shall have the same force and effect as if it had been sent to the provider or other party. </SECTION> <SECTION> <SECTNO>§ 405.1885</SECTNO> <SUBJECT>Reopening a determination or decision.</SUBJECT> (a) A determination of an intermediary, a decision by a hearing officer or panel of hearing officers, a decision by the Board, or a decision of the Secretary may be reopened with respect to findings on matters at issue in such determination or decision, by such intermediary officer or panel of hearing officers, Board, or Secretary, as the case may be, either on motion of such intermediary officer or panel of hearing officers, Board, or Secretary, or on the motion of the provider affected by such determination or decision to revise any matter in issue at any such proceedings. Any such request to reopen must be made within 3 years of the date of the notice of the intermediary or Board hearing decision, or where there has been no such decision, any such request to reopen must be made within 3 years of the date of notice of the intermediary determination. No such determination or decision may be reopened after such 3-year period except as provided in paragraphs (d) and (e) of this section. (b)(1) An intermediary determination or an intermediary hearing decision must be reopened and revised by the intermediary if, within the 3-year period specified in paragraph (a) of this section, CMS— (i) Provides notice to the intermediary that the intermediary determination or the intermediary hearing decision is inconsistent with the applicable law, regulations, CMS ruling, or CMS general instructions in effect, and as CMS understood those legal provisions, at the time the determination or decision was rendered by the intermediary; and (ii) Explicitly directs the intermediary to reopen and revise the intermediary determination or the intermediary hearing decision. (2) A change of legal interpretation or policy by CMS in a regulation, CMS ruling, or CMS general instruction, whether made in response to judicial precedent or otherwise, is not a basis for reopening an intermediary determination or an intermediary hearing decision under this section. (3) Notwithstanding paragraph (b)(1)(i) of this section, CMS may direct <PRTPAGE P="137"/>the intermediary to reopen a particular intermediary determination or intermediary hearing decision in order to implement, for the same intermediary determination or intermediary decision— (i) A final agency decision under §§ 405.1833, 405.1871(b), 405.1875, or 405.1877(a) of this part; (ii) A final nonappealable court judgment; or (iii) An agreement to settle an administrative appeal or a lawsuit. (c) Jurisdiction for reopening a determination or decision rests exclusively with that administrative body that rendered the last determination or decision. (d) Notwithstanding the provisions of paragraph (a) of this section, an intermediary determination or hearing decision, a decision of the Board, or a decision of the Secretary shall be reopened and revised at any time if it is established that such determination or decision was procured by fraud or similar fault of any party to the determination or decision. (e) Notwithstanding an intermediary's discretion to reopen or not reopen an intermediary determination or an intermediary hearing decision under paragraphs (a) and (c) of this section, CMS may direct an intermediary to reopen, or not to reopen, an intermediary determination or an intermediary hearing decision in accordance with paragraphs (a) and (c) of this section. (f) Paragraphs (a) and (b) of this section apply to determinations on cost reporting periods ending on or after December 31, 1971. (See § 405.1801(c).) However, the 3-year period described shall also apply to determinations with respect to cost reporting periods ending prior to December 31, 1971, but only if the reopening action was undertaken after May 27, 1972 (the effective date of regulations which, prior to the publication of this subpart R, governed the reopening of such determinations). <CITA>[39 FR 34515, Sept. 26, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, and amended at 50110, Aug. 1, 2002]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1887</SECTNO> <SUBJECT>Notice of reopening.</SUBJECT> (a) All parties to any reopening described above shall be given written notice of the reopening. When such reopening results in any revision in the prior decision notice of said revision or revisions will be mailed to the parties with a complete explanation of the basis for the revision or revisions. Notices of reopenings by the Board shall also be sent to the Secretary. (b) In any such reopening, the parties to the prior decision shall be allowed a reasonable period of time in which to present any additional evidence or argument in support of their position. </SECTION> <SECTION> <SECTNO>§ 405.1889</SECTNO> <SUBJECT>Effect of a revision.</SUBJECT> Where a revision is made in a determination or decision on the amount of program reimbursement after such determination or decision has been reopened as provided in § 405.1885, such revision shall be considered a separate and distinct determination or decision to which the provisions of §§ 405.1811, 405.1835, 405.1875 and 405.1877 are applicable. (See § 405.1801(c) for applicable effective dates.) </SECTION> </SUBPART> <SUBPART> <RESERVED>Subparts S-T [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart U—Conditions for Coverage of Suppliers of End-Stage Renal Disease (ESRD) Services</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1138, 1861, 1862(a), 1871, 1874, and 1881 of the Social Security Act (42 U.S.C. 1302, 1320b-8, 1395x, 1395y(a), 1395hh, 1395kk, and 1395rr), unless otherwise noted. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 41 FR 22511, June 3, 1976, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.2100</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> (a) The regulations in this subpart prescribe the role which End-Stage Renal Disease (ESRD) networks have in the ESRD program, establish the mechanism by which minimal utilization rates are promulgated and applied, under section 1881(b)(1) of the Act, and describe the health and safety requirements that facilities furnishing ESRD care to beneficiaries must meet. These regulations further prescribe the role of ESRD networks in meeting the requirements of section 1881(c) of the Act.<PRTPAGE P="138"/> (b) The general objectives of the ESRD program are contained in § 405.2101, and general definitions are contained in § 405.2102. The provisions of §§ 405.2110, 405.2112 and 405.2113 discuss the establishment and activities of ESRD networks, network organizations and membership requirements and restrictions for members of the medical review boards. Sections 405.2120 through 405.2124 discuss the establishment of minimal utilization rates and the requirements for approval of facilities with respect to such rates. Sections 405.2130 through 405.2140 discuss general requirements for, and description of, all facilities furnishing ESRD services. Sections 405.2160 through 405.2164 discuss specific requirements for facilities which furnish ESRD dialysis services. Sections 405.2170 and 405.2171 discuss specific requirements for facilities which furnish ESRD transplantation services. <CITA>[51 FR 30361, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2101</SECTNO> <SUBJECT>Objectives of the end-stage renal disease (ESRD) program.</SUBJECT> The objectives of the end-stage renal disease program are: (a) To assist beneficiaries who have been diagnosed as having end-stage renal disease (ESRD) to receive the care they need; (b) To encourage proper distribution and effective utlization of ESRD treatment resources while maintaining or improving the quality of care; (c) To provide the flexibility necessary for the efficient delivery of appropriate care by physicians and facilities; and (d) To encourage self-dialysis or transplantation for the maximum practical number of patients who are medically, socially, and psychologically suitable candidates for such treatment. <CITA>[43 FR 48950, Oct. 19, 1979]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2102</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this subpart, the following definitions apply: <E T="03">Agreement.</E> A written document executed between an ESRD facility and another facility in which the other facility agrees to assume responsibility for furnishing specified services to patients and for obtaining reimbursement for those services. <E T="03">Arrangement.</E> A written document executed between an ESRD facility and another facility in which the other facility agrees to furnish specified services to patients but the ESRD facility retains responsibility for those services and for obtaining reimbursement for them. <E T="03">Dialysis.</E> A process by which dissolved substances are removed from a patient's body by diffusion from one fluid compartment to another across a semipermeable membrane. The two types of dialysis that are currently in common use are hemodialysis and peritoneal dialysis. <E T="03">End-Stage Renal Disease (ESRD).</E> That stage of renal impairment that appears irreversible and permanent, and requires a regular course of dialysis or kidney transplantation to maintain life. <E T="03">ESRD facility.</E> A facility which is approved to furnish at least one specific ESRD service (see definition of “ESRD service”). Such facilities are: (a) <E T="03">Renal Transplantation Center.</E> A hospital unit which is approved to furnish directly transplantation and other medical and surgical specialty services required for the care of the ESRD transplant patients, including inpatient dialysis furnished directly or under arrangement. A Renal Transplantation Center may also be a Renal Dialysis Center. (b) <E T="03">Renal dialysis center.</E> A hospital unit which is approved to furnish the full spectrum of diagnostic, therapeutic, and rehabilitative services required for the care of ESRD dialysis patients (including inpatient dialysis furnished directly or under arrangement). A hospital need not provide renal transplantation to qualify as a renal dialysis center. (c) <E T="03">Renal dialysis facility.</E> A unit which is approved to furnish dialysis service(s) directly to ESRD patients. (d) <E T="03">Self-dialysis unit.</E> A unit that is part of an approved renal transplantation center, renal dialysis center, or renal dialysis facility, and furnishes self-dialysis services. (e) <E T="03">Special purpose renal dialysis facility.</E> A renal dialysis facility which is <PRTPAGE P="139"/>approved under § 405.2164 to furnish dialysis at special locations on a short-term basis to a group of dialysis patients otherwise unable to obtain treatment in the geographical area. The special locations must be either special rehabilitative (including vacation) locations serving ESRD patients temporarily residing there, or locations in need of ESRD facilities under emergency circumstances. <E T="03">ESRD service.</E> The type of care or services furnished to an ESRD patient. Such types of care are: (a) <E T="03">Transplantation service.</E> A process by which (1) a kidney is excised from a live or cadaveric donor, (2) that kidney is implanted in an ESRD patient, and (3) supportive care is furnished to the living donor and to the recipient following implantation. (b) <E T="03">Dialysis service—</E>(1) <E T="03">Inpatient dialysis.</E> Dialysis which, because of medical necessity, is furnished to an ESRD patient on a temporary inpatient basis in a hospital; (2) <E T="03">Outpatient dialysis.</E> Dialysis furnished on an outpatient basis at a renal dialysis center or facility. Outpatient dialysis includes: (i) <E T="03">Staff-assisted dialysis.</E> Dialysis performed by the staff of the center or facility. (ii) <E T="03">Self-dialysis.</E> Dialysis performed, with little or no professional assistance, by an ESRD patient who has completed an appropriate course of training. (3) <E T="03">Home dialysis.</E> Dialysis performed by an appropriately trained patient at home. (c) <E T="03">Self-dialysis and home dialysis training.</E> A program that trains ESRD patients to perform self-dialysis or home dialysis with little or no professional assistance, and trains other individuals to assist patients in performing self-dialysis or home dialysis. <E T="03">Furnishes directly.</E> The ESRD facility provides the service through its own staff and employees, or through individuals who are under direct contract to furnish such services personally for the facility (i.e., not through “agreements” or “arrangements”). <E T="03">Furnishes on the premises.</E> The ESRD facility furnishes services on its main premises; or on its other premises that are (a) contiguous with or in immediate proximity to the main premises, and under the direction of the same professional staff and governing body as the main premises, or (b) approved on a time-limited basis as a special purpose renal dialysis facility. <E T="03">Histocompatibility testing.</E> Laboratory test procedures which determine compatibility between a potential organ donor and a potential organ transplant recipient. <E T="03">Medical care criteria.</E> Predetermined elements against which aspects of the quality of a medical service may be compared. They are developed by professionals relying on professional expertise and on the professional literature. <E T="03">Medical care norms.</E> Numerical or statistical measures of usual observed performance. Norms are derived from aggregate information related to the health care provided to a large number of patients over a period of time. <E T="03">Medical care standards.</E> Professionally developed expressions of the range of acceptable variation from a norm or criterion. <E T="03">Medical care evaluation study</E> (<E T="03">MCE</E>). Review of health care services, usually performed retrospectively, in which an indepth assessment of the quality and/or utilization of such services is made. <E T="03">Network, ESRD.</E> All Medicare-approved ESRD facilities in a designated geographic area specified by CMS. <E T="03">Network organization.</E> The administrative governing body to the network and liaison to the Federal government. <E T="03">Organ procurement.</E> The process of acquiring donor kidneys. (See definition of <E T="03">Organ procurement organization</E> in § 485.302 of this chapter.) <E T="03">Qualified personnel.</E> Personnel that meet the requirements specified in this paragraph. (a) <E T="03">Chief executive officer.</E> A person who: (1) Holds at least a baccalaureate degree or its equivalent and has at least 1 year of experience in an ESRD unit; or (2) Is a registered nurse or physician director as defined in this definition; or (3) As of September 1, 1976, has demonstrated capability by acting for at least 2 years as a chief executive officer in a dialysis unit or transplantation program.<PRTPAGE P="140"/> (b) <E T="03">Dietitian.</E> A person who: (1) Is eligible for registration by the American Dietetic Association under its requirements in effect on June 3, 1976, and has at least 1 year of experience in clinical nutrition; or (2) Has a baccalaureate or advanced degree with major studies in food and nutrition or dietetics, and has at least 1 year of experience in clinical nutrition. (c) <E T="03">Medical record practitioner.</E> A person who: (1) Has graduated from a program for Medical Record Administrators accredited by the Council on Medical Education of the American Medical Association and the American Medical Record Association, and is eligible for certification as a Registered Record Administrator (RRA) by the American Medical Record Association under its requirements in effect on June 3, 1976. (2) Has graduated from a program for Medical Record Technicians approved jointly by the Council on Medical Education of the American Medical Association and the American Medical Record Association, and is eligible for certification as an Accredited Record Technician (ART) by the American Medical Record Association under its requirements in effect June 3, 1976, or (3) Has successfully completed and received a satisfactory grade in the American Medical Record Association's Correspondence Course for Medical Record Personnel approved by the Accrediting Commission of the National Home Study Council, and is eligible for certification as an Accredited Record Technician by the American Medical Record Association under its requirements in effect June 3, 1976. (d) <E T="03">Nurse responsible for nursing service.</E> A person who is licensed as a registered nurse by the State in which practicing, and (1) has at least 12 months of experience in clinical nursing, and an additional 6 months of experience in nursing care of the patient with permanent kidney failure or undergoing kidney transplantation, including training in and experience with the dialysis process; or (2) Has 18 months of experience in nursing care of the patient on maintenance dialysis, or in nursing care of the patient with a kidney transplant, including training in and experience with the dialysis process; (3) If the nurse responsible for nursing service is in charge of self-care dialysis training, at least 3 months of the total required ESRD experience is in training patients in self-care. (e) <E T="03">Physician-director.</E> A physician who: (1) Is board eligible or board certified in internal medicine or pediatrics by a professional board, and has had at least 12 months of experience or training in the care of patients at ESRD facilities; or (2) During the 5-year period prior to September 1, 1976, served for at least 12 months as director of a dialysis or transplantation program; (3) In those areas where a physician who meets the definition in paragraph (1) or (2) of this definition is not available to direct a participating dialysis facility, another physician may direct the facility, subject to the approval of the Secretary. (f) <E T="03">Social worker.</E> A person who is licensed, if applicable, by the State in which practicing, and (1) Has completed a course of study with specialization in clinical practice at, and holds a masters degree from, a graduate school of social work accredited by the Council on Social Work Education; or (2) Has served for at least 2 years as a social worker, 1 year of which was in a dialysis unit or transplantation program prior to September 1, 1976, and has established a consultative relationship with a social worker who qualifies under paragraph (f)(1) of this definition. (g) <E T="03">Transplantation surgeon.</E> A person who: (1) Is board eligible or board certified in general surgery or urology by a professional board; and (2) Has at least 12 months training or experience in the performance of renal transplantation and the care of patients with renal transplants. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48950, Oct. 19, 1978; 51 FR 30361, Aug. 26, 1986; 53 FR 6547, Mar. 1, 1988; 55 FR 9575, Mar. 14, 1990]</CITA> </SECTION> <SECTION> <PRTPAGE P="141"/> <SECTNO>§ 405.2110</SECTNO> <SUBJECT>Designation of ESRD networks.</SUBJECT> CMS designated ESRD networks in which the approved ESRD facilities collectively provide the necessary care for ESRD patients. (a) <E T="03">Effect on patient choice of facility.</E> The designation of networks does not require an ESRD patient to seek care only through the facilities in the designated network where the patient resides, nor does the designation of networks limit patient choice of physicians or facilities, or preclude patient referral by physicians to a facility in another designated network. (b) <E T="03">Redesignation of networks.</E> CMS will redesignate networks, as needed, to ensure that the designations are consistent with ESRD program experience, consistent with ESRD program objectives specified in § 405.2101, and compatible with efficient program administration. <CITA>[51 FR 30361, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2111</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 405.2112</SECTNO> <SUBJECT>ESRD network organizations.</SUBJECT> CMS will designate an administrative governing body (network organization) for each network. The functions of a network organization include but are not limited to the following: (a) Developing network goals for placing patients in settings for self-care and transplantation. (b) Encouraging the use of medically appropriate treatment settings most compatible with patient rehabilitation and the participation of patients, providers of services, and renal disease facilities in vocational rehabilitation programs. (c) Developing criteria and standards relating to the quality and appropriateness of patient care and, with respect to working with patients, facilities, and providers of services, for encouraging participation in vocational rehabilitation programs. (d) Evaluating the procedures used by facilities in the network in assessing patients for placement in appropriate treatment modalities. (e) Making recommendations to member facilities as needed to achieve network goals. (f) On or before July 1 of each year, submitting to CMS an annual report that contains the following information: (1) A statement of the network goals. (2) The comparative performance of facilities regarding the placement of patients in appropriate settings for— (i) Self-care; (ii) Transplants; and (iii) Vocational rehabilitation programs. (3) Identification of those facilities that consistently fail to cooperate with the goals specified under paragraph (f)(1) of this section or to follow the recommendations of the medical review board. (4) Identification of facilities and providers that are not providing appropriate medical care. (5) Recommendations with respect to the need for additional or alternative services in the network including self-dialysis training, transplantation and organ procurement. (g) Evaluating and resolving patient grievances. (h) Appointing a network council and a medical review board (each including at least one patient representative) and supporting and coordinating the activities of each. (i) Conducting on-site reviews of facilities and providers as necessary, as determined by the medical review board or CMS, using standards of care as specified under paragraph (c) of this section. (j) Collecting, validating, and analyzing such data as necessary to prepare the reports required under paragraph (f) of this section and the Secretary's report to Congress on the ESRD program and to assure the maintenance of the registry established under section 1881(c)(7) of the Act. <CITA>[53 FR 1620, Jan. 21, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2113</SECTNO> <SUBJECT>Medical review board.</SUBJECT> (a) <E T="03">General.</E> The medical review board must be composed of physicians, nurses, and social workers engaged in treatment relating to ESRD and qualified to evaluate the quality and appropriateness of care delivered to ESRD patients, and at least one patient representative.<PRTPAGE P="142"/> (b) <E T="03">Restrictions on medical review board members.</E> (1) A medical review board member must not review or provide advice with respect to any case in which he or she has, or had, any professional involvement, received reimbursement or supplied goods. (2) A medical review board member must not review the ESRD services of a facility in which he or she has a direct or indirect financial interest (as described in section 1126(a)(1) of the Act). <CITA>[51 FR 30361, Aug. 26, 1986, as amended at 53 FR 1620, Jan. 21, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2114</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 405.2120</SECTNO> <SUBJECT>Minimum utilization rates: general.</SUBJECT> Section 1881(b)(1) of the Social Security Act (42 U.S.C. 1395rr(b)(1)) authorizes the Secretary to limit payment for ESRD care to those facilities that meet the requirements that the Secretary may prescribe, including minimum utilization rates for covered transplantations. The minimum utilization rates, which are explained and specified in §§ 405.2121 through 405.2130, may be changed from time to time in accordance with program experience. Changes will be published as amendments to these regulations. <CITA>[55 FR 23440, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2121</SECTNO> <SUBJECT>Basis for determining minimum utilization rates.</SUBJECT> In developing minimum utilization rates, the Secretary takes into account the performance of ESRD facilities, the availability of care, the quality of care, and the efficient utilization of equipment and personnel, based on the following evidence: (a) Information on the geographic distribution of ESRD patients and facilities; (b) Information on quality of care; and (c) Information on operational and management efficiency. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept 30, 1977, as amended at 51 FR 30362, Aug. 26, 1986; 55 FR 23440, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2122</SECTNO> <SUBJECT>Types and duration of classification according to utilization rates.</SUBJECT> A renal transplantation center that meets all the other conditions for coverage of ESRD services will be classified according to its utilization rate(s) as follows: Unconditional status, conditional status, exception status, or not eligible for reimbursement for that ESRD service. Such classification will be based on previously reported utilization data (see § 405.2124, except as specified in paragraph (a) of this section), and will be effective until notification of subsequent classification occurs. (See § 405.2123 for reporting requirements; § 405.2124 for method of calculating rates: § 405.2130 for specific standards.) (a) <E T="03">Initial classification.</E> (1) A renal transplantation center that has not previously participated in the ESRD program will be granted conditional status if it submits a written plan, detailing how it will achieve the utilization rates for conditional status by the end of the second calendar year of its operation under the ESRD program, and the rates required for unconditional status by the end of its fourth calendar year of operation. (2) The renal transplantation center's performance will be evaluated at the end of the first calendar year to ascertain whether it is properly implementing the plan. (b) <E T="03">Exception status.</E> (1) A renal transplantation center that does not meet the minimum utilization rate for unconditional or conditional status may be approved by the Secretary for a time limited exception status if: (i) It meets all other conditions for coverage under this subpart; (ii) It is unable to meet the minimum utilization rate because it lacks a sufficient number of patients and is located in an area without a sufficient population base to support a center or facility which would meet the rate; and (iii) Its absence would adversely affect the achievement of ESRD program objectives. (2) A hospital that furnishes renal transplantation services primarily to pediatric patients and is approved as a renal dialysis center under this subpart, but does not meet the utilization <PRTPAGE P="143"/>standards prescribed in § 405.2130(a), may be approved by the Secretary for a time limited exception status if: (i) It meets all other conditions for coverage as a renal transplantation center; (ii) The surgery is performed under the direct supervision of a qualified transplantation surgeon (§ 405.2102) who is also performing renal transplantation surgery at an approved renal transplantation center that is primarily oriented to adult nephrology; (iii) It has an agreement, with the other hospital serviced by the surgeon, for sharing limited resources that are needed for kidney transplantation; and (iv) There are pediatric patients who need the surgery and who cannot obtain it from any other hospital located within a reasonable distance. <CITA>[43 FR 48951, Oct. 19, 1978, as amended at 45 FR 58124, Sept. 2, 1980; 51 FR 30362, Aug. 26, 1986; 55 FR 23440, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2123</SECTNO> <SUBJECT>Reporting of utilization rates for classification.</SUBJECT> Each hospital furnishing renal transplantation services must submit an annual report to CMS on its utilization rates. The report must include both the number of transplants performed during the most recent year of operation and the number performed during each of the preceding 2 calendar years. <CITA>[55 FR 23441, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2124</SECTNO> <SUBJECT>Calculation of utilization rates for comparison with minimal utilization rate(s) and notification of status.</SUBJECT> For purposes of classification the Secretary will use either the utilization rate for the preceding 12 months or the average utilization rate of the preceding 2 calendar years, whichever is higher. The Secretary will inform each ESRD facility and the network coordinating council of the network area in which the ESRD facility is located of the results of this classification. </SECTION> <SECTION> <SECTNO>§ 405.2130</SECTNO> <SUBJECT>Condition: Minimum utilization rates.</SUBJECT> Unless a renal transplantation center is granted an exception under § 405.2122(b), the center must meet the following minimum utilization rate(s) for unconditional or conditional status: (a) Unconditional status: 15 or more transplants performed annually. (b) Conditional status: 7 to 14 transplants performed annually. <CITA>[55 FR 23441, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2131</SECTNO> <SUBJECT>Condition: Provider status: Renal transplantation center or renal dialysis center.</SUBJECT> A renal transplantation center or a renal dialysis center (§ 405.2102(e) (1) or (2)) operated by a hospital may qualify for approval and be reimbursed under the ESRD program only if the hospital is otherwise an approved provider in the Medicare program. </SECTION> <SECTION> <SECTNO>§ 405.2132</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 405.2133</SECTNO> <SUBJECT>Condition: Furnishing data and information for ESRD program administration.</SUBJECT> The ESRD facility, laboratory performing histocompatibility testing, and organ procurement organization furnishes data and information in the manner and at the intervals specified by the Secretary, pertaining to its ESRD patient care activities and costs, for inclusion in a national ESRD medical information system and in compilations relevant to program administration, including claims processing and reimbursement. Such information is treated as confidential when it pertains to individual patients and is not disclosed except as authorized by Department regulations on confidentiality and disclosure (see 45 CFR parts 5, 5b, and part 401 of this chapter). <CITA>[53 FR 6548, Mar. 1, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2134</SECTNO> <SUBJECT>Condition: Participation in network activities.</SUBJECT> Each facility must participate in network activities and pursue network goals. <CITA>[51 FR 30362, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2135</SECTNO> <SUBJECT>Condition: Compliance with Federal, State and local laws and regulations.</SUBJECT> The ESRD facility is in compliance with applicable Federal, State and local laws, and regulations.<PRTPAGE P="144"/> (a) <E T="03">Standard: licensure.</E> Where State or applicable local law provides for the licensing of ESRD facilities, the facility is: (1) Licensed pursuant to such law; or (2) Approved by the agency of such State or locality responsible for such licensing as meeting the standards established for such licensing. (b) <E T="03">Standard: licensure or registration of personnel.</E> Each staff member is currently licensed or registered in accordance with applicable law. (c) <E T="03">Standard: conformity with other laws.</E> The facility is in conformity with applicable laws and regulations pertaining to fire safety, equipment, and other relevant health and safety requirements. </SECTION> <SECTION> <SECTNO>§ 405.2136</SECTNO> <SUBJECT>Condition: Governing body and management.</SUBJECT> The ESRD facility is under the control of an identifiable governing body, or designated person(s) so functioning, with full legal authority and responsibility for the governance and operation of the facility. The governing body adopts and enforces rules and regulations relative to its own governance and to the health care and safety of patients, to the protection of the patients' personal and property rights, and to the general operation of the facility. The governing body receives and acts upon recommendations from the network organization. The governing body appoints a chief executive officer who is responsible for the overall management of the facility. (a) <E T="03">Standard: disclosure of ownership.</E> The ESRD facility supplies full and complete information to the State survey agency (§ 405.1902(a)) as to the identity of: (1) Each person who has any direct or indirect ownership interest of 10 per centum or more in the facility, or who is the owner (in whole or in part) of any mortgage, deed of trust, note, or other obligation secured (in whole or in part) by the facility or any of the property or assets of the facility; (2) Each officer and director of the corporation, if the facility is organized as a corporation; and (3) Each partner, if the facility is organized as a partnership; and promptly reports to the State survey agency any changes which would affect the current accuracy of the information so required to be supplied. (b) <E T="03">Standard: Operational objectives.</E> The operational objectives of the ESRD facility, including the services that it provides, are established by the governing body and delineated in writing. The governing body adopts effective administrative rules and regulations that are designed to safeguard the health and safety of patients and to govern the general operations of the facility, in accordance with legal requirements. Such rules and regulations are in writing and dated. The governing body ensures that they are operational, and that they are reviewed at least annually and revised as necessary. If the ESRD facility is engaged in the practice of hemodialyzer reuse, the governing body ensures that there are written policies and procedures with respect to reuse, to assure that recommended standards and conditions are being followed, and requires that patients be informed of the policies and procedures. (1) The objectives of the facility are formulated in writing and clearly stated in documents appropriate for distribution to patients, facility personnel, and the public. (2) A description of the services provided by the facility, together with a categorical listing of the types of diagnostic and therapeutic procedures that may be performed, is readily available upon request to all concerned. (3) Admission criteria that insure equitable access to services are adopted by the facility and are readily available to the public. Access to the self-dialysis unit is available only to patients for whom the facility maintains patient care plans (see § 405.2137). (4) The operational objectives and administrative rules and regulations of the facility are reviewed at least annually and revised as necessary by the administrative staff, medical director, and other appropriate personnel of the facility, and are adopted when approved by the governing body. (c) <E T="03">Standard: chief executive officer.</E> The governing body appoints a qualified chief executive officer who, as the ESRD facility's administrator: Is responsible for the overall management <PRTPAGE P="145"/>of the facility; enforces the rules and regulations relative to the level of health care and safety of patients, and to the protection of their personal and property rights; and plans, organizes, and directs those responsibilities delegated to him by the governing body. Through meetings and periodic reports, the chief executive officer maintains on-going liaison among the governing body, medical and nursing personnel, and other professional and supervisory staff of the facility, and acts upon recommendations made by the medical staff and the governing body. In the absence of the chief executive officer, a qualified person is authorized in writing to act on the officer's behalf. (1) The governing body delineates in writing the responsibilities of the chief executive officer, and ensures that he/she is sufficiently free from other duties to provide effective direction and management of the operations and fiscal affairs of the facility. (2) The chief executive officer serves on a full-time or part-time basis, in accordance with the scope of the facility's operations and administrative needs, and devotes sufficient time to the conduct of such responsibilities. (3) The responsibilities of the chief executive officer include but are not limited to: (i) Implementing the policies of the facility and coordinating the provision of services, in accordance with delegations by the governing body. (ii) Organizing and coordinating the administrative functions of the facility, redelegating duties as authorized, and establishing formal means of accountability for those involved in patient care. (iii) Authorizing expenditures in accordance with established policies and procedures. (iv) Familiarizing the staff with the facility's policies, rules, and regulations, and with applicable Federal, State, and local laws and regulations. (v) Maintaining and submitting such records and reports, including a chronological record of services provided to patients, as may be required by the facility's internal committees and governing body, or as required by the Secretary. (vi) Participating in the development, negotiation, and implementation of agreements or contracts into which the facility may enter, subject to approval by the governing body of such agreements or contracts. (vii) Participating in the development of the organizational plan and ensuring the development and implementation of an accounting and reporting system, including annual development of a detailed budgetary program, maintenance of fiscal records, and quarterly submission to the governing body of reports of expenses and revenues generated through the facility's operation. (viii) Ensuring that the facility employs the number of qualified personnel needed; that all employees have appropriate orientation to the facility and their work responsibilities upon employment; and that they have an opportunity for continuing education and related development activities. (d) <E T="03">Standard: personnel policies and procedures.</E> The governing body, through the chief executive officer of the ESRD facility, is responsible for maintaining and implementing written personnel policies and procedures that support sound patient care and promote good personnel practices. These policies and procedures ensure that: (1) All members of the facility's staff are qualified to perform the duties and responsibilities assigned to them and meet such Federal, State, and local professional requirements as may apply. (2) A safe and sanitary environment for patients and personnel exists, and reports of incidents and accidents to patients and personnel are reviewed to identify health and safety hazards. Health supervision of personnel is provided, and they are referred for periodic health examinations and treatments as necessary or as required by Federal, State, and local laws. Procedures are established for routine testing to ensure detection of hepatitis and other infectious diseases. (3) If the services of trainees are utilized in providing ESRD services, such trainees are under the direct supervision of qualified professional personnel.<PRTPAGE P="146"/> (4) Complete personnel records are maintained on all personnel. These include health status reports, resumes of training and experience, and current job descriptions that reflect the employees' responsibilities and work assignments. (5) Personnel policies are written and made available to all personnel in the facility. The policies provide for an effective mechanism to handle personnel grievances. (6) All personnel of the facility participate in educational programs on a regular basis. These programs cover initial orientation, and continuing inservice training, including procedures for infection control. Records are maintained showing the content of training sessions and the attendance at such sessions. (7) Personnel manuals are maintained, periodically updated, and made available to all personnel involved in patient care. (e) <E T="03">Standard: use of outside resources.</E> If the ESRD facility makes arrangements for the provision of a specific service as authorized in this subpart, the responsibilities, functions, objectives, and the terms of each arrangement, including financial provisions and charges, are delineated in a document signed by an authorized representative of the facility and the person or agency providing the service. The chief executive officer when utilizing outside resource, as a consultant, assures that he is apprised of recommendations, plans for implementation, and continuing assessment through dated, signed reports, which are retained by the chief executive officer for follow-up action and evaluation of performance. (f) <E T="03">Standard: patient care policies.</E> The ESRD facility has written policies, approved by the governing body, concerning the provision of dialysis and other ESRD services to patients. The governing body reviews implementation of policies periodically to ensure that the intent of the policies is carried out. These policies are developed by the physician responsible for supervising and directing the provision of ESRD services, or the facility's organized medical staff (if there is one), with the advice of (and with provision for review of such policies from time to time, but at least annually, by) a group of professional personnel associated with the facility, including, but not limited to, one or more physicians and one or more registered nurses experienced in rendering ESRD care. (1) The patient care policies cover the following: (i) Scope of services provided by the facility (either directly or under arrangement). (ii) Admission and discharge policies (in relation to both in-facility care and home care). (iii) Medical supervision and physician services. (iv) Patient long term programs, patient care plans and methods of implementation. (v) Care of patients in medical and other emergencies. (vi) Pharmaceutical services. (vii) Medical records (including those maintained in the ESRD facility and in the patients' homes, to ensure continuity of care). (viii) Administrative records. (ix) Use and maintenance of the physical plant and equipment. (x) Consultant qualifications, functions, and responsibilities. (xi) The provision of home dialysis support services, if offered (see § 405.2163(e)). (2) The physician-director of the facility is designated in writing to be responsible for the execution of patient care policies. If the responsibility for day-to-day execution of patient care policies has been delegated by a physican director to (or, in the case of a self-dialysis unit, to another licensed health practitioner) a registered nurse, the physican-director provides medical guidance in such matters. (3) The facility policy provides that, whenever feasible, hours for dialysis are scheduled for patient convenience and that arrangements are made to accommodate employed patients who wish to be dialyzed during their non-working hours. (4) The governing body adopts policies to ensure there is evaluation of the progress each patient is making toward the goals stated in the patient's long term program and patient's care plan (see § 405.2137(a)). Such evaluations are <PRTPAGE P="147"/>carried out through regularly scheduled conferences, with participation by the staff involved in the patient's care. (g) <E T="03">Standard: medical supervision and emergency coverage.</E> The governing body of the ESRD dialysis and/or transplant facility ensures that the health care of every patient is under the continuing supervision of a physician and that a physician is available in emergency situations. (1) The physician responsible for the patient's medical supervision evaluates the patient's immediate and long-term needs and on this basis prescribes a planned regimen of care which covers indicated dialysis and other ESRD treatments, services, medications, diet, special procedures recommended for the health and safety of the patient, and plans for continuing care and discharge. Such plans are made with input from other professional personnel involved in the care of the patient. (2) The governing body ensures that there is always available medical care for emergencies, 24 hours a day, 7 days a week. There is posted at the nursing/monitoring station a roster with the names of the physicians to be called, when they are available for emergencies, and how they can be reached. (h) <E T="03">Standard: medical staff.</E> The governing body of the ESRD facility designates a qualified physician (see § 405.2102) as director of the ESRD services; the appointment is made upon the recommendation of the facility's organized medical staff, if there is one. The governing body establishes written policies regarding the development, negotiation, consummation, evaluation, and termination of appointments to the medical staff. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, and amended at 43 FR 48952, Oct. 19, 1978; 51 FR 30362, Aug. 26, 1986; 52 FR 36934, Oct. 2, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2137</SECTNO> <SUBJECT>Condition: Patient long-term program and patient care plan.</SUBJECT> Each facility maintains for each patient a written long-term program and a written patient care plan to ensure that each patient receives the appropriate modality of care and the appropriate care within that modality. The patient, or where appropriate, parent or legal guardian is involved with the health team in the planning of care. A copy of the current program and plan accompany the patient on interfacility transfer. (a) <E T="03">Standard: patient long-term program.</E> There is a written long-term program representing the selection of a suitable treatment modality (i.e., dialysis or transplantation) and dialysis setting (e.g., home, self-care) for each patient. (1) The program is developed by a professional team which includes but is not limited to the physician director of the dialysis facility or center where the patient is currently being treated, a physician director of a center or facility which offers self-care dialysis training (if not available at the location where the patient is being treated), a transplant surgeon, a qualified nurse responsible for nursing services, a qualified dietitian and a qualified social worker. (2) The program is formally reviewed and revised in writing as necessary by a team which includes but is not limited to the physician director of the dialysis facility or center where the patient is presently being treated, in addition to the other personnel listed in paragraph (a)(1) of this section at least every 12 months or more often as indicated by the patient's response to treatment (see § 405.2161(b)(1) and § 405.2170(a)). (3) The patient, parent, or legal guardian, as appropriate, is involved in the development of the patient's long-term program, and due consideration is given to his preferences. (4) A copy of the patient's long-term program accompanies the patient on interfacility transfer or is sent within 1 working day. (b) <E T="03">Standard: patient care plan.</E> There is a written patient care plan for each patient of an ESRD facility (including home dialysis patients under the supervision of the ESRD facility; see § 405.2163(e)), based upon the nature of the patient's illness, the treatment prescribed, and an assessment of the patient's needs. (1) The patient care plan is personalized for the individual, reflects the psychological, social, and functional needs of the patient, and indicates the ESRD <PRTPAGE P="148"/>and other care required as well as the individualized modifications in approach necessary to achieve the long-term and short-term goals. (2) The plan is developed by a professional team consisting of at least the physician responsible for the patient's ESRD care, a qualified nurse responsible for nursing services, a qualified social worker, and a qualified dietitian. (3) The patient, parent, or legal guardian, as appropriate, is involved in the development of the care plan, and due consideration is given to his preferences. (4) The care plan for patients whose medical condition has not become stabilized is reviewed at least monthly by the professional patient care team described in paragraph (b)(2) of this section. For patients whose condition has become stabilized, the care plan is reviewed every 6 months. The care plan is revised as necessary to insure that it provides for the patients ongoing needs. (5) If the patient is transferred to another facility, the care plan is sent with the patient or within 1 working day. (6) For a home-dialysis patient whose care is under the supervision of the ESRD facility, the care plan provides for periodic monitoring of the patient's home adaptation, including provisions for visits to the home by qualified facility personnel to the extent appropriate. (See § 405.2163(e).) (7) Beginning July 1, 1991, for a home dialysis patient, and beginning January 1, 1994, for any dialysis patient, who uses EPO in the home, the plan must provide for monitoring home use of EPO that includes the following: (i) Review of diet and fluid intake for indiscretions as indicated by hyperkalemia and elevated blood pressure secondary to volume overload. (ii) Review of medications to ensure adequate provision of supplemental iron. (iii) Ongoing evaluations of hematocrit and iron stores. (iv) A reevaluation of the dialysis prescription taking into account the patient's increased appetite and red blood cell volume. (v) A method for physician followup on blood tests and a mechanism (such as a patient log) for keeping the physician informed of the results. (vi) Training of the patient to identify the signs and symptoms of hypotension and hypertension. (vii) The decrease or discontinuance of EPO if hypertension is uncontrollable. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48952, Oct. 19, 1978; 59 FR 1284, Jan. 10, 1994; 59 FR 26958, May 25, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2138</SECTNO> <SUBJECT>Condition: Patients' rights and responsibilities.</SUBJECT> The governing body of the ESRD facility adopts written policies regarding the rights and responsibilities of patients and, through the chief executive officer, is responsible for development of, and adherence to, procedures implementing such policies. These policies and procedures are made available to patients and any guardians, next of kin, sponsoring agency(ies), representative payees (selected pursuant to section 205(j) of the Social Security Act and subpart Q of 20 CFR part 404), and to the public. The staff of the facility is trained and involved in the execution of such policies and procedures. The patients' rights policies and procedures ensure at least the following: (a) <E T="03">Standard: informed patients.</E> All patients in the facility: (1) Are fully informed of these rights and responsibilities, and of all rules and regulations governing patient conduct and responsibilities; (2) Are fully informed of services available in the facility and of related charges including any charges for services not covered under title XVIII of the Social Security Act; (3) Are fully informed by a physician of their medical condition unless medically contraindicated (as documented in their medical records); (4) Are fully informed regarding the facility's reuse of dialysis supplies, including hemodialyzers. If printed materials such as brochures are utilized to describe a facility and its services, they must contain a statement with respect to reuse; and (5) Are fully informed regarding their suitability for transplantation and home dialysis.<PRTPAGE P="149"/> (b) <E T="03">Standard: participation in planning.</E> All patients treated in the facility: (1) Are afforded the opportunity to participate in the planning of their medical treatment and to refuse to participate in experimental research; (2) Are transferred or discharged only for medical reasons or for the patient's welfare or that of other patients, or for nonpayment of fees (except as prohibited by title XVIII of the Social Security Act), and are given advance notice to ensure orderly transfer or discharge. (c) <E T="03">Standard: respect and dignity.</E> All patients are treated with consideration, respect, and full recognition of their individuality and personal needs, including the need for privacy in treatment. Provision is made for translators where a significant number of patients exhibit language barriers. (d) <E T="03">Standard: confidentiality.</E> All patients are ensured confidential treatment of their personal and medical records, and may approve or refuse release of such records to any individual outside the facility, except in case of their transfer to another health care institution or as required by Federal, State, or local law and the Secretary for proper administration of the program. (e) <E T="03">Standard: grievance mechanism.</E> All patients are encouraged and assisted to understand and exercise their rights. Grievances and recommended changes in policies and services may be addressed to facility staff, administration, the network organization, and agencies or regulatory bodies with jurisdiction over the facility, through any representative of the patient's choice, without restraint or interference, and without fear of discrimination or reprisal. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 51 FR 30362, Aug. 26, 1986; 52 FR 36934, Oct. 2, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2139</SECTNO> <SUBJECT>Condition: Medical records.</SUBJECT> The ESRD facility maintains complete medical records on all patients (including self-dialysis patients within the self-dialysis unit and home dialysis patients whose care is under the supervision of the facility) in accordance with accepted professional standards and practices. A member of the facility's staff is designated to serve as supervisor of medical records services, and ensures that all records are properly documented, completed, and preserved. The medical records are completely and accurately documented, readily available, and systematically organized to facilitate the compilation and retrieval of information. (a) <E T="03">Standard: medical record.</E> Each patient's medical record contains sufficient information to identify the patient clearly, to justify the diagnosis and treatment, and to document the results accurately. All medical records contain the following general categories of information: Documented evidence of assessment of the needs of the patient, whether the patient is treated with a reprocessed hemodialyzer, of establishment of an appropriate plan of treatment, and of the care and services provided (see § 405.2137(a) and (b)); evidence that the patient was informed of the results of the assessment described in § 405.2138(a)(5); identification and social data; signed consent forms referral information with authentication of diagnosis; medical and nursing history of patient; report(s) of physician examination(s); diagnostic and therapeutic orders; observations, and progress notes; reports of treatments and clinical findings; reports of laboratory and other diagnostic tests and procedures; and discharge summary including final diagnosis and prognosis. (b) <E T="03">Standard: protection of medical record information.</E> The ESRD facility safeguards medical record information against loss, destruction, or unauthorized use. The ESRD facility has written policies and procedures which govern the use and release of information contained in medical records. Written consent of the patient, or of an authorized person acting in behalf of the patient, is required for release of information not provided by law. Medical records are made available under stipulation of confidentiality for inspection by authorized agents of the Secretary, as required for administration of the ESRD program under Medicare. (c) <E T="03">Standard: medical records supervisor.</E> A member of the ESRD facility's staff is designated to serve as supervisor of the facility's medical records service. The functions of the medical <PRTPAGE P="150"/>records supervisor include, but are not limited to, the following: Ensuring that the records are documented, completed, and maintained in accordance with accepted professional standards and practices; safeguarding the confidentiality of the records in accordance with established policy and legal requirements; ensuring that the records contain pertinent medical information and are filed for easy retrieval. When necessary, consultation is secured from a qualified medical record practitioner. (d) <E T="03">Standard: Completion of medical records and centralization of clinical information.</E> Current medical records and those of discharged patients are completed promptly. All clinical information pertaining to a patient is centralized in the patient's medical record. Provision is made for collecting and including in the medical record medical information generated by self-dialysis patients. Entries concerning the daily dialysis process may either be completed by staff, or be completed by trained self-dialysis patients, trained home dialysis patients or trained assistants and countersigned by staff. (e) <E T="03">Standard: retention and preservation of records.</E> Medical records are retained for a period of time not less than that determined by the State statute governing records retention or statute of limitations; or in the absence of a State statute, 5 years from the date of discharge; or, in the case of a minor, 3 years after the patient becomes of age under State law, whichever is longest. (f) <E T="03">Standard: location and facilities.</E> The facility maintains adequate facilities, equipment, and space conveniently located, to provide efficient processing of medical records (e.g., reviewing, filing, and prompt retrieval) and statistical medical information (e.g., required abstracts, reports, etc.). (g) <E T="03">Standard: transfer of medical information.</E> The facility provides for the interchange of medical and other information necessary or useful in the care and treatment of patients transferred between treating facilities, or in determining whether such patients can be adequately cared for otherwise than in either of such facilities. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48952, Oct. 19, 1978; 52 FR 36934, Oct. 2, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2140</SECTNO> <SUBJECT>Condition: Physical environment.</SUBJECT> The physical environment in which ESRD services are furnished affords a functional, sanitary, safe, and comfortable setting for patients, staff, and the public. (a) <E T="03">Standard: building and equipment.</E> The physical structure in which ESRD services are furnished is constructed, equipped, and maintained to insure the safety of patients, staff, and the public. (1) Fire extinguishers are conveniently located on each floor of the facility and in areas of special hazard. Fire regulations and fire management procedures are prominently posted and properly followed. (2) All electrical and other equipment used in the facility is maintained free of defects which could be a potential hazard to patients or personnel. There is established a planned program of preventive maintenance of equipment used in dialysis and related procedures in the facility. (3) The areas used by patients are maintained in good repair and kept free of hazards such as those created by damaged or defective parts of the building. (4) [Reserved] (5)(i) The ESRD facility must employ the water quality requirements listed in paragraph (a)(5)(ii) of this section developed by the Association for the Advancement of Medical Instrumentation (AAMI) and published in “Hemodialysis Systems,” second edition, which is incorporated by reference. (ii) Required water quality requirements are those listed in sections 3.2.1, Water Bacteriology; 3.2.2, Maximum Level of Chemical Contaminants; and in Appendix B: Guideline for Monitoring Purity of Water Used for Hemodialysis as B1 through B5. (iii) Incorporation by reference of the AAMI's “Hemodialysis Systems,” second edition, 1992, was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR <PRTPAGE P="151"/>part 51.<E T="51">1</E> <FTREF/> If any changes in “Hemodialysis Systems,” second edition, are also to be incorporated by reference, a notice to that effect will be published in the <E T="04">Federal Register</E>. <FTNT> <E T="51">1</E> The publication entitled “Hemodialysis Systems,” second edition, 1992, is available for inspection at the CMS Information Resource Center, 7500 Security Boulevard, Baltimore, MD 21244-1850 and the Office of the Federal Register, 800 North Capitol Street, NW., Suite 700, Washington, DC. Copies may be purchased from the Association for the Advancement of Medical Instrumentation, 3300 Washington Boulevard, Suite 400, Arlington, VA 22201-4598. </FTNT> (b) <E T="03">Standard: favorable environment for patients.</E> The facility is maintained and equipped to provide a functional sanitary, and comfortable environment with an adequate amount of well-lighted space for the service provided. (1) There are written policies and procedures in effect for preventing and controlling hepatitis and other infections. These policies include, but are not limited to, appropriate procedures for surveillance and reporting of infections, housekeeping, handling and disposal of waste and contaminants, and sterilization and disinfection, including the sterilization and maintenance of equipment where dialysis supplies are reused, there are written policies and procedures covering the rinsing, cleaning, disinfection, preparation and storage of reused items which conform to requirements for reuse in § 405.2150. (2) Treatment areas are designed and equipped to provide adequate and safe dialysis therapy, as well as privacy and comfort for patients. The space for treating each patient is sufficient to accomodate medically needed emergency equipment and staff and to ensure that such equipment and staff can reach the patient in an emergency. There is sufficient space in units for safe storage of self-dialysis supplies. (3) There is a nursing/monitoring station from which adequate surveillance of patients receiving dialysis services can be made. (4) Heating and ventilation systems are capable of maintaining adequate and comfortable temperatures. (5) Each ESRD facility utilizing a central-batch delivery system provides, either on the premises or through affiliation agreement or arrangement (see § 405.2160) sufficient individual delivery systems for the treatment of any patient requiring special dialysis solutions. (c) <E T="03">Standard contamination prevention.</E> The facility employs appropriate techniques to prevent cross-contamination between the unit and adjacent hospital or public areas including, but not limited to, food service areas, laundry, disposal of solid waste and blood-contaminated equipment, and disposal of contaminants into sewage systems. Waste storage and disposal are carried out in accordance with applicable local laws and accepted public health procedures. The written patient care policies (see § 405.2136(f)(1)) specify the functions that are carried out by facility personnel and by the self-dialysis patients with respect to contamination prevention. Where dialysis supplies are reused, records are maintained that can be used to determine whether established procedures covering the rinsing, cleaning, disinfection, preparation and storage of reused items, conform to requirements for reuse in § 405.2150. (d) <E T="03">Standard: emergency preparedness.</E> Written policies and procedures specifically define the handling of emergencies which may threaten the health or safety of patients. Such emergencies would exist during a fire or natural disaster or during functional failures in equipment. Specific emergency preparedness procedures exist for different kinds of emergencies. These are reviewed and tested at least annually and revised as necessary by, or under the direction of, the chief executive officer. All personnel are knowledgeable and trained in their respective roles in emergency situations. (1) There is an established written plan for dealing with fire and other emergencies which, when necessary, is developed in cooperation with fire and other expert personnel. (2) All personnel are trained, as part of their employment orientation, in all aspects of preparedness for any emergency or disaster. The emergency preparedness plan provides for orientation and regular training and periodic drills for all personnel in all procedures so <PRTPAGE P="152"/>that each person promptly and correctly carries out a specified role in case of an emergency. (3) There is available at all times on the premises a fully equipped emergency tray, including emergency drugs, medical supplies, and equipment, and staff are trained in its use. (4) The staff is familiar with the use of all dialysis equipment and procedures to handle medical emergencies. (5) Patients are trained to handle medical and nonmedical emergencies. Patients must be fully informed regarding what to do, where to go, and whom to contact if a medical or nonmedical emergency occurs. <APPRO>(Secs. 1102, 1871, 1881(b), Social Security Act; 42 U.S.C. 1302, 1395hh, 1395rr(b))</APPRO> <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48952, Oct. 19, 1978; 45 FR 24839, Apr. 10, 1980; 52 FR 36934, Oct. 2, 1987; 60 FR 48043, Sept. 18, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2150</SECTNO> <SUBJECT>Condition: Reuse of hemodialyzers and other dialysis supplies.</SUBJECT> An ESRD facility that reuses hemodialyzers and other dialysis supplies meets the requirements of this section. Failure to meet any of paragraphs (a) through (c) of this section constitutes grounds for denial of payment for the dialysis treatment affected and termination from participation in the Medicare program. (a) <E T="03">Standard: Hemodialyzers.</E> If the ESRD facility reuses hemodialyzers, it conforms to the following: (1) <E T="03">Reuse guidelines.</E> Voluntary guidelines adopted by the AAMI (“Reuse of Hemodialyzers,” second edition). Incorporation by reference of the AAMI's “Reuse of Hemodialyzers,” second edition, 1993, was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.<E T="51">1</E> <FTREF/> If any changes in “Reuse of Hemodialyzers,” second edition, are also to be incorporated by reference, a notice to that effect will be published in the <E T="04">Federal Register</E>. <FTNT> <E T="51">1</E> The publication entitled “Reuse of Hemodialyzers,” second edition, 1993, is available for inspection at the CMS Information Resources Center, 7500 Security Boulevard, Baltimore, MD 21244-1850 and the Office of the Federal Register, 800 North Capitol Street, NW., Suite 700, Washington, DC. Copies may be purchased from the Association for the Advancement of Medical Instrumentation, 3300 Washington Boulevard, Suite 400, Arlington, VA 22201-4598. </FTNT> (2) <E T="03">Procedure for chemical germicides.</E> To prevent any risk of dialyzer membrane leaks due to the combined action of different chemical germicides, dialyzers are exposed to only one chemical germicide during the reprocessing procedure. If a dialyzer is exposed to a second germicide, the dialyzer must be discarded. (3) <E T="03">Surveillance of patient reactions.</E> In order to detect bacteremia and to maintain patient safety when unexplained events occur, the facility— (i) Takes appropriate blood cultures at the time of a febrile response in a patient; and (ii) If pyrogenic reactions, bacteremia, or unexplained reactions associated with ineffective reprocessing are identified, terminates reuse of hemodialyzers in that setting and does not continue reuse until the entire reprocessing system has been evaluated. (b) <E T="03">Standard: Transducer filters.</E> To control the spread of hepatitis, transducer filters are changed after each dialysis treatment and are not reused. (c) <E T="03">Standard: Bloodlines.</E> If the ESRD facility reuses bloodlines, it must— (1) Limit the reuse of bloodlines to the same patient; (2) Not reuse bloodlines labeled for “single use only”; (3) Reuse only bloodlines for which the manufacturer's protocol for reuse has been accepted by the Food and Drug Administration (FDA) pursuant to the premarket notification (section 510(k)) provision of the Food, Drug, and Cosmetic Act; and (4) Follow the FDA-accepted manufacturer's protocol for reuse of that bloodline. <CITA>[52 FR 36935, Oct. 2, 1987, as amended at 55 FR 18335, May 2, 1990; 60 FR 48044, Sept. 18, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2160</SECTNO> <SUBJECT>Condition: Affiliation agreement or arrangement.</SUBJECT> (a) A renal dialysis facility and a renal dialysis center (see § 405.2102(e)(2)) have in effect an affiliation agreement or arrangement with <PRTPAGE P="153"/>each other, in writing, for the provision of inpatient care and other hospital services. (b) The affiliation agreement or arrangement provides the basis for effective working relationships under which inpatient hospital care or other hospital services are available promptly to the dialysis facility's patients when needed. The dialysis facility has in its files documentation from the renal dialysis center to the effect that patients from the dialysis facility will be accepted and treated in emergencies. There are reasonable assurances that: (1) Transfer or referral of patients will be effected between the renal dialysis center and the dialysis facility whenever such transfer or referral is determined as medically appropriate by the attending physician, with timely acceptance and admission; (2) There will be interchange, within 1 working day, of the patient long-term program and patient care plan, and of medical and other information necessary or useful in the care and treatment of patients transferred or referred between the facilities, or in determining whether such patients can be adequately cared for otherwise than in either of such facilities; and (3) Security and accountability for patients' personal effects are assured. </SECTION> <SECTION> <SECTNO>§ 405.2161</SECTNO> <SUBJECT>Condition: Director of a renal dialysis facility or renal dialysis center.</SUBJECT> Treatment is under the general supervision of a Director who is a physician. The physician-director need not devote full time as Director but is responsible for planning, organizing, conducting, and directing the professional ESRD services and must devote sufficient time to carrying out these responsibilities. The director may also serve as the Chief Executive Officer of the facility. (a) <E T="03">Standard: qualifications.</E> The director of a dialysis facility is a qualified physician-director. (See § 405.2102.) (b) <E T="03">Standard: responsibilities.</E> The responsibilities of the physician-director include but are not limited to the following: (1) Participating in the selection of a suitable treatment modality, i.e., transplantation or dialysis, and dialysis setting, for all patients; (2) Assuring adequate training of nurses and technicians in dialysis techniques; (3) Assuring adequate monitoring of the patient and the dialysis process, including, for self-dialysis patients, assuring periodic assessment of patient performance of dialysis tasks; (4) Assuring the development and availability of a patient care policy and procedures manual and its implementation. As a minimum, the manual describes the types of dialysis used in the facility and the procedures followed in performance of such dialysis; hepatitis prevention and procedures for handling an individual with hepatitis; and a disaster preparedness plan (e.g., patient emergency, fire, flood); and (5) When self-dialysis training or home dialysis training is offered, assuring that patient teaching materials are available for the use of all trainees during training and at times other than during the dialysis procedure. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48952, Oct. 19, 1978; 51 FR 30362, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2162</SECTNO> <SUBJECT>Condition: Staff of a renal dialysis facility or renal dialysis center.</SUBJECT> Properly trained personnel are present in adequate numbers to meet the needs of the patients, including those arising from medical and nonmedical emergencies. (a) <E T="03">Standard: Registered nurse.</E> The dialysis facility employs at least one full time qualified nurse responsible for nursing service. (See § 405.2102.) (b) <E T="03">Standard: On-duty personnel.</E> Whenever patients are undergoing dialysis: (1) One currently licensed health professional (e.g., physician, registered nurse, or licensed practical nurse) experienced in rendering ESRD care is on duty to oversee ESRD patient care; (2) An adequate number of personnel are present so that the patient/staff ratio is appropriate to the level of dialysis care being given and meets the needs of patients; and (3) An adequate number of personnel are readily available to meet medical and nonmedical needs.<PRTPAGE P="154"/> (c) <E T="03">Standard: Self-care dialysis training personnel.</E> If the facility offers self-care dialysis training, a qualified nurse is in charge of such training (see § 405.2102.) <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48953, Oct. 19, 1978; 51 FR 30362, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2163</SECTNO> <SUBJECT>Condition: Minimal service requirements for a renal dialysis facility or renal dialysis center.</SUBJECT> The facility must provide dialysis services, as well as adequate laboratory, social, and dietetic services to meet the needs of the ESRD patient. (a) <E T="03">Standard: Outpatient dialysis services—</E>(1) <E T="03">Staff-assisted dialysis services.</E> The facility must provide all necessary institutional dialysis services and staff required in performing the dialysis. (2) <E T="03">Self-dialysis services.</E> If the facility offers self-dialysis services, it must provide all medically necessary supplies and equipment and any other service specified in the facility's patient care policies. (b) <E T="03">Standard: Laboratory services.</E> The dialysis facility makes available laboratory services (other than the specialty of tissue pathology and histocompatibility testing), to meet the needs of the ESRD patient. All laboratory services must be performed by an appropriately certified laboratory in accordance with part 493 of this chapter. If the renal dialysis facility furnishes its own laboratory services, it must meet the applicable requirements established for certification of laboratories found in part 493 of this chapter. If the facility does not provide laboratory services, it must make arrangements to obtain these services from a laboratory certified in the appropriate specialties and subspecialties of service in accordance with the requirements of part 493 of this chapter. (c) <E T="03">Standard: Social services.</E> Social services are provided to patients and their families and are directed at supporting and maximizing the social functioning and adjustment of the patient. Social services are furnished by a qualified social worker (§ 405.2102) who has an employment or contractual relationship with the facility. The qualified social worker is responsible for conducting psychosocial evaluations, participating in team review of patient progress and recommending changes in treatment based on the patient's current psychosocial needs, providing casework and groupwork services to patients and their families in dealing with the special problems associated with ESRD, and identifying community social agencies and other resources and assisting patients and families to utilize them. (d) <E T="03">Standard: Dietetic services.</E> Each patient is evaluated as to his nutritional needs by the attending physician and by a qualified dietician (§ 405.2102) who has an employment or contractual relationship with the facility. The dietician, in consultation with the attending physician, is responsible for assessing the nutritional and dietetic needs of each patient, recommending therapeutic diets, counseling patients and their families on prescribed diets, and monitoring adherence and response to diets. (e) <E T="03">Standard: Self-dialysis support services.</E> The renal dialysis facility or center furnishing self-dialysis training upon completion of the patient's training, furnishes (either directly, under agreement or by arrangement with another ESRD facility) the following services: (1) Surveillance of the patient's home adaptation, including provisions for visits to the home or the facility; (2) Consultation for the patient with a qualified social worker and a qualified dietitian; (3) A recordkeeping system which assures continuity of care; (4) Installation and maintenance of equipment; (5) Testing and appropriate treatment of the water; and (6) Ordering of supplies on an ongoing basis. (f) <E T="03">Standard: Participation in recipient registry.</E> The dialysis facility or center participates in a patient registry program with an OPO designated or redesignated under part 486, subpart G of this chapter, for patients who are awaiting cadaveric donor transplantation. (g) <E T="03">Use of EPO at home: Patient selection.</E> The dialysis facility, or the physician responsible for all dialysis-related services furnished to the patient, must <PRTPAGE P="155"/>make a comprehensive assessment that includes the following: (1) <E T="03">Pre-selection monitoring.</E> The patient's hematocrit (or hemoglobin), serum iron, transferrin saturation, serum ferritin, and blood pressure must be measured. (2) <E T="03">Conditions the patient must meet.</E> The assessment must find that the patient meets the following conditions: (i) On or after July 1, 1991, is a home dialysis patient or, on or after January 1, 1994, is a dialysis patient; (ii) Has a hematocrit (or comparable hemoglobin level) that is as follows: (A) For a patient who is initiating EPO treatment, no higher than 30 percent unless there is medical documentation showing the need for EPO despite a hematocrit (or comparable hemoglobin level) higher than 30 percent. (Patients with severe angina, severe pulmonary distress, or severe hypertension may require EPO to prevent adverse symptoms even if they have higher hematocrit or hemoglobin levels.) (B) For a patient who has been receiving EPO from the facility or the physician, between 30 and 33 percent. (iii) Is under the care of— (A) A physician who is responsible for all dialysis-related services and who prescribes the EPO and follows the drug labeling instructions when monitoring the EPO home therapy; and (B) A renal dialysis facility that establishes the plan of care and monitors the progress of the home EPO therapy. (3) <E T="03">Conditions the patient or the patient's caregiver must meet.</E> The assessment must find that the patient or a caregiver who assists the patient in performing self-dialysis meets the following conditions: (i) Is trained by the facility to inject EPO and is capable of carrying out the procedure. (ii) Is capable of reading and understanding the drug labeling. (iii) Is trained in, and capable of observing, aseptic techniques. (4) <E T="03">Care and storage of drug.</E> The assessment must find that EPO can be stored in the patient's residence under refrigeration and that the patient is aware of the potential hazard of a child's having access to the drug and syringes. (h) <E T="03">Use of EPO at home: Responsibilities of the physician or the dialysis facility.</E> The patient's physician or dialysis facility must— (1) Develop a protocol that follows the drug label instructions; (2) Make the protocol available to the patient to ensure safe and effective home use of EPO; and (3) Through the amounts prescribed, ensure that the drug “on hand” at any time does not exceed a 2-month supply. <CITA>[43 FR 48953, Oct. 19, 1978, as amended at 51 FR 30362, Aug. 26, 1986; 57 FR 7134, Feb. 28, 1992; 59 FR 1284, Jan. 10, 1994; 59 FR 26958, May 25, 1994; 59 FR 46513, Sept. 8, 1994; 61 FR 19743, May 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2164</SECTNO> <SUBJECT>Conditions for coverage of special purpose renal dialysis facilities.</SUBJECT> (a) A special purpose renal dialysis facility must comply with all conditions for coverage for renal dialysis facilities specified in §§ 405.2130 through 405.2164, with the exception of §§ 405.2134, and 405.2137 that relate to participation in the network activities and patient long-term programs. (b) A special purpose renal dialysis facility must consult with a patient's physician to assure that care provided in the special purpose dialysis facility is consistent with the patient's long-term program and patient care plan required under § 405.2137. (c) The period of approval for a special purpose renal dialysis facility may not exceed 8 calendar months in any calendar year. (d) A special purpose renal dialysis facility may provide services only to those patients who would otherwise be unable to obtain treatments in the geographical areas served by the facility. <CITA>[48 FR 21283, May 11, 1983, as amended at 51 FR 30362, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2170</SECTNO> <SUBJECT>Condition: Director of a renal transplantation center.</SUBJECT> The renal transplantation center is under the general supervision of a qualified transplantation surgeon (§ 405.2102) or a qualified physician-director (§ 405.2102), who need not serve full time. This physician is responsible for planning, organizing, conducting, and directing the renal transplantation center and devotes sufficient time to <PRTPAGE P="156"/>carry out these responsibilities, which include but are not limited to the following: (a) Participating in the selection of a suitable treatment modality for each patient. (b) Assuring adequate training, of nurses in the care of transplant patients. (c) Assuring that tissue typing and organ procurement services are available either directly or under arrangement. (d) Assuring that transplantation surgery is performed under the direct supervision of a qualified transplantation surgeon. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 51 FR 30362, Aug. 26, 1986; 59 FR 46514, Sept. 8, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2171</SECTNO> <SUBJECT>Condition: Minimal service requirements for a renal transplantation center.</SUBJECT> Kidney transplantation is furnished directly by a hospital that is participating as a provider of services in the Medicare program and is approved by CMS as a renal transplantation center. The renal transplantation center is under the overall direction of a hospital administrator and medical staff; if operated by an organizational subsidiary, it is under the direction of an administrator and medical staff member (or committee) who are directly responsible to the hospital administrator and medical staff, respectively. Patients are accepted for transplantation only on the order of a physician and their care continues under the supervision of a physician. (a) <E T="03">Standard: participation in recipient registry.</E> The renal transplantation center participates in a patient registry program with an OPO certified or recertified under part 485, subpart D of this chapter for patients who are awaiting cadaveric donor transplantation. (b) <E T="03">Standard: social services.</E> Social services are provided to patients and their families and are directed at supporting and maximizing the social functioning and adjustment of the patient. Social services are furnished by a qualified social worker (§ 405.2102) who has an employment or contractual relationship with the facility. The qualified social worker is responsible for conducting psychosocial evaluations, participating in team review of patient progress and recommending changes in treatment based on the patient's current psychosocial needs, providing casework and groupwork services to patients and their families in dealing with the special problems associated with ESRD, and identifying community social agencies and other resources and assisting patients and families to utilize them. (c) <E T="03">Standard: dietetic services.</E> Each patient is evaluated as to his nutritional needs by the attending physician and a qualified dietician (§ 405.2102) who has an employment or contractual relationship with the facility. The dietician, in consultation with the attending physician, is responsible for assessing the nutritional and dietetic needs of each patient, recommending therapeutic diets, counseling patients and their families on prescribed diets, and monitoring adherence and response to diets. (d) <E T="03">Standard: Laboratory services:</E> (1) The renal transplantation center makes available, directly or under arrangements, laboratory services to meet the needs of ESRD patients. Laboratory services are performed in a laboratory facility certified in accordance with part 493 of this chapter. (2) Laboratory services for crossmatching of recipient serum and donor lymphocytes for pre-formed antibodies by an acceptable technique are available on a 24-hour emergency basis. (e) <E T="03">Standard: Organ procurement.</E> A renal transplantation center using the services of an organ procurement organization designated or redesignated under part 485, subpart D of this chapter to obtain donor organs has a written agreement covering these services. The renal transplantation center agrees to notify CMS in writing within 30 days of the termination of the agreement. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 51 FR 30362, Aug. 26, 1986; 53 FR 6548, Mar. 1, 1988; 57 FR 7134, Feb. 28, 1992; 59 FR 46514, Sept. 8, 1994]</CITA> </SECTION> <SECTION> <PRTPAGE P="157"/> <SECTNO>§ 405.2180</SECTNO> <SUBJECT>Termination of Medicare coverage.</SUBJECT> (a) Except as provided in § 405.2181, failure of a supplier of ESRD services to meet one or more of the conditions for coverage set forth in this subpart U will result in termination of Medicare coverage of the services furnished by that supplier. (b) If termination of coverage is based solely on a supplier's failure to participate in network activities and pursue network goals, as required by § 405.2134, coverage may be reinstated when CMS determines that the supplier is making reasonable and appropriate efforts to meet that condition. (c) If termination of coverage is based on failure to meet any of the other conditions specified in this subpart, coverage will not be reinstated until CMS finds that the reason for termination has been removed and there is reasonable assurance that it will not recur. <CITA>[53 FR 36277, Sept. 19, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2181</SECTNO> <SUBJECT>Alternative sanctions.</SUBJECT> (a) <E T="03">Basis for application of alternative sanctions.</E> CMS may, as an alternative to termination of Medicare coverage, impose one of the sanctions specified in paragraph (b) of this section if CMS finds that— (1) The supplier fails to participate in the activities and pursue the goals of the ESRD network that is designated to encompass its geographic area; and (2) This failure does not jeopardize patient health and safety. (b) <E T="03">Alternative sanctions.</E> The alternative sanctions that CMS may apply in the circumstances specified in paragraph (a) of this section include the following: (1) Denial of payment for services furnished to patients first accepted for care after the effective date of sanction as specified in the sanction notice. (2) Reduction of payments, for all ESRD services furnished by the supplier, by 20 percent for each 30-day period after the effective date of sanction. (3) Withholding of all payments, without interest, for all ESRD services furnished by the supplier to Medicare beneficiaries. (c) <E T="03">Duration of sanction.</E> An alternative sanction remains in effect until CMS finds that the supplier is in substantial compliance with the requirement to cooperate in the network plans and goals, or terminates coverage of the supplier's services for lack of compliance. <CITA>[53 FR 36277, Sept. 19, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2182</SECTNO> <SUBJECT>Notice of sanction and appeal rights: Termination of coverage.</SUBJECT> (a) <E T="03">Notice of sanction.</E> CMS gives the supplier and the general public notice of sanction and of the effective date of the sanction. The effective date of the sanction is at least 30 days after the date of the notice. (b) <E T="03">Appeal rights.</E> Termination of Medicare coverage of a supplier's ESRD services because the supplier no longer meets the conditions for coverage of its services is an initial determination appealable under part 498 of this chapter. <CITA>[53 FR 36277, Sept. 19, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2184</SECTNO> <SUBJECT>Notice of appeal rights: Alternative sanctions.</SUBJECT> If CMS proposes to apply a sanction specified in § 405.2181(b), the following rules apply: (a) CMS gives the facility notice of the proposed sanction and 15 days in which to request a hearing. (b) If the facility requests a hearing, CMS provides an informal hearing by a CMS official who was not involved in making the appealed decision. (c) During the informal hearing, the facility— (1) May be represented by counsel; (2) Has access to the information on which the allegation was based; and (3) May present, orally or in writing, evidence and documentation to refute the finding of failure to participate in network activities and pursue network goals. (d) If the written decision of the informal hearing supports application of the alternative sanction, CMS provides the facility and the public, at least 30 days before the effective date of the sanction, with a written notice that <PRTPAGE P="158"/>specifies the effective date and the reasons for the sanction. <CITA>[53 FR 36277, Sept. 19, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <RESERVED>Subparts V-W [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart X—Rural Health Clinic and Federally Qualified Health Center Services</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 43 FR 8261, Mar. 1, 1978, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 405.2400</SECTNO> <SUBJECT>Basis.</SUBJECT> Subpart X is based on the provisions of the following sections of the Act: Section 1833 sets forth the amounts of payment for supplementary medical insurance services. Section 1861(aa) sets forth the rural health clinic services and Federally qualified health center services covered by the Medicare program. <CITA>[60 FR 63176, Dec. 8, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2401</SECTNO> <SUBJECT>Scope and definitions.</SUBJECT> (a) <E T="03">Scope.</E> This subpart establishes the requirements for coverage and reimbursement of rural health clinic and Federally qualified health center services under Medicare. (b) <E T="03">Definitions.</E> As used in this subpart, unless the context indicates otherwise: <E T="03">Act</E> means the Social Security Act. <E T="03">Allowable costs</E> means costs that are incurred by a clinic or center and are reasonable in amount and proper and necessary for the efficient delivery of rural health clinic and Federally qualified health center services. <E T="03">Beneficiary</E> means an individual enrolled in the Supplementary Medical Insurance program for the Aged and Disabled (part of title XVIII of the Act). <E T="03">Coinsurance</E> means that portion of the clinic's charge for covered services for which the beneficiary is liable in addition to the deductible. <E T="03">Carrier</E> means an organization that has a contract with the Secretary to administer the benefits covered by this subpart. <E T="03">Covered services</E> means items or services for which the beneficiary is entitled to have payment made on his or her behalf under this subpart. <E T="03">Deductible</E> means: (1) The first $100 of expenses incurred by the beneficiary during any calendar year for items and services covered under Part B of title XVIII; and (2) The expenses incurred for the first 3 pints of blood or 3 units of packed red blood cells furnished to a beneficiary during any calendar year. (See §§ 410.160 and 410.161 of this chapter for greater detail.) <E T="03">Federally qualified health center</E> (FQHC) means an entity that has entered into an agreement with CMS to meet Medicare program requirements under §§ 405.2434 and— (1) Is receiving a grant under section 329, 330, or 340 of the Public Health Service Act, or is receiving funding from such a grant under a contract with the recipient of such a grant and meets the requirements to receive a grant under section 329, 330 or 340 of the Public Health Service Act; (2) Based on the recommendation of the PHS, is determined by CMS to meet the requirements for receiving such a grant; (3) Was treated by CMS, for purposes of part B, as a comprehensive federally funded health center (FFHC) as of January 1, 1990; or (4) Is an outpatient health program or facility operated by a tribe or tribal organizations under the Indian Self-Determination Act or by an Urban Indian organization receiving funds under title V of the Indian Health Care Improvement Act. <E T="03">CMS</E> stands for Centers for Medicare & Medicaid Services. <E T="03">Intermittent nursing care</E> means a medically predictable need for nursing care from time to time, but usually not less frequently than once every 60 days. <E T="03">Nurse-midwife</E> means a registered professional nurse who meets the following requirements: (1) Is currently licensed to practice in the State as a registered professional nurse. (2) Is legally authorized under State law or regulations to practice as a nurse-midwife.<PRTPAGE P="159"/> (3) Except as provided in paragraph (b)(10)(iv) of this section, has completed a program of study and clinical experience for nurse-midwives, as specified by the State. (4) If the State does not specify a program of study and clinical experience that nurse-midwives must complete to practice in that State, meets one of the following conditions: (i) Is currently certified as a nurse-midwife by the American College of Nurse-Midwives. (ii) Has satisfactorily completed a formal education program (of at least one academic year) that, upon completion, qualifies the nurse to take the certification examination offered by the American College of Nurse-Midwives. (iii) Has successfully completed a formal educational program for preparing registered nurses to furnish gynecological and obstetrical care to women during pregnancy, delivery, and the postpartum period, and care to normal newborns, and was practicing as a nurse-midwife for a total of 12 months during any 18-month period from August 8, 1976 to July 16, 1982. <E T="03">Nurse practitioner</E> and <E T="03">physician assistant</E> means individuals who meet the applicable education, training experience and other requirements of § 491.2 of this chapter. <E T="03">Part-time nursing care</E> means nursing care that is required on less than a full-time basis, that is, less than 8 hours a day or 40 hours a week. <E T="03">Physician</E> means the following: (1) A doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which the function is performed. (2) Within limitations as to the specific services furnished, a doctor of dentistry or dental or oral surgery, a doctor of optometry, a doctor of podiatry or surgical chiropody or a chiropractor. (See section 1861(r) of the Act for specific limitations.) (3) A resident (including residents as defined in § 415.152 of this chapter who meet the requirements in § 415.206(b) of this chapter for payment under the physician fee schedule). <E T="03">Reporting period</E> means a period of 12 consecutive months specified by the intermediary as the period for which a clinic or center must report its costs and utilization. The first and last reporting periods may be less than 12 months. <E T="03">Rural health clinic</E> means a facility that: (1) Has been determined by the Secretary to meet the requirements of section 1861(aa)(2) of the Act and part 491 of this chapter; and (2) Has filed an agreement with the Secretary in order to provide rural health clinic services under Medicare. (See § 405.2402.) <E T="03">Secretary</E> means the Secretary of Health and Human Services or his delegate. <E T="03">Visiting nurse services</E> means part-time or intermittent nursing care and related medical supplies (other than drugs or biologicals) furnished by a registered nurse or licensed practical nurse to a homebound patient. <SECAUTH>(Secs. 1102, 1833, 1861(aa), 1871, 1902(a)(13), Social Security Act; 49 Stat. 647, 79 Stat. 302, 322, and 331, 91 Stat. 1485 (42 U.S.C. 1302, 1395<E T="03">l</E>, 1395hh, 1395x(aa), and 1396(a)(13))</SECAUTH> <CITA>[43 FR 8261, Mar. 1, 1978, as amended at 43 FR 30526, July 14, 1978; 47 FR 21049, May 17, 1982; 47 FR 23448, May 28, 1982; 51 FR 41351, Nov. 14, 1986; 57 FR 24975, June 12, 1992; 59 FR 26958, May 25, 1994; 60 FR 63176, Dec. 8, 1995; 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2402</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> (a) <E T="03">Certification by the State survey agency.</E> The rural health clinic must be certified in accordance with part 491 of this chapter. (b) <E T="03">Acceptance of the clinic as qualified to furnish rural health clinic services.</E> If the Secretary, after reviewing the survey agency recommendation and other evidence relating to the qualifications of the rural health clinic, determines that it meets the requirements of this subpart and of part 491 of this chapter, he will send the clinic: (1) Written notice of the determination; and (2) Two copies of the agreement to be filed as required by section 1861(aa)(1) of the Act. (c) <E T="03">Filing of agreement by the rural health clinic.</E> If the rural health clinic wishes to participate in the program, it must:<PRTPAGE P="160"/> (1) Have both copies of the agreement signed by an authorized representative; and (2) File them with the Secretary. (d) <E T="03">Acceptance by the Secretary.</E> If the Secretary accepts the agreement filed by the rural health clinic, he will return to the clinic one copy of the agreement, with a notice of acceptance specifying the effective date. (e) <E T="03">Duration of agreement.</E> The agreement shall be for a term of one year and may be renewed annually by mutual consent of the Secretary and the rural health clinic. (f) <E T="03">Appeal rights.</E> If the Secretary does not certify a rural health clinic, or refuses to enter into or renew an agreement, the facility is entitled to a hearing in accordance with part 498 of this chapter. <CITA>[43 FR 8261, Mar. 1, 1978, as amended at 52 FR 22454, June 12, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2403</SECTNO> <SUBJECT>Content and terms of the agreement with the Secretary.</SUBJECT> (a) Under the agreement, the rural health clinic agrees to the following: (1) <E T="03">Maintaining compliance with conditions.</E> The clinic agrees to maintain compliance with the conditions set forth in part 491 of this chapter and to report promptly to CMS any failure to do so. (2) <E T="03">Charges to beneficiaries.</E> The clinic agrees not to charge the beneficiary or any other person for items and services for which the beneficiary is entitled to have payment made under the provisions of this part (or for which the beneficiary would have been entitled if the rural health clinic had filed a request for payment in accordance with § 410.165 of this chapter), except for any deductible or coinsurance amounts for which the beneficiary is liable under § 405.2410. (3) <E T="03">Refunds to beneficiaries.</E> (i) The clinic agrees to refund as promptly as possible any money incorrectly collected from beneficiaries or from someone on their behalf. (ii) As used in this section, <E T="03">money incorrectly collected</E> means sums collected in excess of the amount for which the beneficiary was liable under § 405.2410. It includes amounts collected at a time when the beneficiary was believed not to be entitled to Medicare benefits but: (A) The beneficiary is later determined to have been entitled to Medicare benefits; and (B) The beneficiary's entitlement period falls within the time the rural health clinic's agreement with the Secretary is in effect. (4) <E T="03">Beneficiary treatment.</E> (i) The clinic agrees to accept beneficiaries for care and treatment; and (ii) The clinic agrees not to impose any limitations on the acceptance of beneficiaries for care and treatment that it does not impose on all other persons. (b) <E T="03">Additional provisions.</E> The agreement may contain any additional provisions that the Secretary finds necessary or desirable for the efficient and effective administration of the Medicare program. <CITA>[43 FR 8261, Mar. 1, 1978, as amended at 51 FR 41351, Nov. 14, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2404</SECTNO> <SUBJECT>Terminations of agreements.</SUBJECT> (a) <E T="03">Termination by rural health clinic.</E> (1) <E T="03">Notice to Secretary.</E> If the clinic wishes to terminate its agreement it shall file with the Secretary a written notice stating the intended effective date of termination. (2) <E T="03">Action by the Secretary.</E> (i) The Secretary may approve the date proposed by the clinic, or set a different date no later than 6 months after the date of the clinic's notice. (ii) The Secretary may approve a date which is less than 6 months after the date of notice if he determines that termination on that date would not: (A) Unduly disrupt the furnishing of services to the community serviced by the clinic; or (B) Otherwise interfere with the effective and efficient administration of the Medicare program. (3) <E T="03">Cessation of business.</E> If a clinic ceases to furnish services to the community, that shall be deemed to be a voluntary termination of the agreement by the clinic, effective on the last day of business. (b) <E T="03">Termination by the Secretary.</E> (1) <E T="03">Cause for termination.</E> The Secretary may terminate an agreement if he determines that the rural health clinic: (i) No longer meets the conditions for certification under part 491 of this chapter; or<PRTPAGE P="161"/> (ii) Is not in substantial compliance with the provisions of the agreement, the requirements of this subpart, any other applicable regulations of this part, or any applicable provisions of title XVIII of the Act; or (iii) Has undergone a change of ownership. (2) <E T="03">Notice of termination.</E> The Secretary will give notice of termination to the rural health clinic at least 15 days before the effective date stated in the notice. (3) <E T="03">Appeal by the rural health clinic.</E> A rural health clinic may appeal the termination of its agreement in accordance with the provisions set forth in part 498 of this chapter. (c) <E T="03">Effect of termination.</E> Payment will not be available for rural health clinic services furnished on or after the effective date of termination. (d) <E T="03">Notice to the public.</E> Prompt notice of the date and effect of termination shall be given to the public, through publication in local newspapers: (1) By the clinic, after the Secretary has approved or set a termination date; or (2) By the Secretary, when he has terminated the agreement. (e) <E T="03">Conditions for reinstatement after termination of agreement by the Secretary.</E> When an agreement with a rural health clinic is terminated by the Secretary, the rural health clinic may not file another agreement to participate in the Medicare program unless the Secretary: (1) Finds that the reason for the termination of the prior agreement has been removed; and (2) Is assured that the reason for the termination will not recur. <CITA>[43 FR 8261, Mar. 1, 1978, as amended at 52 FR 22454, June 12, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2410</SECTNO> <SUBJECT>Application of Part B deductible and coinsurance.</SUBJECT> (a) <E T="03">Application of deductible.</E> (1) Medicare payment for rural health clinic services begins only after the beneficiary has incurred the deductible. (2) Medicare payment for services covered under the Federally qualified health center benefit is not subject to the usual Part B deductible. (b) <E T="03">Application of coinsurance.</E> (1) The beneficiary is responsible for a coinsurance amount which cannot exceed 20 percent of the clinic's reasonable customary charge for the covered service; and (2)(i) The beneficiary's deductible and coinsurance liability, with respect to any one item or service furnished by the rural health clinic, may not exceed a reasonable amount customarily charged by the clinic for that particular item or service. (ii) For any one item or service furnished by a Federally qualified health center, the coinsurance liability may not exceed 20 percent of a reasonable amount customarily charged by the center for that particular item or service. <CITA>[57 FR 24976, June 12, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2411</SECTNO> <SUBJECT>Scope of benefits.</SUBJECT> (a) Rural health clinic services reimbursable under this subpart are: (1) The physicians' services specified in § 405.2412; (2) Services and supplies furnished as an incident to a physician's professional service; (3) The nurse practitioner or physician assistant services specified in § 405.2414; (4) Services and supplies furnished as an incident to a nurse practitioner's or physician assistant's services; and (5) Visiting nurse services. (b) Rural health clinic services are reimbursable when furnished to a patient at the clinic, at a hospital or other medical facility, or at the patient's place of residence. </SECTION> <SECTION> <SECTNO>§ 405.2412</SECTNO> <SUBJECT>Physicians' services.</SUBJECT> (a) Physicians' services are professional services that are performed by a physician at the clinic or are performed away from the clinic by a physician whose agreement with the clinic provides that he or she will be paid by the clinic for such services. </SECTION> <SECTION> <SECTNO>§ 405.2413</SECTNO> <SUBJECT>Services and supplies incident to a physician's services.</SUBJECT> (a) Services and supplies incident to a physician's professional service are reimbursable under this subpart if the service or supply is: (1) Of a type commonly furnished in physicians' offices;<PRTPAGE P="162"/> (2) Of a type commonly rendered either without charge or included in the rural health clinic's bill; (3) Furnished as an incidental, although integral, part of a physician's professional services; (4) Furnished under the direct, personal supervision of a physician; and (5) In the case of a service, furnished by a member of the clinic's health care staff who is an employee of the clinic. (b) Only drugs and biologicals which cannot be self-administered are included within the scope of this benefit. </SECTION> <SECTION> <SECTNO>§ 405.2414</SECTNO> <SUBJECT>Nurse practitioner and physician assistant services.</SUBJECT> (a) Professional services are reimbursable under this subpart if: (1) Furnished by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner who is employed by, or receives compensation from, the rural health clinic; (2) Furnished under the medical supervision of a physician; (3) Furnished in accordance with any medical orders for the care and treatment of a patient prepared by a physician; (4) They are of a type which the nurse practitioner, physician assistant, nurse midwife or specialized nurse practitioner who furnished the service is legally permitted to perform by the State in which the service is rendered; and (5) They would be covered if furnished by a physician. (b) The physician supervision requirement is met if the conditions specified in § 491.8(b) of this chapter and any pertinent requirements of State law are satisfied. (c) The services of nurse practitioners, physician assistants, nurse midwives or specialized nurse practitioners are not covered if State law or regulations require that the services be performed under a physician's order and no such order was prepared. </SECTION> <SECTION> <SECTNO>§ 405.2415</SECTNO> <SUBJECT>Services and supplies incident to nurse practitioner and physician assistant services.</SUBJECT> (a) Services and supplies incident to a nurse practitioner's or physician assistant's services are reimbursable under this subpart if the service or supply is: (1) Of a type commonly furnished in physicians' offices; (2) Of a type commonly rendered either without charge or included in the rural health clinic's bill; (3) Furnished as an incidental, although integral part of professional services furnished by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner; (4) Furnished under the direct, personal supervision of a nurse practitioner, physician assistant, nurse midwife, specialized nurse practitioner or a physician; and (5) In the case of a service, furnished by a member of the clinic's health care staff who is an employee of the clinic. (b) The direct personal supervision requirement is met in the case of a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner only if such a person is permitted to supervise such services under the written policies governing the rural health clinic. (c) Only drugs and biologicals which cannot be self-administered are included within the scope of this benefit. </SECTION> <SECTION> <SECTNO>§ 405.2416</SECTNO> <SUBJECT>Visiting nurse services.</SUBJECT> (a) Visiting nurse services are covered if: (1) The rural health clinic is located in an area in which the Secretary has determined that there is a shortage of home health agencies; (2) The services are rendered to a homebound individual; (3) The services are furnished by a registered nurse, licensed practical nurse, or licensed vocational nurse who is employed by, or receives compensation for the services from the clinic; and (4) The services are furnished under a written plan of treatment that is: (i) Established and reviewed at least every 60 days by a supervising physician of the rural health clinic or established by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner and reviewed at least every 60 days by a supervising physician; and (ii) Signed by the nurse practitioner, physician assistant, nurse midwife, <PRTPAGE P="163"/>specialized nurse practitioner, or the supervising physician of the clinic. (b) The nursing care covered by this section includes: (1) Services that must be performed by a registered nurse, licensed practical nurse, or licensed vocational nurse if the safety of the patient is to be assured and the medically desired results achieved; and (2) Personal care services, to the extent covered under Medicare as home health services. These services include helping the patient to bathe, to get in and out of bed, to exercise and to take medications. (c) This benefit does not cover household and housekeeping services or other services that would constitute custodial care. (d) For purposes of this section, <E T="03">homebound</E> means an individual who is permanently or temporarily confined to his or her place of residence because of a medical or health condition. The individual may be considered homebound if he or she leaves the place of residence infrequently. For this purpose, “place of residence” does not include a hospital or long term care facility. </SECTION> <SECTION> <SECTNO>§ 405.2417</SECTNO> <SUBJECT>Visiting nurse services: Determination of shortage of agencies.</SUBJECT> A shortage of home health agencies exists if the Secretary determines that the rural health clinic: (a) Is located in a county, parish, or similar geographic area in which there is no participating home health agency or adequate home health services are not available to patients of the rural health clinic; (b) Has (or expects to have) patients whose permanent residences are not within the area serviced by a participating home health agency; or (c) Has (or expects to have) patients whose permanent residences are not within a reasonable traveling distance, based on climate and terrain, of a participating home health agency. </SECTION> <SUBJGRP> <HD SOURCE="HED">Federally Qualified Health Center Services</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 57 FR 24978, June 12, 1992, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 405.2430</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> (a) <E T="03">Filing procedures.</E> (1) In response to a request from an entity that wishes to participate in the Medicare program, CMS enters into an agreement with an entity when— (i) PHS recommends that the entity qualifies as a Federally qualified health center; (ii) The Federally qualified health center assures CMS that it meets the Federally qualified health center requirements specified in this subpart and part 491, as described in § 405.2434(a); and (iii) The FQHC terminates other provider agreements, unless the FQHC assures CMS that it is not using the same space, staff and resources simultaneously as a physician's office or another type of provider or supplier. A corporate entity may own other provider types as long as the provider types are distinct from the FQHC. (2) CMS sends the entity a written notice of the disposition of the request. (3) When the requirement of paragraph (a)(1) of this section is satisfied, CMS sends the entity two copies of the agreement. The entity must sign and return both copies of the agreement to CMS. (4) If CMS accepts the agreement filed by the Federally qualified health center, CMS returns to the center one copy of the agreement with the notice of acceptance specifying the effective date (see § 489.11), as determined under § 405.2434. (b) <E T="03">Recommendations by PHS about Federally qualified health centers.</E> (1) An entity must— (i) Meet the applicable requirements of the PHS Act, as specified in § 405.2401(b); and (ii) Be recommended by PHS to CMS as a Federally qualified health center. (2) The PHS notifies CMS of entities that meet the requirements specified in § 405.2401(b). (c) <E T="03">Provider-based and freestanding Federally qualified health centers.</E> The requirements and benefits under Medicare for provider-based or freestanding Federally qualified health centers are the same, except that payment methodologies differ, as described in § 405.2462.<PRTPAGE P="164"/> (d) <E T="03">Appeals.</E> An entity is entitled to a hearing in accordance with part 498 of this chapter when CMS fails to enter into an agreement with the entity. <CITA>[57 FR 24978, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2434</SECTNO> <SUBJECT>Content and terms of the agreement.</SUBJECT> Under the agreement, the Federally qualified health center must agree to the following: (a) <E T="03">Maintain compliance with the requirements.</E> (1) The Federally qualified health center must agree to maintain compliance with the Federally qualified health center requirements set forth in this subpart and part 491, except that the provisions of § 491.3 do not apply. (2) Centers must promptly report to CMS any changes that result in noncompliance with any of these requirements. (b) <E T="03">Effective date of agreement.</E> (1) Except as specified in paragraph (b)(2) of this section, the effective date of the agreement is the date CMS accepts the signed agreement, which assures that all Federal requirements are met. (2) For facilities that met all requirements on October 1, 1991, the effective date of the agreement can be October 1, 1991. (c) <E T="03">Charges to beneficiaries.</E> (1) The beneficiary is responsible for payment of a coinsurance amount which is 20 percent of the amount of Part B payment made to the Federally qualified health center for the covered services. There is no coinsurance for a second or third opinion obtained in accordance with section 1164 of the Act or for pneumococcal vaccine and its administration. (2) The beneficiary is responsible for blood deductible expenses, as specified in § 410.161. (3) The Federally qualified health center agrees not to charge the beneficiary (or any other person acting on behalf of a beneficiary) for any Federally qualified health center services for which the beneficiary is entitled to have payment made on his or her behalf by the Medicare program (or for which the beneficiary would have been entitled if the Federally qualified health center had filed a request for payment in accordance with § 410.165 of this chapter), except for coinsurance amounts. (4) The Federally qualified health center may charge the beneficiary for items and services that are not Federally qualified health center services. However, if the item or service is covered under Part B of Medicare, and the Federally qualified health center agrees to receive Part B payment under the assignment method, the Federally qualified health center may not charge the beneficiary more than 20 percent of the Part B payment. (d) <E T="03">Refunds to beneficiaries.</E> (1) The Federally qualified health center must agree to refund as promptly as possible any money incorrectly collected from Medicare beneficiaries or from someone on their behalf. (2) As used in this section, “money incorrectly collected” means any amount for covered services that is greater than the amount for which the beneficiary was liable because of the coinsurance requirements specified in part 410, subpart E. (3) Amounts also are considered incorrectly collected if the Federally qualified health center believed the beneficiary was not entitled to Medicare benefits but— (i) The beneficiary was later determined to have been so entitled; (ii) The beneficiary's entitlement period fell within the time the Federally qualified health center's agreement with CMS was in effect; and (iii) The amounts exceed the beneficiary's coinsurance liability. (e) <E T="03">Treatment of beneficiaries.</E> (1) The Federally qualified health center must agree to accept Medicare beneficiaries for care and treatment. (2) The Federally qualified health center may not impose any limitations with respect to care and treatment of Medicare beneficiaries that it does not also impose upon all other persons seeking care and treatment from the Federally qualified health center. Failure to comply with this requirement is a cause for termination of the Federally qualified health center's agreement with CMS in accordance with § 405.2436(d). (3) If the Federally qualified health center does not furnish treatment for <PRTPAGE P="165"/>certain illnesses and conditions to patients who are not Medicare beneficiaries, it need not furnish such treatment to Medicare beneficiaries. </SECTION> <SECTION> <SECTNO>§ 405.2436</SECTNO> <SUBJECT>Termination of agreement.</SUBJECT> (a) <E T="03">Termination by Federally qualified health center.</E> The Federally qualified health center may terminate its agreement by— (1) Filing with CMS a written notice stating its intention to terminate the agreement; and (2) Notifying CMS of the date on which the Federally qualified health center requests that the termination take effect. (b) <E T="03">Effective date.</E> (1) Upon receiving a Federally qualified health center's notice of intention to terminate the agreement, CMS will set a date upon which the termination takes effect. This effective date may be— (i) The date proposed by the Federally qualified health center in its notice of intention to terminate, if that date is acceptable to CMS; or (ii) Except as specified in paragraph (2) of this section, a date set by CMS, which is no later than 6 months after the date CMS receives the Federally qualified health center's notice of intention to terminate. (2) The effective date of termination may be less than 6 months following CMS's receipt of the Federally qualified health center's notice of intention to terminate if CMS determines that termination on such a date would not— (i) Unduly disrupt the furnishing of Federally qualified health center services to the community; or (ii) Otherwise interfere with the effective and efficient administration of the Medicare program. (3) The termination is effective at the end of the last day of business as a Federally qualified health center. (c) <E T="03">Termination by CMS.</E> (1) CMS may terminate an agreement with a Federally qualified health center if it finds that the Federally qualified health center— (i) No longer meets the requirements specified in this subpart; or (ii) Is not in substantial compliance with— (A) The provisions of the agreement; or (B) The requirements of this subpart, any other applicable regulations of this part, or any applicable provisions of title XVIII of the Act. (2) <E T="03">Notice by CMS.</E> CMS will notify the Federally qualified health center in writing of its intention to terminate an agreement at least 15 days before the effective date stated in the written notice. (3) <E T="03">Appeal.</E> A Federally qualified health center may appeal CMS's decision to terminate the agreement in accordance with part 498 of this chapter. (d) <E T="03">Effect of termination.</E> When a Federally qualified health center's agreement is terminated whether by the Federally qualified health center or CMS, payment will not be available for Federally qualified health center services furnished on or after the effective date of termination. </SECTION> <SECTION> <SECTNO>§ 405.2440</SECTNO> <SUBJECT>Conditions for reinstatement after termination by CMS.</SUBJECT> When CMS has terminated an agreement with a Federally qualified health center, CMS will not enter into another agreement with the Federally qualified health center to participate in the Medicare program unless CMS— (a) Finds that the reason for the termination no longer exists; and (b) Is assured that the reason for the termination of the prior agreement will not recur. </SECTION> <SECTION> <SECTNO>§ 405.2442</SECTNO> <SUBJECT>Notice to the public.</SUBJECT> (a) When the Federally qualified health center voluntarily terminates the agreement and an effective date is set for the termination, the Federally qualified health center must notify the public prior to a prospective effective date or on the actual day that business ceases, if no prospective date of termination has been set, through publication in at least one newspaper in general circulation in the area serviced by the Federally qualified health center of the— (1) Effective date of termination of the provision of services; and (2) Effect of termination of the agreement. (b) When CMS terminates the agreement, CMS will notify the public through publication in at least one newspaper in general circulation in the <PRTPAGE P="166"/>Federally qualified health center's service area. </SECTION> <SECTION> <SECTNO>§ 405.2444</SECTNO> <SUBJECT>Change of ownership.</SUBJECT> (a) <E T="03">What constitutes change of ownership—</E>(1) <E T="03">Incorporation.</E> The incorporation of an unincorporated FQHC constitutes change of ownership. (2) <E T="03">Merger.</E> The merger of the center corporation into another corporation, or the consolidation of two or more corporations, one of which is the center corporation, resulting in the creation of a new corporation, constitutes a change of ownership. (The merger of another corporation into the center corporation does not constitute change of ownership.) (3) <E T="03">Leasing.</E> The lease of all or part of an entity constitutes a change of ownership of the leased portion. (b) <E T="03">Notice to CMS.</E> A center which is contemplating or negotiating change of ownership must notify CMS. (c) <E T="03">Assignment of agreement.</E> When there is a change of ownership as specified in paragraph (a) of this section, the agreement with the existing center is automatically assigned to the new owner if it continues to meet the conditions to be a Federally qualified health center. (d) <E T="03">Conditions that apply to assigned agreements.</E> An assigned agreement is subject to all applicable statutes and regulations and to the terms and conditions under which it was originally issued including, but not limited to, the following: (1) Compliance with applicable health and safety standards. (2) Compliance with the ownership and financial interest disclosure requirements of part 420, subpart C of this subchapter. </SECTION> <SECTION> <SECTNO>§ 405.2446</SECTNO> <SUBJECT>Scope of services.</SUBJECT> (a) For purposes of this section, the terms <E T="03">rural health clinic</E> and <E T="03">clinic</E> when they appear in the cross references in paragraph (b) of this section also mean Federally qualified health centers. (b) FQHC services that are paid for under this subpart are outpatient services that include the following: (1) Physician services specified in § 405.2412. (2) Services and supplies furnished as an incident to a physician's professional services, as specified in § 405.2413. (3) Nurse practitioner or physician assistant services specified in § 405.2414. (4) Services and supplies furnished as an incident to a nurse practitioner or physician assistant services, as specified in § 405.2415. (5) Clinical psychologist and clinical social worker services specified in § 405.2450. (6) Services and supplies furnished as an incident to a clinical psychologist or clinical social worker services, as specified in § 405.2452. (7) Visiting nurse services specified in § 405.2416. (8) Nurse-midwife services specified in § 405.2401. (9) Preventive primary services specified in § 405.2448 of this subpart. (c) Federally qualified health center services are covered when provided in outpatient settings only, including a patient's place of residence, which may be a skilled nursing facility or a nursing facility or other institution used as a patient's home. (d) Federally qualified health center services are not covered in a hospital, as defined in section 1861(e)(1) of the Act. <CITA>[57 FR 24979, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2448</SECTNO> <SUBJECT>Preventive primary services.</SUBJECT> (a) Preventive primary services are those health services that— (1) A center is required to provide as preventive primary health services under section 329, 330, and 340 of the Public Health Service Act; (2) Are furnished by or under the direct supervision of a nurse practitioner, physician assistant, nurse midwife, specialized nurse practitioner, clinical psychologist, clinical social worker, or a physician; (3) In the case of a service, are furnished by a member of the center's health care staff who is an employee of the center or by a physician under arrangements with the center; and (4) Except as specifically provided in section 1861(s) of the Act, include only drugs and biologicals that cannot be self-administered.<PRTPAGE P="167"/> (b) Preventive primary services which may be paid for when provided by Federally qualified health centers are the following: (1) Medical social services. (2) Nutritional assessment and referral. (3) Preventive health education. (4) Children's eye and ear examinations. (5) Prenatal and post-partum care. (6) Perinatal services. (7) Well child care, including periodic screening. (8) Immunizations, including tetanus-diptheria booster and influenza vaccine. (9) Voluntary family planning services. (10) Taking patient history. (11) Blood pressure measurement. (12) Weight. (13) Physical examination targeted to risk. (14) Visual acuity screening. (15) Hearing screening. (16) Cholesterol screening. (17) Stool testing for occult blood. (18) Dipstick urinalysis. (19) Risk assessment and initial counseling regarding risks. (20) Tuberculosis testing for high risk patients. (21) For women only. (i) Clinical breast exam. (ii) Referral for mammography; and (iii) Thyroid function test. (c) Preventive primary services do not include group or mass information programs, health education classes, or group education activities, including media productions and publications. (d) Screening mammography is not considered a Federally qualified health center service, but may be provided at a Federally qualified health center if the center meets the requirements applicable to that service specified in § 410.34 of this subchapter. Payment is made under applicable Medicare requirements. (e) Preventive primary services do not include eyeglasses, hearing aids, or preventive dental services. <CITA>[57 FR 24980, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2450</SECTNO> <SUBJECT>Clinical psychologist and clinical social worker services.</SUBJECT> (a) For clinical psychologist or clinical social worker professional services to be payable under this subpart, the services must be— (1) Furnished by an individual who owns, is employed by, or furnishes services under contract to the FQHC; (2) Of a type that the clinical psychologist or clinical social worker who furnishes the services is legally permitted to perform by the State in which the service is furnished; (3) Performed by a clinical social worker or clinical psychologist who is legally authorized to perform such services under State law or the State regulatory mechanism provided by the law of the State in which such services are performed; and (4) Covered if furnished by a physician. (b) If State law prescribes a physician supervision requirement, it is met if the conditions specified in § 491.8(b) of this chapter and any pertinent requirements of State law are satisfied. (c) The services of clinical psychologists or clinical social workers are not covered if State law or regulations require that the services be performed under a physician's order and no such order was prepared. <CITA>[57 FR 24980, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2452</SECTNO> <SUBJECT>Services and supplies incident to clinical psychologist and clinical social worker services.</SUBJECT> (a) Services and supplies incident to a clinical psychologist's or clinical social worker's services are reimbursable under this subpart if the service or supply is— (1) Of a type commonly furnished in a physician's office; (2) Of a type commonly furnished either without charge or included in the Federally qualified health center's bill; (3) Furnished as an incidental, although integral part of professional services furnished by a clinical psychologist or clinical social worker; (4) Furnished under the direct, personal supervision of a clinical psychologist, clinical social worker or physician; and<PRTPAGE P="168"/> (5) In the case of a service, furnished by a member of the center's health care staff who is an employee of the center. (b) The direct personal supervision requirement in paragraph (a)(4) of this section is met only if the clinical psychologist or clinical social worker is permitted to supervise such services under the written policies governing the Federally qualified health center. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Payment for Rural Health Clinic and Federally Qualified Health Center Services</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 57 FR 24976, 24977, June 12, 1992, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 405.2460</SECTNO> <SUBJECT>Applicability of general payment exclusions.</SUBJECT> The payment conditions, limitations, and exclusions set out in subpart C of this part, part 410 and part 411 of this chapter are applicable to payment for services provided by rural health clinics and Federally qualified health centers, except that preventive primary services, as defined in § 405.2448, are covered in Federally qualified health centers and not excluded by the provisions of section 1862(a) of the Act. </SECTION> <SECTION> <SECTNO>§ 405.2462</SECTNO> <SUBJECT>Payment for rural health clinic and Federally qualified health center services.</SUBJECT> (a) <E T="03">Payment to provider-based rural health clinics and Federally qualified health centers.</E> A rural health clinic or Federally qualified health center is paid in accordance with parts 405 and 413 of this subchapter, as applicable, if: (1) The clinic or center is an integral and subordinate part of a hospital, skilled nursing facility or home health agency participating in Medicare (i.e., a provider of services); and (2) The clinic or center is operated with other departments of the provider under common licensure, governance and professional supervision. (b) <E T="03">Payment to independent rural health clinics and freestanding Federally qualified health centers.</E> (1) All other clinics and centers will be paid on the basis of an all-inclusive rate for each beneficiary visit for covered services. This rate will be determined by the intermediary, in accordance with this subpart and general instructions issued by CMS. (2) The amount payable by the intermediary for a visit will be determined in accordance with paragraph (b)(3) and (4) of this section. (3) <E T="03">Federally qualified health centers.</E> For Federally qualified health center visits, Medicare will pay 80 percent of the all-inclusive rate since no deductible is applicable to Federally qualified health center services. (4) <E T="03">Rural health clinics.</E> (i) If the deductible has been fully met by the beneficiary prior to the rural health clinic visit, Medicare pays 80 percent of the all-inclusive rate. (ii) If the deductible has not been fully met by the beneficiary before the visit, and the amount of the clinic's reasonable customary charge for the services that is applied to the deductible is— (A) Less than the all-inclusive rate, the amount applied to the deductible will be subtracted from the all-inclusive rate and 80 percent of the remainder, if any, will be paid to the clinic; (B) Equal to or exceeds the all-inclusive rate, no payment will be made to the clinic. (5) To receive payment, the clinic or center must follow the payment procedures specified in section 410.165 of this chapter. (6) Payment for treatment of mental psychoneurotic or personality disorders is subject to the limitations on payment in § 410.155(c). </SECTION> <SECTION> <SECTNO>§ 405.2463</SECTNO> <SUBJECT>What constitutes a visit.</SUBJECT> (a) <E T="03">Visit.</E> (1) A visit is a face-to-face encounter between a clinic or center patient and a physician, physician assistant, nurse practitioner, nurse-midwife, or visiting nurse. (2) For FQHCs, a visit also means a face-to-face encounter between a patient and a qualified clinical psychologist or clinical social worker. (3) Encounters with more than one health professional and multiple encounters with the same health professional that take place on the same day and at a single location constitute a single visit, except when one of the following conditions exist:<PRTPAGE P="169"/> (i) After the first encounter, the patient suffers illness or injury requiring additional diagnosis or treatment. (ii) For FQHCs, the patient has a medical visit and an other health visit, as defined in paragraphs (b) and (c) of this section. (4) <E T="03">Payment.</E> (i) Medicare pays for two visits per day when the conditions in paragraph (a)(3) of this section are met. (ii) In all other cases, payment is limited to one visit per day. (b) <E T="03">Medical visit.</E> For purposes of paragraph (a)(3) of this section, a medical visit is a face-to-face encounter between an FQHC patient and a physician, physician assistant, nurse practitioner, nurse-midwife, or visiting nurse. (c) <E T="03">Other health visit.</E> For purposes of paragraph (a)(3) of this section, an other health visit is a face-to-face encounter between an FQHC patient and a clinical psychologist, clinical social worker, or other health professional for mental health services. <CITA>[61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2464</SECTNO> <SUBJECT>All-inclusive rate.</SUBJECT> (a) <E T="03">Determination of rate.</E> (1) An all-inclusive rate is determined by the intermediary at the beginning of the reporting period. (2) The rate is determined by dividing the estimated total allowable costs by estimated total visits for rural health clinic or Federally qualified health center services. (3) The rate determination is subject to any tests of reasonableness that may be established in accordance with this subpart. (b) <E T="03">Adjustment of rate.</E> (1) The intermediary, during each reporting period, periodically reviews the rate to assure that payments approximate actual allowable costs and visits for rural health clinic or Federally qualified health center services and adjusts the rate if: (i) There is a significant change in the utilization of clinic or center services; (ii) Actual allowable costs vary materially from the clinic or center's allowable costs; or (iii) Other circumstances arise which warrant an adjustment. (2) The clinic or center may request the intermediary to review the rate to determine whether adjustment is required. </SECTION> <SECTION> <SECTNO>§ 405.2466</SECTNO> <SUBJECT>Annual reconciliation.</SUBJECT> (a) <E T="03">General.</E> Payments made to a rural health clinic or a Federally qualified health center during a reporting period are subject to reconciliation to assure that those payments do not exceed or fall short of the allowable costs attributable to covered services furnished to Medicare beneficiaries during that period. (b) <E T="03">Calculation of reconciliation.</E> (1) The total reimbursement amount due the clinic or center for covered services furnished to Medicare beneficiaries is based on the report specified in § 405.2470(c)(2) and is calculated by the intermediary as follows: (i) The average cost per visit is calculated by dividing the total allowable cost incurred for the reporting period by total visits for rural health clinic or Federally qualified health center services furnished during the period. The average cost per visit is subject to tests of reasonableness which may be established in accordance with this subpart. (ii) The total cost of rural health clinic or Federally qualified health center services furnished to Medicare beneficiaries is calculated by multiplying the average cost per visit by the number of visits for covered rural health clinic or Federally qualified health center services by beneficiaries. (iii) For rural health clinics, the total reimbursement due the clinic is 80 percent of the amount calculated by subtracting the amount of deductible incurred by beneficiaries that is attributable to rural health clinic services from the cost of these services. The reimbursement computation for Federally qualified health centers does not include a reduction related to the deductible because Federally qualified health center services are not subject to a deductible. (iv) For rural health clinics and FQHCs, payment for pneumococcal and influenza vaccine and their administration is 100 percent of Medicare reasonable cost.<PRTPAGE P="170"/> (2) The total reimbursement amount due is compared with total payments made to the clinic or center for the reporting period, and the difference constitutes the amount of the reconciliation. (c) <E T="03">Notice of program reimbursement.</E> The intermediary sends written notice to the clinic or center: (1) Setting forth its determination of the total reimbursement amount due the clinic or center for the reporting period and the amount, if any, of the reconciliation; and (2) Informing the clinic or center of its right to have the determination reviewed at a hearing under the procedures set forth in subpart R of this part. (d) <E T="03">Payment of reconciliation amount</E>—(1) <E T="03">Underpayments.</E> If the total reimbursement due the clinic or center exceeds the payments made for the reporting period, the intermediary makes a lump-sum payment to the clinic or center to bring total payments into agreement with total reimbursement due the clinic or center. (2) <E T="03">Overpayments</E>. If the total payments made to a clinic or center for the reporting period exceed the total reimbursement due the clinic or center for the period, the intermediary arranges with the clinic or center for repayment through a lump-sum refund, or, if that poses a hardship for the clinic or center, through offset against subsequent payments or a combination of offset and refund. The repayment must be completed as quickly as possible, generally within 12 months from the date of the notice of program reimbursement. A longer repayment period may be agreed to by the intermediary if the intermediary is satisfied that unusual circumstances exist which warrant a longer period. <CITA>[57 FR 24976, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2468</SECTNO> <SUBJECT>Allowable costs.</SUBJECT> (a) <E T="03">Applicability of general Medicare principles.</E> In determining whether and to what extent a specific type or item of cost is allowable, such as interest, depreciation, bad debts and owner compensation, the intermediary applies the principles for reimbursement of provider costs, as set forth in part 413 of this subchapter. (b) <E T="03">Typical rural health clinic and Federally qualified health center costs.</E> The following types and items of cost are included in allowable costs to the extent that they are covered and reasonable: (1) Compensation for the services of a physician, physician assistant, nurse practitioner, nurse-midwife, visiting nurse, qualified clinical psychologist, and clinical social worker who owns, is employed by, or furnishes services under contract to an FQHC. (RHCs are not paid for services furnished by contracted individuals other than physicians.) (2) Compensation for the duties that a supervising physician is required to perform under the agreement specified in § 491.8 of this chapter. (3) Costs of services and supplies incident to the services of a physician, physician assistant, nurse practitioner, nurse-midwife, qualified clinical psychologist, or clinical social worker. (4) Overhead costs, including clinic or center administration, costs applicable to use and maintenance of the entity, and depreciation costs. (5) Costs of services purchased by the clinic or center. (c) <E T="03">Tests of reasonableness for rural health clinic cost and utilization.</E> Tests of reasonableness authorized by sections 1833(a) and 1861(v)(1)(A) of the Act may be established by CMS or the carrier with respect to direct or indirect overall costs, costs of specific items and services, or costs of groups of items and services. Those tests include, but are not limited to, screening guidelines and payment limitations. (d) <E T="03">Screening guidelines.</E> (1) Costs in excess of amounts established by the guidelines are not included unless the clinic or center provides reasonable justification satisfactory to the intermediary. (2) Screening guidelines are used to assess the costs of services, including the following: (i) Compensation for the professional and supervisory services of physicians and for the services of physician assistants, nurse practitioners, and nurse-midwives.<PRTPAGE P="171"/> (ii) Services of physicians, physician assistants, nurse practitioners, nurse-midwives, visiting nurses, qualified clinical psychologists, and clinical social workers. (iii) The level of administrative and general expenses. (iv) Staffing (for example, the ratio of other clinic or center personnel to physicians, physician assistants, and nurse practitioners). (v) The reasonableness of payments for services purchased by the clinic or center, subject to the limitation that the costs of physician services purchased by the clinic or center may not exceed amounts determined under the applicable provisions of subpart E of part 405 or part 415 of this chapter. (e) <E T="03">Payment limitations.</E> Limits on payments may be set by CMS, on the basis of costs estimated to be reasonable for the provision of such services. (f) <E T="03">Graduate medical education.</E> (1) Effective for that portion of cost reporting periods occurring on or after January 1, 1999, if an RHC or an FQHC incurs “all or substantially all” of the costs for the training program in the nonhospital setting as defined in § 413.86(b) of this chapter, the RHC or FQHC may receive direct graduate medical education payment for those residents. (2) Direct graduate medical education costs are not included as allowable cost under § 405.2466(b)(1)(i); and therefore, are not subject to the limit on the all-inclusive rate for allowable costs. (3) Allowable graduate medical education costs must be reported on the RHC's or the FQHC's cost report under a separate cost center. (4) Allowable graduate medical education costs are non-reimbursable if payment for these costs are received from a hospital or a Medicare+Choice organization. (5) Allowable direct graduate medical education costs under paragraphs (f)(6) and (f)(7)(i) of this section, are subject to reasonable cost principles under part 413 and the reasonable compensation equivalency limits in §§ 415.60 and 415.70 of this chapter. (6) The allowable direct graduate medical education costs are those costs incurred by the nonhospital site for the educational activities associated with patient care services of an approved program, subject to the redistribution and community support principles in § 413.85(c). (i) The following costs are allowable direct graduate medical education costs to the extent that they are reasonable— (A) The costs of the residents' salaries and fringe benefits (including travel and lodging expenses where applicable). (B) The portion of teaching physicians' salaries and fringe benefits that are related to the time spent teaching and supervising residents. (C) Facility overhead costs that are allocated to direct graduate medical education. (ii) The following costs are not allowable graduate medical education costs— (A) Costs associated with training, but not related to patient care services. (B) Normal operating and capital-related costs. (C) The marginal increase in patient care costs that the RHC or FQHC experiences as a result of having an approved program. (D) The costs associated with activities described in § 413.85(h) of this chapter. (7) Payment is equal to the product of— (i) The RHC's or the FQHC's allowable direct graduate medical education costs; and (ii) Medicare's share, which is equal to the ratio of Medicare visits to the total number of visits (as defined in § 405.2463). (8) Direct graduate medical education payments to RHCs and FQHCs made under this section are made from the Federal Supplementary Medical Insurance Trust Fund. <CITA>[43 FR 8261, Mar. 1, 1978. Redesignated and amended at 57 FR 24977, June 12, 1992; 60 FR 63176, Dec. 8, 1995; 61 FR 14658, Apr. 3, 1996; 63 FR 41002, July 31, 1998; 66 FR 39932, Aug. 1, 2001]</CITA> </SECTION> <SECTION> <PRTPAGE P="172"/> <SECTNO>§ 405.2470</SECTNO> <SUBJECT>Reports and maintenance of records.</SUBJECT> (a) <E T="03">Maintenance and availability of records.</E> The rural health clinic or Federally qualified health center must: (1) Maintain adequate financial and statistical records, in the form and containing the data required by CMS, to allow the intermediary to determine payment for covered services furnished to Medicare beneficiaries in accordance with this subpart; (2) Make the records available for verification and audit by HHS or the General Accounting Office; (3) Maintain financial data on an accrual basis, unless it is part of a governmental institution that uses a cash basis of accounting. In the latter case, appropriate depreciation on capital assets is allowable rather than the expenditure for the capital asset. (b) <E T="03">Adequacy of records</E>. (1) The intermediary may suspend reimbursement if it determines that the clinic or center does not maintain records that provide an adequate basis to determine payments under Medicare. (2) The suspension continues until the clinic or center demonstrates to the intermediary's satisfaction that it does, and will continue to, maintain adequate records. (c) <E T="03">Reporting requirements—</E>(1) <E T="03">Initial report.</E> At the beginning of its initial reporting period, the clinic or center must submit an estimate of budgeted costs and visits for rural health clinic or Federally qualified health center services for the reporting period, in the form and detail required by CMS, and such other information as CMS may require to establish the payment rate. (2) <E T="03">Annual reports.</E> Within 90 days after the end of its reporting period, the clinic or center must submit, in such form and detail as may be required by CMS, a report of: (i) Its operations, including the allowable costs actually incurred for the period and the actual number of visits for rural health clinic or Federally qualified health center services furnished during the period; and (ii) The estimated costs and visits for rural health clinic services or Federally qualified health center services for the succeeding reporting period and such other information as CMS may require to establish the payment rate. (3) <E T="03">Late reports.</E> If the clinic or center does not submit an adequate annual report on time, the intermediary may reduce or suspend payments to preclude excess payment to the clinic or center. (4) <E T="03">Inadequate reports.</E> If the clinic or center does not furnish a report or furnishes a report that is inadequate for the intermediary to make a determination of program payment, CMS may deem all payments for the reporting period to be overpayments. (5) <E T="03">Postponement of due date.</E> For good cause shown by the clinic or center, the intermediary may, with CMS's approval, grant a 30-day postponement of the due date for the annual report. (6) <E T="03">Reports following termination of agreement or change of ownership.</E> The report from a clinic or center which voluntarily or involuntarily ceases to participate in the Medicare program or experiences a change in ownership (see §§ 405.2436-405.2438) is due no later than 45 days following the effective date of the termination of agreement or change of ownership. </SECTION> <SECTION> <SECTNO>§ 405.2472</SECTNO> <SUBJECT>Beneficiary appeals.</SUBJECT> A beneficiary may request a hearing by an intermediary (subject to the limitations and conditions set forth in subpart H of this part) if: (a) The beneficiary is dissatisfied with an intermediary's determination denying a request for payment made on his or her behalf by a rural health clinic or Federally qualified health center; or (b) The beneficiary is dissatisfied with the amount of payment; or (c) The beneficiary believes the request for payment is not being acted upon with reasonable promptness. <CITA>[43 FR 8261, Mar. 1, 1978. Redesignated and amended at 57 FR 24978, June 12, 1992]</CITA> </SECTION> </SUBJGRP> </SUBPART> </PART> <PART> <EAR>Pt. 406</EAR> <HD SOURCE="HED">PART 406—HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>406.1</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> <SECTNO>406.2</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>406.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>406.5</SECTNO> <SUBJECT>Basis of eligibility and entitlement.<PRTPAGE P="173"/> </SUBJECT> <SECTNO>406.6</SECTNO> <SUBJECT>Application or enrollment for hospital insurance.</SUBJECT> <SECTNO>406.7</SECTNO> <SUBJECT>Forms to apply for entitlement under Medicare Part A.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Hospital Insurance Without Monthly Premiums</HD> <SECTNO>406.10</SECTNO> <SUBJECT>Individual age 65 or over who is entitled to social security or railroad retirement benefits, or who is eligible for social security benefits.</SUBJECT> <SECTNO>406.11</SECTNO> <SUBJECT>Individual age 65 or over who is not eligible as a social security or railroad retirement benefits beneficiary, or on the basis of government employment.</SUBJECT> <SECTNO>406.12</SECTNO> <SUBJECT>Individual under age 65 who is entitled to social security or railroad retirement disability benefits.</SUBJECT> <SECTNO>406.13</SECTNO> <SUBJECT>Individual who has end-stage renal disease.</SUBJECT> <SECTNO>406.15</SECTNO> <SUBJECT>Special provisions applicable to Medicare qualified government employment.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Premium Hospital Insurance</HD> <SECTNO>406.20</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> <SECTNO>406.21</SECTNO> <SUBJECT>Individual enrollment.</SUBJECT> <SECTNO>406.22</SECTNO> <SUBJECT>Effect of month of enrollment on entitlement.</SUBJECT> <SECTNO>406.24</SECTNO> <SUBJECT>Special enrollment period.</SUBJECT> <SECTNO>406.26</SECTNO> <SUBJECT>Enrollment under State buy-in.</SUBJECT> <SECTNO>406.28</SECTNO> <SUBJECT>End of entitlement.</SUBJECT> <SECTNO>406.32</SECTNO> <SUBJECT>Monthly premiums.</SUBJECT> <SECTNO>406.33</SECTNO> <SUBJECT>Determination of months to be counted for premium increase: Enrollment.</SUBJECT> <SECTNO>406.34</SECTNO> <SUBJECT>Determination of months to be counted for premium increase: Reenrollment.</SUBJECT> <SECTNO>406.38</SECTNO> <SUBJECT>Prejudice to enrollment rights because of Federal Government error.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Special Circumstances That Affect Entitlement to Hospital Insurance</HD> <SECTNO>406.50</SECTNO> <SUBJECT>Nonpayment of benefits on behalf of certain aliens.</SUBJECT> <SECTNO>406.52</SECTNO> <SUBJECT>Conviction of certain offenses.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 48 FR 12536, Mar. 25, 1983, unless otherwise noted. Redesignated at 51 FR 41338, Nov. 14, 1986. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 406.1</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> Sections 226, 226A, 1818 and 1818A of the Social Security Act and section 103 of Public Law 89-97 establish the conditions for entitlement to hospital insurance benefits. Sections 202 (t) and (u) of the Act specify limitations that apply to certain aliens and to persons convicted of certain offenses. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 56 FR 38078, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.2</SECTNO> <SUBJECT>Scope.</SUBJECT> Subparts A through D of this part specify the conditions of eligibility for hospital insurance and set forth certain specific conditions that affect entitlement to benefits. Hospital insurance is authorized under Part A of title XVIII and is also referred to as Medicare Part A. It includes inpatient hospital care, posthospital SNF care, home health services, and hospice care. <CITA>[48 FR 56026, Dec. 16, 1983, as amended at 50 FR 33033, Aug. 16, 1985. Redesignated and amended at 51 FR 41338, Nov. 14, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">First month of eligibility</E> means the first month in which an individual meets all the requirements for entitlement to hospital insurance except application or enrollment if that is required. <E T="03">First month of entitlement</E> means the first month for which the individual meets all the requirements for entitlement to Part A benefits. <E T="03">Insured individual</E> means an individual who has the number of quarters of coverage required for monthly social security benefits. <E T="03">Quarter of coverage</E> means a calendar quarter that is counted toward the number of covered quarters required to make the individual eligible for monthly social security benefits. A quarter is counted if during that quarter (or that calendar year) the individual earned a required minimum amount of money. (For details, see 20 CFR part 404, subpart B.) </SECTION> <SECTION> <SECTNO>§ 406.5</SECTNO> <SUBJECT>Basis of eligibility and entitlement.</SUBJECT> (a) <E T="03">Hospital insurance without premiums.</E> Hospital insurance is available to most individuals without payment of a premium if they: (1) Are age 65 or over, or (2) Have received social security or railroad retirement disability benefits for 25 months; or<PRTPAGE P="174"/> (3) Have end-stage renal disease. Subpart B of this part explains the requirements such individuals must meet to obtain hospital insurance without premiums. (b) <E T="03">Premium hospital insurance.</E> Many individuals who are age 65 or over, but do not meet the requirements set forth in subpart B of this part, and certain individuals under age 65, may obtain the benefits by paying a premium. Section 406.20 of this part explains the requirements individuals must meet to obtain premium hospital insurance. <CITA>[48 FR 12536, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 56 FR 38078, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.6</SECTNO> <SUBJECT>Application or enrollment for hospital insurance.</SUBJECT> (a) <E T="03">Basic provision.</E> In most cases, eligibility for Medicare Part A is a result of entitlement to monthly social security or railroad retirement cash benefits or eligibility for monthly social security cash benefits. This section specifies the individuals who need not file an application to become entitled to hospital insurance, those who must file an application, and those who must enroll. (b) <E T="03">Individuals who need not file an application for hospital insurance.</E> An individual who meets any of the following conditions need not file an application for hospital insurance: (1) Is under age 65 and has been entitled, for more than 24 months, to monthly social security or railroad retirement benefits based on disability. (2) At the time of attainment of age 65, is entitled to monthly social security or railroad retirement benefits. (3) Establishes entitlement to monthly social security or railroad retirement benefits at any time after attaining age 65. (c) <E T="03">Individuals who must file an application for hospital insurance.</E> An individual must file an application for hospital insurance if he or she seeks entitlement to hospital insurance on the basis of— (1) The transitional provisions set forth in § 406.11; (2) Deemed entitlement to disabled widow's or widower's benefit under certain circumstances as provided in § 406.12; (3) A diagnosis of end-stage renal disease, as specified in § 406.13; (4) Effective January 1, 1981, eligibility for social security cash benefits, as specified in § 406.10(a)(3), if the individual has attained age 65 without applying for those benefits; or (5) The special provisions applicable to government employment as set forth in § 406.15. (d) <E T="03">When application is deemed to be filed.</E> (1) An application based on the transitional provisions or on ESRD is deemed to be filed in the first month of eligibility if it is filed not more than 3 months before the first month, and is retroactive to that month if filed within 12 months after the first month. An application filed more than 12 months after the first month of eligibility is retroactive to the 12th month before the month it is filed. (2) An application for deemed entitlement to disabled widow's or widower's benefits, that is filed before the first month in which the individual meets all conditions of entitlement for this benefit, will be deemed a valid application if those conditions are met before an initial determination, reconsideration, or hearing decision is made on the application. If the conditions are met after the date of any hearing decision, a new application will have to be filed. An application validly filed within 12 months after the first month of eligibility is retroactive to that first month. If filed more than 12 months after that first month, it is retroactive to the 12th month before the month of filing. (3) Effective June 8, 1980, an application based on eligibility for social security benefits at or after age 65, that is filed before the first month in which the individual meets all eligibility conditions for this benefit, will be deemed a valid application if those conditions are met before an initial determination, reconsideration, or hearing decision is made on the application. If the conditions are met after the date of any hearing decision, a new application will have to be filed. (4) Effective March 1, 1981, an application under § 406.10 that is validly filed within 6 months after the first month of eligibility is retroactive to that first month. If filed more than 6 <PRTPAGE P="175"/>months after that first month, it is retroactive to the 6th month before the month of filing. (e) <E T="03">Individuals who must enroll for hospital insurance.</E> An individual who must pay a monthly premium for hospital insurance must enroll in accordance with the procedures set forth in § 406.21. <CITA>[48 FR 12536, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 53 FR 47202, Nov. 22, 1988; 61 FR 40345, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.7</SECTNO> <SUBJECT>Forms to apply for entitlement under Medicare Part A.</SUBJECT> The following forms, available free of charge by mail from CMS or at any Social Security branch or district office, are used to apply for Medicare entitlement under the circumstances indicated: <EXTRACT> CMS-18-F-5—Application for Hospital Insurance Entitlement. (For use by individuals who are not eligible for retirement benefits under Title II of the Social Security Act or under the Railroad Retirement Act. This form may also be used for enrollment in the supplementary medical insurance program.) CMS-43—Application for Health Insurance Benefits under Medicare for Individuals with End Stage Renal Disease (ESRD). (An initial application for entitlement by individuals with ESRD). </EXTRACT> <FP>As an alternative, an individual may use the application for monthly social benefits to apply also for Medicare entitlement if he or she is eligible for hospital insurance at that time.</FP> <CITA>[53 FR 6633, Mar. 2, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Hospital Insurance Without Monthly Premiums</HD> <SECTION> <SECTNO>§ 406.10</SECTNO> <SUBJECT>Individual age 65 or over who is entitled to social security or railroad retirement benefits, or who is eligible for social security benefits.</SUBJECT> (a) <E T="03">Requirements.</E> An individual is entitled to hospital insurance benefits under section 226 of the Act if he or she has attained aged 65 and is: (1) Entitled to monthly social security benefits under section 202 of the Social Security Act; (2) A qualified railroad retirement beneficiary who has been certified as such to the Social Security Administration by the Railroad Retirement Board in accordance with section 7(d) of the Railroad Retirement Act of 1974; or (3) Effective January 1, 1981, eligible for monthly social security benefits under section 202 of the Act and has filed an application for hospital insurance. (b) <E T="03">Beginning and end of entitlement.</E> (1) Entitlement begins with the first day of the first month in which the individual meets the requirements of paragraph (a) of this section. (2) Entitlement continues until the individual dies or no longer meets the requirements of paragraph (a) of this section. An individual is not entitled to railroad retirement benefits and is neither entitled to, nor eligible for, monthly social security benefits in the month in which he or she dies. However, an individual who meets all other requirements for hospital insurance entitlement is entitled to hospital insurance in the month in which he or she dies if he or she— (i) Would have been entitled to monthly railroad retirement benefits or social security benefits in that month if he or she had not died; or (ii) Has filed an application for hospital insurance and would have been eligible for monthly social security benefits in that month if he or she had not died. </SECTION> <SECTION> <SECTNO>§ 406.11</SECTNO> <SUBJECT>Individual age 65 or over who is not eligible as a social security or railroad retirement benefits beneficiary, or on the basis of government employment.</SUBJECT> (a) <E T="03">Basis.</E> Section 103 of the law that established the Medicare program in 1965 (Pub. L. 89-97) provided for eligibility for certain individuals who were age 65 or would soon attain age 65 but would not be able to qualify for social security or railroad retirement benefits. (b) <E T="03">Requirements.</E> Unless he or she is excluded under paragraph (c) of this section, an individual age 65 or over who does not meet the requirements of § 406.10 or § 406.15 (and who would not meet those requirements if he or she filed an application), is entitled to Medicare Part A benefits if he or she meets the following requirements: (1) <E T="03">Age and quarters of coverage.</E> (i) He or she attained age 65 before 1968; or<PRTPAGE P="176"/> (ii) If he or she attained age 65 in 1968 or later, he or she must have at least 3 quarters of coverage for each year that elapsed after 1966 and before the year in which he or she attained age 65. (The quarters of coverage may have been acquired at any time, not necessarily during the elapsed years.) (2) <E T="03">Residence and citizenship.</E> He or she is a resident of the United States and— (i) A citizen of the United States; or (ii) An alien lawfully admitted for permanent residence who has continuously resided in the United States for 5 years immediately preceding the first month in which he or she meets all other requirements for entitlement to hospital insurance. (3) <E T="03">Application.</E> He or she has filed an application for Medicare Part A no earlier than the third month before the first month of eligibility. (c) <E T="03">Bases for exclusion.</E> An individual who meets the requirements of paragraph (b) of this section is excluded from Medicare Part A if he or she— (1) Has been convicted of spying, sabotage, or treason, sedition, and subversive action under chapter 37, 105, or 115 of title 18 of the United States Code; (2) Has been convicted of conspiracy to establish a dictatorship under section 4 of the Internal Security Act of 1950; (3) On February 16, 1965, was or could have been covered under the Federal Employees Health Benefits Act (FEHBA) of 1959; or (4) In his or her first month of eligibility; (i) Is covered by an enrollment under the FEHBA; or (ii) Could have been covered by an enrollment under that Act if he or she (or any other person who could provide him or her with coverage) was a Federal employee at any time after February 15, 1965, and had enrolled and retained coverage under that Act. (d) <E T="03">End of exclusion.</E> An individual excluded under paragraph (c)(3) or (4) of this section can become entitled beginning with the first month in which he or she loses the right to FEHBA coverage solely because he or she or the other person leaves Federal employment. (e) <E T="03">Beginning and end of entitlement.</E> (1) Entitlement begins— (i) In the first month of eligibility if the application is filed no later than 12 months after the first month of eligibility: (ii) In the 12th month before the month of application if the application is filed more than 12 months after the first month of eligibility. (2) Entitlement continues until death or until the month before the month in which the individual becomes entitled under § 406.10 or § 406.15. <CITA>[48 FR 12536, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 53 FR 47202, Nov. 22, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.12</SECTNO> <SUBJECT>Individual under age 65 who is entitled to social security or railroad retirement disability benefits.</SUBJECT> (a) <E T="03">Basic requirements.</E> An individual under age 65 is entitled to hospital insurance benefits if, for 25 months, he or she has been— (1) Entitled or deemed entitled to social security disability benefits as an insured individual, child, widow, or widower who is “under a disability” or (2) A disabled qualified beneficiary certified under Section 7(d) of the Railroad Retirement Act. (b) <E T="03">Previous periods of disability benefits entitlement.</E> Months of a previous period of entitlement or deemed entitlement to disability benefits count toward the 25-month requirement if any of the following conditions is met: (1) Entitlement was as an insured individual or a disabled qualified railroad retirement beneficiary, and the previous period ended within the 60 months preceding the month in which the current disability began. (2) Entitlement was as a disabled child, widow, or widower, and the previous period ended within the 84 months preceding the month in which the current disability began. (3) The previous period ended on or after March 1, 1988 and the current impairment is the same as, or directly related to, the impairment on which the previous period of entitlement was based. (c) <E T="03">Deemed entitlement to disabled widow's or widower's monthly benefits.</E> (1) <E T="03">Purpose.</E> The provisions of paragraphs (c) (2), (3), and (4) of this section are intended to enable individuals—<PRTPAGE P="177"/> (i) To meet the 25-month requirement of paragraph (a) of this section; or (ii) To retain hospital insurance entitlement when they are no longer entitled to monthly disability benefits. (2) <E T="03">Deemed entitlement for certain individuals entitled to old-age insurance benefits.</E> An individual who becomes entitled to monthly old-age insurance benefits before age 65, is, by law, precluded from establishing or retaining entitlement to disabled widow's or widower's monthly benefits. However, for purposes of meeting the 25-month requirement, a widow or widower who meets all other requirements for disability benefits and is excluded solely because of entitlement to old-age insurance benefits, shall be deemed to be (or to continue to be) entitled to disability benefits. A widow or widower who is not entitled to disability benefits for the month before attaining age 60 must file two applications, one for old-age insurance benefits and one for hospital insurance. (3) <E T="03">Deemed entitlement for certain individuals entitled to mother's benefits.</E> An individual entitled to mother's insurance benefits under section 202(g) of the Social Security Act cannot at the same time be entitled to disabled widow's benefits. However, if she applies for hospital insurance, she will be deemed to be entitled to disabled widow's monthly benefits in the first month (of the 12 months before application) in which she would have been entitled to those benefits if she had filed an application for them. (4) <E T="03">Deemed entitlement for certain individuals entitled to father's benefits.</E> An individual who is entitled to father's insurance benefits under section 202(g) of the Act cannot at the same time be entitled to disabled widower's benefits. However, if he applies for hospital insurance benefits, he will be deemed to be entitled to disabled widower's monthly benefits as follows: (i) If he applied for hospital insurance benefits before May 1984, he was deemed entitled to disabled widower's benefits for any month after April 1981 for which he would have been entitled to those benefits if he had filed an application for them. (ii) If he applies for hospital insurance benefits in or after May 1984, he is deemed entitled to disabled widower's benefits for any month, up to 12 months before the month of application, for which he would have been entitled to those benefits if he had filed an application for them. (iii) Hospital insurance entitlement under this paragraph (c)(4) could not begin before May 1983. (5) <E T="03">Deemed retroactive entitlement for certain disabled widows and widowers.</E> In some cases, disabled widows or widowers cannot become entitled to monthly cash benefits before the month in which they file application. However, for purposes of meeting the 25-month requirement, disability benefit entitlement will be deemed to have begun with the earliest month (of the 12 months before the application for cash benefits) in which the individual met all the requirements except the filing of an application. (This provision is effective for applications filed on or after January 1, 1978.) (d) <E T="03">When entitlement begins and ends.</E> (1) Entitlement to hospital insurance begins with the 25th month of an individual's entitlement or deemed entitlement to disability benefits. Although an individual is not entitled to disability benefits for the month in which he or she dies, for purposes of this paragraph the individual will be deemed to be entitled for the month of death. (2) Except as provided in paragraph (e) of this section, entitlement to hospital insurance ends with the earliest of the following: (i) The last day of the last month in which he or she was entitled or deemed entitled to disability benefits or was qualified as a disabled railroad retirement beneficiary, if he or she was notified of the termination of entitlement before that month. (ii) The last day of the month following the month in which he or she is mailed a notice that his or her entitlement or deemed entitlement to disability benefits, or his or her status as a qualified disabled railroad retirement beneficiary, has ended. (iii) The last day of the month before the month he or she attains age 65. (An individual who is entitled to social security or railroad retirement cash benefits for the month of attainment of <PRTPAGE P="178"/>age 65 is automatically entitled to hospital insurance under § 406.10.) (iv) The day of death. (e) <E T="03">Continuation of Medicare entitlement when disability benefit entitlement</E> ends because of substantial gainful activity (SGA)—(1) <E T="03">Definitions.</E> As used in this section— <E T="03">Trial work period</E> means the 9-month period provided under title II of the Act and as defined 20 CFR 404.1592, during which the individual may test his or her ability to work and still receive disability cash benefits; and <E T="03">Reentitlement period</E> means a period as defined in 20 CFR 404.1592a that begins with the first month after the trial work period and ends with the 36th month after the trial work period or, if earlier, with the first month in which the impairment no longer exists or is no longer disabling. (During the reentitlement period, benefits may be discontinued because of SGA. However, if SGA is later discontinued, benefits may be reinstated without a new application and a new disability determination.) (2) <E T="03">Duration of continued Medicare entitlement.</E> Effective January 1, 1988, if an individual's entitlement to disability benefits or status as a qualified disabled railroad retirement beneficiary ends because he or she engaged in, or demonstrated the ability to engage in, substantial gainful activity after the 36 months following the end of the trial work period, Medicare entitlement continues until the earlier of the following: (i) The last day of the 24th month following the first month of SGA occurring after the 15th month of the individual's reentitlement period or, if later, the end of the month following the month the individual's disability benefit entitlement ends. (ii) The last day of the month following the month in which notice is mailed to the individual indicating that he or she is no longer entitled to hospital insurance because of an event or circumstance (for example, there has been medical improvement, or the disabled widow has remarried) that would terminate disability benefit entitlement if it had not already been terminated because of substantial gainful activity. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47202, Nov. 22, 1988; 56 FR 38078, Aug. 12, 1991; 56 FR 50058, Oct. 3, 1991; 61 FR 40345, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.13</SECTNO> <SUBJECT>Individual who has end-stage renal disease.</SUBJECT> (a) <E T="03">Statutory basis and applicability.</E> This section explains the conditions of entitlement to hospital insurance benefits on the basis of end-stage renal disease, and specifies the beginning and end of the period of entitlement. It implements section 226A of the Social Security Act. (b) <E T="03">Definitions.</E> As used in this section: <E T="03">End-stage renal disease</E> (ESRD) means that stage of kidney impairment that appears irreversible and permanent and requires a regular course of dialysis or kidney transplantation to maintain life. <E T="03">Child</E> or <E T="03">spouse</E> means a child or spouse whose relationship to the parent or spouse meets the relationship requirements for entitlement to child's monthly social security benefits or to wife's, husband's, widow's, widower's, mother's or father's monthly benefits, as set forth in 20 CFR part 404. However, the duration of relationship requirements apply only to divorced spouses. (See 20 CFR 404.331.) <E T="03">Dependent child</E> means a person who, on the first day he or she has end-stage renal disease, is unmarried and meets the dependency requirements for entitlement to child's social security benefits on the basis of a parent's earnings (see 20 CFR 404.350-404.365) and who— (1) Is under age 22; (2) Is under a disability that began before age 22; or (3) Is under age 26, is receiving at least one-half support from that parent, and has continuously received at least one-half support from that parent since the day before attaining age 22. <E T="03">One-half support</E> means regular contributions, in cash or in kind, that equals or exceeds one-half of the child's total support. (c) <E T="03">Requirements.</E> An individual is entitled to hospital insurance benefits if—<PRTPAGE P="179"/> (1) He or she is medically determined to have ESRD; (2) He or she is: (i) Fully or currently insured under the social security program (title II of the Act) or would be fully or currently insured if his or her employment (after 1936) as defined under the Railroad Retirement Act were considered “employment” under the Social Security Act; (ii) Entitled to monthly social security or railroad retirement benefits; or (iii) The spouse or dependent child of a person who meets the requirements of paragraph (c)(2)(i) or (c)(2)(ii) of this section; (3) He or she has filed an application for Medicare Part A; and (4) He or she has satisfied the waiting period explained in paragraph (e) of this section. (d) <E T="03">Filing an application.</E> (1) An individual may obtain an application form, and help in completing it, from any social security office. (2) An application is not valid if it is filed earlier than the third month before the month in which the individual meets the conditions of paragraphs (c)(1), (c)(2), and (c)(4) of this section. (3) If an individual who has ESRD dies before he or she has filed an application, or is unable to file because of physical or mental condition, a relative or other person responsible for his or her affairs may file in his or her behalf. If a responsible person is not available, the hospital or dialysis facility that furnished treatment may file the application. (e) <E T="03">Beginning of entitlement—</E>(1) <E T="03">Basic limitations.</E> Entitlement can begin no earlier than the first month in which the individual meets the conditions specified in paragraph (c) of this section, or the 12th month before the month of application, whichever is later. (2) <E T="03">Waiting period.</E> Entitlement begins on the first day of the third month after the month in which the individual initiates a regular course of renal dialysis, if the course is maintained throughout the waiting period, unless entitlement would begin earlier under paragraph (e) (3) or (4) of this section. This means that if dialysis began in January, entitlement would begin April 1. (3) <E T="03">Exceptions: Early kidney transplant.</E> If the individual receives a transplant, entitlement begins with the first day of the month in which the transplant was performed. However, if the individual is admitted as an inpatient to a hospital that is an approved renal transplantation center or renal dialysis center (see § 405.2102) for procedures preliminary to transplant surgery, entitlement begins— (i) On the first day of the month in which he or she initially enters the hospital, if the transplant is performed in that month or in either of the next 2 months; or (ii) On the first day of the second month before the month of kidney transplantation, if the transplant is delayed more than 2 months after the month of initial hospital stay. <FP>For example, if an individual enters the hospital in January, and the transplant is performed in January, February, or March, entitlement would begin January 1. However, if the transplant is performed in April, entitlement would begin February 1.</FP> (4) <E T="03">Exceptions: Self-dialysis training.</E> Entitlement begins on the first day of the month in which a regular course of renal dialysis began if: (i) Before the end of the waiting period, the individual participates in a self-dialysis training program offered by a participating Medicare facility that is approved to provide such training; (ii) The patient's physician has certified that it is reasonable to expect the individual will complete the training program and will self-dialyze on a regular basis; and (iii) The regular course of dialysis is maintained throughout the time that would otherwise be the waiting period (unless it is terminated earlier because the individual dies). (f) <E T="03">End of entitlement.</E> Entitlement ends with— (1) The end of the 12th month after the month in which a regular course of dialysis ends; or (2) The end of the 36th month after the month in which the individual has received a kidney transplant.<PRTPAGE P="180"/> (g) <E T="03">Resumption of entitlement.</E> Entitlement is resumed under the following conditions: (1) An individual who initiates a regular course of renal dialysis or has a kidney transplant during the 12-month period after the previous course of dialysis ended is entitled to Part A benefits and eligible to enroll in Part B with the month the regular course of dialysis is resumed or the month the kidney is transplanted. (2) An individual who initiates a regular course of renal dialysis or has a kidney transplant during the 36-month period after an earlier kidney transplant is entitled to Part A benefits and eligible to enroll in Part B with the month the regular course of dialysis begins or with the month the subsequent kidney transplant occurs. (3) An individual who initiates a regular course of renal dialysis more than 12 months after the previous course of regular dialysis ended or more than 36 months after the month of a kidney transplant is eligible to enroll in Part A and Part B with the month in which the regular course of dialysis is resumed. If he or she is otherwise entitled under the conditions specified in paragraph (c) of this section, including the filing of an application, entitlement begins with the month in which dialysis is initiated or resumed, without a waiting period, subject to the limitations of paragraph (e)(1) of this section. <CITA>[48 FR 12536, Mar. 25, 1983, as amended at 60 FR 22535, May 8, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.15</SECTNO> <SUBJECT>Special provisions applicable to Medicare qualified government employment.</SUBJECT> (a) <E T="03">Definition.</E> As used in this section, <E T="03">Medicare-qualified government employment</E> means Federal, State, or local government employment that is subject only to the hospital insurance portion of the tax imposed by the Federal Insurance Contributions Act (F.I.C.A.). This includes— (1) Wages paid for Federal employment after December 1982. (2) Wages paid to State and local government employees hired after March 31, 1986. (3) Wages paid to State and local government employees hired before April 1, 1986 but whose employment after March 31, 1986 is covered, for Medicare purposes only, under an agreement under section 218 of the Act. (b) <E T="03">Crediting of wages that are taxable only for Medicare purposes.</E> Medicare qualified government employment is credited in the same way and in the same amount as social security covered employment is credited for monthly social security cash benefit purposes. However, since only the Medicare portion (not the social security portion) of the F.I.C.A. tax is imposed, Medicare qualified government employment does not help qualify the individual for monthly Social Security cash benefits. (c) <E T="03">Required quarters of coverage.</E> (1) To qualify for hospital insurance on the basis of Medicare qualified government employment, an individual must have the number of quarters of coverage necessary to qualify for hospital insurance under § 406.10, § 406.12, or § 406.13. (2) An individual who has worked in Medicare qualified government employment may qualify for hospital insurance on the basis of Medicare qualified government employment exclusively, or a combination of Medicare qualified government employment and social security covered employment. (d) <E T="03">Transitional provision for Federal employment.</E> Any individual who was a Federal employee at any time both during and before January 1983 will receive credit for quarters of Federal employment before January 1983 without paying tax. This transitional provision applies even if the Federal employee did not receive Federal wages for January 1983, for instance, because he or she was on approved leave without pay or on loan to a State or foreign agency. (e) <E T="03">Conditions of entitlement.</E> An individual who has worked in Medicare qualified government employment (or any related individual who would be entitled to social security cash benefits on the employee's record if Medicare qualified government employment qualified for those benefits) is entitled to hospital insurance benefits if he or she— (1) Would meet the requirements of § 406.10, § 406.12, or § 406.13 if Medicare qualified government employment <PRTPAGE P="181"/>were social security covered employment; and (2) Has filed an application for hospital insurance. <FP>For purposes of this section not more than 12 months before the month of application may be counted towards the 25-month qualifying period specified in § 406.12(a).</FP> (f) <E T="03">Beginning and end of entitlement—</E>(1) <E T="03">Basic rule.</E> Subject to the limitations specified in paragraph (f)(2) and (f)(3) of this section, entitlement begins and ends as specified in § 406.10, § 406.12 or § 406.13, whichever is used to establish hospital insurance entitlement for the Federal, State, or local government employee or related individual. (2) <E T="03">Limitations: Federal government employment.</E> (i) Hospital insurance entitlement based on Federal employment could not begin before January 1983. (ii) No months before January 1983 may be used to satisfy the qualifying period required for entitlement based on disability. (3) <E T="03">Limitations: State and local government employment.</E> (i) Hospital insurance entitlement based on State or local government employment cannot begin before April 1986. (ii) No months before April 1986 may be used to satisfy the qualifying period required for entitlement based on disability. <CITA>[53 FR 47202, Nov. 22, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Premium Hospital Insurance</HD> <SECTION> <SECTNO>§ 406.20</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> (a) <E T="03">General provisions.</E> Hospital insurance benefits are available to most individuals age 65 or over and to certain individuals under age 65 who do not qualify for those benefits under subpart B of this part and are willing to pay a monthly premium. This is called premium hospital insurance. (b) <E T="03">Eligibility of individuals age 65 or over to enroll for premium hospital insurance.</E> Any individual is eligible to enroll for Medicare Part A if he or she— (1) Has attained age 65; (2) Is a resident of the United States and is either— (i) A citizen of the United States; or (ii) An alien lawfully admitted for permanent residence who has resided in the United States continuously for the 5-year period immediately preceding the month in which he or she meets all other requirements; (3) Is not eligible for Part A benefits under subpart B of this part; and (4) Is entitled to supplementary medical insurance (Part B of Medicare) or is eligible and has enrolled for it during an enrollment period. (c) <E T="03">Eligibility of individuals under age 65 to enroll for premium hospital insurance.</E> An individual who has not attained age 65 is eligible to enroll for Medicare Part A if he or she meets the following conditions: (1) Has been entitled to Medicare Part A (under § 406.12 or § 406.15) on the basis of entitlement or deemed entitlement to social security disability benefits, as provided under section 226(b) of the Act. (2) Continues to have a disabling physical or mental impairment. (3) Loses entitlement to disability benefits (and therefore also loses entitlement to Medicare Part A under § 406.12) solely because his or her earnings exceed the amount allowed under the social security regulations pertaining to “substantial gainful activity” (20 CFR 404.1571-404.1574); and (4) Is not otherwise entitled to Medicare Part A. <CITA>[56 FR 38078, Aug. 12, 1991; 56 FR 50058, Oct. 3, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.21</SECTNO> <SUBJECT>Individual enrollment.</SUBJECT> (a) <E T="03">Basic provision.</E> An individual who meets the requirements of § 406.20 (b) or (c) may enroll for premium hospital insurance only during his or her “initial enrollment period”, a “general enrollment period”, a “special enrollment period”, or, for HMO/CMP enrollees, a “transfer enrollment period”, as set forth in paragraphs (b) through (f) of this section. (b) <E T="03">Initial enrollment periods—</E>(1) <E T="03">Initial enrollment period for individual age 65 or over.</E> The initial enrollment period extends for 7 months, from the third month before the month the individual first meets the requirements of § 406.20 (b)(1) through (b)(3) through the third month after that first month of eligibility.<PRTPAGE P="182"/> (2) <E T="03">Initial enrollment period of individual under age 65.</E> The initial enrollment period begins with the month in which the individual receives notice that entitlement to Medicare Part A will end because he or she has lost entitlement to disability benefits solely because of earnings in excess of the amounts allowed under the social security regulations on substantial gainful activity (20 CFR 404.1571-404.1574). It continues for 7 full months after that month. (c) <E T="03">General enrollment period.</E> (1) Except as specified in paragraph (c)(4) of this section, the general enrollment period extends from January 1 to March 31 of each calendar year. (2) General enrollment periods are for individuals who do not enroll during the special enrollment period, who failed to enroll during the initial enrollment period, or whose previous period of entitlement had terminated. (3) If the individual enrolls or reenrolls during a general enrollment period, his or her entitlement begins on July 1 of the calendar year. (4) During the period April 1 through September 30, 1981, the general enrollment period was any time after the end of the individual's initial enrollment period. Any eligible individual whose initial enrollment period has ended, or whose previous period of entitlement had terminated, could enroll or reenroll during that 6-month period. (d) <E T="03">“Deemed” initial enrollment period for individual age 65 or over.</E> (1) If an individual who has attained age 65 fails to enroll during the initial enrollment period because of reliance on incorrect documentary information which led him or her to believe that he or she was not yet age 65, an initial enrollment period may be established for him or her as though he or she had attained age 65 on the date indicated by the incorrect documentary information. (2) The deemed initial enrollment period will be used to determine the individual's premium and right to enroll in a general enrollment period if such use is advantageous to the individual. (e) [Reserved] (f) <E T="03">Transfer enrollment period for HMO/CMP enrollees.</E> (1) <E T="03">Terminology. HMO</E> or <E T="03">CMP</E> means an eligible organization as defined in § 417.401 which has a contract with CMS under part 417, subpart L of this chapter. (2) <E T="03">Basic rule.</E> Effective February 1, 1991, individuals enrolled in an HMO or CMP under part 417, subpart K of this chapter who meet the requirements of § 406.20(b) may enroll in premium hospital insurance during a transfer enrollment period. This transfer enrollment period begins with any month or any part of a month in which the individual is enrolled in an HMO or CMP and ends with the last day of the 8th consecutive month in which the individual is no longer enrolled in the HMO or CMP. (3) <E T="03">Effective date of coverage.</E> (i) If the individual enrolls in premium hospital insurance while still enrolled in an HMO or CMP, or during the first month that he or she is no longer enrolled in the HMO or CMP, part A coverage will begin on the first day of the month of part A enrollment, or, at the option of the individual, on the first day of any of the following 3 months. (ii) If the individual enrolls in premium hospital insurance during any of the last 7 months of the transfer enrollment period, coverage will begin on the first day of the month after the month of enrollment. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47203, Nov. 22, 1988; 56 FR 38079, Aug. 12, 1991; 57 FR 36014, Aug. 12, 1992; 61 FR 40345, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.22</SECTNO> <SUBJECT>Effect of month of enrollment on entitlement.</SUBJECT> (a) <E T="03">Individual age 65 or over.</E> For an individual who has attained age 65, the following rules apply: (1) If the individual enrolls during the 3 months before the first month of eligibility, entitlement begins with the first month of eligibility. (2) If the individual enrolls in the first month of eligibility, entitlement begins with the following month. (3) If the individual enrolls during the month after the first month of eligibility, entitlement begins with the second month after the month of enrollment. (4) If the individual enrolls in either of the last 2 months of the enrollment period, entitlement begins with the <PRTPAGE P="183"/>third month after the month of enrollment. (b) <E T="03">Individual under age 65.</E> For an individual who has not attained age 65, the following rules apply: (1) If the individual enrolls before the month in which he or she meets the requirements of § 406.20(c), entitlement begins with the month in which the individual meets those requirements. (2) If the individual enrolls in the month in which he or she first meets the requirements of § 406.20(c), entitlement begins with the following month. (3) If the individual enrolls in the month following the month in which he or she meets the requirements of § 406.20(c), entitlement begins with the second month after the month of enrollment. (4) If the individual enrolls more than one month after the month in which he or she first meets the requirements of § 406.20(c), entitlement begins with the third month after the month of enrollment. <CITA>[56 FR 38079, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.24</SECTNO> <SUBJECT>Special enrollment period.<E T="51">1</E> <FTREF/> </SUBJECT> <FTNT> <E T="51">1</E> Before August 1986, SEPs were available only for enrollment in supplementary medical insurance, not for enrollment in premium hospital insurance. </FTNT> (a) <E T="03">Terminology.</E> As used in this subpart, the following terms have the indicated meanings. (1) <E T="03">Current employment status</E> has the meaning given this term in § 411.104 of this chapter. (2) <E T="03">Family member</E> has the meaning given this term in § 411.201 of this chapter. (3) <E T="03">Group health plan (GHP)</E> and <E T="03">large group health plan (LGHP)</E> have the meanings given those terms in § 411.101 of this chapter, except that the “former employee” language of those definitions does not apply with respect to SEPs because— (i) Section 1837(i)(1)(A) of the Act explicitly requires that GHP coverage of an individual age 65 or older, be by reason of the individual's (or the individual's spouse's) current employment status; and (ii) The sentence following section 1837(i)(1)(B), of the Act refers to “large group health plan”. Under section 1862(b)(1)(B)(i), as amended by OBRA '93, LGHP coverage of a disabled individual must be “by virtue of the individual's or a family member's current employment status with an employer”. (4) <E T="03">Special enrollment period (SEP)</E> is a period provided by statute to enable certain individuals to enroll in Medicare without having to wait for the general enrollment period. (b) <E T="03">Duration of SEP.</E> <E T="51">2</E> <FTREF/> (1) The SEP includes any month during any part of which— <FTNT> <E T="51">2</E> Before March 1995, SEPs began on the first day of the first month the individual was no longer covered under a GHP or LGHP by reason of current employment status. </FTNT> (i) An individual over age 65 is enrolled in a GHP by reason of the current employment status of the individual or the individual's spouse; or (ii) An individual under age 65 and disabled— (A) Is enrolled in a GHP by reason of the current employment status of the individual or the individual's spouse; or (B) Is enrolled in an LGHP by reason of the current employment status of the individual or a member of the individual's family. (2) The SEP ends on the last day of the eighth consecutive month during which the individual is at no time enrolled in a GHP or an LGHP by reason of current employment status. (c) <E T="03">Conditions for use of a SEP.</E> <E T="51">3</E> <FTREF/> In order to use a SEP, the individual must meet the following conditions: <FTNT> <E T="51">3</E> Before August 10, 1993, an individual under age 65 could qualify for a SEP only if he or she had LGHP coverage as an “active individual”, which the statute defined as “an employee, employer, self-employed individual (such as the employer), individual associated with the employer in a business relationship, or as a member of the family of any of those persons”. </FTNT> (1) When first eligible to enroll for premium hospital insurance under § 406.20(b) or (c), the individual was— (i) Age 65 or over and covered under a GHP by reason of the current employment status of the individual or the individual's spouse; (ii) Under age 65 and covered under an LGHP by reason of the current employment status of the individual or a member of the individual's family ; or<PRTPAGE P="184"/> (iii) Under age 65 and covered under a GHP by reason of the current employment status of the individual or the individual's spouse. (2) For all the months thereafter, the individual has maintained coverage either under hospital insurance or a GHP or LGHP. (d) <E T="03">Special rule: Additional SEPs.</E> (1) Generally, if an individual fails to enroll during any available SEP, he or she is not entitled to any additional SEPs. (2) However, if an individual fails to enroll during a SEP, because coverage under the same or a different GHP or LGHP was restored before the end of that particular SEP, that failure to enroll does not preclude additional SEPs. (e) <E T="03">Effective date of coverage.</E> (1) If the individual enrolls in a month during any part of which he or she is covered under a GHP or LGHP on the basis of current employment status, or in the first full month when no longer so covered, coverage begins on the first day of the month of enrollment or, at the individual's option, on the first day of any of the three following months. (2) If the individual enrolls in any month of the SEP other than the months specified in paragraph (e)(1) of this section, coverage begins on the first day of the month following the month of enrollment. <CITA>[61 FR 40346, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.26</SECTNO> <SUBJECT>Enrollment under State buy-in.</SUBJECT> (a) <E T="03">Enrollment of QMBs under a State buy-in agreement—</E>(1) <E T="03">Effective date.</E> Beginning with calendar year 1990, a State may request and be granted a modification of its buy-in agreement to include enrollment and payment of Part A premiums for QMBs (as defined in section 1905(p)(1) of the Act) who can become entitled to Medicare Part A only by paying a premium. (2) <E T="03">Amount of premium.</E> Premiums paid under State buy-in are not subject to increase because of late enrollment or reenrollment. (b) <E T="03">Beginning of coverage under buy-in.</E> The coverage period begins with the latest of the following: (1) The third month following the month in which the agreement modification covering QMBs is effectuated. (2) The first month in which the individual is entitled to premium hospital insurance under § 406.20(b) and has QMB status. (3) The date specified in the agreement modification. (c) <E T="03">End of coverage under buy-in.</E> Buy-in coverage ends with the earlier of the following: (1) <E T="03">Death.</E> Coverage ends on the last day of the month in which the QMB dies. (2) <E T="03">Loss of QMB status.</E> If the individual loses eligibility for QMB status, coverage ends on the last day of the month in which CMS receives the State's notice of ineligibility. (3) <E T="03">Termination of buy-in agreement.</E> If the State's buy-in agreement is terminated, coverage ends on the last day of the last month for which the agreement is in effect. (4) <E T="03">Entitlement to premium-free Part A.</E> If the individual becomes entitled to premium-free Part A, buy-in coverage ends on the last day of entitlement to premium Part A. (d) <E T="03">Continuation of coverage: Individual enrollment following termination of buy-in coverage</E>—(1) <E T="03">Deemed enrollment.</E> If coverage under a buy-in agreement ends because the agreement is terminated or the individual loses QMB status, the individual— (i) Is considered to have enrolled during his or her initial enrollment period; and (ii) Is entitled to Part A benefits and liable for Part A premiums beginning with the first month for which he or she is no longer covered under the buy-in agreement. (2) <E T="03">Voluntary termination.</E> (i) An individual may voluntarily terminate entitlement acquired under paragraph (d)(1) of this section by filing, with SSA or CMS, a request for disenrollment. (ii) Voluntary disenrollment is effective as follows: (A) If the individual files a request within 30 days after the date of CMS's notice that buy-in coverage has ended, the individual's entitlement ends on the last day of the last month for which the State paid the premium. (B) If the individual files the request more than 30 days but not more than 6 <PRTPAGE P="185"/>months after buy-in coverage ends, entitlement ends on the last day of the month in which the request is filed. (C) If the individual files the request later than the 6th month after buy-in coverage ends, entitlement ends at the end of the month after the month in which request is filed. <CITA>[56 FR 38080, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.28</SECTNO> <SUBJECT>End of entitlement.</SUBJECT> Any of the following actions or events ends entitlement to premium hospital insurance: (a) <E T="03">Filing of request for termination.</E> The beneficiary may at any time give CMS or the Social Security Administration written notice that he or she no longer wishes to participate in the premium hospital insurance program. (1) If he or she files the notice before entitlement begins, he or she will be deemed not to have enrolled. (2) If he or she files the notice after entitlement begins, that entitlement will end at the close of the month following the month in which he or she filed the notice. (b) <E T="03">Eligibility for hospital insurance without premiums.</E> (1) If an individual meets the eligibility requirements for hospital insurance specified in § 406.10, § 406.11, § 406.13 or § 406.15, entitlement to premium hospital insurance ends with the month before the month in which he or she meets those requirements. (2) If an individual meets the requirements of § 406.10, § 406.11, § 406.13, or § 406.15, he or she will be deemed to have filed the required application for hospital insurance benefits in his or her first month of eligibility under that section. (c) <E T="03">End of entitlement to supplementary medical insurance (SMI) for individual who has attained age 65.</E> In the case of an individual enrolled on the basis of § 406.20(b), entitlement to premium hospital insurance ends on the same date that entitlement to SMI ends. (d) <E T="03">Nonpayment of premium.</E> (1) If an individual fails to pay the premium bill, entitlement will end on the last day of the third month after the billing month. (2) CMS may reinstate entitlement if the individual shows good cause for failure to pay on time, and pays all overdue premiums within 3 calendar months after the date specified in paragraph (d)(1) of this section. (e) <E T="03">Death.</E> Entitlement ends with the day of death. (A premium is due for the month of death.) (f) <E T="03">End of disabling impairment for individual under age 65.</E> In the case of an individual enrolled on the basis of § 406.20(c), entitlement to premium hospital insurance ends on the last day of the month after the month in which the individual is notified that he or she no longer has a disabling impairment. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47204, Nov. 22, 1988. Redesignated and amended at 56 FR 38080, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.32</SECTNO> <SUBJECT>Monthly premiums.</SUBJECT> (a) <E T="03">Promulgation and effective date.</E> Beginning with 1984, premiums are promulgated each September, effective for the succeeding calendar year. (b) <E T="03">Monthly premiums: Determination of dollar amount.</E> (1) Effective for calendar years beginning January 1989, the dollar amount is determined based on an estimate of one-twelfth of the average per capita costs for benefits and administrative costs that will be payable with respect to individuals age 65 or over from the Federal Hospital Insurance Trust Fund during the succeeding calendar year. (2) Before 1989, the dollar amount was determined by multiplying $33 by the ratio of the next year's inpatient deductible to $76, which was the inpatient deductible determined for 1973. (Because of cost controls, the deductible actually charged for that year was $72.) (3) Effective for months beginning January 1994, if an individual meets the requirements in paragraph (c) of this section, the monthly premium determined under paragraph (b)(1) of this section is reduced in each month in which the individual meets the requirements by 25 percent in 1994, 30 percent in 1995, 35 percent in 1996, 40 percent in 1997 and 45 percent in 1998 and thereafter. (4) The amount determined under paragraphs (b) (1), (2), or (3) of this section is rounded to the next nearest multiple of $1. (Fifty cents is rounded to the next higher dollar.)<PRTPAGE P="186"/> (c) <E T="03">Qualifying for a reduction in monthly premium.</E> An individual who qualifies for the reduction described in paragraph (b)(3) of this section must be an individual who— (1) Has 30 or more quarters of coverage (QCs) as defined in 20 CFR 404.140 through 404.146; (2) Has been married for at least the previous one year period to a worker who has 30 or more QCs; (3) Had been married to a worker who had 30 or more QCs for a period of at least one year before the death of the worker; (4) Is divorced from, after at least 10 years of marriage to, a worker who had 30 or more QCs at the time the divorce became final; or (5) Is divorced from, after at least 10 years of marriage to, a worker who subsequently died and who had 30 or more QCs at the time the divorce became final. (d) <E T="03">Monthly premiums: Increase for late enrollment and for reenrollment.</E> For an individual who enrolls after the close of the initial enrollment period or reenrolls, the amount of the monthly premium, as determined under paragraph (b) of this section, is increased by 10 percent for each full 12 months in the periods described in §§ 406.33 and 406.34. Effective beginning with premiums due for July 1986, the premium increase is limited to 10 percent and is payable for twice the number of full 12-month periods determined under those sections. (e) <E T="03">Collection of monthly premiums.</E> (1) CMS will bill the enrollee on a monthly basis and include an addressed return envelope with the bill. (2) The enrollee must pay by check or money order that is payable to “CMS Medicare Insurance,” and shows his or her name and the claim number that appears on his or her Medicare card. He or she must return the bill with the check or money order. (f) <E T="03">Months for which payment is due.</E> (1) A premium payment is due for each month beginning with the first month of coverage and continuing through the month of death or if earlier, the month in which coverage ends. (2) A premium is due for the month of death if coverage is still in effect, even if the individual dies on the first day of the month. (g) <E T="03">Option for group payments.</E> A public or private organization may pay the premiums on behalf of one or more enrollees under a contract or other arrangement with CMS if CMS determines that this method of payment is administratively feasible. (The rules set forth in subpart E of part 408 of this chapter, for SMI premiums, also apply to group payment of Part A premiums.) <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47203, Nov. 22, 1988; 56 FR 8839, Mar. 1, 1991. Redesignated and amended at 56 FR 38079, 38080, Aug. 12, 1991; 57 FR 36014, Aug. 12, 1992; 57 FR 58717, Dec. 11, 1992; 59 FR 26959, May 25, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.33</SECTNO> <SUBJECT>Determination of months to be counted for premium increase: Enrollment.</SUBJECT> (a) <E T="03">Enrollment before April 1, 1981, or after September 30, 1981.</E> The months to be counted for premium increase are the months from the end of the initial enrollment period through the end of the general enrollment period, the special enrollment period, or the transfer enrollment period in which the individual enrolls, excluding the following: (1) Any months before September 1973. (2) For premiums due for months after May 1986, any months beginning with January 1983 during which the individual was enrolled in an employer group health plan based on the current employment of the individual or the individual's spouse. (3) Any months during the 7-month special enrollment period under § 406.21(e) during which premium hospital insurance coverage is in effect. (4) Any months that the individual was enrolled in an HMO or CMP under part 417, subpart K of this chapter as described in § 406.21(f). (b) <E T="03">Enrollment during the period April 1 through September 30, 1981.</E> The months to be counted for premium increase are the months from the end of the initial enrollment period through the month in which the individual enrolled, excluding any months before September 1973. (c) <E T="03">Examples.</E> (1) John F's initial enrollment period ended July 1979 but he did not enroll until January 1980. The <PRTPAGE P="187"/>months to be counted are August 1979 through March 1980. Since only 8 months elapsed, there is no premium increase. (2) Mary T's initial enrollment period ended in April 1980 but she did not enroll until May 1981. The months to be counted are May 1980 through May 1981. Since 13 months has elapsed, the premium would be increased by 10 percent. (3) Effective with July 1986, Mary T, in Example 2, would no longer have to pay an increased premium because she had paid it for twice the number of full 12-month periods during which she could have been, but was not, enrolled in the program. (4) Vincent C's initial enrollment period ended August 31, 1986. He was covered under his wife's employer group health plan until she retired on May 31, 1989. He enrolled during June 1989, the first month of the special enrollment period under § 406.21(e). No months are countable for premium increase purposes because the exclusions of paragraph (a) of this section apply to all months. (5) Terry P enrolled in the 1987 general enrollment period, with coverage effective July 1987. There were 28 months after the end of his initial enrollment period through the end of the 1987 general enrollment period. His premium is increased by 10 percent. The increase will be eliminated after he has paid the additional 10 percent for 48 months. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47203, Nov. 22, 1988. Further redesignated and amended at 57 FR 36014, Aug. 12, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.34</SECTNO> <SUBJECT>Determination of months to be counted for premium increase: Reenrollment.</SUBJECT> (a) <E T="03">First reenrollment before April 1, 1981 or after September 30, 1981.</E> The months to be counted for premium increase are: (1) The months specified in § 406.33(a) or (b); plus (2) The months from the end of the first period of entitlement through the end of the general enrollment period in which the individual reenrolled. (b) <E T="03">First reenrollment during the period April 1, 1981</E> through September 30, 1981. The months to be counted for premium increase are— (1) The months specified in § 406.33(a); plus (2) The months from the end of the first period of entitlement through the month in which the individual reenrolled. (c) <E T="03">Subsequent reenrollment during the period April 1, 1981 through September 30, 1981.</E> The months to be counted for premium increase are— (1) The months specified in paragraph (a) of this section; plus (2) The months from April 1981 through the month in which the individual reenrolled for the second time. (Since only one reenrollment was permitted before April 1981, any months from the end of the individual's first enrollment period of entitlement through March 1981 are not counted.) (d) <E T="03">Subsequent reenrollment after September 30, 1981.</E> The months to be counted for premium increase are— (1) The months specified in paragraph (a) or (b) of this section, for the first and second periods of coverage; plus (2) The months from the end of each subsequent period of entitlement through the end of the general enrollment period in which the individual reenrolled, excluding any months before April 1981. (e) <E T="03">Example.</E> Peter M enrolled during his initial enrollment period, terminated his first coverage period in August 1979 and reenrolled for the first time in January 1980. The 7 months to be counted (September 1979 through March, 1980) were not enough to require any increase in the premium. Peter terminated his second period of coverage in February 1981 and reenrolled for the second time in July 1981. Since the 4 months (April through July 1981), when added to the previous 7 months, bring the total to only 11 months, no premium increase is required. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986. Further redesignated and amended at 57 FR 58717, Dec. 11, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.38</SECTNO> <SUBJECT>Prejudice to enrollment rights because of Federal Government error.</SUBJECT> (a) If an individual's enrollment or nonenrollment for premium hospital <PRTPAGE P="188"/>insurance is unintentional, inadvertent, or erroneous because of the error, misrepresentation, or inaction of a Federal employee, or any person authorized by the Federal Government to act on its behalf, the Social Security Administration or CMS may take whatever action it determines is necessary to provide appropriate relief. (b) The action may include— (1) Designation of a special initial or general enrollment period; (2) Designation of an entitlement period; (3) Adjustment of premiums; (4) Any combination of the actions specified in paragraph (b) (1) through (3) of this section; or (5) Any other remedial action which may be necessary to correct or eliminate the effects of such error, misrepresentation, or inaction. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986. Further redesignated at 56 FR 38080, Aug. 12, 1991]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Special Circumstances That Affect Entitlement to Hospital Insurance</HD> <SECTION> <SECTNO>§ 406.50</SECTNO> <SUBJECT>Nonpayment of benefits on behalf of certain aliens.</SUBJECT> (a) Hospital insurance benefit payments may not be made for services furnished to an alien in any month in which his or her monthly social security benefits are suspended (or would be suspended if he or she were entitled to those benefits) because the alien remains outside the United States for more than 6 months. (b) Benefits will be payable beginning with services furnished in the first full calendar month the alien is back in the United States. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986. Further redesignated at 57 FR 58717, Dec. 11, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.52</SECTNO> <SUBJECT>Conviction of certain offenses.</SUBJECT> (a) <E T="03">Penalty that affects entitlement.</E> (1) If an individual is convicted of any of the crimes listed in § 406.11(c) (1) and (2), the court may impose, in addition to all other penalties, a penalty that affects entitlement to hospital insurance, beginning with the month of conviction. (2) The additional penalty is that the individual's income (or the income of the insured individual on whose earnings record he or she became or seeks to become entitled) for the year of conviction and any previous year may not be counted in determining the insured status necessary for entitlement to hospital insurance. (b) <E T="03">Effect of pardon.</E> If the President of the United States pardons the convicted individual, that individual regains (or may again seek) entitlement effective with the month following the month in which the pardon is granted. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986. Further redesignated at 57 FR 58717, Dec. 11, 1992]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 407</EAR> <HD SOURCE="HED">PART 407—SUPPLEMENTARY MEDICAL INSURANCE (SMI) ENROLLMENT AND ENTITLEMENT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>407.1</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SECTNO>407.2</SECTNO> <SUBJECT>General description of program.</SUBJECT> <SECTNO>407.4</SECTNO> <SUBJECT>Basic requirements for entitlement.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Individual Enrollment and Entitlement for SMI</HD> <SECTNO>407.10</SECTNO> <SUBJECT>Eligibility to enroll.</SUBJECT> <SECTNO>407.11</SECTNO> <SUBJECT>Forms used to apply for enrollment under Medicare Part B.</SUBJECT> <SECTNO>407.12</SECTNO> <SUBJECT>General enrollment provisions.</SUBJECT> <SECTNO>407.14</SECTNO> <SUBJECT>Initial enrollment period.</SUBJECT> <SECTNO>407.15</SECTNO> <SUBJECT>General enrollment period.</SUBJECT> <SECTNO>407.17</SECTNO> <SUBJECT>Automatic enrollment.</SUBJECT> <SECTNO>407.18</SECTNO> <SUBJECT>Determining month of automatic enrollment.</SUBJECT> <SECTNO>407.20</SECTNO> <SUBJECT>Special enrollment period related to coverage under group health plans.</SUBJECT> <SECTNO>407.22</SECTNO> <SUBJECT>Request for individual enrollment.</SUBJECT> <SECTNO>407.25</SECTNO> <SUBJECT>Beginning of entitlement: Individual enrollment.</SUBJECT> <SECTNO>407.27</SECTNO> <SUBJECT>Termination of entitlement: Individual enrollment.</SUBJECT> <SECTNO>407.30</SECTNO> <SUBJECT>Limitations on enrollment.</SUBJECT> <SECTNO>407.32</SECTNO> <SUBJECT>Prejudice to enrollment rights because of Federal Government misrepresentation, inaction, or error.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—State Buy-in Agreements</HD> <SECTNO>407.40</SECTNO> <SUBJECT>Enrollment under a State buy-in agreement.</SUBJECT> <SECTNO>407.42</SECTNO> <SUBJECT>Buy-in groups available to the 50 States, the District of Columbia, and the Northern Mariana Islands.</SUBJECT> <SECTNO>407.43</SECTNO> <SUBJECT>Buy-in groups available to Puerto Rico, Guam, the Virgin Islands, and American Samoa.<PRTPAGE P="189"/> </SUBJECT> <SECTNO>407.45</SECTNO> <SUBJECT>Termination of State buy-in agreements.</SUBJECT> <SECTNO>407.47</SECTNO> <SUBJECT>Beginning of coverage under a State buy-in agreement.</SUBJECT> <SECTNO>407.48</SECTNO> <SUBJECT>Termination of coverage under a State buy-in agreement.</SUBJECT> <SECTNO>407.50</SECTNO> <SUBJECT>Continuation of coverage: Individual enrollment following end of coverage under a State buy-in agreement.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 53 FR 47204, Nov. 22, 1988, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 407.1</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Statutory basis.</E> The supplementary medical insurance (SMI) program is authorized by Part B of title XVIII of the Social Security Act. (1) Section 1831 of the Act establishes the program. (2) Sections 1836 and 1837 set forth the eligibility and enrollment requirements. (3) Section 1838 specifies the entitlement periods, which vary depending on the time and method of enrollment and on the basis for termination. (4) Section 1843 sets forth the requirements for State buy-in agreements under which States may enroll, and pay the SMI premiums for, eligible individuals who are also eligible for cash assistance or Medicaid. (5) Section 104(b) of the Social Security Amendments of 1965 (Pub. L. 89-87) specifies the limitations that apply to certain aliens and persons convicted of subversive activities. (b) <E T="03">Scope.</E> This part sets forth the eligibility, enrollment, and entitlement requirements and procedures for supplementary medical insurance. (The rules about premiums are in part 408 of this chapter.) </SECTION> <SECTION> <SECTNO>§ 407.2</SECTNO> <SUBJECT>General description of program.</SUBJECT> Part B of Title XVIII of the Act provides for voluntary “supplementary medical insurance” available to most individuals age 65 or over and to disabled individuals who are under age 65 and entitled to hospital insurance. The SMI program is financed by premiums paid by (or for) each individual enrolled in the program, plus contributions from Federal funds. It covers certain physicians' services, outpatient services, home health services, services furnished by rural health clinics (RHCs), Federally qualified health centers (FQHCS), ambulatory surgical centers (ASCs), and comprehensive outpatient rehabilitation facilities (CORFs), and other medical and other health services. <CITA>[57 FR 24980, June 12, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.4</SECTNO> <SUBJECT>Basic requirements for entitlement.</SUBJECT> (a) An individual must meet the following requirements to be entitled to SMI: (1) <E T="03">Eligibility.</E> The individual must meet the eligibility requirements specified in § 407.10(a). (2) <E T="03">Enrollment.</E> The individual must enroll for SMI, or must be enrolled by a State under a buy-in agreement as specified in § 407.40. (b) SMI pays only for covered expenses incurred during an individual's period of entitlement. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Individual Enrollment and Entitlement for SMI</HD> <SECTION> <SECTNO>§ 407.10</SECTNO> <SUBJECT>Eligibility to enroll.</SUBJECT> (a) <E T="03">Basic rule.</E> Except as specified in paragraph (b) of this section, an individual is eligible to enroll for SMI if he or she— (1) Is entitled to hospital insurance under any of the rules set forth in §§ 406.10 through 406.15 of this chapter; or (2) Meets the following requirements: (i) Has attained age 65. (An individual is considered to have attained age 65 on the day before the 65th anniversary of his or her birth.) (ii) Is a resident of the United States. (iii) Is a citizen of the United States, or an alien lawfully admitted for permanent residence who has resided continuously in the United States during the 5 years preceding the month in which he or she applies for enrollment. (b) <E T="03">Exception.</E> An individual is not eligible to enroll for SMI if he or she has been convicted of— (1) Spying, sabotage, treason, or subversive activities under chapter 37, 105, or 115 of title 18 of the United States Code; or<PRTPAGE P="190"/> (2) Conspiracy to establish dictatorship under section 4 of the Internal Security Act of 1950. </SECTION> <SECTION> <SECTNO>§ 407.11</SECTNO> <SUBJECT>Forms used to apply for enrollment under Medicare Part B.</SUBJECT> The following forms, available free of charge by mail from CMS, or at any Social Security branch or district office, are used to apply for enrollment under the supplementary medical insurance program. <EXTRACT> CMS-4040—Application for Enrollment in the Supplementary Medical Insurance Program. (This form is used for enrollment by individuals who are not eligible for monthly benefits or for hospital insurance.) CMS-40-B—Application for Medical Insurance. (For general use by the SSA District Office in requesting medical insurance protection during the general enrollment period or during the initial enrollment period if the enrollee is not subject to automatic enrollment is SMI.) CMS-40-D—Application for Enrollment in the Supplementary Medical Insurance Program. (This form is mailed to individuals who do not have current supplementary medical insurance because of prior refusals, voluntary withdrawal, or premium default from prior coverage. It is used during the annual general enrollment period.) CMS-40-F—Application for Medical Insurance. (For use by beneficiaries residing outside the United States.) CMS-18-F-5—Application for Hospital Insurance Entitlement. (For use by individuals who are not eligible for retirement benefits under Title II of the Social Security Act or under the Railroad Retirement Act. This form may also be used for enrollment in the supplementary medical insurance program.) </EXTRACT> <FP>As an alternative, the individual may request enrollment by answering the Part B enrollment questions on an application for monthly Social Security benefits, or by signing a simple statement of request, if he or she is eligible to enroll at that time.</FP> </SECTION> <SECTION> <SECTNO>§ 407.12</SECTNO> <SUBJECT>General enrollment provisions.</SUBJECT> (a) <E T="03">Opportunity to enroll.</E> (1) An individual who is eligible to enroll for SMI may do so during an initial enrollment period or a general enrollment period as specified in §§ 407.14, and 407.15. An individual who meets the conditions specified in § 407.20 may enroll during a special enrollment period, as provided in that section. (2) An individual who fails to enroll during his or her initial enrollment period or whose enrollment has been terminated may enroll or reenroll during a general enrollment period, or, if he or she meets the specified conditions, during a special enrollment period. (b) <E T="03">Enrollment periods ending on a nonworkday.</E> (1) If an enrollment period ends on a Federal nonworkday, that period is automatically extended to the next succeeding workday. (2) A Federal nonworkday is any Saturday, Sunday, or Federal legal holiday or a day that is declared by statute or executive order to be a day on which Federal employees are not required to work. </SECTION> <SECTION> <SECTNO>§ 407.14</SECTNO> <SUBJECT>Initial enrollment period.</SUBJECT> (a) <E T="03">Duration.</E> (1) The initial enrollment period is the 7-month period that begins 3 months before the month an individual first meets the eligibility requirements of § 407.10 and ends 3 months after that first month of eligibility. (2) In determining the initial enrollment period of an individual who is age 65 or over and eligible for enrollment solely because of entitlement to hospital insurance, the individual is considered as first meeting the eligibility requirements for SMI n the first day he or she becomes entitled to hospital insurance or would have been entitled if he or she filed an application for that program. (b) <E T="03">Deemed initial enrollment period.</E> (1) SSA or CMS will establish a deemed initial enrollment period for an individual who fails to enroll during the initial enrollment period because of a belief, based on erroneous documentary evidence, that he or she had not yet attained age 65. The period will be established as though the individual had attained age 65 on the date indicated by the incorrect information. (2) A deemed initial enrollment period established under paragraph (b)(1) of this section is used to determine the individual's premium and right to enroll in a general enrollment period if that is advantageous to the individual. </SECTION> <SECTION> <PRTPAGE P="191"/> <SECTNO>§ 407.15</SECTNO> <SUBJECT>General enrollment period.</SUBJECT> (a) Except as specified in paragraph (b) of this section, the general enrollment period is January through March of each calendar year. (b) An unlimited general enrollment period existed between April 1 and September 30, 1981. Any eligible individual whose initial enrollment period had ended, or whose previous period of entitlement had terminated, could have enrolled or reenrolled during any month of that 6-month period. </SECTION> <SECTION> <SECTNO>§ 407.17</SECTNO> <SUBJECT>Automatic enrollment.</SUBJECT> (a) <E T="03">Who is automatically enrolled.</E> An individual is automatically enrolled for SMI if he or she: (1) Resides in the United States, except in Puerto Rico; (2) Becomes entitled to hospital insurance under any of the provisions set forth in §§ 406.10 through 406.15 of this chapter; and (3) Does not decline SMI enrollment. (b) <E T="03">Opportunity to decline automatic enrollment.</E> (1) SSA will notify an individual that he or she is automatically enrolled under paragraph (a) of this section and grant the individual a specified period (at least 2 months after the month the notice is mailed) to decline enrollment. (2) The individual may decline enrollment by submitting to SSA or CMS a signed statement that he or she does not wish SMI. (3) The statement must be submitted before entitlement begins, or if later, within the time limits set in the notice of enrollment. </SECTION> <SECTION> <SECTNO>§ 407.18</SECTNO> <SUBJECT>Determining month of automatic enrollment.</SUBJECT> (a) An individual who is automatically enrolled in SMI under § 407.17 will have the month of enrollment determined in accordance with paragraphs (b) through (f) of this section. The month of enrollment determines the month of entitlement. (b) An individual is automatically enrolled in the third month of the initial enrollment period if he or she— (1) Is entitled to social security benefits under section 202 of the Act on the first day of the initial enrollment period; (2) Is entitled to hospital insurance based on end-stage renal disease; on entitlement to disability benefits as a social security or railroad retirement beneficiary; or on deemed entitlement to disability benefits on the basis of Medicare-qualified government employment; or (3) Establishes entitlement to hospital insurance by filing an application and meeting all other requirements (as set forth in subpart B of part 406 of this chapter) during the first 3 months of the initial enrollment period. (c) If an individual establishes entitlement to hospital insurance on the basis of an application filed in the last 4 months of the SMI initial enrollment period, he or she is automatically enrolled for SMI in the month in which the application is filed. (d) If an individual establishes entitlement to hospital insurance on the basis of an application filed after the SMI initial enrollment period but not during a general enrollment period in effect before April 1, 1981, or after September 30, 1981, he or she is automatically enrolled for SMI on the first day of the next general enrollment period. (e) If the individual establishes entitlement to hospital insurance on the basis of an application filed during a SMI general enrollment period in effect before April 1, 1981 or after September 30, 1981, he or she is automatically enrolled on the first day of that period. (f) If an individual established entitlement to hospital insurance on the basis of an application filed during the general enrollment period of April 1, 1981, through September 30, 1981, he or she was automatically enrolled for SMI on the first day of the month in which the application was filed. </SECTION> <SECTION> <SECTNO>§ 407.20</SECTNO> <SUBJECT>Special enrollment period related to coverage under group health plans.</SUBJECT> (a) <E T="03">Terminology—</E>(1) <E T="03">Group health plan (GHP) and large group health plan (LGHP).</E> These terms have the meanings given them in § 411.101 of this chapter except that the “former employee” language of those definitions does not apply with respect to SEPs for the reasons specified in § 406.24(a)(3) of this chapter.<PRTPAGE P="192"/> (2) <E T="03">Special enrollment period (SEP).</E> This term has the meaning set forth in § 406.24(a)(4) of this chapter. In order to use a SEP, an individual must meet the conditions of paragraph (b) and of paragraph (c) or (d) of this section, as appropriate. (b) <E T="03">General rule.</E> All individuals must meet the following conditions: (1) They are eligible to enroll for SMI on the basis of age or disability, but not on the basis of end-stage renal disease. (2) When first eligible for SMI coverage (4th month of their initial enrollment period), they were covered under a GHP or LGHP on the basis of current employment status or, if not so covered, they enrolled in SMI during their initial enrollment period; and (3) For all months thereafter, they maintained coverage under either SMI or a GHP or LGHP. (Generally, if an individual fails to enroll in SMI during any available SEP, he or she is not entitled to any additional SEPs. However, if an individual fails to enroll during a SEP because coverage under the same or a different GHP or LGHP was restored before the end of that particular SEP, that failure to enroll does not preclude additional SEPs.) (c) <E T="03">Special rule: Individual age 65 or over.</E> For an individual who is or was covered under a GHP, coverage must be by reason of the current employment status of the individual or the individual's spouse. (d) <E T="03">Special rules: Disabled individual.</E> <E T="51">4</E> <FTREF/> Individuals entitled on the basis of disability (but not on the basis of end-stage renal disease) must meet conditions that vary depending on whether they were covered under a GHP or an LGHP. <FTNT> <E T="51">4</E> Under the current statute, the SEP provision applicable to disabled individuals covered under an LGHP expires on September 1998. Unless Congress changes that date, the last SEP available under those provisions will begin with June 1998. </FTNT> (1) For a disabled individual who is or was covered under a GHP, coverage must be on the basis of the current employment status of the individual or the individual's spouse. (2) For a disabled individual who is or was covered under an LGHP, coverage must be as follows: (i) Before August 10, 1993, as an “active individual”, that is, as an employee, employer, self-employed individual (such as the employer), individual associated with the employer in a business relationship, or as a member of the family of any of those persons. (ii) On or after August 10, 1993, by reason of current employment status of the individual or a member of the individual's family. (e) <E T="03">Effective date of coverage.</E> The rule set forth in § 406.24(d) for Medicare Part A applies equally to Medicare Part B. <CITA>[61 FR 40346, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.22</SECTNO> <SUBJECT>Request for individual enrollment.</SUBJECT> (a) A request for enrollment is required of an individual who meets the eligibility requirements of § 407.10 and desires SMI, if the individual— (1) Is not entitled to hospital insurance; (2) Has previously declined enrollment in SMI; (3) Has had a previous period of SMI entitlement which terminated; (4) Resides in Puerto Rico or outside the United States; or (5) Is enrolling or reenrolling during a special enrollment period under § 407.20. (b) A request for enrollment under paragraph (a) of this section must: (1) Be signed by the individual or someone acting in his or her behalf; and (2) Be filed with SSA or CMS during the initial enrollment period, a general enrollment period, or a special enrollment period as provided in § 407.20. </SECTION> <SECTION> <SECTNO>§ 407.25</SECTNO> <SUBJECT>Beginning of entitlement: Individual enrollment.</SUBJECT> The following apply whether an individual is self-enrolled or automatically enrolled in SMI: (a) <E T="03">Enrollment during initial enrollment period.</E> (1) If an individual enrolls during the first three months of the initial enrollment period, entitlement begins with the first month of eligibility. (2) If an individual enrolls during the fourth month of the initial enrollment period, entitlement begins with the following month. (3) If an individual enrolls during the fifth month of the initial enrollment <PRTPAGE P="193"/>period, entitlement begins with the second month after the month of enrollment. (4) If an individual enrolls in either of the last two months of the initial enrollment period, entitlement begins with the third month after the month of enrollment. (5) Example. An individual first meets the eligibility requirements for enrollment in April. The initial enrollment period is January through July. The month in which the individual enrolls determines the month that begins the period of entitlement, as follows: <GPOTABLE CDEF="xs60,r10" COLS="2" OPTS="L2,i1"> <BOXHD> <CHED H="1">Enrolls in initial enrollment period</CHED> <CHED H="1">Entitlement begins on—</CHED> </BOXHD> <ROW> <ENT I="01">January </ENT> <ENT>April 1 (month eligibility requirements first met).</ENT> </ROW> <ROW> <ENT I="01">February </ENT> <ENT>April 1.</ENT> </ROW> <ROW> <ENT I="01">March</ENT> <ENT>April 1.</ENT> </ROW> <ROW> <ENT I="01">April</ENT> <ENT>May 1 (month following month of enrollment).</ENT> </ROW> <ROW> <ENT I="01">May</ENT> <ENT>July 1 (second month after month of enrollment).</ENT> </ROW> <ROW> <ENT I="01">June </ENT> <ENT>September 1 (third month after month of enrollment).</ENT> </ROW> <ROW> <ENT I="01">July </ENT> <ENT>October 1 (third month after month of enrollment).</ENT> </ROW> </GPOTABLE> (b) <E T="03">Enrollment on reenrollment during general enrollment period.</E> (1) if an individual enrolls or reenrolls during a general enrollment period before April 1, 1981 or after September 30, 1981, entitlement begins on July 1 of that calendar year. (2) If an individual enrolled or reenrolled during the general enrollment period between April 1, 1981 and September 20, 1981, entitlement began with the third month after the month in which the enrollment request was filed. (c) <E T="03">Enrollment or reenrollment during a SEP.</E> The rules set forth in § 406.24(d) of this chapter apply. <CITA>[53 FR 47204, Nov. 22, 1988, as amended at 61 FR 40347, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.27</SECTNO> <SUBJECT>Termination of entitlement: Individual enrollment.</SUBJECT> An individual's entitlement will terminate for any of the following reasons: (a) <E T="03">Death.</E> Entitlement to SMI ends on the last day of the month in which the individual dies. (b) <E T="03">Termination of hospital insurance benefits.</E> If an individual's entitlement to hospital insurance ends before the month in which he or she attains age 65, entitlement to SMI will end on the same day unless it has been previously terminated in accordance with paragraph (c) or (d) of this section. (c) <E T="03">Request by individual.</E> An individual may at any time give CMS or SSA written notice that he or she no longer wishes to participate in SMI, and request disenrollment. (1) Before July 1987, entitlement ended at the end of the calendar quarter after the quarter in which the individual filed the disenrollment request. (2) For disenrollment requests filed in or after July 1987, entitlement ends at the end of the month after the month in which the individual files the disenrollment request. (d) <E T="03">Nonpayment of premiums.</E> If an individual fails to pay the premiums, entitlement will end as provided in the rules for SMI premiums, set forth in part 408 of this chapter. </SECTION> <SECTION> <SECTNO>§ 407.30</SECTNO> <SUBJECT>Limitations on enrollment.</SUBJECT> (a) <E T="03">Initial enrollment periods</E>—(1) <E T="03">Individual under age 65.</E> An individual who has not attained age 65 may have one or more periods of entitlement to hospital insurance, based on disability. Since each period of disability entitlement entitles the individual to hospital insurance and since entitlement to hospital insurance makes the individual eligible for SMI enrollment, an individual may have an SMI initial enrollment period for each continous period of entitlement to hospital insurance. (2) <E T="03">Individuals who have attained age 65.</E> An individual who has attained age 65 may not have more than one initial enrollment period on the basis of age. However, if the individual develops ESRD after age 65, he or she may have another initial enrollment period based on meeting the requirements of § 406.13 of this chapter. (b) <E T="03">Number of enrollments.</E> There is no limitation on the number of enrollments. (c) <E T="03">Coverage under buy-in agreements.</E> For purposes of paragraph (a) of this section, the continued enrollment of an individual following the end of coverage under a State buy-in agreement in considered an initial enrollment. </SECTION> <SECTION> <PRTPAGE P="194"/> <SECTNO>§ 407.32</SECTNO> <SUBJECT>Prejudice to enrollment rights because of Federal Government misrepresentation, inaction, or error.</SUBJECT> If an individual's enrollment or nonenrollment in SMI is unintentional, inadvertent, or erroneous because of the error, misrepresentation, on inaction of a Federal employee or any person authorized by the Federal Government to act in its behalf, the Social Security Administration or CMS may take whatever action it determines is necessary to provide appropriate relief. The action may include: (a) Designation of a special initial or general enrollment period; (b) Designation of an entitlement period based on that enrollment period; (c) Adjustment of premiums; (d) Any combination of actions under paragraphs (a) through (c) of this section; or (e) Any other remedial action that may be necessary to correct or eliminate the effects of the error, misrepresentation, or inaction. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—State Buy-In Agreements</HD> <SECTION> <SECTNO>§ 407.40</SECTNO> <SUBJECT>Enrollment under a State buy-in agreement.</SUBJECT> (a) <E T="03">Statutory basis.</E> (1) Section 1843 of the Act, as amended through 1969, permitted a State to enter into an agreement with the Secretary to enroll in the SMI program certain individuals who are eligible for SMI and who are members of the buy-in group specified in the agreement. A buy-in group could include certain individuals receiving Federally-aided State cash assistance (with the option of excluding individuals also entitled to social security benefits or railroad retirement benefits) or could include all individuals eligible for Medicaid. Before 1981, December 31, 1969 was the last day on which a State could request a buy-in agreement or a modification to include a coverage group broader than the one originally selected. (2) Section 945(e) of the Omnibus Reconciliation Act of 1980 (Pub. L. 96-499) further amended section 1843 to provide that, during calendar year 1981, a State could request a buy-in agreement if it did not already have one, or request a broader coverage group for an existing agreement. (3) Several laws enacted during 1980-1987 had the effect of requiring that the buy-in groups available under section 1843 of the Act be expanded to include certain individuals who lose eligibility for cash assistance payments but are treated as if they were cash assistance recipients for Medicaid eligibility purposes. (4) Section 301(e)(1) of the Medicare Catastrophic Coverage Act of 1988 (Pub. L. 100-360) amends section 1843 of the Act to restore the 1981 provisions on a permanent basis, effective “after 1988.” (5) The same section 301, as amended by section 608(d)(14)(H) of the Family Support Act of 1988 (Pub. L. 100-485), further amended section 1843 of the Act, beginning January 1, 1989, to establish a new buy-in category consisting of Qualified Medicare Beneficiaries and to provide that a State may request a buy-in agreement if it does not already have one, or request a broader buy-in group for the existing agreement. (b) <E T="03">Definitions.</E> As used in this section, unless the context indicates otherwise— <E T="03">Cash assistance</E> means any of the following kinds of monthly cash benefits, authorized by specified titles of the Act and, for convenience, represented by initials, as follows: <E T="03">AABD</E> stands for aid to the aged, blind or disabled under the first title XVI of the Act in effect until December 31, 1973. <E T="03">AB</E> stands for aid to the blind under title X of the Act. <E T="03">AFDC</E> stands for aid to families with dependent children under Part A of title IV of the Act. <E T="03">APTD</E> stands for aid to the permanently and totally disabled under title XIV of the Act. <E T="03">OAA</E> stands for old-age assistance under title I of the Act. <E T="03">SSI</E> stands for supplemental security income for the aged, blind, and disabled under the second title XVI of the Act, effective January 1, 1974. <E T="03">SSP</E> stands for State supplementary payments, whether mandatory or optional, to an aged, blind, or disabled individual under the second title XVI or the Act.<PRTPAGE P="195"/> <E T="03">Qualified Medicare Beneficiary</E> or <E T="03">QMB</E> means an individual who meets the definition in § 400.200 of this chapter and, therefore, is eligible to have the State Medicaid agency pay Medicare cost sharing amounts on his or her behalf. <E T="03">Railroad retirement beneficiary</E> means an individual entitled to receive an annuity under the Railroad Retirement Act of 1974. <E T="03">State</E> means one of the 50 States, the District of Columbia, Guam, Puerto Rico, the Virgin Islands, American Samoa, or the Northern Mariana Islands, except when reference is made to “the 50 States”. <E T="03">State buy-in agreement</E> or <E T="03">buy-in agreement</E> means an agreement authorized by section 1843 of the Act, under which a State secures SMI or premium HI coverage for individuals who are members of the buy-in group specified in the agreement, by enrolling them and paying the premiums on their behalf. (c) <E T="03">Basic rules.</E> (1) A State that has a buy-in agreement in effect must enroll any individual who is eligible to enroll in SMI under § 407.10. (2) Any State that does not have a buy-in agreement in effect may request buy-in for any one of the groups specified in §§ 407.42 and 407.43. (3) Any State that does have an agreement may request a modification to cover a broader buy-in group or cancel its current agreement and request a new agreement to cover a narrower group. <CITA>[56 FR 38080, Aug. 12, 1991; 56 FR 50058, Oct. 3, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.42</SECTNO> <SUBJECT>Buy-in groups available to the 50 States, the District of Columbia, and the Northern Mariana Islands.</SUBJECT> (a) <E T="03">Categories included in the buy-in groups.</E> The buy-in groups that are available to the 50 States, the District of Columbia, and the Northern Mariana Islands are specified in paragraph (b) of this section in terms of the following categories: (1) <E T="03">Category A:</E> Individuals who— (i) Receive SSI or SSP or both; and (ii) Are covered under the State's Medicaid plan as categorically needy. (2) <E T="03">Category B:</E> Individuals who— (i) Under the Act or any other provision of Federal law are treated, for Medicaid eligibility purposes, as though they were receiving SSI or SSP; and (ii) Are covered under the State's Medicaid plan as categorically needy. (3) <E T="03">Category C:</E> Individuals who are receiving AFDC. (4) <E T="03">Category D:</E> Individuals who, under the Act or any other provision of Federal law, are treated, for Medicaid eligibility purposes, as though they were receiving AFDC. (5) <E T="03">Category E:</E> Individuals who, in accordance with § 435.114 or § 435.134 of this chapter, are covered under the State's Medicaid plan despite the increase in social security benefits provided by Public Law 92-336. (6) <E T="03">Category F:</E> Individuals who are Qualified Medicare Beneficiaries.<E T="51">1</E> <FTREF/> <FTNT> <E T="51">1</E> Rules for buy-in for premium hospital insurance for QMBs are set forth in § 406.26 of this chapter. </FTNT> (7) <E T="03">Category G:</E> All other individuals who are eligible for Medicaid. (b) <E T="03">Buy-in groups available.</E> Any of the 50 States, the District of Columbia, and the Northern Mariana Islands may buy-in for one of the following groups: (1) <E T="03">Group 1:</E> Categories A through G. (2) <E T="03">Group 2:</E> Categories A through F. (3) <E T="03">Group 3:</E> Categories A through E. (4) <E T="03">Group 4:</E> Categories A, B, and F, individuals in categories C and D who are not social security or railroad retirement beneficiaries, and individuals in category E who are included in that category (in accordance with § 435.134 of this chapter) because they received OAA, AB, APTD, or AABD in August 1972 or would have been eligible to receive such cash assistance for that month if they had applied or had not been institutionalized. (5) <E T="03">Group 5:</E> Categories A and B, individuals in categories C and D who are not social security or railroad retirement beneficiaries, and individuals in category E who are included in that category (in accordance with § 435.134 of this chapter) because they received OAA, AB, APTD, or AABD in August 1972 or would have been eligible to receive such cash assistance for that month if they had applied or had not been institutionalized. (6) <E T="03">Group 6:</E> Categories A, B, and F, and individuals in category E who are <PRTPAGE P="196"/>included in that category (in accordance with § 435.134 of this chapter) because they received AABD in August 1972 or would have been eligible to receive AABD for that month if they had applied or had not been institutionalized. This option is available only to those States that had an AABD program as of December 31, 1973. (7) <E T="03">Group 7:</E> Categories A and B, and individuals in category E who are included in that category (in accordance with § 435.134 of this chapter) because they received AABD in August 1972 or would have been eligible to receive AABD for that month if they had applied or had not been institutionalized. This option is available only to those States that had an AABD program as of December 31, 1973. <CITA>[56 FR 38081, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.43</SECTNO> <SUBJECT>Buy-in groups available to Puerto Rico, Guam, the Virgin Islands, and American Samoa.</SUBJECT> (a) <E T="03">Categories included in buy-in groups.</E> The buy-in groups that are available to Puerto Rico, Guam, the Virgin Islands, and American Samoa, which are not covered by the SSI program, are described in paragraph (b) of this section in terms of the following categories: (1) <E T="03">Category A:</E> Individuals receiving OAA, AB, APTD, or AFDC. (2) <E T="03">Category B:</E> Individuals who, under the Act or any other provision of Federal law, are treated, for Medicaid eligibility purposes, as though they were receiving AFDC. (3) <E T="03">Category C:</E> Individuals who, in accordance with § 436.112 of this chapter, are covered under the State's Medicaid plan despite the increase in social security benefits provided by Public Law 92-336. (4) <E T="03">Category D:</E> Individuals who are Qualified Medicare Beneficiaries.<E T="51">1</E> <FTREF/> <FTNT> <E T="51">1</E> Rules for buy-in for premium hospital insurance for QMBs are set forth in § 406.26 of this chapter. </FTNT> (5) <E T="03">Category E:</E> All other individuals who are eligible for Medicaid. (b) <E T="03">Buy-in groups available.</E> Puerto Rico, Guam, the Virgin Islands, and American Samoa may choose any of the following coverage groups: (1) <E T="03">Group 1:</E> Categories A through E. (2) <E T="03">Group 2:</E> Categories A through D. (3) <E T="03">Group 3:</E> Categories A through C. (4) <E T="03">Group 4:</E> Individuals in category D, and individuals in categories A and B who are not social security or railroad retirement beneficiaries. (5) <E T="03">Group 5:</E> Individuals in categories A and B who are not social security or railroad retirement beneficiaries. (6) <E T="03">Group 6:</E> Individuals in category D, individuals in category A who are receiving OAA, and individuals in category C who are included in that category (in accordance with § 436.112 of this chapter) because they received OAA for August 1972 or would have been eligible to receive OAA for that month if they had applied or had not been institutionalized. (7) <E T="03">Group 7:</E> Individuals in category A who are receiving OAA, and individuals in category C who are included in that category (in accordance with § 436.112 of this chapter) because they received OAA for August 1972 or would have been eligible to receive OAA for that month if they had applied or had not been institutionalized. (8) <E T="03">Group 8:</E> Individuals in category D and individuals in category A who are receiving OAA and are not social security or railroad retirement beneficiaries. (9) <E T="03">Group 9:</E> Individuals in category A who are receiving OAA and are not social security or railroad retirement beneficiaries. <CITA>[56 FR 38082, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.45</SECTNO> <SUBJECT>Termination of State buy-in agreements.</SUBJECT> (a) <E T="03">Termination by the State—</E>(1) <E T="03">Termination after advance notice.</E> A State may terminate its buy-in agreement after giving CMS 3 months, advance notice. (2) <E T="03">Termination without advance notice.</E> A State may terminate its buy-in agreement without advance notice if— (i) The State gives CMS written certification to the effect that it is no longer legally able to comply with one or more of the provisions of the agreement; and (ii) Submits a supporting opinion from the appropriate State legal officer, if CMS requests such an opinion. (b) <E T="03">Termination by CMS.</E> If CMS, after giving the State notice and opportunity for hearing, finds that the State <PRTPAGE P="197"/>has failed to comply substantially with one or more of the provisions of the agreement, other than the requirement for timely payment of premiums, CMS will give the State written notice to the effect that the agreement will terminate on the date indicated in the notice unless, before that date, CMS finds that there is no longer that failure to comply. (Rules for collection of overdue premiums, including assessment of interest and offset against FFP due the State, are those set forth in the Notice published on September 30, 1985 at 50 FR 39784.) </SECTION> <SECTION> <SECTNO>§ 407.47</SECTNO> <SUBJECT>Beginning of coverage under a State buy-in agreement.</SUBJECT> (a) <E T="03">General rule.</E> The beginning of an individual's coverage period depends on two factors: (1) The individual's meeting the SMI eligibility requirements and the requirements for being a member of the buy-in group; and (2) The effective date of the buy-in agreement or agreement modification that covers the group to which the individual belongs, and which may not be earlier than the third month after the month in which the agreement or modification is executed. (b) <E T="03">Application of general rule: Medicaid eligibles who are, or are treated as, cash assistance recipients.</E> For Medicaid eligibles who are, or are treated as, cash assistance recipients (that is, are members of categories A through E of § 407.42(a) or categories A through C of § 407.43(a)), coverage begins with the later of the following: (1) The first month in which the individual— (i) Meets the SMI eligibility requirements specified in § 407.10; and (ii) Is a member of one of those categories. (2) The month in which the buy-in agreement is effective. (c) <E T="03">Application of general rule: Qualified Medicare Beneficiaries.</E> For individuals who are QMBs (that is, are members of category F of § 407.42 or category D of § 407.43(a)), coverage begins with the later of the following: (1) The first month in which the individual meets the SMI eligibility requirements specified in § 407.10, and has QMB status. (2) The month in which the buy-in agreement or agreement modification covering QMBs is effective. (d) <E T="03">Application of general rule: Other individuals eligible for Medicaid.</E> For individuals who are members of category G of § 407.42(a) or category E of § 407.43(a), coverage begins with the later of the following: (1) The second month after the month in which the individual— (i) Meets the SMI eligibility requirements specified in § 407.10; and (ii) Is determined to be eligible for Medicaid. (2) The month in which the buy-in agreement or agreement modification is effective. (e) <E T="03">Coverage based on erroneous report.</E> If the State erroneously reports to SSA that an individual is a member of its coverage group, the rules of paragraphs (a) through (d) of this section apply, and coverage begins as though the individual were in fact a member of the group. Coverage will end only as provided in § 407.48. <CITA>[56 FR 38082, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.48</SECTNO> <SUBJECT>Termination of coverage under a State buy-in agreement.</SUBJECT> An individual's coverage under a buy-in agreement terminates with the earliest of the following events: (a) <E T="03">Death.</E> Coverage ends on the last day of the month in which the individual dies. (b) <E T="03">Loss of entitlement to hospital insurance benefits before age 65.</E> If an individual loses entitlement to hospital insurance benefits before attaining age 65, coverage ends on the last day of the last month for which he or she is entitled to hospital insurance. (c) <E T="03">Loss of eligibility for the buy-in group.</E> If an individual loses eligibility for inclusion in the buy-in group, buy-in coverage ends as follows: (1) On the last day of the last month for which he or she is eligible for inclusion in the group, if CMS determines ineligibility or receives a State ineligibility notice by the 25th day of the second month after the month in which the individual becomes ineligible for inclusion in the group. (2) On the last day of the second month before the month in which CMS receives a State ineligibility notice <PRTPAGE P="198"/>later than the time specified in paragraph (c)(1) of this section. A notice received by CMS after the 25th day of the month is considered to have been received in the following month. (d) <E T="03">Termination or modification of buy-in agreement.</E> If the State's buy-in agreement is terminated, or modified to substitute a narrower buy-in group, coverage ends on the last day of the last month for which the agreement was in effect, or covered the broader buy-in group. <CITA>[53 FR 47204, Nov. 22, 1988, as amended at 56 FR 38082, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.50</SECTNO> <SUBJECT>Continuation of coverage: Individual enrollment following end of coverage under a State buy-in agreement.</SUBJECT> (a) <E T="03">Deemed enrollment.</E> When coverage under a buy-in agreement ends because the agreement terminates, or is modified to substitute a narrower buy-in group, or because the individual is no longer eligible for inclusion in the buy-in group, the individual— (1) Is considered to have enrolled during his or her initial enrollment period; and (2) Will be entitled to SMI on this basis and liable for SMI premiums beginning with the first month for which he or she is no longer covered under the buy-in agreement. (b) <E T="03">Voluntary termination.</E> (1) An individual may voluntarily terminate entitlement acquired under paragraph (a) of this section by filing, with SSA or CMS, a request for disenrollment. (2) Voluntary disenrollment is effective as follows: (i) If the individual files a request within 30 days after the date of CMS's notice that buy-in coverage has ended, the individual's entitlement ends on the last day of the last month for which the State paid the premium. (ii) If the individual files the request more than 30 days but not more than 6 months after buy-in coverage ends, entitlement ends on the last day of the month in which the request is filed. (iii) If the individual files the request later than the 6th month after buy-in coverage ends, entitlement ends at the end of the month after the month in which request is filed.<E T="51">1</E> <FTREF/> <FTNT> <E T="51">1</E> For requests filed before July 1987, entitlement ended on the last day of the calendar quarter after the quarter in which the disenrollment request was filed. </FTNT> <CITA>[53 FR 47204, Nov. 22, 1988, as amended at 56 FR 38082, Aug. 12, 1991]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 408</EAR> <HD SOURCE="HED">PART 408—PREMIUMS FOR SUPPLEMENTARY MEDICAL INSURANCE</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>408.1</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> <SECTNO>408.2</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> <SECTNO>408.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>408.4</SECTNO> <SUBJECT>Payment obligations.</SUBJECT> <SECTNO>408.6</SECTNO> <SUBJECT>Methods and priorities for payment.</SUBJECT> <SECTNO>408.8</SECTNO> <SUBJECT>Grace period and termination date.</SUBJECT> <SECTNO>408.10</SECTNO> <SUBJECT>Claim for monthly benefits pending concurrently with request for SMI enrollment.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Amount of Monthly Premium</HD> <SECTNO>408.20</SECTNO> <SUBJECT>Monthly premiums.</SUBJECT> <SECTNO>408.22</SECTNO> <SUBJECT>Increased premiums for late enrollment and for reenrollment.</SUBJECT> <SECTNO>408.24</SECTNO> <SUBJECT>Individuals who enrolled or reenrolled before April 1, 1981 or after September 30, 1981.</SUBJECT> <SECTNO>408.25</SECTNO> <SUBJECT>Individuals who enrolled or reenrolled between April 1 and September 30, 1981.</SUBJECT> <SECTNO>408.26</SECTNO> <SUBJECT>Examples.</SUBJECT> <SECTNO>408.27</SECTNO> <SUBJECT>Rounding the monthly premium.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Deduction From Monthly Benefits</HD> <SECTNO>408.40</SECTNO> <SUBJECT>Deduction from monthly benefits: Basic rules.</SUBJECT> <SECTNO>408.42</SECTNO> <SUBJECT>Deduction from railroad retirement benefits.</SUBJECT> <SECTNO>408.43</SECTNO> <SUBJECT>Deduction from social security benefits.</SUBJECT> <SECTNO>408.44</SECTNO> <SUBJECT>Deduction from civil service annuities.</SUBJECT> <SECTNO>408.45</SECTNO> <SUBJECT>Deduction from age 72 special payments.</SUBJECT> <SECTNO>408.46</SECTNO> <SUBJECT>Effect of suspension of social security benefits.</SUBJECT> <SECTNO>408.47</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>408.50</SECTNO> <SUBJECT>When premiums are considered paid.</SUBJECT> <SECTNO>408.52</SECTNO> <SUBJECT>Change from direct remittance to deduction.</SUBJECT> <SECTNO>408.53</SECTNO> <SUBJECT>Change from partial direct remittance to full deduction.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Direct Remittance: Individual Payment</HD> <SECTNO>408.60</SECTNO> <SUBJECT>Direct remittance: Basic rules.<PRTPAGE P="199"/> </SUBJECT> <SECTNO>408.62</SECTNO> <SUBJECT>Initial and subsequent billings.</SUBJECT> <SECTNO>408.63</SECTNO> <SUBJECT>Billing procedures when monthly benefits are less than monthly premiums.</SUBJECT> <SECTNO>408.65</SECTNO> <SUBJECT>Payment options.</SUBJECT> <SECTNO>408.68</SECTNO> <SUBJECT>When premiums are considered paid.</SUBJECT> <SECTNO>408.70</SECTNO> <SUBJECT>Change from quarterly to monthly payments.</SUBJECT> <SECTNO>408.71</SECTNO> <SUBJECT>Change from deduction or State payment to direct remittance.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Direct Remittance: Group Payment</HD> <SECTNO>408.80</SECTNO> <SUBJECT>Basic rules.</SUBJECT> <SECTNO>408.82</SECTNO> <SUBJECT>Conditions for group billing.</SUBJECT> <SECTNO>408.84</SECTNO> <SUBJECT>Billing and payment procedures.</SUBJECT> <SECTNO>408.86</SECTNO> <SUBJECT>Responsibilities under group billing arrangement.</SUBJECT> <SECTNO>408.88</SECTNO> <SUBJECT>Refund of group payments.</SUBJECT> <SECTNO>408.90</SECTNO> <SUBJECT>Termination of group billing arrangement.</SUBJECT> <SECTNO>408.92</SECTNO> <SUBJECT>Change from group payment to deduction or individual payment.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Termination and Reinstatement of Coverage</HD> <SECTNO>408.100</SECTNO> <SUBJECT>Termination of coverage for nonpayment of premiums.</SUBJECT> <SECTNO>408.102</SECTNO> <SUBJECT>Reconsideration of termination.</SUBJECT> <SECTNO>408.104</SECTNO> <SUBJECT>Reinstatement procedures.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Collection of Unpaid Premiums; Refund of Excess Premiums After the Death of the Enrollee</HD> <SECTNO>408.110</SECTNO> <SUBJECT>Collection of unpaid premiums.</SUBJECT> <SECTNO>408.112</SECTNO> <SUBJECT>Refund of excess premiums after the enrollee dies.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Supplementary Medical Insurance Premium Surcharge Agreements</HD> <SECHD>Sec.</SECHD> <SECTNO>408.200</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> <SECTNO>408.201</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>408.202</SECTNO> <SUBJECT>Conditions for participation.</SUBJECT> <SECTNO>408.205</SECTNO> <SUBJECT>Application procedures.</SUBJECT> <SECTNO>408.207</SECTNO> <SUBJECT>Billing and payment procedures.</SUBJECT> <SECTNO>408.210</SECTNO> <SUBJECT>Termination of SMI premium surcharge agreement. </SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 52 FR 48115, Dec. 18, 1987, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 408.1</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> (a) This part implements certain provisions of sections 1837 through 1840 and 1881(d) of the Social Security Act (the Act) and conforms to other regulations that implement section 1843 of the Act. Section 1838(b) requires regulations to establish when an individual's coverage ends because of nonpayment of premiums. It also specifies that those regulations may provide a grace period for payment of overdue premiums without loss of coverage. Section 1839 sets forth the specific procedures for determining the amount of the monthly premium and section 1840 establishes the rules for payment of premiums. Section 1843 provides that a State may enter into a buy-in agreement to secure SMI coverage for certain individuals by enrolling them in the SMI program and paying the premiums on their behalf. Section 1881(d) provides that Medicare payment, for the reasonable charges incurred in connection with a kidney donation, shall be made (without regard to deductible, premium, or coinsurance provisions of title XVIII) as prescribed in regulations. (b) The Federal Claims Collection Act (31 U.S.C. 3711), as implemented by 4 CFR parts 101-105, provides the basic authority for recovery of debts owed the United States government and specifies the conditions for the suspension or termination of collection action. Departmental regulations at 45 CFR part 30, updated by a final rule published on January 5, 1987 (52 FR 260) set forth procedures for the exercise of the Department's authority to collect and dispose of debts and were intended to complement rules applicable to particular programs. CMS rules are set forth at 42 CFR part 401, subpart F. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4158, Feb. 12, 1988, as amended at 56 FR 48112, Sept. 24, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.2</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> (a) This part sets forth the policies and procedures for determining the amount of monthly supplementary medical insurance (SMI) premiums, for the payment, collection, or refund of premiums, for termination of coverage because of nonpayment of premiums, and for reinstatement of coverage if certain conditions are met. It conforms to subpart C of part 407 of this chapter, which sets forth the requirements for State buy-in agreements. These policies are intended to protect enrollee <PRTPAGE P="200"/>coverage to the maximum degree compatible with maintaining the integrity of the SMI program. (b) Policies that apply to premiums that certain individuals must pay in order to become entitled to Medicare Part A hospital insurance benefits, are set forth in part 406 of this chapter. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this part, unless the context indicates otherwise— <E T="03">Enrollee</E> means an individual who is enrolled in the SMI program under Medicare Part B. <E T="03">Taxable year</E> means the 12-month period (calendar or fiscal year) for which the individual files his or her income tax return. </SECTION> <SECTION> <SECTNO>§ 408.4</SECTNO> <SUBJECT>Payment obligations.</SUBJECT> (a) <E T="03">Month for which payment is due.</E> (1) A payment is due for each month, beginning with the first month of SMI coverage and continuing through the month of death or, if earlier, the month in which coverage terminates. (2) A premium is due for the month of death, if SMI coverage is still in effect, even though the individual dies on the first day of the month. (b) <E T="03">Overdue premiums.</E> (1) Overdue premiums constitute an obligation enforceable against the enrollee or the enrollee's estate. (2) Overdue premiums are collected— (i) By deduction from social security or railroad retirement benefits or Federal civil service annuities; (ii) Directly from the enrollee or the enrollee's estate; or (iii) By offset against any SMI payments payable to the enrollee or the enrollee's estate. (3) Interest is not charged on overdue premiums, except under a State buy-in agreement, as provided in § 408.6(c)(4). (c) <E T="03">Premiums not required for certain kidney donors.</E> (1) No premiums are required for SMI benefits related to the donation of a kidney if the donor is not an enrollee. (2) A kidney donor who is an enrollee is not relieved of the obligation for premiums. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.6</SECTNO> <SUBJECT>Methods and priorities for payment.</SUBJECT> (a) <E T="03">Methods of payment</E>—(1) <E T="03">General rules.</E> Premiums are paid by one of the following four methods: (i) Payment by a State under a buy-in agreement. (ii) Deduction from monthly railroad retirement of social security cash benefits or Federal civil service annuities. (iii) Direct remittance on an individual basis, by or on behalf of the enrollee. (iv) Direct remittance on a group basis, by an employer, union, lodge or other organization, or by an entity of State or local government. (2) <E T="03">Special situations.</E> (i) If the monthly social security benefit or age 72 special benefit is less than the monthly premium, the benefit is withheld and the enrollee is required to pay the balance through direct remittance. (This situation may arise if the individual first becomes eligible for social security benefits after December 31, 1981, and is, therefore, not eligible for the fixed minimum, or receives age 72 special benefits that are reduced because the individual receives a government pension.) (ii) If the monthly railroad retirement benefit or civil service annuity payment is less than the premium, the monthly payment is not withheld and the enrollee is required to pay the total premium by direct remittance. (b) <E T="03">Priorities for payment.</E> (1) If an enrollee is enrolled under a State buy-in agreement— (i) SMI premiums may not be deducted from monthly cash benefits or annuities; and (ii) The enrollee may not be required to pay by direct remittance. (2) If an enrollee is not covered under a State buy-in agreement, but is receiving a monthly benefit or an annuity specified in paragraph (a)(1)(ii) of this section—<PRTPAGE P="201"/> (i) The premiums are deducted from that benefit or annuity; or (ii) If the monthly benefit or payment is less than the monthly premium, the rules of paragraph (a)(2) of this section apply. (3) If an enrollee is neither covered under a State buy-in agreement, nor receiving monthly benefits or annuity payments, the premiums must be paid totally by direct remittance. (c) <E T="03">Payment by a State under a buy-in agreement.</E> (1) A buy-in agreement is an agreement under which a State, through enrollment and payment of SMI premiums, secures SMI benefits for individuals who are eligible for that program and also eligible for certain other cash or medical benefits. (Policies on enrollment under State buy-in agreements are contained in subpart C of part 407 of this chapter.) (2) The State pays the premiums for each month for which an individual is covered under the agreement. (3) If an individual's coverage under a State buy-in agreement terminates, his coverage continues on an individual enrollment basis. The premiums are then deducted from benefits, as set forth in subpart C of this part, or paid by direct remittance in accordance with subpart D or subpart E of this part. (4) Policy on collection of premiums from buy-in States is set forth in a <E T="04">Federal Register</E> notice published on September 30, 1985 at 50 FR 39784. </SECTION> <SECTION> <SECTNO>§ 408.8</SECTNO> <SUBJECT>Grace period and termination date.</SUBJECT> (a) <E T="03">Grace period</E>. (1) For all initial premium payments (monthly or quarterly), and subsequent monthly or quarterly payments, the grace period ends with the last day of the third month after the billing month. (2) For payments required because the monthly benefit is less than the monthly premium, the grace period ends on April 30 of the year following the calendar year which the premiums are due. (b) <E T="03">Extension of grace period: Last day is nonwork day.</E> If the last day of the grace period is a Saturday, Sunday, legal holiday, or a day that, by statute or executive order, is a nonwork day for Federal employees, the grace period is extended to the next succeeding work day. (c) <E T="03">Termination date.</E> The end of the grace period is the termination date for SMI coverage if overdue premiums have not been paid by that date in accordance with § 408.68. (d) <E T="03">Extension of grace period for good cause.</E> (1) CMS may reinstate entitlement, without interruption of coverage, if the individual shows good cause for failure to pay within the initial grace period, and pays all overdue premiums within three calendar months after the termination date. (2) Good cause will be found if the individual establishes, by a credible statement, that failure to pay premiums within the initial grace period was due to conditions over which he or she had no control, or which he or she could not reasonably have been expected to foresee. <CITA>[52 FR 48115, Dec. 18, 1987, as amended at 56 FR 48112, Sept. 24, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.10</SECTNO> <SUBJECT>Claim for monthly benefits pending concurrently with request for SMI enrollment.</SUBJECT> (a) If it is clear that an individual who applies for social security or railroad retirement benefits and for SMI will be entitled to monthly benefits, the application for monthly benefits is processed simultaneously with the request for SMI enrollment. (1) If monthly benefits are paid, the SMI premiums are deducted from those benefits. (2) If monthly benefits are suspended (for instance, because the individual's earnings exceed the maximum allowed by law), the enrollee is billed for direct remittance. (b) If it is clear that an individual will be entitled to SMI, but there is substantial question as to eligibility for monthly benefits, the request for SMI enrollment is processed separately. (1) When SMI enrollment is approved, the enrollee is billed for direct remittance. (2) When the application for monthly benefits is adjudicated, the following rules apply: (i) If monthly benefits are paid, the SMI premiums are deducted from those benefits, with appropriate adjustments <PRTPAGE P="202"/>for any premiums already paid by direct remittance. (ii) If the application for monthly benefits is approved but the benefits are suspended, the grace period is as set forth in § 408.8(a). (iii) If the application for monthly benefits is denied, the grace period is as set forth in § 408.8(a)(1). <CITA>[52 FR 48115, Dec. 18, 1987, as amended at 56 FR 48112, Sept. 24, 1991]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Amount of Monthly Premiums</HD> <SECTION> <SECTNO>§ 408.20</SECTNO> <SUBJECT>Monthly premiums.</SUBJECT> (a) <E T="03">Statutory provisions.</E> (1) The law established a monthly premium of $3 for the initial period of the program. It also set forth criteria and procedures for the Secretary to follow each December, beginning with December 1968, to determine and promulgate the standard monthly premium for the 12-month period beginning with July of the following year. (2) The law was amended in 1983 to require that the Secretary promulgate the standard monthly premium in September of that year, and each year thereafter, to be effective for the 12 months beginning with the following January. (3) The standard monthly premium applies to individuals who enroll during their initial enrollment periods. In other situations, that premium may be increased or decreased as specified in this subpart. (4) The law was further amended in 1984 to include a temporary “hold harmless” provision (set forth in paragraph (e) of this section), that was subsequently extended and finally made permanent in 1988. (b) <E T="03">Criteria and procedures for the period from July 1976 through December 1983, the period from January 1991 through December 1995, and for periods after December 1998.</E> (1) For periods from July 1976 through December 1983 and after December 1998, the Secretary determines and promulgates as the standard monthly premium (for disabled as well as aged enrollees) the lower of the following: (i) The actuarial rate for the aged. (ii) The monthly premium promulgated the previous December for the year beginning July 1, increased by a percentage that is the same as the latest cost-of-living increase in old age insurance benefits that occurred before the current promulgation. (Because of the change in the effective dates of the premium amount (under paragraph (a)(2) of this section), there was no increase in the standard monthly premium for the period July 1983 through December 1983.) (2) For periods after December 1998, the Secretary determines the standard monthly premium in the manner specified in paragraph (b)(1) of this section, but promulgates it in September for the following calendar year. (3) The premiums for calendar years 1991 through 1995 are those amounts as specified by section 1839(e)(1)(B) of the Act as follows: (i) In 1991, $29.90; (ii) In 1992, $31.80; (iii) In 1993, $36.60; (iv) In 1994, $41.10; and (v) In 1995, $46.10. (c) <E T="03">Premiums for calendar years 1984 through 1990 and 1996 through 1998.</E> For calendar years 1984 through 1990 and 1996 through 1998, the standard monthly premium for all enrollees— (1) Is equal to 50 percent of the actuarial rate for enrollees age 65 or over, that is, is calculated on the basis of 25 percent of program costs without regard to any cost-of-living increase in old age insurance benefits; and (2) Is promulgated in the preceding September. (d) <E T="03">Limitation on increase of standard premium: 1987 and 1988.</E> If there is no cost-of-living increase in old age or disability benefits for December 1985 or December 1986, the standard monthly premiums for 1987 and 1988 (promulgated in September 1986 and September 1987, respectively) may not be increased. (e) <E T="03">Nonstandard premiums for certain cases</E>—(1) <E T="03">Basic rule.</E> A nonstandard premium may be established in individual cases only if the individual is entitled to old age or disability benefits for the months of November and December, and actually receives the corresponding benefit checks in December and January.<PRTPAGE P="203"/> (2) <E T="03">Special rules: Calendar years 1987 and 1988.</E> For calendar years 1987 and 1988, the following rules apply: (i) A nonstandard premium may be established if there is a cost-of-living increase in old age or disability benefits but, because the increase in the standard premium is greater than the cost-of-living increase, the beneficiary would receive a lower cash benefit in January than he or she received in December. (ii) A nonstandard premium may not be established if the reduction in the individual's benefit would result, in whole or in part, from any circumstance other than the circumstance described in paragraph (e)(2)(i) of this section. (3) <E T="03">Special rule: Calendar years after 1988.</E> (i) Beginning with calendar year 1989, a premium increase greater than the cost-of-living increase is still a prerequisite for a nonstandard premium. (ii) However, a nonstandard premium is not precluded solely because the cash benefit is further reduced as a result of government pension offset or workers' compensation payment. (4) <E T="03">Amount of nonstandard premium.</E> The nonstandard premium is the greater of the following: (i) The premium paid for December. (ii) The standard premium promulgated for January, reduced as necessary to compensate for— (A) The fact that the cost-of-living increase was less than the increase in the standard premium; or (B) The further reduction in benefit because of government pension offset or workers' compensation payments. (5) <E T="03">Effective dates of nonstandard premium.</E> A nonstandard premium established under this paragraph (e) continues in effect for the rest of the calendar year even if later there are retroactive adjustments in benefit payments. (The nonstandard premium could be affected by a determination that the individual had not established, or had lost, entitlement to monthly benefits for November or December, or both.) (6) <E T="03">Effect of late enrollment or reenrollment.</E> A nonstandard premium is subject to increase for late enrollment or reenrollment as required under other sections of this subpart. The increase is computed on the basis of the standard premium and added to the nonstandard premium. <CITA>[56 FR 8839, Mar. 1, 1991, as amended at 59 FR 26959, May 25, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.22</SECTNO> <SUBJECT>Increased premiums for late enrollment and for reenrollment.</SUBJECT> For an individual who enrolls after expiration of his or her initial enrollment period or reenrolls after termination of a coverage period, the standard monthly premium determined under § 408.20 is increased by ten percent for each full twelve months in the periods specified in §§ 408.24 and 408.25. </SECTION> <SECTION> <SECTNO>§ 408.24</SECTNO> <SUBJECT>Individuals who enrolled or reenrolled before April 1, 1981 or after September 30, 1981.</SUBJECT> (a) <E T="03">Enrollment.</E> For an individual who first enrolled before April 1, 1981 or after September 30, 1981, the period <E T="03">includes</E> the number of months elapsed between the close of the individual's initial enrollment period and the close of the enrollment period in which he or she first enrolled, and <E T="03">excludes</E> the following: (1) The three months of January through March 1968, if the individual first enrolled before April 1968. (2) Any months before January 1973 during which the individual was precluded from enrolling or reenrolling by the 3-year limitation on enrollment or reenrollment that was in effect before October 30, 1972. (3) Any months in or before a period of coverage under a State buy-in agreement. (4) For an individual under age 65, any month before his or her current continuous period of entitlement to hospital insurance. (5) For an individual age 65 or older, any month before the month he or she attained age 65. (6) For premiums due for months beginning with September 1984 and ending with May 1986, the following: (i) Any months after December 1982 during which the individual was— (A) Age 65 to 69; (B) Entitled to hospital insurance (Medicare Part A); and (C) Covered under a group health plan (GHP) by reason of current employment status.<PRTPAGE P="204"/> (ii) Any months of SMI coverage for which the individual enrolled during a special enrollment period as provided in § 407.20 of this chapter. (7) For premiums due for months beginning with June 1986, the following: (i) Any months after December 1982 during which the individual was: (A) Age 65 or over; and (B) Covered under a GHP by reason of current employment status. (ii) Any months of SMI coverage for which the individual enrolled during a special enrollment period as provided in § 407.20 of this chapter. (8) For premiums due for months beginning with January 1987, the following: (i) Any months after December 1986 and before October 1998 during which the individual was: (A) A disabled Medicare beneficiary under age 65; (B) Not eligible for Medicare on the basis of end stage renal disease, under § 406.13 of this chapter; and (C) Covered under an LGHP as described in § 407.20 of this chapter. (ii) Any months of SMI coverage for which the individual enrolled during a special enrollment period as provided in § 407.20 of this chapter. (9) For premiums due for months beginning with July 1990, the following: (i) Any months after December 1986 during which the individual met the conditions of paragraphs (a)(8)(i)(A) and (a)(8)(i)(B) of this section, and was covered under a GHP by reason of the current employment status of the individual or the individual's spouse. (ii) Any months of SMI coverage for which the individual enrolled during a special enrollment period as provided in § 407.20 of this chapter. (b) <E T="03">Reenrollment.</E> For an individual who reenrolled before April 1, 1981 or after September 30, 1981, the period: (1) <E T="03">Includes</E> the following: (i) The number of months elapsed between the close of the individual's initial enrollment period and the close of the enrollment period in which he or she first enrolled; plus (ii) The number of months elapsed between the individual's initial period of coverage and the close of the enrollment period in which he or she reenrolled; plus (iii) The number of months elapsed between each subsequent period of coverage and the close of the enrollment period in which he or she reenrolled. (2) <E T="03">Excludes</E> the following: (i) The periods specified in paragraphs (a)(1) through (a)(9) of this section; and (ii) Any month before April 1981 during which the individual was precluded from reenrolling by the two-enrollment limitation in effect before that date. <CITA>[52 FR 48118, Dec. 18, 1987, as amended at 53 FR 6648, Mar. 2, 1988; 61 FR 40347, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.25</SECTNO> <SUBJECT>Individuals who enrolled or reenrolled between April 1 and September 30, 1981.</SUBJECT> (a) <E T="03">Basic rules.</E> Except as specified in paragraph (b) of this section, the rules set forth in § 408.24 apply to an individual who enrolled or reenrolled between April 1 and September 30, 1981. (b) <E T="03">Exception.</E> For an individual who enrolled or reenrolled between April 1 and September 30, 1981, the months to be counted ran through the month in which he or she reenrolled. (During those 6 months, continuous open enrollment was in effect and there was no 3-month “general enrollment period”.) </SECTION> <SECTION> <SECTNO>§ 408.26</SECTNO> <SUBJECT>Examples.</SUBJECT> <E T="03">Example 1.</E> Mr. J, who became age 65 and otherwise eligible for enrollment in November 1965, first enrolls in March 1968. The months to be included in determining the amount of the increase in Mr. J's premiums begin with June 1966 (the first month after the close of his initial enrollment period) and extend through December 1967 (the period January through March of 1968 is excluded in determining the total months) for a total of 19 months. Since there is only one full 12-month period in 19 months, Mr. J's premiums will be 10 percent greater than if he had enrolled in his initial enrollment period. <E T="03">Example 2.</E> Mr. V, who enrolled in December 1965, voluntarily terminates his enrollment effective midnight December 31, 1967. He enrolls for a second time in January 1969. The months to be included in determining the amount of the increase in Mr. V's premiums are January 1968 through March 1969, a total of 15 months. Since this totals one full 12-month period. Mr. V's <PRTPAGE P="205"/>monthly premium, will be increased by 10 percent. <E T="03">Example 3.</E> Ms. N becomes age 65 in July 1965 and first enrolls in December 1967. She pays premiums increased by 10 percent above the regular rate, beginning July 1968, the first month of her SMI coverage. Ms. N fails to pay the premiums for the calendar quarter ending June 30, 1970, and her coverage is terminated on that date, the end of her grace period. Ms. N enrolls for a second time in January 1971. The months to be included in determining the amount of the increase in Ms. N's premiums are June 1966 through December 1967, a total of 19 months, and July 1970 through March 1971, a total of 9 months, for a grand total of 28 months. Since this totals two full 12-month periods, Ms. N's monthly premium will be increased by 20 percent. <E T="03">Example 4.</E> Mr. X attained age 65 in August 1966 and enrolled during his initial enrollment period. His coverage was terminated effective June 30, 1968, for nonpayment of premiums. He reenrolls in March 1973. For purposes of computing any applicable premium increase, he will not be charged any months between March 1971 (the end of the last general enrollment period during which he was eligible to reenroll under the law in effect before October 30, 1972) and January 1973. Therefore, he will be charged 36 months (July 1968-March 1971 plus January 1973-March 1973) and his premiums for his second period of coverage will be increased 30 percent. <E T="03">Example 5.</E> Ms. C, who attained age 65 in August 1973, had two periods of supplementary medical insurance coverage, both of which were terminated because of nonpayment of premiums: August 1973 through April 1975 and July 1977 through August 1978. She reenrolls in July 1981. The months to be included in determining the amount of premium increase are May 1975 through March 1977 (23 months) and April 1981 through July 1981 (4 months) for a total of 27 months. The 31 months from September 1978 through March 1981 may not be counted because Ms. C was prevented from reenrolling by the two-enrollment limitation in effect before April 1, 1981. For Ms. C, the standard monthly premium would be increased by 20 percent. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.27</SECTNO> <SUBJECT>Rounding the monthly premium.</SUBJECT> Any monthly premium that is not a multiple of 10 cents is rounded to the nearest multiple of 10 cents, and any odd mulitple of 5 cents is rounded to the next higher multiple of 10 cents. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Deduction From Monthly Benefits</HD> <SECTION> <SECTNO>§ 408.40</SECTNO> <SUBJECT>Deduction from monthly benefits: Basic rules.</SUBJECT> (a) <E T="03">Deduction from monthly benefits.</E> (1) Enrollees who are receiving monthly benefits do not have the option of paying by direct remittance to avoid deduction. (2) If the enrollee is entitled to more than one type of monthly benefit, the order of priority for deduction is as follows: (i) Railroad retirement benefits. (ii) Social security benefits. (iii) Civil service annuities. (b) <E T="03">Deduction from initial or reinstated benefits.</E> When an enrollee receives a monthly benefit check after an initial award or after a period of suspension, that check is, if administratively feasible, reduced or increased to deduct unpaid premiums or refund premiums paid in advance by direct remittance. (c) <E T="03">Ongoing deductions.</E> The premium for each month is deducted from the cash benefit for the preceding month, e.g., the premium for March is deducted from the benefit for February, which is paid at the beginning of March. </SECTION> <SECTION> <SECTNO>§ 408.42</SECTNO> <SUBJECT>Deduction from railroad retirement benefits.</SUBJECT> (a) <E T="03">Responsibility for deductions.</E> If an enrollee is entitled to railroad retirement benefits, his or her SMI premiums are deducted from those benefits by the Railroad Retirement Board (RRB) even though he or she is also entitled to social security benefits or a civil service annuity, or both.<PRTPAGE P="206"/> (b) <E T="03">Action when benefits are suspended.</E> If the railroad retirement benefits are suspended, the RRB sends premium notices requesting direct remittance, to be made in accordance with the rules set forth in Subpart D of this part. </SECTION> <SECTION> <SECTNO>§ 408.43</SECTNO> <SUBJECT>Deduction from social security benefits.</SUBJECT> SSA, acting as CMS's agent, deducts the premiums from the monthly social security benefits if the enrollee is not entitled to railroad retirement benefits. (If the benefit is less than the monthly premium, the benefit is withheld and the enrollee is required to pay the balance through direct remittance.) </SECTION> <SECTION> <SECTNO>§ 408.44</SECTNO> <SUBJECT>Deduction from civil service annuities.</SUBJECT> (a) <E T="03">Responsibility for deductions.</E> If an enrollee is not entitled to railroad retirement benefits or social security benefits, and is receiving a civil service annuity, the premiums are deducted from that annuity by the Office of Personnel Management (OPM) on the basis of a notice from SSA indicating that the annuitant is entitled to SMI. (b) <E T="03">Deduction of spouse's premiums.</E> If the annuitant's spouse is also enrolled for SMI and is not entitled to a civil service annuity or to social security or railroad retirement benefits, and the annuitant gives written consent, OPM also deducts the spouse's premium from the annuitant's monthly check. (c) <E T="03">Withdrawal of annuitant's consent.</E> (1) If an annuitant wishes to withdraw consent for deduction of the spouse's premium, he or she must send written notice of withdrawal to OPM. (2) The withdrawal notice is effective with the third month after the month in which it is received, or with the month specified in the notice, whichever is later. </SECTION> <SECTION> <SECTNO>§ 408.45</SECTNO> <SUBJECT>Deduction from age 72 special payments.</SUBJECT> (a) <E T="03">Deduction of premiums.</E> SMI premiums are deducted from age 72 special payments made under section 228 of the Act or the payments are withheld under procedures that correspond to the rules set forth in §§ 408.40 and 408.43. (b) <E T="03">Collection of premiums while age 72 special payments are suspended.</E> If the age 72 special payments are suspended, CMS or its agent notifies the enrollee to pay premiums by direct remittance, in accordance with the rules set forth in § 408.60. (c) <E T="03">Grace period.</E> The grace period ends with the last day of the third month after the billing month. (d) <E T="03">Resumption of age 72 special payments.</E> (1) If age 72 special payments are resumed before the end of the grace period and all premium arrears can be deducted from those special payments, SMI coverage continues and the enrollee need not pay by direct remittance. (2) Subsequent special payments are reduced by the amount of the premium for as long as the enrollee receives special payments. </SECTION> <SECTION> <SECTNO>§ 408.46</SECTNO> <SUBJECT>Effect of suspension of social security benefits.</SUBJECT> (a) <E T="03">Benefit payments to be resumed during the taxable year.</E> (1) If social security benefit payments are scheduled to be resumed during the enrollee's current taxable year, the enrollee is not billed. (2) The enrollee may, if he or she wishes, pay the premiums during suspension of benefits. (b) <E T="03">Benefit payments not to be resumed during the enrollee's current taxable year.</E> (1) If social security benefits are suspended for a period that will not permit collection of all premiums due from monthly benefits payable in the enrollee's current taxable year, CMS or its agents bill the enrollee and require direct remittance in accordance with subpart D of this part. (2) The first billing is for whatever premiums are necessary to place the enrollee in a quarterly cycle. (3) Thereafter, the billing is on a quarterly basis. (Quarters for different enrollees are staggered throughout the year.) (4) The enrollee has the option of paying premiums for more than one quarter at the same time. </SECTION> <SECTION> <PRTPAGE P="207"/> <SECTNO>§ 408.47</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 408.50</SECTNO> <SUBJECT>When premiums are considered paid.</SUBJECT> (a) <E T="03">Actual deduction.</E> A premium is considered paid if it is actually deducted from a monthly benefit check. Therefore— (1) The premium is “paid” even if SSA later finds that the benefit was paid in error; but (2) A finding that a monthly benefit was erroneously withheld does not constitute payment of the premium for that month. Since there was no payment, there was no deduction. The enrollee is billed and continuance of coverage depends on payment of premiums before the end of the grace period or extended grace period. (b) <E T="03">Payment within the grace period.</E> Overdue premiums are considered paid within the grace period in the following situations: (1) <E T="03">Benefits are resumed during the grace period.</E> (i) Monthly cash benefit payments are payable for the last month of the initial grace period or for earlier months on the basis of a notice filed by the enrollee before the initial grace period ends; and (ii) Those payments are sufficient to permit deduction of all overdue premiums. (2) <E T="03">Annual earnings report or other report submitted during the grace period shows a benefit is due.</E> (i) Before the end of the grace period, the enrollee submits a report clearly showing that monthly cash benefits, previously withheld, are payable; and (ii) Those benefits are sufficient to permit deduction of the full amount of the overdue premiums. (3) <E T="03">Premium arrears are paid by direct remittance.</E> The enrollee makes a direct remittance payment of all overdue premiums before the end of the grace period. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988; 56 FR 48112, Sept. 24, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.52</SECTNO> <SUBJECT>Change from direct remittance to deduction.</SUBJECT> If a direct remittance enrollee becomes entitled to monthly benefits— (a) The SMI premiums are deducted from those benefits; and (b) The enrollee is notified of the deduction and of any adjustment of the initial benefit check that is required to collect overdue premiums or refund premiums paid in advance. </SECTION> <SECTION> <SECTNO>§ 408.53</SECTNO> <SUBJECT>Change from partial direct remittance to full deduction.</SUBJECT> If a benefit that was less than the premium (and therefore required direct remittance of the difference) is increased to an amount equal to, or greater than, the premium— (a) The full premium is paid from the benefit; and (b) Any amounts the enrollee had paid toward premiums not yet due are refunded. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Direct Remittance: Individual Payment</HD> <SECTION> <SECTNO>§ 408.60</SECTNO> <SUBJECT>Direct remittance: Basic rules.</SUBJECT> (a) Premiums not deducted from monthly benefits under Subpart C of this part or paid by a State buy-in agreement must be paid by direct remittance to CMS or its agents, by or on behalf of the enrollee. (b) Quarterly payment is preferred as more cost-effective, but monthly payment is accepted if the enrollee is unwilling or unable to make quarterly payments or is also paying hospital insurance premiums, which must be paid every month. (c) CMS, directly or through its agents, sends quarterly or monthly premium bills and includes an addressed return envelope with the bill. (d) The individual must— (1) Send a check or money order that is drawn payable to “CMS Medicare Insurance” and show the enrollee's name and claim number as it appears on the Medicare card; and (2) Return the bill with the check or money order in the preaddressed envelope. </SECTION> <SECTION> <SECTNO>§ 408.62</SECTNO> <SUBJECT>Initial and subsequent billings.</SUBJECT> (a) <E T="03">Monthly billing.</E> (1) The first premium bill is for the period from the first month of coverage (or the first month of change from deduction or State buy-in payment) through the end of the first month after the month of billing.<PRTPAGE P="208"/> (2) Subsequent billings are for periods of one month. (b) <E T="03">Quarterly billing.</E> (1) The first premium bill is for the period from the first month of coverage (or of change from deduction or State buy-in payment) through the third month after the month of billing. (2) Subsequent billings are for periods of three months. </SECTION> <SECTION> <SECTNO>§ 408.63</SECTNO> <SUBJECT>Billing procedures when monthly benefits are less than monthly premiums.</SUBJECT> If monthly benefits are less than monthly premiums, the following procedures apply: (a) <E T="03">Notice of amount due.</E> At the beginning of SMI entitlement, and at the beginning of each succeeding calendar year, SSA— (1) Notifies the enrollee of the amount of benefits payable for the rest of the year and the total premiums due for those same months; and (2) Bills the enrollee for the difference. (b) <E T="03">Notice of amount overdue.</E> At the beginning of each succeeding calendar year, SSA— (1) Notifies the enrollee of any amounts overdue for premiums for the preceding calendar year; and (2) Indicates that if the amount still overdue on April 30 is equal to or greater than the premium for 3 months, SMI coverage will terminate on that date. </SECTION> <SECTION> <SECTNO>§ 408.65</SECTNO> <SUBJECT>Payment options.</SUBJECT> (a) The enrollee is not asked to pay premiums at the time of enrollment but is instructed to pay them upon receipt of a premium bill from CMS or its agents. (b) However, if the enrollee wishes, he or she may pay from one to 12 months or from one to four quarters at the time of enrollment. </SECTION> <SECTION> <SECTNO>§ 408.68</SECTNO> <SUBJECT>When premiums are considered paid.</SUBJECT> (a) <E T="03">Payment by check.</E> The premium is considered paid if the check is paid by the bank the first or second time it is presented for payment. (b) <E T="03">Payment within the grace period.</E> (1) A premium is considered paid within the grace period if it is delivered personally, or mailed on or before the last day of that period. (2) A premium payment is considered to have been mailed 7 days before it is received by CMS. </SECTION> <SECTION> <SECTNO>§ 408.70</SECTNO> <SUBJECT>Change from quarterly to monthly payments.</SUBJECT> If an enrollee requests change from quarterly to monthly payment— (a) If the enrollee is paid up under the quarterly cycle, the first monthly bill is for one month. (b) If the enrollee is not paid up under the quarter system, the first bill includes all premiums due. </SECTION> <SECTION> <SECTNO>§ 408.71</SECTNO> <SUBJECT>Change from deduction or State payment to direct remittance.</SUBJECT> (a) <E T="03">Basis for change.</E> An SMI enrollee is required to pay by direct remittance in any of the following circumstances: (1) The enrollee's entitlement to social security or railroad retirement benefits ends for any reason other than death. (2) The premiums can no longer be deducted from the civil service annuity of the enrollee or the enrollee's spouse. (3) The enrollee no longer qualifies for coverage under a State buy-in agreement, and is not entitled to social security or railroad retirement monthly benefits. (b) <E T="03">Billing.</E> When any of the events specified in paragraph (a) of this section occurs (or as soon thereafter as possible), CMS or its agents bill the enrollee for direct remittance, in accordance with this subpart. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Direct Remittance: Group Payment</HD> <SECTION> <SECTNO>§ 408.80</SECTNO> <SUBJECT>Basic rules.</SUBJECT> (a) <E T="03">Sources of group payment.</E> An employer, a lodge, union, or other organization may pay SMI premiums on behalf of one or more enrollees. (b) <E T="03">Informal arrangement.</E> Enrollees may turn over their premium notices to their employer, union, lodge, or other organization and that organization may send a single payment (with the premium notices attached so that the payments can readily be identified with the appropriate enrollees) to the CMS Premium Collection Center. Prompt payment is essential since SMI <PRTPAGE P="209"/>coverage terminates if premiums are not paid by the end of the grace period. (c) <E T="03">Group billing arrangement.</E> CMS may send a single notice for the premiums due from a group of enrollees if the following conditions are met: (1) The group payer— (i) Uses funds other than the enrollees' to pay all or a substantial part of the premiums; or (ii) Deducts the premiums from periodic payments it makes to the enrollees in the group. (2) The enrollee's rights are protected and enrollees are not required to pay the costs of having their premiums paid on a group basis. </SECTION> <SECTION> <SECTNO>§ 408.82</SECTNO> <SUBJECT>Conditions for group billing.</SUBJECT> CMS agrees to a group billing arrangement only if the following conditions are met: (a) Conditions the group payer must meet. The group payer submits a written request for group billing— (1) Showing that all or part of the payments are made from the payer's funds or from funds due the enrollees and in the payer's possession; and (2) Agreeing not to charge the enrollees for the service of paying the premiums or for the administrative costs such as recordkeeping and postage. (b) <E T="03">Enrollees eligible for group payment.</E> (1) Group payment may be made only on behalf of individuals who are already enrolled and are being billed for direct remittance. (2) Group payment may not be made for enrollees whose premiums are being deducted from monthly benefits in accordance with Subpart C of this part or being paid by the State under a buy-in agreement. (c) <E T="03">Protection of enrollee's rights.</E> The use of group billing must not jeopardize the enrollees' right— (1) To confidentiality of personal information; (2) To terminate enrollment; (3) To resume individual payment of premiums if he or she wishes; and (4) To receive notice of any action that affects the SMI benefits. (d) <E T="03">Authorization by the enrollee.</E> (1) To ensure maximum feasible protection of the rights specified in paragraph (c) of this section, each enrollee must give written authorization as specified in § 408.84(a)(2). (2) A group payer that is not an entity of State or local government must submit all enrollee authorizations to CMS. (3) A group payer that is an entity of State or local government may retain the authorizations and certify to CMS that it has on file an authorization for each enrollee included in the group. (4) It is on the basis of the enrollee's authorization that CMS sends the group payer information about each enrollee, as necessary to carry out the group payment function. (e) <E T="03">Size of group.</E> The number of enrollees must be at least 20, which is the minimum size sufficient to make group billing efficient. (Smaller groups may use the informal procedure described in § 408.80(b).) </SECTION> <SECTION> <SECTNO>§ 408.84</SECTNO> <SUBJECT>Billing and payment procedures.</SUBJECT> (a) <E T="03">Initial premium notice.</E> (1) CMS or its agent always sends the initial premium notice to the enrollee. (2) An enrollee who wishes to have the premiums paid on a group basis must give the notice to the group payer, along with written authorization for sending subsequent notices to the group payer and for release of the information required for the group payment process. (b) <E T="03">Monthly billings.</E> Group premiums are billed on a monthly basis. However, the group payer may pay up to 12 months in advance. (c) Group payers must make their payments within 30 days after billing, to avoid infringing on the 90-day grace period during which the premiums may be paid by the enrollee if he or she is dropped from the group. (d) <E T="03">Effect of group payment.</E> Payment by a group payer is considered payment by the enrollee. </SECTION> <SECTION> <SECTNO>§ 408.86</SECTNO> <SUBJECT>Responsibilities under group billing arrangement.</SUBJECT> (a) <E T="03">Enrollee responsibilities.</E> (1) The enrollee is still responsible for premium payments; the group payer simply acts as his agent. If the agent fails to pay, or identifies the payment incorrectly, <PRTPAGE P="210"/>SSA notifies both the agent and the enrollee that the enrollee's account is delinquent. If an enrollee fails to take action on that notice, entitlement is terminated for nonpayment of premiums. (2) The enrollee must promptly notify both SSA and the group payer of any change of address. (b) <E T="03">Group payer's responsibilities.</E> The group payer must— (1) Make premium payments promptly upon receipt of notices; (2) Promptly notify both CMS and the enrollee when it drops an enrollee from the group; (3) Make payments in a way that facilitates efficient and economical processing; and (4) Maintain the confidentiality of the personal information obtained from CMS for the group payment process. (c) <E T="03">CMS responsibilities.</E> CMS— (1) Sends the bill to the group payer upon authorization from the enrollee; (2) Notifies both the payer and the enrollee if the payer fails to make timely payments; and (3) Refunds excess premiums in accordance with § 408.88. </SECTION> <SECTION> <SECTNO>§ 408.88</SECTNO> <SUBJECT>Refund of group payments.</SUBJECT> (a) <E T="03">Basis for refund.</E> Group payments are refunded only in the following circumstances: (1) The premium was for a month after the month in which the enrollee's SMI coverage terminated or the enrollee died. (2) The premium was for a month after the month in which the group payer gave notice (before the 26th day of that month) that the enrollee was no longer eligible for group payment and was being dropped from the group. (b) <E T="03">Example.</E> F is the wife of J who is a retiree of Corporation X. That corporation pays premiums on behalf of all of its retirees and their dependents. F obtains a divorce from J on October 20 and thus disqualifies herself for further premium payments by the corporation. The corporation gives notice on November 10 that a refund is due because F has been dropped from the list of persons for whom it has agreed to pay premiums. The premium paid for December would be refunded to the group payer. (c) <E T="03">To whom refund is made.</E> (1) CMS ordinarily refunds to the group payer the premiums specified in paragraph (a) of this section. (2) However, if CMS has information that clearly shows those premiums were paid from the enrollee's funds, it sends the refund to the enrollee. </SECTION> <SECTION> <SECTNO>§ 408.90</SECTNO> <SUBJECT>Termination of group billing arrangement.</SUBJECT> (a) A group billing arrangement may be terminated either by the group payer or by CMS upon 30 days' notice. (b) CMS may terminate the arrangement if it finds that the group payer is not acting in the best interest of the enrollees or that, for any other reason, the arrangement has proved inconvenient for CMS. </SECTION> <SECTION> <SECTNO>§ 408.92</SECTNO> <SUBJECT>Change from group payment to deduction or individual payment.</SUBJECT> (a) <E T="03">Enrollee excluded from group payment arrangement because of entitlement to monthly benefits.</E> (1) When an enrollee becomes entitled to monthly benefits from which premiums can be deducted as specified in subpart C of this part, CMS notifies the group payer to discontinue payment for that enrollee. (2) In order to maintain confidentiality, CMS does not explain to the group payer the reason for excluding the enrollee from the group payment arrangement. (3) The enrollee's premiums are thereafter deducted from the monthly benefits, in accordance with subpart C of this part. (b) <E T="03">Enrollee no longer eligible for the group.</E> (1) When an enrollee is no longer eligible to be included in the group (for instance because he or she is no longer employed by the group payer or has terminated union or lodge membership), the group payer must promptly notify CMS and the enrollee. (2) CMS or its agents resume sending individual bills to the enrollee, for direct remittance subject to the grace period and termination dates specified in § 408.8. </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="211"/> <HD SOURCE="HED">Subpart F—Termination and Reinstatement of Coverage</HD> <SECTION> <SECTNO>§ 408.100</SECTNO> <SUBJECT>Termination of coverage for nonpayment of premiums.</SUBJECT> (a) <E T="03">Effective date of termination.</E> Termination is effective on the last day of the grace period. The determination is not made until 15 days after that day to allow for processing of remittances mailed late in the grace period, as provided in § 408.68. (b) <E T="03">Notice of termination.</E> (1) SSA sends the enrollee notice of termination between 15 and 30 days after the end of the grace period and includes information regarding the enrollee's right of appeal. (2) CMS notifies any intermediary or carrier that had previously been informed that the enrollee had met the SMI deductible for the year in which the termination is effective. </SECTION> <SECTION> <SECTNO>§ 408.102</SECTNO> <SUBJECT>Reconsideration of termination.</SUBJECT> (a) <E T="03">Basic rules.</E> Coverage may be reinstated without interruption of benefits if the following conditions are met: (1) The enrollee appeals the termination by the end of the month following the month in which SSA sent the notice of termination. (2) The enrollee alleges and it is found that the enrollee did not receive timely and adequate notice that the premiums were overdue. (3) The enrollee pays, within 30 days after SSA's subsequent request for payment, all premiums due through the month in which he or she appealed the termination. (b) <E T="03">Basis for reinstating coverage.</E> Coverage may be reinstated if the evidence establishes one of the following: (1) The enrollee acted diligently to pay the premiums or to request relief upo

CODE OF FEDERAL REGULATIONS 42 Parts 400 to 429 Revised as of October 1, 2002 Public Health Containing a codification of documents of general applicability and future effect As of October 1, 2002 With Ancillaries

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Table of Contents Page Explanation v Title 42: Chapter IV—Centers for Medicare & Medicaid Services, Department of Health and Human Services 3 Finding Aids: Material Approved for Incorporation by Reference 963 Table of CFR Titles and Chapters 965 Alphabetical List of Agencies Appearing in the CFR 983 List of CFR Sections Affected 993

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Raymond A. Mosley, Director, Office of the Federal Register. October 1, 2002. THIS TITLE

Title 42—Public Health is composed of three volumes. The parts in these volumes are arranged in the following order: Parts 1-399, parts 400-429 and part 430 to end. The first volume (parts 1-399) contains current regulations issued under chapter I—Public Health Service (HHS). The second volume (parts 400-429) includes regulations issued under chapter IV—Centers for Medicare & Medicaid Services (HHS) and the third volume (part 430 to end) contains the remaining regulations in chapter IV and the regulations issued under chapter V by the Office of Inspector General-Health Care (HHS). The contents of these volumes represent all current regulations codified under this title of the CFR as of October 1, 2002.

The OMB control numbers for the Centers for Medicare & Medicaid Services appear in § 400.310 of chapter IV. For the convenience of the user, subpart C consisting of §§ 400.300-400.310 is reprinted in the Finding Aids section of the third volume.

CFRORDR.FRM <CFRTITLE> <LRH>42 CFR Ch. IV (10-1-02 Edition)</LRH> <RRH>Centers for Medicare & Medicaid Services, HHS</RRH> <TITLEHD> <PRTPAGE P="1"/> <HD SOURCE="HED">Title 42—Public Health</HD> (This book contains parts 400 to 429) </TITLEHD> <CFRTOC> <PTHD>Part</PTHD> <CHAPTI> <SUBJECT> <E T="04">chapter iv</E>— Centers for Medicare & Medicaid Services, Department of Health and Human Services</SUBJECT> <PG>400</PG> </CHAPTI> </CFRTOC> </CFRTITLE> <CHAPTER> <TOC> <TOCHD> <PRTPAGE P="3"/> <HD SOURCE="HED">CHAPTER IV—CENTERS FOR MEDICARE </HD> <HD SOURCE="HED">& MEDICAID SERVICES, </HD> <HD SOURCE="HED">DEPARTMENT OF HEALTH AND </HD> <HD SOURCE="HED">HUMAN SERVICES</HD> </TOCHD> <EDNOTE> <HD SOURCE="HED">Editorial Note:</HD> Nomenclature changes affecting chapter IV appear at 56 FR 8852, Mar. 1, 1991, 62 FR 46037, Aug. 29, 1997, 66 FR 39452, July 31, 2001, and 67 FR 36540, May 24, 2002. </EDNOTE> <SUBCHAP> <HD SOURCE="HED">SUBCHAPTER A—GENERAL PROVISIONS</HD> </SUBCHAP> <PTHD>Part</PTHD> <PGHD>Page</PGHD> <CHAPTI> <PT>400</PT> <SUBJECT>Introduction; definitions</SUBJECT> <PG>5</PG> <PT>401</PT> <SUBJECT>General administrative requirements</SUBJECT> <PG>9</PG> <PT>402</PT> <SUBJECT>Civil money penalties, assessments, and exclusions</SUBJECT> <PG>22</PG> <PT>403</PT> <SUBJECT>Special programs and projects</SUBJECT> <PG>36</PG> </CHAPTI> <SUBCHAP> <HD SOURCE="HED">SUBCHAPTER B—MEDICARE PROGRAM</HD> </SUBCHAP> <CHAPTI> <PT>405</PT> <SUBJECT>Federal health insurance for the aged and disabled</SUBJECT> <PG>65</PG> <PT>406</PT> <SUBJECT>Hospital insurance eligibility and entitlement</SUBJECT> <PG>172</PG> <PT>407</PT> <SUBJECT>Supplementary medical insurance (SMI) enrollment and entitlement</SUBJECT> <PG>188</PG> <PT>408</PT> <SUBJECT>Premiums for supplementary medical insurance</SUBJECT> <PG>198</PG> <PT>409</PT> <SUBJECT>Hospital insurance benefits</SUBJECT> <PG>215</PG> <PT>410</PT> <SUBJECT>Supplementary medical insurance (SMI) benefits</SUBJECT> <PG>241</PG> <PT>411</PT> <SUBJECT>Exclusions from Medicare and limitations on Medicare payment</SUBJECT> <PG>299</PG> <PT>412</PT> <SUBJECT>Prospective payment systems for inpatient hospital services</SUBJECT> <PG>367</PG> <PT>413</PT> <SUBJECT>Principles of reasonable cost reimbursement; payment for end-stage renal disease services; prospectively determined payment rates for skilled nursing facilities</SUBJECT> <PG>490</PG> <PT>414</PT> <SUBJECT>Payment for Part B medical and other health services</SUBJECT> <PG>622</PG> <PT>415</PT> <SUBJECT>Services furnished by physicians in providers, supervising physicians in teaching settings, and residents in certain settings</SUBJECT> <PG>654</PG> <PT>416</PT> <SUBJECT>Ambulatory surgical services</SUBJECT> <PG>672<PRTPAGE P="4"/> </PG> <PT>417</PT> <SUBJECT>Health maintenance organizations, competitive medical plans, and health care prepayment plans</SUBJECT> <PG>682</PG> <PT>418</PT> <SUBJECT>Hospice care</SUBJECT> <PG>775</PG> <PT>419</PT> <SUBJECT>Prospective payment system for hospital outpatient department services</SUBJECT> <PG>792</PG> <PT>420</PT> <SUBJECT>Program integrity: Medicare</SUBJECT> <PG>804</PG> <PT>421</PT> <SUBJECT>Intermediaries and carriers</SUBJECT> <PG>815</PG> <PT>422</PT> <SUBJECT>Medicare+Choice program</SUBJECT> <PG>827</PG> <PT>424</PT> <SUBJECT>Conditions for Medicare payment</SUBJECT> <PG>931</PG> </CHAPTI> </TOC> <SUBCHAP TYPE="N"> <PRTPAGE P="5"/> <HD SOURCE="HED">SUBCHAPTER A—GENERAL PROVISIONS</HD> <PART> <EAR>Pt. 400</EAR> <HD SOURCE="HED">PART 400—INTRODUCTION; DEFINITIONS</HD> <CONTENTS> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Definitions</HD> <SECHD>Sec.</SECHD> <SECTNO>400.200</SECTNO> <SUBJECT>General definitions.</SUBJECT> <SECTNO>400.202</SECTNO> <SUBJECT>Definitions specific to Medicare.</SUBJECT> <SECTNO>400.203</SECTNO> <SUBJECT>Definitions specific to Medicaid.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—OMB Control Numbers for Approved Collections of Information</HD> <SECTNO>400.300</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>400.310</SECTNO> <SUBJECT>Display of currently valid OMB control numbers.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35. </AUTH> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Definitions</HD> <SECTION> <SECTNO>§ 400.200</SECTNO> <SUBJECT>General definitions.</SUBJECT> In this chapter, unless the context indicates otherwise— <E T="03">Act</E> means the Social Security Act, and titles referred to are titles of that Act. <E T="03">Administrator</E> means the Administrator, Centers for Medicare & Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA). <E T="03">ALJ</E> stands for administrative law judge. <E T="03">Area</E> means the geographical area within the boundaries of a State, or a State or other jurisdiction, designated as constituting an area with respect to which a Professional Standards Review Organization or a Utilization and Quality Control Peer Review Organization has been or may be designated. <E T="03">CMP</E> stands for competitive medical plan. <E T="03">Conditions of participation</E> includes <E T="03">requirements for participation</E> as the latter term is used in part 483 of this chapter. <E T="03">Condition level</E> deficiencies includes deficiencies with respect to “level A requirements” as the latter term is used in parts 442 and 483 of this chapter. <E T="03">CORF</E> stands for comprehensive outpatient rehabilitation facility. <E T="03">CFR</E> stands for Code of Federal Regulations. <E T="03">CMS</E> stands for Centers for Medicare & Medicaid Services, formerly the Health Care Financing Administration (HCFA). <E T="03">CY</E> stands for calendar year. <E T="03">DAB</E> stands for Departmental Appeals Board. <E T="03">Department</E> means the Department of Health and Human Services (HHS), formerly the Department of Health, Education, and Welfare. <E T="03">ESRD</E> stands for end-stage renal disease. <E T="03">FDA</E> stands for the Food and Drug Administration. <E T="03">FQHC</E> means Federally qualified health center. <E T="03">FR</E> stands for <E T="04">Federal Register.</E> <E T="03">FY</E> stands for fiscal year. <E T="03">HCPP</E> stands for health care prepayment plan. <E T="03">HHS</E> stands for the Department of Health and Human Services. <E T="03">HHA</E> stands for home health agency. <E T="03">HMO</E> stands for health maintenance organization. <E T="03">ICF</E> stands for intermediate care facility. <E T="03">ICF/MR</E> stands for intermediate care facility for the mentally retarded. <E T="03">Medicaid</E> means medical assistance provided under a State plan approved under title XIX of the Act. <E T="03">Medicare</E> means the health insurance program for the aged and disabled under title XVIII of the Act. <E T="03">NCD</E> stands for national coverage determination. <E T="03">OASDI</E> stands for the Old Age, Survivors, and Disability Insurance program under title II of the Act. <E T="03">OIG</E> stands for the Department's Office of the Inspector General. <E T="03">QDWI</E> stands for Qualified Disabled and Working Individual. <E T="03">QIO</E> stands for quality improvement organization. <E T="03">QMB</E> stands for Qualified Medicare Beneficiary. <E T="03">Qualified Disabled and Working Individual</E> means an individual who—<PRTPAGE P="6"/> (1) Is eligible to enroll for Medicare Part A under section 1818A of the Act. (2) Has income, as determined in accordance with SSI methodologies, that does not exceed 200 percent of the Federal poverty guidelines (as defined and revised annually by the Office of Management and Budget) for a family of the size of the individual's family; (3) Has resources, as determined in accordance with SSI methodologies, that do not exceed twice the relevant maximum amount established, for SSI eligibility, for an individual or for an individual and his or her spouse; and (4) Is not otherwise eligible for Medicaid. <E T="03">Qualified Medicare Beneficiary</E> means an individual who— (1) Is entitled to Medicare Part A, with or without payment of premiums, but is not entitled solely because he or she is eligible to enroll as a QDWI; (2) Has resources, as determined in accordance with SSI methodologies, that do not exceed twice the maximum amount established for SSI eligibility; and (3) Has income, as determined in accordance with SSI methodologies, that does not exceed 100 percent of the Federal poverty guidelines. <E T="03">Quality improvement organization</E> means an organization that has a contract with CMS, under part B of title XI of the Act, to perform utilization and quality control review of the health care furnished, or to be furnished, to Medicare beneficiaries. <E T="03">Regional Administrator</E> means a Regional Administrator of CMS. <E T="03">Regional Office</E> means one of the regional offices of CMS. <E T="03">RHC</E> stands for rural health clinic. <E T="03">RRB</E> stands for Railroad Retirement Board. <E T="03">Secretary</E> means the Secretary of Health and Human Services. <E T="03">SNF</E> stands for skilled nursing facility. <E T="03">Social security benefits</E> means monthly cash benefits payable under section 202 or 223 of the Act. <E T="03">SSA</E> stands for Social Security Administration. <E T="03">United States</E> means the fifty States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. <E T="03">U.S.C.</E> stands for United States Code. <CITA>[48 FR 12534, Mar. 25, 1983, as amended at 49 FR 7206, Feb. 27, 1984; 50 FR 15326 and 15358, Apr. 17, 1985; 50 FR 41886, Oct. 16, 1985; 51 FR 43197, Dec. 1, 1986; 52 FR 27764, July 23, 1987; 56 FR 8852, Mar. 1, 1991; 56 FR 38077, Aug. 12, 1991; 57 FR 24975, June 12, 1992; 57 FR 55912, Nov. 25, 1992; 63 FR 35065, June 26, 1998; 63 FR 52611, Oct. 1, 1998; 63 FR 68690, Dec. 14, 1998; 66 FR 39452, July 31, 2001; 67 FR 36540, May 24, 2002]</CITA> </SECTION> <SECTION> <SECTNO>§ 400.202</SECTNO> <SUBJECT>Definitions specific to Medicare.</SUBJECT> As used in connection with the Medicare program, unless the context indicates otherwise— <E T="03">Beneficiary</E> means a person who is entitled to Medicare benefits. <E T="03">Carrier</E> means an entity that has a contract with CMS to determine and make Medicare payments for Part B benefits payable on a charge basis and to perform other related functions. <E T="03">Critical access hospital (CAH)</E> means a facility designated by HFCA as meeting the applicable requirements of section 1820 of the Act and of subpart F of part 485 of this chapter. <E T="03">Entitled</E> means that an individual meets all the requirements for Medicare benefits. <E T="03">Essential access community hospital (EACH)</E> means a hospital designated by CMS as meeting the applicable requirements of section 1820 of the Act and of subpart G of part 412 of this chapter, as in effect on September 30, 1997. <E T="03">GME</E> stands for graduate medical education. <E T="03">Hospital insurance benefits</E> means payments on behalf of, and in rare circumstances directly to, an entitled individual for services that are covered under Part A of title XVIII of the Act. <E T="03">Intermediary</E> means an entity that has a contract with CMS to determine and make Medicare payments for Part A or Part B benefits payable on a cost basis and to perform other related functions. <E T="03">Medicare Part A</E> means the hospital insurance program authorized under Part A of title XVIII of the Act. <E T="03">Medicare Part B</E> means the supplementary medical insurance program authorized under Part B of title XVIII of the Act.<PRTPAGE P="7"/> <E T="03">National coverage determination (NCD)</E> means a national policy determination regarding the coverage status of a particular service, that makes under section 1862(a)(1) of the Act, and publishes as a <E T="04">Federal Register</E> notice or CMS Ruling. (The term does not include coverage changes mandated by statute.) <E T="03">Nonparticipating supplier</E> means a supplier that does not have an agreement with CMS to participate in Part B of Medicare in effect on the date of the service. <E T="03">Participating supplier</E> means a supplier that has an agreement with CMS to participate in Part B of Medicare in effect on the date of the service. <E T="03">Payment on an assignment-related basis</E> means payment for Part B services— (1) To a physician or other supplier that accepts assignment from the beneficiary, in accordance with § 424.55 or § 424.56 of this chapter; (2) To a physician or other supplier after the beneficiary's death, in accordance with § 424.64(c)(1) of this chapter; or (3) To an entity that pays the physician or other supplier under a health benefit plan, in accordance with § 424.66 of this chapter. <E T="03">Provider</E> means a hospital, a CAH, a skilled nursing facility, a comprehensive outpatient rehabilitation facility, a home health agency, or a hospice that has in effect an agreement to participate in Medicare, or a clinic, a rehabilitation agency, or a public health agency that has in effect a similar agreement but only to furnish outpatient physical therapy or speech pathology services, or a community mental health center that has in effect a similar agreement but only to furnish partial hospitalization services. <E T="03">Railroad retirement benefits</E> means monthly benefits payable to individuals under the Railroad Retirement Act of 1974 (45 U.S.C. beginning at section 231). <E T="03">Services</E> means medical care or services and items, such as medical diagnosis and treatment, drugs and biologicals, supplies, appliances, and equipment, medical social services, and use of hospital, CAH, or SNF facilities. <E T="03">Supplementary medical insurance benefits</E> means payment to or on behalf of an entitled individual for services covered under Part B of title XVIII of the Act. <E T="03">Supplier</E> means a physician or other practitioner, or an entity other than a provider, that furnishes health care services under Medicare. <CITA>[48 FR 12534, Mar. 25, 1983, as amended at 48 FR 56024, Dec. 16, 1983; 49 FR 3658, Jan. 30, 1984; 51 FR 43197, Dec. 1, 1986; 52 FR 27764, July 23, 1987; 55 FR 24567, June 18, 1990; 56 FR 8852, Mar. 1, 1991; 58 FR 30666, May 26, 1993; 59 FR 6576, Feb. 11, 1994; 60 FR 63175, Dec. 8, 1995; 62 FR 46025, Aug. 29, 1997; 62 FR 59098, Oct. 31, 1997; 63 FR 35065, June 26, 1998]</CITA> </SECTION> <SECTION> <SECTNO>§ 400.203</SECTNO> <SUBJECT>Definitions specific to Medicaid.</SUBJECT> As used in connection with the Medicaid program, unless the context indicates otherwise— <E T="03">Applicant</E> means an individual whose written application for Medicaid has been submitted to the agency determining Medicaid eligibility, but has not received final action. This includes an individual (who need not be alive at the time of application) whose application is submitted through a representative or a person acting responsibly for the individual. <E T="03">Federal financial participation</E> (FFP) means the Federal Government's share of a State's expenditures under the Medicaid program. <E T="03">FMAP</E> stands for the Federal medical assistance percentage, which is used to calculate the amount of Federal share of State expenditures for services. <E T="03">Medicaid agency</E> or <E T="03">agency</E> means the single State agency administering or supervising the administration of a State Medicaid plan. <E T="03">Nursing facility (NF),</E> effective October 1, 1990, means an SNF or an ICF participating in the Medicaid program. <E T="03">PCCM</E> stands for primary care case manager. <E T="03">PCP</E> stands for primary care physician. <E T="03">Provider</E> means either of the following: (1) For the fee-for-service program, any individual or entity furnishing Medicaid services under an agreement with the Medicaid agency. (2) For the managed care program, any individual or entity that is engaged in the delivery of health care services and is legally authorized to do <PRTPAGE P="8"/>so by the State in which it delivers the services. <E T="03">Recipient</E> means an individual who has been determined eligible for Medicaid. <E T="03">Services</E> means the types of medical assistance specified in section 1905(a) of the Act and defined in subpart A of part 440 of this chapter. <E T="03">State</E> means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa and the Northern Mariana Islands. <E T="03">State plan</E> or <E T="03">the plan</E> means a comprehensive written commitment by a Medicaid agency, submitted under section 1902(a) of the Act, to administer or supervise the administration of a Medicaid program in accordance with Federal requirements. <CITA>[48 FR 12534, Mar. 25, 1983, as amended at 50 FR 33029, Aug. 16, 1985; 56 FR 8852, Mar. 1, 1991; 57 FR 29155, June 30, 1992; 67 FR 41094, June 14, 2002]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—OMB Control Numbers for Approved Collections of Information</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 49 FR 4477, Feb. 7, 1984, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 400.300</SECTNO> <SUBJECT>Scope.</SUBJECT> This subpart collects and displays control numbers assigned by the Office of Management and Budget (OMB) to collections of information contained in CMS regulations, in accordance with OMB's regulations for controlling paperwork burdens on the public, 5 CFR part 1320. CMS intends that the subpart comply with the requirements of section 3507(f) of the Paperwork Reduction Act of 1980, 44 U.S.C. chapter 35 which requires that agencies shall not engage in a “collection of information” without obtaining a control number from OMB. </SECTION> <SECTION> <SECTNO>§ 400.310</SECTNO> <SUBJECT>Display of currently valid OMB control numbers.</SUBJECT> <GPOTABLE CDEF="s10,11" COLS="2" OPTS="L2,i1"> <BOXHD> <CHED H="1">Sections in 42 CFR that contain collections of information</CHED> <CHED H="1">Current OMB control Nos.</CHED> </BOXHD> <ROW> <ENT I="01">403.510 </ENT> <ENT>0938—0641</ENT> </ROW> <ROW> <ENT I="01">405.509 </ENT> <ENT>0938—0666</ENT> </ROW> <ROW> <ENT I="01">405.512 </ENT> <ENT>0938—0008</ENT> </ROW> <ROW> <ENT I="01">405.2112, 405.2123, 405.2134, 405.2136-405.2140, 405.2171 </ENT> <ENT>0938—0386</ENT> </ROW> <ROW> <ENT I="01">409.43 </ENT> <ENT>0938—0365</ENT> </ROW> <ROW> <ENT I="01">410.105 </ENT> <ENT>0938—0267</ENT> </ROW> <ROW> <ENT I="01">411.25, 411.32 </ENT> <ENT>0938—0564</ENT> </ROW> <ROW> <ENT I="01">411.54 </ENT> <ENT>0938—0558</ENT> </ROW> <ROW> <ENT I="01">411.165 </ENT> <ENT>0938—0564</ENT> </ROW> <ROW> <ENT I="01">411.404, 411.406 </ENT> <ENT>0938—0465</ENT> </ROW> <ROW> <ENT I="01">411.408 </ENT> <ENT>0938—0566</ENT> </ROW> <ROW> <ENT I="01">412.42 </ENT> <ENT>0938—0666</ENT> </ROW> <ROW> <ENT I="01">412.92 </ENT> <ENT>0938—0477</ENT> </ROW> <ROW> <ENT I="01">412.105 </ENT> <ENT>0938—0456</ENT> </ROW> <ROW> <ENT I="01">412.230, 412.232, 412.234, 412.236, 412.254, 412.260, 412.266, 412.278 </ENT> <ENT>0938—0573</ENT> </ROW> <ROW> <ENT I="01">415.60 </ENT> <ENT>0938—0301</ENT> </ROW> <ROW> <ENT I="01">415.162 </ENT> <ENT>0938—0301</ENT> </ROW> <ROW> <ENT I="01">416.43 </ENT> <ENT>0938—0506</ENT> </ROW> <ROW> <ENT I="01">416.47 </ENT> <ENT>0938—0266 <LI O="oi0"> and </LI> <LI>0938—0506</LI> </ENT> </ROW> <ROW> <ENT I="01">417.126 </ENT> <ENT>0938—0472</ENT> </ROW> <ROW> <ENT I="01">417.436, 417.801 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">418.22, 418.24, 418.28, 418.56, 418.58, 418.70, 418.74 </ENT> <ENT>0938—0302</ENT> </ROW> <ROW> <ENT I="01">418.30, 418.82, 418.83, 418.96, 418.100 </ENT> <ENT>0938—0475</ENT> </ROW> <ROW> <ENT I="01">418.96, 418.100 </ENT> <ENT>0938—0302</ENT> </ROW> <ROW> <ENT I="01">421.117 </ENT> <ENT>0938—0542</ENT> </ROW> <ROW> <ENT I="01">424.3 </ENT> <ENT>0938—0008</ENT> </ROW> <ROW> <ENT I="01">424.5, 424.7, 424.20 </ENT> <ENT>0938—0454</ENT> </ROW> <ROW> <ENT I="01">424.22 </ENT> <ENT>0938—0489</ENT> </ROW> <ROW> <ENT I="01">424.32, 424.34 </ENT> <ENT>0938—0008</ENT> </ROW> <ROW> <ENT I="01">431.17 </ENT> <ENT>0938—0467</ENT> </ROW> <ROW> <ENT I="01">431.50, 431.52, 431.55 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">431.107 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">431.306 </ENT> <ENT>0938—0467</ENT> </ROW> <ROW> <ENT I="01">431.625 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">431.630 </ENT> <ENT>0938—0445</ENT> </ROW> <ROW> <ENT I="01">431.800 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">431.806, 431.830, 431.432, 431.834, 431.836 </ENT> <ENT>0938—0438</ENT> </ROW> <ROW> <ENT I="01">432.50 </ENT> <ENT>0938—0459</ENT> </ROW> <ROW> <ENT I="01">433.36, 433.37 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">433.68, 433.74 </ENT> <ENT>0938—0618</ENT> </ROW> <ROW> <ENT I="01">433.110, 433.112-433.114, 433.116, 433.117, 433.119-433.121, 433.123, 433.127, 433.130, 433.131, 433.135 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">433.138 </ENT> <ENT>0938—0502 <LI>0938—0553 </LI> <LI O="oi0"> and </LI> <LI>0938—0555</LI> </ENT> </ROW> <ROW> <ENT I="01">433.139 </ENT> <ENT>0938—0459 <LI>0938—0554 </LI> <LI O="oi0"> and </LI> <LI>0938—0555</LI> </ENT> </ROW> <ROW> <ENT I="01">434.27 </ENT> <ENT>0938—0572</ENT> </ROW> <ROW> <ENT I="01">434.28 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">435.1, 435.910, 435.919, 435.920, 435.940, 435.945, 435.948, 435.952, 435.953, 435.955, 435.960, 435.965, 435.1003, 441.11, 441.15, 441.20 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">441.56, 441.58, 441.60, 441.61 </ENT> <ENT>0938—0354</ENT> </ROW> <ROW> <ENT I="01">441.302 </ENT> <ENT>0938—0449</ENT> </ROW> <ROW> <ENT I="01">441.303 </ENT> <ENT>0938—0272 <LI O="oi0"> and </LI> <LI>0938—0449</LI> </ENT> </ROW> <ROW> <ENT I="01">441.351, 441.352, 441.353, 441.356, 441.365 </ENT> <ENT>0938—0613</ENT> </ROW> <ROW> <ENT I="01">442.505 </ENT> <ENT>0938—0366</ENT> </ROW> <ROW> <ENT I="01">447.31 </ENT> <ENT>0938—0287</ENT> </ROW> <ROW> <ENT I="01">447.45, 447.50, 447.51, 447.52 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">447.53 </ENT> <ENT>0938—0429</ENT> </ROW> <ROW> <ENT I="01">447.55 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">447.253 </ENT> <ENT>0938—0366 <LI>0938—0523 </LI> <LI O="oi0"> and </LI> <LI>0938—0556</LI> </ENT> </ROW> <ROW> <ENT I="01">447.255 </ENT> <ENT>0938—0193</ENT> </ROW> <ROW> <PRTPAGE P="9"/> <ENT I="01">447.272, 447.299 </ENT> <ENT>0938—0618</ENT> </ROW> <ROW> <ENT I="01">447.302, 447.331, 447.332, 447.333 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">456.80 </ENT> <ENT>0938—0247</ENT> </ROW> <ROW> <ENT I="01">456.654 </ENT> <ENT>0938—0445</ENT> </ROW> <ROW> <ENT I="01">456.700, 456.705, 456.709, 456.711, 456.712 </ENT> <ENT>0938—0659</ENT> </ROW> <ROW> <ENT I="01">462.102, 462.103 </ENT> <ENT>0938—0526</ENT> </ROW> <ROW> <ENT I="01">466.70, 466.72, 466.74 </ENT> <ENT>0938—0445</ENT> </ROW> <ROW> <ENT I="01">466.78 </ENT> <ENT>0938—0445 <LI O="oi0"> and </LI> <LI>0938—0665</LI> </ENT> </ROW> <ROW> <ENT I="01">466.80, 466.94 </ENT> <ENT>0938—0445</ENT> </ROW> <ROW> <ENT I="01">473.18, 473.34, 473.36, 473.42 </ENT> <ENT>0938—0443</ENT> </ROW> <ROW> <ENT I="01">476.104, 476.105, 476.116, 476.134 </ENT> <ENT>0938—0426</ENT> </ROW> <ROW> <ENT I="01">481.61 </ENT> <ENT>0938—0328</ENT> </ROW> <ROW> <ENT I="01">482.12, 482.21, 482.22, 482.27, 482.30, 482.41, 482.43, 482.53, 482.56, 482.57, 482.60, 482.62 </ENT> <ENT>0938—0328</ENT> </ROW> <ROW> <ENT I="01">483.10 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">483.410, 483.420, 483.440, 483.460, 483.470 </ENT> <ENT>0938—0366</ENT> </ROW> <ROW> <ENT I="01">484.1, 484.2 </ENT> <ENT>0938—0365</ENT> </ROW> <ROW> <ENT I="01">484.10 </ENT> <ENT>0938—0365 <LI O="oi0"> and </LI> <LI>0938—0610</LI> </ENT> </ROW> <ROW> <ENT I="01">484.12, 484.14, 484.16, 484.18, 484.30, 484.32, 484.34, 484.36, 484.48, 484.52 </ENT> <ENT>0938—0365</ENT> </ROW> <ROW> <ENT I="01">485.56, 485.58, 485.60, 485.64, 485.66 </ENT> <ENT>0938—0267 <LI O="oi0"> and </LI> <LI>0938—0538</LI> </ENT> </ROW> <ROW> <ENT I="01">485.709, 485.711, 485.717, 485.719, 485.721, 487.723, 485.725, 485.727 </ENT> <ENT>0938—0336</ENT> </ROW> <ROW> <ENT I="01">486.104, 486.106, 486.110 </ENT> <ENT>0938—0338</ENT> </ROW> <ROW> <ENT I="01">486.155, 486.161, 486.163 </ENT> <ENT>0938—0336</ENT> </ROW> <ROW> <ENT I="01">488.10 </ENT> <ENT>0938—0646</ENT> </ROW> <ROW> <ENT I="01">488.18 </ENT> <ENT>0938—0667</ENT> </ROW> <ROW> <ENT I="01">488.26 </ENT> <ENT>0938—0646</ENT> </ROW> <ROW> <ENT I="01">489.20 </ENT> <ENT>0938—0564 <LI O="oi0"> and </LI> <LI>0938—0667</LI> </ENT> </ROW> <ROW> <ENT I="01">489.24 </ENT> <ENT>0938—0334 <LI>0938—0663 </LI> <LI O="oi0">and </LI> <LI>0938—0667</LI> </ENT> </ROW> <ROW> <ENT I="01">489.102 </ENT> <ENT>0938—0610</ENT> </ROW> <ROW> <ENT I="01">491.9, 491.10 </ENT> <ENT>0938—0334</ENT> </ROW> <ROW> <ENT I="01">493.35, 493.37, 493.39, 493.43, 493.45, 493.47, 493.49, 493.51, 493.53,</ENT> </ROW> <ROW> <ENT I="01">493.55, 493.60, 493.61, 493.62, 493.63 </ENT> <ENT>0938—0612</ENT> </ROW> <ROW> <ENT I="01">493.614, 493.633, 494.634 </ENT> <ENT>0938—0607</ENT> </ROW> <ROW> <ENT I="01">493.801-493.1285, 493.1425, 493.1701, 493.1703, 493.1705, 493.1707, 493.1709, 493.1711, 493.1713, 493.1715, 493.1717, 493.1719, 493.1721, 493.1775, 493.1776, 493.1777, 493.1780, 493.2001 </ENT> <ENT>0938—0612</ENT> </ROW> <ROW> <ENT I="01">494.52, 494.54, 494.56, 494.58, 494.64 </ENT> <ENT>0938—0608</ENT> </ROW> <ROW> <ENT I="01">498.22, 498.40, 498.58, 498.82 </ENT> <ENT>0938—0508</ENT> </ROW> <ROW> <ENT I="01">1004.40, 1004.50, 1004.60, 1004.70 </ENT> <ENT>0938—0444</ENT> </ROW> </GPOTABLE> <CITA>[60 FR 50445, Sept. 29, 1995, as amended at 60 FR 63188, Dec. 8, 1995]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 401</EAR> <HD SOURCE="HED">PART 401—GENERAL ADMINISTRATIVE REQUIREMENTS</HD> <CONTENTS> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Confidentiality and Disclosure</HD> <SECHD>Sec.</SECHD> <SECTNO>401.101</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <SECTNO>401.102</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>401.105</SECTNO> <SUBJECT>Rules for disclosure.</SUBJECT> <SECTNO>401.106</SECTNO> <SUBJECT>Publication.</SUBJECT> <SECTNO>401.108</SECTNO> <SUBJECT>CMS rulings.</SUBJECT> <SECTNO>401.110</SECTNO> <SUBJECT>Publications for sale.</SUBJECT> <SECTNO>401.112</SECTNO> <SUBJECT>Availability of administrative staff manuals.</SUBJECT> <SECTNO>401.116</SECTNO> <SUBJECT>Availability of records upon request.</SUBJECT> <SECTNO>401.118</SECTNO> <SUBJECT>Deletion of identifying details.</SUBJECT> <SECTNO>401.120</SECTNO> <SUBJECT>Creation of records.</SUBJECT> <SECTNO>401.126</SECTNO> <SUBJECT>Information or records that are not available.</SUBJECT> <SECTNO>401.128</SECTNO> <SUBJECT>Where requests for records may be made.</SUBJECT> <SECTNO>401.130</SECTNO> <SUBJECT>Materials available at social security district offices and branch offices.</SUBJECT> <SECTNO>401.132</SECTNO> <SUBJECT>Materials in field offices of the Office of Hearings and Appeals, SSA.</SUBJECT> <SECTNO>401.133</SECTNO> <SUBJECT>Availability of official reports on providers and suppliers of services, State agencies, intermediaries, and carriers under Medicare.</SUBJECT> <SECTNO>401.134</SECTNO> <SUBJECT>Release of Medicare information to State and Federal agencies.</SUBJECT> <SECTNO>401.135</SECTNO> <SUBJECT>Release of Medicare information to the public.</SUBJECT> <SECTNO>401.136</SECTNO> <SUBJECT>Requests for information or records.</SUBJECT> <SECTNO>401.140</SECTNO> <SUBJECT>Fees and charges.</SUBJECT> <SECTNO>401.144</SECTNO> <SUBJECT>Denial of requests.</SUBJECT> <SECTNO>401.148</SECTNO> <SUBJECT>Administrative review.</SUBJECT> <SECTNO>401.152</SECTNO> <SUBJECT>Court review.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subparts C-E [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Claims Collection and Compromise</HD> <SECTNO>401.601</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SECTNO>401.603</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>401.605</SECTNO> <SUBJECT>Omissions not a defense.</SUBJECT> <SECTNO>401.607</SECTNO> <SUBJECT>Claims collection.</SUBJECT> <SECTNO>401.613</SECTNO> <SUBJECT>Compromise of claims.</SUBJECT> <SECTNO>401.615</SECTNO> <SUBJECT>Payment of compromise amount.</SUBJECT> <SECTNO>401.617</SECTNO> <SUBJECT>Suspension of collection action.</SUBJECT> <SECTNO>401.621</SECTNO> <SUBJECT>Termination of collection action.</SUBJECT> <SECTNO>401.623</SECTNO> <SUBJECT>Joint and several liability.</SUBJECT> <SECTNO>401.625</SECTNO> <SUBJECT>Effect of CMS claims collection decisions on appeals.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). Subpart F is also issued under the authority of the Federal Claims Collection Act (31 U.S.C. 3711). </AUTH> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Confidentiality and Disclosure</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 46 FR 55696, Nov. 12, 1981, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 401.101</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> (a) The regulations in this subpart:<PRTPAGE P="10"/> (1) Implement section 1106(a) of the Social Security Act as it applies to the Centers for Medicare & Medicaid Services (CMS). The rules apply to information obtained by officers or employees of CMS in the course of administering title XVIII of the Social Security Act (Medicare), information obtained by Medicare intermediaries or carriers in the course of carrying out agreements under sections 1816 and 1842 of the Social Security Act, and any other information subject to section 1106(a) of the Social Security Act; (2) Relate to the availability to the public, under 5 U.S.C. 552, of records of CMS and its components. They set out what records are available and how they may be obtained; and (3) Supplement the regulations of the Department of Health and Human Services relating to availability of information under 5 U.S.C. 552, codified in 45 CFR part 5, and do not replace or restrict them. (b) Except as authorized by the rules in this subpart, no information described in paragraph (a)(1) of this section shall be disclosed. The procedural rules in this subpart (§§ 401.106 through 401.152) shall be applied to requests for information which is subject to the rules for disclosure in this subpart. (c) Requests for information which may not be disclosed according to the provisions of this subpart shall be denied under authority of section 1106(a) of the Social Security Act and this subpart, and furthermore, such requests which have been made pursuant to the Freedom of Information Act shall be denied under authority of an appropriate Freedom of Information Act exemption, 5 U.S.C. 552(b). </SECTION> <SECTION> <SECTNO>§ 401.102</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart: <E T="03">Act</E> means the Social Security Act. <E T="03">Freedom of Information Act rules</E> means the substantive mandatory disclosure provisions of the Freedom of Information Act, 5 U.S.C. 552 (including the exemptions from mandatory disclosure, 5 U.S.C. 552(b), as implemented by the Department's public information regulation, 45 CFR part 5, subpart F and by §§ 401.106 to 401.152 of this subpart. <E T="03">Person</E> means a person as defined in the Administrative Procedure Act, 5 U.S.C. 551(2). This includes State or local agencies, but does not include Federal agencies or State or Federal courts. <E T="03">Record</E> has the same meaning as that provided in 45 CFR 5.5. <E T="03">Subject individual</E> means an individual whose record is maintained by the Department in a system of records, as the terms “individual,” “record”, and “system of records” are defined in the Privacy Act of 1974, 5 U.S.C. 552a(a). </SECTION> <SECTION> <SECTNO>§ 401.105</SECTNO> <SUBJECT>Rules for disclosure.</SUBJECT> (a) <E T="03">General rule.</E> The Freedom of Information Act rules shall be applied to every proposed disclosure of information. If, considering the circumstances of the disclosure, the information would be made available in accordance with the Freedom of Information Act rules, then the information may be disclosed regardless of whether the requester or recipient of the information has a statutory right to request the information under the Freedom of Information Act, 5 U.S.C. 552, or whether a request has been made. (b) <E T="03">Application of the general rule.</E> Pursuant to the general rule in paragraph (a) of this section, (1) Information shall be disclosed— (i) To a subject individual when required by the access provision of the Privacy Act, 5 U.S.C. 552a(d), as implemented by the Department Privacy Act regulation, 45 CFR part 5b; and (ii) To a person upon request when required by the Freedom of Information Act, 5 U.S.C. 552; (2) Unless prohibited by any other statute (e.g., the Privacy Act of 1974, 5 U.S.C. 552a(b), the Tax Reform Act of 1976, 26 U.S.C. 6103, or section 1106(d) and (e) of the Social Security Act), information may be disclosed to any requester or recipient of the information, including another Federal agency or a State or Federal court, when the information would not be exempt from mandatory disclosure under Freedom of Information Act rules or when the information nevertheless would be made available under the Department's public information regulation's criteria for disclosures which are in the public interest and consistent with obligations <PRTPAGE P="11"/>of confidentiality and administrative necessity, 45 CFR part 5, subpart F, as supplemented by §§ 401.106 to 401.152 of this subpart. <CITA>[42 FR 14704, Mar. 16, 1977. Redesignated at 45 FR 74913, 74914, Nov. 13, 1980, and correctly redesignated at 46 FR 24551, May 1, 1981, as amended at 46 FR 55697, Nov. 12, 1981]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.106</SECTNO> <SUBJECT>Publication.</SUBJECT> (a) <E T="03">Methods of publication.</E> Materials required to be published under the provisions of The Freedom of Information Act, 5 U.S.C. 552 (a)(1) and (2) are published in one of the following ways: (1) By publication in the <E T="04">Federal Register</E> of CMS regulations, and by their subsequent inclusion in the Code of Federal Regulations; (2) By publication in the <E T="04">Federal Register</E> of appropriate general notices; (3) By other forms of publication, when incorporated by reference in the <E T="04">Federal Register</E> with the approval of the Director of the Federal Register; and (4) By publication of indexes of precedential orders and opinions issued in the adjudication of claims, statements of policy and interpretations which have been adopted but have not been published in the <E T="04">Federal Register,</E> and of administrative staff manuals and instructions to staff that affect a member of the public. (b) <E T="03">Availability for inspection.</E> Those materials which are published in the <E T="04">Federal Register</E> pursuant to 5 U.S.C. 552(a)(1) shall, to the extent practicable and to further assist the public, be made available for inspection at the places specified in § 401.128. <CITA>[46 FR 55696, Nov. 12, 1981, as amended at 48 FR 22924, May 23, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.108</SECTNO> <SUBJECT>CMS rulings.</SUBJECT> (a) After September 1981, a precedent final opinion or order or a statement of policy or interpretation that has not been published in the <E T="04">Federal Register</E> as a part of a regulation or of a notice implementing regulations, but which has been adopted by CMS as having precedent, may be published in the <E T="04">Federal Register</E> as a CMS Ruling and will be made available in the publication entitled <E T="03">CMS Rulings.</E> (b) Precedent final opinions and orders and statements of policy and interpretation that were adopted by CMS before October, 1981, and that have not been published in the <E T="04">Federal Register</E> are available in <E T="03">CMS Rulings.</E> (c) CMS Rulings are published under the authority of the Administrator, CMS. They are binding on all CMS Components, and on the Social Security Administration to the extent that components of the Social Security Administration adjudicate matters under the jurisdiction of CMS. <CITA>[48 FR 22924, May 23, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.110</SECTNO> <SUBJECT>Publications for sale.</SUBJECT> The following publications containing information pertaining to the program, organization, functions, and procedures of CMS may be purchased from the Superintendent of Documents, Government Printing Office, Washington, DC 20402. (a) Titles 20, 42, and 45 of the Code of Federal Regulations. (b) <E T="04">Federal Register</E> issues. (c) Compilation of the Social Security Laws. (d) CMS Rulings. (e) Social Security Handbook. The information in the Handbook is not of precedent or interpretative force. (f) Medicare/Medicaid Directory of Medical Facilities. </SECTION> <SECTION> <SECTNO>§ 401.112</SECTNO> <SUBJECT>Availability of administrative staff manuals.</SUBJECT> All CMS administrative staff manuals and instructions to staff personnel which contain policies, procedures, or interpretations that affect the public are available for inspection and copying. A complete listing of such materials is published in CMS Rulings. These manuals are generally not printed in a sufficient quantity to permit sale or other general distribution to the public. Selected material is maintained at Social Security Administration district offices and field offices and may be inspected there. See §§ 401.130 and 401.132 for a listing of this material. </SECTION> <SECTION> <SECTNO>§ 401.116</SECTNO> <SUBJECT>Availability of records upon request.</SUBJECT> (a) <E T="03">General.</E> In addition to the records made available pursuant to §§ 401.106, <PRTPAGE P="12"/>401.108, 401.110 and 401.112, CMS will, upon request made in accordance with this subpart, make identified records available to any person, unless they are exempt from disclosure under the provisions of section 552(b) of title 5, United States Code (see § 401.126), or any other provision of law. (b) <E T="03">Misappropriation, alteration, or destruction of records.</E> No person may remove any record made available to him for inspection or copying under this part, from the place where it is made available. In addition, no person may steal, alter, mutilate, obliterate, or destroy in whole or in part, such a record. See sections 641 and 2071 of title 18 of the United States Code. </SECTION> <SECTION> <SECTNO>§ 401.118</SECTNO> <SUBJECT>Deletion of identifying details.</SUBJECT> When CMS publishes or otherwise makes available an opinion or order, statement of policy, or other record which relates to a private party or parties, the name or names or other identifying details will be deleted. </SECTION> <SECTION> <SECTNO>§ 401.120</SECTNO> <SUBJECT>Creation of records.</SUBJECT> Records will not be created by compiling selected items from the files, and records will not be created to provide the requester with such data as ratios, proportions, percentages, per capitas, frequency distributions, trends, correlations, and comparisons. If such data have been compiled and are available in the form of a record, the record shall be made available as provided in this subpart. </SECTION> <SECTION> <SECTNO>§ 401.126</SECTNO> <SUBJECT>Information or records that are not available.</SUBJECT> (a) <E T="03">Specific exemptions from disclosure.</E> Pursuant to paragraph (b) of 5 U.S.C. 552, certain classes of records are exempt from disclosure. For some examples of the kinds of materials which are exempt, see subpart F of the public information regulation of the Department of Health and Human Services (45 CFR part 5) and the appendix to that regulation. (b) <E T="03">Materials exempt from disclosure by statute.</E> Pursuant to paragraph (b)(3) of 5 U.S.C. 552, as amended, which exempts from the requirement for disclosure matters that are exempted from disclosure by statute, provided that such statute requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or establishes particular criteria for withholding or refers to particular types of matter to be withheld: (1) Reports described in sections 1106 (d) and (e) of the Social Security Act shall not be disclosed, except in accordance with the provisions of sections 1106 (d) and (e). Sections 1106 (d) and (e) provide for public inspection of certain official reports dealing with the operation of the health programs established by titles XVIII and XIX of the Social Security Act (Medicare and Medicaid), but require that program validation survey reports and other formal evaluations of providers of services shall not identify individual patients, individual health care practitioners, or other individuals. Section 1106(e) further requires that none of the reports shall be made public until the contractor or provider whose performance is being evaluated has had a reasonable opportunity to review that report and to offer comments. See § 401.133 (b) and (c); (2)(i) Except as specified in paragraph (b)(2)(ii) of this section, CMS may not disclose any accreditation survey or any information directly related to the survey (including corrective action plans) made by and released to it by the Joint Commission on Accreditation of Healthcare Organizations, the American Osteopathic Association or any other national accreditation organization that meets the requirements of § 488.6 or § 493.506 of this chapter. Materials that are confidential include accreditation letters and accompanying recommendations and comments prepared by an accreditation organization concerning the entities it surveys. (ii) <E T="03">Exceptions.</E> (A) CMS may release the accreditation survey of any home health agency; and (B) CMS may release the accreditation survey and other information directly related to the survey (including corrective action plans) to the extent the survey and information relate to an enforcement action (for example, denial of payment for new admissions, <PRTPAGE P="13"/>civil money penalties, temporary management and termination) taken by CMS; and (3) Tax returns and return information defined in section 6103 of the Internal Revenue Code, as amended by the Tax Reform Act of 1976, shall not be disclosed except as authorized by the Internal Revenue Code. (c) <E T="03">Effect of exemption.</E> Neither 5 U.S.C. 552 nor this regulation directs the withholding of any record or information, except to the extent of the prohibitions in paragraph (b) of this section. Except for material required to be withheld under the statutory provisions incorporated in paragraph (b) of this section or under another statute which meets the standards in 5 U.S.C. 552(b)(3), materials exempt from mandatory disclosure will nevertheless be made available when this can be done consistently with obligations of confidentiality and administrative necessity. The disclosure of materials or records under these circumstances in response to a specific request, however, is of no precedent force with respect to any other request. <CITA>[46 FR 55696, Nov. 12, 1981, as amended at 58 FR 61837, Nov. 23, 1993]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.128</SECTNO> <SUBJECT>Where requests for records may be made.</SUBJECT> (a) <E T="03">General.</E> Any request for any record may be made to— (1) Any CMS component; (2) Director, Office of Public Affairs, CMS 313-H, Hubert H. Humphrey Building, 200 Independence Avenue, Washington, DC 20201; or (3) Director of Public Affairs in any Regional Office of the Department of Health and Human Services. <FP>The locations and service areas of these offices are as follows:</FP> <EXTRACT> <FP SOURCE="FP-1">Region I—John F. Kennedy Federal Building, Boston, MA 02203. Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont.</FP> <FP SOURCE="FP-1">Region II—26 Federal Plaza, New York, NY 10007. New York, New Jersey, Puerto Rico, Virgin Islands.</FP> <FP SOURCE="FP-1">Region III—Gateway Building, 3535 Market Street, Philadelphia, PA 19101. Delaware, Maryland, Pennsylvania, Virginia, West Virginia, District of Columbia.</FP> <FP SOURCE="FP-1">Region IV—101 Marietta Street, Altanta, GA 30323. Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee.</FP> <FP SOURCE="FP-1">Region V—300 South Wacker Drive, Chicago, IL 60606. Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin.</FP> <FP SOURCE="FP-1">Region VI—1200 Main Tower Building, Dallas, TX 75202. Arkansas, Louisiana, New Mexico, Oklahoma, Texas.</FP> <FP SOURCE="FP-1">Region VII—601 East 12th Street, Kansas City, MO 64106. Iowa, Kansas, Missouri, Nebraska.</FP> <FP SOURCE="FP-1">Region VIII—Federal Office Building, 19th and Stout Streets, Denver, CO 80294. Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming.</FP> <FP SOURCE="FP-1">Region IX—Federal Office Building, 50 United Nations Plaza, San Francisco, CA 94102. Arizona, California, Hawaii, Nevada, Guam, Trust Territory of Pacific Islands, American Samoa.</FP> <FP SOURCE="FP-1">Region X—Arcade Plaza Building, 1321 Second Avenue, Seattle, WA 98101. Alaska, Idaho, Oregon, Washington.</FP> </EXTRACT> (b) <E T="03">Records pertaining to individuals.</E> CMS maintains some records pertaining to individuals. Disclosure of such records is generally prohibited by section 1106 of the Social Security Act (42 U.S.C. 1306), except as prescribed in § 401.105 (See also § 401.126(b)). Requests for records pertaining to individuals may be addressed to: <FP>Director, Office of Research, Demonstrations and Statistics, CMS, Baltimore, Maryland 21235, when information is sought from the record of a person who has participated in a research survey conducted by or for CMS, Office of Research, Demonstrations and Statistics; or whose records have been included by statistical sampling techniques in research and statistical studies authorized by the Social Security Act in the field of health care financing.</FP> (c) <E T="03">Requests for materials listed in § 401.130 or § 401.132 or indexed in the CMS Rulings.</E> A request to inspect and copy materials listed in § 401.130 or § 401.132 or indexed in CMS Rulings may be made to any district or branch office of the Social Security Administration. If the specific material requested is not available in the office receiving the request, the material will be obtained and made available promptly. </SECTION> <SECTION> <PRTPAGE P="14"/> <SECTNO>§ 401.130</SECTNO> <SUBJECT>Materials available at social security district offices and branch offices.</SUBJECT> (a) <E T="03">Materials available for inspection.</E> The following are available or will be made available for inspection at the social security district offices and branch offices: (1) Compilation of the Social Security Laws. (2) The Public Information Regulation of the Department of Health and Human Services (45 CFR part 5). (3) Medicare Program regulations issued by the Centers for Medicare & Medicaid Services. 42 CFR chapter IV . (4) CMS Rulings. (5) Social Security Handbook. (b) <E T="03">Materials available for inspection and copying.</E> The following materials are available or will be made available for inspection and copying at the social security district offices and branch offices: (1) Claims Manual of the Social Security Administration. (2) Department Staff Manual on Organization, Department of Health and Human Services, Part F, CMS. (3) Parts 2 and 3 of the Part A <FP>Intermediary Manual (Provider Services under Medicare CMS Pub. 13-2 and 13-3).</FP> (4) Parts 2 and 3 of the Part B Intermediary Manual (Physician and Supplier Services). (5) Intermediary Letters Related to Parts 2 and 3 of the Part A and Part B Intermediary Manuals. (6) State Buy-In Handbook (State Enrollment of Eligible Individuals under the Supplementary Medical Insurance Program) and Letters. (7) Group Practice Prepayment Plan Manual (HIM-8) and Letters. (8) State Operations Manual (HIM-7). (9) CMS Letters to State Agencies on Medicare. (10) Skilled Nursing Facility Manual (CMS Pub. 12). (11) Hearing Officers Handbook (Supplementary Medical Insurance Program—HIM-21). (12) Hospital Manual (HIM-10). (13) Home Health Agency Manual (HIM-11). (14) Outpatient Physical Therapy Provider Manual (HIM-9). (15) Provider Reimbursement Manual (HIM-15). (16) Audit Program Manuals for Hospital (HIM-16), Home Health Agency (HIM-17), and Extended Care Facilities (HIM-18). (17) Statements of deficiencies based upon survey reports of health care institutions or facilities prepared after January 31, 1973, by a State agency, and such reports (including pertinent written statements furnished by such institution or facility on such statements of deficiencies), as set forth in § 401.133(a). Except as otherwise provided for at §§ 401.133 and 488.325 of this chapter for SNFs, such statements of deficiencies, reports, and pertinent written statements shall be available or made available only at the social security district office and regional office servicing the area in which the institution or facility is located, except that such statements of deficiencies and pertinent written statements shall also be available at the local public assistance offices servicing such area. (18) Indexes to the materials listed in paragraph (a) of this section and in this paragraph (b) and an index to the Bureau of Hearings and Appeals Handbook. <CITA>[46 FR 55696, Nov. 12, 1981, as amended at 59 FR 56232, Nov. 10, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.132</SECTNO> <SUBJECT>Materials in field offices of the Office of Hearings and Appeals, SSA.</SUBJECT> (a) <E T="03">Materials available for inspection.</E> The following materials are available for inspection in the field offices of the Office of Hearings and Appeals, SSA. (1) Title 45 of the Code of Federal Regulations (including the public information regulation of the Department of Health and Human Services). (2) Regulations of the Social Security Administration and CMS. (3) Title 5, United States Code. (4) Compilation of the Social Security Laws. (5) CMS Rulings. (6) Social Security Handbook. (b) <E T="03">Handbook available for inspection and copying.</E> The Office of Hearings and Appeals Handbook is available for inspection and copying in the field offices of the Office of Hearings and Appeals. </SECTION> <SECTION> <PRTPAGE P="15"/> <SECTNO>§ 401.133</SECTNO> <SUBJECT>Availability of official reports on providers and suppliers of services, State agencies, intermediaries, and carriers under Medicare.</SUBJECT> Except as otherwise provided for in § 488.325 of this chapter for SNFs, the following must be made available to the public under the conditions specified: (a) <E T="03">Statements of deficiencies and survey reports on providers of services prepared by State agencies.</E> (1) Statements of deficiencies based upon official survey reports prepared after January 31, 1973, by a State agency pursuant to its agreement entered into under section 1864 of the Social Security Act and furnished to CMS, which relate to a State agency's findings on the compliance of a health care institution or facility with the applicable provisions in section 1861 of the Act and with the regulations, promulgated pursuant to those provisions, dealing with health and safety of patients in those institutions and facilities; and (2) State agency survey reports. The statement of deficiencies or report and any pertinent written statements furnished by the institution or facility on the statement of deficiencies shall be disclosed within 90 days following the completion of the survey by the State agency, but not to exceed 30 days following the receipt of the report by CMS. (See § 401.130(b)(17)) for places where statements of deficiencies, reports, and pertinent written statements will be available.) (b) <E T="03">CMS reports on providers of services.</E> Upon request in writing, official reports and other formal evaluations (including followup reviews), excluding references to internal tolerance rules and practices contained therein, internal working papers or other informal memoranda, prepared and completed after January 31, 1973, which relate to the performance of providers of services under Medicare: <E T="03">Provided,</E> That no information identifying individual patients, physicians, or other practitioners, or other individuals shall be disclosed under this paragraph. Those reports and other evaluations shall be disclosed within 30 days following the final preparation thereof by CMS during which time the providers of services shall be afforded a reasonable opportunity to offer comments, and there shall be disclosed with those reports and evaluations any pertinent written statements furnished CMS by those providers on those reports and evaluations. (c) <E T="03">Contractor performance review reports.</E> Upon request in writing, official contractor performance review reports and other formal evaluations (including followup reviews), excluding references to internal tolerance rules and practices contained therein, internal working papers or other informal memoranda, prepared and completed after January 31, 1973, which relate to the evaluation of the performance of (1) intermediaries and carriers under their agreements entered into pursuant to sections 1816 and 1842 of the Social Security Act and (2) State agencies under their agreements entered into pursuant to section 1864 of the Act (including comparative evaluations of the performance of those intermediaries, carriers, and State agencies). The latest Contract Performance Review Report pertaining to a particular intermediary or carrier, prepared prior to February 1, 1973, may also be disclosed to any person upon request in writing. Those reports and evaluations shall be disclosed within 30 days following their final preparation by CMS (or 30 days following the request therefor, in the case of the contract performance review report prepared prior to February 1, 1973), during which time those intermediaries, carriers, and State agencies, as the case may be, shall be afforded a reasonable opportunity to offer comments, and there shall be disclosed with those reports and evaluations any pertinent written statements furnished CMS by those intermediaries, carriers, on State agencies or those reports and evaluations. (d) <E T="03">Accreditation surveys.</E> Upon written request, CMS will release the accreditation survey and related information from an accreditation organization meeting the requirements of § 488.5, § 488.6 or § 493.506 of this chapter to the extent the survey and information relate to an enforcement action taken (for example, denial of payment for new admission, civil money penalties, temporary management and termination) by CMS;<PRTPAGE P="16"/> (e) Upon written request, CMS will release the accreditation survey of any home health agency. <CITA>[46 FR 55696, Nov. 12, 1981; 46 FR 59249, Dec. 4, 1981, as amended at 58 FR 61838, Nov. 23, 1993; 59 FR 56232, Nov. 10, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.134</SECTNO> <SUBJECT>Release of Medicare information to State and Federal agencies.</SUBJECT> (a) Except as provided in paragraph (b) of this section, the following information may be released to an officer or employee of an agency of the Federal or a State government lawfully charged with the administration of a program receiving grants-in-aid under title V and XIX of the Social Security Act for the purpose of administration of those titles, or to any officer or employee of the Department of Army, Department of Defense, solely for the administration of its Civilian Health and Medical Program of the Uniformed Services (CHAMPUS): (1) Information, including the identification number, concerning charges made by physicians, other practitioners, or suppliers, and amounts paid under Medicare for services furnished to beneficiaries by such physicians, other practioners, or suppliers, to enable the agency to determine the proper amount of benefits payable for medical services performed in accordance with those programs; or (2) Information as to physicians or other practioners that has been disclosed under § 401.105. (3) Information relating to the qualifications and certification status of hospitals and other health care facilities obtained in the process of determining whether, and certifying as to whether, institutions or agencies meet or continue to meet the conditions of participation of providers of services or whether other entities meet or continue to meet the conditions for coverage of services they furnish. (b) The release of such information shall not be authorized by a fiscal intermediary or carrier. (c) The following information may be released to any officer or employee of an agency of the Federal or a State government lawfully charged with the duty of conducting an investigation or prosecution with respect to possible fraud or abuse against a program receiving grants-in-aid under Medicaid, but only for the purpose of conducting such an investigation or prosecution, or to any officer or employee of the Department of the Army, Department of Defense, solely for the administration of its Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), provided that the agency has filed an agreement with CMS that the information will be released only to the agency's enforcement branch and that the agency will preserve the confidentiality of the information received and will not disclose that information for other than program purposes: (1) The name and address of any provider of medical services, organization, or other person being actively investigated for possible fraud in connection with Medicare, and the nature of such suspected fraud. An active investigation exists when there is significant evidence supporting an initial complaint but there is need for further investigation. (2) The name and address of any provider of medical services, organization, or other person found, after consultation with an appropriate professional association or a program review team, to have provided unnecessary services, or of any physician or other individual found to have violated the assignment agreement on at least three occasions. (3) The name and address of any provider of medical services, organization or other person released under paragraph (c)(1) or (2) of this section concerning which an active investigation is concluded with a finding that there is no fraud or other prosecutable offense. </SECTION> <SECTION> <SECTNO>§ 401.135</SECTNO> <SUBJECT>Release of Medicare information to the public.</SUBJECT> The following shall be made available to the public under the conditions specified: (a) Information as to amounts paid to providers and other organizations and facilities for services to beneficiaries under title XVIII of the Act: <E T="03">Provided,</E> That no information identifying any particular beneficiaries shall be disclosed under this paragraph.<PRTPAGE P="17"/> (b) The name of any provider of services or other person furnishing services to Medicare beneficiaries who— (1) Has been found by a Federal court to have been guilty of submitting false claims in connection with Medicare; or (2) Has been found by a carrier or intermediary, after consultation with a professional medical association functioning external to program administration or, if appropriate, the State medical authority, to have been engaged in a pattern of furnishing services to beneficiaries which are substantially in excess of their medical needs; except that the name of any provider or other person shall not be disclosed pursuant to a finding under this paragraph (b)(2) of this section, unless that provider or other person has first been afforded a reasonable opportunity to offer evidence on his behalf. (c) Upon request in writing, cost reports submitted by providers of services pursuant to section 1815 of the Act to enable the Secretary to determine amounts due the providers. </SECTION> <SECTION> <SECTNO>§ 401.136</SECTNO> <SUBJECT>Requests for information or records.</SUBJECT> (a) A request should reasonably identify the requested record by brief description. Requesters who have detailed information which would assist in identifying the records requested are urged to provide such information in order to expedite the handling of the request. Envelopes in which written requests are submitted should be clearly identified as Freedom of Information requests. The request should include the fee or request determination of the fee. When necessary, a written request will be promptly forwarded to the proper office, and the requester will be advised of the date of the receipt and identification and address of the proper office. (b) Determinations of whether records will be released or withheld will be made within 10 working days from date of receipt of the request in the office listed in § 401.128 except where CMS extends this time and sends notice of such extension to the requester. Such extension may not exceed 10 additional working days and shall apply only where the following unusual circumstances exist: (1) The need to search for and collect the requested records from field facilities or other establishments that are separate from the office processing the requests; (2) The need to search for, collect, and appropriately examine a voluminous amount of separate and distinct records which are requested in a single request; or (3) The need for consultation, which shall be conducted with all practicable speed, with another agency having a substantial interest in the request or among two or more components of CMS having a substantial interest in the subject matter of the request. (c) If an extension is made, the requester will be notified in writing before the expiration of 10 working days from receipt of the request and will be given an explanation of why the extension was necessary and the date on which a determination will be made. (d) Authority to extend the time limit with respect to any request for information or records is granted to the Director, Office of Public Affairs, CMS and to the Director of Public Affairs in any HHS Regional Office. Those officers and employees of CMS who are listed in § 401.144(a) as having authority to deny requests for information from records maintained on individuals are granted authority to extend the time limit for responding to requests for information from such records. </SECTION> <SECTION> <SECTNO>§ 401.140</SECTNO> <SUBJECT>Fees and charges.</SUBJECT> (a) <E T="03">Statement of policy.</E> It is CMS's policy to comply with certain requests for information services without charge. Except as otherwise determined pursuant to paragraph (c) of this section, fees will be charged for the following services with respect to all other requests for information from records which are reasonably identified by the requesters: (1) Reproduction, duplication, or copying of records; (2) Searches for records; and (3) Certification or authentication of records. (b) <E T="03">Fee schedules.</E> The fee schedule is as follows: (1) <E T="03">Search for records.</E> Three dollars per hour: <E T="03">Provided, however,</E> That no <PRTPAGE P="18"/>charge will be made for the first half hour. (2) <E T="03">Reproduction, duplication, or copying of records.</E> Ten cents per page where such reproduction can be made by commonly available photocopying machines. The cost of reproducing records which cannot be so photocopied will be determined on an individual basis at actual cost. (3) <E T="03">Certification or authentication of records.</E> Three dollars per certification or authentication. (4) <E T="03">Forwarding materials to destination.</E> Any special arrangements for forwarding which are requested shall be charged at actual cost; however, no charge will be made for postage. (5) No charge will be made when the total amount does not exceed five dollars. (c) <E T="03">Waiver or reduction of fees.</E> Waiver or reduction of the fees in paragraph (b) of this section may be made upon a determination that such waiver or reduction is in the public interest because furnishing the information can be considered as primarily benefiting the general public. Such determination may be made by the appropriate officer or employee identified in § 401.144. (d) <E T="03">Sale of documents.</E> On occasion, a previously printed document may be available for sale to the public; the cost of supplying the document is one cent per page unless the document is available for sale from the Superintendent of Documents, in which case the price shall be that determined by the Superintendent. </SECTION> <SECTION> <SECTNO>§ 401.144</SECTNO> <SUBJECT>Denial of requests.</SUBJECT> (a) <E T="03">General authority.</E> Only the Director, Office of Public Affairs, CMS, and the Regional Directors of Public Affairs, HHS, are authorized to deny written requests to obtain, inspect or copy any CMS information or record. (b) <E T="03">Forms of denials.</E> (1) Oral requests may be dealt with orally, but the requester should be advised that the oral response is not an official determination and that an official determination may be obtained only by submitting the request in writing. Appropriate available assistance will be offered. (2) Written Requests—Denials of written requests will be in writing and will contain the reasons for the denial including, as appropriate, a statement that a document requested is nonexistent or not reasonably described or is subject to one or more clearly described exemption(s). Denials will also provide the requester with appropriate information on how to exercise the right of appeal. </SECTION> <SECTION> <SECTNO>§ 401.148</SECTNO> <SUBJECT>Administrative review.</SUBJECT> (a) <E T="03">Review by the Administrator.</E> A person whose request has been denied may initiate a review by filing a request for review with the Administrator of CMS, 700 East High Rise Building, 6401 Security Boulevard, Baltimore, Maryland 21235, within 30 days of receipt of the determination to deny or within 30 days of receipt of records which are in partial response to his request if a portion of a request is granted and a portion denied, whichever is later. Upon receipt of a timely request for review, the Administrator will review the decision in question and the findings upon which it was based. Upon the basis of the data considered in connection with the decision and whatever other evidence and written argument is submitted by the person requesting the review or which is otherwise obtained, the Administrator or his designee will affirm or revise in whole or in part the findings and decision in question. A decision to affirm the denial will be made only upon concurrence of the Assistant Secretary for Public Affairs, or his designee, after consultation with the General Counsel or his or her designee, and the appropriate program policy official. Written notice of the decision of the Administrator will be mailed to the person who requested the review. A written decision will be made within 20 working days from receipt of the request for review. Extension of the time limit may be granted under the circumstances listed in § 401.136(b) to the extent that the maximum 10 days limit on extensions has not been exhausted on the initial determination. The decision will include the basis for it and will advise the requester of his right to judicial review. (b) <E T="03">Failure of the Administrator to comply with the time limits.</E> Failure of the Administrator to comply with the time <PRTPAGE P="19"/>limits set forth in § 401.136 and this section constitutes an exhaustion of the requester's administrative remedies. </SECTION> <SECTION> <SECTNO>§ 401.152</SECTNO> <SUBJECT>Court review.</SUBJECT> Where the Administrator upon review affirms the denial of a request for records, in whole or in part, the requester may seek court review in the district court of the United States pursuant to 5 U.S.C. 552(a)(4)(B). </SECTION> </SUBPART> <SUBPART> <RESERVED>Subparts C-E [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Claims Collection and Compromise</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 48 FR 39064, Aug. 29, 1983, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 401.601</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Basis.</E> This subpart implements for CMS the Federal Claims Collection Act (FCCA) of 1966 (31 U.S.C. 3711), and conforms to the regulations (4 CFR parts 101-105) issued jointly by the General Accounting Office and the Department of Justice that generally prescribe claims collection standards and procedures under the FCCA for the Federal government. (b) <E T="03">Scope.</E> Except as provided in paragraphs (c) through (f) of this section, the regulations in this subpart describe CMS's procedures and standards for the collection of claims in any amount, and the compromise of, or the suspension or termination of collection action on, all claims for money or property that do not exceed $100,000 or such higher amount as the Attorney General may from time to time prescribe, exclusive of interest, arising under any functions delegated to CMS by the Secretary. (c) <E T="03">Amount of claim.</E> CMS refers all claims that exceed $100,000 or such higher amount as the Attorney General may from time to time prescribe, exclusive of interest, to the Department of Justice or the General Accounting Office for the compromise of claims, or the suspension or termination of collection action. (d) <E T="03">Related regulations</E>—(1) <E T="03">Department regulations.</E> DHHS regulations applicable to CMS that generally implement the FCCA for the Department are located at 45 CFR part 30. These regulations apply only to the extent CMS regulations do not address a situation. (2) <E T="03">CMS regulations.</E> The following regulations govern specific debt management situations encountered by CMS and supplement this subpart: (i) Claims against Medicare beneficiaries for the recovery of overpayments are covered in 20 CFR 404.515. (ii) Adjustments in Railroad Retirement or Social Security benefits to recover Medicare overpayments to individuals are covered in §§ 405.350—405.358 of this chapter. (iii) Claims against providers, physicians, or other suppliers of services for overpayments under Medicare and for assessment of interest are covered in §§ 405.377 and 405.378 of this chapter, respectively. (iv) Claims against beneficiaries for unpaid hospital insurance or supplementary medical insurance premiums under Medicare are covered in § 408.110 of this chapter. (v) State repayment of Medicaid funds by installments is covered in § 430.48 of this chapter. (e) <E T="03">Collection and compromise under other statutes and at common law.</E> The regulations in this subpart do not— (1) Preclude disposition by CMS of claims under statutes, other than the FCCA, that provide for the collection or compromise of a claim, or suspension or termination of collection action. (2) Affect any rights that CMS may have under common law as a creditor. (f) <E T="03">Fraud.</E> The regulations in this subpart do not apply to claims in which there is an indication of fraud, the presentation of a false claim, or misrepresentation on the part of a debtor or any other party having an interest in the claim. CMS forwards these claims to the Department of Justice for disposition under 4 CFR 105.1. (g) <E T="03">Enforced collection.</E> CMS refers claims to the Department of Justice for enforced collection through litigation in those cases which cannot be compromised or on which collection action cannot be suspended or terminated in accordance with this subpart or the regulations issued jointly by the <PRTPAGE P="20"/>Attorney General and the Comptroller General. <CITA>[48 FR 39064, Aug. 29, 1983, as amended at 52 FR 48123, Dec. 18, 1987; 57 FR 56998, Dec. 2, 1992; 61 FR 49271, Sept. 19, 1996; 61 FR 63748, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.603</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart— <E T="03">Claim</E> means any debt owed to CMS. <E T="03">Debtor</E> means any individual, partnership, corporation, estate, trust or other legal entity against which CMS has a claim. </SECTION> <SECTION> <SECTNO>§ 401.605</SECTNO> <SUBJECT>Omissions not a defense.</SUBJECT> The failure of CMS to comply with the regulations in this subpart, or with the related regulations listed in § 401.601(d), is not available as a defense to a debtor against whom CMS has a claim for money or property. </SECTION> <SECTION> <SECTNO>§ 401.607</SECTNO> <SUBJECT>Claims collection.</SUBJECT> (a) <E T="03">General policy.</E> CMS recovers amounts of claims due from debtors, including interest where appropriate, by— (1) Direct collections in lump sums or in installments; or (2) Offsets against monies owed to the debtor by the Federal government where possible. (b) <E T="03">Collection in lump sums.</E> Whenever possible, CMS attempts to collect claims in full in one lump sum. However, if CMS determines that a debtor is unable to pay the claim in one lump sum, CMS may instead enter into an agreement to accept regular installment payments. (c) <E T="03">Collection in installments.</E> Generally, CMS requires that all claims to be satisfied by installment payments must be liquidated in three years or less. If unusual circumstances exist, such as the possibility of debtor insolvency, an installment agreement that extends beyond three years may be approved. (1) <E T="03">Debtor request.</E> If a debtor desires to repay a claim in installments, the debtor must submit— (i) A request to CMS; and (ii) Any information required by CMS to make a decision regarding the request. (2) <E T="03">CMS decision.</E> CMS will determine the number, amount and frequency of installment payments based on the information submitted by the debtor and on other factors such as— (i) Total amount of the claim; (ii) Debtor's ability to pay; and (iii) Cost to CMS of administering an installment agreement. (d) <E T="03">Collection by offset.</E> (1) CMS may offset, where possible, the amount of a claim against the amount of pay, compensation, benefits or other monies that a debtor is receiving or is due from the Federal government. (2) Under regulations at § 405.350—405.358 of this chapter, CMS may initiate adjustments in program payments to which an individual is entitled under title II of the Act (Federal Old Age, Survivors, and Disability Insurance Benefits) or under the Railroad Retirement Act of 1974 (45 U.S.C. 231) to recover Medicare overpayments. <CITA>[48 FR 39064, Aug. 29, 1983, as amended at 61 FR 49271, Sept. 19, 1996; 61 FR 63748, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 401.613</SECTNO> <SUBJECT>Compromise of claims.</SUBJECT> (a) <E T="03">Amount of compromise.</E> HFCA requires that the amount to be recovered through a compromise of a claim must— (1) Bear a reasonable relation to the amount of the claim; and (2) Be recoverable through enforced collection procedures. (b) <E T="03">General factors.</E> After considering the bases for a decision to compromise a claim under paragraph (c) of this section, CMS may further consider factors such as— (1) The age and health of the debtor if the debtor is an individual; (2) Present and potential income of the debtor; and (3) Whether assets have been concealed or improperly transferred by the debtor. (c) <E T="03">Basis for compromise.</E> Bases on which CMS may compromise a claim include the following— (1) <E T="03">Inability to pay.</E> CMS may compromise a claim if it determines that the debtor, or the estate of a deceased debtor, does not have the present or prospective ability to pay the full amount of the claim within a reasonable time. (2) <E T="03">Litigative probabilities.</E> CMS may compromise a claim if it determines <PRTPAGE P="21"/>that it would be difficult to prevail in a case before a court of law as a result of the legal issues involved or inability of the parties to agree to the facts of the case. The amount that CMS accepts in compromise under this provision will reflect— (i) The likelihood that CMS would have prevailed on the legal question(s) involved; (ii) Whether and to what extent CMS would have obtained a full or partial recovery of a judgment, depending on the availability of witnesses, or other evidentiary support for CMS's claim; and (iii) The amount of court costs that would be assessed to CMS. (3) <E T="03">Cost of collecting the claim.</E> CMS may compromise a claim if it determines that the cost of collecting the claim does not justify the enforced collection of the full amount. In this case, CMS may adjust the amount it accepts as a compromise to allow an appropriate discount for the costs of collection it would have incurred but for the compromise. (d) <E T="03">Enforcement policy.</E> CMS may compromise statutory penalties, forfeitures, or debts established as an aid to enforcement or to compel compliance, if it determines that its enforcement policy, in terms of deterrence and securing compliance both present and future, is adequately served by acceptance of the compromise amount. </SECTION> <SECTION> <SECTNO>§ 401.615</SECTNO> <SUBJECT>Payment of compromise amount.</SUBJECT> (a) <E T="03">Time and manner of compromise.</E> Payment by the debtor of the amount that CMS has agreed to accept as a compromise in full settlement of a claim must be made within the time and in the manner prescribed by CMS. Accordingly, CMS will not settle a claim until the full payment of the compromise amount has been made. (b) <E T="03">Effect of failure to pay compromise amount.</E> Failure of the debtor to make payment, as provided by the compromise agreement, reinstates the full amount of the claim, less any amounts paid prior to the default. (c) <E T="03">Prohibition against grace periods.</E> CMS will not agree to inclusion of a provision in an installment agreement that would permit grace periods for payments that are late under the terms of the agreement. </SECTION> <SECTION> <SECTNO>§ 401.617</SECTNO> <SUBJECT>Suspension of collection action.</SUBJECT> (a) <E T="03">General conditions.</E> CMS may temporarily suspend collection action on a claim if the following general conditions are met— (1) <E T="03">Amount of future recovery.</E> CMS determines that future collection action may result in a recovery of an amount sufficient to justify periodic review and action on the claim by CMS during the period of suspension. (2) <E T="03">Statute of limitations.</E> CMS determines that— (i) The applicable statute of limitations has been tolled, waived or has started running anew; or (ii) Future collections may be made by CMS through offset despite an applicable statute of limitations. (b) <E T="03">Basis for suspension.</E> Bases on which CMS may suspend collection action on a particular claim include the following— (1) A debtor cannot be located; or (2) A debtor— (i) Owns no substantial equity in property; (ii) Is unable to make payment on CMS's claim or is unable to effect a compromise; and (iii) Has future prospects that justify retention of the claim. (c) <E T="03">Locating debtors.</E> CMS will make every reasonable effort to locate missing debtors sufficiently in advance of the bar of an applicable statute of limitations to permit timely filing of a lawsuit to recover the amount of the claim. (d) <E T="03">Effect of suspension on liquidation of security.</E> CMS will liquidate security, obtained in partial recovery of a claim, despite a decision under this section to suspend collection action against the debtor for the remainder of the claim. </SECTION> <SECTION> <SECTNO>§ 401.621</SECTNO> <SUBJECT>Termination of collection action.</SUBJECT> (a) <E T="03">General factors.</E> After considering the bases for a decision to terminate collection action under paragraph (b) of this section, CMS may further consider factors such as— (1) The age and health of the debtor if the debtor is an individual;<PRTPAGE P="22"/> (2) Present and potential income of the debtor; and (3) Whether assets have been concealed or improperly transferred by the debtor. (b) <E T="03">Basis for termination of collection action.</E> Bases on which CMS may terminate collection action on a claim include the following— (1) <E T="03">Inability to collect a substantial amount of the claim.</E> CMS may terminate collection action if it determines that it is unable to collect, or to enforce collection, of a significant amount of the claim. In making this determination, CMS will consider factors such as— (i) Judicial remedies available; (ii) The debtor's future financial prospects; and (iii) Exemptions available to the debtor under State or Federal law. (2) <E T="03">Inability to locate debtor.</E> In cases involving missing debtors, CMS may terminate collection action if— (i) There is no security remaining to be liquidated; (ii) The applicable statute of limitations has run; or (iii) The prospects of collecting by offset, whether or not an applicable statute of limitations has run, are considered by CMS to be too remote to justify retention of the claim. (3) <E T="03">Cost of collection exceeds recovery.</E> CMS may terminate collection action if it determines that the cost of further collection action will exceed the amount recoverable. (4) <E T="03">Legal insufficiency.</E> CMS may terminate collection action if it determines that the claim is legally without merit. (5) <E T="03">Evidence unavailable.</E> CMS may terminate collection action if— (i) Efforts to obtain voluntary payment are unsuccessful; and (ii) Evidence or witnesses necessary to prove the claim are unavailable. </SECTION> <SECTION> <SECTNO>§ 401.623</SECTNO> <SUBJECT>Joint and several liability.</SUBJECT> (a) <E T="03">Collection action.</E> CMS will liquidate claims as quickly as possible. In cases of joint and several liability among two or more debtors, CMS will not allocate the burden of claims payment among the debtors. CMS will proceed with collection action against one debtor even if other liable debtors have not paid their proportionate shares. (b) <E T="03">Compromise.</E> Compromise with one debtor does not release a claim against remaining debtors. Furthermore, CMS will not consider the amount of a compromise with one debtor to be a binding precedent concerning the amounts due from other debtors who are jointly and severally liable on the claim. </SECTION> <SECTION> <SECTNO>§ 401.625</SECTNO> <SUBJECT>Effect of CMS claims collection decisions on appeals.</SUBJECT> Any action taken under this subpart regarding the compromise of a claim, or suspension or termination of collection action on a claim, is not an initial determination for purposes of CMS appeal procedures. </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 402</EAR> <HD SOURCE="HED">PART 402—CIVIL MONEY PENALTIES, ASSESSMENTS, AND EXCLUSIONS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>402.1</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SECTNO>402.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>402.5</SECTNO> <SUBJECT>Right to a hearing before the final determination.</SUBJECT> <SECTNO>402.7</SECTNO> <SUBJECT>Notice of proposed determination.</SUBJECT> <SECTNO>402.9</SECTNO> <SUBJECT>Failure to request a hearing.</SUBJECT> <SECTNO>402.11</SECTNO> <SUBJECT>Notice to other agencies and other entities.</SUBJECT> <SECTNO>402.13</SECTNO> <SUBJECT>Penalty, assessment, and exclusion not exclusive.</SUBJECT> <SECTNO>402.15</SECTNO> <SUBJECT>Collateral estoppel.</SUBJECT> <SECTNO>402.17</SECTNO> <SUBJECT>Settlement.</SUBJECT> <SECTNO>402.19</SECTNO> <SUBJECT>Hearings and appeals.</SUBJECT> <SECTNO>402.21</SECTNO> <SUBJECT>Judicial review.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Civil Money Penalties and Assessments</HD> <SECTNO>402.105</SECTNO> <SUBJECT>Amount of penalty.</SUBJECT> <SECTNO>402.107</SECTNO> <SUBJECT>Amount of assessment.</SUBJECT> <SECTNO>402.109</SECTNO> <SUBJECT>Statistical sampling.</SUBJECT> <SECTNO>402.111</SECTNO> <SUBJECT>Factors considered determinations regarding the amount of penalties and assessments.</SUBJECT> <SECTNO>402.113</SECTNO> <SUBJECT>When a penalty and assessment are collectible.</SUBJECT> <SECTNO>402.115</SECTNO> <SUBJECT>Collection of penalty or assessment.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart C—Exclusions [Reserved]</RESERVED> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 63 FR 68690, Dec. 14, 1998, unless otherwise noted. </SOURCE> <SUBPART> <PRTPAGE P="23"/> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 402.1</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Basis</E>. This part is based on the sections of the Act that are specified in paragraph (c) of this section. (b) <E T="03">Scope.</E> This part— (1) Provides for the imposition of civil money penalties, assessments, and exclusions against persons that violate the provisions of the Act specified in paragraph (c), (d), or (e) of this section; and (2) Sets forth the appeal rights of persons subject to penalties, assessments, or exclusion and the procedures for reinstatement following exclusion. (c) <E T="03">Civil money penalties.</E> CMS or OIG may impose civil money penalties against any person or other entity specified in paragraphs (c)(1) through (c)(33) of this section under the identified section of the Act. (The authorities that also permit imposition of an assessment or exclusion are noted in the applicable paragraphs.) (1) Sections 1833(h)(5)(D) and 1842(j)(2)—Any person that knowingly and willfully, and on a repeated basis, bills for a clinical diagnostic laboratory test, other than on an assignment-related basis. This provision includes tests performed in a physician's office but excludes tests performed in a rural health clinic. (This violation may also include an assessment and cause exclusion.) (2) Section 1833(i)(6)—Any person that knowingly and willfully presents, or causes to be presented, a bill or request for payment for an intraocular lens inserted during or after cataract surgery for which the Medicare payment rate includes the cost of acquiring the class of lens involved. (3) Section 1833(q)(2)(B)—Any entity that knowingly and willfully fails to provide information about a referring physician, including the physician's name and unique physician identification number for the referring physician, when seeking payment on an unassigned basis. (This violation, if it occurs in repeated cases, may also cause an exclusion.) (4) Sections 1834(a)(11)(A) and 1842(j)(2)—Any durable medical equipment supplier that knowingly and willfully charges for a covered service that is furnished on a rental basis after the rental payments may no longer be made (except for maintenance and servicing) as provided in section 1834(a)(7)(A). (This violation may also include an assessment and cause exclusion.) (5) Sections 1834(a)(18)(B) and 1842(j)(2)—Any nonparticipating durable medical equipment supplier that knowingly and willfully, in violation of section 1834(a)(18)(A), fails to make a refund to Medicare beneficiaries for a covered service for which payment is precluded due to an unsolicited telephone contact from the supplier. (This violation may also include an assessment and cause exclusion.) (6) Sections 1834(b)(5)(C) and 1842(j)(2)—Any nonparticipating physician or supplier that knowingly and willfully charges a Medicare beneficiary more than the limiting charge, as specified in section 1834(b)(5)(B), for radiologist services. (This violation may also include an assessment and cause exclusion.) (7) Sections 1834(c)(4)(C) and 1842(j)(2)—Any nonparticipating physician or supplier that knowingly and willfully charges a Medicare beneficiary more than the limiting charge, as specified in section 1834(c)(4)(B), for mammography screening. (This violation may also include an assessment and cause exclusion.) (8) Sections 1834(h)(3) and 1842(j)(2)—Any supplier of prosthetic devices, orthotics, and prosthetics that knowingly and willfully charges for a covered prosthetic device, orthotic, or prosthetic that is furnished on a rental basis after the rental payment may no longer be made (except for maintenance and servicing). (This violation may also include an assessment and cause exclusion.) (9) Section 1834(j)(2)(A)(iii)—Any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, that knowingly and willfully distributes a certificate of medical necessity in violation of section 1834(j)(2)(A)(i) or fails to provide the information required under section 1834(j)(2)(A)(ii). (10) Sections 1834(j)(4) and 1842(j)(2)—<PRTPAGE P="24"/> (i) Any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, that knowingly and willfully fails to make refunds in a timely manner to Medicare beneficiaries for services billed other than on an assignment-related basis if— (A) The supplier does not possess a Medicare supplier number; (B) The service is denied in advance under section 1834(a)(15); or (C) The service is determined not to be medically necessary or reasonable. (ii) These violations may also include an assessment and cause exclusion. (11) Sections 1842(b)(18)(B) and 1842(j)(2)—Any practitioner specified in section 1842(b)(18)(C) (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives, clinical social workers, and clinical psychologists) or other person that knowingly and willfully bills or collects for any services by the practitioners on other than an assignment-related basis. (This violation may also include an assessment and cause exclusion.) (12) Sections 1842(k) and 1842(j)(2)—Any physician who knowingly and willfully presents, or causes to be presented, a claim or bill for an assistant at cataract surgery performed on or after March 1, 1987 for which payment may not be made because of section 1862(a)(15). (This violation may also include an assessment and cause exclusion.) (13) Sections 1842(l)(3) and 1842(j)(2)—Any nonparticipating physician who does not accept payment on an assignment-related basis and who knowingly and willfully fails to refund on a timely basis any amounts collected for services that are not reasonable or medically necessary or are of poor quality, in accordance with section 1842(l)(1)(A). (This violation may also include an assessment and cause exclusion.) (14) Sections 1842(m)(3) and 1842(j)(2)—(i) Any nonparticipating physician, who does not accept payment for an elective surgical procedure on an assignment-related basis and whose charge is at least $500, who knowingly and willfully fails to— (A) Disclose the information required by section 1842(m)(1) concerning charges and coinsurance amounts; and (B) Refund on a timely basis any amount collected for the procedure in excess of the charges recognized and approved by the Medicare program. (ii) This violation may also include an assessment and cause exclusion. (15) Sections 1842(n)(3) and 1842(j)(2)—Any physician who knowingly and willfully, in repeated cases, bills one or more beneficiaries, for purchased diagnostic tests, any amount other than the payment amount specified in section 1842(n)(1)(A) or section 1842(n)(1)(B). (This violation may also include an assessment and cause exclusion.) (16) Section 1842(p)(3)(A)—Any physician or practitioner who knowingly and willfully fails promptly to provide the appropriate diagnosis code or codes upon request by CMS or a carrier on any request for payment or bill not submitted on an assignment-related basis for any service furnished by the physician. (This violation, if it occurs in repeated cases, may also cause exclusion.) (17) Sections 1848(g)(1)(B) and 1842(j)(2)— (i) Any nonparticipating physician, supplier, or other person that furnishes physicians' services and does not accept payment on an assignment-related basis, that— (A) Knowingly and willfully bills or collects in excess of the limiting charge (as defined in section 1848(g)(2)) on a repeated basis; or (B) Fails to make an adjustment or refund on a timely basis as required by section 1848(g)(1)(A)(iii) or (iv). (ii) These violations may also include an assessment and cause exclusion. (18) Section 1848(g)(3)(B) and 1842(j)(2)—Any person that knowingly and willfully bills for State plan approved physicians' services, as defined in section 1848(j)(3), on other than an assignment-related basis for a Medicare beneficiary who is also eligible for Medicaid (these individuals include qualified Medicare beneficiaries). This provision applies to services furnished on or after April 1, 1990. (This violation may also include an assessment and cause exclusion.)<PRTPAGE P="25"/> (19) Section 1848(g)(4)(B)(ii), 1842(p)(3), and 1842(j)(2)(A)— (i) Any physician, supplier, or other person (except any person that has been excluded from the Medicare program) that, for services furnished after September 1, 1990, knowingly and willfully— (A) Fails to submit a claim on a standard claim form for services provided for which payment is made under Part B on a reasonable charge or fee schedule basis; or (B) Imposes a charge for completing and submitting the standard claims form. (ii) These violations, if they occur in repeated cases, may also cause exclusion. (20) Section 1862(b)(5)(C)—Any employer (other than a Federal or other governmental agency) that, before October 1, 1998, willfully or repeatedly fails to provide timely and accurate information requested relating to an employee's group health insurance coverage. (21) Section 1862(b)(6)(B)—Any entity that knowingly, willfully, and repeatedly— (i) Fails to complete a claim form relating to the availability of other health benefit plans in accordance with section 1862(b)(6)(A); or (ii) Provides inaccurate information relating to the availability of other health benefit plans on the claim form. (22) Section 1877(g)(5)—Any person that fails to report information required by HHS under section 1877(f) concerning ownership, investment, and compensation arrangements. (This violation may also include an assessment and cause exclusion.) (23) Sections 1879(h), 1834(a)(18), and 1842(j)(2)— (i) Any durable medical equipment supplier, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, that knowingly and willfully fails to make refunds in a timely manner to Medicare beneficiaries for services billed on an assignment-related basis if— (A) The supplier did not possess a Medicare supplier number; (B) The service is denied in advance under section 1834(a)(15) of the Act; or (C) The service is determined not to be payable under section 1834(a)(17)(b) because of unsolicited telephone contacts. (ii) These violations may also include an assessment and cause exclusion. (24) Section 1882(a)(2)—Any person that issues a Medicare supplemental policy that has not been approved by the State regulatory program or does not meet Federal standards on and after the effective date in section 1882(p)(1)(C). (This violation may also include an assessment and cause exclusion.) (25) Section 1882(p)(8)—Any person that sells or issues Medicare supplemental policies, on or after July 30, 1992, that fail to conform to the NAIC or Federal standards established under section 1882(p). (This violation may also include an assessment and cause exclusion.) (26) Section 1882(p)(9)(C)— (i) Any person that sells a Medicare supplemental policy and— (A) Fails to make available for sale the core group of basic benefits when selling other Medicare supplemental policies with additional benefits; or (B) Fails to provide the individual, before the sale of the policy, an outline of coverage describing the benefits provided by the policy. (ii) These violations may also include an assessment and cause exclusion. (27) Section 1882(q)(5)(C)— (i) Any person that fails to— (A) Suspend a Medicare supplemental policy at the policyholder's request, if the policyholder applies for and is determined eligible for medical assistance, and the policyholder provides notice within 90 days of the eligibility determination; or (B) Automatically reinstate the policy as of the date of termination of medical assistance if the policyholder loses eligibility for medical assistance and the policyholder provides notice within 90 days of loss of eligibility. (ii) These violations may also include an assessment and cause exclusion. (28) Section 1882(r)(6)(A)—Any person that fails to provide refunds or credits as required by section 1882(r)(1)(B). (This violation may also include an assessment and cause exclusion.) (29) Section 1882(s)(4)—<PRTPAGE P="26"/> (i) Any issuer of a Medicare supplemental policy that— (A) Does not waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods if the time periods were already satisfied under a preceding Medicare supplemental policy; or (B) Denies a policy, conditions the issuance or effectiveness of the policy, or discriminates in the pricing of the policy based on health status or other criteria as specified in section 1882(s)(2)(A). (ii) These violations may also include an assessment and cause exclusion. (30) Section 1882(t)(2)— (i) Any issuer of a Medicare supplemental policy that— (A) Fails substantially to provide medically necessary services to enrollees seeking the services through the issuer's network of entities; (B) Imposes premiums on enrollees in excess of the premiums approved by the State; (C) Acts to expel an enrollee for reasons other than nonpayment of premiums; or (D) Does not provide each enrollee at the time of enrollment with the specific information provided in section 1882(t)(1)(E)(i) or fails to obtain a written acknowledgment from the enrollee of receipt of the information (as required by section 1882(t)(1)(E)(ii)). (ii) These violations may also include an assessment and cause exclusion. (31) Sections 1834(k)(6) and 1842(j)(2)—Any person or entity who knowingly and willfully bills or collects for any outpatient therapy services or comprehensive outpatient rehabilitation services on other than an assignment-related basis. (This violation may also include an assessment and cause exclusion.) (32) Sections 1834(l)(6) and 1842(j)(2)—Any supplier of ambulance services who knowingly and willfully bills or collects for any services on other than an assignment-related basis. (This violation may also include an assessment and cause exclusion.) (33) Section 1806(b)(2)(B)—Any person who knowingly and willfully fails to furnish a beneficiary with an itemized statement of items or services within 30 days of the beneficiary's request. (d) <E T="03">Assessments</E>. CMS or OIG may impose assessments in addition to civil money penalties for violations of the following statutory sections: (1) Section 1833: Paragraph (h)(5)(D). (2) Section 1834: Paragraphs (a)(11)(A), (a)(18)(B), (b)(5)(C), (c)(4)(C), (h)(3), (j)(4), (k)(6), and (l)(6). (3) Section 1842: Paragraphs (k), (l)(3), (m)(3), and (n)(3). (4) Section 1848: Paragraph (g)(1)(B). (5) Section 1877: Paragraph (g)(5). (6) Section 1879: Paragraph (h). (7) Section 1882: Paragraphs (a)(2), (p)(8), (p)(9)(C), (q)(5)(C), (r)(6)(A), (s)(3), and (t)(2). (e) <E T="03">Exclusions</E>. (1) CMS or OIG may exclude any person from participation in the Medicare program on the basis of any of the following violations of the statute: (i) Section 1833: Paragraphs (h)(5)(D) and, in repeated cases, (q)(2)(B). (ii) Section 1834: Paragraphs (a)(11)(A), (a)(18)(B), (b)(5)(C), (c)(4)(C), (h)(3), (j)(4), (k)(6), and (l)(6). (iii) Section 1842: Paragraphs (b)(18)(B), (k), (l)(3), (m)(3), (n)(3), and, in repeated cases, (p)(3)(B). (iv) Section 1848: Paragraphs (g)(1)(B), (g)(3)(B), and, in repeated cases, (g)(4)(B)(ii). (v) Section 1877: Paragraph (g)(5). (vi) Section 1879: Paragraph (h). (vii) Section 1882: Paragraphs (a)(2), (p)(8), (p)(9)(C), (q)(5)(C), (r)(6)(A), (s)(4), and (t)(2). (2) CMS or OIG must exclude from participation in the Medicare program any of the following, under the identified section of the Act: (i) Section 1834(a)(17)(C)—Any supplier of durable medical equipment and supplies that are covered under section 1834(a)(13) that knowingly contacts Medicare beneficiaries by telephone regarding the furnishing of covered services in violation of section 1834(a)(17)(A) and whose conduct establishes a pattern of prohibited contacts as described under section 1834(a)(17)(A). (ii) Section 1834(h)(3)—Any supplier of prosthetic devices, orthotics, and prosthetics that knowingly contacts <PRTPAGE P="27"/>Medicare beneficiaries by telephone regarding the furnishing of prosthetic devices, orthotics, or prosthetics in the same manner as in the violation under section 1834(a)(17)(A) and whose conduct establishes a pattern of prohibited contacts in the same manner as described in section 1834(a)(17)(C). (f) <E T="03">Responsible persons</E>. (1) If CMS or OIG determines that more than one person is responsible for any of the violations described in paragraph (c) or paragraph (d) of this section, it may impose a civil money penalty or a civil money penalty and assessment against any one of those persons or jointly and severally against two or more of those persons. However, the aggregate amount of the assessments collected may not exceed the amount that could be assessed if only one person were responsible. (2) A principal is liable for penalties and assessments for the actions of his or her agent acting within the scope of the agency. (g) <E T="03">Time limits</E>. Neither CMS nor OIG initiates an action to impose a civil money penalty, assessment, or proceeding to exclude a person from participation in the Medicare program unless it begins the action within 6 years from the date on which the claim was presented, the request for payment was made, or the incident occurred. <CITA>[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 402.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this part: <E T="03">Assessment</E> means the amount described in § 402.107 and includes the plural of that term. <E T="03">Assignment-related basis</E> means that the claim submitted by a physician, supplier or other person is paid on the basis of an assignment, whereby the physician, supplier or other person agrees to accept the Medicare payment as payment in full for the services furnished to the beneficiary and is precluded from charging the beneficiary more than the deductible and coinsurance based upon the approved Medicare fee amount. Additional obligations, including obligations to make refunds in certain circumstances, are established at section 1842(b)(3) of the Act. <E T="03">Claim</E> means an application for payment for a service for which the Medicare or Medicaid program may pay. <E T="03">Covered</E> means that a service is described as reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. A service is not covered if it is specifically identified as excluded from Medicare Part B coverage or is not a defined Medicare Part B benefit. <E T="03">Exclusion</E> means the temporary or permanent barring of a person or other entity from participation in the Medicare or State health care program and that services furnished or ordered by that person are not paid for under either program. <E T="03">General Counsel</E> means the General Counsel of HHS or his or her designees. <E T="03">Knowingly</E> or <E T="03">knowingly and willfully</E> means that a person, with respect to information— (1) Has actual knowledge of the information; (2) Acts in deliberate ignorance of the truth or falsity of the information; or (3) Acts in reckless disregard of the truth or falsity of the information; and (4) No proof of specific intent is required. <E T="03">Medicare supplemental policy</E> means a policy guaranteeing that a health plan will pay a policyholder's coinsurance and deductible and will cover other limitations on payment imposed under title XVIII of the Act and will provide additional health plan or non-Medicare coverage for services up to a predefined benefit limit. <E T="03">NAIC</E> stands for the National Association of Insurance Commissioners. <E T="03">Nonparticipating</E> describes a physician, supplier, or other person (excluding any provider of services) that, at the time of furnishing the services to Medicare Part B beneficiaries, is not a participating physician or supplier. <E T="03">Participating</E> describes a physician or supplier (excluding any provider of services) that, before the beginning of any given year, enters into an agreement with HHS that provides that the physician or supplier will accept payment under the Medicare program on an assignment-related basis for all services furnished to Medicare Part B beneficiaries.<PRTPAGE P="28"/> <E T="03">Penalty</E> means the amount described in § 402.105 and includes the plural of that term. <E T="03">Person</E> means an individual, trust or estate, partnership, corporation, professional association or corporation, or other entity, public or private. <E T="03">Physicians' services</E> means the following Medicare covered professional services: (1) Surgery, consultation, home, office and institutional calls, and other professional services performed by physicians. (2) Services and supplies furnished “incident to” a physician's professional services. (3) Outpatient physical and occupational therapy services. (4) Diagnostic x-ray tests and other diagnostic tests (excluding clinical diagnostic laboratory tests). (5) X-ray, radium, and radioactive isotope therapy, including materials and services of technicians. (6) Antigens prepared by a physician. <E T="03">Radiologist service</E> means radiology services performed only by, or under the direction of, a physician who is certified, or eligible to be certified, by the American Board of Radiology or for whom radiology services account for at least 50 percent of the total amount of charges made under part B of title XVIII of the Act. <E T="03">Request for payment</E> means an application submitted by a person to any person for payment for a service. <E T="03">Respondent</E> means the person upon which CMS or OIG has imposed, or proposes to impose, a civil money penalty, assessment, or exclusion. <E T="03">Service</E> includes— (1) Any item, device, medical supply, or service claimed to have been furnished to a patient and listed in an itemized claim for program payment; or (2) In the case of a claim based on costs, any entry or omission in a cost report, books of account or other documents supporting the claim. <E T="03">State</E> includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and the Trust Territory of the Pacific Islands. <E T="03">Timely basis</E> means that the adjustment to a bill or a refund is considered “on a timely basis” if the physician, supplier, or other person makes the adjustment or refund to the appropriate party no later than 30 days after the date the physician, supplier, or other person is notified by the Medicare Part B contractor of the violation and the requirement to refund any excess collections. </SECTION> <SECTION> <SECTNO>§ 402.5</SECTNO> <SUBJECT>Right to a hearing before the final determination.</SUBJECT> CMS or OIG does not make a determination adverse to any person under this part until the person has been given a written notice and opportunity for the determination to be made on the record after a hearing at which the person is entitled to be represented by counsel, to present witnesses, and to cross-examine witnesses against the person. </SECTION> <SECTION> <SECTNO>§ 402.7</SECTNO> <SUBJECT>Notice of proposed determination.</SUBJECT> (a) If CMS or OIG proposes a penalty and, as applicable, an assessment, or proposes to exclude a respondent from participation in Medicare in accordance with this part, it sends the respondent written notice of its intent by certified mail, return receipt requested. The notice includes the following information: (1) Reference to the statutory basis or bases for the penalty, assessment, exclusion, or any combination, as applicable. (2)(i) A description of the claims, requests for payment, or incidents with respect to which the penalty, assessment, and exclusion are proposed; or (ii) If CMS or OIG is relying upon statistical sampling to project the number and types of claims or requests for payment and the dollar amount, a description of the claims and requests for payment comprising the sample and a brief description of the statistical sampling technique CMS or OIG used. (3) The reason why the claims, requests for payment, or incidents are subject to a penalty and assessment. (4) The amount of the proposed penalty and of any proposed assessment. (5) Any mitigating or aggravating circumstances that CMS or OIG considered when it determined the amount of <PRTPAGE P="29"/>the proposed penalty and any applicable assessment. (6) Information concerning response to the notice, including— (i) A specific statement of the respondent's right to a hearing; and (ii) A statement that failure to request a hearing within 60 days renders the proposed determination final and permits the imposition of the proposed penalty and any assessment. (iii) A statement that the debt may be collected through an administrative offset. (7) In the case of a respondent that has an agreement under section 1866 of the Act, notice that imposition of an exclusion may result in termination of the provider's agreement in accordance with section 1866(b)(2)(C) of the Act. </SECTION> <SECTION> <SECTNO>§ 402.9</SECTNO> <SUBJECT>Failure to request a hearing.</SUBJECT> (a) If the respondent does not request a hearing within 60 days of receipt of the notice of proposed determination specified in § 402.7, any civil money penalty, assessment, or exclusion becomes final and CMS or OIG may impose the proposed penalty, assessment, or exclusion, or any less severe penalty, assessment, or suspension. (b) CMS or OIG notifies the respondent by certified mail, return receipt requested, of any penalty, assessment, or exclusion that has been imposed and of the means by which the respondent may satisfy the judgment. (c) The respondent has no right to appeal a penalty, assessment, or exclusion for which he or she has not requested a hearing. </SECTION> <SECTION> <SECTNO>§ 402.11</SECTNO> <SUBJECT>Notice to other agencies and other entities.</SUBJECT> (a) Whenever a penalty, assessment, or exclusion becomes final, CMS or OIG notifies the following organizations and entities about the action and the reasons for it: (1) The appropriate State or local medical or professional association. (2) The appropriate quality improvement organization. (3) As appropriate, the State agency responsible for the administration of each State health care program (Medicaid, the Maternal and Child Health Services Block Grant Program, and the Social Services Block Grant Program). (4) The appropriate Medicare carrier or fiscal intermediary. (5) The appropriate State or local licensing agency or organization (including the Medicare and Medicaid State survey agencies). (6) The long-term care ombudsman. (b) For exclusions, CMS or OIG also notifies the public and specifies the effective date. </SECTION> <SECTION> <SECTNO>§ 402.13</SECTNO> <SUBJECT>Penalty, assessment, and exclusion not exclusive.</SUBJECT> Penalties, assessments, and exclusions imposed under this part are in addition to any other penalties prescribed by law. </SECTION> <SECTION> <SECTNO>§ 402.15</SECTNO> <SUBJECT>Collateral estoppel.</SUBJECT> (a) When a final determination that the respondent presented or caused to be presented a claim or request for payment falling within the scope of § 402.1 has been rendered in any proceeding in which the respondent was a party and had an opportunity to be heard, the respondent is bound by that determination in any proceeding under this part. (b) A person who has been convicted (whether upon a verdict after trial or upon a plea of guilty or nolo contendere) of a Federal crime charging fraud or false statements is barred from denying the essential elements of the criminal offense if the proceedings under this part involve the same transactions. </SECTION> <SECTION> <SECTNO>§ 402.17</SECTNO> <SUBJECT>Settlement.</SUBJECT> CMS or OIG has exclusive authority to settle any issues or case, without the consent of the ALJ or the Secretary, at any time before a final decision by the Secretary. Thereafter, the General Counsel has the exclusive authority. </SECTION> <SECTION> <SECTNO>§ 402.19</SECTNO> <SUBJECT>Hearings and appeals.</SUBJECT> The hearings and appeals procedures set forth in part 1005 of chapter V of this title are available to any person that receives an adverse determination under this part. For an appeal of a civil money penalty, assessment, or exclusion imposed under this part, either CMS or OIG may represent the government in the hearing and appeals process. </SECTION> <SECTION> <PRTPAGE P="30"/> <SECTNO>§ 402.21</SECTNO> <SUBJECT>Judicial review.</SUBJECT> After exhausting all available administrative remedies, a respondent may seek judicial review of a penalty, assessment, or exclusion that has become final. The respondent may seek review only with respect to a penalty, assessment, or exclusion with respect to which the respondent filed an exception under § 1005.21(c) of this title unless the court excuses the failure or neglect to urge the exception in accordance with section 1128A(e) of the Act because of extraordinary circumstances. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Civil Money Penalties and Assessments</HD> <SECTION> <SECTNO>§ 402.105</SECTNO> <SUBJECT>Amount of penalty.</SUBJECT> (a) <E T="03">$2,000.</E> Except as provided in paragraphs (b) through (g) of this section, CMS or OIG may impose a penalty of not more than $2,000 for each service, bill, or refusal to issue a timely refund that is subject to a determination under this part and for each incident involving the knowing, willful, and repeated failure of an entity furnishing a service to submit a properly completed claim form or to include on the claim form accurate information regarding the availability of other health insurance benefit plans (§ 402.1(c)(21)). (b) <E T="03">$1,000.</E> CMS or OIG may impose a penalty of not more than $1,000 for the following: (1) Per certificate of medical necessity knowingly and willfully distributed to physicians on or after December 31, 1994 that— (i) Contains information concerning the medical condition of the patient; or (ii) Fails to include cost information. (2) Per individual about whom information is requested, for willful or repeated failure of an employer to respond to an intermediary or carrier about coverage of an employee or spouse under the employer's group health plan (§ 402.1(c)(20)). (c) <E T="03">$5,000</E>. CMS or OIG may impose a penalty of not more than $5,000 for each violation resulting from the following: (1) The failure of a Medicare supplemental policy issuer, on a replacement policy, to waive any time periods applicable to pre-existing conditions, waiting periods, elimination periods, or probationary periods that were satisfied under a preceding policy (§ 402.1(c)(29)); and (2) Any issuer of any Medicare supplemental policy denying a policy, conditioning the issuance or effectiveness of the policy, or discriminating in the pricing of the policy based on health status or other criteria as specified in section 1882(s)(2)(A). (§ 402.1(c)(29)). (d) <E T="03">$10,000</E>. (1) CMS or OIG may impose a penalty of not more than $10,000 for each day that reporting entity ownership arrangements is late (§ 402.1(c)(22)). (2) CMS or OIG may impose a penalty of not more than $10,000 for the following violations that occur on or after January 1, 1997: (i) Knowingly and willfully, and on a repeated basis, billing for a clinical diagnostic laboratory test, other than on an assignment-related basis (§ 402.1(c)(1)). (ii) By any durable medical equipment supplier, knowingly and willfully charging for a covered service that is furnished on a rental basis after the rental payments may no longer be made (except for maintenance and servicing) as provided in section 1834(a)(7)(A) (§ 402.1(c)(4)). (iii) By any durable medical equipment supplier, knowingly and willfully, in violation of section 1834(a)(18)(A), failing to make a refund to Medicare beneficiaries for a covered service for which payment is precluded due to an unsolicited telephone contact from the supplier (§ 402.1(c)(5)). (iv) By any nonparticipating physician or supplier, knowingly and willfully charging a Medicare beneficiary more than the limiting charge, as specified in section 1834(b)(5)(B), for radiologist services (§ 402.1(c)(6)). (v) By any nonparticipating physician or supplier, knowingly and willfully charging a Medicare beneficiary more than the limiting charge, as specified in section 1834(c)(3), for mammography screening (§ 402.1(c)(7)). (vi) By any supplier of prosthetic devices, orthotics, and prosthetics, knowingly and willfully charging for a covered prosthetic device, orthotic, or prosthetic that is furnished on a rental <PRTPAGE P="31"/>basis after the rental payment may no longer be made (except for maintenance and servicing) (§ 401.2(c)(8)). (vii) By any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, knowingly and willfully failing to make refunds in a timely manner to Medicare beneficiaries for services billed other than on an assigned-related basis if— (A) The supplier does not possess a Medicare supplier number; (B) The service is denied in advance; or (C) The service is determined not to be medically necessary or reasonable (§ 402.1(c)(10)). (viii) Knowingly and willfully billing or collecting for any services on other than an assignment-related basis for practitioners specified in section 1842(b)(18)(B) (§ 402.1(c)(11)). (xix) By any physician, knowingly and willfully presenting, or causing to be presented, a claim or bill for an assistant at cataract surgery performed on or after March 1, 1987 for which payment may not be made because of section 1862(a)(15) (§ 402.1(c)(12)). (x) By any nonparticipating physician who does not accept payment on an assignment-related basis, knowingly and willfully failing to refund on a timely basis any amounts collected for services that are not reasonable or medically necessary or are of poor quality, in accordance with section 1842(l)(1)(A) (§ 402.1(c)(13)). (xi) By any nonparticipating physician, who does not accept payment for an elective surgical procedure on an assignment-related basis and whose charge is at least $500, knowingly and willfully failing to— (A) Disclose the information required by section 1842(m)(1) concerning charges and coinsurance amounts; and (B) Refund on a timely basis any amount collected for the procedure in excess of the charges recognized and approved by the Medicare program (§ 402.1(c)(14)). (xii) By any physician, in repeated cases, knowingly and willfully billing one or more beneficiaries, for purchased diagnostic tests, any amount other than the payment amount specified in section 1842(n)(1)(A) or section 1842(n)(1)(B) (§ 402.1(c)(15)). (xiii) By any nonparticipating physician, supplier, or other person that furnishes physicians' services and does not accept payment on an assignment-related basis— (A) Knowingly and willfully billing or collecting in excess of the limiting charge (as defined in section 1843(g)(2)) on a repeated basis; or (B) Failing to make an adjustment or refund on a timely basis as required by section 1848(g)(1)(A)(iii) or (iv) (§ 402.1(c)(17)). (xiv) Knowingly and willfully billing for State plan approved physicians' services on other than an assignment-related basis for a Medicare beneficiary who is also eligible for Medicaid (§ 402.1(c)(18)). (xv) By any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, knowingly and willfully failing to make refunds in a timely manner to Medicare beneficiaries for services billed on an assignment-related basis if— (A) The supplier did not possess a Medicare supplier number; (B) The service is denied in advance; or (C) The service is determined not to be medically necessary or reasonable (§ 402.1(c)(23)). (3) CMS or OIG may impose a penalty of not more than $10,000 for each violation, if a person or entity knowingly and willfully bills or collects for outpatient therapy or comprehensive rehabilitation services other than on an assignment-related basis. (4) CMS or OIG may impose a penalty of not more than $10,000 for each violation, if a person or entity knowingly and willfully bills or collects for outpatient ambulance services other than on an assignment-related basis. (e) <E T="03">$15,000</E>. CMS or OIG may impose a penalty of not more than $15,000 if the seller of a Medicare supplemental policy is not the issuer, for each violation described in paragraphs (f)(2) and (f)(3) of this section (§ 402.1 (c)(25) and (c)(26)). (f) <E T="03">$25,000</E>. CMS or OIG may impose a penalty of not more than $25,000 for each of the following violations:<PRTPAGE P="32"/> (1) Issuance of a Medicare supplemental policy that has not been approved by an approved State regulatory program or does not meet Federal standards on and after the effective date in section 1882(p)(1)(C) of the Act (§ 402.1(c)(23)). (2) Sale or issuance after July 30, 1992, of a Medicare supplemental policy that fails to conform with the NAIC or Federal standards established under section 1882(p) of the Act (§ 402.1(c)(25)). (3) Failure to make the core group of basic benefits available for sale when selling other Medicare supplemental plans with additional benefits (§ 402.1(c)(26)). (4) Failure to provide, before sale of a Medicare supplemental policy, an outline of coverage describing the benefits provided by the policy (§ 402.1(c)(26)). (5) Failure of an issuer of a policy to suspend or reinstate a policy, based on the policy holder's request, during entitlement to or upon loss of eligibility for medical assistance (§ 402.1(c)(27)). (6) Failure to provide refunds or credits for Medicare supplemental policies as required by section 1882(r)(1)(B) (§ 402.1(c)(28)). (7) By an issuer of a Medicare supplemental policy— (i) Substantial failure to provide medically necessary services to enrollees seeking the services through the issuer's network of entities; (ii) Imposition of premiums on enrollees in excess of the premiums approved by the State; (iii) Action to expel an enrollee for reasons other than nonpayment of premiums; or (iv) Failure to provide each enrollee, at the time of enrollment, with the specific information provided in section 1882(t)(1)(E)(i) or failure to obtain a written acknowledgment from the enrollee of receipt of the information (as required by section 1882(t)(1)(E)(ii)) (section 1882(t)(2)). (g) <E T="03">$100.</E> CMS or OIG may impose a penalty of not more than $100 for each violation if the person or entity does not furnish an itemized statement to a Medicare beneficiary within 30 days of the beneficiary's request. <CITA>[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 402.107</SECTNO> <SUBJECT>Amount of assessment.</SUBJECT> A person subject to civil money penalties specified in § 402.1(c) may be subject, in addition, to an assessment. An assessment is a monetary payment in lieu of damages sustained by HHS or a State agency. (a) The assessment may not be more than twice the amount claimed for each service that was a basis for the civil money penalty, except for the violations specified in paragraph (b) of this section that occur before January 1, 1997. (b) For the violations specified in this paragraph occurring after January 1, 1997, the assessment may not be more than three times the amount claimed for each service that was the basis for a civil money penalty. The violations are the following: (1) Knowingly and willfully billing, and on a repeated basis, for a clinical diagnostic laboratory test, other than on an assignment-related basis (§ 402.1(c)(1)). (2) By any durable medical equipment supplier, knowingly and willfully charging for a covered service that is furnished on a rental basis after the rental payments may no longer be made (except for maintenance and servicing) as provided in section 1834(a)(7)(A) (§ 402.1(c)(4)). (3) By any durable medical equipment supplier, knowingly and willfully failing, in violation of section 1834(a)(18)(A), to make a refund to Medicare beneficiaries for a covered service for which payment is precluded due to an unsolicited telephone contact from the supplier (§ 402.1(c)(5)). (4) By any nonparticipating physician or supplier, knowingly and willfully charging a Medicare beneficiary more than the limiting charge, as specified in section 1834(b)(5)(B), for radiologist services (§ 402.1(c)(6)). (5) By any nonparticipating physician or supplier, knowingly and willfully charging a Medicare beneficiary more than the limiting charge as specified in section 1834(c)(3), for mammography screening (§ 402.1(c)(7)). (6) By any supplier of prosthetic devices, orthotics, and prosthetics, knowingly and willfully charging for a covered prosthetic device, orthotic, or prosthetic that is furnished on a rental <PRTPAGE P="33"/>basis after the rental payment may no longer be made (except for maintenance and servicing) (§ 401.2(c)(8)). (7) By any supplier of durable medical equipment, including a supplier of prosthetic devices, prosthetics, orthotics, or supplies, knowingly and willfully failing to make refunds in a timely manner to Medicare beneficiaries for services billed other than on an assignment-related basis if— (i) The supplier does not possess a Medicare supplier number; (ii) The service is denied in advance; or (iii) The service is determined not to be medically necessary or reasonable (§ 402.1(c)(10)). (8) Knowingly and willfully billing or collecting for any services on other than an assignment-related basis for a person or entity specified in sections 1834(k)(6), 1834(l)(6), or 1842(b)(18)(B) (§ 402.1(c)(11), (c)(31), or (c)(32)). (9) By any physician, knowingly and willfully presenting, or causing to be presented, a claim or bill for an assistant at cataract surgery performed on or after March 1, 1987 for which payment may not be made because of section 1862(a)(15) (§ 402.1(c)(12)). (10) By any nonparticipating physician who does not accept payment on an assignment-related basis, knowingly and willfully failing to refund on a timely basis any amounts collected for services that are not reasonable or medically necessary or are of poor quality, in accordance with section 1842(l)(1)(A) (§ 402.1(c)(13)). (11) By any nonparticipating physician, who does not accept payment for an elective surgical procedure on an assignment-related basis and whose charge is at least $500, knowingly and willfully failing to— (i) Disclose the information required by section 1842(m)(1) concerning charges and coinsurance amounts; and (ii) Refund on a timely basis any amount collected for the procedure in excess of the charges recognized and approved by the Medicare program (§ 402.1(c)(14)). (12) By any physician, in repeated cases, knowingly and willfully billing one or more beneficiaries, for purchased diagnostic tests, any amount other than the payment amount specified in section 1842(n)(1)(A) or section 1842(n)(1)(B) (§ 402.1(c)(15)). (13) By any nonparticipating physician, supplier, or other person that furnishes physicians' services and does not accept payment on an assignment-related basis— (i) Knowingly and willfully billing or collecting in excess of the limiting charge (as defined in section 1843(g)(2)) on a repeated basis; or (ii) Failing to make an adjustment or refund on a timely basis as required by section 1848(g)(1)(A) (iii) or (iv) (§ 402.1(c)(17)). (14) Knowingly and willfully billing for State plan approved physicians' services on other than an assignment-related basis for a Medicare beneficiary who is also eligible for Medicaid (§ 402.1(c)(18)). (15) By any supplier of durable medical equipment, including suppliers of prosthetic devices, prosthetics, orthotics, or supplies, knowingly and willfully failing to make refunds in a timely manner to Medicare beneficiaries for services billed on an assignment-related basis if— (i) The supplier did not possess a Medicare supplier number; (ii) The service is denied in advance; or (iii) The service is determined not to be medically necessary or reasonable (§ 402.1(c)(23)). <CITA>[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 402.109</SECTNO> <SUBJECT>Statistical sampling.</SUBJECT> (a) <E T="03">Purpose.</E> CMS or OIG may introduce the results of a statistical sampling study to show the number and amount of claims subject to sanction under this part that the respondent presented or caused to be presented. (b) <E T="03">Prima facie evidence.</E> The results of the statistical sampling study, if based upon an appropriate sampling and computed by valid statistical methods, constitute prima facie evidence of the number and amount of claims or requests for payment subject to sanction under § 402.1. (c) <E T="03">Burden of proof.</E> Once CMS or OIG has made a prima facie case, the burden is on the respondent to produce evidence reasonably calculated to rebut the findings of the statistical <PRTPAGE P="34"/>sampling study. CMS or OIG then has the opportunity to rebut this evidence. </SECTION> <SECTION> <SECTNO>§ 402.111</SECTNO> <SUBJECT>Factors considered in determinations regarding the amount of penalties and assessments.</SUBJECT> (a) <E T="03">Basic factors.</E> In determining the amount of any penalty or assessment, CMS or OIG takes into account the following: (1) The nature of the claim, request for payment, or information given and the circumstances under which it was presented or given. (2) The degree of culpability, history of prior offenses, and financial condition of the person submitting the claim or request for payment or giving the information. (3) The resources available to the person submitting the claim or request for payment or giving the information. (4) Such other matters as justice may require. (b) <E T="03">Criteria to be considered.</E> As guidelines for taking into account the factors listed in paragraph (a) of this section, CMS or OIG considers the following circumstances: (1) <E T="03">Aggravating circumstances of the incident.</E> An aggravating circumstance is any of the following: (i) The services or incidents were of several types, occurring over a lengthy period of time. (ii) There were many of these services or incidents or the nature and circumstances indicate a pattern of claims or requests for payment for these services or a pattern of incidents. (iii) The amount claimed or requested for these services was substantial. (iv) Before the incident or presentation of any claim or request for payment subject to imposition of a civil money penalty, the respondent was held liable for criminal, civil, or administrative sanctions in connection with a program covered by this part or any other public or private program of payment for medical services. (v) There is proof that a respondent engaged in wrongful conduct, other than the specific conduct upon which liability is based, relating to government programs or in connection with the delivery of a health care service. (The statute of limitations governing civil money penalty proceedings does not apply to proof of other wrongful conduct as an aggravating circumstance.) (2) <E T="03">Mitigating circumstances.</E> The following circumstances are mitigating circumstances: (i) All the services or incidents subject to a civil money penalty were few in number and of the same type, occurred within a short period of time, and the total amount claimed or requested for the services was less than $1,000. (ii) The claim or request for payment for the service was the result of an unintentional and unrecognized error in the process of presenting claims or requesting payment and the respondent took corrective steps promptly after discovering the error. (iii) Imposition of the penalty or assessment without reduction would jeopardize the ability of the respondent to continue as a health care provider. (3) <E T="03">Other matters as justice may require.</E> Other circumstances of an aggravating or mitigating nature are taken into account if, in the interests of justice, they require either a reduction of the penalty or assessment or an increase in order to ensure the achievement of the purposes of this part. (c) <E T="03">Effect of aggravating or mitigating circumstances.</E> In determining the amount of the penalty and assessment to be imposed for every service or incident subject to a determination under § 402.1(c)— (1) If there are substantial or several mitigating circumstances, the aggregate amount of the penalty and assessment is set at an amount sufficiently below the maximum permitted by §§ 402.105(a) and 402.107 to reflect that fact. (2) If there are substantial or several aggravating circumstances, the aggregate amount of the penalty and assessment is set at an amount at or sufficiently close to the maximum permitted by §§ 402.105(a) and 402.107 to reflect that fact. (d)(1) The standards set forth in this section are binding, except to the extent that their application would result in imposition of an amount that would exceed limits imposed by the United States Constitution.<PRTPAGE P="35"/> (2) The amount imposed is not less than the approximate amount required to fully compensate the United States, or any State, for its damages and costs, tangible and intangible, including but not limited to the costs attributable to the investigation, prosecution, and administrative review of the case. (3) Nothing in this section limits the authority of CMS or OIG to settle any issue or case as provided by § 402.19 or to compromise any penalty and assessment as provided by § 402.115. </SECTION> <SECTION> <SECTNO>§ 402.113</SECTNO> <SUBJECT>When a penalty and assessment are collectible.</SUBJECT> A civil money penalty and assessment become collectible after the earliest of the following: (a) Sixty days after the respondent receives CMS's or OIG's notice of proposed determination under § 402.7, if the respondent has not requested a hearing before an ALJ. (b) Immediately after the respondent abandons or waives his or her appeal right at any administrative level. (c) Thirty days after the respondent receives the ALJ's decision imposing a civil money penalty or assessment under § 1005.20(d) of this title, if the respondent has not requested a review before the DAB. (d) If the DAB grants an extension of the period for requesting the DAB's review, the day after the extension expires if the respondent has not requested the review. (e) Immediately after the ALJ's decision denying a request for a stay of the effective date under § 1005.22(b) of this title. (f) If the ALJ grants a stay under § 1005.22(b) of this title, immediately after the judicial ruling is completed. (g) Sixty days after the respondent receives the DAB's decision imposing a civil money penalty if the respondent has not requested a stay of the decision under § 1005.22(b) of this title. </SECTION> <SECTION> <SECTNO>§ 402.115</SECTNO> <SUBJECT>Collection of penalty or assessment.</SUBJECT> (a) Once a determination by HHS has become final, CMS is responsible for the collection of any penalty or assessment. (b) The General Counsel may compromise a penalty or assessment imposed under this part, after consultation with CMS or OIG, and the Federal government may recover the penalty or assessment in a civil action brought in the United States district court for the district where the claim was presented or where the respondent resides. (c) The United States or a State agency may deduct the amount of a penalty and assessment when finally determined, or the amount agreed upon in compromise, from any sum then or later owing to the respondent. (d) Matters that were raised or that could have been raised in a hearing before an ALJ or in an appeal under section 1128A(e) of the Act may not be raised as a defense in a civil action by the United States to collect a penalty under this part. </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart C—Exclusions [Reserved]</RESERVED> </SUBPART> </PART> <PART> <EAR>Pt. 403</EAR> <HD SOURCE="HED">PART 403—SPECIAL PROGRAMS AND PROJECTS</HD> <CONTENTS> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Medicare Supplemental Policies</HD> <SECHD>Sec.</SECHD> <SECTNO>403.200</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTNO>403.201</SECTNO> <SUBJECT>State regulation of insurance policies.</SUBJECT> <SECTNO>403.205</SECTNO> <SUBJECT>Medicare supplement policy.</SUBJECT> <SECTNO>403.206</SECTNO> <SUBJECT>General standards for Medicare supplemental policies.</SUBJECT> <SECTNO>403.210</SECTNO> <SUBJECT>NAIC model standards.</SUBJECT> <SECTNO>403.215</SECTNO> <SUBJECT>Loss ratio standards.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">State Regulatory Programs</HD> <SECTNO>403.220</SECTNO> <SUBJECT>Supplemental Health Insurance Panel.</SUBJECT> <SECTNO>403.222</SECTNO> <SUBJECT>State with an approved regulatory program.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Voluntary Certification Program: General Provisions</HD> <SECTNO>403.231</SECTNO> <SUBJECT>Emblem.</SUBJECT> <SECTNO>403.232</SECTNO> <SUBJECT>Requirements and procedures for obtaining certification.</SUBJECT> <SECTNO>403.235</SECTNO> <SUBJECT>Review and certification of policies.</SUBJECT> <SECTNO>403.239</SECTNO> <SUBJECT>Submittal of material to retain certification.</SUBJECT> <SECTNO>403.245</SECTNO> <SUBJECT>Loss of certification.</SUBJECT> <SECTNO>403.248</SECTNO> <SUBJECT>Administrative review of CMS determinations.</SUBJECT> </SUBJGRP> <SUBJGRP> <PRTPAGE P="36"/> <HD SOURCE="HED">Voluntary Certification Program: Loss Ratio Provisions</HD> <SECTNO>403.250</SECTNO> <SUBJECT>Loss ratio calculations: General provisions.</SUBJECT> <SECTNO>403.251</SECTNO> <SUBJECT>Loss ratio date and time frame provisions.</SUBJECT> <SECTNO>403.253</SECTNO> <SUBJECT>Calculation of benefits.</SUBJECT> <SECTNO>403.254</SECTNO> <SUBJECT>Calculation of premiums.</SUBJECT> <SECTNO>403.256</SECTNO> <SUBJECT>Loss ratio supporting data.</SUBJECT> <SECTNO>403.258</SECTNO> <SUBJECT>Statement of actuarial opinion.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Recognition of State Reimbursement Control Systems</HD> <SECTNO>403.300</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> <SECTNO>403.302</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>403.304</SECTNO> <SUBJECT>Minimum requirements for State systems—discretionary approval.</SUBJECT> <SECTNO>403.306</SECTNO> <SUBJECT>Additional requirements for State systems—mandatory approval.</SUBJECT> <SECTNO>403.308</SECTNO> <SUBJECT>State systems under demonstration projects—mandatory approval.</SUBJECT> <SECTNO>403.310</SECTNO> <SUBJECT>Reduction in payments.</SUBJECT> <SECTNO>403.312</SECTNO> <SUBJECT>Submittal of application.</SUBJECT> <SECTNO>403.314</SECTNO> <SUBJECT>Evaluation of State systems.</SUBJECT> <SECTNO>403.316</SECTNO> <SUBJECT>Reconsideration of certain denied applications.</SUBJECT> <SECTNO>403.318</SECTNO> <SUBJECT>Approval of State systems.</SUBJECT> <SECTNO>403.320</SECTNO> <SUBJECT>CMS review and monitoring of State systems.</SUBJECT> <SECTNO>403.321</SECTNO> <SUBJECT>State systems for hospital outpatient services.</SUBJECT> <SECTNO>403.322</SECTNO> <SUBJECT>Termination of agreements for Medicare recognition of State systems.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart D [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Beneficiary Counseling and Assistance Grants</HD> <SECTNO>403.500</SECTNO> <SUBJECT>Basis, scope, and definition.</SUBJECT> <SECTNO>403.501</SECTNO> <SUBJECT>Eligibility for grants.</SUBJECT> <SECTNO>403.502</SECTNO> <SUBJECT>Availability of grants.</SUBJECT> <SECTNO>403.504</SECTNO> <SUBJECT>Number and size of grants.</SUBJECT> <SECTNO>403.508</SECTNO> <SUBJECT>Limitations.</SUBJECT> <SECTNO>403.510</SECTNO> <SUBJECT>Reporting requirements.</SUBJECT> <SECTNO>403.512</SECTNO> <SUBJECT>Administration.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart F [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Religious Nonmedical Health Care Institutions—Benefits, Conditions of Participation, and Payment</HD> <SECTNO>403.700</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> <SECTNO>403.702</SECTNO> <SUBJECT>Definitions and terms.</SUBJECT> <SECTNO>403.720</SECTNO> <SUBJECT>Conditions for coverage.</SUBJECT> <SECTNO>403.724</SECTNO> <SUBJECT>Valid election requirements.</SUBJECT> <SECTNO>403.730</SECTNO> <SUBJECT>Condition of participation: Patient rights.</SUBJECT> <SECTNO>403.732</SECTNO> <SUBJECT>Condition of participation: Quality assessment and performance improvement.</SUBJECT> <SECTNO>403.734</SECTNO> <SUBJECT>Condition of participation: Food services.</SUBJECT> <SECTNO>403.736</SECTNO> <SUBJECT>Condition of participation: Discharge planning.</SUBJECT> <SECTNO>403.738</SECTNO> <SUBJECT>Condition of participation: Administration.</SUBJECT> <SECTNO>403.740</SECTNO> <SUBJECT>Condition of participation: Staffing.</SUBJECT> <SECTNO>403.742</SECTNO> <SUBJECT>Condition of participation: Physical environment.</SUBJECT> <SECTNO>403.744</SECTNO> <SUBJECT>Condition of participation: Life safety from fire.</SUBJECT> <SECTNO>403.746</SECTNO> <SUBJECT>Condition of participation: Utilization review.</SUBJECT> <SECTNO>403.750</SECTNO> <SUBJECT>Estimate of expenditures and adjustments.</SUBJECT> <SECTNO>403.752</SECTNO> <SUBJECT>Payment provisions.</SUBJECT> <SECTNO>403.754</SECTNO> <SUBJECT>Monitoring expenditure level.</SUBJECT> <SECTNO>403.756</SECTNO> <SUBJECT>Sunset provision.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Medicare-Endorsed Prescription Drug Card Assistance Initiative</HD> <SECTNO>403.800</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SECTNO>403.802</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>403.804</SECTNO> <SUBJECT>General rules for Medicare endorsement.</SUBJECT> <SECTNO>403.806</SECTNO> <SUBJECT>Requirements for eligibility for endorsement.</SUBJECT> <SECTNO>403.807</SECTNO> <SUBJECT>Application process.</SUBJECT> <SECTNO>403.808</SECTNO> <SUBJECT>Agreement terms and conditions.</SUBJECT> <SECTNO>403.810</SECTNO> <SUBJECT>Administrative consortium responsibilities and oversight.</SUBJECT> <SECTNO>403.811</SECTNO> <SUBJECT>Beneficiary enrollment.</SUBJECT> <SECTNO>403.812</SECTNO> <SUBJECT>Withdrawal of endorsement.</SUBJECT> <SECTNO>403.820</SECTNO> <SUBJECT>Oversight and beneficiary education. </SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). <EXT-XREF HREF="20020904" REFID="14">Link to an amendment published at 67 FR 56682, Sept. 4, 2002.</EXT-XREF> </AUTH> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Medicare Supplemental Policies</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 47 FR 32400, July 26, 1982, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 403.200</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Provisions of the legislation.</E> This subpart implements, in part, section 1882 of the Social Security Act. The intent of that section is to enable Medicare beneficiaries to identify Medicare supplemental policies that do not duplicate Medicare, and that provide adequate, fairly priced protection against expenses not covered by Medicare. The legislation establishes certain standards for Medicare supplemental policies and provides two methods for informing Medicare beneficiaries which policies meet those standards:<PRTPAGE P="37"/> (1) Through a State approved program, that is, a program that a Supplemental Health Insurance Panel determines to meet certain minimum requirements for the regulation of Medicare supplemental policies; and (2) In a State without an approved program, through certification by the Secretary of policies voluntarily submitted by insuring organizations for review against the standards. (b) <E T="03">Scope of subpart.</E> This subpart sets forth the standards and procedures CMS will use to implement the voluntary certification program. </SECTION> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 403.201</SECTNO> <SUBJECT>State regulation of insurance policies.</SUBJECT> (a) The provisions of this subpart do not affect the right of a State to regulate policies marketed in that State. (b) Approval of a policy under the voluntary certification program, as provided for in § 403.235(b), does not authorize the insuring organization to market a policy that does not conform to applicable State laws and regulations. </SECTION> <SECTION> <SECTNO>§ 403.205</SECTNO> <SUBJECT>Medicare supplemental policy.</SUBJECT> (a) Except as specified in paragraph (d) of this section, <E T="03">Medicare supplemental policy</E> (policy) means a health insurance policy or other health benefit plan— (1) That a private entity offers to a Medicare beneficiary; and (2) That is primarily designed, or is advertised, marketed, or otherwise purported to provide payment for expenses incurred for services and items that are not reimbursed under the Medicare program because of deductibles, coinsurance, or other limitations under Medicare. (b) Unless otherwise specified in this subpart, the term <E T="03">policy</E> includes both policy form and policy. (1) <E T="03">Policy form</E> means the form of health insurance contract that is approved by and on file with the State agency for the regulation of insurance. (2) <E T="03">Policy</E> means the contract— (i) Issued under the policy form; and (ii) Held by the policyholder. (c) Medicare supplemental policy includes the following— (1) An individual policy. (2) A group policy. (d) Medicare supplemental policy does not include a Medicare+Choice plan or any of the following health insurance policies or health benefit plans: (1) A policy or plan of one or more employers for employees, former employees, or any combination thereof. (2) A policy or plan of one or more labor organizations for members, former members, or any combination thereof. (3) A policy or plan of the trustees of a fund established by one or more labor organizations, one or more employers, or any combination, for any one or combination of the following— (i) Employees. (ii) Former employees. (iii) Members. (iv) Former members. (4) A policy or plan of a profession, trade, or occupational association, if the association— (i) Is composed of individuals all of whom are actively engaged in the same profession, trade, or occupation; (ii) Has been maintained in good faith for a purpose other than obtaining insurance; and (iii) Has been in existence for at least two years before the date of its initial offering of a Medicare supplemental health insurance policy to its members. (5) For purposes of the voluntary certification program, a policy issued to an employee or to a member of a labor organization as an addition to a franchise plan (a plan that enables members of the same entity to purchase an individual policy marketed to them under group underwriting procedures), if the plan is in existence on July 1, 1982. <CITA>[47 FR 32400, July 26, 1982, as amended at 63 FR 35066, June 26, 1998]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.206</SECTNO> <SUBJECT>General standards for Medicare supplemental policies.</SUBJECT> (a) For purposes of the voluntary certification program described in this subpart, a policy must meet— (1) The National Association of Insurance Commissioners (NAIC) model standards as defined in § 405.210; and<PRTPAGE P="38"/> (2) The loss ratio standards specified in § 403.215. (b) Except as specified in paragraph (c) of this section, the standards specified in paragraph (a) of this section must be met in a single policy. (c) In the case of a nonprofit hospital or a medical association where State law prohibits the inclusion of all benefits in a single policy, the standards specified in paragraph (a) of the section must be met in two or more policies issued in conjunction with one another. </SECTION> <SECTION> <SECTNO>§ 403.210</SECTNO> <SUBJECT>NAIC model standards.</SUBJECT> (a) <E T="03">NAIC model standards</E> means the National Association of Insurance Commissioners (NAIC) “Model Regulation to Implement the Individual Accident and Insurance Minimum Standards Act” (as amended and adopted by the NAIC on June 6, 1979, as it applies to Medicare supplemental policies). Copies of the NAIC model standards can be purchased from the National Association of Insurance Commissioners at 350 Bishops Way, Brookfield, Wisconsin 53004, and from the NIARS Corporation, 318 Franklin Avenue, Minneapolis, Minnesota 55404. (b) The policy must comply with the provisions of the NAIC model standards, except as follows— (1) <E T="03">Policy</E>, for purposes of this paragraph, means individual and group policy, as specified in § 403.205. The NAIC model standards limit “policy” to individual policy. (2) The policy must meet the loss ratio standards specified in § 403.215. <CITA>[47 FR 32400, July 26, 1982; 49 FR 44472, Nov. 7, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.215</SECTNO> <SUBJECT>Loss ratio standards.</SUBJECT> (a) The policy must be expected to return to the policyholders, in the form of aggregate benefits provided under the policy— (1) At least 75 percent of the aggregate amount of premiums in the case of group policies; and (2) At least 60 percent of the aggregate amount of premiums in the case of individual policies. (b) For purposes of loss ratio requirements, policies issued as a result of solicitation of individuals through the mail or by mass media advertising are considered individual policies. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">State Regulatory Programs</HD> <SECTION> <SECTNO>§ 403.220</SECTNO> <SUBJECT>Supplemental Health Insurance Panel.</SUBJECT> (a) <E T="03">Membership.</E> The Supplemental Health Insurance Panel (Panel) consists of— (1) The Secretary or a designee, who serves as chairperson, and (2) Four State Commissioners or Superintendents of Insurance appointed by the President. (The terms Commissioner or Superintendent of Insurance include persons of similar rank.) (b) <E T="03">Functions.</E> (1) The Panel determines whether or not a State regulatory program for Medicare supplemental health insurance policies meets and continues to meet minimum requirements specified in section 1882 of the Social Security Act. (2) The chairperson of the Panel informs the State Commissioners and Superintendents of Insurance of all determinations made under paragraph (b)(1) of this section. </SECTION> <SECTION> <SECTNO>§ 403.222</SECTNO> <SUBJECT>State with an approved regulatory program.</SUBJECT> (a) A State has an approved regulatory program if the Panel determines that the State has in effect under State law a regulatory program that provides for the application of standards, with respect to each Medicare supplemental policy issued in that State, that are equal to or more stringent than those specified in section 1882 of the Social Security Act. (b) <E T="03">Policy issued in that State</E> means— (1) A group policy, if the holder of the master policy resides in that State; and (2) An individual policy, if the policy is— (i) Issued in that State; or (ii) Issued for delivery in that State. (c) A policy issued in a State with an approved regulatory program is considered to meet the NAIC model standards in § 403.210 and loss ratio standards in § 403.215. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Voluntary Certification Program: General Provisions</HD> <SECTION> <SECTNO>§ 403.231</SECTNO> <SUBJECT>Emblem.</SUBJECT> (a) The emblem is a graphic symbol, approved by HHS, that indicates that <PRTPAGE P="39"/>CMS has certified a policy as meeting the requirements of the voluntary certification program, specified in § 403.232. (b) Unless prohibited by the State in which the policy is marketed, the insuring organization may display the emblem on policies certified under the voluntary certification program. (c) The manner in which the emblem may be displayed and the conditions and restrictions relating to its use will be stated in the letter with which CMS notifies the insuring organization that a policy has been certified. The insuring organization must comply with these conditions and restrictions. (d) If a certified policy is issued in a State that later has an approved regulatory program, as provided for in § 403.222, the insuring organization may display the emblem on the policy until the earliest of the following— (1) When prohibited by State law or regulation. (2) When the policy no longer meets the requirements for Medicare supplemental policies specified in § 403.206. (3) The date the insuring organization would be required to submit material to CMS for annual review in order to retain certification, if the State did not have an approved program (see § 403.239). </SECTION> <SECTION> <SECTNO>§ 403.232</SECTNO> <SUBJECT>Requirements and procedures for obtaining certification.</SUBJECT> (a) To be certified by CMS, a policy must meet— (1) The NAIC model standards specified in § 403.210; (2) The loss ratio standards specified in § 403.215; and (3) Any State requirements applicable to a policy— (i) Issued in that State; or (ii) Marketed in that State. (b) An insuring organization requesting certification of a policy must submit the following to CMS for review— (1) A copy of the policy form (including all the documents that would constitute the contract of insurance that is proposed to be marketed as a certified policy). (2) A copy of the application form including all attachments. (3) A copy of the uniform certificate issued under a group policy. (4) A copy of the outline of coverage, in the form prescribed by the NAIC model standards. (5) A copy of the Medicare supplement buyers' guide to be provided to all applicants if the buyers' guide is not the CMS/NAIC buyers' guide. (6) A statement of when and how the outline of coverage and the buyers' guide will be delivered and copies of applicable receipt forms. (7) A copy of the notice of replacement and statement as to when and how that notice will be delivered. (8) A list of States in which the policy is authorized for sale. If the policy was approved under a deemer provision in any State, the conditions involved must be specified. (9) A copy of the loss ratio calculations, as specified in § 403.250. (10) Loss ratio supporting data, as specified in § 403.256. (11) A statement of actuarial opinion, as specified in § 403.258. (12) A statement that the insuring organization will notify the policyholders in writing, within the period of time specified in § 403.245(c), if the policy is identified as a certified policy at the time of sale and later loses certification. (13) A signed statement in which the president of the insuring organization, or a designee, attests that— (i) The policy meets the requirements specified in paragraph (a) of this section; and (ii) The information submitted to CMS for review is accurate and complete and does not misrepresent any material fact. </SECTION> <SECTION> <SECTNO>§ 403.235</SECTNO> <SUBJECT>Review and certification of policies.</SUBJECT> (a) CMS will review policies that the insuring organization voluntarily submits, except that CMS will not review a policy issued in a State with an approved regulatory program under § 403.222. (b) If the requirements specified in § 403.232 are met, CMS will— (1) Certify the policy; and (2) Authorize the insuring organization to display the emblem on the policy, as provided for in § 403.231. (c) If CMS certifies a policy, it will inform all State Commissioners and <PRTPAGE P="40"/>Superintendents of Insurance of that fact. </SECTION> <SECTION> <SECTNO>§ 403.239</SECTNO> <SUBJECT>Submittal of material to retain certification.</SUBJECT> (a) CMS certification of a policy that continues to meet the standards will remain in effect, if the insuring organization files the following material with CMS no later than the date specified in paragraph (b) or (c) of this section— (1) Any changes in the material, specified in § 403.232(b), that was submitted for previous certification. (2) The loss ratio supporting data specified in § 403.256(b). (3) A signed statement in which the president of the insuring organization, or a designee, attests that— (i) The policy continues to meet the requirements specified in § 403.232(a); and (ii) The information submitted to CMS for review is accurate and complete and does not misrepresent any material fact. (b) Except as specified in paragraph (c) of this section, the insuring organization must file the material with CMS no later than June 30 of each year. The first time the insuring organization must file the material is no later than June 30 of the calendar year that follows the year in which CMS— (1) Certifies a new policy; or (2) Certifies a policy that lost certification as provided in § 403.245. (c) If the loss ratio calculation period, used to calculate the expected loss ratio for the last actuarial certification submitted to CMS, ends before the June 30 date of paragraph (b) of this section, the insuring organization must file the material with CMS no later then the last day of that rate calculation period. </SECTION> <SECTION> <SECTNO>§ 403.245</SECTNO> <SUBJECT>Loss of certification.</SUBJECT> (a) A policy loses certification if— (1) The insuring organization withdraws the policy from the voluntary certification program; or (2) CMS determines that— (i) The policy fails to meet the requirements specified in § 403.232(a); or (ii) The insuring organization has failed to meet the requirements for submittal of material specified in § 403.239. (b) If a policy loses its certification, CMS will inform all State Commissioners and Superintendents of Insurance of that fact. (c) If a policy that displays the emblem, or that has been marketed as a certified policy without the emblem, loses certification, the insuring organization must notify each holder of the policy, or of a certificate issued under the policy, of that fact. The notice must be in writing and sent by the earlier of— (1) The date of the first regular premium notice after the date the policy loses its certification; or (2) 60 days after the date the policy loses its certification. </SECTION> <SECTION> <SECTNO>§ 403.248</SECTNO> <SUBJECT>Administrative review of CMS determinations.</SUBJECT> (a) This section provides for administrative review if CMS determines— (1) Not to certify a policy; or (2) That a policy no longer meets the standards for certification. (b) If CMS makes a determination specified in paragraph (a) of this section, it will send a notice to the insuring organization containing the following information: (1) That CMS has made such a determination. (2) The reasons for the determination. (3) That the insuring organization has 30 days from the date of the notice to— (i) Request, in writing, an administrative review of the CMS determination; and (ii) Submit additional information to CMS for review. (4) That, if the insuring organization requests an administrative review, CMS will conduct the review, as provided for in paragraph (c) of this section. (5) That, in a case involving loss of certification, the CMS determination will go into effect 30 days from the date of the notice, unless the insuring organization requests an administrative review. If the insuring organization requests an administrative review, the policy retains its certification until CMS makes a final determination.<PRTPAGE P="41"/> (c) If the insuring organization requests an administrative review, CMS will conduct the review as follows— (1) A CMS official, not involved in the initial CMS determination, will initiate and complete an administrative review within 90 days of the date of the notice provided for in paragraph (b) of this section. (2) The official will consider— (i) The original material submitted to CMS for review, as specified in § 403.232(b) or § 403.239(a); and (ii) Any additional information, that the insuring organization submits to CMS. (3) Within 15 days after the administrative review is completed, CMS will inform the insuring organization in writing of the final decision, with an explanation of the final decision. (4) If the final decision is that a policy lose its certification, the loss of certification will go into effect 15 days after the date of CMS's notice informing the insuring organization of the final decision. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Voluntary Certification Program: Loss Ratio Provisions</HD> <SECTION> <SECTNO>§ 403.250</SECTNO> <SUBJECT>Loss ratio calculations: General provisions.</SUBJECT> (a) <E T="03">Basic formula.</E> The expected loss ratio is calculated by determining the ratio of benefits to premiums. (b) <E T="03">Calculations.</E> The insuring organization must calculate loss ratios according to the provisions of §§ 403.251, 403.253, and 403.254. </SECTION> <SECTION> <SECTNO>§ 403.251</SECTNO> <SUBJECT>Loss ratio date and time frame provisions.</SUBJECT> (a) <E T="03">Initial calculation date</E> means the first date of the period that the insuring organization uses to calculate the policy's expected loss ratio. (1) The initial calculation date may be before, the same as, or after the date the insuring organization sends the policy to CMS for review, except— (2) The initial calculation date must not be earlier than January 1 of the calendar year in which the policy is sent to CMS. (b) <E T="03">Loss ratio calculation period</E> means the period beginning with the initial calculation date and ending with the last day of the period for which the insuring organization calculates the policy's scale of premiums. (c) To calculate “present values”, the insuring organization may ignore discounting (an actuarial procedure that provides for the impact of a variety of factors, such as lapse of policies) for loss ratio calculation periods not exceeding 12 months. </SECTION> <SECTION> <SECTNO>§ 403.253</SECTNO> <SUBJECT>Calculation of benefits.</SUBJECT> (a) <E T="03">General provisions.</E> (1) Except as provided for in paragraph (a)(2) of this section, calculate the amount of “benefits” by— (i) Adding the present values on the initial calculation date of— (A) Expected incurred benefits in the loss ratio calculation period, to— (B) The total policy reserve at the last day of the loss ratio calculation period: and (ii) Subtracting the total policy reserve on the initial calculation date from the sum of these values. (2) To calculate the amount of “benefits” in the case of community or pool rated individual or group policies rerated on an annual basis, calculate the expected incurred benefits in the loss ratio calculation period. (b) <E T="03">Calculation of total policy reserve—</E>(1) <E T="03">Option for calculation.</E> The insuring organization must calculate “total policy reserve” according to the provisions of paragraph (b) (2) or (3) of this section. (2) <E T="03">Total policy reserve: Federal provisions.</E> (i) “Total policy reserve” means the sum of— (A) Additional reserve; and (B) The reserve for future contingent benefits. (ii) <E T="03">Additional reserve</E> means the amount calculated on a net level reserve basis, using appropriate values to account for lapse, mortality, morbidity, and interest, that on the valuation date represents— (A) The present value of expected incurred benefits over the loss ratio calculation period; less— (B) The present value of expected net premiums over the loss ratio calculation period. (iii) <E T="03">Net premium</E> means the level portion of the gross premium used in calculating the additional reserve. On the day the policy is issued, the present <PRTPAGE P="42"/>value of the series of those portions equals the present value of the expected incurred claims over the period that the gross premiums are computed to provide coverage. (iv) <E T="03">Reserve for future contingent benefits</E> means the amounts, not elsewhere included, that provide for the extension of benefits after insurance coverage terminates. These benefits— (A) Are predicated on a health condition existing on the date coverage ends; (B) Accrue after the date coverage ends; and (C) Are payable after the valuation date. (3) <E T="03">Total policy reserve: State provisions.</E> “Total policy reserve” means the total policy reserve calculated according to appropriate State law or regulation. </SECTION> <SECTION> <SECTNO>§ 403.254</SECTNO> <SUBJECT>Calculation of premiums.</SUBJECT> (a) <E T="03">General provisions.</E> To calculate the amount of “premiums”, calculate the present value on the initial calculation date of expected earned premiums for the loss ratio calculation period. (b) <E T="03">Specific provisions.</E> (1) <E T="03">Earned premium</E> for a given period means— (i) Written premiums for the period; plus— (ii) The total premium reserve at the beginning of the period; less— (iii) The total premium reserve at the end of the period. (2) <E T="03">Written premiums in a period</E> means— (i) Premiums collected in that period; plus— (ii) Premiums due and uncollected at the end of that period; less— (iii) Premiums due and uncollected at the beginning of that period. (3) <E T="03">Total premium reserve</E> means the sum of— (i) The unearned premium reserve; (ii) The advance premium reserve; and (iii) The reserve for rate credits. (4) <E T="03">Unearned premium reserve</E> means the portion of gross premiums due that provide for days of insurance coverage after the valuation date. (5) <E T="03">Advance premium reserve</E> means premiums received by the insuring organization that are due after the valuation date. (6) <E T="03">Reserve for rate credits</E> means rate credits on a group policy that— (i) Accrue by the valuation date of the policy; and (ii) Are paid or credited after the valuation date. </SECTION> <SECTION> <SECTNO>§ 403.256</SECTNO> <SUBJECT>Loss ratio supporting data.</SUBJECT> (a) For purposes of requesting CMS certification under § 403.232, the insuring organization must submit the following loss ratio data to CMS for review— (1) A statement of why the policy is to be considered, for purposes of the loss ratio standards, an individual or a group policy. (2) The earliest age at which policyholders can purchase the policy. (3) The general marketing method and the underwriting criteria used for the selection of applicants to whom coverage is offered. (4) What policies are to be included under the one policy form, by the dates the policies are issued. (5) The loss ratio calculation period. (6) The scale of premiums for the loss ratio calculation period. (7) The expected level of earned premiums in the loss ratio calculation period. (8) The expected level of incurred claims in the loss ratio calculation period. (9) A description of how the following assumptions were used in calculating the loss ratio. (i) Morbidity. (ii) Mortality. (iii) Lapse. (iv) Assumed increases in the Medicare deductible. (v) Impact of inflation on reimbursement per service. (vi) Interest. (vii) Expected distribution, by age and sex, of persons who will purchase the policy in the coming year. (viii) Expected impact on morbidity by policy duration of— (A) The process used to select insureds from among those that apply for a policy; and (B) Pre-existing condition clauses in the policy.<PRTPAGE P="43"/> (b) For purposes of requesting continued CMS certification under § 403.239(a), the insuring organization must submit the following to CMS— (1) A description of all changes in the loss ratio data, specified in paragraph (a) of this section, that occurred since CMS last reviewed the policy. (2) The past loss ratio experience for the policy, including the experience of all riders and endorsements issued under the policy. The loss ratio experience data must include earned premiums, incurred claims, and total policy reserves that the insuring organization calculates— (i) For all years of issue combined; and (ii) Separately for each calendar year since CMS first certified the policy. </SECTION> <SECTION> <SECTNO>§ 403.258</SECTNO> <SUBJECT>Statement of actuarial opinion.</SUBJECT> (a) For purposes of certification requests submitted under § 403.232(b) and subsequent review as specified in § 403.239(a), <E T="03">statement of actuarial opinion</E> means a signed declaration in which a qualified actuary states that the assumptions used in calculating the expected loss ratio are appropriate and reasonable, taking into account actual policy experience, if any, and reasonable expectations. (b) <E T="03">Qualified actuary</E> means— (1) A member in good standing of the American Academy of Actuaries; or (2) A person who has otherwise demonstrated his or her actuarial competence to the satisfaction of the Commissioner or Superintendent of Insurance of the domiciliary State of the insuring organization. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Recognition of State Reimbursement Control Systems</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 51 FR 15492, Apr. 24, 1986, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 403.300</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> (a) <E T="03">Basis.</E> This subpart implements section 1886(c) of the Act, which authorizes payment for Medicare inpatient hospital services in accordance with a State's reimbursement control system rather than under the Medicare reimbursement principles as described in CMS's regulations and instructions. (b) <E T="03">Purpose.</E> Contained in this subpart are— (1) The basic requirements that a State reimbursement control system must meet in order to be approved by CMS; (2) A description of CMS's review and evaluation procedures; and (3) The conditions that apply if the system is approved. </SECTION> <SECTION> <SECTNO>§ 403.302</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart— <E T="03">Chief executive officer of a State</E> means the Governor of the State or the Governor's designee. <E T="03">Existing demonstration project</E> refers to demonstration projects approved by CMS under the authority of section 402(a) of the Social Security Amendments of 1967 (42 U.S.C. 1395b-1) or section 222(a) of the Social Security Amendments of 1972 (42 U.S.C. 1395b-1 (note)) and in effect on April 20, 1983 (the date of the enactment of Pub. L. 98-21 (Social Security Amendments of 1983)). <E T="03">Federal hospital</E> means a hospital that is administered by, or that is under exclusive contract with, the Department of Defense, the Veterans Administration, or the Indian Health Service. <E T="03">State system</E> or <E T="03">system</E> refers to a State reimbursement control system that is approved by CMS under the authority of section 1886(c) of the Act and that satisfies the requirements described in this subpart. </SECTION> <SECTION> <SECTNO>§ 403.304</SECTNO> <SUBJECT>Minimum requirements for State systems—discretionary approval.</SUBJECT> (a) <E T="03">Discretionary approval by CMS.</E> CMS may approve Medicare payments under a State system, if CMS determines that the system meets the requirements in paragraphs (b) and (c) of this section and, if applicable paragraph (d) of this section. (b) <E T="03">Requirements for State system.</E> (1) An application for approval of the system must be submitted to CMS by the Chief Executive Officer of the State. (2) The State system must apply to substantially all non-Federal acute care hospitals in the State.<PRTPAGE P="44"/> (3) All hospitals covered by the system must have and maintain a utilization and quality control review agreement with a Quality Improvement Organization, as required under section 1866(a)(1)(F) of the Act and § 466.78(a) of this chapter. (4) Federal hospitals must be excluded from the State system. (5) Nonacute care or specialty hospital (such as rehabilitation, psychiatric, or children's hospitals) may, at the option of the State, be excluded from the State system. (6) The State system must apply to at least 75 percent of all revenues or expenses— (i) For inpatient hospital services in the State; and (ii) For inpatient hospital services under the State's Medicaid plan. (7) Under the system, HMOs and competitive medical plans (CMPs), as defined by section 1876(b) of the Act and part 417 of this chapter, must be allowed to negotiate payment rates with hospitals. (8) The system must limit hospital charges for Medicare beneficiaries to deductibles, coinsurance or non-covered services. (9) Unless a waiver is granted by CMS under § 489.23 of this chapter, the system must prohibit payment, as required under section 1862(a)(14) of the Act and § 405.310(m) of this chapter, for nonphysician services provided to hospital inpatients under Part B of Medicare. (10) The system must require hospitals to submit Medicare cost reports or approved reports in lieu of Medicare cost reports as required. (11) The system must require— (i) Preparation, collection, or retention by the State of reports (such as financial, administrative, or statistical reports) that may be necessary, as determined by CMS, to review and monitor the State's assurances; and (ii) Submission of the reports to CMS upon request. (12) The system must provide hospitals an opportunity to appeal errors that they believe have been made in the determination of their payment rates. The system, if it is prospective may not permit providers to file administrative appeals that would result in a retroactive revision of prospectively determined payment rates. (c) <E T="03">Satisfactory assurances.</E> The State must provide to CMS satisfactory assurance as to the following: (1) The system provides for equitable treatment of hospital patients and hospital employees. (2) The system provides for equitable treatment of all entities that pay hospitals for inpatient hospital services, including Federal and State programs. Under the requirement, the following conditions must be met: (i) Both the Medicare and Medicaid programs must participate under the system. (ii) The State must assure equitable and uniform treatment under the system of third-party payors of inpatient hospital services in terms of opportunity. Equitable opportunity must include, but need not be limited to, participation in the system and availability of discounts. Criteria under which discounts are made available must be equitably and uniformly applied to all payors, except for discounts negotiated by HMOs and CMPs. Discounts available to HMOs and CMPs as result of their statutory right to negotiate payment rates independently of a State system, as described in paragraph (b)(7) of this section, need not be available to other payors. (iii) The State must assure that all third-party payors that participate under the system share in the system's risks and benefits. (3) The amount of Medicare payments made under the system over 36-month periods may not exceed the amount of Medicare payment that would otherwise have been made under the Medicare principles of reimbursement for Medicare items and services had the State system not been in effect. States must submit the assurance and supporting data as required by § 403.320 to document that the payment limit is not exceeded. States that have an existing Medicare demonstration project in effect on April 20, 1983, and that have requested approval of a State system under section 1886(c)(4) of the Act, may elect to have the effectiveness of the State system under this paragraph judged on the basis of the State system's rate of increase or inflation in <PRTPAGE P="45"/>Medicare inpatient hospital payments as compared to the national rate of increase or inflation for such payments during the three cost reporting periods of the hospitals in the State beginning on or after October 1, 1983. (d) <E T="03">Additional cost-effectiveness assurance.</E> If the assurances and supporting data required under paragraph (c)(3) of this section are insufficient to provide assurance satisfactory to CMS regarding the cost-effectiveness of a State system, the State may additionally submit one of the following assurances in order to meet the cost-effectiveness test: (1) <E T="03">State responsibility for excess payments.</E> The State must agree that each month Medicare intermediaries will disburse to the State's hospital Federal funds that in the aggregate equal no more than would have been disbursed in the absence of the State system. Any additional funds necessary to pay hospitals for Medicare services required by the State system will be paid to the intermediaries by the State. These additional amounts will be refunded to the State by the intermediaries to the extent that, in subsequent months, the State system requires a smaller aggregate payment for Medicare services than would have been paid in the absence of the State system. (2) <E T="03">Limitations on payments.</E> (i) The State must agree that if its projections exceed what Medicare would pay in any particular period, the State and CMS will establish and agreed upon payment schedule that will limit payments under the State system based on a predetermined percentage relationship between projected State payments and what payments would have been under Medicare. (ii) If deviation from the predetermined relationship described in paragraph (d)(2)(i) of this section occurs, the State must further agree that— (A) Medicare payments would be capped automatically at payment levels based on the rates used for the Medicare prospective payment system and the State would be required to pay the difference to individual hospitals in its system; or (B) The State may provide by legislation or legally binding regulations that any reduced payments to hospitals under the system that result from this cost-effectiveness assurance will constitute full and final payment for hospital services furnished to Medicare beneficiaries for the period covered by these reduced payments. </SECTION> <SECTION> <SECTNO>§ 403.306</SECTNO> <SUBJECT>Additional requirements for State systems—mandatory approval.</SUBJECT> (a) <E T="03">General policy</E>—(1) <E T="03">Mandatory approval.</E> HFCA will approve an application for Medicare reimbursement under a State system if the system meets all of the requirements of § 403.304 and of paragraph (b) of this section. (2) <E T="03">Exception.</E> CMS may approve an application if the State system meets all of the requirements of § 403.304 but only some of the requirements of paragraph (b) of this section. (b) <E T="03">Additional requirements</E>—(1) <E T="03">Operation of system.</E> The system must— (i) Be operated directly by the State or by entity designated under State law; (ii) Provide for payments to hospitals using a methodology under which— (A) Prospectively determined payment rates are established; and (B) Exceptions, adjustments, and methods for changes in methodology are set forth; (iii) Provide that a change by the State in the system that has the effect of materially changing payments to hospitals can take effect only upon 60 days notice to CMS and to the hospitals likely to be materially affected by the change and upon CMS's approval of the change. (2) <E T="03">Satisfactory assurances</E>—(i) <E T="03">Admissions practice.</E> The State must assure that the operation of the system will not result in any change in hospital admission practices that result in— (A) A significant reduction in the proportion of patients receiving hospital services covered under the system who have no third-party coverage and who are unable to pay for hospital services; (B) A significant reduction in the proportion of individuals admitted to hospitals for inpatient hospital services for which payment is less, or is likely to be less, than the anticipated charges for or cost of the services;<PRTPAGE P="46"/> (C) A refusal to admit patients who would be expected to require unusually costly or prolonged treatment for reasons other than those related to the appropriateness of the care available at the hospital; or (D) A refusal to provide emergency services to any person who is in need of emergency services, if the hospital provides the services. (ii) <E T="03">Consultation with local government officials.</E> The State must provide documentation that it has consulted with local government officials concerning the impact of the system on publicly owned or operated hospitals. </SECTION> <SECTION> <SECTNO>§ 403.308</SECTNO> <SUBJECT>State systems under demonstration projects—mandatory approval.</SUBJECT> CMS will approve an application from a State for a State system if— (a) The system was in effect prior to April 20, 1983 under an existing demonstration project; and (b) The minimum requirements and assurances for approval of a State system are met under § 403.304 (b)(1)-(10) and § 403.304(c), and, if appropriate § 403.304(d). </SECTION> <SECTION> <SECTNO>§ 403.310</SECTNO> <SUBJECT>Reduction in payments.</SUBJECT> (a) <E T="03">General rule.</E> If CMS determines that the satisfactory assurances required of a State under § 403.304(c) and, if applicable, § 403.304(d) have not been met, or will not be met, with respect to any 36-month period, CMS will reduce Medicare payments to individual hospitals being reimbursed under the State's system or, if applicable, under the Medicare payment system, in an amount equal to the amount by which the Medicare payments under the system exceed the amount of Medicare payments to such hospitals that otherwise would have been made not using the State system. The amount of the recoupment will include, when appropriate, interest charges computed in accordance with § 405.378 of this chapter. (b) <E T="03">Recoupment procedures.</E> The amount of the overpayment will be recouped on a proportionate basis from each of those hospitals that received payments under the State system that exceeded the payments they would have received under the Medicare payment system. Each hospital's share of the aggregate excess payment will be determined on the basis of a comparison of the hospital's proportionate share of the aggregate payment received under the State system that is in excess of what the aggregate payment would have been under the Medicare payment system. Recoupments may be accomplished by a hospital's direct payment to the Medicare program or by offsets to future payments made to the hospital. (c) <E T="03">Alternative recoupment procedures.</E> As an alternative to the recoupment procedures described in paragraph (b) of this section and subject to CMS's acceptance, the State may provide, by legislation or legally binding regulations, procedures for the recoupment of the amount of payments that exceed the amount of payments that otherwise would have been paid by Medicare if the State system had not been in effect. (d) <E T="03">Rule for existing Medicare demonstration projects.</E> In cases of existing Medicare demonstration projects where the expenditure test is to be applied by a rate of increase factor, the amount of the excess payment will be determined, for the three hospital cost reporting periods beginning before October 1, 1986, by a comparison of the State system's rate of increase to the national rate of increase. Recoupment of excessive payments will be assessed and recouped as described in this section. <CITA>[51 FR 15492, Apr. 24, 1986, as amended at 61 FR 63748, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.312</SECTNO> <SUBJECT>Submittal of application.</SUBJECT> The Chief Executive Officer of the State is responsible for— (a) Submittal of the application to CMS for approval; and (b) Supplying the assurances and necessary documentation as required under §§ 403.304 through 403.308. </SECTION> <SECTION> <SECTNO>§ 403.314</SECTNO> <SUBJECT>Evaluation of State systems.</SUBJECT> CMS will evaluate all State applications for approval of State systems and notify the State of its determination within 60 days. </SECTION> <SECTION> <PRTPAGE P="47"/> <SECTNO>§ 403.316</SECTNO> <SUBJECT>Reconsideration of certain denied applications.</SUBJECT> (a) <E T="03">Request for reconsideration.</E> If CMS denies an application for a State system, the State may request that CMS reconsider the denial if the State believes that its system meets all of the requirements for mandatory approval under §§ 403.304 and 403.306 or, in the case of a State with a system operating under an existing demonstration project, the applicable requirements of §§ 403.304 and 403.308. (b) <E T="03">Time limit.</E> (1) The State must submit its request for reconsideration within 60 days after the date of CMS's notice that the application was denied. (2) CMS will notify the State of the results of its reconsideration within 60 days after it receives the request for reconsideration. </SECTION> <SECTION> <SECTNO>§ 403.318</SECTNO> <SUBJECT>Approval of State systems.</SUBJECT> (a) <E T="03">Approval agreement.</E> If CMS approves a State system, a written agreement will be executed between CMS and the Chief Executive Officer of the State. The agreement must incorporate any terms of the State's application for approval of the system as agreed to by the parties and, as a minimum, must contain provisions that require the following: (1) The system is operated directly by the State or an entity designated by State law. (2) For purposes of the Medicare program, the State's system applies only to Medicare payments for inpatient, and if applicable, outpatient hospital services. (3) The system conforms to applicable Medicare law and regulations other than those relating to the amount of reimbursement for inpatient hospital services, or for inpatient and outpatient services, whichever the State system covers. Applicable regulations include, for example, those describing Medicare benefits and entitlement requirements for program beneficiaries, as explained in parts 406 and 409 of this chapter; the requirements at part 405, subpart J of this chapter specifying conditions of participation for hospitals; the requirements at part 405, subparts A, G, and S of this chapter on Medicare program administration; and all applicable fraud and abuse regulations contained in titles 42 and 45 of the CFR. (4) The State must obtain CMS's approval of the State's reporting forms and of provider cost reporting forms or other forms that have not been approved by CMS but that are necessary for the collection of required information. (b) <E T="03">Effective date.</E> An approved State system may not be effective earlier than the date of the approval agreement, which may not be retroactive. </SECTION> <SECTION> <SECTNO>§ 403.320</SECTNO> <SUBJECT>CMS review and monitoring of State systems.</SUBJECT> (a) <E T="03">General rule.</E> The State must submit an assurance and detailed and quantitative studies of provider cost and financial data and projections to support the effectiveness of its system, as required by paragraphs (b) and (c) of this section. (b) <E T="03">Required information.</E> (1) Under § 403.304(c)(3) an assurance is required that the system will not result in greater payments over a 36-month period than would have otherwise been made under Medicare not using such system. If a State that has an existing demonstration project in effect on April 20, 1983 elects under § 403.304(c)(3) to have the effectiveness of its system judged on the basis of a rate of increase factor, the State must submit an assurance that its rate of increase or inflation in inpatient hospital payments does not exceed, for that portion of the 36-month period that is subject to this test, the national rate of increase or inflation in Medicare inpatient hospital payments. The election of the rate of increase test applies only to the three cost reporting periods beginning on or after October 1, 1983. At the end of these cost reporting periods, the State must assure, beginning with the first month after the expiration of the third cost reporting period beginning after October 1, 1983, that payments under its system will not exceed over the remainder of the 36-month period what Medicare payments would have been. (2) Estimates and data are required to support the State's assurance, required under § 403.304(c)(3), that expenditures under the State system will not exceed what Medicare would have paid <PRTPAGE P="48"/>over a 36-month period. The estimates and projections of what Medicare would have otherwise paid must take into account all the Medicare reimbursement principles in effect at the time and, for any period in which payments either exceed or are less than Medicare levels, the values of interest the Medicare Trust Fund earned, or would have earned, on these amounts. Upon application for approval, the State must submit projections for each hospital for the first 12-month period covered by the assurance, in both the aggregate and on a per discharge basis, of Medicare inpatient expenditures under Medicare principles of reimbursement and parallel projections of Medicare inpatient expenditures under the State's system and the resulting cost or savings to Medicare. The State must also submit separate statewide projections for each year of the 36-month period, in both the aggregate and on a weighted average discharge basis, of inpatient expenditures under the State system and under the Medicare principles of reimbursement. (3) The projection submitted under paragraph (b)(2) of this section must include a detailed description of the methodology and assumptions used to derive the expenditure amounts under both systems. In instances where the assumptions are different under the projections cited in paragraph (b)(2) of this section, the State must provide a detailed explanation of the reasons for the differences. At a minimum, the following separate data and assumptions are to be included in the projections for the Medicare principles and for the State's system. (i) The State system base year and the Medicare allowable and reimbursable cost of each hospital that the State used to develop the projections, including the amount of estimated pass through costs. (ii) The categories of costs that are included in the State system and are reimbursed differently under the State system than under the Medicare system. (iii) The number of Medicare and total base year discharges and admissions for each hospital. (iv) The rate of change factor (and the method of application of this factor) used to project the base year costs over the 36-month period to which the assurance would apply. (v) Any allowance for anticipated growth in the amount of services from the base year (if applicable, the allowance must be presented in separate estimates for population increases or for increases in rates of admissions or both). (vi) Any adjustment in which the State is permitted by CMS to take into account previous reductions in the Medicare payment amounts that were the result of the effectiveness of the State's system even though Medicare was not a part of that system. (vii) Appropriate recognition and projection of the time value of trust fund expenditures for the period the State system expenditures were either less than or exceeded the Medicare system payments. (viii) States applying under a rate of increase effectiveness test under § 403.304(c)(3) must also submit data projecting the parallel rates of increase during the requisite period. (4) The projections must include both the aggregate payments and the payments per discharge for the individual hospitals and for the State as a whole. (5) On a case-by-case basis. CMS may require additional data and documentation as needed to complete its review and monitoring. (6) For existing Medicare demonstration projects in effect on April 20, 1983, the assurance and data as required by paragraphs (a) and (b) of this section, if appropriate, may be based on aggregate payments or payments per inpatient admission or discharge. CMS will judge the effectiveness of these systems on the basis of the rate of increase or inflation in Medicare inpatient hospital payments compared to the national rate of increase or inflation for such payments during the State's hospitals' three cost reporting periods beginning on or after October 1, 1983. The data submitted by the State for the period subject to the rate of increase test must include the rate of increase projection for that particular period of time. For the subsequent period of time, the State must assure that payments under its system will not exceed <PRTPAGE P="49"/>what Medicare payments would have been, as described in § 403.304(c)(3). (7) If the amount of Medicare payments under the State system exceeds what would have been paid under the Medicare reimbursement principles in any given year, the State must also submit quantitative evidence that the system will result in expenditures that do not exceed what Medicare expenditures would have been over the 36 month period beginning with the first month that the State system is operating. For a State that has an existing demonstration project in effect on April 20, 1983, and that elects under § 403.304(c)(3) to have a rate of increase test apply, if the State's rate of increase or inflation exceeds the national rate of increase or inflation in a given year, the State must submit quantitative evidence that, over 36 months, its payments will not exceed the national rate of increase or inflation. Furthermore, if payments under the State's system must be compared to actual Medicare expenditures, at the end of the third cost reporting period, as described in paragraph (b)(1) of this section, and payments under the State's system exceed what Medicare would have paid in a given year, the State must submit quantitative evidence that, over 36 months, payments under its system will not exceed what Medicare would have paid. (c) <E T="03">Review of assurances regarding expenditures.</E> CMS will review the State's assurances and data submitted under this section, as a prerequisite to the approval of the State's system. CMS will compare the State's projections of payment amounts to CMS data in order to determine if the State's assurance is reasonable and fully supportable. If the CMS data indicate that the State's system would result in payment amounts that would be more then that which would have been paid under the Medicare principles, the State's assurances would not be acceptable. For States applying in accordance with § 403.308, if CMS data indicate that the State's system would result in a rate of increase or inflation that would be more than the national rate of increase or inflation, the State's assurances would not be acceptable. (d) <E T="03">Medicaid upper limit.</E> In accordance with § 447.253 of this chapter, the State system may not result in aggregate payments for Medicaid inpatient hospital services that would exceed the amount that would have otherwise have been paid under the Medicare principles as applied through the State system. (e) <E T="03">Monitoring of Medicare expenditures.</E> CMS will monitor on a quarterly basis expenditures under the State's system as compared to what Medicare expenditures would have been if the system had not been in effect. If CMS determines at any time that the payments made under the State's system exceed the States' projections, as established by the satisfactory assurances required under § 403.304(c) and, if appropriate, the predetermined percentage relationship of the payments as required under § 403.304(d). CMS will— (1) Conclude that payments under the State system over a 36-month period will exceed what Medicare would have paid: (2) Terminate the waiver; and (3) Recoup overpayments to the affected hospitals in accordance with the procedures described in § 403.310. </SECTION> <SECTION> <SECTNO>§ 403.321</SECTNO> <SUBJECT>State systems for hospital outpatient services.</SUBJECT> CMS may approve a State's application for approval of an outpatient system if the following conditions are met: (a) The State's inpatient system is approved. (b) The State's outpatient application meets the requirements and assurances for an inpatient system described in § 403.304 (b) and (c), and § 403.306 (b)(1) and (b)(2)(ii). (c) The State submits a separate application that provides separate assurances and estimates and data in further support of its assurance submitted under paragraph (b)(1) of § 403.320, as follows: (1) Upon application for approval, the State must submit estimates and data that include, but are not limited to, projections for the first 12-month period covered by the assurance for each hospital, in both the aggregate and on <PRTPAGE P="50"/>an average cost per service and payment basis, of Medicare outpatient expenditures under Medicare principles of reimbursement; parallel projections of Medicare outpatient expenditures under the State system; and the resulting cost or savings to Medicare independent of the State system for hospital inpatient services. (2) The State must submit separate statewide projections for each year of the 36-month period of the aggregate outpatient expenditures for each system. The projections submitted under this paragraph must— (i) Comply with the requirements of paragraphs (b) (3) and (5) of § 403.320 regarding a detailed description of the methodology used to derive the expenditure amounts: (ii) Include the data and assumptions set forth in paragraphs (b)(3) (i), (ii), (iii), (iv), and (v) of § 403.320; and (iii) Include any assumption the State has adopted for establishing the number of Medicare and total base year outpatient services for each hospital. (3) The State must provide a detailed explanation of the reasons for any difference between the data or assumptions used for the separate projections. </SECTION> <SECTION> <SECTNO>§ 403.322</SECTNO> <SUBJECT>Termination of agreements for Medicare recognition of State systems.</SUBJECT> (a) <E T="03">Termination of agreements.</E> (1) CMS may terminate any approved agreement if it finds, after the procedures described in this paragraph are followed that the State system does not satisfactorily meet the requirements of section 1886(c) of the Act or the regulations in this subpart. A termination must be effective on the last day of a calendar quarter. (2) CMS will give the State reasonable notice of the proposed termination of an agreement and of the reasons for the termination at least 90 days before the effective date of the termination. (3) CMS will give the State the opportunity to present evidence to refute the finding. (4) CMS will issue a final notice of termination upon a final review and determination on the State's evidence. (b) <E T="03">Termination by State.</E> A State may voluntarily terminate a State system by giving CMS notice of its intent to terminate. A termination must be effective on the last day of a calendar quarter. The State must notify CMS of its intent to terminate at least 90 days before the effective date of the termination. </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart D [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Beneficiary Counseling and Assistance Grants</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 59 FR 51128, Oct. 7, 1994, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 403.500</SECTNO> <SUBJECT>Basis, scope, and definition.</SUBJECT> (a) <E T="03">Basis.</E> This subpart implements, in part, the provisions of section 4360 of Public Law 101-508 by establishing a minimum level of funding for grants made to States for the purpose of providing information, counseling, and assistance relating to obtaining adequate and appropriate health insurance coverage to individuals eligible to receive benefits under the Medicare program. (b) <E T="03">Scope of subpart.</E> This subpart sets forth the following: (1) Conditions of eligibility for the grant. (2) Minimum levels of funding for those States qualifying for the grants. (3) Reporting requirements. (c) <E T="03">Definition.</E> For purposes of this subpart, the term “State” includes (except where otherwise indicated by the context) the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa. </SECTION> <SECTION> <SECTNO>§ 403.501</SECTNO> <SUBJECT>Eligibility for grants.</SUBJECT> To be eligible for a grant under this subpart, the State must have an approved Medicare supplemental regulatory program under section 1882 of the Act and submit a timely application to CMS that meets the requirements of— (a) Section 4360 of Public Law 101-508 (42 USC 1395b-4); (b) This subpart; and (c) The applicable solicitation for grant applications issued by CMS. </SECTION> <SECTION> <PRTPAGE P="51"/> <SECTNO>§ 403.502</SECTNO> <SUBJECT>Availability of grants.</SUBJECT> CMS awards grants to States subject to availability of funds, and if applicable, subject to the satisfactory progress in the State's project during the preceding grant period. The criteria by which progress is evaluated and the performance standards for determining whether satisfactory progress has been made are specified in the terms and conditions included in the notice of grant award sent to each State. CMS advises each State as to when to make application, what to include in the application, and provides information as to the timing of the grant award and the duration of the grant award. CMS also provides an estimate of the amount of funds that may be available to the State. <CITA>[65 FR 34985, June 1, 2000]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.504</SECTNO> <SUBJECT>Number and size of grants.</SUBJECT> (a) <E T="03">General.</E> For available grant funds, up to and including $10,000,000, grants will be made to States according to the terms and formula in paragraphs (b) and (c) of this section. For any available grant funds in excess of $10,000,000, distribution of grants will be at the discretion of CMS, and will be made according to criteria that CMS will communicate to the States via grant solicitation. CMS will provide information to each State as to what must be included in the application for grant funds. CMS awards the following type of grants: (1) New program grants. (2) Existing program enhancement grants. (b) <E T="03">Grant Award.</E> Subject to the availability of funds, each eligible State that submits an acceptable application receives a grant that includes a fixed amount (minimum funding level) and a variable amount. (1) A fixed portion is awarded to States in the following amounts: (i) Each of the 50 States, $75,000. (ii) The District of Columbia, $75,000. (iii) Puerto Rico, $75,000. (iv) American Samoa, $25,000. (v) Guam, $25,000. (vi) The Virgin Islands, $25,000. (2) A variable portion, which is based on the number and location of Medicare beneficiaries residing in the State is awarded to each State. The variable amount a particular State receives is determined as set forth in paragraph (c) of this section. (c) <E T="03">Calculation of variable portion of the grant.</E> (1) CMS bases the variable portion of the grant on— (i) The amount of available funds, and (ii) A comparison of each State with the average of all of the States (except the State being compared) with respect to three factors that relate to the size of the State's Medicare population and where that population resides. (2) The factors CMS uses to compare States' Medicare populations comprise separate components of the variable amount. These factors, and the extent to which they each contribute to the variable amount, are as follows: (i) Approximately 75 percent of the variable amount is based on the number of Medicare beneficiaries living in the State as a percentage of all Medicare beneficiaries nationwide. (ii) Approximately 10 percent of the variable amount is based on the percentage of the State's total population who are Medicare beneficiaries. (iii) Approximately 15 percent of the variable amount is based on the percentage of the State's Medicare beneficiaries that reside in rural areas (“rural areas” are defined as all areas not included within a Metropolitan Statistical Area). (3) Based on the foregoing four factors (that is, the amount of available funds and the three comparative factors), CMS determines a variable rate for each participating State for each grant period. (d) <E T="03">Submission of revised budget</E>. A State that receives an amount of grant funds under this subpart that differs from the amount requested in the budget submitted with its application must submit a revised budget to CMS, along with its acceptance of the grant award, that reflects the amount awarded. <CITA>[59 FR 51128, Oct. 7, 1994, as amended at 65 FR 34986, June 1, 2000]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.508</SECTNO> <SUBJECT>Limitations.</SUBJECT> (a) <E T="03">Use of grants.</E> Except as specified in paragraph (b) of this section, and in the terms and conditions in the notice <PRTPAGE P="52"/>of grant award, a State that receives a grant under this subpart may use the grant for any reasonable expenses for planning, developing, implementing, and/or operating the program for which the grant is made as described in the solicitation for application for the grant. (b) <E T="03">Maintenance of effort.</E> A State that receives a grant to supplement an existing program (that is, an existing program enhancement grant)— (1) Must not use the grant to supplant funds for activities that were conducted immediately preceding the date of the initial award of a grant made under this subpart and funded through other sources (including in-kind contributions). (2) Must maintain the activities of the program at least at the level that those activities were conducted immediately preceding the initial award of a grant made under this subpart. <CITA>[59 FR 51128, Oct. 7, 1994, as amended at 65 FR 34986, June 1, 2000]</CITA> </SECTION> <SECTION> <SECTNO>§ 403.510</SECTNO> <SUBJECT>Reporting requirements.</SUBJECT> A State that receives a grant under this subpart must submit at least one annual report to CMS and any additional reports as CMS may prescribe in the notice of grant award. CMS advises the State of the requirements concerning the frequency, timing, and contents of reports in the notice of grant award that it sends to the State. </SECTION> <SECTION> <SECTNO>§ 403.512</SECTNO> <SUBJECT>Administration.</SUBJECT> (a) <E T="03">General.</E> Administration of grants will be in accordance with the provisions of this subpart, 45 CFR part 92 (“Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments”), 45 CFR 74.4, the terms of the solicitation, and the terms of the notice of grant award. Except for the minimum funding levels established by § 403.504(b)(1), in the event of conflict between a provision of the notice of grant award, any provision of the solicitation, or of any regulation enumerated in 45 CFR 74.4 or in part 92, the terms of the notice of grant award control. (b) <E T="03">Notice.</E> CMS provides notice to each applicant regarding CMS's decision on an application for grant funding under § 403.504. (c) <E T="03">Appeal.</E> Any applicant for a grant under this subpart has the right to appeal CMS's determination regarding its application. Appeal procedures are governed by the regulations at 45 CFR part 16 (Procedures of the Departmental Grant Appeals Board). </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart F [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Religious Nonmedical Health Care Institutions—Benefits, Conditions of Participation, and Payment</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 64 FR 67047, Nov. 30, 1999, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 403.700</SECTNO> <SUBJECT>Basis and purpose.</SUBJECT> This subpart implements sections 1821; 1861(e), (y), and (ss); 1869; and 1878 of the Act regarding Medicare payment for inpatient hospital or posthospital extended care services furnished to eligible beneficiaries in religious nonmedical health care institutions. </SECTION> <SECTION> <SECTNO>§ 403.702</SECTNO> <SUBJECT>Definitions and terms.</SUBJECT> For purposes of this subpart, the following definitions and terms apply: <E T="03">Election</E> means a written statement signed by the beneficiary or the beneficiary's legal representative indicating the beneficiary's choice to receive nonmedical care or treatment for religious reasons. <E T="03">Excepted medical care</E> means medical care that is received involuntarily or required under Federal, State, or local laws. <E T="03">FFY</E> stands for Federal fiscal year. <E T="03">Medical care or treatment</E> means health care furnished by or under the direction of a licensed physician that can involve diagnosing, treating, or preventing disease and other damage to the mind and body. It may involve the use of pharmaceuticals, diet, exercise, surgical intervention, and technical procedures. <E T="03">Nonexcepted medical care</E> means medical care (other than excepted medical care) that is sought by or for a beneficiary who has elected religious nonmedical health care institution services.<PRTPAGE P="53"/> <E T="03">Religious nonmedical care or religious method of healing</E> means health care furnished under established religious tenets that prohibit conventional or unconventional medical care for the treatment of a beneficiary, and the sole reliance on these religious tenets to fulfill a beneficiary's total health care needs. <E T="03">RNHCI</E> stands for “religious nonmedical health care institution,” as defined in section 1861(ss)(1) of the Act. <E T="03">Religious nonmedical nursing personnel</E> means individuals who are grounded in the religious beliefs of the RNHCI, trained and experienced in the principles of nonmedical care, and formally recognized as competent in the administration of care within their religious nonmedical health care group. </SECTION> <SECTION> <SECTNO>§ 403.720</SECTNO> <SUBJECT>Conditions for coverage.</SUBJECT> Medicare covers services furnished in an RNHCI if the following conditions are met: (a) The provider meets the definition of an RNHCI as defined in section 1861(ss)(1) of the Act. That is, it is an institution that: (1) Is described in section 501(c)(3) of the Internal Revenue Code of 1986 and is exempt from taxes under section 501(a). (2) Is lawfully operated under all applicable Federal, State, and local laws and regulations. (3) Furnishes only nonmedical nursing items and services to beneficiaries who choose to rely solely upon a religious method of healing and for whom the acceptance of medical services would be inconsistent with their religious beliefs. (4) Furnishes nonmedical items and services exclusively through nonmedical nursing personnel who are experienced in caring for the physical needs of nonmedical patients. (5) Furnishes nonmedical items and services to inpatients on a 24-hour basis. (6) Does not furnish, on the basis of religious beliefs, through its personnel or otherwise medical items and services (including any medical screening, examination, diagnosis, prognosis, treatment, or the administration of drugs) for its patients. (7) Is not owned by, is not under common ownership with, or does not have an ownership interest of 5 percent or more in, a provider of medical treatment or services and is not affiliated with a provider of medical treatment or services or with an individual who has an ownership interest of 5 percent or more in, a provider of medical treatment or services. (Permissible affiliations are described at § 403.738(c).) (8) Has in effect a utilization review plan that sets forth the following: (i) Provides for review of the admissions to the institution, the duration of stays, and the need for continuous extended duration of stays in the institution, and the items and services furnished by the institution. (ii) Requires that reviews be made by an appropriate committee of the institution that included the individuals responsible for overall administration and for supervision of nursing personnel at the institution. (iii) Provides that records be maintained of the meetings, decisions, and actions of the review committee. (iv) Meets other requirements as the Secretary finds necessary to establish an effective utilization review plan. (9) Provides information CMS may require to implement section 1821 of the Act, including information relating to quality of care and coverage decisions. (10) Meets other requirements CMS finds necessary in the interest of the health and safety of the patients who receive services in the institution. These requirements are the conditions of participation in this subpart. (b) The provider meets the conditions of participation cited in §§ 403.730 through 403.746. (A provider may be deemed to meet conditions of participation in accordance with part 488 of this chapter.) (c) The provider has a valid provider agreement as a hospital with CMS in accordance with part 489 of this chapter and for payment purposes is classified as an extended care hospital. (d) The beneficiary has a condition that would make him or her eligible to receive services covered under Medicare Part A as an inpatient in a hospital or SNF.<PRTPAGE P="54"/> (e) The beneficiary has a valid election as described in § 403.724 in effect for Medicare covered services furnished in an RNHCI. </SECTION> <SECTION> <SECTNO>§ 403.724</SECTNO> <SUBJECT>Valid election requirements.</SUBJECT> (a) <E T="03">General requirements.</E> An election statement must be made by the Medicare beneficiary or his or her legal representative. (1) The election must be a written statement that must include the following statements: (i) The beneficiary is conscientiously opposed to acceptance of nonexcepted medical treatment. (ii) The beneficiary acknowledges that the acceptance of nonexcepted medical treatment is inconsistent with his or her sincere religious beliefs. (iii) The beneficiary acknowledges that the receipt of nonexcepted medical treatment constitutes a revocation of the election and may limit further receipt of services in an RNHCI. (iv) The beneficiary acknowledges that the election may be revoked by submitting a written statement to CMS. (v) The beneficiary acknowledges that revocation of the election will not prevent or delay access to medical services available under Medicare Part A in facilities other than RNHCIs. (2) The election must be signed and dated by the beneficiary or his or her legal representative. (3) The election must be notarized. (4) The RNHCI must keep a copy of the election statement on file and submit the original to CMS with any information obtained regarding prior elections or revocations. (5) The election becomes effective on the date it is signed. (6) The election remains in effect until revoked. (b) <E T="03">Revocation of election.</E> (1) A beneficiary's election is revoked by one of the following: (i) The beneficiary receives nonexcepted medical treatment for which Medicare payment is requested. (ii) The beneficiary voluntarily revokes the election and notifies CMS in writing. (2) The receipt of excepted medical treatment as defined in § 403.702 does not revoke the election made by a beneficiary. (c) <E T="03">Limitation on subsequent elections.</E> (1) If a beneficiary's election has been made and revoked twice, the following limitations on subsequent elections apply: (i) The third election is not effective until 1 year after the date of the most recent revocation. (ii) Any succeeding elections are not effective until 5 years after the date of the most recent revocation. (2) CMS will not accept as the basis for payment of any claim any elections executed on or after January 1 of the calendar year in which the sunset provision described in § 403.756 becomes effective. </SECTION> <SECTION> <SECTNO>§ 403.730</SECTNO> <SUBJECT>Condition of participation: Patient rights.</SUBJECT> An RNHCI must protect and promote each patient's rights. (a) <E T="03">Standard: Notice of rights.</E> The RNHCI must do the following: (1) Inform each patient of his or her rights in advance of furnishing patient care. (2) Have a process for prompt resolution of grievances, including a specific person within the facility whom a patient may contact to file a grievance. In addition, the facility must provide patients with information about the facility's process as well as with contact information for appropriate State and Federal resources. (b) <E T="03">Standard: Exercise of rights.</E> The patient has the right to: (1) Be informed of his or her rights and to participate in the development and implementation of his or her plan of care. (2) Make decisions regarding his or her care, including transfer and discharge from the RNHCI. (See § 403.736 for discharge and transfer requirements.) (3) Formulate advance directives and expect staff who furnish care in the RNHCI to comply with those directives, in accordance with part 489, subpart I of this chapter. For purposes of conforming with the requirement in § 489.102 that there be documentation in the patient's medical records concerning advanced directives, the patient care records of a beneficiary in an <PRTPAGE P="55"/>RNHCI are equivalent to medical records held by other providers. (c) <E T="03">Standard: Privacy and safety</E>. The patient has the right to the following: (1) Personal privacy. (2) Care in a safe setting. (3) Freedom from verbal, psychological, and physical abuse, and misappropriation of property. (4) Freedom from the use of restraints. (5) Freedom from involuntary seclusion. (d) <E T="03">Standard: Confidentiality of patient records.</E> For any patient care records or election information it maintains on patients, the RNHCI must establish procedures to do the following: (1) Safeguard the privacy of any information that identifies a particular patient. Information from, or copies of, records may be released only to authorized individuals, and the RNHCI must ensure that unauthorized individuals cannot gain access to or alter patient records. Original patient care records must be released only in accordance with Federal or State laws, court orders, or subpoenas. (2) Maintain the records and information in an accurate and timely manner. (3) Ensure timely access by patients to the records and other information that pertains to that patient. (4) Abide by all Federal and State laws regarding confidentiality and disclosure for patient care records and election information. </SECTION> <SECTION> <SECTNO>§ 403.732</SECTNO> <SUBJECT>Condition of participation: Quality assessment and performance improvement.</SUBJECT> The RNHCI must develop, implement, and maintain a quality assessment and performance improvement program. (a) <E T="03">Standard: Program scope.</E> (1) The quality assessment and performance improvement program must include, but is not limited to, measures to evaluate: (i) Access to care. (ii) Patient satisfaction. (iii) Staff performance. (iv) Complaints and grievances. (v) Discharge planning activities. (vi) Safety issues, including physical environment. (2) In each of the areas listed in paragraph (a)(1) of this section, and any other areas the RNHCI includes, the RNHCI must do the following: (i) Define quality assessment and performance improvement measures. (ii) Describe and outline quality assessment and performance improvement activities appropriate for the services furnished by or in the RNHCI. (iii) Measure, analyze, and track performance that reflect care and RNHCI processes. (iv) Inform all patients, in writing, of the scope and responsibilities of the quality assessment and performance improvement program. (3) The RNHCI must set priorities for performance improvement, considering the prevalence of and severity of identified problems. (4) The RNHCI must act to make performance improvements and must track performance to assure that improvements are sustained. (b) <E T="03">Standard: Program responsibilities.</E> (1) The governing body, administration, and staff are responsible for ensuring that the quality assessment and performance improvement program addresses identified priorities in the RNHCI and are responsible for the development, implementation, maintenance, and performance improvement of assessment actions. (2) The RNHCI must include all programs, departments, functions, and contracted services when developing, implementing, maintaining, and evaluating the program of quality assessment and performance improvement. </SECTION> <SECTION> <SECTNO>§ 403.734</SECTNO> <SUBJECT>Condition of participation: Food services.</SUBJECT> The RNHCI must have an organized food service that is directed and adequately staffed by qualified personnel. (a) <E T="03">Standard: Sanitary conditions.</E> The RNHCI must furnish food to the patient that is obtained, stored, prepared, distributed, and served under sanitary conditions. (b) <E T="03">Standard: Meals.</E> The RNHCI must serve meals that furnish each patient with adequate nourishment in accordance with the recommended dietary allowances of the Food and Nutrition <PRTPAGE P="56"/>Board of the National Research Council, National Academy of Sciences. The RNHCI must do the following: (1) Furnish food that is palatable, attractive, and at the proper temperature and consistency. (2) Offer substitutes of similar nourishment to patients who refuse food served or desire alternative choices. (3) Furnish meals at regular times comparable to normal mealtimes in the community. There must be no more than 14 hours between a substantial evening meal and breakfast the following day. (4) The RNHCI must offer snacks at bedtime. </SECTION> <SECTION> <SECTNO>§ 403.736</SECTNO> <SUBJECT>Condition of participation: Discharge planning.</SUBJECT> The RNHCI must have in effect a discharge planning process that applies to all patients. The process must assure that appropriate post-institution services are obtained for each patient, as necessary. (a) <E T="03">Standard: Discharge planning evaluation.</E> (1) The RNHCI must assess the need for a discharge plan for any patient identified as likely to suffer adverse consequences if there is no planning and for any other patient upon his or her request or at the request of his or her legal representative. This discharge planning evaluation must be initiated at admission and must include the following: (i) An assessment of the possibility of a patient needing post-RNHCI services and of the availability of those services. (ii) An assessment of the probability of a patient's capacity for self-care or of the possibility of the patient being cared for in the environment from which he or she entered the RNHCI. (2) The staff must complete the assessment on a timely basis so that arrangements for post-RNHCI care are made before discharge and so that unnecessary delays in discharge are avoided. (3) The discharge planning evaluation must be included in the patient's rights record for use in establishing an appropriate discharge plan and must discuss the results of the evaluation with the patient or a legal representative acting on his or her behalf. (b) <E T="03">Standard: Discharge plan.</E> (1) If the discharge planning evaluation indicates a need for a discharge plan, qualified and experienced personnel must develop or supervise the development of the plan. (2) In the absence of a finding by the RNHCI that the beneficiary needs a discharge plan, the beneficiary or his or her legal representative may request a discharge plan. In this case, the RNHCI must develop a discharge plan for the beneficiary. (3) The RNHCI must arrange for the initial implementation of the beneficiary's discharge plan. (4) If there are factors that may affect continuing care needs or the appropriateness of the discharge plan, the RNHCI must reevaluate the beneficiary's discharge plan. (5) The RNHCI must inform the beneficiary or legal representative about the beneficiary's post-RNHCI care requirements. (6) The discharge plan must inform the beneficiary or his or her legal representative about the freedom to choose among providers of care when a variety of providers is available that are willing to respect the discharge preferences of the beneficiary or legal representative. (c) <E T="03">Standard: Transfer or referral.</E> The RNHCI must transfer or refer patients in a timely manner to another facility (including a medical facility if requested by the beneficiary, or his or her legal representative) in accordance with § 403.730(b)(2). (d) <E T="03">Standard: Reassessment.</E> The RNHCI must reassess its discharge planning process on an ongoing basis. The reassessment must include a review of discharge plans to ensure that they are responsive to discharge needs. </SECTION> <SECTION> <SECTNO>§ 403.738</SECTNO> <SUBJECT>Condition of participation: Administration.</SUBJECT> An RNHCI must have written policies regarding its organization, services, and administration. (a) <E T="03">Standard: Compliance with Federal, State, and local laws.</E> The RNHCI must operate in compliance with all applicable Federal, State, and local laws, regulations, and codes including, but not limited to, those pertaining to the following:<PRTPAGE P="57"/> (1) Protection against discrimination on the basis of race, color, national origin, age, or handicap (45 CFR parts 80, 84, and 91). (2) Protection of human research subjects (45 CFR part 46). (3) Application of all safeguards to protect against the possibility of fraud and abuse (42 CFR part 455). (b) <E T="03">Standard: Governing body.</E> (1) The RNHCI must have a governing body, or a person designated to function as a governing body, that is legally responsible for establishing and implementing all policies regarding the RNHCI's management and operation. (2) The governing body must appoint the administrator responsible for the management of the RNHCI. (c) <E T="03">Standard: Affiliations and disclosure.</E> (1) An affiliation is permissible if it is between one of the following: (i) An individual serving as an uncompensated director, trustee, officer, or other member of the governing body of an RNHCI and a provider of medical treatment or services. (ii) An individual who is a director, trustee, officer, employee, or staff member of an RNHCI and another individual, with whom he or she has a family relationship, who is affiliated with (or has an ownership interest in) a provider of medical treatment or services. (iii) The RNHCI and an individual or entity furnishing goods or services as a vendor to both providers of medical treatment or services and RNHCIs. (2) The RNHCI complies with the disclosure requirements of §§ 420.206 and 455.104 of this chapter. (3) The RNHCI furnishes written notice, including the identity of each new individual or company, to CMS at the time of a change, if a change occurs in any of the following: (i) Persons with an ownership or control interest, as defined in §§ 420.201 and 455.101 of this chapter. (ii) The officers, directors, agents, or managing employees. (iii) The religious entity, corporation, association, or other company responsible for the management of the RNHCI. (iv) The RNHCI's administrator or director of nonmedical nursing services. </SECTION> <SECTION> <SECTNO>§ 403.740</SECTNO> <SUBJECT>Condition of participation: Staffing.</SUBJECT> The RNHCI must be staffed with qualified experienced personnel who are present in sufficient numbers to meet the needs of the patients. (a) <E T="03">Standard: Personnel qualifications.</E> The RNHCI must ensure that staff who supervise or furnish services to patients are qualified to do so and that staff allowed to practice without direct supervision have specific training to furnish these services. (b) <E T="03">Standard: Education, training, and performance evaluation.</E> (1) The RNHCI must ensure that staff (including contractors and other individuals working under arrangement) have the necessary education and training concerning their duties so that they can furnish services competently. This education includes, but is not limited to, training related to the individual job description, performance expectations, applicable organizational policies and procedures, and safety responsibilities. (2) Staff must demonstrate, in practice, the skills and techniques necessary to perform their duties and responsibilities. (3) The RNHCI must evaluate the performance of staff and implement measures for improvement. </SECTION> <SECTION> <SECTNO>§ 403.742</SECTNO> <SUBJECT>Condition of participation: Physical environment.</SUBJECT> A RNHCI must be designed, constructed, and maintained to ensure the safety of the patients, staff, and the public. (a) <E T="03">Standard: Buildings.</E> The physical plant and the overall environment must be maintained in a manner that ensures the safety and well-being of the patients. The RNHCI must have the following: (1) Emergency power for emergency lights, for fire detection and alarm systems, and for fire extinguishing systems. (2) Procedures for the proper storage and disposal of trash. (3) Proper ventilation and temperature control and appropriate lighting levels to ensure a safe and secure environment. (4) A written disaster plan to address loss of power, water, sewage, and other emergencies.<PRTPAGE P="58"/> (5) Facilities for emergency gas and water supply. (6) An effective pest control program. (7) A preventive maintenance program to maintain essential mechanical, electrical, and fire protection equipment operating in an efficient and safe manner. (8) A working call system for patients to summon aid or assistance. (b) <E T="03">Standard: Patient rooms.</E> Patient rooms must be designed and equipped for adequate care, comfort, and privacy of the patient. (1) Patient rooms must meet the following conditions: (i) Accommodate no more than four patients. (ii) Measure at least 80 square feet per patient in multiple patient rooms and at least 100 square feet in single patient rooms. (iii) Have direct access to an exit corridor. (iv) Be designed or equipped to assure full visual privacy for each patient. (v) Have at least one window to the outside. (vi) Have a floor at or above grade level. (2) The RNHCI must furnish each patient with the following: (i) A separate bed of proper size and height for the convenience of the patient. (ii) A clean, comfortable mattress. (iii) Bedding appropriate to the weather and climate. (iv) Functional furniture appropriate to the patient's needs and individual closet space with clothes racks and shelves accessible to the patient. (3) CMS may permit variances in requirements specified in paragraphs (b)(1)(i) and (ii) of this section relating to rooms on an individual basis when the RNHCI adequately demonstrates in writing that the variances meet the following: (i) Are in accordance with the special needs of the patients. (ii) Will not adversely affect patients’ health and safety. </SECTION> <SECTION> <SECTNO>§ 403.744</SECTNO> <SUBJECT>Condition of participation: Life safety from fire.</SUBJECT> (a) <E T="03">General.</E> An RNHCI must meet the following conditions: (1) Except as provided in paragraph (b) of this section, the RNHCI must meet the new or existing health care occupancies provisions of the 1997 edition of the Life Safety Code of the National Fire Protection Association (NFPA 101), which is incorporated by reference. Incorporation by reference of NFPA 101, the Life Safety Code, 1997 edition, was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.<SU>1</SU> <FTREF/> (See § 483.70). <FTNT> <SU>1</SU> The 1997 edition of the Life Safety Code (NFPA 101) is available for inspection at the CMS Information Resource Center, 7500 Security Boulevard, Central Building, Baltimore, MD, and at the Office of the Federal Register, 800 North Capitol Street, NW, suite 700, Washington, DC. Copies of this publication may be purchased from the National Fire Protection Association, 1 Batterymarch Park, P.O. Box 9101, Quincy, MA 02263-9101. </FTNT> (2) The RNHCI must have written fire control plans that contain provisions for prompt reporting of fires; extinguishing fires; protection of patients, staff, and the public; evacuation; and cooperation with fire fighting authorities. (3) The RNHCI must maintain written evidence of regular inspection and approval by State or local fire control agencies. (b) <E T="03">Exceptions.</E> (1) If application of the Life Safety Code required under paragraph (a)(1) of this section would result in unreasonable hardship upon the RNHCI, CMS may waive specific provisions of the Life Safety Code, but only if the waiver does not adversely affect the health and safety of patients. (2) If CMS finds that the fire and safety code imposed by State law adequately protects patients in the institution, the provisions of the Life Safety Code required in paragraph (a)(1) of this section do not apply in that State. </SECTION> <SECTION> <SECTNO>§ 403.746</SECTNO> <SUBJECT>Condition of participation: Utilization review.</SUBJECT> The RNHCI must have in effect a written utilization review plan to assess the necessity of services furnished. The plan must provide that records be maintained of all meetings, decisions, and actions by the utilization review committee.<PRTPAGE P="59"/> (a) <E T="03">Standard: Utilization review plan.</E> The utilization review plan must contain written procedures for evaluating the following: (1) Admissions. (2) Duration of care. (3) Continuing care of an extended duration. (4) Items and services furnished. (b) <E T="03">Standard: Utilization review committee.</E> The committee is responsible for evaluating each admission and ensuring that the admission is necessary and appropriate. The utilization review plan must be carried out by the utilization review committee, consisting of the governing body, administrator or other individual responsible for the overall administration of the RNHCI, the supervisor of nursing staff, and other staff as appropriate. </SECTION> <SECTION> <SECTNO>§ 403.750</SECTNO> <SUBJECT>Estimate of expenditures and adjustments.</SUBJECT> (a) <E T="03">Estimates.</E> CMS estimates the level of expenditures for services provided under this subpart before the start of each FFY beginning with FFY 2000. (b) <E T="03">Adjustments to payments.</E> When the level of estimated expenditures is projected to exceed the FFY trigger level as described in paragraph (d) of this section, for the year of the projection, payments to RNHCIs will be reduced by a proportional percentage to prevent estimated expenditures from exceeding the trigger level. In addition to reducing payments proportionally, CMS may impose alternative adjustments. (c) <E T="03">Notification of adjustments.</E> CMS notifies participating RNHCIs before the start of the FFY of the type and level of expenditure reductions to be made and when these adjustments will apply. (d) <E T="03">Calculation of trigger level.</E> The trigger level for FFY 1998 is $20,000,000. For subsequent FFYs, the trigger level is the unadjusted trigger level increased or decreased by the carry forward as described in § 403.754(b). The unadjusted trigger level is the base year amount (the unadjusted trigger level dollar amount for the prior FFY) increased by the average consumer price index (the single numerical value published monthly by the Bureau of Labor Statistics that presents the relationship in United States urban areas for the current cost of goods and services compared to a base year, to represent the change in spending power) for the 12-month period ending on July 31 preceding the beginning of the FFY. </SECTION> <SECTION> <SECTNO>§ 403.752</SECTNO> <SUBJECT>Payment provisions.</SUBJECT> (a) <E T="03">Payment to RNHCIs.</E> Payment for services may be made to an RNHCI that meets the conditions for coverage described in § 403.720 and the conditions of participation described in §§ 403.730 through 403.746. Payment is made in accordance with § 413.40 of this chapter to an RNHCI meeting these conditions. (b) <E T="03">Review of estimates and adjustments.</E> There is no administrative or judicial review of the level of estimated expenditures or the adjustments in payments described in §§ 403.750(a) and (b). (c) <E T="03">Effect on beneficiary liability.</E> When payments are reduced in accordance with § 403.750(b), the RNHCI may bill the beneficiary the amount of the Medicare reduction attributable to his or her covered services. (d) <E T="03">Notification of beneficiary liability.</E> (1) The RNHCI must notify the beneficiary in writing at the time of admission of any proposed or current proportional Medicare adjustment. A beneficiary currently receiving care in the RNHCI must be notified in writing at least 30 days before the Medicare reduction is to take effect. The notification must inform the beneficiary that the RNHCI can bill him or her for the proportional Medicare adjustment. (2) The RNHCI must, at time of billing, provide the beneficiary with his or her liability for payment, based on a calculation of the Medicare reduction pertaining to the beneficiary's covered services permitted by § 403.750(b). </SECTION> <SECTION> <SECTNO>§ 403.754</SECTNO> <SUBJECT>Monitoring expenditure level.</SUBJECT> (a) <E T="03">Tracking expenditures.</E> Starting in FFY 1999 CMS begins monitoring Medicare payments to RNHCIs. (b) <E T="03">Carry forward.</E> The difference between the trigger level and Medicare expenditures for a FFY results in a carry forward that either increases or decreases the unadjusted trigger level described in § 403.750(d). In no case may the carry forward exceed $50,000,000 for an FFY. </SECTION> <SECTION> <PRTPAGE P="60"/> <SECTNO>§ 403.756</SECTNO> <SUBJECT>Sunset provision.</SUBJECT> (a) <E T="03">Effective date.</E> Beginning with FFY 2002, if the level of estimated expenditures for all RNHCIs exceeds the trigger level for 3 consecutive FFYs, CMS will not accept as the basis for payment of any claim any election executed on or after January 1 of the following calendar year. (b) <E T="03">Notice of activation.</E> A notice in the <E T="04">Federal Register</E> will be published at least 60 days before January 1 of the calendar year that the sunset provision becomes effective. (c) <E T="03">Effects of sunset provision.</E> Only those beneficiaries who have a valid election in effect before January 1 of the year in which the sunset provision becomes effective will be able to claim Medicare payment for care in an RNHCI, and only for RNCHI services furnished during that election. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Medicare-Endorsed Prescription Drug Card Assistance Initiative</HD> <EFFDNOT> <HD SOURCE="HED">Effective Date Note:</HD> At 67 FR 56682, Sept. 4, 2002, §§ 403.800—403.820 (Subpart H) were added effective November 4, 2002. </EFFDNOT> <SECTION> <SECTNO>§ 403.800</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Provisions of the legislation.</E> This subpart implements, in part, the provisions of section 4359 of the Omnibus Budget Reconciliation Act of 1990 (OBRA). Section 4359 of OBRA requires the Secretary to establish a health insurance advisory service program (the beneficiary assistance program) to assist Medicare beneficiaries with the receipt of services (including both covered and uncovered benefits) under the Medicare and Medicaid programs and other health insurance programs. The subpart is also based on sections 1102 and 1871 of the Act. (b) <E T="03">Scope of subpart.</E> This subpart sets forth the standards and procedures CMS uses to implement the Medicare-Endorsed Prescription Drug Card Assistance Initiative. </SECTION> <SECTION> <SECTNO>§ 403.802</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">For purposes of this subpart, the following definitions apply:</E> <E T="03">Administrative consortium</E> means a private entity established and financed by the Medicare-endorsed prescription drug card program sponsors to carry out a set of specific administrative tasks required under the Medicare-Endorsed Prescription Drug Card Assistance Initiative. <E T="03">Applicant</E> means the organization or entity (along with any subcontractors or others with whom it has legal arrangements for the purpose of meeting the requirements for endorsement) that is applying for Medicare endorsement of its prescription drug discount card program. <E T="03">Application</E> means the document submitted to CMS by an applicant that demonstrates compliance with the requirements specified in this subpart in order to obtain Medicare endorsement of the applicant's drug card program. <E T="03">Formulary</E> means the list of specific drugs for which the Medicare-endorsed prescription drug card program offers discounts to Medicare beneficiaries enrolled in the Medicare-endorsed prescription drug card program. <E T="03">Medicare-Endorsed Prescription Drug Card Assistance Initiative</E> means an effort whereby CMS provides information, counseling, and assistance to Medicare beneficiaries by soliciting applications for Medicare endorsement of prescription drug card programs, reviewing them, offering agreements to program sponsors that meet all of the requirements for endorsement, awarding Medicare endorsements to program sponsors who sign the agreement, and educating beneficiaries about the options available to them in the private marketplace. <E T="03">Medicare-endorsed prescription drug card program</E> means a program developed by an organization or group of organizations, endorsed by CMS under the Medicare-Endorsed Prescription Drug Card Assistance Initiative, to educate Medicare beneficiaries about tools to lower their prescription drug costs and to offer prescription drug discount cards to Medicare beneficiaries. <E T="03">Medicare-endorsed prescription drug card program sponsor</E> means any applicant that has received endorsement from Medicare for its prescription drug card program. <E T="03">Solicitation</E> means a notice published in the <E T="04">Federal Register</E> announcing a <PRTPAGE P="61"/>request for applications from applicants seeking Medicare endorsement for their prescription drug card programs. </SECTION> <SECTION> <SECTNO>§ 403.804</SECTNO> <SUBJECT>General rules for Medicare endorsement.</SUBJECT> (a) <E T="03">Applications.</E> Applicants must submit applications by the deadline announced in the solicitation to participate in the Medicare-Endorsed Prescription Drug Card Assistance Initiative and become a Medicare-endorsed prescription drug card program sponsor. (b) <E T="03">Number of programs sponsored.</E> An organization or entity may sponsor no more than two drug card programs. The same organization or entity may have operational responsibilities in multiple drug card programs. (c) <E T="03">Requirements.</E> In order to be eligible for endorsement, applicants must submit applications and meet all of the requirements specified in § 403.806. (d) <E T="03">Eligibility to receive endorsement.</E> Any applicant that submits an application by the deadline announced in the solicitation that contains all information necessary for CMS to determine whether the applicant meets all of the requirements in § 403.806, and whose application meets all of the requirements in § 403.806, will be eligible to enter into an agreement with CMS to receive a Medicare endorsement. (e) <E T="03">Period of endorsement.</E> In Year One of the initiative, the Medicare endorsement will be effective for a period of at least 12 months but fewer than 24 months. Beginning in Year Two, the endorsement will be effective at least 12 months, but fewer than 15 months. CMS will consider card program sponsor performance under an existing Medicare endorsement as a factor in determining eligibility for endorsement in future annual cycles. (f) <E T="03">Termination of endorsement by CMS.</E> CMS may terminate the endorsement at any time. (g) <E T="03">Termination of participation by Medicare-endorsed drug card sponsor.</E> A Medicare-endorsed prescription drug card program sponsor may choose not to continue participation in the Medicare-Endorsed Prescription Drug Card Assistance Initiative. (h) <E T="03">Notification to beneficiaries of termination of participation.</E> (1) In the event of termination of participation in the initiative by the drug card program sponsor, or termination by CMS, the Medicare-endorsed prescription drug card program sponsor must notify all of its Medicare beneficiary enrollees in writing that they may enroll in an alternative Medicare-endorsed prescription drug card program. This notice must be provided by United States mail within 10 days of providing CMS with notice of termination or within 10 days of receiving notice of termination from CMS. (2) In the event of termination by the drug card program sponsor, or termination by CMS, drug card programs must remain available to beneficiaries for 90 days after beneficiaries are provided with notice of termination. In the event of termination by the drug card program sponsor, or termination by CMS, drug card program sponsors must suspend information and outreach and enrollment of beneficiaries once beneficiaries have been notified of the termination. </SECTION> <SECTION> <SECTNO>§ 403.806</SECTNO> <SUBJECT>Requirements for eligibility for endorsement.</SUBJECT> (a) <E T="03">General.</E> To be eligible for Medicare endorsement, an applicant must submit an application by the deadline announced in the solicitation, demonstrating that it meets and will comply with the requirements described in this section. (b) <E T="03">Applicant structure, experience, and participation in administrative consortium.</E> (1) A single organization or entity that is either the applicant or a subcontractor or under other legal arrangement with the applicant must have no less than 3 years experience in pharmacy benefit management, in administering a prescription drug discount program, or in administering a low income drug assistance program that provides prescription drugs at low or no cost; (2) A single organization or entity that is either the applicant or a subcontractor or under other legal arrangement with the applicant must, at <PRTPAGE P="62"/>the time of application for endorsement, manage at least 1 million covered lives in an insured pharmacy benefit, prescription drug discount program, or a low income drug assistance program that provides prescription drugs at low or no cost. (3) A single organization or entity that is either the applicant or a subcontractor or under other legal arrangement with the applicant must— (i) Have a pharmacy network serving all 50 States and the District of Columbia to qualify as a national program; or (ii) Have a regional pharmacy network serving at least 2 contiguous States (with the exception of Hawaii and Alaska, which can partner with 2 or more contiguous States) to qualify as a regional program. (4) The applicant must demonstrate that it is financially solvent. (5) The applicant must have a satisfactory record of integrity and business ethics. (6) The applicant must agree to, and demonstrate the ability to, jointly administer, abide by the guidelines of, and fund a private administrative consortium with other Medicare-endorsed prescription drug card program sponsors in accordance with the requirements of this subpart. (7) The applicant must comply with all applicable Federal and State laws. (c) <E T="03">Customer service.</E> The applicant must comply with the following customer service requirements: (1) Limit its one time enrollment fee in Year One to no more than $25. In future years, CMS may adjust the fee based on a determination of what is a reasonable amount to defray costs of the applicant's administrative activities. (2) Enroll only Medicare beneficiaries, and all Medicare beneficiaries who wish to participate in its Medicare-endorsed prescription drug card program. (3) Provide information and outreach materials regarding its Medicare-endorsed prescription drug card program to all enrolled Medicare beneficiaries. (4) Maintain a toll free customer call center that is open during usual business hours and that provides customer telephone service, including to pharmacists, in accordance with standard business practices. (d) <E T="03">Privacy and confidentiality of beneficiary-specific information.</E> (1) The applicant must comply, beginning at the time of Medicare endorsement, with 45 CFR 160.103, 160.202, 164.501 through 164.514, and 164.520, subject to the following modifications: (i) All references to covered entities will be applicable to the drug card sponsor, and health care operations means the routine activities, including providing information and outreach, as provided under the Medicare endorsement; and (ii) For the purpose of authorization in 45 CFR 164.508, marketing means any use or disclosure of protected health information to be outside the scope of Medicare endorsement. (2) The applicant must develop and implement a written data security plan for protected health information. (3) The requirements of this paragraph (d) are enforceable by CMS under the provisions of § 403.812. (4) Nothing in this paragraph (d) modifies the applicability of 45 CFR 160.103, 160.202, 164.501 through 164.514, and 164.520 to organizations or entities independently subject to the mandates of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). (e) <E T="03">Discounts, rebates, and access.</E> The applicant must comply with the following discount, rebate, and access requirements: (1) Offer a discount on at least one brand name or generic prescription drug in each of the therapeutic drug classes, groups, or subgroups representing the prescription drugs commonly needed by Medicare beneficiaries. (2) Obtain pharmaceutical manufacturer drug rebates or discounts on brand name or generic drugs or both, and ensure that a substantial share is provided to beneficiaries either directly or indirectly through pharmacies. (3) Ensure that a specific drug offered under the program is not dropped from the formulary nor its price increased for periods of at least 60 days, starting on the first day of the program's operation, and notify CMS, the consortium, <PRTPAGE P="63"/>and the network pharmacies of these changes 30 days before the change becomes effective. (4) Guarantee that for the drugs for which the applicant will offer discounts, Medicare beneficiaries enrolled in its Medicare-endorsed prescription drug discount card program will receive the lower of the discounted price available through the program, or the price the pharmacy would charge a cash paying customer. (5) Have a national or regional contracted pharmacy network sufficient to ensure that pharmacies are locally accessible to beneficiaries where the drug discount card will be offered. At least 90 percent of Medicare beneficiaries, on average, in all Metropolitan Statistical Areas (MSAs) served by the program must live within 5 miles of a contracted pharmacy; and at least 90 percent of Medicare beneficiaries, on average, in all non-MSAs served by the program must live within 10 miles of a contracted pharmacy. (6) Provide to the administrative consortium information on drugs and their pricing included in the applicant's formularies. </SECTION> <SECTION> <SECTNO>§ 403.807</SECTNO> <SUBJECT>Application process.</SUBJECT> (a) CMS will solicit applications through an application process. (b) CMS will review applications and determine whether the applicant has met and is able to comply with all of the requirements set forth in § 403.806 to become Medicare-endorsed. (c) All applications that are submitted by the deadline announced in the solicitation and that demonstrate that the applicant has met and is able to comply with all of the requirements to become Medicare-endorsed will be eligible to enter into an agreement to receive Medicare endorsement from CMS. </SECTION> <SECTION> <SECTNO>§ 403.808</SECTNO> <SUBJECT>Agreement terms and conditions.</SUBJECT> In order to receive a Medicare endorsement, an applicant that complies with all of the application procedures and meets all of the requirements described in this subpart must enter into a written agreement with CMS. The agreement must include a statement by the applicant that it has met the requirements of this subpart and will continue to meet all requirements as long as the agreement is in effect. The agreement must include a statement that the applicant will comply with information and outreach guidelines established by CMS. </SECTION> <SECTION> <SECTNO>§ 403.810</SECTNO> <SUBJECT>Administrative consortium responsibilities and oversight.</SUBJECT> (a) The administrative consortium will be responsible for— (1) Ensuring that beneficiaries are not enrolled in more than one Medicare-endorsed prescription drug card program at the same time; (2) Facilitating the publication of, or publishing, information, including comparative price information on discounted drugs, that assists beneficiaries in determining which Medicare-endorsed prescription drug card program is the most appropriate for their needs; (3) Ensuring the integrity of the information distributed by the Medicare-endorsed prescription drug card programs; and (4) Developing and implementing a written data security plan for protected health information; and (5) Abiding by applicable Federal and State laws. (b) In order to facilitate the formation of the administrative consortium and ensure that all functions are performed in a timely manner, CMS may assist in the start-up of the administrative consortium and perform any of the functions in this section for a transitional period of time. </SECTION> <SECTION> <SECTNO>§ 403.811</SECTNO> <SUBJECT>Beneficiary enrollment.</SUBJECT> (a) <E T="03">Individual enrollment.</E> (1) Medicare beneficiaries who are enrolling in a Medicare-endorsed prescription drug card program for the first time may enroll at any time. (2) Once enrolled, a Medicare beneficiary may belong to only one Medicare-endorsed prescription drug card program at a time. (3) Once enrolled, and except as provided in paragraph (a)(4) of this section, enrollees may change enrollment to a different Medicare-endorsed prescription drug card program, to be effective the first day of the following <PRTPAGE P="64"/>January or July following the request for change, whichever comes first. (4) If the Medicare endorsement of a prescription drug card program is terminated, either by CMS or by the sponsor, enrolled Medicare beneficiaries may enroll in a different Medicare-endorsed prescription drug card program to become effective immediately. (b) <E T="03">Group enrollment.</E> (1) The prescription drug card program sponsor may accept group enrollment from health insurers and must ensure— (i) Disclosure to Medicare beneficiaries of the intent to enroll them as a group; (ii) Disclosure to beneficiaries of the enrollment exclusivity restrictions and other enrollment rules of the initiative; (2) Medicare+Choice (M+C) organizations may subsidize the enrollment fee and offer the drug card program as part of their Adjusted Community Rate filing, but may not require enrollment in a drug card program as a condition of enrollment in any of their M+C plans. </SECTION> <SECTION> <SECTNO>§ 403.812</SECTNO> <SUBJECT>Withdrawal of endorsement.</SUBJECT> If CMS obtains evidence that a Medicare-endorsed prescription drug card program or its sponsor has failed to meet any of the requirements for endorsement or has not complied with the agreement necessary to receive endorsement under this subpart, CMS may withdraw the endorsement. CMS may also take appropriate intermediate actions and may also refer the card program sponsor to appropriate Federal or State authorities, including the Office of Inspector General, for sanctions or prosecution under section 1140 of the Act. </SECTION> <SECTION> <SECTNO>§ 403.820</SECTNO> <SUBJECT>Oversight and beneficiary education.</SUBJECT> (a) The Medicare-endorsed prescription drug card program sponsor must report to CMS on a periodic basis on major features of its programs that correspond to the qualifications for endorsement, including savings to beneficiaries, customer service, and discount card program operations. Card program sponsors must certify the validity of their reported data. (b) The Medicare-endorsed prescription drug card program sponsor must establish and maintain a customer complaints process. This process must be designed to track and address in a timely manner enrollees' complaints about any aspect of the drug card program. (c) CMS will conduct beneficiary education about, and oversight of, the Medicare-endorsed prescription drug card programs, as determined by CMS. </SECTION> </SUBPART> </PART> </SUBCHAP> <SUBCHAP TYPE="P"> <PRTPAGE P="65"/> <HD SOURCE="HED">SUBCHAPTER B—MEDICARE PROGRAM</HD> <PART> <EAR>Pt. 405</EAR> <HD SOURCE="HED">PART 405—FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED</HD> <CONTENTS> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Medical Services Coverage Decisions That Relate to Health Care Technology</HD> <SECHD>Sec.</SECHD> <SECTNO>405.201</SECTNO> <SUBJECT>Scope of subpart and definitions.</SUBJECT> <SECTNO>405.203</SECTNO> <SUBJECT>FDA categorization of investigational devices.</SUBJECT> <SECTNO>405.205</SECTNO> <SUBJECT>Coverage of a non-experimental/investigational (Category B) device.</SUBJECT> <SECTNO>405.207</SECTNO> <SUBJECT>Services related to a noncovered device.</SUBJECT> <SECTNO>405.209</SECTNO> <SUBJECT>Payment for a non-experimental/investigational (Category B) device.</SUBJECT> <SECTNO>405.211</SECTNO> <SUBJECT>Procedures for Medicare contractors in making coverage decisions for a non-experimental/investigational (Category B) device.</SUBJECT> <SECTNO>405.213</SECTNO> <SUBJECT>Re-evaluation of a device categorization.</SUBJECT> <SECTNO>405.215</SECTNO> <SUBJECT>Confidential commercial and trade secret information.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Suspension of Payment, Recovery of Overpayments, and Repayment of Scholarships and Loans</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTNO>405.301</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Liability for Payments to Providers and Suppliers, and Handling of Incorrect Payments</HD> <SECTNO>405.350</SECTNO> <SUBJECT>Individual's liability for payments made to providers and other persons for items and services furnished the individual.</SUBJECT> <SECTNO>405.351</SECTNO> <SUBJECT>Incorrect payments for which the individual is not liable.</SUBJECT> <SECTNO>405.352</SECTNO> <SUBJECT>Adjustment of title XVIII incorrect payments.</SUBJECT> <SECTNO>405.353</SECTNO> <SUBJECT>Certification of amount that will be adjusted against individual title II or railroad retirement benefits.</SUBJECT> <SECTNO>405.354</SECTNO> <SUBJECT>Procedures for adjustment or recovery—title II beneficiary.</SUBJECT> <SECTNO>405.355</SECTNO> <SUBJECT>Waiver of adjustment or recovery.</SUBJECT> <SECTNO>405.356</SECTNO> <SUBJECT>Principles applied in waiver of adjustment or recovery.</SUBJECT> <SECTNO>405.357</SECTNO> <SUBJECT>Notice of right to waiver consideration.</SUBJECT> <SECTNO>405.358</SECTNO> <SUBJECT>When waiver of adjustment or recovery may be applied.</SUBJECT> <SECTNO>405.359</SECTNO> <SUBJECT>Liability of certifying or disbursing officer.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Suspension and Recoupment of Payment to Providers and Suppliers and Collection and Compromise of Overpayments</HD> <SECTNO>405.370</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>405.371</SECTNO> <SUBJECT> Suspension, offset, and recoupment of Medicare payments to providers and suppliers of services.</SUBJECT> <SECTNO>405.372</SECTNO> <SUBJECT> Proceeding for suspension of payment.</SUBJECT> <SECTNO>405.373</SECTNO> <SUBJECT>Proceeding for offset or recoupment.</SUBJECT> <SECTNO>405.374</SECTNO> <SUBJECT>Opportunity for rebuttal.</SUBJECT> <SECTNO>405.375</SECTNO> <SUBJECT>Time limits for, and notification of, administrative determination after receipt of rebuttal statement.</SUBJECT> <SECTNO>405.376</SECTNO> <SUBJECT>Suspension and termination of collection action and compromise of claims for overpayment.</SUBJECT> <SECTNO>405.377</SECTNO> <SUBJECT>Withholding Medicare payments to recover Medicaid overpayments.</SUBJECT> <SECTNO>405.378</SECTNO> <SUBJECT>Interest charges on overpayment and underpayments to providers, suppliers, and other entities.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Repayment of Scholarships and Loans</HD> <SECTNO>405.380</SECTNO> <SUBJECT>Collection of past-due amounts on scholarship and loan programs.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Private Contracts</HD> <SECTNO>405.400</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>405.405</SECTNO> <SUBJECT>General rules.</SUBJECT> <SECTNO>405.410</SECTNO> <SUBJECT>Conditions for properly opting-out of Medicare.</SUBJECT> <SECTNO>405.415</SECTNO> <SUBJECT>Requirements of the private contract.</SUBJECT> <SECTNO>405.420</SECTNO> <SUBJECT>Requirements of the opt-out affidavit.</SUBJECT> <SECTNO>405.425</SECTNO> <SUBJECT>Effects of opting-out of Medicare.</SUBJECT> <SECTNO>405.430</SECTNO> <SUBJECT>Failure to properly opt-out.</SUBJECT> <SECTNO>405.435</SECTNO> <SUBJECT>Failure to maintain opt-out.</SUBJECT> <SECTNO>405.440</SECTNO> <SUBJECT>Emergency and urgent care services.</SUBJECT> <SECTNO>405.445</SECTNO> <SUBJECT>Renewal and early termination of opt-out.</SUBJECT> <SECTNO>405.450</SECTNO> <SUBJECT>Appeals.</SUBJECT> <SECTNO>405.455</SECTNO> <SUBJECT>Application to Medicare+Choice contracts.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Criteria for Determining Reasonable Charges</HD> <SECTNO>405.500</SECTNO> <SUBJECT>Basis.</SUBJECT> <SECTNO>405.501</SECTNO> <SUBJECT>Determination of reasonable charges.</SUBJECT> <SECTNO>405.502</SECTNO> <SUBJECT>Criteria for determining reasonable charges.</SUBJECT> <SECTNO>405.503</SECTNO> <SUBJECT>Determining customary charges.</SUBJECT> <SECTNO>405.504</SECTNO> <SUBJECT>Determining prevailing charges.</SUBJECT> <SECTNO>405.505</SECTNO> <SUBJECT>Determination of locality</SUBJECT> <SECTNO>405.506</SECTNO> <SUBJECT>Charges higher than customary or prevailing charges or lowest charge levels.<PRTPAGE P="66"/> </SUBJECT> <SECTNO>405.507</SECTNO> <SUBJECT>Illustrations of the application of the criteria for determining reasonable charges.</SUBJECT> <SECTNO>405.508</SECTNO> <SUBJECT>Determination of comparable circumstances; limitation.</SUBJECT> <SECTNO>405.509</SECTNO> <SUBJECT>Determining the inflation-indexed charge.</SUBJECT> <SECTNO>405.511</SECTNO> <SUBJECT>Reasonable charges for medical services, supplies, and equipment.</SUBJECT> <SECTNO>405.512</SECTNO> <SUBJECT>Carriers' procedural terminology and coding systems.</SUBJECT> <SECTNO>405.515</SECTNO> <SUBJECT>Reimbursement for clinical laboratory services billed by physicians.</SUBJECT> <SECTNO>405.517</SECTNO> <SUBJECT>Payment for drugs and biologicals that are not paid on a cost or prospective payment basis.</SUBJECT> <SECTNO>405.520</SECTNO> <SUBJECT>Payment for a physician assistant's, nurse practitioner's, and clinical nurse specialists' services and services furnished incident to their professional services.</SUBJECT> <SECTNO>405.534</SECTNO> <SUBJECT>Limitation on payment for screening mammography services.</SUBJECT> <SECTNO>405.535</SECTNO> <SUBJECT> Special rule for nonparticipating physicians and suppliers furnishing screening mammography services before January 1, 2002.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subpart F [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Reconsiderations and Appeals Under Medicare Part A</HD> <SECTNO>405.701</SECTNO> <SUBJECT>Basis, purpose and definitions.</SUBJECT> <SECTNO>405.702</SECTNO> <SUBJECT>Notice of initial determination.</SUBJECT> <SECTNO>405.704</SECTNO> <SUBJECT>Actions which are initial determinations.</SUBJECT> <SECTNO>405.705</SECTNO> <SUBJECT>Actions which are not initial determinations.</SUBJECT> <SECTNO>405.706</SECTNO> <SUBJECT>Decisions of utilization review committees.</SUBJECT> <SECTNO>405.708</SECTNO> <SUBJECT>Effect of initial determination.</SUBJECT> <SECTNO>405.710</SECTNO> <SUBJECT>Right to reconsideration.</SUBJECT> <SECTNO>405.711</SECTNO> <SUBJECT>Time and place of filing request for reconsideration.</SUBJECT> <SECTNO>405.712</SECTNO> <SUBJECT>Extension of time to request reconsideration.</SUBJECT> <SECTNO>405.714</SECTNO> <SUBJECT>Withdrawal of request for reconsideration.</SUBJECT> <SECTNO>405.715</SECTNO> <SUBJECT>Reconsidered determination.</SUBJECT> <SECTNO>405.716</SECTNO> <SUBJECT>Notice of reconsidered determination.</SUBJECT> <SECTNO>405.717</SECTNO> <SUBJECT>Effect of a reconsidered determination.</SUBJECT> <SECTNO>405.718</SECTNO> <SUBJECT>Expedited appeals process.</SUBJECT> <SECTNO>405.720</SECTNO> <SUBJECT>Hearing; right to hearing.</SUBJECT> <SECTNO>405.722</SECTNO> <SUBJECT>Time and place of filing request for a hearing.</SUBJECT> <SECTNO>405.724</SECTNO> <SUBJECT>Departmental Appeals Board (DAB) review.</SUBJECT> <SECTNO>405.730</SECTNO> <SUBJECT>Court review.</SUBJECT> <SECTNO>405.732</SECTNO> <SUBJECT>Review of national coverage decisions (NCDs).</SUBJECT> <SECTNO>405.740</SECTNO> <SUBJECT>Principles for determining the amount in controversy.</SUBJECT> <SECTNO>405.745</SECTNO> <SUBJECT>Amount in controversy ascertained after reconsideration.</SUBJECT> <SECTNO>405.747</SECTNO> <SUBJECT>Dismissal of request for hearing; amount in controversy less than $100.</SUBJECT> <SECTNO>405.750</SECTNO> <SUBJECT>Time period for reopening initial, revised, or reconsidered determinations and decisions or revised decisions of an ALJ or the Departmental Appeals Board (DAB); binding effect of determination and decisions.</SUBJECT> <SECTNO>405.753</SECTNO> <SUBJECT>Appeal of a categorization of a device.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Appeals Under the Medicare Part B Program</HD> <SECTNO>405.801</SECTNO> <SUBJECT>Part B appeals—general description.</SUBJECT> <SECTNO>405.802</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>405.803</SECTNO> <SUBJECT>Initial determination.</SUBJECT> <SECTNO>405.804</SECTNO> <SUBJECT>Notice of initial determination.</SUBJECT> <SECTNO>405.805</SECTNO> <SUBJECT>Parties to the initial determination.</SUBJECT> <SECTNO>405.806</SECTNO> <SUBJECT>Effect of initial determination.</SUBJECT> <SECTNO>405.807</SECTNO> <SUBJECT>Request for review of initial determination.</SUBJECT> <SECTNO>405.808</SECTNO> <SUBJECT>Parties to the review.</SUBJECT> <SECTNO>405.809</SECTNO> <SUBJECT>Opportunity to submit evidence.</SUBJECT> <SECTNO>405.810</SECTNO> <SUBJECT>Review determination.</SUBJECT> <SECTNO>405.811</SECTNO> <SUBJECT>Notice of review determination.</SUBJECT> <SECTNO>405.812</SECTNO> <SUBJECT>Effect of review determination.</SUBJECT> <SECTNO>405.815</SECTNO> <SUBJECT>Amount in controversy for carrier hearing, ALJ hearing and judicial review.</SUBJECT> <SECTNO>405.817</SECTNO> <SUBJECT>Principles for determining amount in controversy.</SUBJECT> <SECTNO>405.821</SECTNO> <SUBJECT>Request for carrier hearing.</SUBJECT> <SECTNO>405.822</SECTNO> <SUBJECT>Parties to a carrier hearing.</SUBJECT> <SECTNO>405.823</SECTNO> <SUBJECT>Carrier hearing officer.</SUBJECT> <SECTNO>405.824</SECTNO> <SUBJECT>Disqualification of carrier hearing officer.</SUBJECT> <SECTNO>405.825</SECTNO> <SUBJECT>Location of carrier hearing.</SUBJECT> <SECTNO>405.826</SECTNO> <SUBJECT>Notice of carrier hearing.</SUBJECT> <SECTNO>405.830</SECTNO> <SUBJECT>Conduct of the carrier hearing.</SUBJECT> <SECTNO>405.831</SECTNO> <SUBJECT>Waiver of right to appear at carrier hearing and present evidence.</SUBJECT> <SECTNO>405.832</SECTNO> <SUBJECT>Dismissal of request for carrier hearing.</SUBJECT> <SECTNO>405.833</SECTNO> <SUBJECT>Record of carrier hearing.</SUBJECT> <SECTNO>405.834</SECTNO> <SUBJECT>Carrier hearing officer's decision.</SUBJECT> <SECTNO>405.835</SECTNO> <SUBJECT>Effect of carrier hearing officer's decision.</SUBJECT> <SECTNO>405.836</SECTNO> <SUBJECT>Authority of the carrier hearing officer.</SUBJECT> <SECTNO>405.841</SECTNO> <SUBJECT>Reopening initial or review determination of the carrier, and decision of a carrier hearing officer.</SUBJECT> <SECTNO>405.842</SECTNO> <SUBJECT>Notice of reopening and revision.</SUBJECT> <SECTNO>405.850</SECTNO> <SUBJECT>Change of ruling or legal precedent.</SUBJECT> <SECTNO>405.853</SECTNO> <SUBJECT>Expedited appeals process.</SUBJECT> <SECTNO>405.855</SECTNO> <SUBJECT>ALJ hearing.</SUBJECT> <SECTNO>405.856</SECTNO> <SUBJECT>Departmental Appeals Board (DAB) review.</SUBJECT> <SECTNO>405.857</SECTNO> <SUBJECT>Court review.</SUBJECT> <SECTNO>405.860</SECTNO> <SUBJECT>Review of national coverage decisions (NCDs).</SUBJECT> <SECTNO>405.870</SECTNO> <SUBJECT>Appointment of representative.</SUBJECT> <SECTNO>405.871</SECTNO> <SUBJECT>Qualifications of representatives.</SUBJECT> <SECTNO>405.872</SECTNO> <SUBJECT>Authority of representatives.</SUBJECT> <SECTNO>405.874</SECTNO> <SUBJECT>Appeals of carrier decisions that supplier standards are not met.<PRTPAGE P="67"/> </SUBJECT> <SECTNO>405.877</SECTNO> <SUBJECT>Appeal of a categorization of a device.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subparts I-Q [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart R—Provider Reimbursement Determinations and Appeals</HD> <SECTNO>405.1801</SECTNO> <SUBJECT>Introduction.</SUBJECT> <SECTNO>405.1803</SECTNO> <SUBJECT>Intermediary determination and notice of amount of program reimbursement.</SUBJECT> <SECTNO>405.1804</SECTNO> <SUBJECT>Matters not subject to administrative or judicial review under prospective payment.</SUBJECT> <SECTNO>405.1805</SECTNO> <SUBJECT>Parties to intermediary determination.</SUBJECT> <SECTNO>405.1807</SECTNO> <SUBJECT>Effect of intermediary determination.</SUBJECT> <SECTNO>405.1809</SECTNO> <SUBJECT>Intermediary hearing procedures.</SUBJECT> <SECTNO>405.1811</SECTNO> <SUBJECT>Right to intermediary hearing; time, place, form, and content of request for intermediary hearing.</SUBJECT> <SECTNO>405.1813</SECTNO> <SUBJECT>Failure to timely request an intermediary hearing.</SUBJECT> <SECTNO>405.1815</SECTNO> <SUBJECT>Parties to the intermediary hearing.</SUBJECT> <SECTNO>405.1817</SECTNO> <SUBJECT>Hearing officer or panel of hearing officers authorized to conduct intermediary hearing; disqualification of officers.</SUBJECT> <SECTNO>405.1819</SECTNO> <SUBJECT>Conduct of intermediary hearing.</SUBJECT> <SECTNO>405.1821</SECTNO> <SUBJECT>Prehearing discovery and other proceedings prior to the intermediary hearing.</SUBJECT> <SECTNO>405.1823</SECTNO> <SUBJECT>Evidence at intermediary hearing.</SUBJECT> <SECTNO>405.1825</SECTNO> <SUBJECT>Witnesses at intermediary hearing.</SUBJECT> <SECTNO>405.1827</SECTNO> <SUBJECT>Record of intermediary hearing.</SUBJECT> <SECTNO>405.1829</SECTNO> <SUBJECT>Authority of hearing officer(s) at intermediary hearing.</SUBJECT> <SECTNO>405.1831</SECTNO> <SUBJECT>Intermediary hearing decision and notice.</SUBJECT> <SECTNO>405.1833</SECTNO> <SUBJECT>Effect of intermediary hearing decision.</SUBJECT> <SECTNO>405.1835</SECTNO> <SUBJECT>Right to Board hearing.</SUBJECT> <SECTNO>405.1837</SECTNO> <SUBJECT>Group appeal.</SUBJECT> <SECTNO>405.1839</SECTNO> <SUBJECT>Amount in controversy.</SUBJECT> <SECTNO>405.1841</SECTNO> <SUBJECT>Time, place, form, and content of request for Board hearing.</SUBJECT> <SECTNO>405.1842</SECTNO> <SUBJECT>Expediting Board proceedings.</SUBJECT> <SECTNO>405.1843</SECTNO> <SUBJECT>Parties to Board hearing.</SUBJECT> <SECTNO>405.1845</SECTNO> <SUBJECT>Composition of Board.</SUBJECT> <SECTNO>405.1847</SECTNO> <SUBJECT>Disqualification of Board members.</SUBJECT> <SECTNO>405.1849</SECTNO> <SUBJECT>Establishment of time and place of hearing by the Board.</SUBJECT> <SECTNO>405.1851</SECTNO> <SUBJECT>Conduct of Board hearing.</SUBJECT> <SECTNO>405.1853</SECTNO> <SUBJECT>Prehearing discovery and other proceedings prior to the Board hearing.</SUBJECT> <SECTNO>405.1855</SECTNO> <SUBJECT>Evidence at Board hearing.</SUBJECT> <SECTNO>405.1857</SECTNO> <SUBJECT>Subpoenas.</SUBJECT> <SECTNO>405.1859</SECTNO> <SUBJECT>Witnesses.</SUBJECT> <SECTNO>405.1861</SECTNO> <SUBJECT>Oral argument and written allegations.</SUBJECT> <SECTNO>405.1863</SECTNO> <SUBJECT>Administrative policy at issue.</SUBJECT> <SECTNO>405.1865</SECTNO> <SUBJECT>Record of Board hearing.</SUBJECT> <SECTNO>405.1867</SECTNO> <SUBJECT>Sources of Board's authority.</SUBJECT> <SECTNO>405.1869</SECTNO> <SUBJECT>Scope of Board's decision-making authority.</SUBJECT> <SECTNO>405.1871</SECTNO> <SUBJECT>Board hearing decision and notice.</SUBJECT> <SECTNO>405.1873</SECTNO> <SUBJECT>Board's jurisdiction.</SUBJECT> <SECTNO>405.1875</SECTNO> <SUBJECT>Administrator's review.</SUBJECT> <SECTNO>405.1877</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <SECTNO>405.1881</SECTNO> <SUBJECT>Appointment of representative.</SUBJECT> <SECTNO>405.1883</SECTNO> <SUBJECT>Authority of representative.</SUBJECT> <SECTNO>405.1885</SECTNO> <SUBJECT>Reopening a determination or decision.</SUBJECT> <SECTNO>405.1887</SECTNO> <SUBJECT>Notice of reopening.</SUBJECT> <SECTNO>405.1889</SECTNO> <SUBJECT>Effect of a revision.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subparts S-T [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart U—Conditions for Coverage of Suppliers of End-Stage Renal Disease (ESRD) Services</HD> <SECTNO>405.2100</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> <SECTNO>405.2101</SECTNO> <SUBJECT>Objectives of the end-stage renal disease (ESRD) program.</SUBJECT> <SECTNO>405.2102</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>405.2110</SECTNO> <SUBJECT>Designation of ESRD networks.</SUBJECT> <SECTNO>405.2111</SECTNO> <RESERVED>[Reserved]</RESERVED> <SECTNO>405.2112</SECTNO> <SUBJECT>ESRD network organizations.</SUBJECT> <SECTNO>405.2113</SECTNO> <SUBJECT>Medical review board.</SUBJECT> <SECTNO>405.2114</SECTNO> <RESERVED>[Reserved]</RESERVED> <SECTNO>405.2120</SECTNO> <SUBJECT>Minimum utilization rates: general.</SUBJECT> <SECTNO>405.2121</SECTNO> <SUBJECT>Basis for determining minimum utilization rates.</SUBJECT> <SECTNO>405.2122</SECTNO> <SUBJECT>Types and duration of classification according to utilization rates.</SUBJECT> <SECTNO>405.2123</SECTNO> <SUBJECT>Reporting of utilization rates for classification.</SUBJECT> <SECTNO>405.2124</SECTNO> <SUBJECT>Calculation of utilization rates for comparison with minimal utilization rates(s) and notification of status.</SUBJECT> <SECTNO>405.2130</SECTNO> <SUBJECT>Condition: Minimum utilization rates.</SUBJECT> <SECTNO>405.2131</SECTNO> <SUBJECT>Condition: Provider status: Renal transplantation center or renal dialysis center.</SUBJECT> <SECTNO>405.2132</SECTNO> <RESERVED>[Reserved]</RESERVED> <SECTNO>405.2133</SECTNO> <SUBJECT>Condition: Furnishing data and information for ESRD program administration.</SUBJECT> <SECTNO>405.2134</SECTNO> <SUBJECT>Condition: Participation in network activities.</SUBJECT> <SECTNO>405.2135</SECTNO> <SUBJECT>Condition: Compliance with Federal, State, and local laws and regulations.</SUBJECT> <SECTNO>405.2136</SECTNO> <SUBJECT>Condition: Governing body and management.</SUBJECT> <SECTNO>405.2137</SECTNO> <SUBJECT>Condition: Patient long-term program and patient care plan.</SUBJECT> <SECTNO>405.2138</SECTNO> <SUBJECT>Condition: Patients' rights and responsibilities.</SUBJECT> <SECTNO>405.2139</SECTNO> <SUBJECT>Condition: Medical records.</SUBJECT> <SECTNO>405.2140</SECTNO> <SUBJECT>Condition: Physical environment.</SUBJECT> <SECTNO>405.2150</SECTNO> <SUBJECT>Condition: Reuse of hemodialyzers and other dialysis supplies.</SUBJECT> <SECTNO>405.2160</SECTNO> <SUBJECT>Condition: Affiliation agreement or arrangement.</SUBJECT> <SECTNO>405.2161</SECTNO> <SUBJECT>Condition: Director of a renal dialysis facility or renal dialysis center.<PRTPAGE P="68"/> </SUBJECT> <SECTNO>405.2162</SECTNO> <SUBJECT>Condition: Staff of a renal dialysis facility or renal dialysis center.</SUBJECT> <SECTNO>405.2163</SECTNO> <SUBJECT>Condition: Minimal service requirements for a renal dialysis facility or renal dialysis center.</SUBJECT> <SECTNO>405.2164</SECTNO> <SUBJECT>Conditions for coverage of special purpose renal dialysis facilities.</SUBJECT> <SECTNO>405.2170</SECTNO> <SUBJECT>Condition: Director of a renal transplantation center.</SUBJECT> <SECTNO>405.2171</SECTNO> <SUBJECT>Condition: Minimal service requirements for a renal transplantation center.</SUBJECT> <SECTNO>405.2180</SECTNO> <SUBJECT>Termination of Medicare coverage.</SUBJECT> <SECTNO>405.2181</SECTNO> <SUBJECT>Alternative sanctions.</SUBJECT> <SECTNO>405.2182</SECTNO> <SUBJECT>Notice of sanction and appeal rights: Termination of coverage.</SUBJECT> <SECTNO>405.2184</SECTNO> <SUBJECT>Notice of appeal rights: Alternative sanctions.</SUBJECT> </SUBPART> <SUBPART> <RESERVED>Subparts V-W [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart X—Rural Health Clinic and Federally Qualified Health Center Services</HD> <SECTNO>405.2400</SECTNO> <SUBJECT>Basis.</SUBJECT> <SECTNO>405.2401</SECTNO> <SUBJECT>Scope and definitions.</SUBJECT> <SECTNO>405.2402</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> <SECTNO>405.2403</SECTNO> <SUBJECT>Content and terms of the agreement with the Secretary.</SUBJECT> <SECTNO>405.2404</SECTNO> <SUBJECT>Terminations of agreements.</SUBJECT> <SECTNO>405.2410</SECTNO> <SUBJECT>Application of Part B deductible and coinsurance.</SUBJECT> <SECTNO>405.2411</SECTNO> <SUBJECT>Scope of benefits.</SUBJECT> <SECTNO>405.2412</SECTNO> <SUBJECT>Physicians' services.</SUBJECT> <SECTNO>405.2413</SECTNO> <SUBJECT>Services and supplies incident to a physician's services.</SUBJECT> <SECTNO>405.2414</SECTNO> <SUBJECT>Nurse practitioner and physician assistant services.</SUBJECT> <SECTNO>405.2415</SECTNO> <SUBJECT>Services and supplies incident to nurse practitioner and physician assistant services.</SUBJECT> <SECTNO>405.2416</SECTNO> <SUBJECT>Visiting nurse services.</SUBJECT> <SECTNO>405.2417</SECTNO> <SUBJECT>Visiting nurse services: Determination of shortage of agencies.</SUBJECT> <HD SOURCE="HD1">Federally Qualified Health Center Services</HD> <SECTNO>405.2430</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> <SECTNO>405.2434</SECTNO> <SUBJECT>Content and terms of the agreement.</SUBJECT> <SECTNO>405.2436</SECTNO> <SUBJECT>Termination of agreement.</SUBJECT> <SECTNO>405.2440</SECTNO> <SUBJECT>Conditions for reinstatement after termination by CMS.</SUBJECT> <SECTNO>405.2442</SECTNO> <SUBJECT>Notice to the public.</SUBJECT> <SECTNO>405.2444</SECTNO> <SUBJECT>Change of ownership.</SUBJECT> <SECTNO>405.2446</SECTNO> <SUBJECT>Scope of services.</SUBJECT> <SECTNO>405.2448</SECTNO> <SUBJECT>Preventive primary services.</SUBJECT> <SECTNO>405.2450</SECTNO> <SUBJECT>Clinical psychologist and clinical social worker services.</SUBJECT> <SECTNO>405.2452</SECTNO> <SUBJECT>Services and supplies incident to clinical psychologist and clinical social worker services.</SUBJECT> <HD SOURCE="HD1">Payment for Rural Health Clinic and Federally Qualified Health Center Services</HD> <SECTNO>405.2460</SECTNO> <SUBJECT>Applicability of general payment exclusions.</SUBJECT> <SECTNO>405.2462</SECTNO> <SUBJECT>Payment for rural health clinic and Federally qualified health center services.</SUBJECT> <SECTNO>405.2463</SECTNO> <SUBJECT>What constitutes a visit.</SUBJECT> <SECTNO>405.2464</SECTNO> <SUBJECT>All-inclusive rate.</SUBJECT> <SECTNO>405.2466</SECTNO> <SUBJECT>Annual reconciliation.</SUBJECT> <SECTNO>405.2468</SECTNO> <SUBJECT>Allowable costs.</SUBJECT> <SECTNO>405.2470</SECTNO> <SUBJECT>Reports and maintenance of records.</SUBJECT> <SECTNO>405.2472</SECTNO> <SUBJECT>Beneficiary appeals.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1861, 1862(a), 1871, 1874, 1881, and 1886(k) of the Social Security Act (42 U.S.C. 1302, 1395x, 1395y(a), 1395hh, 1395kk, 1395rr and 1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C. 263a). </AUTH> <SUBPART> <RESERVED>Subpart A [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Medical Services Coverage Decisions That Relate to Health Care Technology</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1862 and 1871 of the Social Security Act as amended (42 U.S.C.1302, 1395y, and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 60 FR 48423, Sept. 19, 1995, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 405.201</SECTNO> <SUBJECT>Scope of subpart and definitions.</SUBJECT> (a) <E T="03">Scope.</E> This subpart establishes that— (1) CMS uses the FDA categorization of a device as a factor in making Medicare coverage decisions; and (2) CMS may consider for Medicare coverage certain devices with an FDA-approved investigational device exemption (IDE) that have been categorized as non-experimental/investigational (Category B). (b) <E T="03">Definitions.</E> As used in this subpart— <E T="03">Class I</E> refers to devices for which the general controls of the Food, Drug, and Cosmetic Act, such as adherence to good manufacturing practice regulations, are sufficient to provide a reasonable assurance of safety and effectiveness. <E T="03">Class II</E> refers to devices that, in addition to general controls, require special controls, such as performance standards or postmarket surveillance, to provide a reasonable assurance of safety and effectiveness. <E T="03">Class III</E> refers to devices that cannot be classified into Class I or Class II because insufficient information exists to <PRTPAGE P="69"/>determine that either special or general controls would provide reasonable assurance of safety and effectiveness. Class III devices require premarket approval. <E T="03">Contractors</E> refers to carriers, fiscal intermediaries, and other entities that contract with CMS to review and adjudicate claims for Medicare services. <E T="03">Experimental/investigational (Category A) device</E> refers to an innovative device believed to be in Class III for which “absolute risk” of the device type has not been established (that is, initial questions of safety and effectiveness have not been resolved and the FDA is unsure whether the device type can be safe and effective). <E T="03">IDE</E> stands for investigational device exemption. An FDA-approved IDE application permits a device, which would otherwise be subject to marketing clearance, to be shipped lawfully for the purpose of conducting a clinical trial in accordance with 21 U.S.C. 360j(g) and 21 CFR parts 812 and 813. <E T="03">Non-experimental/investigational (Category B) device</E> refers to a device believed to be in Class I or Class II, or a device believed to be in Class III for which the incremental risk is the primary risk in question (that is, underlying questions of safety and effectiveness of that device type have been resolved), or it is known that the device type can be safe and effective because, for example, other manufacturers have obtained FDA approval for that device type. <E T="03">PMA</E> stands for “premarket approval” and refers to a marketing application for a Class III device, which includes all information submitted with or incorporated by reference in the application in accordance with 21 U.S.C. 360e and 360j and 21 CFR 814.3(e). <E T="03">Sponsor</E> refers to a person or entity that initiates, but does not conduct, an investigation under an IDE. </SECTION> <SECTION> <SECTNO>§ 405.203</SECTNO> <SUBJECT>FDA categorization of investigational devices.</SUBJECT> (a) The FDA assigns a device with an FDA-approved IDE to one of two categories: (1) Experimental/Investigational (Category A) Devices. (2) Non-Experimental/Investigational (Category B) Devices. (b) The FDA notifies CMS, when it notifies the sponsor, that the device is categorized by FDA as experimental/investigational (Category A) or non-experimental/investigational (Category B). (c) CMS uses the categorization of the device as a factor in making Medicare coverage decisions. </SECTION> <SECTION> <SECTNO>§ 405.205</SECTNO> <SUBJECT>Coverage of a non-experimental/investigational (Category B) device.</SUBJECT> (a) For any device that meets the requirements of the exception at § 411.15(o) of this chapter, the following procedures apply: (1) The FDA notifies CMS, when it notifies the sponsor, that the device is categorized by FDA as non-experimental/investigational (Category B). (2) CMS uses the categorization of the device as a factor in making Medicare coverage decisions. (b) If the FDA becomes aware that a categorized device no longer meets the requirements of the exception at § 411.15(o) of this chapter, the FDA notifies the sponsor and CMS and the procedures described in paragraph (a)(2) of this section apply. </SECTION> <SECTION> <SECTNO>§ 405.207</SECTNO> <SUBJECT>Services related to a noncovered device.</SUBJECT> (a) <E T="03">When payment is not made.</E> Medicare payment is not made for medical and hospital services that are related to the use of a device that is not covered because CMS determines the device is not “reasonable” and “necessary” under section 1862(a)(1)(A) of the Act or because it is excluded from coverage for other reasons. These services include all services furnished in preparation for the use of a noncovered device, services furnished contemporaneously with and necessary to the use of a noncovered device, and services furnished as necessary after-care that are incident to recovery from the use of the device or from receiving related noncovered services. (b) <E T="03">When payment is made.</E> Medicare payment may be made for services, ordinarily covered by Medicare, to treat a condition or complication that arises <PRTPAGE P="70"/>because of the use of a noncovered device or from the furnishing of related noncovered services. </SECTION> <SECTION> <SECTNO>§ 405.209</SECTNO> <SUBJECT>Payment for a non-experimental/investigational (Category B) device.</SUBJECT> Payment under Medicare for a non-experimental/investigational (Category B) device is based on, and may not exceed, the amount that would have been paid for a currently used device serving the same medical purpose that has been approved or cleared for marketing by the FDA. </SECTION> <SECTION> <SECTNO>§ 405.211</SECTNO> <SUBJECT>Procedures for Medicare contractors in making coverage decisions for a non-experimental/investigational (Category B) device.</SUBJECT> (a) <E T="03">General rule.</E> In their review of claims for payment, Medicare contractors are bound by the statute, regulations, and all CMS administrative issuances, including all national coverage decisions. (b) <E T="03">Potentially covered non-experimental/investigational (Category B) devices.</E> Medicare contractors may approve coverage for any device with an FDA-approved IDE categorized as a non-experimental/investigational (Category B) device if all other coverage requirements are met. (c) <E T="03">Other considerations.</E> Medicare contractors must consider whether any restrictions concerning site of service, indications for use, or any other list of conditions for coverage have been placed on the device's use. </SECTION> <SECTION> <SECTNO>§ 405.213</SECTNO> <SUBJECT>Re-evaluation of a device categorization.</SUBJECT> (a) <E T="03">General rules.</E> (1) Any sponsor that does not agree with an FDA decision that categorizes its device as experimental/investigational (Category A) may request re-evaluation of the categorization decision. (2) A sponsor may request review by CMS only after the requirements of paragraph (b) of this section are met. (3) No reviews other than those described in paragraphs (b) and (c) of this section are available to the sponsor. (4) Neither the FDA original categorization or re-evaluation (described in paragraph (b) of this section) nor CMS's review (described in paragraph (c) of this section) constitute an initial determination for purposes of the Medicare appeals processes under part 405, subpart G or subpart H, or parts 417, 473, or 498 of this chapter. (b) <E T="03">Request to FDA.</E> A sponsor that does not agree with the FDA's categorization of its device may submit a written request to the FDA at any time requesting re-evaluation of its original categorization decision, together with any information and rationale that it believes support recategorization. The FDA notifies both CMS and the sponsor of its decision. (c) <E T="03">Request to CMS.</E> If the FDA does not agree to recategorize the device, the sponsor may seek review from CMS. A device sponsor must submit its request in writing to CMS. CMS obtains copies of relevant portions of the application, the original categorization decision, and supplementary materials. CMS reviews all material submitted by the sponsor and the FDA's recommendation. CMS reviews only information in the FDA record to determine whether to change the categorization of the device. CMS issues a written decision and notifies the sponsor of the IDE and the FDA. </SECTION> <SECTION> <SECTNO>§ 405.215</SECTNO> <SUBJECT>Confidential commercial and trade secret information.</SUBJECT> To the extent that CMS relies on confidential commercial or trade secret information in any judicial proceeding, CMS will maintain confidentiality of the information in accordance with Federal law. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Suspension of Payment, Recovery of Overpayments, and Repayment of Scholarships and Loans</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1815, 1833, 1842, 1866, 1870, 1871, 1879, and 1892 of the Social Security Act (42 U.S.C. 1302, 1395g, 1395l, 1395u, 1395cc, 1395gg, 1395hh, 1395pp, and 1395ccc) and 31 U.S.C. 3711. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 31 FR 13534, Oct. 20, 1966, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SUBJGRP> <PRTPAGE P="71"/> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 405.301</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> This subpart sets forth the policies and procedures for handling of incorrect payments and recovery of overpayments. <CITA>[54 FR 41733, Oct. 11, 1989]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Liability for Payments To Providers or Suppliers and Handling of Incorrect Payments</HD> <SECTION> <SECTNO>§ 405.350</SECTNO> <SUBJECT>Individual's liability for payments made to providers and other persons for items and services furnished the individual.</SUBJECT> Any payment made under title XVIII of the Act to any provider of services or other person with respect to any item or service furnished an individual shall be regarded as a payment to the individual, and adjustment shall be made pursuant to §§ 405.352 through 405.358 where: (a) More than the correct amount is paid to a provider of services or other person and the Secretary determines that: (1) Within a reasonable period of time, the excess over the correct amount cannot be recouped from the provider of services or other person, or (2) The provider of services or other person was without fault with respect to the payment of such excess over the correct amount, or (b) A payment has been made under the provisions described in section 1814(e) of the Act, to a provider of services for items and services furnished the individual. (c) For purposes of paragraph (a)(2) of this section, a provider of services or other person shall, in the absence of evidence to the contrary, be deemed to be without fault if the determination of the carrier, the intermediary, or the Centers for Medicare & Medicaid Services that more than the correct amount was paid was made subsequent to the third year following the year in which notice was sent to such individual that such amount had been paid. <CITA>[41 FR 1492, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 61 FR 49271, Sept. 19, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.351</SECTNO> <SUBJECT>Incorrect payments for which the individual is not liable.</SUBJECT> Where an incorrect payment has been made to a provider of services or other person, the individual is liable only to the extent that he has benefited from such payment. </SECTION> <SECTION> <SECTNO>§ 405.352</SECTNO> <SUBJECT>Adjustment of title XVIII incorrect payments.</SUBJECT> Where an individual is liable for an incorrect payment (i.e., a payment made under § 405.350(a) or § 405.350(b)) adjustment is made (to the extent of such liability) by: (a) Decreasing any payment under title II of the Act, or under the Railroad Retirement Act of 1937, to which the individual is entitled; or (b) In the event of the individual's death before adjustment is completed, by decreasing any payment under title II of the Act, or under the Railroad Retirement Act of 1937 payable to the estate of the individual or to any other person, that are based on the individual's earnings record (or compensation). <CITA>[31 FR 13534, Oct. 20, 1966, as amended by 41 FR 1492, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.353</SECTNO> <SUBJECT>Certification of amount that will be adjusted against individual title II or railroad retirement benefits.</SUBJECT> As soon as practicable after any adjustment is determined to be necessary, the Secretary, for purposes of this subpart, shall certify the amount of the overpayment or payment (see § 405.350) with respect to which the adjustment is to be made. If the adjustment is to be made by decreasing subsequent payments under the Railroad Retirement Act of 1937, such certification shall be made to the Railroad Retirement Board. </SECTION> <SECTION> <SECTNO>§ 405.354</SECTNO> <SUBJECT>Procedures for adjustment or recovery—title II beneficiary.</SUBJECT> The procedures applied in making an adjustment or recovery in the case of a title II beneficiary are the applicable procedures of 20 CFR 404.502. <CITA>[31 FR 13534, Oct. 20, 1966, as amended at 32 FR 18027, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <PRTPAGE P="72"/> <SECTNO>§ 405.355</SECTNO> <SUBJECT>Waiver of adjustment or recovery.</SUBJECT> (a) The provisions of § 405.352 may not be applied and there may be no adjustment or recovery of an incorrect payment (i.e., a payment made under § 405.350(a) or § 405.350(b)) in any case where such incorrect payment has been made with respect to an individual who is without fault, or where such adjustment or recovery would be made by decreasing payments to which another person who is without fault is entitled as provided in section 1870(b) of the Act where such adjustment or recovery would defeat the purpose of title II or title XVIII of the Act or would be against equity and good conscience. (See 20 CFR 404.509 and 404.512.) (b) Adjustment or recovery of an incorrect payment (or only such part of an incorrect payment as may be determined to be inconsistent with the purposes of Title XVIII of the Act) against an individual who is without fault shall be deemed to be against equity and good conscience if the determination that such payment was incorrect was made subsequent to the third year following the year in which notice of such payment was sent to such individual. (See §§ 405.330-405.332 for conditions under which payment may be made for items or services furnished after October 30, 1972 which are noncovered by reasons of § 405.310 (g) and (k).) <CITA>[41 FR 1493, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.356</SECTNO> <SUBJECT>Principles applied in waiver of adjustment or recovery.</SUBJECT> The principles applied in determining waiver of adjustment or recovery (§ 405.355) are the applicable principles of § 405.358 and 20 CFR 404.507-404.509, 404.510a, and 404.512. <CITA>[61 FR 49271, Sept. 19, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.357</SECTNO> <SUBJECT>Notice of right to waiver consideration.</SUBJECT> Whenever an initial determination is made that more than the correct amount of payment has been made, notice of the provisions of section 1870(c) of the Act regarding waiver of adjustment or recovery shall be sent to the overpaid individual and to any other individual against whom adjustment or recovery of the overpayment is to be effected (see § 405.358). <CITA>[61 FR 49271, Sept. 19, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.358</SECTNO> <SUBJECT>When waiver of adjustment or recovery may be applied.</SUBJECT> Section 1870(c) of the Act provides that there shall be no adjustment or recovery in any case where an incorrect payment under title XVIII (hospital and supplementary medical insurance benefits) has been made (including a payment under section 1814(e) of the Act with respect to an individual: (a) Who is without fault, and (b) Adjustment or recovery would either: (1) Defeat the purposes of title II or title XVIII of the Act, or (2) Be against equity and good conscience. <CITA>[61 FR 49271, Sept. 19, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.359</SECTNO> <SUBJECT>Liability of certifying or disbursing officer.</SUBJECT> No certifying or disbursing officer shall be held liable for any amount certified or paid by him to any provider of services or other person: (a) Where the adjustment or recovery of such amount is waived (see § 405.355), or (b) Where adjustment (see § 405.352) or recovery is not completed prior to the death of all persons against whose benefits such adjustment is authorized. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Suspension and Recoupment of Payment to Providers and Suppliers and Collection and Compromise of Overpayments</HD> <SECTION> <SECTNO>§ 405.370</SECTNO> <SUBJECT> Definitions.</SUBJECT> For purposes of this subpart, the following definitions apply: <E T="03">Offset.</E> The recovery by Medicare of a non-Medicare debt by reducing present or future Medicare payments and applying the amount withheld to the indebtedness. (Examples are Public Health Service debts or Medicaid debts recovered by CMS). <E T="03">Recoupment.</E> The recovery by Medicare of any outstanding Medicare debt by reducing present or future Medicare payments and applying the amount withheld to the indebtedness. <E T="03">Suspension of payment.</E> The withholding of payment by an intermediary <PRTPAGE P="73"/>or carrier from a provider or supplier of an approved Medicare payment amount before a determination of the amount of the overpayment exists. <CITA>[61 FR 63745, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.371</SECTNO> <SUBJECT> Suspension, offset, and recoupment of Medicare payments to providers and suppliers of services.</SUBJECT> (a) <E T="03">General.</E> Medicare payments to providers and suppliers, as authorized under this subchapter (excluding payments to beneficiaries), may be— (1) Suspended, in whole or in part, by CMS, an intermediary, or a carrier if CMS, the intermediary, or the carrier possesses reliable information that an overpayment or fraud or willful misrepresentation exists or that the payments to be made may not be correct, although additional evidence may be needed for a determination; or (2) Offset or recouped, in whole or in part, by an intermediary or a carrier if the intermediary, carrier, or CMS has determined that the provider or supplier to whom payments are to be made has been overpaid. (b) <E T="03">Steps necessary for suspension of payment, offset, and recoupment.</E> Except as provided in paragraph (c) of this section, CMS, the intermediary, or carrier suspends payments only after it has complied with the procedural requirements set forth at § 405.372. The intermediary or carrier offsets or recoups payments only after it has complied with the procedural requirements set forth at § 405.373. (c) <E T="03">Suspension of payment in the case of unfiled cost reports.</E> If a provider has failed to timely file an acceptable cost report, payment to the provider is immediately suspended until a cost report is filed and determined by the intermediary to be acceptable. In the case of an unfiled cost report, the provisions of § 405.372 do not apply. (See § 405.372(a)(2) concerning failure to furnish other information.) <CITA>[61 FR 63746, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.372</SECTNO> <SUBJECT> Proceeding for suspension of payment.</SUBJECT> (a) <E T="03">Notice of intention to suspend</E>—(1) <E T="03">General rule.</E> Except as provided in paragraphs (a)(2) through (a)(4) of this section, if the intermediary, carrier, or CMS has determined that a suspension of payments under § 405.371(a)(1) should be put into effect, the intermediary or carrier must notify the provider or supplier of the intention to suspend payments, in whole or in part, and the reasons for making the suspension. (2) <E T="03">Failure to furnish information.</E> The notice requirement of paragraph (a)(1) of this section does not apply if the intermediary or carrier suspends payments to a provider or supplier in accordance with section 1815(a) or section 1833(e) of the Act, respectively, because the provider or supplier has failed to submit information requested by the intermediary or carrier that is needed to determine the amounts due the provider or supplier. (See § 405.371(c) concerning failure to file timely acceptable cost reports.) (3) <E T="03">Harm to Trust Funds.</E> A suspension of payment may be imposed without prior notice if CMS, the intermediary, or carrier determines that the Medicare Trust Funds would be harmed by giving prior notice. CMS may base its determination on an intermediary's or carrier's belief that giving prior notice would hinder the possibility of recovering the money. (4) <E T="03">Fraud or misrepresentation.</E> If the intended suspension of payment involves suspected fraud or misrepresentation, CMS determines whether to impose the suspension and if prior notice is appropriate. CMS directs the intermediary or carrier as to the timing and content of the notification to the provider or supplier. CMS is the real party in interest and is responsible for the decision. CMS may base its decision on information from the intermediary, carrier, law enforcement agencies, or other sources. CMS determines whether the information is reliable. (b) <E T="03">Rebuttal</E>—(1) <E T="03">If prior notice is required.</E> If prior notice is required under paragraph (a) of this section, the intermediary or carrier must give the provider or supplier an opportunity for rebuttal in accordance with § 405.374. If a rebuttal statement is received within the specified time period, the suspension of payment goes into effect on the date stated in the notice, and the procedures and provisions set forth in <PRTPAGE P="74"/>§ 405.375 apply. If by the end of the period specified in the notice no statement has been received, the suspension goes into effect automatically, and the procedures set forth in paragraph (c) of this section are followed. (2) <E T="03">If prior notice is not required.</E> If, under the provisions of paragraphs (a)(2) through (a)(4) of this section, a suspension of payment is put into effect without prior notice to the provider or supplier, the intermediary or carrier must, once the suspension is in effect, give the provider or supplier an opportunity to submit a rebuttal statement as to why the suspension should be removed. (c) <E T="03">Subsequent action.</E> If a suspension of payment is put into effect, the intermediary, carrier, or CMS takes timely action after the suspension to obtain the additional evidence it may need to make a determination as to whether an overpayment exists or the payments may be made. The intermediary, carrier, or CMS makes all reasonable efforts to expedite the determination. As soon as the determination is made, the intermediary or carrier informs the provider or supplier and, if appropriate, the suspension is rescinded or any existing recoupment or offset is adjusted to take into account the determination. (d) <E T="03">Duration of suspension of payment</E>—(1) <E T="03">General rule.</E> Except as provided in paragraphs (d)(2) and (d)(3) of this section, a suspension of payment is limited to 180 days, starting with the date the suspension begins. (2) <E T="03">180-day extension.</E> (i) An intermediary, a carrier, or, in cases of fraud and misrepresentation, OIG or a law enforcement agency, may request a one-time only extension of the suspension period for up to 180 additional days if it is unable to complete its examination of the information or investigation, as appropriate, within the 180-day time limit. The request must be submitted in writing to CMS. (ii) Upon receipt of a request for an extension, CMS notifies the provider or supplier of the requested extension. CMS then either extends the suspension of payment for up to an additional 180 days or determines that the suspended payments are to be released to the provider or supplier. (3) <E T="03">Exceptions to the time limits.</E> (i) The time limits specified in paragraphs (d)(1) and (d)(2) of this section do not apply if the case has been referred to, and is being considered by, the OIG for administrative action (for example, civil money penalties). (ii) CMS may grant an extension in addition to the extension provided under paragraph (d)(2) of this section if the Department of Justice submits a written request to CMS that the suspension of payment be continued based on the ongoing investigation and anticipated filing of criminal and/or civil actions. At a minimum, the request must include the following: (A) Identification of the entity under suspension. (B) The amount of time needed for continued suspension in order to implement the criminal and/or civil proceedings. (C) A statement of why and/or how criminal and/or civil actions may be affected if the requested extension is not granted. (e) <E T="03">Disposition of suspended payments.</E> Payments suspended under the authority of § 405.371(b) are first applied to reduce or eliminate any overpayments determined by the intermediary, carrier, or CMS, including any interest assessed under the provisions of § 405.378, and then applied to reduce any other obligation to CMS or to HHS. In the absence of a legal requirement that the excess be paid to another entity, the excess is released to the provider or supplier. <CITA>[61 FR 63746, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.373</SECTNO> <SUBJECT>Proceeding for offset or recoupment.</SUBJECT> (a) <E T="03">General rule.</E> Except as specified in paragraph (b) of this section, if the intermediary, carrier, or CMS has determined that an offset or recoupment of payments under § 405.371(a)(2) should be put into effect, the intermediary or carrier must— (1) Notify the provider or supplier of its intention to offset or recoup payment, in whole or in part, and the reasons for making the offset or recoupment; and (2) Give the provider or supplier an opportunity for rebuttal in accordance with § 405.374.<PRTPAGE P="75"/> (b) Paragraph (a) of this section does not apply if the intermediary, after furnishing a provider a written notice of the amount of program reimbursement in accordance with § 405.1803, recoups payment under paragraph (c) of § 405.1803. (For provider rights in this circumstance, see §§ 405.1809, 405.1811, 405.1815, 405.1835, and 405.1843.) (c) <E T="03">Actions following receipt of rebuttal statement.</E> If a provider or supplier submits, in accordance with § 405.374, a statement as to why an offset or recoupment should not be put into effect on the date specified in the notice, the intermediary or carrier must comply with the time limits and notification requirements of § 405.375. (d) <E T="03">No rebuttal statement received.</E> If, by the end of the time period specified in the notice, no statement has been received, the recoupment or offset goes into effect automatically. (e) <E T="03">Duration of recoupment or offset.</E> If a recoupment or offset is put into effect, it remains in effect until the earliest of the following: (1) The overpayment and any assessed interest are liquidated. (2) The intermediary or carrier obtains a satisfactory agreement from the provider or supplier for liquidation of the overpayment. (3) The intermediary or carrier, on the basis of subsequently acquired evidence or otherwise, determines that there is no overpayment. <CITA>[61 FR 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.374</SECTNO> <SUBJECT>Opportunity for rebuttal.</SUBJECT> (a) <E T="03">General rule.</E> If prior notice of the suspension of payment, offset, or recoupment is given under § 405.372 or § 405.373, the intermediary or carrier must give the provider or supplier an opportunity, before the suspension, offset, or recoupment takes effect, to submit any statement (to include any pertinent information) as to why it should not be put into effect on the date specified in the notice. Except as provided in paragraph (b) of this section, the provider or supplier has at least 15 days following the date of notification to submit the statement. (b) <E T="03">Exception.</E> The intermediary or carrier may for cause— (1) Impose a shorter period for rebuttal; or (2) Extend the time within which the statement must be submitted. <CITA>[61 FR 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.375</SECTNO> <SUBJECT>Time limits for, and notification of, administrative determination after receipt of rebuttal statement.</SUBJECT> (a) <E T="03">Submission and disposition of evidence.</E> If the provider or supplier submits a statement, under § 405.374, as to why a suspension of payment, offset, or recoupment should not be put into effect, or, under § 405.372(b)(2), why a suspension should be terminated, CMS, the intermediary, or carrier must within 15 days, from the date the statement is received, consider the statement (including any pertinent evidence submitted), together with any other material bearing upon the case, and determine whether the facts justify the suspension, offset, or recoupment or, if already initiated, justify the termination of the suspension, offset, or recoupment. Suspension, offset, or recoupment is not delayed beyond the date stated in the notice in order to review the statement. (b) <E T="03">Notification of determination.</E> The intermediary or carrier must send written notice of the determination made under paragraph (a) of this section to the provider or supplier. The notice must— (1) In the case of offset or recoupment, contain rationale for the determination; and (2) In the case of suspension of payment, contain specific findings on the conditions upon which the suspension is initiated, continued, or removed and an explanatory statement of the determination. (c) <E T="03">Determination is not appealable.</E> A determination made under paragraph (a) of this section is not an initial determination and is not appealable. <CITA>[61 FR 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.376</SECTNO> <SUBJECT>Suspension and termination of collection action and compromise of claims for overpayment.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section contains requirements and procedures for the compromise of, or suspension or termination of collection action on, claims for overpayments against a provider or a supplier under the Medicare <PRTPAGE P="76"/>program. It is adopted under the authority of the Federal Claims Collection Act (31 U.S.C. 3711). Collection and compromise of claims against Medicare beneficiaries are explained at 20 CFR 404.515. (b) <E T="03">Definitions.</E> As used in this section, <E T="03">debtor</E> means a provider of services or a physician or other supplier of services that has been overpaid under title XVIII of the Social Security Act. It includes an individual, partnership, corporation, estate, trust, or other legal entity. (c) <E T="03">Basic conditions.</E> A claim for recovery of Medicare overpayments against a debtor may be compromised, or collection action on it may be suspended or terminated, by the Centers for Medicare & Medicaid Services (CMS) if; (1) The claim does not exceed $100,000, or such higher amount as the Attorney General may from time to time prescribe, exclusive of interest; and (2) There is no indication of fraud, the filing of a false claim, or misrepresentation on the part of the debtor or any director, partner, manager, or other party having an interest in the claim. (d) <E T="03">Basis for compromise.</E> A claim may be compromised for one or more of the following reasons: (1) The debtor, or the estate of a deceased debtor, does not have the present or prospective ability to pay the full amount within a reasonable time; (2) The debtor refuses to pay the claim in full and the United States is unable to collect the full amount within a reasonable time by legal proceedings; (3) There is real doubt the United States can prove its case in court; or (4) The cost of collecting the claim does not justify enforced collection of the full amount. (e) <E T="03">Basis for termination of collection action.</E> Collection action may be terminated for one or more of the following reasons: (1) The United States cannot enforce collection of any significant sum; (2) The debtor cannot be located, there is no security to be liquidated, the statute of limitations has run, and the prospects of collecting by offset are too remote to justify retention of the claim; (3) The cost of further collection action is likely to exceed any recovery; (4) It is determined the claim is without merit; or (5) Evidence to substantiate the claim is no longer available. (f) <E T="03">Basis for suspension of collection action.</E> Collection action may be suspended for either of the following reasons if future collection action is justified based on potential productivity, including foreseeable ability to pay, and size of claim: (1) The debtor cannot be located; or (2) The debtor is unable to make payments on the claim or to fulfill an acceptable compromise. (g) <E T="03">Factors considered.</E> In determining whether a claim will be compromised, or collection action terminated or suspended, CMS will consider the following factors: (1) Age and health of the debtor, present and potential income, inheritance prospects, possible concealment or fraudulent transfer of assets, and the availability of assets which may be reached by enforced collection proceedings, for compromise under paragraph (d)(1) of this section, termination under paragraph (e)(1) of this section, and suspension under paragraph (f)(2) of this section; (2) Applicable exemptions available to a debtor and uncertainty concerning the price of the property in a forced sale, for compromise under paragraph (d)(2) of this section and termination under paragraph (e)(1) of this section; and (3) The probability of proving the claim in court, the probability of full or partial recovery, the availability of necessary evidence, and related pragmatic considerations, for compromise under paragraph (d)(3) of this section. (h) <E T="03">Amount of compromise.</E> The amount accepted in compromise will be reasonable in relation to the amount that can be recovered by enforced collection proceedings. <FP>Consideration shall be given to the following:</FP> (1) The exemptions available to the debtor under State or Federal law; (2) The time necessary to collect the overpayment;<PRTPAGE P="77"/> (3) The litigative probabilities involved; and (4) The administrative and litigative costs of collection where the cost of collecting the claim is a basis for compromise. (i) <E T="03">Payment of compromise—</E>(1) <E T="03">Time and manner.</E> Payment of the amount that CMS has agreed to accept as a compromise in full settlement of a Medicare overpayment claim must be made within the time and in the manner prescribed by CMS. An overpayment claim is not compromised or settled until the full payment of the compromised amount has been made within the time and in the manner prescribed by CMS. (2) <E T="03">Failure to pay compromised amount.</E> Failure of the debtor or the estate to make payment as provided by the comprise reinstates the full amount of the overpayment claim, less any amounts paid prior to the default. (j) <E T="03">Effect of compromise, or suspension, or termination of collection action.</E> Any action taken by CMS under this section regarding the compromise of an overpayment claim, or termination or suspension of collection action on an overpayment claim, is not an initial determination for purposes of the appeal procedures under subparts G, H, and R of this part. <CITA>[43 FR 59381, Dec. 20, 1978, as amended at 57 56998, Dec. 2, 1992. Redesignated and amended at 61 FR 63745, 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.377</SECTNO> <SUBJECT>Withholding Medicare payments to recover Medicaid overpayments.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section implements section 1885 of the Act, which provides for withholding Medicare payments to certain Medicaid providers that have not arranged to repay Medicaid overpayments as determined by the Medicaid State agency or have failed to provide information necessary to determine the amount (if any) of overpayments. (b) <E T="03">When withholding may be used.</E> CMS may withhold Medicare payment to offset Medicaid overpayments that a Medicaid agency has been unable to collect if— (1) The Medicaid agency has followed the procedure specified in § 447.31 of this chapter; and (2) The institution or person is one described in paragraph (c) of this section and either— (i) Has not made arrangements satisfactory to the Medicaid agency to repay the overpayment; or (ii) Has not provided information to the Medicaid agency necessary to enable the agency to determine the existence or amount of Medicaid overpayment. (c) <E T="03">Institutions or persons affected.</E> Withholding under paragraph (b) of this section may be made with respect to any of the following entities that has or had in effect an agreement with a Medicaid agency to furnish services under an approved Medicaid State plan: (1) An institutional provider that has in effect an agreement under section 1866 of the Act. (Part 489 (Provider and Supplier Agreements) implements section 1866 of the Act.) (2) A physician or supplier that has accepted payment on the basis of an assignment under section 1842(b)(3)(B)(ii) of the Act. (Section 424.55 sets forth the conditions a supplier agrees to in accepting assignment.) (d) <E T="03">Amount to be withheld.</E> (1) CMS contacts the appropriate intermediary or carrier to determine the amount of Medicare payment to which the institution or person is entitled. (2) CMS may require the intermediary or carrier to withhold Medicare payments to the institution or person by the lesser of the following amounts: (i) The amount of the Medicare payments to which the institution or person would otherwise be entitled. (ii) The total Medicaid overpayment to the institution or person. (e) <E T="03">Notice of withholding.</E> If CMS intends to withhold payments under this section, it notifies by certified mail, return receipt requested, the institution or person and the appropriate intermediary or carrier of the intention to withhold Medicare payments and follows the procedure in § 405.374. The notice includes— (1) Identification of the institution or person; and (2) The amount of Medicaid overpayment to be withheld from payments to which the institution or person would otherwise be entitled under Medicare.<PRTPAGE P="78"/> (f) <E T="03">Termination of withholding.</E> CMS terminates the withholding if— (1) The Medicaid overpayment is completely recovered; (2) The institution or person enters into an agreement satisfactory to the Medicaid agency to repay the overpayment; or (3) The Medicaid agency determines that there is no overpayment based on newly acquired evidence or a subsequent audit. (g) <E T="03">Disposition of funds withheld.</E> CMS releases amounts withheld under this section to the Medicaid agency to be applied against the Medicaid overpayment made by the State agency. <CITA>[61 FR 63747, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.378</SECTNO> <SUBJECT>Interest charges on overpayment and underpayments to providers, suppliers, and other entities.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section, which implements sections 1815(d) and 1833(j) of the common law and Act, and authority granted under the Federal Claims Collection Act, provides for the charging and payment of interest on overpayments and underpayments to Medicare providers, suppliers, HMOs, competitive medical plans (CMPs), and health care prepayment plans (HCPPs). (b) <E T="03">Basic rules.</E> (1) CMS will charge interest on overpayments, and pay interest on underpayments, to providers and suppliers of services (including physicians and other practitioners), except as specified in paragraphs (f) and (h) of this section. (2) Interest will accrue from the date of the final determination as defined in paragraph (c) of this section, and will either be charged on the overpayment balance or paid on the underpayment balance for each 30-day period that payment is delayed. (Periods of less than 30 days will be treated as a full 30-day period, and the 30-day interest charge will be applied to any balance.) (c) <E T="03">Definition of final determination.</E> (1) For purposes of this section, any of the following constitutes a final determination: (i) A Notice of Amount of Program Reimbursement (NPR) is issued, as discussed in §§ 405.1803, 417.576, and 417.810, and either— (A) A written demand for payment is made; or (B) A written determination of an underpayment is made by the intermediary after a cost report is filed. (ii) In cases in which an NPR is not used as a notice of determination (that is, primarily under part B), one of the following determinations is issued— (A) A written determination that an overpayment exists and a written demand for payment; (B) A written determination of an underpayment; or (C) An Administrative Law Judge (ALJ) decision that reduces the amount of an overpayment below the amount that CMS has already collected. (iii) Other examples of cases in which an NPR is not used are carrier reasonable charge determinations under subpart E of this part, interim cost settlements made for HMOs, CMPs, and HCPPs under §§ 417.574 and 417.810(e) of this chapter, and initial retroactive adjustment determinations under § 413.64(f)(2) of this chapter. In the case of interim cost settlements and initial retroactive adjustment determinations, if the debtor does not dispute the adjustment determination within the timeframe designated in the notice of the determination (generally at least 15 days), a final determination is deemed to have been made. If the provider or supplier does dispute portions of the determination, a final determination is deemed to have been made on those portions when the intermediary issues a new determination in response to the dispute. (iv) The due date of a timely-filed cost report that indicates an amount is due CMS, and is not accompanied by payment in full. (If an additional overpayment or underpayment is determined by the carrier or intermediary, a final determination on the additional amount is made in accordance with paragraphs (c)(1)(i), (c)(1)(ii), or (c)(1)(iii), of this section.) (v) With respect to a cost report that is not filed on time, the day following the date the cost report was due (plus a single extension of time not to exceed 30 days if granted for good cause), until the time as a cost report is filed. (When the cost report is subsequently filed, there is an additional determination as <PRTPAGE P="79"/>specified in paragraphs (c)(1) (i), (ii), (iii), or (iv) of this section.) (2) Except as required by any subsequent administrative or judicial reversal, interest accrues from the date of final determination as specified in this subsection. (d) <E T="03">Rate of interest</E>. (1) The interest rate on overpayments and underpayments is the higher of— (i) The rate as fixed by the Secretary of the Treasury after taking into consideration private consumer rates of interest prevailing on the date of final determination as defined in paragraph (c) of this section (this rate is published quarterly in the <E T="04">Federal Register</E> by the Department under 45 CFR 30.13(a)); or (ii) The current value of funds rate (this rate is published annually in the <E T="04">Federal Register</E> by the Secretary of the Treasury, subject to quarterly revisions). (2) [Reserved] (e) <E T="03">Accrual of interest.</E> (1) If a cost report is filed that does not indicate an amount is due CMS but the intermediary makes a final determination that an overpayment exists, or if a carrier makes a final determination that an overpayment to a physician or supplier exists, interest will accrue beginning with the date of such final determination. Interest will continue to accrue during periods of administrative and judicial appeal and until final disposition of the claim. (2)(i) If a cost report is filed and indicates that an amount is due CMS, interest on the amount due will accrue from the due date of the cost report unless— (A) Full payment on the amount due accompanies the cost report; or (B) The provider and the intermediary agree in advance to liquidate the overpayment through a reduction in interim payments over the next 30-day period. (ii) If the intermediary determines an additional overpayment during the cost settlement process, interest will accrue from the date of each determination. (iii) The interest rate on each of the final determinations of an overpayment will be the rate of interest in effect on the date the determination is made. (3) In the case of a cost report that is not filed on time, interest also will accrue on a determined overpayment from the day following the due date of the report (plus a single extension of time not to exceed 30 days if granted for good cause, as specified in § 413.24(f)) of this chapter, to the time the cost report is filed. (4) If an intermediary or a carrier makes a final determination that an underpayment exists, interest to the provider or the supplier will accrue from the date of notification of the underpayment. (f) <E T="03">Waiver of interest charges.</E> (1) When an intermediary or a carrier makes a final determination that an overpayment or underpayment exists, as specified in paragraphs (e)(1), (e)(2)(ii), and (e)(4)— (i) Interest charges will be waived if the overpayment or underpayment is completely liquidated within 30 days from the date of the final determination. (ii) CMS may waive interest charges if it determines that the administrative cost of collecting them exceeds the interest charges. (2) Interest will not be waived for that period of time during which the cost report was due but remained unfiled for more than 30 days, as specified in paragraph (e)(3) of this section. (g) <E T="03">Rules applicable to partial payments.</E> If an overpayment is repaid in installments or recouped by withholding from several payments due the provider or supplier of services— (1) Each payment or recoupment will be applied first to accrued interest and then to the principal; and (2) After each payment or recoupment, interest will accrue on the remaining unpaid balance. (h) <E T="03">Exceptions to applicability.</E> (1) The provisions of this section do not apply to the time period for which interest is payable under § 413.64(j) of this chapter because the provider seeks judicial review of a decision of the Provider Reimbursement Review Board, or a subsequent reversal, affirmance, or modification of that decision by the Administrator. Prior to that time, until the provider seeks judicial review, interest <PRTPAGE P="80"/>accrues at the rate specified in this section on outstanding unpaid balances resulting from final determinations as defined in paragraph (c) of this section. (2) If an overpayment or an underpayment determination is reversed administratively or judicially, and the reversal is no longer subject to appeal, appropriate adjustments will be made with respect to the overpayment or underpayment and the amount of interest charged. (i) <E T="03">Nonallowable cost.</E> As specified in §§ 412.113 and 413.153 of this chapter, interest accrued on overpayments and interest on funds borrowed specifically to repay overpayments are not considered allowable costs, up to the amount of the overpayment, unless the provider had made a prior commitment to borrow funds for other purposes (for example, capital improvements). <FP>(See § 413.153(a)(2) of this chapter for exceptions based on administrative or judicial reversal.)</FP> <CITA>[47 FR 54814, Dec. 6, 1982, as amended at 49 FR 36102, Sept. 14, 1984; 49 FR 44472, Nov. 7, 1984; 51 FR 34792, Sept. 30, 1986; 56 FR 31336, July 10, 1991. Redesignated at 61 FR 63745, Dec. 2, 1996]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Repayment of Scholarships and Loans</HD> <SECTION> <SECTNO>§ 405.380</SECTNO> <SUBJECT>Collection of past-due amounts on scholarship and loan programs.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section implements section 1892 of the Act, which authorizes the Secretary to deduct from Medicare payments for services amounts considered as past-due obligations under the National Health Service Corps Scholarship program, the Physician Shortage Area Scholarship program, and the Health Education Assistance Loan program. (b) <E T="03">Offsetting against Medicare payment.</E> (1) Medicare carriers and intermediaries offset against Medicare payments in accordance with the signed repayment agreement between the Public Health Service and individuals who have breached their scholarship or loan obligations and who— (i) Accept Medicare assignment for services; (ii) Are employed by or affiliated with a provider, HMO, or Competitive Medical Plan (CMP) that receives Medicare payment for services; or (iii) Are members of a group practice that receives Medicare payment for services. (2) For purposes of this section, “provider” includes all entities eligible to receive Medicare payment in accordance with an agreement under section 1866 of the Act. (c) <E T="03">Beginning of offset.</E> (1) The Medicare carrier offsets Medicare payments beginning six months after it notifies the individual or the group practice of the amount to be deducted and the particular individual to whom the deductions are attributable. (2) The Medicare intermediary offsets payments beginning six months after it notifies the provider, HMO, CMP or group practice of the amount to be deducted and the particular individuals to whom the deductions are attributable. Offset of payments is made in accordance with the terms of the repayment agreement. If the individual ceases to be employed by the provider, HMO, or CMP, or leaves the group practice, no deduction is made. (d) <E T="03">Refusal to offset against Medicare payment.</E> If the individual refuses to enter into a repayment agreement, or breaches any provision of the agreement, or if Medicare payment is insufficient to maintain the offset collection according to the agreed upon formula, then— (1) The Department, within 30 days if feasible, informs the Attorney General; and (2) The Department excludes the individual from Medicare until the entire past due obligation has been repaid, unless the individual is a sole community practitioner or the sole source of essential specialized services in a community and the State requests that the individual not be excluded. <CITA>[57 FR 19092, May 4, 1992]</CITA> </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Private Contracts</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1802, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395a, and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 63 FR 58901, Nov. 2, 1998, unless otherwise noted. </SOURCE> <SECTION> <PRTPAGE P="81"/> <SECTNO>§ 405.400</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart, the following definitions apply: <E T="03">Beneficiary</E> means an individual who is enrolled in Part B of Medicare. <E T="03">Emergency care services</E> means services furnished to an individual for treatment of an “emergency medical condition” as that term is defined in § 422.2 of this chapter. <E T="03">Legal representative</E> means one or more individuals who, as determined by applicable State law, has the legal authority to enter into the contract with the physician or practitioner on behalf of the beneficiary. <E T="03">Opt-out</E> means the status of meeting the conditions specified in § 405.410. <E T="03">Opt-out period</E> means the 2-year period beginning on the effective date of the affidavit as specified by § 405.410(c)(1) or § 405.410(c)(2), as applicable. <E T="03">Participating physician</E> means a “physician” as defined in this section who has signed an agreement to participate in Part B of Medicare. <E T="03">Physician</E> means a doctor of medicine or a doctor of osteopathy who is currently licensed as that type of doctor in each State in which he or she furnishes services to patients. <E T="03">Practitioner</E> means a physician assistant, nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, certified nurse midwife, clinical psychologist, or clinical social worker, who is currently legally authorized to practice in that capacity by each State in which he or she furnishes services to patients or clients. <E T="03">Private contract</E> means a document that meets the criteria specified in § 405.415. <E T="03">Properly opt-out</E> means to complete, without defect, the requirements for opt-out as specified in § 405.410. <E T="03">Properly terminate opt-out</E> means to complete, without defect, the requirements for terminating opt-out as specified in § 405.445. <E T="03">Urgent care services</E> means services furnished to an individual who requires services to be furnished within 12 hours in order to avoid the likely onset of an emergency medical condition. </SECTION> <SECTION> <SECTNO>§ 405.405</SECTNO> <SUBJECT>General rules.</SUBJECT> (a) A physician or practitioner may enter into one or more private contracts with Medicare beneficiaries for the purpose of furnishing items or services that would otherwise be covered by Medicare, provided the conditions of this subpart are met. (b) A physician or practitioner who enters into at least one private contract with a Medicare beneficiary under the conditions of this subpart, and who submits one or more affidavits in accordance with this subpart, opts-out of Medicare for a 2-year period unless the opt-out is terminated early according to § 405.445. The physician's or practitioner's opt-out may be renewed for subsequent 2-year periods. (c) Both the private contracts described in paragraph (a) of this section and the physician's or practitioner's opt-out described in paragraph (b) of this section are null and void if the physician or practitioner fails to properly opt-out in accordance with the conditions of this subpart. (d) Both the private contracts described in paragraph (a) of this section and the physician's or practitioner's opt-out described in paragraph (b) of this section are null and void for the remainder of the opt-out period if the physician or practitioner fails to remain in compliance with the conditions of this subpart during the opt-out period. (e) Services furnished under private contracts meeting the requirements of this subpart are not covered services under Medicare, and no Medicare payment will be made for such services either directly or indirectly, except as permitted in accordance with § 405.435(c). </SECTION> <SECTION> <SECTNO>§ 405.410</SECTNO> <SUBJECT>Conditions for properly opting-out of Medicare.</SUBJECT> The following conditions must be met for a physician or practitioner to properly opt-out of Medicare: (a) Each private contract between a physician or a practitioner and a Medicare beneficiary that is entered into prior to the submission of the affidavit described in paragraph (b) of this section must meet the specifications of § 405.415.<PRTPAGE P="82"/> (b) The physician or practitioner must submit an affidavit that meets the specifications of § 405.420 to each Medicare carrier with which he or she would file claims absent completion of opt-out. (c) A nonparticipating physician or a practitioner may opt-out of Medicare at any time in accordance with the following: (1) The 2-year opt-out period begins the date the affidavit meeting the requirements of § 405.420 is signed, provided the affidavit is filed within 10 days after he or she signs his or her first private contract with a Medicare beneficiary. (2) If the physician or practitioner does not timely file any required affidavit, the 2-year opt-out period begins when the last such affidavit is filed. Any private contract entered into before the last required affidavit is filed becomes effective upon the filing of the last required affidavit and the furnishing of any items or services to a Medicare beneficiary under such contract before the last required affidavit is filed is subject to standard Medicare rules. (d) A participating physician may properly opt-out of Medicare at the beginning of any calendar quarter, provided that the affidavit described in § 405.420 is submitted to the participating physician's Medicare carriers at least 30 days before the beginning of the selected calendar quarter. A private contract entered into before the beginning of the selected calendar quarter becomes effective at the beginning of the selected calendar quarter and the furnishing of any items or services to a Medicare beneficiary under such contract before the beginning of the selected calendar quarter is subject to standard Medicare rules. </SECTION> <SECTION> <SECTNO>§ 405.415</SECTNO> <SUBJECT>Requirements of the private contract.</SUBJECT> A private contract under this subpart must: (a) Be in writing and in print sufficiently large to ensure that the beneficiary is able to read the contract. (b) Clearly state whether the physician or practitioner is excluded from Medicare under sections 1128, 1156, or 1892 or any other section of the Social Security Act. (c) State that the beneficiary or his or her legal representative accepts full responsibility for payment of the physician's or practitioner's charge for all services furnished by the physician or practitioner. (d) State that the beneficiary or his or her legal representative understands that Medicare limits do not apply to what the physician or practitioner may charge for items or services furnished by the physician or practitioner. (e) State that the beneficiary or his or her legal representative agrees not to submit a claim to Medicare or to ask the physician or practitioner to submit a claim to Medicare. (f) State that the beneficiary or his or her legal representative understands that Medicare payment will not be made for any items or services furnished by the physician or practitioner that would have otherwise been covered by Medicare if there was no private contract and a proper Medicare claim had been submitted. (g) State that the beneficiary or his or her legal representative enters into this contract with the knowledge that he or she has the right to obtain Medicare-covered items and services from physicians and practitioners who have not opted-out of Medicare, and that the beneficiary is not compelled to enter into private contracts that apply to other Medicare-covered services furnished by other physicians or practitioners who have not opted-out. (h) State the expected or known effective date and expected or known expiration date of the opt-out period. (i) State that the beneficiary or his or her legal representative understands that Medigap plans do not, and that other supplemental plans may elect not to, make payments for items and services not paid for by Medicare. (j) Be signed by the beneficiary or his or her legal representative and by the physician or practitioner. (k) Not be entered into by the beneficiary or by the beneficiary's legal representative during a time when the beneficiary requires emergency care services or urgent care services. (However, a physician or practitioner may <PRTPAGE P="83"/>furnish emergency or urgent care services to a Medicare beneficiary in accordance with § 405.440.) (l) Be provided (a photocopy is permissible) to the beneficiary or to his or her legal representative before items or services are furnished to the beneficiary under the terms of the contract. (m) Be retained (original signatures of both parties required) by the physician or practitioner for the duration of the opt-out period. (n) Be made available to CMS upon request. (o) Be entered into for each opt-out period. </SECTION> <SECTION> <SECTNO>§ 405.420</SECTNO> <SUBJECT>Requirements of the opt-out affidavit.</SUBJECT> An affidavit under this subpart must: (a) Be in writing and be signed by the physician or practitioner. (b) Contain the physician's or practitioner's full name, address, telephone number, national provider identifier (NPI) or billing number, if one has been assigned, uniform provider identification number (UPIN) if one has been assigned, or, if neither an NPI nor a UPIN has been assigned, the physician's or practitioner's tax identification number (TIN). (c) State that, except for emergency or urgent care services (as specified in § 405.440), during the opt-out period the physician or practitioner will provide services to Medicare beneficiaries only through private contracts that meet the criteria of paragraph § 405.415 for services that, but for their provision under a private contract, would have been Medicare-covered services. (d) State that the physician or practitioner will not submit a claim to Medicare for any service furnished to a Medicare beneficiary during the opt-out period, nor will the physician or practitioner permit any entity acting on his or her behalf to submit a claim to Medicare for services furnished to a Medicare beneficiary, except as specified in § 405.440. (e) State that, during the opt-out period, the physician or practitioner understands that he or she may receive no direct or indirect Medicare payment for services that he or she furnishes to Medicare beneficiaries with whom he or she has privately contracted, whether as an individual, an employee of an organization, a partner in a partnership, under a reassignment of benefits, or as payment for a service furnished to a Medicare beneficiary under a Medicare+Choice plan. (f) State that a physician or practitioner who opts-out of Medicare acknowledges that, during the opt-out period, his or her services are not covered under Medicare and that no Medicare payment may be made to any entity for his or her services, directly or on a capitated basis. (g) State a promise by the physician or practitioner to the effect that, during the opt-out period, the physician or practitioner agrees to be bound by the terms of both the affidavit and the private contracts that he or she has entered into. (h) Acknowledge that the physician or practitioner recognizes that the terms of the affidavit apply to all Medicare-covered items and services furnished to Medicare beneficiaries by the physician or practitioner during the opt-out period (except for emergency or urgent care services furnished to the beneficiaries with whom he or she has not previously privately contracted) without regard to any payment arrangements the physician or practitioner may make. (i) With respect to a physician who has signed a Part B participation agreement, acknowledge that such agreement terminates on the effective date of the affidavit. (j) Acknowledge that the physician or practitioner understands that a beneficiary who has not entered into a private contract and who requires emergency or urgent care services may not be asked to enter into a private contract with respect to receiving such services and that the rules of § 405.440 apply if the physician furnishes such services. </SECTION> <SECTION> <SECTNO>§ 405.425</SECTNO> <SUBJECT>Effects of opting-out of Medicare.</SUBJECT> If a physician or practitioner opts-out of Medicare in accordance with this subpart for the 2-year period for which the opt-out is effective, the following results obtain: (a) Except as provided in § 405.440, no payment may be made directly by <PRTPAGE P="84"/>Medicare or by any Medicare+Choice plan to the physician or practitioner or to any entity to which the physician or practitioner reassigns his right to receive payment for services. (b) The physician or practitioner may not furnish any item or service that would otherwise be covered by Medicare (except for emergency or urgent care services) to any Medicare beneficiary except through a private contract that meets the requirements of this subpart. (c) The physician or practitioner is not subject to the requirement to submit a claim for items or services furnished to a Medicare beneficiary, as specified in § 424.5(a)(6) of this chapter, except as provided in § 405.440. (d) The physician or practitioner is prohibited from submitting a claim to Medicare for items or services furnished to a Medicare beneficiary except as provided in § 405.440. (e) In the case of a physician, he or she is not subject to the limiting charge provisions of § 414.48 of this chapter, except for services provided under § 405.440. (f) The physician or practitioner is not subject to the prohibition-on-reassignment provisions of § 414.80 of this chapter, except for services provided under § 405.440. (g) In the case of a practitioner, he or she is not prohibited from billing or collecting amounts from beneficiaries (as provided in 42 U.S.C. 1395u(b)(18)(B)). (h) The death of a beneficiary who has entered into a private contract (or whose legal representative has done so) does not invoke § 424.62 or § 424.64 of this chapter with respect to the physician or practitioner with whom the beneficiary (or legal representative) has privately contracted. (i) The physician or practitioner who has not been excluded under sections 1128, 1156, or 1892 of the Social Security Act may order, certify the need for, or refer a beneficiary for Medicare-covered items and services, provided the physician or practitioner is not paid, directly or indirectly, for such services (except as provided in § 405.440). (j) The physician or practitioner who is excluded under sections 1128, 1156, or 1892 of the Social Security Act may not order, prescribe, or certify the need for Medicare-covered items and services except as provided in § 1001.1901 of this title, and must otherwise comply with the terms of the exclusion in accordance with § 1001.1901 effective with the date of the exclusion. </SECTION> <SECTION> <SECTNO>§ 405.430</SECTNO> <SUBJECT>Failure to properly opt-out.</SUBJECT> (a) A physician or practitioner fails to properly opt-out if— (1) Any private contract between the physician or practitioner and a Medicare beneficiary, that was entered into before the affidavit described in § 405.420 was filed, does not meet the specifications of § 405.415; or (2) He or she fails to submit the affidavit(s) in accordance with § 405.420. (b) If a physician or practitioner fails to properly opt-out in accordance with paragraph (a) of this section, the following results obtain: (1) The physician's or practitioner's attempt to opt-out of Medicare is nullified, and all of the private contracts between the physician or practitioner and Medicare beneficiaries for the two-year period covered by the attempted opt-out are deemed null and void. (2) The physician or practitioner must submit claims to Medicare for all Medicare-covered items and services furnished to Medicare beneficiaries, including the items and services furnished under the nullified contracts. A nonparticipating physician is subject to the limiting charge provisions of § 414.48 of this chapter. A participating physician is subject to the limitations on charges of the participation agreement he or she signed. (3) The practitioner may not reassign any claim except as provided in § 424.80 of this chapter. (4) The practitioner may neither bill nor collect an amount from the beneficiary except for applicable deductible and coinsurance amounts. (5) The physician or practitioner may make another attempt to properly opt-out at any time. </SECTION> <SECTION> <SECTNO>§ 405.435</SECTNO> <SUBJECT>Failure to maintain opt-out.</SUBJECT> (a) A physician or practitioner fails to maintain opt-out under this subpart if, during the opt-out period— (1) He or she knowingly and willfully—<PRTPAGE P="85"/> (i) Submits a claim for Medicare payment (except as provided in § 405.440); or (ii) Receives Medicare payment directly or indirectly for Medicare-covered services furnished to a Medicare beneficiary (except as provided in § 405.440). (2) He or she fails to enter into private contracts with Medicare beneficiaries for the purpose of furnishing items and services that would otherwise be covered by Medicare, or enters into contracts that fail to meet the specifications of § 405.415; or (3) He or she fails to comply with the provisions of § 405.440 regarding billing for emergency care services or urgent care services; or (4) He or she fails to retain a copy of each private contract that he or she has entered into for the duration of the opt-out period for which the contracts are applicable or fails to permit CMS to inspect them upon request. (b) If a physician or practitioner fails to maintain opt-out in accordance with paragraph (a) of this section, and fails to demonstrate, within 45 days of a notice from the carrier of a violation of paragraph (a) of this section, that he or she has taken good faith efforts to maintain opt-out (including by refunding amounts in excess of the charge limits to beneficiaries with whom he or she did not sign a private contract), the following results obtain, effective 46 days after the date of the notice, but only for the remainder of the opt-out period: (1) All of the private contracts between the physician or practitioner and Medicare beneficiaries are deemed null and void. (2) The physician's or practitioner's opt-out of Medicare is nullified. (3) The physician or practitioner must submit claims to Medicare for all Medicare-covered items and services furnished to Medicare beneficiaries. (4) The physician or practitioner or beneficiary will not receive Medicare payment on Medicare claims for the remainder of the opt-out period, except as provided in paragraph (c) of this section. (5) The physician is subject to the limiting charge provisions of § 414.48 of this chapter. (6) The practitioner may not reassign any claim except as provided in § 424.80 of this chapter. (7) The practitioner may neither bill nor collect any amount from the beneficiary except for applicable deductible and coinsurance amounts. (8) The physician or practitioner may not attempt to once more meet the criteria for properly opting-out until the 2-year opt-out period expires. (c) Medicare payment may be made for the claims submitted by a beneficiary for the services of an opt-out physician or practitioner when the physician or practitioner did not privately contract with the beneficiary for services that were not emergency care services or urgent care services and that were furnished no later than 15 days after the date of a notice by the carrier that the physician or practitioner has opted-out of Medicare. </SECTION> <SECTION> <SECTNO>§ 405.440</SECTNO> <SUBJECT>Emergency and urgent care services.</SUBJECT> (a) A physician or practitioner who has opted-out of Medicare under this subpart need not enter into a private contract to furnish emergency care services or urgent care services to a Medicare beneficiary. Accordingly, a physician or practitioner will not be determined to have failed to maintain opt-out if he or she furnishes emergency care services or urgent care services to a Medicare beneficiary with whom the physician or practitioner has not previously entered into a private contract, provided the physician or practitioner complies with the billing requirements specified in paragraph (b) of this section. (b) When a physician or practitioner who has not been excluded under sections 1128, 1156, or 1892 of the Social Security Act furnishes emergency care services or urgent care services to a Medicare beneficiary with whom the physician or practitioner has not previously entered into a private contract, he or she: (1) Must submit a claim to Medicare in accordance with both 42 CFR part 424 and Medicare instructions (including but not limited to complying with proper coding of emergency or urgent care services furnished by physicians <PRTPAGE P="86"/>and practitioners who have opted-out of Medicare). (2) May collect no more than— (i) The Medicare limiting charge, in the case of a physician; or (ii) The deductible and coinsurance, in the case of a practitioner. (c) Emergency care services or urgent care services furnished to a Medicare beneficiary with whom the physician or practitioner has previously entered into a private contract (that is, entered into before the onset of the emergency medical condition or urgent medical condition), are furnished under the terms of the private contract. (d) Medicare may make payment for emergency care services or urgent care services furnished by a physician or practitioner who has properly opted-out when the services are furnished and the claim for services is made in accordance with this section. A physician or practitioner who has been excluded must comply with the regulations at § 1001.1901 (Scope and effect of exclusion) of this title when he or she furnishes emergency services to beneficiaries and may not bill and be paid for urgent care services. </SECTION> <SECTION> <SECTNO>§ 405.445</SECTNO> <SUBJECT>Renewal and early termination of opt-out.</SUBJECT> (a) A physician or practitioner may renew opt-out by filing an affidavit with each carrier with which he or she would file claims absent completion of opt-out, provided the affidavits are filed within 30 days after the current opt-out period expires. (b) To properly terminate opt-out a physician or practitioner must: (1) Not have previously opted out of Medicare. (2) Notify all Medicare carriers, with which he or she filed an affidavit, of the termination of the opt-out no later than 90 days after the effective date of the opt-out period. (3) Refund to each beneficiary with whom he or she has privately contracted all payment collected in excess of: (i) The Medicare limiting charge (in the case of physicians); or (ii) The deductible and coinsurance (in the case of practitioners). (4) Notify all beneficiaries with whom the physician or practitioner entered into private contracts of the physician's or practitioner's decision to terminate opt-out and of the beneficiaries' right to have claims filed on their behalf with Medicare for the services furnished during the period between the effective date of the opt-out and the effective date of the termination of the opt-out period. (c) When the physician or practitioner properly terminates opt-out in accordance with paragraph (b), he or she will be reinstated in Medicare as if there had been no opt-out, and the provision of § 405.425 shall not apply unless the physician or practitioner subsequently properly opts out. (d) A physician or practitioner who has completed opt-out on or before January 1, 1999 may terminate opt-out during the 90 days following January 1, 1999 if he or she notifies all carriers to whom he or she would otherwise submit claims of the intent to terminate opt-out and complies with paragraphs (b)(3) and (4) of this section. Paragraph (c) of this section applies in these cases. </SECTION> <SECTION> <SECTNO>§ 405.450</SECTNO> <SUBJECT>Appeals.</SUBJECT> (a) A determination by CMS that a physician or practitioner has failed to properly opt-out, failed to maintain opt-out, failed to timely renew opt-out, failed to privately contract, or failed to properly terminate opt-out is an initial determination for purposes of § 405.803. (b) A determination by CMS that no payment can be made to a beneficiary for the services of a physician who has opted-out is an initial determination for purposes of § 405.803. </SECTION> <SECTION> <SECTNO>§ 405.455</SECTNO> <SUBJECT>Application to Medicare+Choice contracts.</SUBJECT> An organization that has a contract with CMS to provide one or more Medicare+Choice (M+C) plans to beneficiaries (part 422 of this chapter): (a) Must acquire and maintain information from Medicare carriers on physicians and practitioners who have opted-out of Medicare. (b) Must make no payment directly or indirectly for Medicare covered services furnished to a Medicare beneficiary by a physician or practitioner who has opted-out of Medicare.<PRTPAGE P="87"/> (c) May make payment to a physician or practitioner who furnishes emergency or urgent care services to a beneficiary who has not previously entered into a private contract with the physician or practitioner in accordance with § 405.440. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Criteria for Determining Reasonable Charges</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 32 FR 12599, Aug. 31, 1967, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.500</SECTNO> <SUBJECT>Basis.</SUBJECT> Subpart E is based on the provisions of the following sections of the Act: Section 1814(b) provides for Part A payment on the basis of the lesser of a provider's reasonable costs or customary charges. Section 1832 establishes the scope of benefits provided under the Part B supplementary medical insurance program. Section 1833(a) sets forth the amounts of payment for supplementary medical insurance services on the basis of the lesser of a provider's reasonable costs or customary charges. Section 1834(a) specifies how payments are made for the purchase or rental of new and used durable medical equipment for Medicare beneficiaries. Section 1834(b) provides for payment for radiologist services on a fee schedule basis. Section 1834(c) provides for payments and standards for screening mammography. Section 1842(b) sets forth the provisions for a carrier to enter into a contract with the Secretary and to make determinations with respect to Part B claims. Section 1842(h) sets forth the requirements for a physician or supplier to voluntarily enter into an agreement with the Secretary to become a participating physician or supplier. Section 1842(i) sets forth the provisions for the payment of Part B claims. Section 1848 establishes a fee schedule for payment of physician services. Section 1861(b) sets forth the inpatient hospital services covered by the Medicare program. Section 1861(s) sets forth medical and other health services covered by the Medicare program. Section 1861(v) sets forth the general authority under which CMS may establish limits on provider costs recognized as reasonable in determining Medicare program payments. Section 1861(aa) sets forth the rural health clinic services and Federally qualified health center services covered by the Medicare program. Section 1861(jj) defines the term “covered osteoporosis drug.” Section 1862(a)(14) lists services that are excluded from coverage. Section 1866(a) specifies the terms for provider agreements. Section 1881 authorizes special rules for the coverage of and payment for services furnished to patients with end-stage renal disease. Section 1886 sets forth the requirements for payment to hospitals for inpatient hospital services. Section 1887 sets forth requirements for payment of provider-based physicians and payment under certain percentage arrangements. Section 1889 provides for Medicare and Medigap information by telephone. <CITA>[60 FR 63175, Dec. 8, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.501</SECTNO> <SUBJECT>Determination of reasonable charges.</SUBJECT> (a) Except as specified in paragraphs (b), (c), and (d) of this section, Medicare pays no more for Part B medical and other health services than the “reasonable charge” for such service. The reasonable charge is determined by the carriers (subject to any deductible and coinsurance amounts as specified in §§ 410.152 and 410.160 of this chapter). (b) Part B of Medicare pays on the basis of “reasonable cost” (see part 413 of this chapter) for certain institutional services, certain services furnished under arrangements with institutions, and services furnished by entities that elect to be paid on a cost basis (including health maintenance organizations, rural health clinics, Federally qualified health centers and end-stage renal disease facilities). (c) Carriers will determine the reasonable charge on the basis of the criteria specified in § 405.502, and the customary and prevailing charge screens in effect when the service was furnished. (Also see §§ 415.55 through 415.70 and §§ 415.100 through 415.130 of this chapter, which pertain to the determination of reimbursement for services <PRTPAGE P="88"/>performed by hospital-based physicians.) However, when services are furnished more than 12 months before the beginning of the fee screen year (January 1 through December 30) in which a request for payment is made, payment is based on the customary and prevailing charge screens in effect for the fee screen year that ends immediately preceding the fee screen year in which the claim or request for payment is made. (d) Payment under Medicare Part B for durable medical equipment and prosthetic and orthotic devices is determined in accordance with the provisions of subpart D of part 414 of this chapter. <CITA>[47 FR 63274, Dec. 31, 1981, as amended at 51 FR 34978, Oct. 1, 1986; 51 FR 37911, Oct. 27, 1986; 54 FR 9003, Mar. 2, 1989; 57 FR 24975, June 12, 1992; 57 FR 33896, July 31, 1992; 57 FR 57688, Dec. 7, 1992; 60 FR 63176, Dec. 8, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.502</SECTNO> <SUBJECT>Criteria for determining reasonable charges.</SUBJECT> (a) Criteria. The law allows for flexibility in the determination of reasonable charges to accommodate reimbursement to the various ways in which health services are furnished and charged for. The criteria for determining what charges are reasonable include: (1) The customary charges for similar services generally made by the physician or other person furnishing such services. (2) The prevailing charges in the locality for similar services. (3) In the case of physicians' services, the prevailing charges adjusted to reflect economic changes as provided under § 405.504 of this subpart. (4) In the case of medical services, supplies, and equipment that are reimbursed on a reasonable charge basis (excluding physicians' services), the inflation-indexed charge as determined under § 405.509. (5) [Reserved] (6) In the case of medical services, supplies, and equipment (including equipment servicing) that the Secretary judges do not generally vary significantly in quality from one supplier to another, the lowest charge levels at which such services, supplies, and equipment are widely and consistently available in a locality. (7) Other factors that may be found necessary and appropriate with respect to a category of service to use in judging whether the charge is inherently reasonable. This includes special reasonable charge limits (which may be either upper or lower limits) established by CMS or a carrier if it determines that the standard rules for calculating reasonable charges set forth in this subpart result in the grossly deficient or excessive charges. The determination of these limits is described in paragraphs (g) and (h) of this section. (8) In the case of laboratory services billed by a physician but performed by an outside laboratory, the payment levels established in accordance with the criteria stated in § 405.515. (9) Except as provided in paragraph (a)(10) of this section, in the case of services of assistants-at-surgery as defined in § 405.580 in teaching and non-teaching settings, charges that are not more than 16 percent of the prevailing charge in the locality, adjusted by the economic index, for the surgical procedure performed by the primary surgeon. Payment is prohibited for the services of an assistant-at-surgery in surgical procedures for which CMS has determined that assistants-at-surgery on average are used in less than 5 percent of such procedures nationally. (10) In the case of services of assistants at surgery that meet the exception under § 415.190(c)(2) or (c)(3) of this chapter because the physician is performing a unique, necessary, specialized medical service in the total care of a patient during surgery, reasonable charges consistent with prevailing practice in the carrier's service area rather than the special assistant at surgery rate. (b) <E T="03">Comparable services limitation.</E> The law also specifies that the reasonable charge cannot be higher than the charge applicable for a comparable service under comparable circumstances to the carriers' own policyholders and subscribers. (c) <E T="03">Application of criteria.</E> In applying these criteria, the carriers are to exercise judgment based on factual data on the charges made by physicians to patients generally and by other persons <PRTPAGE P="89"/>to the public in general and on special factors that may exist in individual cases so that determinations of reasonable charge are realistic and equitable. (d) <E T="03">Responsibility of Administration and carriers.</E> Determinations by carriers of reasonable charge are not reviewed on a case-by-case basis by the Centers for Medicare & Medicaid Services, although the general procedures and performance of functions by carriers are evaluated. In making determinations, carriers apply the provisions of the law under broad principles issued by the Centers for Medicare & Medicaid Services. These principles are intended to assure overall consistency among carriers in their determinations of reasonable charge. The principles in §§ 405.503 through 405.507 establish the criteria for making such determinations in accordance with the statutory provisions. (e) <E T="03">Determination of reasonable charges under the End-Stage Renal Disease (ESRD) Program—</E>(1) <E T="03">General.</E> Reasonable charges for renal-related items and services (furnished in connection with transplantation or dialysis) must be related to costs and allowances that are reasonable when the treatments are furnished in an effective and economical manner. (2) <E T="03">Nonprovider (independent) dialysis facilities.</E> Reasonable charges for renal-related items and services furnished before August 1, 1983 must be determined related to costs and charges prior to July, 1973, in accordance with the regulations at § 405.541. Items and services related to outpatient maintenance dialysis that are furnished after that date are paid for in accordance with §§ 405.544 and 413.170 of this chapter. (3) <E T="03">Provider services and (hospital-based) dialysis facilities.</E> Renal-related items and services furnished by providers, or by ESRD facilities based in hospitals, before August 1, 1983 are paid for under the provider reimbursement provisions found generally in part 413 of this chapter. Items and services related to outpatient maintenance dialysis that are furnished after that date are paid for in accordance with §§ 405.544 and 413.170 of this chapter. (4) <E T="03">Physicians' services.</E> Reasonable charges for renal-related physicians' services must be determined considering charges made for other services involving comparable physicians' time and skill requirements, in accordance with regulations at §§ 405.542 and 405.543. (5) <E T="03">Health maintenance organizations (HMOs).</E> For special rules concerning the reimbursement of ESRD services furnished by risk-basis HMOs, or by facilities owned or operated by or related to such HMOs by common ownership or control, see §§ 405.2042(b)(14) and 405.2050(c). (f) <E T="03">Determining payments for certain physician services furnished in outpatient hospital settings—</E>(1) <E T="03">General rule.</E> If physician services of the type routinely furnished in physicians' offices are furnished in outpatient hospital settings before January 1, 1992, carriers determine the reasonable charge for those services by applying the limits described in paragraph (f)(5) of this section. (2) <E T="03">Definition.</E> As used in this paragraph (f), <E T="03">outpatient settings</E> means— (i) Hospital outpatient departments, including clinics and emergency rooms; and (ii) Comprehensive outpatient rehabilitation facilities. (3) <E T="03">Services covered by limits.</E> The carrier establishes a list of services routinely furnished in physicians' offices in the area. The carrier has the discretion to determine which professional services are routinely furnished in physicians' offices, based on current medical practice in the area. Listed below are some examples of routine services furnished by office-based physicians. <HD SOURCE="HD2">Examples</HD> <EXTRACT> Review of recent history, determination of blood pressure, ausculation of heart and lungs, and adjustment of medication. Brief history and examination, and initiation of diagnostic and treatment programs. Treatment of an acute respiratory infection. </EXTRACT> (4) <E T="03">Services excluded from limits.</E> The limits established under this paragraph do not apply to the following: (i) Rural health clinic services. (ii) Surgical services included on the ambulatory surgical center list of procedures published under § 416.65(c) of this chapter.<PRTPAGE P="90"/> (iii) Services furnished in a hospital emergency room after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in— (A) Placing the patient's health in serious jeopardy; (B) Serious impairment to bodily functions; or (C) Serious dysfunction of any bodily organ or part. (iv) Anesthesiology services and diagnostic and therapeutic radiology services. (v) Federally qualified health center services paid under the rules in part 405 subpart X. (5) <E T="03">Methodology for developing limits—</E>(i) <E T="03">Development of a charge base.</E> The carrier establishes a charge base for each service identified as a routine office-based physician service. The charge base consists of the prevailing charge in the locality for each such service adjusted by the economic index. The carrier uses the prevailing charges that apply to services by nonspecialists in office practices in the locality in which the outpatient setting is located. (ii) <E T="03">Calculation of the outpatient limits.</E> The carrier calculates the charge limit for each service by multiplying the charge base amount for each service by .60. (6) <E T="03">Application of limits.</E> The reasonable charge for physician services of the type described in paragraph (f)(3) of this section that are furnished in an outpatient setting is the lowest of the actual charges, the customary charges in accordance with § 405.503, the prevailing charges applicable to these services in accordance with § 405.504, or the charge limits calculated in paragraph (f)(5)(ii) of this section. (g) <E T="03">Determination of payment amounts in special circumstances</E>—(1) <E T="03">General.</E> (i) For purposes of this paragraph, a “category of items or services” may consist of a single item or service or any number of items or services. (ii) CMS or a carrier may determine that the standard rules for calculating Part B payment amounts for a category of items or services identified in section 1861(s) of the Act (other than physician services paid under section 1848 of the Act) will result in grossly deficient or excessive amounts. (iii) If CMS or the carrier determines that the standard rules for calculating payment amounts for a category of items or services set forth in this subpart will result in grossly deficient or excessive amounts, CMS or the carrier may establish special payment limits that are realistic and equitable for a category of items or services. (iv) The limit on the payment amount is either an upper limit to correct a grossly excessive payment amount or a lower limit to correct a grossly deficient payment amount. (v) The limit is either a specific dollar amount or is based on a special method to be used in determining the payment amount. (vi) Except as provided in paragraph (h) of this section, a payment limit for a given year may not vary by more than 15 percent from the payment amount established for the preceding year. (vii) <E T="03">Examples of excessive or deficient payment amounts.</E> Examples of the factors that may result in grossly deficient or excessive payment amounts include, but are not limited to, the following: (A) The marketplace is not competitive. This includes circumstances in which the marketplace for a category of items or services is not truly competitive because a limited number of suppliers furnish the item or service. (B) Medicare and Medicaid are the sole or primary sources of payment for a category of items or services. (C) The payment amounts for a category of items or services do not reflect changing technology, increased facility with that technology, or changes in acquisition, production, or supplier costs. (D) The payment amounts for a category of items or services in a particular locality are grossly higher or lower than payment amounts in other comparable localities for the category of items or services, taking into account the relative costs of furnishing the category of items or services in the different localities.<PRTPAGE P="91"/> (E) Payment amounts for a category of items or services are grossly higher or lower than acquisition or production costs for the category of items or services. (F) There have been increases in payment amounts for a category of items or services that cannot be explained by inflation or technology. (G) The payment amounts for a category of items or services are grossly higher or lower than the payments made for the same category of items or services by other purchasers in the same locality. (2) <E T="03">Establishing a limit.</E> In establishing a payment limit for a category of items or services, CMS or a carrier considers the available information that is relevant to the category of items or services and establishes a payment amount that is realistic and equitable. The factors CMS or a carrier consider in establishing a specific dollar amount or special payment method for a category of items or services may include, but are not limited to, the following: (i) <E T="03">Price markup.</E> This is the relationship between the retail and wholesale prices or manufacturer's costs of a category of items or services. If information on a particular category of items or services is not available, CMS or a carrier may consider the markup on a similar category of items or services and information on general industry pricing trends. (ii) <E T="03">Differences in charges.</E> CMS or a carrier may consider the differences in charges for a category of items or services made to non-Medicare and Medicare patients or to institutions and other large volume purchasers. (iii) <E T="03">Costs.</E> CMS or a carrier may consider resources (for example, overhead, time, acquisition costs, production costs, and complexity) required to produce a category of items or services. (iv) <E T="03">Utilization.</E> CMS or a carrier may impute a reasonable rate of use for a category of items or services and consider unit costs based on efficient utilization. (v) <E T="03">Payment amounts in other localities.</E> CMS or a carrier may consider payment amounts for a category of items or services furnished in another locality. (3) <E T="03">Notification of limits</E>—(i) <E T="03">National limits.</E> CMS publishes in the <E T="04">Federal Register</E> proposed and final notices announcing a special payment limit described in this paragraph (g) before it adopts the limit. The notices set forth the criteria and circumstances, if any, under which a carrier may grant an exception to a payment limit for a category of items or services. (ii) <E T="03">Carrier-level limits.</E> A carrier proposing to establish a special payment limit for a category of items or services must inform the affected suppliers and State Medicaid agencies of the factors it considered in determining and in establishing the limit, as described in paragraphs (g)(1) through (g)(3) of this section, and solicit comments. The carrier must evaluate the comments it receives and inform the affected suppliers, State Medicaid agencies, and CMS of any final limits it establishes. CMS acknowledges in writing to the carrier that it received the carrier's notification. After the carrier has received CMS's acknowledgement, the limit may be effective for services furnished at least 30 days after the date of the carrier's notification. (h) <E T="03">Special payment limit adjustments greater than 15 percent of the payment amount.</E> In addition to applying the general rules under paragraphs (g)(1) through (g)(3) of this section, CMS applies the following rules in determining and establishing a payment adjustment greater than 15 percent of the payment amount for a category of items or services within a year: (1) <E T="03">Potential impact of special limit.</E> CMS considers the potential impact on quality, access, beneficiary liability, assignment rates, and participation of suppliers. (2) <E T="03">Supplier consultation.</E> Before making a determination that a payment amount for a category of items or services is not inherently reasonable by reason of its grossly excessive or deficient amount, CMS consults with representatives of the suppliers likely to be affected by the change in the payment amount. (3) <E T="03">Publication of national limits.</E> If CMS determines under this paragraph (h) to establish a special payment limit for a category of items or services, it publishes in the <E T="04">Federal Register</E> <PRTPAGE P="92"/>proposed and final notices of a special payment limit before it adopts the limit. The notice sets forth the criteria and circumstances, if any, under which a carrier may grant an exception to the limit for the category of items or services. (i) <E T="03">Proposed notice.</E> The proposed notice— (A) Explains the factors and data that CMS considered in determining that the payment amount for a category of items or services is grossly excessive or deficient; (B) Specifies the proposed payment amount or methodology to be established with respect to a category of items or services; (C) Explains the factors and data that CMS considered in determining the payment amount or methodology, including the economic justification for a uniform fee or payment limit if it is proposed; (D) Explains the potential impacts of a limit on a category of items or services as described in paragraph (h)(1) of this section; and (E) Allows no less than 60 days for public comment on the proposed payment limit for the category of items or services. (ii) <E T="03">Final notice.</E> The final notice— (A) Explains the factors and data that CMS considered, including the economic justification for any uniform fee or payment limit established; and (B) Responds to the public comments. (i) <E T="03">Paramedic intercept ambulance services.</E> (1) CMS establishes its payment allowance on a carrier-wide basis by using the median allowance from all localities within an individual carrier's jurisdiction. (2) CMS's payment allowance is equal to the advanced life support rate minus 40 percent of the basic life support rate. (3) CMS bases payment on the lower of the actual charge or the amount described in paragraph (i)(1) and (i)(2) of this section. <SECAUTH>(Secs. 1102, 1814(b), 1833(a), 1842(b), and (h), and 1871, 1903(i)(1) of the Social Security Act; 49 Stat. 647, as amended, 79 Stat. 296, 302, 310, 331; 86 Stat. 1395, 1454; 42 U.S.C. 1302, 1395u(b), 1395hh, 1396b(i)(1).</SECAUTH> <CITA>[32 FR 12599, Aug. 31, 1967]</CITA> <EDNOTE> <HD SOURCE="HED">Editorial Note:</HD> For <E T="04">Federal Register</E> citations affecting § 405.502, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and on GPO Access. </EDNOTE> </SECTION> <SECTION> <SECTNO>§ 405.503</SECTNO> <SUBJECT>Determining customary charges.</SUBJECT> (a) <E T="03">Customary charge defined.</E> The term “customary charges” will refer to the uniform amount which the individual physician or other person charges in the majority of cases for a specific medical procedure or service. In determining such uniform amount, token charges for charity patients and substandard charges for welfare and other low income patients are to be excluded. The reasonable charge cannot, except as provided in § 405.506, be higher than the individual physician's or other person's customary charge. The customary charge for different physicians or other persons may, of course, vary. Payment for covered services would be based on the actual charge for the service when, in a given instance, that charge is less than the amount which the carrier would otherwise have found to be within the limits of acceptable charges for the particular service. Moreover, the income of the individual beneficiary is not to be taken into account by the carrier in determining the amount which is considered to be a reasonable charge for a service rendered to him. There is no provision in the law for a carrier to evaluate the reasonableness of charges in light of an individual beneficiary's economic status. (b) <E T="03">Variation of charges.</E> If the individual physician or other person varies his charges for a specific medical procedure or service, so that no one amount is charged in the majority of cases, it will be necessary for the carrier to exercise judgment in the establishment of a “customary charge” for such physician or other person. In making this judgment, an important guide, to be utilized when a sufficient volume of data on the physician's or other person's charges is available, would be the median or midpoint of his charges, excluding token and substandard charges as well as exceptional charges on the high side. A significant clustering of charges in the vicinity of the median amount might indicate that a point of such clustering should be taken as the physician's or other person's “customary” charge. Use of <PRTPAGE P="93"/>relative value scales will help in arriving at a decision in such instances. (c) <E T="03">Use of relative value scales.</E> If, for a particular medical procedure or service, the carrier is unable to determine the customary charge on the basis of reliable statistical data (for example, because the carrier does not yet have sufficient data or because the performance of the particular medical procedure or service by the physician or other person is infrequent), the carrier may use appropriate relative value scales to determine the customary charge for such procedure or service in relation to customary charges of the same physician or person for other medical procedures and services. (d) <E T="03">Revision of customary charge.</E> A physician's or other person's customary charge is not necessarily a static amount. Where a physician or other person alters his charges, a revised pattern of charges for his services may develop. Where on the basis of adequate evidence, the carrier finds that the physician or other person furnishing services has changed his charge for a service to the public in general, the customary charge resulting from the revised charge for the service should be recognized as the customary charge in making determinations of reasonable charges for such service when rendered thereafter to supplementary insurance beneficiaries. If the new customary charge is not above the top of the range of prevailing charges (see § 405.504(a)), it should be deemed to be reasonable by the carrier, subject to the provisions of § 405.508. </SECTION> <SECTION> <SECTNO>§ 405.504</SECTNO> <SUBJECT>Determining prevailing charges.</SUBJECT> (a) <E T="03">Ranges of charges.</E> (1) In the case of physicians' services furnished beginning January 1, 1987, the prevailing charges for a nonparticipating physician as defined in this paragraph will be no higher than the same level that was set for services furnished during the previous calendar year for a physician who was a participating physician during that year. A nonparticipating physician is a physician who has not entered into an agreement with the Medicare program to accept payment on an assignment-related basis (in accordance with § 424.55 of this chapter) for all items and services furnished to individuals enrolled under Part B of Medicare during a given calendar year. (2) No charge for Part B medical or other health services may be considered to be reasonable if it exceeds the higher of: (i) The prevailing charge for similar services in the same locality in effect on December 31, 1970, provided such prevailing charge had been found acceptable by CMS; or (ii) The prevailing charge that, on the basis of statistical data and methodology acceptable to CMS, would cover: (A) 75 percent of the customary charges made for similar services in the same locality during the 12-month period of July 1 through June 30 preceding the fee screen year (January 1 through December 31) in which the service was furnished; or (B) In the case of services furnished more than 12 months before the beginning of the fee screen year (January 1 through December 31) in which the claim or request for payment is submitted, 75 percent of the customary charges made for similar services in the same locality during the 12 month period of July 1 through June 30 preceding the fee screen year that ends immediately preceding the fee screen year in which the claim or request for payment is submitted. (3)(i) In the case of physicians' services, furnished before January 1, 1992, each prevailing charge in each locality may not exceed the prevailing charge determined for the FY ending June 30, 1973 (without reference to the adjustments made in accordance with the economic stabilization program then in effect), except on the basis of appropriate economic index data that demonstrate the higher prevailing charge level is justified by: (A) Changes in general earnings levels of workers that are attributable to factors other than increases in their productivity; and (B) changes in expenses of the kind incurred by physicians in office practice. The office-expense component and the earnings component of such index shall be given the relative weights shown in data on self-employed physicians' gross incomes. <EXTRACT> <PRTPAGE P="94"/> <E T="03">Example.</E> The available data indicate the office-expense and earnings components of the index should be given relative weights of 40 percent and 60 percent, respectively, and it is calculated that the aggregate increase in expenses of practice for a particular July through June period was 112 percent over the expenses of practice for calendar year 1971 and the increase in earnings (less increases in workers' productivity was 110 percent over the earnings for calendar year 1971. The allowable increase in any prevailing charge that could be recognized during the next fee screen year would be 110.8 percent ((.40×112)+(.60)×110)=110.8) above the prevailing charge recognized for fiscal year 1973. </EXTRACT> (ii)(A) If the increase in the prevailing charge in a locality for a particular physician service resulting from an aggregate increase in customary charges for that service does not exceed the index determined under paragraph (a)(3)(i) of this section, the increase is permitted and any portion of the allowable increase not used is carried forward and is a basis for justifying increases in that prevailing charge in the future. However, if the increase in the prevailing charge exceeds the allowable increase, the increase will be reduced to the allowable amount. Further increases will be justified only to the degree that they do not exceed further rises in the economic index. The prevailing charge for physicians' services furnished during the 15-month period beginning July 1, 1984 may not exceed the prevailing charge for physicians' services in effect for the 12-month period beginning July 1, 1983. The increase in prevailing charges for physicians' services for subsequent fee screen years similarly may not reflect the rise in the economic index that would have otherwise been provided for the period beginning July 1, 1984, and must be treated as having fully provided for the rise in the economic index which would have been otherwise taken into account. (B) Notwithstanding the provisions of paragraphs (a)(3)(i) and (ii)(A) of this section, the prevailing charge in the case of a physician service in a particular locality determined pursuant to paragraphs (a)(2) and (3)(i) of this section for the fiscal year beginning July 1, 1975, and for any subsequent fee screen years, if lower than the prevailing charge for the fiscal year ending June 30, 1975, by reason of the application of economic index data, must be raised to such prevailing charge which was in effect for the fiscal year ending June 30, 1975. (If the amount paid on any claim processed by a carrier after the original reasonable charge update for the fiscal year beginning July 1, 1975, and prior to the adjustments required by the preceding sentence, was at least $1 less than the amount due pursuant to the preceding sentence, the difference between the amount previously paid and the amount due shall be paid within 6 months after December 31, 1975; however, no payment shall be made on any claim where the difference between the amount previously and the amount due shall be paid within 6 months after December 31, 1975; however, no payment shall be made on any claim where the difference between the amount previously paid and the amount due is less than $1.) (iii) If, for any reason, a prevailing charge for a service in a locality has no precise counterpart in the carrier's charge data for calendar year 1971 (the data on which the prevailing charge calculations for fiscal year 1973 were based), the limit on the prevailing charge will be estimated, on the basis of data and methodology acceptable to CMS, to seek to produce the effect intended by the economic index criterion. The allowance or reduction of an increase in a prevailing charge for any individual medical item or service may affect the allowance or reduction of an increase in the prevailing charges for other items or services if, for example, the limit on the prevailing charge is estimated, or if the prevailing charges for more than one item or service are established through the use of a relative value schedule and dollar conversion factors. (b) <E T="03">Variation in range of prevailing charges.</E> The range of prevailing charges in a locality may be different for physicians or other persons who engage in a specialty practice or service than for others. Existing differentials in the level of charges between different kinds of practice or service could, in some localities, lead to the development of more than one range of prevailing charges for application by <PRTPAGE P="95"/>the carrier in its determinations of reasonable charges. Carrier decisions in this respect should be responsive to the existing patterns of charges by physicians and other persons who render covered services, and should establish differentials in the levels of charges between different kinds of practice or service only where in accord with such patterns. (c) <E T="03">Re-evaluation and adjustment of prevailing charges.</E> Determinations of prevailing charges by the carrier are to be re-evaluated and adjusted from time to time on the basis of factual information about the charges made by physicians and other persons to the public in general. This information should be obtained from all possible sources including a carrier's experience with its own programs as well as with the supplementary medical insurance program. (d) <E T="03">Computation and issuance of the MEI after CY 1992—</E>(1) For update years after CY 1992, the MEI is a physician input price index, in which the annual percent changes for the direct-labor price components are adjusted by an annual percent change in a 10-year moving average index of labor productivity in the nonfarm business sector. (2) The MEI is constructed, using as a base year, CY 1989 weights and annual percent changes in the economic price proxies as shown on the following chart: <GPOTABLE CDEF="s100,12,r100" COLS="3" OPTS="L2,i1"> <TTITLE>Medicare Economic Index Expenditure Categories, Weights, and Price Proxies</TTITLE> <BOXHD> <CHED H="1">Expense category</CHED> <CHED H="1">1989 weights <SU>1</SU>,<SU>2</SU> (percent)</CHED> <CHED H="1">Price proxy <SU>3</SU> </CHED> </BOXHD> <ROW> <ENT I="03">Total </ENT> <ENT>100.0</ENT> </ROW> <ROW> <ENT I="01">1. Physician's Own Time (net income, general earnings)</ENT> <ENT>54.2</ENT> </ROW> <ROW> <ENT I="03">a. Wages and Salaries</ENT> <ENT>45.3</ENT> <ENT>Average hourly earnings, total private non-farm.<SU>4</SU> </ENT> </ROW> <ROW> <ENT I="03">b. Fringe Benefits</ENT> <ENT>8.8</ENT> <ENT>Employment Cost Index, fringe benefits, private non-farm.<SU>4</SU> </ENT> </ROW> <ROW> <ENT I="01">2. Physician Practice Expense</ENT> <ENT>45.8</ENT> </ROW> <ROW> <ENT I="03">a. Non-physician Employee Compensation</ENT> <ENT>16.3</ENT> </ROW> <ROW> <ENT I="05">(1) Wages and Salaries</ENT> <ENT>13.8</ENT> <ENT>Employment Cost Index, wages and salaries weighted for occupational mix of non-physician employees.<SU>4</SU> </ENT> </ROW> <ROW> <ENT I="05">(2) Fringe Benefits</ENT> <ENT>2.5</ENT> <ENT>Employment Cost Index, fringe benefits, white collar.<SU>4</SU> </ENT> </ROW> <ROW> <ENT I="03">b. Office Expense</ENT> <ENT>10.3</ENT> <ENT>CPI-U, housing.</ENT> </ROW> <ROW> <ENT I="03">c. Medical Materials and Supplies</ENT> <ENT>5.2</ENT> <ENT>PPI, ethical drugs; PPI, surgical appliances and supplies; and CPI-U medical equipment and supplies (equally weighted).</ENT> </ROW> <ROW> <ENT I="03">d. Professional Liability Insurance</ENT> <ENT>4.8</ENT> <ENT>CMS survey of change in average liability premiums for $100,000/$300,000 liability coverage among 9 major insurers.</ENT> </ROW> <ROW> <ENT I="03">e. Medical Equipment</ENT> <ENT>2.3</ENT> <ENT>PPI, medical instruments and equipment.</ENT> </ROW> <ROW> <ENT I="03">f. Other Professional Expense</ENT> <ENT>6.9</ENT> </ROW> <ROW> <ENT I="05">(1) Professional Car</ENT> <ENT>1.4</ENT> <ENT>CPI-U, private transportation.</ENT> </ROW> <ROW> <ENT I="05">(2) Other</ENT> <ENT>5.5</ENT> <ENT>CPI-U, all items less food and energy.</ENT> </ROW> <TNOTE> <SU>1</SU> Sources: Martin L. Gonzalez, ed.: <E T="03">Physician Marketplace Statistics, Fall, 1990.</E> Center for Health Policy Research, Chicago, American Medical Association, 1990; Mark Holoweiko, “Practice Expenses Take the Leap of the Decade,” <E T="03">Medical Economics,</E> November 12, 1990; and CMS, OACT special study.</TNOTE> <TNOTE> <SU>2</SU> Due to rounding, weights may not sum to 100.0%</TNOTE> <TNOTE> <SU>3</SU> All price proxies are for <E T="03">annual</E> percent changes for the 12 months ending June 30th.</TNOTE> <TNOTE> <SU>4</SU> Annual percent change values for Physicians' Own Time and Non-physician Employee Compensation are net of the change in the 10-year moving average of output per man-hour to exclude changes in non-farm business sector labor productivity.</TNOTE> </GPOTABLE> (3) If there is no methodological change, CMS publishes a notice in the <E T="04">Federal Register</E> to announce the annual increase in the MEI before the beginning of the update year to which it applies. If there are changes in the base year weights or price proxies, or if there are any other MEI methodological changes, they are published in the <E T="04">Federal Register</E> with an opportunity for public comment. <CITA>[32 FR 12600, Aug. 31, 1967, as amended at 40 FR 25447, June 16, 1975; 42 FR 18275, Apr. 6, 1977. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 4430, Feb. 2, 1978; 47 FR 63274, Dec. 31, 1982; 51 FR 34978, Oct. 1, 1986; 53 FR 6648, Mar. 2, 1988; 57 FR 55912, Nov. 25, 1992]</CITA> </SECTION> <SECTION> <PRTPAGE P="96"/> <SECTNO>§ 405.505</SECTNO> <SUBJECT>Determination of locality.</SUBJECT> “Locality” is the geographical area for which the carrier is to derive the reasonable charges or fee schedule amounts for services or items. Usually, a locality may be a State (including the District of Columbia, a territory, or a Commonwealth), a political or economic subdivision of a State, or a group of States. It should include a cross section of the population with respect to economic and other characteristics. Where people tend to gravitate toward certain population centers to obtain medical care or service, localities may be recognized on a basis constituting medical services areas (interstate or otherwise), comparable in concept to “trade areas.” Localities may differ in population density, economic level, and other major factors affecting charges for services. Carriers therefore shall delineate localities on the basis of their knowledge of local conditions. However, distinctions between localities are not to be so finely made that a locality includes only a very limited geographic area whose population has distinctly similar income characteristics (e.g., a very rich or very poor neighborhood within a city). <CITA>[57 FR 27305, June 18, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.506</SECTNO> <SUBJECT>Charges higher than customary or prevailing charges or lowest charge levels.</SUBJECT> A charge which exceeds the customary charge of the physician or other person who rendered the medical or other health service, or the prevailing charge in the locality, or an applicable lowest charge level may be found to be reasonable, but only where there are unusual circumstances, or medical complications requiring additional time, effort or expense which support an additional charge, and only if it is acceptable medical or medical service practice in the locality to make an extra charge in such cases. The mere fact that the physician's or other person's customary charge is higher than prevailing would not justify a determination that it is reasonable. <SECAUTH>(Secs. 1102, 1842(b) and 1871, 1903(i)(1) of the Social Security Act; 49 Stat. 647, 79 Stat. 302, 310, 331; 86 Stat. 1395, 1454; (42 U.S.C. 1302, 1395u(b), 1395hh, 1396b(i)(1)))</SECAUTH> <CITA>[43 FR 32300, July 26, 1978]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.507</SECTNO> <SUBJECT>Illustrations of the application of the criteria for determining reasonable charges.</SUBJECT> The following examples illustrate how the general criteria on customary charges and prevailing charges might be applied in determining reasonable charges under the supplementary medical insurance program. Basically, these examples demonstrate that, except where the actual charge is less, reasonable charges will reflect current customary charges of the particular physician or other person within the ranges of the current prevailing charges in the locality for that type and level of service: <EXTRACT> The prevailing charge for a specific medical procedure ranges from $80 to $100 in a certain locality. Doctor A's bill is for $75 although he customarily charges $80 for the procedure. Doctor B's bill is his customary charge of $85 Doctor C's bill is his customary charge of $125 Doctor D's bill is for $100, although he customarily charges $80, and there are no special circumstances in the case. The reasonable charge for Doctor A would be limited to $75 since under the law the reasonable charge cannot exceed the actual charge, even if it is lower than his customary charge and below the prevailing charges for the locality. The reasonable charge for Doctor B would be $85, because it is his customary charge and it falls within the range of prevailing charges for that locality. The reasonable charge for Doctor C could not be more than $100, the top of the range of prevailing charges. The reasonable charge for Doctor D would be $80, because that is his customary charge. Even though his actual charge of $100 falls within the range of prevailing charges, the reasonable charge cannot exceed his customary charge in the absence of special circumstances. </EXTRACT> </SECTION> <SECTION> <PRTPAGE P="97"/> <SECTNO>§ 405.508</SECTNO> <SUBJECT>Determination of comparable circumstances; limitation.</SUBJECT> (a) <E T="03">Application of limitation.</E> The carrier may not in any case make a determination of reasonable charge which would be higher than the charge upon which it would base payment to its own policyholders for a comparable service in comparable circumstances. The charge upon which it would base payment, however, does not necessarily mean the amount the carrier would be obligated to pay. Under certain circumstances, some carriers pay amounts on behalf of individuals who are their policyholders, which are below the customary charges of physicians or other persons to other individuals. Payment under the supplementary medical insurance program would not be limited to these lower amounts. (b) <E T="03">When comparability exists.</E> “Comparable circumstances,” as used in the Act and this subpart, refers to the circumstances under which services are rendered to individuals and the nature of the carrier's health insurance programs and the method it uses to determine the amounts of payments under these programs. Generally, comparability would exist where: (1) The carrier bases payment under its program on the customary charges, as presently constituted, of physicians or other persons and on current prevailing charges in a locality, and (2) The determination does not preclude recognition of factors such as speciality status and unusual circumstances which affect the amount charged for a service. (c) <E T="03">Responsibility for determining comparability.</E> Responsibility for determining whether or not a carrier's program has comparability will in the first instance fall upon the carrier in reporting pertinent information about its programs to the Centers for Medicare & Medicaid Services. When the pertinent information has been reported, the Centers for Medicare & Medicaid Services will advise the carrier whether any of its programs have comparability. </SECTION> <SECTION> <SECTNO>§ 405.509</SECTNO> <SUBJECT>Determining the inflation-indexed charge.</SUBJECT> (a) <E T="03">Definition.</E> For purposes of this section, <E T="03">inflation-indexed charge</E> means the lowest of the fee screens used to determine reasonable charges (as determined in § 405.503 for the customary charge, § 405.504 for the prevailing charge, this section for the inflation-indexed charge, and § 405.511 for the lowest charge level) for services, supplies, and equipment reimbursed on a reasonable charge basis (excluding physicians' services), that is in effect on December 31 of the previous fee screen year, updated by the inflation adjustment factor, as described in paragraph (b) of this section. (b) <E T="03">Application of inflation adjustment factor to determine inflation-indexed charge.</E> (1) For fee screen years beginning on or after January 1, 1987, the inflation-indexed charge is determined by updating the fee screen used to determine the reasonable charges in effect on December 31 of the previous fee screen year by application of an inflation adjustment factor, that is, the annual change in the level of the consumer price index for all urban consumers, as compiled by the Bureau of Labor Statistics, for the 12-month period ending on June 30 of each year. (2) For services, supplies, and equipment furnished from October 1, 1985 through December 31, 1986 the inflation adjustment factor is zero. (c) The inflation-indexed charge does not apply to any services, supplies, or equipment furnished after December 31, 1991, that are covered under or limited by the fee schedule for physicians' services established under section 1848 of the Act and part 415 of this chapter. These services are subject to the Medicare Economic Index described in § 415.30 of this chapter. <CITA>[51 FR 34979, Oct. 1, 1986; 51 FR 37911, Oct. 27, 1986, as amended at 56 FR 59621, Nov. 25, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.511</SECTNO> <SUBJECT>Reasonable charges for medical services, supplies, and equipment.</SUBJECT> (a) <E T="03">General rule.</E> (1) A charge for any medical service, supply, or equipment (including equipment servicing) that in the judgment of CMS generally does not vary significantly in quality from one supplier to another (and that is <PRTPAGE P="98"/>identified by a notice published in the <E T="04">Federal Register</E>) may not be considered reasonable if it exceeds: (i) The customary charge of the supplier (see § 405.503); (ii) The prevailing charge in the locality (see § 405.504); (iii) The charge applicable for a comparable service and under comparable circumstances to the policyholders or subscribers of the carrier (see § 405.508); (iv) The lowest charge level at which the item or service is widely and consistently available in the locality (see paragraph (c) of this section); or (v) The inflation-indexed charge, as determined under § 405.509, in the case of medical services, supplies, and equipment that are reimbursed on a reasonable charge basis (excluding physicians' services). (2) In the case of laboratory services, paragraph (a)(1) of this section is applicable to services furnished by physicians in their offices, by independent laboratories (see § 405.1310(a)) and to services furnished by a hospital laboratory for individuals who are neither inpatients nor outpatients of a hospital. Allowance of additional charges exceeding the lowest charge level can be approved by the carrier on the basis of unusual circumstances or medical complications in accordance with § 405.506. (b) <E T="03">Public notice of items and services subject to the lowest charge level rule.</E> Before the Secretary determines that lowest charge levels should be established for an item or service, notice of the proposed determination will be published with an opportunity for public comment. The descriptions or specifications of items or services in the notice will be in sufficient detail to permit a determination that items or services conforming to the descriptions will not vary significantly in quality. (c) <E T="03">Calculating the lowest charge level.</E> The lowest charge level at which an item or service is widely and consistently available in a locality is calculated by the carrier in accordance with instructions from CMS as follows: (1) <E T="03">For items or services furnished on or before December 31, 1986.</E> (i) A lowest charge level is calculated for each identified item or service in January and July of each year. (ii) The lowest charge level for each identified item or service is set at the 25th percentile of the charges (incurred or submitted on claims processed by the carrier) for that item or service, in the locality designated by the carrier for this purpose, during the second calendar quarter preceding the determination date. Accordingly, the January calculations will be based on charges for the July through September quarter of the previous calendar year, and the July calculations will be based on charges for the January through March quarter of the same calendar year. (2) <E T="03">For items or services furnished on or after January 1, 1987</E>. (i) A lowest charge level is calculated for each identified item or service in January of each year. (ii) The lowest charge level for each identified item or service is set at the 25th percentile of the charges (incurred or submitted on claims processed by the carrier) for that item or service, in the locality designated by the carrier for this purpose, during the 3-month period of July 1 through September 30 preceding the fee screen year (January 1 through December 31) for which the item or service was furnished. (3) <E T="03">Lowest charge levels for laboratory services.</E> In setting lowest charge levels for laboratory services, the carrier will consider only charges made for laboratory services performed by physicians in their offices, by independent laboratories which meet coverage requirements, and for services furnished by a hospital laboratory for individuals who are neither inpatients nor outpatients of a hospital. (d) <E T="03">Locality.</E> Subject to the approval of the Secretary, the carrier may designate its entire service area as the locality for purposes of this section, or may otherwise modify the localities used for calculating prevailing charges. (The modified locality for an item or service will also be used for calculating the prevailing charge for that item or service.) <SECAUTH>(Secs. 1102, 1842(b) and 1871, 1903(i)(1) of the Social Security Act; 49 Stat. 647, 79 Stat. 302, 310, 331, 86 Stat. 1395, 1454 (42 U.S.C. 1302, 1395u(b), 1395hh, 1396b(i)(1)))</SECAUTH> <CITA>[43 FR 32300, July 26, 1978, as amended at 50 FR 40174, Oct. 1, 1985; 51 FR 34979, Oct. 1, 1986]</CITA> </SECTION> <SECTION> <PRTPAGE P="99"/> <SECTNO>§ 405.512</SECTNO> <SUBJECT>Carriers' procedural terminology and coding systems.</SUBJECT> (a) <E T="03">General.</E> Procedural terminology and coding systems are designed to provide physicians and third party payers with a common language that accurately describes the kinds and levels of services provided and that can serve as a basis for coverage and payment determinations. (b) <E T="03">Modification of terminology and/or coding systems.</E> A carrier that wishes to modify its system of procedural terminology and coding shall submit its request to the Centers for Medicare & Medicaid Services with all pertinent data and information for approval before the revision is implemented. The Centers for Medicare & Medicaid Services will evaluate the proposal in the light of the guidelines specified in paragraph (c) of this section and such other considerations as may be pertinent, and consult with the Assistant Secretary for Health. The Centers for Medicare & Medicaid Services will approve such a revision if it determines that the potential advantages of the proposed new system, outweigh the disadvantages. (c) <E T="03">Guidelines.</E> The following considerations and guidelines are taken into account in evaluating a carrier's proposal to change its system of procedural terminology and coding: (1) The rationale for converting to the new terminology and coding; (2) The estimated short-run and long-run impact on the cost of the health insurance program, other medical care costs, administrative expenses, and the reliability of the estimates; (3) The degree to which the conversion to the proposed new terminology and coding can be accomplished in a way that permits full implementation of the reasonable charge criteria in accordance with the provisions of this subpart; (4) The degree to which the proposed new terminology and coding are accepted by physicians in the carrier's area (physician acceptance is assumed only if a majority of the Medicare and non-Medicare bills and claims completed by physicians in the area and submitted to the carrier can reasonably be expected to utilize the proposed new terminology and coding); (5) The extent to which the proposed new terminology and coding system is used by the carrier in its non-Medicare business; (6) The clarity with which the proposed system defines its terminology and whether the system lends itself to: (i) Accurate determinations of coverage; (ii) Proper assessment of the appropriate level of payment; and (iii) Meeting the carrier's or Professional Standards Review Organizations' review needs and such other review needs as may be appropriate; (7) Compatibility of the new terminology and coding system with other systems that the carrier and other carriers may utilize in the administration of the Medicare program—e.g., its compatibility with systems and statistical requirements and with the historical data in the carrier's processing system; and (8) Compatibility of the proposed system with the carriers methods for determining payment under the fee schedule for physicians' services for services which are identified by a single element of terminology but which may vary in content. <CITA>[40 FR 7639, Feb. 21, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 10298, Mar. 4, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.515</SECTNO> <SUBJECT>Reimbursement for clinical laboratory services billed by physicians.</SUBJECT> This section implements section 1842(h) of the Social Security Act, which places a limitation on reimbursement for markups on clinical laboratory services billed by physicians. If a physician's bill, or a request for payment for a physician's services, includes a charge for a laboratory test for which payment may be made under this part, the amount payable with respect to the test shall be determined as follows (subject to the coinsurance and deductible provisions at §§ 410.152 and 410.160 of this chapter): (a) If the bill or request for payment indicates that the test was personally performed or supervised either by the physician who submitted the bill (or for whose services the request for payment was made), or by another physician with whom that physician shares <PRTPAGE P="100"/>his or her practice, the payment will be based on the physician's reasonable charge for the test (as determined in accordance with § 405.502). (b) If the bill or request for payment indicates that the test was performed by an outside laboratory, and identifies both the laboratory and the amount the laboratory charged, payment for the test will be based on the lower of— (1) The laboratory's reasonable charge for the service (as determined in accordance with § 405.502), or (2) The amount that the laboratory charged the physician for the service. (c) If the bill or request for payment does not indicate that the conditions specified in paragraph (a) of this section were met, and does not identify both the laboratory and the amount the laboratory charged, payment will be based on the lowest charge at which the carrier estimates the test could have been secured from a laboratory serving the physician's locality. The carrier will estimate this lowest amount twice a year by (i) obtaining lists of charges laboratories make to physicians from as many commercial laboratories serving the carrier's area as possible (including laboratories in other States from which tests may be obtained by physicians in the carrier's service area) and (ii) establishing a schedule of lowest prices based on this information. The carrier will take into consideration specific circumstances, such as a need for emergency services that may be costlier than routine services, in making the estimate in a particular case. However, in no case may this estimate be higher than the lowest customary charge for commercial laboratories, or when applicable to the laboratory service, the lowest charge level determined in accordance with § 405.511, in the carrier's service area. (d) When a physician bills, in accordance with paragraph (b) or (c) of this section, for a laboratory test and indicates that it was performed by an independent laboratory, a nominal payment will also be made to the physician for collecting, handling, and shipping the specimen to the laboratory, if the physician bills for such a service. <CITA>[46 FR 42672, Aug. 24, 1981, as amended at 51 FR 41351, Nov. 14, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.517</SECTNO> <SUBJECT>Payment for drugs and biologicals that are not paid on a cost or prospective payment basis.</SUBJECT> (a) <E T="03">Applicability.</E> Payment for a drug or biological that is not paid on a cost or prospective payment basis is determined by the standard methodology described in paragraph (b) of this section. Examples of when this procedure applies include a drug or biological furnished incident to a physician's service, a drug or biological furnished by an independent dialysis facility that is not included in the ESRD composite rate set forth in § 413.170(c) of this chapter, and a drug or biological furnished as part of the durable medical equipment benefit. (b) <E T="03">Methodology.</E> Payment for a drug or biological described in paragraph (a) of this section is based on the lower of the actual charge on the Medicare claim for benefits or 95 percent of the national average wholesale price of the drug or biological. (c) <E T="03">Multiple-source drugs.</E> For multiple-source drugs and biologicals, for purposes of this regulation, the average wholesale price is defined as the lesser of the median average wholesale price for all sources of the generic forms of the drug or biological or the lowest average wholesale price of the brand name forms of the drug or biological. <CITA>[63 FR 58905, Nov. 2, 1998]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.520</SECTNO> <SUBJECT>Payment for a physician assistant's, nurse practitioner's, and clinical nurse specialists' services and services furnished incident to their professional services.</SUBJECT> (a) <E T="03">General rule.</E> A physician assistant's, nurse practitioner's, and clinical nurse specialists' services, and services and supplies furnished incident to their professional services, are paid in accordance with the physician fee schedule. The payment for a physician assistants' services may not exceed the limits at § 414.52 of this chapter. The payment for a nurse practitioners' and clinical nurse specialists' services may not exceed the limits at § 414.56 of this chapter. (b) <E T="03">Requirements.</E> Medicare payment is made only if all claims for payment are made on an assignment-related basis in accordance with § 424.55 of this chapter, that sets forth, respectively, <PRTPAGE P="101"/>the conditions for coverage of physician assistants' services, nurse practitioners' services and clinical nurse specialists' services, and services and supplies furnished incident to their professional services. (c) <E T="03">Civil money penalties.</E> Any person or entity who knowingly and willingly bills a Medicare beneficiary amounts in excess of the appropriate coinsurance and deductible is subject to a civil money penalty as described in §§ 402.1(c)(11), 402.105(d)(2)(viii), and 402.107(b)(8) of this chapter. <CITA>[63 FR 58905, Nov. 2, 1998, as amended at 66 FR 49547, Sept. 28, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.534</SECTNO> <SUBJECT>Limitation on payment for screening mammography services.</SUBJECT> The provisions in paragraphs (a), (b), and (c) of this section apply for services provided from January 1, 1991 until December 31, 2001. Screening mammography services provided after December 31, 2001 are paid under the physician fee schedule in accordance with § 414.2 of this chapter. (a) <E T="03">Basis and scope.</E> This section implements section 1834(c) of the Act by establishing a limit on payment for screening mammography examinations. There are three categories of billing for screening mammography services. Those categories and the payment limitations on each are set forth in paragraphs (b) through (d) of this section. (b) <E T="03">Global or complete service billing representing both the professional and technical components of the procedure.</E> If a fee is billed for a global service, the amount of payment subject to the deductible is equal to 80 percent of the least of the following: (1) The actual charge for the service. (2) The amount established for the global procedure for a diagnostic bilateral mammogram under the fee schedule for physicians' services set forth at part 414, subpart A. (3) The payment limit for the procedure. For screening mammography services furnished in CY 1994, the payment limit is $59.63. On January 1 of each subsequent year, the payment limit is updated by the percentage increase in the Medicare Economic Index (MEI) and reflects the relationship between the relative value units for the professional and technical components of a diagnostic bilateral mammogram under the fee schedule for physicians' services. (c) <E T="03">Professional component billing representing only the physician's interpretation for the procedure.</E> If the professional component of screening mammography services is billed separately, the amount of payment for that professional component, subject to the deductible, is equal to 80 percent of the least of the following: (1) The actual charge for the professional component of the service. (2) The amount established for the professional component of a diagnostic bilateral mammogram under the fee schedule for physicians' services. (3) The professional component of the payment limit for screening mammography services described in paragraph (b)(3) of this section. (d) <E T="03">Technical component billing representing other resources involved in furnishing the procedure.</E> If the technical component of screening mammography services is billed separately, the amount of payment, subject to the deductible, is equal to 80 percent of the least of the following: (1) The actual charge for the technical component of the service. (2) The amount established for the technical component of a diagnostic bilateral mammogram under the fee schedule for physicians' services. (3) The technical component of the payment limit for screening mammography services described in paragraph (b)(3) of this section. <CITA>[55 FR 53521, Dec. 31, 1990, as amended at 59 FR 49833, Sept. 30, 1994; 66 FR 55328, Nov. 1, 2001]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.535</SECTNO> <SUBJECT>Special rule for nonparticipating physicians and suppliers furnishing screening mammography services before January 1, 2002.</SUBJECT> The provisions in this section apply for screening mammography services provided from January 1, 1991 until December 31, 2001. Screening mammography services provided after December 31, 2001 are physician services pursuant to § 414.2 of this chapter paid under the physician fee schedule. If screening mammography services are furnished to a beneficiary by a nonparticipating <PRTPAGE P="102"/>physician or supplier that does not accept assignment, a limiting charge applies to the charges billed to the beneficiary. The limiting charge is the lesser of the following: (a) 115 percent of the payment limit set forth in § 405.534(b)(3), (c)(3), and (d)(3) (limitations on the global service, professional component, and technical component of screening mammography services, respectively). (b) The limiting charge for the global service, professional component, and technical component of a diagnostic bilateral mammogram under the fee schedule for physicians' services set forth at § 414.48(b) of this chapter. <CITA>[59 FR 49833, Sept. 30, 1994, as amended at 62 FR 59098, Oct. 31, 1997; 66 FR 55328, Nov. 1, 2001]</CITA> </SECTION> </SUBPART> <SUBPART> <RESERVED>Subpart F [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Reconsiderations and Appeals Under Medicare Part A</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1155, 1869(b), 1871, 1872, and 1879 of the Social Security Act (42 U.S.C. 1302, 1320c-4, 1395ff(b), 1395hh, 1395ii, and 1395pp). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 37 FR 5814, Mar. 22, 1972, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.701</SECTNO> <SUBJECT>Basis, purpose and definitions.</SUBJECT> (a) This subpart implements section 1869 of the Social Security Act. Section 1869(a) provides that the Secretary will make determinations about the following matters, and section 1869(b) provides for a hearing for an individual who is dissatisfied with the Secretary's determination as to: (1) Whether the individual is entitled to hospital insurance (part A) or supplementary medical insurance (part B) under title XVIII of the Act; or (2) The amount payable under hospital insurance. (b) This subpart establishes the procedures governing initial determinations, reconsidered determinations, hearings, and final agency review, and the reopening of determinations and decisions that are applicable to matters arising under paragraph (a) of this section. (c) Subparts J and R of 20 CFR part 404 (dealing with determinations, the administrative review process and representation of parties) are also applicable to matters arising under paragraph (a) of this section, except to the extent that specific provisions are contained in this subpart. (d) <E T="03">Definitions.</E> As used in subpart G of this part, the term— <E T="03">Appellant</E> designates the beneficiary, provider or other person or entity that has filed an appeal concerning a particular determination of benefits under Medicare part A. Designation as an appellant does not in itself convey standing to appeal the determination in question. <E T="03">Common issues of law and fact,</E> with respect to the aggregation of claims by two or more appellants to meet the minimum amount in controversy needed for a hearing, occurs when the claims sought to be aggregated are denied or reduced for similar reasons and arise from a similar fact pattern material to the reason the claims are denied. <E T="03">Delivery of similar or related services,</E> with respect to the aggregation of claims by two or more provider appellants to meet the minimum amount in controversy needed for a hearing, means like or coordinated services or items provided to the same beneficiary by the appellants. <CITA>[55 FR 11020, Mar. 26, 1990, as amended at 59 FR 12181, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.702</SECTNO> <SUBJECT>Notice of initial determination.</SUBJECT> After a request for payment under part A of title XVIII of the Act is filed with the intermediary by or on behalf of the individual who received inpatient hospital services, extended care services, or home health services, and the intermediary has ascertained whether the items and services furnished are covered under part A of title XVIII, and where appropriate, ascertained and made payment of amounts due or has ascertained that no payments were due, the individual will be notified in writing of the initial determination in his case. In addition, if the items or services furnished such individual are not covered under part A of title XVIII by reason of § 411.15(g) or <PRTPAGE P="103"/>§ 411.15(k) and payment may not be made for such items or services under § 411.400 only because the requirements of § 411.400(a)(2) are not met, the provider of services which furnished such items or services will be notified in writing of the initial determination in such individual's case. These notices shall be mailed to the individual and the provider of services at their last known addresses and shall state in detail the basis for the determination. Such written notices shall also inform the individual and the provider of services of their right to reconsideration of the determination if they are dissatisfied with the determination. <CITA>[55 FR 11020, Mar. 26, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.704</SECTNO> <SUBJECT>Actions which are initial determinations.</SUBJECT> (a) <E T="03">Applications and entitlement of individuals.</E> An initial determination with respect to an individual includes the following— (1) A determination with respect to entitlement to hospital insurance or supplementary medical insurance; (2) A disallowance of an individual's application for entitlement to hospital or supplementary medical insurance, if the individual fails to submit evidence requested by SSA to support the application. (SSA will specify in the initial determination the conditions of entitlement that the applicant failed to establish by not submitting the requested evidence); (3) A denial of a request for withdrawal of an application for hospital or supplementary medical insurance; (4) A denial of a request for cancellation of a “request for withdrawal”; and (5) A determination as to whether an individual, previously determined to be entitled to hospital or supplementary medical insurance, is no longer entitled to such benefits, including a determination based on nonpayment of premiums. (b) <E T="03">Requests for payment by or on behalf of individuals.</E> An initial determination with respect to an individual includes any determination made on the basis of a request for payment by or on behalf of the individual under part A of Medicare, including a determination with respect to: (1) The coverage of items and services furnished; (2) The amount of an applicable deductible; (3) The application of the coinsurance feature; (4) The number of days of inpatient hospital benefits utilized during a spell of illness or for purposes of the inpatient psychiatric hospital 190-day lifetime maximum; (5) The number of days of the 60-day lifetime reserve utilized for inpatient hospital coverage; (6) The number of days of posthospital extended care benefits utilized; (7) The number of home health visits utilized; (8) The physician certification requirement; (9) The request for payment requirement; (10) The beginning and ending of a spell of illness, including a determination made under the presumptions established under § 409.60(c)(2) of this chapter, as specified in § 409.60(c)(4) of this chapter. (11) The medical necessity of services (See parts 466 and 473 of this chapter for provisions pertaining to initial and reconsidered determinations made by a QIO); (12) When services are excluded from coverage as custodial care (§ 411.15(g)) or as not reasonable and necessary (§ 411.15(k)), whether the individual or the provider of services who furnished the services, or both, knew or could reasonably have been expected to know that the services were excluded from coverage (see § 411.402); (13) Any other issues having a present or potential effect on the amount of benefits to be paid under part A of Medicare, including a determination as to whether there has been an overpayment or underpayment of benefits paid under part A, and if so, the amount thereof; and (14) Whether a waiver of adjustment or recovery under sections 1870 (b) and (c) of the Act is appropriate when an overpayment of hospital insurance benefits or supplementary medical insurance benefits (including a payment under section 1814(e) of the Act) has <PRTPAGE P="104"/>been made with respect to an individual. (c) <E T="03">Initial determination with respect to a provider of services.</E> An initial determination with respect to a provider of services shall be a determination made on the basis of a request for payment filed by the provider under part A of Medicare on behalf of an individual who was furnished items or services by the provider, but only if the determination involves the following: (1) A finding by the intermediary that such items or services are not covered by reason of § 411.15(g) or § 411.15(k); and (2) A finding by the intermediary that either such individual or such provider of services, or both, knew or could reasonably have been expected to know that such items or services were excluded from coverage under the program. <CITA>[55 FR 11020, Mar. 26, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.705</SECTNO> <SUBJECT>Actions which are not initial determinations.</SUBJECT> An initial determination under Part A of Medicare does not include determinations relating to: (a) The reasonable cost of items or services furnished under Part A of Medicare; (b) Whether an institution or agency meets the conditions for participation in the program; (c) Whether an individual is qualified for use of the expedited appeals process as provided in § 405.718; (d) An action regarding compromise of a claim arising under the Medicare program, or termination or suspension of collection action on such a claim under the Federal Claims Collection Act of 1966 (31 U.S.C. 3711). See 20 CFR 404.515 for overpayment claims against an individual, § 405.376 for overpayment claims against a provider, physician or other supplier, and § 408.110 for claims concerning unpaid Medicare premiums; (e) The transfer or discharge of residents of skilled nursing facilities in accordance with § 483.12 of this chapter; or (f) The preadmission screening and annual resident review processes required by part 483 subparts C and E of this chapter. <CITA>[45 FR 73932, Nov. 7, 1980; 46 FR 24565, May 1, 1981, as amended at 52 FR 22454, June 12, 1987; 52 FR 48123, Dec. 18, 1987; 57 FR 56504, Nov. 30, 1992; 61 FR 63749, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.706</SECTNO> <SUBJECT>Decisions of utilization review committees.</SUBJECT> (a) <E T="03">General rule.</E> A decision of a utilization review committee is a medical determination by a staff committee of the provider or a group similarly composed and does not constitute a determination by the Secretary within the meaning of section 1869 of the Act. The decision of a utilization review committee may be considered by CMS along with other pertinent medical evidence in determining whether or not an individual has the right to have payment made under Part A of title XVIII. (b) <E T="03">Applicability under the prospective payment system.</E> CMS may consider utilization review committee decisions related to inpatient hospital services paid for under the prospective payment system (see part 412 of this chapter) only as those decisions concern: (1) The appropriateness of admissions resulting in payments under subparts D, E and G of part 412 of this chapter. (2) The covered days of care involved in determinations of outlier payments under § 412.80(a)(1)(i) of this chapter; and (3) The necessity of professional services furnished in high cost outliers under § 412.80(a)(1)(ii) of this chapter. <CITA>[48 FR 39831, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.708</SECTNO> <SUBJECT>Effect of initial determination.</SUBJECT> (a) The initial determination under § 405.704 (a) or (b) shall be binding upon the individual on whose behalf payment under part A has been requested or, if such individual is deceased, upon the representative of such individual's estate, unless it is reconsidered in accordance with §§ 405.710 through 405.717 or revised in accordance with § 405.750. Such individual (or the representative of such individual's estate if the individual is deceased) shall be the party to such initial determination. (b) The initial determination under § 405.704(c) shall be binding upon the <PRTPAGE P="105"/>provider of services unless it is reconsidered in accordance with §§ 405.710 through 405.717 or revised in accordance with § 405.750. Such provider of services shall be the party to such initial determination. <CITA>[55 FR 11021, Mar. 26, 1990, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.710</SECTNO> <SUBJECT>Right to reconsideration.</SUBJECT> (a) An individual who is a party to an initial determination, as specified in § 405.704 (a) and (b), (or if such individual is deceased, the representative of such individual's estate) and who is dissatisfied with the initial determination may request a reconsideration of such determination in accordance with § 405.711 regardless of the amount in controversy. (b) A provider of services who is a party to an initial determination (as specified in § 405.704(c)) and who is dissatisfied with such initial determination may request a reconsideration of such determination in accordance with § 405.711, regardless of the amount in controversy, but only if the individual on whose behalf the request for payment was made has indicated in writing that he does not intend to request reconsideration of the intermediary's initial determination on such request for payment, or if the intermediary has made a finding (see § 405.704(c)) that such individual did not know or could not reasonably have been expected to know that the expenses incurred for the items or services for which such request for payment was made were not reimbursable by reason of § 411.15(g) or § 411.15(k). <CITA>[55 FR 11021, Mar. 26, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.711</SECTNO> <SUBJECT>Time and place of filing request for reconsideration.</SUBJECT> The request for reconsideration shall be made in writing and filed at an office of the SSA or the CMS or, in the case of a qualified railroad retirement beneficiary (see 20 CFR 404.368) filed at an office of the Railroad Retirement Board, within 60 days after the date of receipt of notice of initial determination, unless such time is extended as provided in § 405.712. A request for reconsideration which is filed with the intermediary which received the request for payment submitted on behalf of the individual is considered to have been filed with the CMS as of the date it is filed with the intermediary. For purposes of this section, the date of receipt of notice of the initial determination shall be presumed to be 5 days after the date of such notice, unless there is a reasonable showing to the contrary. <CITA>[41 FR 47917, Nov. 1, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.712</SECTNO> <SUBJECT>Extension of time to request reconsideration.</SUBJECT> If a party to an initial determination desires to file a request for reconsideration after the time for filing such request in accordance with § 405.711 has passed, such party may file a petition with the SSA or the CMS or, in the case of a qualified railroad retirement beneficiary, with the Railroad Retirement Board, for an extension of time for the filing of such request. Such petition shall be in writing and shall state the reasons why the request for reconsideration was not filed within the required time. For good cause shown, the CMS may extend the time for filing the request for reconsideration. <CITA>[37 FR 5814, Mar. 22, 1972. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.714</SECTNO> <SUBJECT>Withdrawal of request for reconsideration.</SUBJECT> A request for reconsideration may be withdrawn by the party to the initial determination who filed the request or by his representative provided that the withdrawal is made in writing and filed at an office of the SSA or the CMS or, in the case of a qualified railroad retirement beneficiary, with the Railroad Retirement Board prior to the date of the mailing of the notice of reconsidered determination. A withdrawal filed with the intermediary which received the request for payment submitted on behalf of the individual is considered to have been filed with the CMS as of the date it is filed with the intermediary. <CITA>[40 FR 1025, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <PRTPAGE P="106"/> <SECTNO>§ 405.715</SECTNO> <SUBJECT>Reconsidered determination.</SUBJECT> (a) In reconsidering an initial determination, the CMS shall review such initial determination, the evidence and findings upon which such determination was based, and any additional evidence submitted to the SSA or the CMS or otherwise obtained by the intermediary or the CMS; and shall make a determination affirming or revising, in whole or in part, such initial determination. (b) If the request for reconsideration is filed by an individual with respect to an initial determination specified in § 405.704(b)(12), the provider of services who furnished the items or services shall, prior to the making of the reconsidered determination, be made a party thereto. If pursuant to § 405.710(b) a request for reconsideration is filed by a provider of services with respect to an individual determination under § 405.704(c), the individual who was furnished the items or services shall, prior to the making of the reconsidered determination, be made a party thereto. <CITA>[55 FR 11021, Mar. 26, 1990, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.716</SECTNO> <SUBJECT>Notice of reconsidered determination.</SUBJECT> Written notice of the reconsidered determination shall be mailed by the CMS to the parties and their representatives at their last known addresses. Such notice shall state the specific reasons for the reconsidered determination and shall advise the parties of their right to a hearing if the amount in controversy is $100 or more, or, if appropriate, advise them of the requirements for use of the expedited appeals process (see § 405.718). <CITA>[40 FR 53387, Nov. 18, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.717</SECTNO> <SUBJECT>Effect of a reconsidered determination.</SUBJECT> The reconsidered determination is binding upon all parties unless— (a) A request for a hearing is filed with SSA or CMS within 60 days after the date of receipt of notice of the reconsidered determination by the parties (for purposes of this section, the date of receipt of notice of the reconsidered determination is presumed to be 5 days after the date of the notice, unless it is shown that the notice was received earlier or later); or (b) The reconsidered determination is revised in accordance with § 405.750; or (c) The expedited appeals process is used in accordance with § 405.718. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.718</SECTNO> <SUBJECT>Expedited appeals process.</SUBJECT> (a) <E T="03">Conditions for use of expedited appeals process (EAP).</E> A party may use the EAP to request court review in place of an administrative law judge (ALJ) hearing or Departmental Appeals Board (DAB) review if the following conditions are met: (1) CMS has made a reconsideration determination; an ALJ has made a hearing decision; or DAB review has been requested, but a final decision has not been issued. (2) The filing entity is a party referred to in § 405.718(d). (3) The party has filed a request for an ALJ hearing in accordance with § 405.722, or DAB review in accordance with 20 CFR 404.968. (4) The amount remaining in controversy is $1,000 or more. (5) If there is more than one party to the reconsideration determination or hearing decision, each party concurs, in writing, with the request for the EAP. (b) <E T="03">Content of the request for EAP.</E> The request for the EAP: (1) Alleges that there are no material issues of fact in dispute; and (2) Asserts that the only factor precluding a decision favorable to the party is a statutory provision that is unconstitutional or a regulation, national coverage decision under section 1862(a)(1) of the Act, or CMS Ruling that is invalid. (c) <E T="03">Place and time for requesting an EAP</E>—(1) <E T="03">Place for filing request.</E> The person must file a written request— (i) At an office of SSA or CMS; or (ii) If the person is in the Philippines, at the Veterans Administration Regional Office or with an ALJ; or (iii) If the person is a qualified railroad retirement beneficiary, at an office of the Railroad Retirement Board. (2) <E T="03">Time of filing request.</E> The party may file a request for the EAP—<PRTPAGE P="107"/> (i) If the party has requested a hearing, at any time prior to receipt of the notice of the ALJ's decision; (ii) Within 60 days after the date of receipt of notice of the ALJ's decision or dismissal, unless the time is extended in accordance with the standards set out in 20 CFR 404.925(c). For purposes of this section, the date of receipt of the notice is presumed to be 5 days after the date on the notice, unless it is shown that the notice was received later; or (iii) If the party has requested DAB review, at any time prior to receipt of notice of the Board's decision. (d) <E T="03">Parties to the EAP.</E> The parties to the EAP are the persons who were parties to the reconsideration determination and, if appropriate, to the hearing. (e) <E T="03">Determination on request for EAP.</E> (1) For EAP requests initiated at the ALJ level, an ALJ determines whether all conditions of paragraphs (a) and (b) of this section are met. (2) If a hearing decision has been issued, the DAB determines whether all conditions of paragraphs (a) and (b) of this section are met. (f) <E T="03">ALJ or DAB certification for the EAP.</E> If the party meets the requirements for the EAP, the ALJ or the DAB, as appropriate, certifies the case in writing stating that: (1) The facts involved in the claim are not in dispute; (2) Except as indicated in paragraph (f)(3) of this section, CMS's interpretation of the law is not in dispute; (3) The sole issue(s) in dispute is the constitutionality of a statutory provision or the validity of a regulation, CMS Ruling, or national coverage decision based on section 1862(a)(1) of the Act. (4) Except for the provision challenged, the right(s) of the party is established; and (5) The determination or decision made by the ALJ or DAB is final for purposes of seeking judicial review. (g) <E T="03">Effect of ALJ or DAB certification.</E> (1) Following the issuance of the certification described in paragraph (f) of this section, the party waives completion of the remaining steps of the administrative appeals process. (2) The 60-day period for filing a civil suit in a Federal district court begins on the date of receipt of the ALJ or DAB certification. (h) <E T="03">Effect of a request for EAP that does not result in certification.</E> If a request for the EAP does not meet all the conditions for use of the process, the ALJ or DAB so advises the party and treats the request as a request for hearing or DAB review, as appropriate. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.720</SECTNO> <SUBJECT>Hearing; right to hearing.</SUBJECT> A person has a right to a hearing regarding any initial determination made under § 405.704 if: (a) Such initial determination has been reconsidered by the CMS; (b) Such person was a party to the reconsidered determination; (c) Such person or his representative has filed a written request for a hearing in accordance with the procedure described in § 405.722; and (d) The amount in controversy is $100 or more. <CITA>[40 FR 1025, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.722</SECTNO> <SUBJECT>Time and place of filing request for a hearing.</SUBJECT> The request for a hearing shall be made in writing and filed at an office of the SSA or the CMS or with a ALJ, or, in the case of a qualified railroad retirement beneficiary, at an office of the Railroad Retirement Board. Such request must be filed within 60 days after the date of receipt of notice of the reconsidered determination by such individual, except where the time is extended as provided in 20 CFR 404.933(c). For purposes of this section, the date of receipt of notice of the reconsidered determination shall be presumed to be 5 days after the date of such notice, unless there is a reasonable showing to the contrary. <CITA>[45 FR 73933, Nov. 7, 1980, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.724</SECTNO> <SUBJECT>Departmental Appeals Board (DAB) review.</SUBJECT> Regulations beginning at 20 CFR 404.967 regarding SSA Appeals Council <PRTPAGE P="108"/>Review are also applicable to DAB review of matters addressed by this subpart. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.730</SECTNO> <SUBJECT>Court review.</SUBJECT> (a) To the extent authorized by sections 1869, 1876(c)(5)(B), and 1879(d) of the Act, a party to a Departmental Appeals Board (DAB) decision or an ALJ decision if the DAB does not review the ALJ decision, may obtain a court review if the amount remaining in controversy is $1,000 or more. A party may obtain court review by filing a civil action in a district court of the United States in accordance with the provisions of section 205(g) of the Act. The filing procedure is set forth at 20 CFR 422.210. (b) A party to a reconsidered determination or an ALJ hearing decision may obtain a court review if the amount in controversy is $1,000 or more, and he or she requests and meets the conditions for the expedited appeals process set forth in § 405.718. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.732</SECTNO> <SUBJECT>Review of national coverage decisions (NCDs).</SUBJECT> (a) <E T="03">General.</E> (1) CMS makes NCDs either granting, limiting, or excluding Medicare coverage for a specific medical service, procedure or device. NCDs are made under section 1862(a)(1) of the Act or other applicable provisions of the Act. An NCD is binding on all Medicare carriers, fiscal intermediaries, QIOs, HMOs, CMPs, and HCPPs when published in CMS program manuals or the <E T="04">Federal Register</E>. (2) Under section 1869(b)(3) of the Act, only NCDs made under section 1862(a)(1) of the Act are subject to the conditions of paragraphs (b) through (d) of this section. (b) <E T="03">Review by ALJ.</E> (1) An ALJ may not disregard, set aside, or otherwise review an NCD. (2) An ALJ may review the facts of a particular case to determine whether an NCD applies to a specific claim for benefits and, if so, whether the NCD has been applied correctly to the claim. (c) <E T="03">Review by Court.</E> (1) A court's review of an NCD is limited to whether the record is incomplete or otherwise lacks adequate information to support the validity of the decision, unless the case has been remanded to the Secretary to supplement the record regarding the NCD. The court may not invalidate an NCD except upon review of the supplemented record. (2) A Federal court may not hold unlawful or set aside an NCD because it was not issued in accordance with the notice and comment procedures of the Administrative Procedure Act (5 U.S.C. 553) or section 1871(b) of the Act. (d) <E T="03">Remands</E>—(1) <E T="03">Secretary's action.</E> When a court remands an NCD matter to the Secretary because the record in support of the NCD is incomplete or otherwise lacks adequate information, the Secretary remands the case to CMS in order to supplement the record. (2) <E T="03">Remand to CMS.</E> CMS supplements the record with new or updated evidence, including additional information from other sources, and may issue a revised NCD. (3) <E T="03">Final Actions.</E> (i) The proceedings to supplement the record are expedited. (ii) When CMS does not issue a revised NCD, it returns the supplemented record to the court for review. (iii) When CMS issues a revised NCD, it forwards the case to an ALJ who issues a new decision applying the revised NCD to the facts of the claim(s) under consideration. The ALJ's decision is subject to DAB review and, ultimately, judicial review. <CITA>[62 FR 25852, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.740</SECTNO> <SUBJECT>Principles for determining the amount in controversy.</SUBJECT> (a) <E T="03">Individual appellants.</E> For the purpose of determining whether an individual appellant meets the minimum amount in controversy needed for a hearing ($100), the following rules apply: (1) The amount in controversy is computed as the actual amount charged the individual for the items and services in question, less any amount for which payment has been made by the intermediary and less any deductible and coinsurance amounts applicable in the particular case.<PRTPAGE P="109"/> (2) A single beneficiary may aggregate claims from two or more providers to meet the $100 hearing threshold and a single provider may aggregate claims for services provided to one or more beneficiaries to meet the $100 hearing threshold. (3) In either of the circumstances specified in paragraph (a)(2) of this section, two or more claims may be aggregated by an individual appellant only if the claims have previously been reconsidered and a request for hearing has been made within 60 days after receipt of the reconsideration determination(s). (4) When requesting a hearing, the appellant must specify in his or her appeal request the specific claims to be aggregated. (b) <E T="03">Two or more appellants.</E> As specified below, under section 1869(b)(2) of the Act, two or more appellants may aggregate their claims together to meet the minimum amount in controversy needed for a hearing ($100). The right to aggregate under this statutory provision applies to claims for items and services furnished on or after January 1, 1987. (1) The aggregate amount in controversy is computed as the actual amount charged the individual(s) for the items and services in question, less any amount for which payment has been made by the intermediary and less any deductible and coinsurance amounts applicable in the particular case. (2) In determining the amount in controversy, two or more appellants may aggregate their claims together under the following circumstances: (i) Two or more beneficiaries may combine claims representing services from the same or different provider(s) if the claims involve common issues of law and fact; (ii) Two or more providers may combine their claims if the claims involve the delivery of similar or related services to the same beneficiary; or (iii) Two or more providers may combine their claims if the claims involve common issues of law and fact with respect to services furnished to two or more beneficiaries. (iv) In any of the circumstances specified in paragraphs (b)(2)(i) through (b)(2)(iii) of this section, the claims may be aggregated only if the claims have previously been reconsidered and a request for hearing has been made within 60 days after receipt of the reconsideration determination(s). Moreover, in the request for hearing, the appellants must specify the claims that they seek to aggregate. (c) The determination as to whether the amount in controversy is $100 or more is made by the administrative law judge (ALJ). (d) In determining the amount in controversy under paragraph (b) of this section, the ALJ also makes the determination as to what constitutes “similar or related services” or “common issues of law and fact.” (e) When a civil action is filed by either an individual appellant or two or more appellants, the Secretary may assert that the aggregation principles contained in this subpart may be applied to determine the amount in controversy for judicial review ($1000). (f) Notwithstanding the provisions of paragraphs (a)(1) and (b)(1) of this section, when payment is made for certain excluded services under § 411.400 of this chapter or the liability of the beneficiary for those services is limited under § 411.402 of this chapter, the amount in controversy is computed as the amount that would have been charged the beneficiary for the items or services in question, less any deductible and coinsurance amounts applicable in the particular case, had such expenses not been paid pursuant to § 411.400 of this chapter or had such liability not been limited pursuant to § 411.402 of this chapter. (g) Under this subpart, an appellant may not combine part A and part B claims together to meet the requisite amount in controversy for a hearing. HMO, CMP and HCPP appellants under part 417 of this chapter may combine part A and part B claims together to meet the requisite amounts in controversy for a hearing. <CITA>[59 FR 12181, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.745</SECTNO> <SUBJECT>Amount in controversy ascertained after reconsideration.</SUBJECT> For the purpose of determining whether a party to a reconsidered determination is entitled to a hearing, <PRTPAGE P="110"/>the amount in controversey after the reconsideration action rather than the amount in controversy initially at issue shall be controlling. <CITA>[40 FR 1026, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.747</SECTNO> <SUBJECT>Dismissal of request for hearing; amount in controversy less than $100.</SUBJECT> The ALJ shall, without holding a hearing, dismiss the request for hearing if the request for hearing plainly shows that less than $100 is in controversy. If a hearing is held and the ALJ finds that the amount in controversy is less than $100, the ALJ shall dismiss the request for hearing and will not rule on the substantive issues involved in the appeal. <CITA>[37 FR 5814, Mar. 23, 1972. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.750</SECTNO> <SUBJECT>Time period for reopening initial, revised, or reconsidered determinations and decisions or revised decisions of an ALJ or the Departmental Appeals Board (DAB); binding effect of determination and decisions.</SUBJECT> (a) <E T="03">Reopenings concerning applications and entitlement.</E> A determination, or decision, or revised determination or decision made by the SSA concerning any matter under § 405.704(a), may be reopened and revised under 20 CFR 404.988 (Conditions for reopening). (b) <E T="03">Reopenings concerning a request for payment.</E> An initial, revised, or reconsidered determination of CMS, or a decision or revised decision of an ALJ or of the DAB, with respect to an individual's right concerning a request for payment under Medicare Part A, which is otherwise binding under 20 CFR 404.955 or 404.981 and §§ 405.708 or 405.717 of this subpart may be reopened: (1) Within 12 months from the date of the notice of the initial or reconsidered determination to the party to such determination; (2) After such 12-month period, but within 4 years after the date of the notice of the initial determination to the individual, upon establishment of good cause for reopening such determination or decision (see 20 CFR 404.988(b) and 404.989); or (3) At any time, when: (i) Such initial, revised, or reconsidered determination or such decision or revised decision is unfavorable, in whole or in part, to the party thereto, but only for the purpose of correcting clerical error or error on the face of the evidence on which such determination or decision was based; or (ii) Such initial, revised, or reconsidered determination or such decision or revised decision was procured by fraud or similar fault of the beneficiary or some other person. <CITA>[45 FR 73933, Nov. 7, 1980, as amended at 61 FR 32348, June 24, 1996; 62 FR 25853, 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.753</SECTNO> <SUBJECT>Appeal of a categorization of a device.</SUBJECT> (a) CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 is a national coverage decision under section 1862(a)(1) of the Act. (b) CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 is an aspect of an initial determination that, under section 1862 of the Act, payment may not be made. (c) In accordance with section 1869(b)(3)(A) of the Act, CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 may not be reviewed by an administrative law judge. <CITA>[60 FR 48424, Sept. 19, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Appeals Under the Medicare Part B Program</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1842(b)(3)(C), 1869(b), and 1871 of the Social Security Act (42 U.S.C. 1302, 1395u(b)(3)(C), 1395ff(b), and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 32 FR 18028, Dec. 16, 1967, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.801</SECTNO> <SUBJECT>Part B appeals—general description.</SUBJECT> (a) The Medicare carrier makes an initial determination when a request for payment for Part B benefits is submitted. If an individual beneficiary is <PRTPAGE P="111"/>dissatisfied with the initial determination, he or she may request, and the carrier will perform, a review of the claim. Following the carrier's review determination, the beneficiary may obtain a carrier hearing if the amount remaining in controversy is at least $100. The beneficiary is also entitled to a carrier hearing without the benefit of a review determination when the initial request for payment is not being acted upon with reasonable promptness (as defined in § 405.802). Following the carrier hearing, the beneficiary may obtain a hearing before an ALJ if the amount remaining in controversy is at least $500. If the beneficiary is dissatisfied with the decision of the ALJ, he or she may request the Departmental Appeals Board (DAB) to review the case. Following the action of the DAB, the beneficiary may file suit in Federal district court if the amount remaining in controversy is at least $1,000. (b) The rights of a beneficiary under paragraph (a) of this section to appeal the carrier's initial determination are granted also to— (1) A physician or supplier that furnishes services to a beneficiary and that accepts an assignment from the beneficiary, or (2) A physician who meets the conditions of section 1842(l)(1)(A) of the Act pertaining to refund requirements for nonparticipating physicians who have not taken assignment on the claim(s) at issue. (c) Procedures governing the determinations by SSA as to whether an individual has met basic Part B entitlement requirements are covered in subpart G of this part and 20 CFR part 404, subpart J. Subparts J and R of 20 CFR part 404 are also applicable to ALJ, DAB, and judicial review conducted under subpart H, except to the extent that specific provisions are contained in this subpart. <CITA>[62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.802</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in subpart H of this part, the term— <E T="03">After receipt of the notice</E> means 5 days after the date on the notice, unless it is shown that the notice was received earlier or later. <E T="03">Appellant</E> designates the beneficiary, assignee or other person or entity that has filed an appeal concerning a particular determination of benefits under Medicare part B. Designation as an appellant does not in itself convey standing to appeal the determination in question. <E T="03">Assignee</E> means a physician or supplier who furnishes services to a beneficiary under Medicare part B and who has accepted a valid assignment executed by the beneficiary. <E T="03">Assignment</E> means the transfer by the assignor of his or her claim for payment to the assignee in return for the latter's promise not to charge more for his or her services than the carrier finds to be the reasonable charge or other approved amount. <E T="03">Assignor</E> means a beneficiary under Medicare part B whose physician or supplier has taken assignment of a claim. <E T="03">Carrier</E> means an organization which has entered into a contract with the Secretary pursuant to section 1842 of the Act and which is authorized to make determinations with respect to part B of title XVIII of the Act. For purposes of this subpart, the term carrier also refers to an intermediary that has entered into a contract with the Secretary under section 1816 of the Act and is authorized to make determinations with respect to part B provider services, as specified in § 421.5(c) of this chapter. <E T="03">Common issues of law and fact,</E> with respect to the aggregation of claims by two or more appellants to meet the minimum amount in controversy needed for an ALJ hearing, occurs when the claims sought to be aggregated are denied or reduced for similar reasons and arise from a similar fact pattern material to the reason the claims are denied. <E T="03">Delivery of similar or related services,</E> with respect to the aggregation of claims by two or more physician/supplier appellants to meet the minimum amount in controversy needed for an ALJ hearing, means like or coordinated services or items provided to the same beneficiary by the appellants. <E T="03">Representative</E> means an individual meeting the conditions described in §§ 405.870 through 405.871.<PRTPAGE P="112"/> <E T="03">With reasonable promptness</E> means within a period of 60 consecutive days after the receipt by the carrier of a request for payment. <CITA>[59 FR 12182, Mar. 16, 1994, as amended at 62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.803</SECTNO> <SUBJECT>Initial determination.</SUBJECT> (a) Carriers make initial determinations regarding claims for benefits under Medicare Part B. (b) An initial determination for purposes of this subpart includes determinations such as the following: (1) Whether services furnished are covered. (2) Whether the deductible has been met. (3) Whether the receipted bill or other evidence of payment is acceptable. (4) Whether the charges for services furnished are reasonable. (5) If the services furnished to a beneficiary by a physician or a supplier pursuant to an assignment under § 424.55 of this chapter are not covered because they are determined to be not reasonable and necessary under § 411.15(k) of this chapter, whether the beneficiary, physician or supplier, or a physician who meets the requirements of § 411.408, knew or could reasonably have been expected to know at the time the services were furnished that the services were not covered. (c) The following are not initial determinations for purposes of this subpart: (1) Any issue or factor for which SSA or CMS has sole responsibility, for example, whether an independent laboratory meets the conditions for coverage of services; whether a Medicare overpayment claim should be compromised, or collection action terminated or suspended. (2) Any issue or factor which relates to hospital insurance benefits under Medicare Part A. <CITA>[62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.804</SECTNO> <SUBJECT>Notice of initial determination.</SUBJECT> After a carrier has made an initial determination on a request for payment written notice of this determination shall be mailed to each party to the determination at his last known address. The notice of the determination shall inform each party to the determination of his right to have such determination reviewed. </SECTION> <SECTION> <SECTNO>§ 405.805</SECTNO> <SUBJECT>Parties to the initial determination.</SUBJECT> The parties to the initial determination (see § 405.803) may be any party described in § 405.802. <CITA>[64 FR 52670, Sept. 30, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.806</SECTNO> <SUBJECT>Effect of Initial Determination.</SUBJECT> The initial determination is binding upon all parties to the claim for benefits unless the determination is— (a) Reviewed in accordance with §§ 405.810 through 405.812; or (b) Revised as a result of a reopening in accordance with § 405.841. <CITA>[62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.807</SECTNO> <SUBJECT>Request for review of initial determination.</SUBJECT> (a) <E T="03">General.</E> A party to an initial determination by a carrier, that is dissatisfied with the initial determination and wants to appeal the matter, may request that the carrier review the determination. The request for review by the party to an initial determination must clearly indicate that he or she is dissatisfied with the initial determination and wants to appeal the matter. The request for review does not constitute a waiver of the party's right to a hearing (under § 405.815) after the review. (b) <E T="03">Place and method of filing a request.</E> A request by a party for a carrier to review the initial determination may be made in one of the following ways: (1) In writing and filed at an office of the carrier, SSA, or CMS. (2) By telephone to the telephone number designated by the carrier as the appropriate number for the receipt of requests for review. (c) <E T="03">Time of filing request.</E> (1) The carrier must provide a period of 6 months after the date of the notice of the initial determination within which the party to the initial determination may request a review.<PRTPAGE P="113"/> (2) The carrier may, upon request by the party, extend the period for requesting the review of the initial determination. <CITA>[64 FR 52670, Sept. 30, 1999]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.808</SECTNO> <SUBJECT>Parties to the review.</SUBJECT> The parties to the review (as provided for in § 405.807(a)) shall be the persons who were parties to the carrier's initial determination as described in § 405.805, and any other party whose rights with respect to the particular claim being reviewed may be affected by such review. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.809</SECTNO> <SUBJECT>Opportunity to submit evidence.</SUBJECT> The parties to the review (as provided for in § 405.807(a)) shall have a reasonable opportunity to submit written evidence and contentions as to fact or law relative to the claim at issue. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.810</SECTNO> <SUBJECT>Review determination.</SUBJECT> Subject to the provisions of §§ 405.807 through 405.809, the carrier shall review the claim in dispute and, upon the basis of the evidence of record, shall make a separate determination affirming or revising in whole or in part the findings and determination in question. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.811</SECTNO> <SUBJECT>Notice of review determination.</SUBJECT> Written notice of the review determination is mailed to a party at his or her last known address. The review determination states the basis of the determination and advises the party of his or her right to a carrier hearing when the amount in controversy is $100 or more as determined in accordance with § 405.817. The notice states the place and manner of requesting a carrier hearing as well as the time limit under which a hearing must be requested (see § 405.821). <CITA>[59 FR 12182, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.812</SECTNO> <SUBJECT>Effect of review determination.</SUBJECT> The review determination is binding upon all parties to the review unless a carrier hearing decision is issued pursuant to a request for hearing made in accordance with § 405.821 or is revised as a result of reopening in accordance with § 405.841. <CITA>[59 FR 12182, Mar. 16, 1994, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.815</SECTNO> <SUBJECT>Amount in controversy for carrier hearing, ALJ hearing and judicial review.</SUBJECT> Any party designated in § 405.822 is entitled to a carrier hearing after a review determination has been made by the carrier if the amount remaining in controversy is $100 or more and the party meets the requirements of § 405.821 of this subpart. To be entitled to a hearing before an ALJ following the carrier hearing, the amount remaining in controversy must be $500 or more, and for judicial review following the ALJ hearing and Departmental Appeals Board Review, the amount remaining in controversy must be $1000 or more. <CITA>[59 FR 12182, Mar. 16, 1994, as amended at 61 FR 32348, June 24, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.817</SECTNO> <SUBJECT>Principles for determining amount in controversy.</SUBJECT> (a) <E T="03">Individual appellants.</E> For the purpose of determining whether an individual appellant meets the minimum amount in controversy needed for a carrier hearing ($100) or ALJ hearing ($500), the following rules apply: (1) The amount in controversy is computed as the actual amount charged the individual for the items and services in question, less any amount for which payment has been made by the carrier and less any deductible and coinsurance amounts applicable in the particular case. (2) A single beneficiary may aggregate claims from two or more physicians/suppliers to meet the $100 or $500 thresholds. A single physician/supplier may aggregate claims from two or more beneficiaries to meet the $100 or $500 threshold levels of appeal.<PRTPAGE P="114"/> (3) In either of the circumstances specified in paragraph (a)(2) of this section, two or more claims may be aggregated by an individual appellant to meet the amount in controversy for a carrier hearing only if the claims have previously been reviewed and a request for hearing has been made within six months after the date of the review determination(s). (4) In either of the circumstances specified in paragraph (a)(2) of this section, two or more claims may be aggregated by an individual appellant to meet the amount in controversy for an ALJ hearing only if the claims have previously been decided by a carrier hearing officer and a request for an ALJ hearing has been made within 60 days after receipt of the carrier hearing officer decision(s). (5) When requesting a carrier hearing or an ALJ hearing, the appellant must specify in his or her appeal request the specific claims to be aggregated. (b) <E T="03">Two or more appellants.</E> As specified in this paragraph, under section 1869(b)(2) of the Act, two or more appellants may aggregate their claims together to meet the minimum amount in controversy needed for an ALJ hearing ($500). The right to aggregate under this statutory provision applies to claims for items and services furnished on or after January 1, 1987. (1) The aggregate amount in controversy is computed as the actual amount charged the individual(s) for the items and services in question, less any amount for which payment has been made by the carrier and less any deductible and coinsurance amounts applicable in the particular case. (2) In determining the amount in controversy, two or more appellants may aggregate their claims together under the following circumstances: (i) Two or more beneficiaries may combine claims representing services from the same or different physician(s) or supplier(s) if the claims involve common issues of law and fact; (ii) Two or more physicians/suppliers may combine their claims if the claims involve the delivery of similar or related services to the same beneficiary; (iii) Two or more physicians/suppliers may combine their claims if the claims involve common issues of law and fact with respect to services furnished to two or more beneficiaries. (iv) In any of the circumstances specified in paragraphs (b)(2)(i) through (b)(2)(iii) of this section, the claims may be aggregated only if the claims have previously been decided by a carrier hearing officer(s) and a request for ALJ hearing has been made within 60 days after receipt of the carrier hearing officer decision(s). Moreover, in a request for ALJ hearing, the appellants must specify the claims that they seek to aggregate. (c) The determination as to whether the amount in controversy is $100 or more is made by the carrier hearing officer. The determination as to whether the amount in controversy is $500 or more is made by the ALJ. (d) In determining the amount in controversy under paragraph (b) of this section, the ALJ will also make the determination as to what constitutes “similar or related services” or “common issues of law and fact.” (e) When a civil action is filed by either an individual appellant or two or more appellants, the Secretary may assert that the aggregation principles contained in this subpart may be applied to determine the amount in controversy for judicial review ($1000). (f) Notwithstanding the provisions of paragraphs (a)(1) and (b)(1) of this section, when payment is made for certain excluded services under § 411.400 of this chapter or the liability of the beneficiary for those services is limited under § 411.402 of this chapter, the amount in controversy is computed as the amount that would have been charged the beneficiary for the items or services in question, less any deductible and coinsurance amounts applicable in the particular case, had such expenses not been paid under § 411.400 of this chapter or had such liability not been limited under § 411.402 of this chapter. (g) Under this subpart, an appellant may not combine part A and part B claims together to meet the requisite amount in controversy for a carrier hearing or ALJ hearing. HMO, CMP and HCPP appellants under part 417 of this chapter may combine part A and <PRTPAGE P="115"/>part B claims together to meet the requisite amount in controversy for a hearing. <CITA>[59 FR 12182, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.821</SECTNO> <SUBJECT>Request for carrier hearing.</SUBJECT> (a) A request for a carrier hearing is any clear expression in writing by a claimant asking for a hearing to adjudicate a claim when not acted upon with reasonable promptness or by a party to a review determination who states, in effect, that he or she is dissatisfied with the carrier's review determination and wants further opportunity to appeal the matter to the carrier. (b) The hearing request must be filed at an office of the carrier or at an office of SSA or CMS. (c) Except when a carrier hearing is held because the carrier did not act upon a claim with reasonable promptness, a party to the review determination may request a carrier hearing within six months after the date of the notice of the review determination. The carrier may, upon request by the party affected, extend the period for filing the request for hearing. <CITA>[59 FR 12183, Mar. 16, 1994, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.822</SECTNO> <SUBJECT>Parties to a carrier hearing.</SUBJECT> The parties to a hearing shall be the persons who were parties to the carrier's review determination (§ 405.808) which is in question. Any other person may be made a party if that person's rights with respect to supplementary medical insurance benefits may be prejudiced by the decision. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.823</SECTNO> <SUBJECT>Carrier hearing officer.</SUBJECT> Any hearing provided for in this subpart shall be conducted by a hearing officer designated by the appropriate official of the carrier. <CITA>[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, and amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.824</SECTNO> <SUBJECT>Disqualification of carrier hearing officer.</SUBJECT> A hearing officer shall not conduct a hearing in any case in which he is prejudiced or partial with respect to any party, or if he has any interest in the matter before him. Notice of any objection with respect to the hearing officer who will conduct the hearing shall be made by the objecting party at his earliest opportunity. The hearing officer shall consider such objection and shall, at his discretion, withdraw. If the hearing officer withdraws, the appropriate official of the carrier shall designate another hearing officer to conduct the hearing. If the hearing officer does not withdraw, the objecting party may present his objections to the carrier for consideration at any time prior to the issuance of a decision. The carrier shall review the request and take appropriate action. The fact that a hearing officer is an employee of the carrier may not serve as prima facie cause for disqualification. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.825</SECTNO> <SUBJECT>Location of carrier hearing.</SUBJECT> (a) <E T="03">Time and place.</E> The hearing officer shall fix a time and place for the hearing reasonably convenient to the requesting party and not inconsistent with the public interest. (b) <E T="03">Adjournment or postponement.</E> The hearing officer may, for a good and sufficient reason, fix a new time and/or place for the hearing; he may change the time and place for the hearing or adjourn the hearing on his own motion upon reasonable notification to the parties. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.826</SECTNO> <SUBJECT>Notice of carrier hearing.</SUBJECT> The notice of hearing is to include notice of the time and place of the hearing; information as to the specific issues to be determined; and the matters on which findings will be made and conclusions will be reached. The notice is to contain sufficient information about the hearing procedure (including <PRTPAGE P="116"/>the party's right to representation) for effective preparation for the hearing. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.830</SECTNO> <SUBJECT>Conduct of the carrier hearing.</SUBJECT> (a) <E T="03">General.</E> Hearings shall be open to the parties and to such other persons as the hearing officer deems necessary and proper for the orderly and efficient conduct of the hearing. The hearing officer shall inquire fully into the matters at issue and shall receive in evidence the testimony of witnesses and any documents which are relevant and material to such matters. The parties shall be provided an opportunity to enter any objection to the inclusion of any document. The order in which evidence and allegations shall be presented and the procedure at the hearing, except as this subpart otherwise expressly provides, shall be at the discretion of the hearing officer and of such nature as to afford the parties a proper hearing. (b) <E T="03">Evidence.</E> Evidence may be received at the hearing even though inadmissible under rules of evidence applicable to court procedures. (c) <E T="03">Witnesses.</E> The hearing officer may examine the witnesses and shall allow the parties or their representatives to do so. If the hearing officer conducts the examination of a witness, he may allow the parties to suggest matters upon which they desire the witness to be questioned, and the hearing officer shall question the witness with respect to such matters if they are relevant and material to any issue pending for decision before him. (d) <E T="03">Oral argument and written allegations.</E> The parties, upon their request shall be allowed a reasonable time for the presentation of oral argument or for the filing of briefs or other written statements or allegations of facts or law. (e) <E T="03">Consolidated issues.</E> When one or more new issues are raised at any time after a request for hearing has been made, but before the mailing of notice of the decision, the hearing officer may, at his discretion, consider the issues along with the other issues pending before him on the same request for hearing. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.831</SECTNO> <SUBJECT>Waiver of right to appear at carrier hearing and present evidence.</SUBJECT> If all parties waive their right to appear before the hearing officer and present evidence and contentions personally or by representative, it shall not be necessary for the hearing officer to give notice of or conduct a formal hearing as provided in §§ 405.825 through 405.830. A waiver of the right to appear is to be in writing and filed with the hearing officer or the carrier. Such waiver may be withdrawn by a party at any time prior to the mailing of notice of the decision in the case. Even though all of the parties have filed a waiver of the right to appear and present evidence and contentions at a hearing before the hearing officer, the hearing officer may, nevertheless, give notice of a time and place and conduct a hearing as provided in §§ 405.825 through 405.830, if he believes that the personal appearance and testimony of the party or parties would assist him to ascertain the facts at issue in the case. For purposes of this section, failure of the parties to appear shall not be cause for a finding of abandonment and the hearing officer shall make his decision on the basis of all evidence adduced. <CITA>[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.832</SECTNO> <SUBJECT>Dismissal of request for carrier hearing.</SUBJECT> (a) <E T="03">By application of party.</E> With the approval of the hearing officer, a request for a hearing may be withdrawn or dismissed at any time prior to the mailing of notice of the decision upon the application of the party or parties filing the request for such hearing. A party may request a dismissal by filing a written notice of such request with the carrier, the hearing officer or orally stating such request at the hearing. The dismissal of a request for hearing shall be binding unless vacated (see paragraph (d) of this section).<PRTPAGE P="117"/> (b) <E T="03">Dismissal by abandonment of party.</E> A hearing officer may dismiss a request for hearing upon abandonment by the party or parties who filed the request. A party shall be deemed to have abandoned a request for hearing, other than where personal appearance is waived in accordance with § 405.831, if neither the party nor his representative appears at the time and place fixed for the hearing and within 10 days after the mailing of a notice to him by the hearing officer to show cause, such party does not show good and sufficient cause for such failure to appear and failure to notify the hearing officer prior to the time fixed for hearing that he cannot appear. (c) <E T="03">Dismissal for cause.</E> The hearing officer may, on his own motion, dismiss a hearing request, either entirely or as to any stated issue, under either of the following circumstances: (1) Where the party requesting a hearing is not a proper party under § 405.822 or does not otherwise have a right to a hearing under section 1842(b)(3)(C) of the Act; or (2) Where the party who filed the hearing request dies and there is no information before the hearing officer showing that an individual who is not a party may be prejudiced by the carrier's determination. (d) <E T="03">Dismissal without prejudice.</E> The hearing officer may on his own motion dismiss without prejudice a hearing request where the amount in controversy is less than $100. (e) <E T="03">Vacation of dismissal.</E> A hearing officer may, on request of a party and for good and sufficient cause shown, vacate any dismissal of a request for hearing at any time within 6 months from the date of mailing notice of the dismissal to the party requesting the hearing at his last known address. <CITA>[32 FR 18028, Dec. 16, 1967, as amended at 39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994; 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.833</SECTNO> <SUBJECT>Record of carrier hearing.</SUBJECT> A complete record of the proceedings at the carrier hearing is made. The testimony is transcribed and copies of other documentary evidence are reproduced in any case when directed by the hearing officer, the carrier, or CMS. The record will also be transcribed and reproduced at the request of any party to the hearing provided the requesting party bears the cost. <CITA>[62 FR 25853, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.834</SECTNO> <SUBJECT>Carrier hearing officer's decision.</SUBJECT> (a) As soon as practicable after the close of a carrier hearing, the carrier hearing officer issues a decision in the case based upon the evidence presented at the hearing or otherwise included in the hearing record. The decision is issued as a written notice to the parties and contains— (1) Findings of fact, (2) A statement of reasons, and (3) Notification to the parties of their right to an ALJ hearing when the amount remaining in controversy is at least $500. (b) A copy of the decision is mailed to the parties to the hearing at their last known addresses. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.835</SECTNO> <SUBJECT>Effect of carrier hearing officer's decision.</SUBJECT> The carrier hearing officer's decision is binding upon all parties to the hearing unless— (a) A request for an ALJ hearing is filed in accordance with § 405.855, or (b) The decision is revised in accordance with § 405.841. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.836</SECTNO> <SUBJECT>Authority of the carrier hearing officer.</SUBJECT> The carrier hearing officer, in adjudicating Medicare Part B claims, complies with all of the provisions of, and regulations issued under, title XVIII of the Act, as well as with CMS Rulings, national coverage decisions, and other policy statements, instructions, and guides issued by CMS. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.841</SECTNO> <SUBJECT>Reopening initial or review determination of the carrier, and decision of a carrier hearing officer.</SUBJECT> An initial or review determination of a carrier or a decision of a hearing officer may be reopened by such carrier or hearing officer:<PRTPAGE P="118"/> (a) Within 12 months from the date of the notice of such initial or review determination or decision to the party to such determination or decision; or (b) After such 12-month period, but within 4 years from the date of the notice of the initial determination to the party to such determination, upon establishment of good cause for reopening such determination or decision (see 20 CFR 404.988(b) and 404.989); or (c) At any time, when: (1) Such initial or review determination or decision was procured by fraud or similar fault of the beneficiary or some other person, or (2) Such initial or review determination or decision is unfavorable, in whole or in part, to the party thereto, but only for the purpose of correcting a clerical error or error on the face of the evidence on which such determination or decision was based. <CITA>[39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183, Mar. 16, 1994; 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.842</SECTNO> <SUBJECT>Notice of reopening and revision.</SUBJECT> (a) <E T="03">Notice.</E> When any determination or decision is reopened as provided in § 405.841, notice of such reopening shall be mailed to the parties to such determination or decision at their last known addresses. A notice of revision following a reopening of a decision, shall be mailed to the parties and shall state the basis for the revised determination or decision. (b) <E T="03">Effect of revised determination.</E> The revision of a determination (see § 405.841) shall be binding upon all parties thereto unless a party files a written request for a hearing with respect to a revised determination when the amount in controversy is $100 or more. <CITA>[32 FR 18028, Dec. 16, 1967, as amended at 39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977; 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.850</SECTNO> <SUBJECT>Change of ruling or legal precedent.</SUBJECT> Change of a legal interpretation or administrative ruling upon which a determination or decision was made shall not be considered as good and sufficient reason for reopening the determination or decision. </SECTION> <SECTION> <SECTNO>§ 405.853</SECTNO> <SUBJECT>Expedited appeals process.</SUBJECT> (a) <E T="03">Conditions for use of expedited appeals process (EAP).</E> A party may use the EAP set forth in § 405.718 of this chapter to request court review in place of the ALJ hearing or Departmental Appeals Board (DAB) review if the following conditions are met: (1) The carrier hearing officer has made a decision; an ALJ has made a hearing decision; or DAB review has been requested, but a final decision has not been issued. (2) The filing entity is a party referred to in § 405.718(d) of this chapter. (3) The party has filed a request for an ALJ hearing in accordance with § 405.855, or DAB review in accordance with 20 CFR 404.968. (4) The amount remaining in controversy is $1,000 or more. (5) If there is more than one party to the hearing decision, each party concurs, in writing, with the request for an EAP. (b) <E T="03">Content of the request for EAP.</E> The request for an EAP: (1) Alleges that there are no material issues of fact in dispute; and (2) Asserts that the only factor precluding a decision favorable to the party is a statutory provision that is unconstitutional or a regulation, national coverage decision under section 1862(a)(1) of the Act, or CMS Ruling that is invalid. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.855</SECTNO> <SUBJECT>ALJ hearing.</SUBJECT> (a) <E T="03">Right to hearing.</E> A party to the carrier hearing has a right to a hearing before an ALJ if— (1) The party files a written request for an ALJ hearing within 60 days after receipt of the notice of the carrier hearing decision; and (2) The amount remaining in controversy is $500 or more. (b) <E T="03">Place of filing hearing request.</E> The request for an ALJ hearing must be made in writing and filed with the carrier that issued the decision, a Social Security office, or, in the case of a qualified railroad retirement beneficiary, an office of the Railroad Retirement Board.<PRTPAGE P="119"/> (c) <E T="03">Effect of ALJ hearing decision.</E> (1) An ALJ's decision is binding on all parties to the hearing unless— (i) The DAB reviews the ALJ decision; (ii) The DAB does not review the ALJ decision, and the party requests judicial review; (iii) The decision is revised by the DAB or an ALJ in accordance with the provisions of § 405.750 of this chapter; or (iv) The expedited appeals process is used. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.856</SECTNO> <SUBJECT>Departmental Appeals Board (DAB) review.</SUBJECT> Regulations beginning at 20 CFR 404.967 regarding SSA Appeals Council Review are applicable to DAB review of matters addressed by this subpart. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.857</SECTNO> <SUBJECT>Court review.</SUBJECT> (a) <E T="03">General rule.</E> To the extent authorized by sections 1869, 1876(c)(5)(B), and 1879(d) of the Act, a party to a DAB decision, or an ALJ decision if the DAB does not review the ALJ's decision, may obtain a court review if the amount remaining in controversy is $1,000 or more. A party may obtain court review by filing a civil action in a district court of the United States in accordance with the provisions of section 205(g) of the Act. The filing procedure is set forth in 20 CFR 422.210. (b) <E T="03">Prohibition against court review of certain Part B regulations or instructions.</E> Under section 1869(b)(4) of the Act, a court may not review a regulation or instruction that relates to a method of payment under Part B if the regulation was promulgated, or the instruction issued, before January 1, 1981. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.860</SECTNO> <SUBJECT>Review of national coverage decisions (NCDs).</SUBJECT> (a) <E T="03">General.</E> (1) CMS makes NCDs either granting, limiting, or excluding Medicare coverage for a specific medical service, procedure or device. NCDs are made under section 1862(a)(1) of the Act or other applicable provisions of the Act. An NCD is binding on all Medicare carriers, fiscal intermediaries, QIOs, HMOs, CMPs, and HCPPs when published in CMS program manuals or the <E T="04">Federal Register</E>. (2) Under section 1869(b)(3) of the Act, only NCDs made under section 1862(a)(1) of the Act are subject to the conditions of paragraphs (b) through (d) of this section. (b) <E T="03">Review by ALJ.</E> (1) An ALJ may not disregard, set aside, or otherwise review an NCD. (2) An ALJ may review the facts of a particular case to determine whether an NCD applies to a specific claim for benefits and, if so, whether the NCD has been applied correctly to the claim. (c) <E T="03">Review by Court.</E> (1) A court's review of an NCD is limited to whether the record is incomplete or otherwise lacks adequate information to support the validity of the decision, unless the case has been remanded to the Secretary to supplement the record regarding the NCD. The court may not invalidate an NCD except upon review of the supplemented record. (2) A Federal court may not hold unlawful or set aside an NCD because it was not issued in accordance with the notice and comment procedures of the Administrative Procedure Act (5 U.S.C. 553) or section 1871(b) of the Act. (d) <E T="03">Remands—</E>(1) <E T="03">Secretary's action.</E> When a court remands an NCD matter to the Secretary because the record in support of the NCD is incomplete or otherwise lacks adequate information, the Secretary remands the case to CMS in order to supplement the record. (2) <E T="03">Remand to CMS.</E> CMS supplements the record with new or updated evidence, including additional information from other sources, and may issue a revised NCD. (3) <E T="03">Final Actions.</E> (i) The proceedings to supplement the record, are expedited. (ii) When CMS does not issue a revised NCD, it returns the supplemented record to the court for review. (iii) When CMS issues a revised NCD, it forwards the case to an ALJ who issues a new decision applying the revised NCD to the facts of the claim(s) under consideration. The ALJ's decision is subject to DAB review and, ultimately, judicial review. <CITA>[62 FR 25854, May 12, 1997]</CITA> </SECTION> <SECTION> <PRTPAGE P="120"/> <SECTNO>§ 405.870</SECTNO> <SUBJECT>Appointment of representative.</SUBJECT> A party to an initial determination, informal review or hearing as provided in §§ 405.803 through 405.934, may appoint as his representative in any such proceeding any person qualified under § 405.871. Where the representative is an attorney, in the absence of information to the contrary, his representation that he has such authority shall be accepted as evidence of the attorney's authority to represent a party. </SECTION> <SECTION> <SECTNO>§ 405.871</SECTNO> <SUBJECT>Qualifications of representatives.</SUBJECT> Any individual may be appointed to act as representative in accordance with § 405.870, unless he is disqualified or suspended from acting as a representative in proceedings before the SSA or the CMS or unless otherwise prohibited by law. <CITA>[39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 62 FR 25855, May 12, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.872</SECTNO> <SUBJECT>Authority of representatives.</SUBJECT> A representative, appointed and qualified as provided in §§ 405.870 and 405.871, may make or give, on behalf of the party he represents, any request or notice relative to any proceeding before the carrier including review and hearing. A representative shall be entitled to present evidence and allegations as to facts and law in any proceeding affecting the party he represents and to obtain information with respect to the claim of such party to the same extent as such party. Notice to any party or any action, determination, or decision, or request to any party for the production of evidence, shall be sent to the representative of such party. </SECTION> <SECTION> <SECTNO>§ 405.874</SECTNO> <SUBJECT>Appeals of carrier decisions that supplier standards are not met.</SUBJECT> (a) An entity serving as a National Supplier Clearinghouse must act promptly to determine if any entity submitting a request for a billing number as a Medicare supplier of part B items meets the standards set forth in part 424. Effective July 1, 1993, the National Supplier Clearinghouse must accept, reject or request additional information within 15 days of the receipt of an enrollment application. (b) If the National Supplier Clearinghouse disallows an entity's request for a billing number or revokes, with the concurrence of CMS, an entity's billing number, the National Supplier Clearinghouse notifies the entity by certified mail. Revocation is effective 15 days after the National Supplier Clearinghouse mails notice of its determination. The carrier disallows payment for items furnished by the supplier beginning with that effective date. The notice must inform the entity of the reason for the rejection or revocation, its right to appeal, the date by which it must file that appeal (90 days after the postmark of the notice) and the address to which the appeal must be sent in writing. (c) A fair hearing officer not involved in the original determination to disallow an entity's request for a billing number, or to revoke an entity's billing number, must schedule a hearing to be held within one week of receipt of an appeal, or later at the request of the entity. Both the entity and carrier may offer evidence. The hearing officer issues notice of his/her decision within 2 weeks of the hearing. The notice is sent by certified letter to CMS, the carrier, and the appealing entity. This notice must include information about the supplier's further right to appeal, the carrier's right to appeal, the date by which the appeal must be filed (90 days after the postmark of the notice) and the address to which the appeals must be sent in writing. Either the carrier or entity may appeal the hearings officer's decision to CMS. (d) A CMS official, designated by the Administrator of CMS, must make an appeal decision based on the evidence presented to the fair hearing officer and his or her decision. The CMS official requests any additional information he or she deems necessary from either the carrier or the entity within two weeks of receipt by the CMS of the appeal. Notice of the CMS official's decision— (1) Is issued within two weeks of when the last information is received is received by the CMS official, or four weeks of when the information is requested, whichever is shorter, unless <PRTPAGE P="121"/>the party appealing the fair hearing decision requests a delay; (2) Is sent by the CMS official by certified mail to both the carrier and the entity; and (3) Contains information on any further appeals the entity and carrier may have. (e) A billing number is not issued, or remains revoked, and payment is not made, for items or services furnished by any entity which a carrier determines does not qualify for a billing number, until the carrier (upon reapplication of the entity), a fair hearing officer, or a CMS official designated to hear such appeals, determines that the entity qualifies for a billing number. Any claims for items or services furnished after revocation of the supplier's billing number and submitted by the entity during the appeals period are held and not processed, i.e., are neither approved, denied or developed, until all administrative appeals have been exhausted. If an entity is determined not to have qualified for a billing number in one period but to have qualified in another, the carrier pays for claims for items sold or rented to beneficiaries during the period the entity qualified as a supplier. If there is evidence of an overpayment, see subpart C of part 405 of this Chapter. (f) A billing number may be reinstated after revocation when an entity completes a corrective action plan, to which CMS has agreed, and provided sufficient assurance of its intent to comply fully with the supplier standards. <CITA>[57 FR 27305, June 18, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.877</SECTNO> <SUBJECT>Appeal of a categorization of a device.</SUBJECT> (a) CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 is a national coverage decision under section 1862(a)(1) of the Act. (b) CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 is an aspect of an initial determination that, under section 1862 of the Act, payment may not be made. (c) In accordance with section 1869(b)(3)(A) of the Act, CMS's acceptance of the FDA categorization of a device as an experimental/investigational (Category A) device under § 405.203 may not be reviewed by an administrative law judge. <CITA>[60 FR 48424, Sept. 19, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <RESERVED>Subparts I-Q [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart R—Provider Reimbursement Determinations and Appeals</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 205, 1102, 1814(b), 1815(a), 1833, 1861(v), 1871, 1872, 1878, and 1886 of the Social Security Act (42 U.S.C. 405, 1302, 1395f(b), 1395g(a), 1395l, 1395x(v), 1395hh, 1395ii, 1395oo, and 1395ww). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 39 FR 34515, Sept. 26, 1974, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.1801</SECTNO> <SUBJECT>Introduction.</SUBJECT> (a) <E T="03">Definitions.</E> As used in this subpart: <E T="03">Administrator</E> means the Administrator or Deputy Administrator of CMS. <E T="03">Administrator's review</E> means that review provided for in section 1878(f) of the Act (42 U.S.C. 1395oo(f)) and § 405.1875. <E T="03">Board</E> means the Provider Reimbursement Review Board established in accordance with section 1878 of the Act (42 U.S.C. 1395oo) and § 405.1845. <E T="03">Board hearing</E> means that hearing provided for in section 1878(a) of the Act (42 U.S.C. 1395oo(a)), and § 405.1835. <E T="03">Date of filing</E> and <E T="03">date of submission of materials</E> mean the day of the mailing (as evidenced by the postmark) or hand-delivery of materials, unless otherwise defined in this subpart. <E T="03">Date of receipt</E> means the date on the return receipt of “return receipt requested” mail, unless otherwise defined in this subpart. <E T="03">Intermediary determination</E> means the following: (1) With respect to a provider of services that has filed a cost report under §§ 413.20 and 413.24(f) of this chapter, the term means a determination of the amount of total reimbursement due the <PRTPAGE P="122"/>provider, pursuant to § 405.1803 following the close of the provider's cost reporting period, for items and services furnished to beneficiaries for which reimbursement may be made on a reasonable cost basis under Medicare for the period covered by the cost report. (2) With respect to a hospital that receives payments for inpatient hospital services under the prospective payment system (part 412 of this chapter), the term means a determination of the total amount of payment due the hospital, pursuant to § 405.1803 following the close of the hospital's cost reporting period, under that system for the period covered by the determination. (3) For purposes of appeal to the Provider Reimbursement Review Board, the term is synonymous with the phrases “intermediary's final determination” and “final determination of the Secretary”, as those phrases are used in section 1878(a) of the Act. (4) For purposes of § 405.376 concerning claims collection activities, the term does not include an action by CMS with respect to a compromise of a Medicare overpayment claim, or termination or suspension of collection action on an overpayment claim, against a provider or physician or other supplier. <E T="03">Intermediary hearing</E> means that hearing provided for in § 405.1809. (b) <E T="03">General rule—</E>(1) <E T="03">Providers.</E> The principles of reimbursement for determining reasonable cost and prospective payment are contained in parts 413 and 412, respectively, of this chapter. In order to be reimbursed for covered services furnished to Medicare beneficiaries, providers of services are obliged to file cost reports with their intermediaries as specified in § 413.24(f) of this chapter. Where the term “provider” appears in this subpart, it includes hospitals paid under the prospective payment system for purposes of applying the appeal procedures described in this subpart to those hospitals. (2) <E T="03">Other entities participating in Medicare Part A.</E> In addition to providers of services whose status as such is indicated in the Act, there are entities (such as health maintenance organizations) that do not meet the statutory test for providers of services, which may also participate in Medicare. These entities are required to file periodic cost reports and are reimbursed on the basis of information furnished in the reports. Although the entities do not qualify for Board review, the rules as set forth in this subpart with respect to intermediary hearings are applicable to the entities to the maximum extent possible, for cost-reporting periods ending on or after December 31, 1971, where the amount of program reimbursement in controversy is at least $1,000. (c) <E T="03">Effective dates.</E> (1) Except as provided in paragraphs (c)(2) and (c)(3) of this section or in § 405.1885(e), this subpart applies to all cost reporting periods ending on or after December 31, 1971, for which reimbursement may be made on a reasonable cost basis. (2) Sections 405.1835 to 405.1877 apply only to cost reporting periods ending on or after June 30, 1973, for which reimbursement may be made on a reasonable cost basis. (3) With respect to hospitals under the prospective payment system (see part 412 of this chapter), the appeals procedures in §§ 405.1811 to 405.1877 that apply become applicable with the hospital's first cost reporting period beginning on or after October 1, 1983. <CITA>[39 FR 34515, Sept. 26, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 48 FR 39834, Sept. 1, 1983; 48 FR 45773, Oct. 7, 1983; 49 FR 322, Jan. 3, 1984; 49 FR 23013, June 1, 1984; 51 FR 34793, Sept. 30, 1986; 61 FR 63749, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1803</SECTNO> <SUBJECT>Intermediary determination and notice of amount of program reimbursement.</SUBJECT> (a) <E T="03">General requirement.</E> Upon receipt of a provider's cost report, or amended cost report where permitted or required, the intermediary must within a reasonable period of time (see § 405.1835(b)), furnish the provider and other parties as appropriate (see § 405.1805) a written notice reflecting the intermediary's determination of the total amount of reimbursement due the provider. The intermediary must include the following information in the notice, as appropriate: (1) <E T="03">Reasonable cost.</E> The notice must—<PRTPAGE P="123"/> (i) Explain the intermediary's determination of total program reimbursement due the provider on the basis of reasonable cost for the reporting period covered by the cost report or amended cost report; and (ii) Relate this determination to the provider's claimed total program reimbursement due the provider for this period. (2) <E T="03">Prospective payment.</E> With respect to a hospital that receives payments for inpatient hospital services under the prospective payment system (see part 412 of this chapter), the intermediary must include in the notice its determination of the total amount of the payments due the hospital under that system for the cost reporting period covered by the notice. The notice must explain (with appropriate use of the applicable money amounts) any difference in the amount determined to be due, and the amounts received by the hospital during the cost reporting period covered by the notice. (b) <E T="03">Requirements for intermediary notices.</E> The intermediary must include in each notice appropriate references to law, regulations, CMS Rulings, or program instructions to explain why the intermediary's determination of the amount of program reimbursement for the period differs from the amount the provider claimed. The notice must also inform the provider of its right to an intermediary or Board hearing (see §§ 405.1809, 405.1811, 405.1815, 405.1835, and 405.1843) and that the provider must request the hearing within 180 days after the date of the notice. (c) <E T="03">Use of notice as basis for recoupment of overpayments.</E> The intermediary's determination contained in its notice is the basis for making the retroactive adjustment (required by § 413.64(f) of this chapter) to any program payments made to the provider during the period to which the determination applies, including recoupment under § 405.373 from ongoing payments to the provider of any overpayments to the provider identified in the determination. Recoupment is made notwithstanding any request for hearing on the determination the provider may make under § 405.1811 or § 405.1835. <CITA>[48 FR 39834, Sept. 1, 1983, as amended at 49 FR 322, Jan 3, 1984; 51 FR 34793, Sept. 30, 1986; 61 FR 63748, Dec. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1804</SECTNO> <SUBJECT>Matters not subject to administrative and judicial review under prospective payment.</SUBJECT> Neither administrative nor judicial review is available for controversies about the following matters: (a) The determination of the requirement, or the proportional amount, of any budget neutrality adjustment in the prospective payment rates. (b) The establishment of— (1) Diagnosis related groups (DRGs); (2) The methodology for the classification of inpatient discharges within the DRGs; or (3) Appropriate weighting factors that reflect the relative hospital resources used with respect to discharge within each DRG. <CITA>[49 FR 322, Jan. 1, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1805</SECTNO> <SUBJECT>Parties to intermediary determination.</SUBJECT> The parties to the intermediary's determination are the provider and any other entity found by the intermediary to be a related organization of the provider under § 413.17 of this chapter. <CITA>[48 FR 39835, Sept. 1, 1983, as amended at 51 FR 34793, Sept. 30, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1807</SECTNO> <SUBJECT>Effect of intermediary determination.</SUBJECT> The determination shall be final and binding on the party or parties to such determination unless: (a) An intermediary hearing is requested in accordance with § 405.1811 and an intermediary hearing decision rendered in accordance with § 405.1831; or (b) The intermediary determination is revised in accordance with § 405.1885; or (c) A Board hearing is requested in accordance with § 405.1835 and a hearing decision rendered pursuant thereto. </SECTION> <SECTION> <PRTPAGE P="124"/> <SECTNO>§ 405.1809</SECTNO> <SUBJECT>Intermediary hearing procedures.</SUBJECT> (a) <E T="03">Hearings.</E> Each intermediary must establish and maintain written procedures for intermediary hearings, in accordance with the regulations in this subpart, for resolving issues that may arise between the intermediary and a provider concerning the amount of reasonable cost reimbursement, or prospective payment due the provider (except as provided in § 405.1804) under the Medicare program. The procedures must provide for a hearing on the intermediary determination contained in the notice of program reimbursement (§ 405.1803), if the provider files a timely request for a hearing. (b) <E T="03">Amount in controversy.</E> In order for an intermediary to grant a hearing, the following dates and amounts in controversy apply: (1) For cost reporting periods ending prior to June 30, 1973, the amount of program reimbursement in controversy must be at least $1000. (2) For cost reporting periods ending on or after June 30, 1973, the amount of program reimbursement in controversy must be at least $1000 but less than $10,000. <CITA>[48 FR 39835, Sept. 1, 1983, as amended at 49 FR 323, Jan. 1, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1811</SECTNO> <SUBJECT>Right to intermediary hearing; time, place, form, and content of request for intermediary hearing.</SUBJECT> (a) A provider that has been furnished a notice of amount of program reimbursement may request an intermediary hearing if it is dissatisfied with the intermediary's determination contained in the notice and the amount in controversy requirement described in § 405.1809 is met. The request must be in writing and be filed with the intermediary within 180 calendar days after the date of the notice. (See § 405.1835(c)). No other individual, entity, or party has the right to an intermediary hearing. (b) The request must (1) identify the aspect(s) of the determination with which the provider is dissatisfied, and (2) explain why the provider believes the determination on these matters is incorrect, and (3) be submitted with any documentary evidence the provider considers necessary to support its position. (c) Following the timely filing of the request for hearing, the provider may identify in writing, prior to the onset of the hearing proceedings, additional aspects of the determination with which it is dissatisfied and furnish any documentary evidence in support thereof. If such additional aspects are submitted, the hearing officer may postpone the hearing to allow for his examination of such additional aspects. <CITA>[39 FR 34515, Sept. 26, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 48 FR 39835, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1813</SECTNO> <SUBJECT>Failure to timely request an intermediary hearing.</SUBJECT> If a provider requests an intermediary hearing on an intermediary's determination after the time limit prescribed in § 405.1811, the designated intermediary hearing officer or panel of hearing officers will dismiss the request and furnish the provider a written notice that explains the time limitation, except that for good cause shown, the time limit prescribed in § 405.1811 may be extended. However, an extension may not be granted if the extension request is filed more than 3 years after the date of the original notice of the intermediary determination. <CITA>[48 FR 39835, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1815</SECTNO> <SUBJECT>Parties to the intermediary hearing.</SUBJECT> The parties to the intermediary hearing shall be the parties to the intermediary determination and any other entity determined by the intermediary to be a related organization of such provider. Said parties shall be given reasonable notice of the time, date, and place of such hearing. Neither the intermediary nor the Centers for Medicare & Medicaid Services are parties (see § 405.1819). </SECTION> <SECTION> <SECTNO>§ 405.1817</SECTNO> <SUBJECT>Hearing officer or panel of hearing officers authorized to conduct intermediary hearing; disqualification of officers.</SUBJECT> The intermediary hearing provided for in § 405.1809 shall be conducted by a hearing officer or panel of hearing officers designated by the intermediary. <PRTPAGE P="125"/>Such hearing officer or officers shall be persons knowledgeable in the field of health care reimbursement. The hearing officer or officers shall not have had any direct responsibility for the program reimbursement determination with respect to which a request for hearing is filed; no hearing officer (or officers) shall conduct a hearing in a case in which he is prejudiced or partial with respect to any party, or where he has any interest in the matter pending for determination before him. Notice of any objection which a party may have with respect to a hearing officer shall be presented in writing to such officer by the objecting party at the party's earliest opportunity. The hearing officer shall consider the objection and shall, at his discretion, either proceed in the conduct of the hearing or withdraw. If the hearing officer does not withdraw, the objecting party may, after the hearing, present his objections to an executive official of the intermediary, who shall rule promptly on the objection. </SECTION> <SECTION> <SECTNO>§ 405.1819</SECTNO> <SUBJECT>Conduct of intermediary hearing.</SUBJECT> The hearing shall be open to all parties thereto (see § 405.1815) and to representatives of the intermediary and of the Centers for Medicare & Medicaid Services (see § 405.1815). The hearing officer(s) shall inquire fully into all of the matters at issue and shall receive into evidence the testimony and any documents which are relevant and material to such matters. If the hearing officer(s) believes that there is relevant and material evidence available which has not been presented at the hearing, he (they) may, at any time prior to the mailing of notice of the decision, reopen the hearing record for the receipt of such evidence. The order in which the evidence and the allegations shall be presented and the conduct of the hearing shall be at the discretion of the hearing officer(s). </SECTION> <SECTION> <SECTNO>§ 405.1821</SECTNO> <SUBJECT>Prehearing discovery and other proceedings prior to the intermediary hearing.</SUBJECT> (a) Prehearing discovery shall be permitted upon timely request of any party. To be timely, a request for discovery and inspection shall be made before the beginning of the hearing. A reasonable time for inspection and reproduction of documents shall be provided by order of the hearing officer(s). (b) If, in the discretion of the hearing officer(s), the purpose of defining the issues more clearly would be served, the hearing officer(s) may schedule a prehearing conference. For this purpose, a single member of a panel of hearing officers, when such is the case, may be appointed to act for the panel with respect to prehearing activities. </SECTION> <SECTION> <SECTNO>§ 405.1823</SECTNO> <SUBJECT>Evidence at intermediary hearing.</SUBJECT> Evidence may be received at the intermediary hearing even though inadmissible under the rules of evidence applicable to court procedure. The hearing officer(s) shall give the parties opportunity for submission and consideration of facts and arguments, and during the course of the hearing, should in ruling upon admissibility of evidence, exclude irrelevant, immaterial, or unduly repetitious evidence. The hearing officer(s) shall render a final ruling on the admissibility of evidence. </SECTION> <SECTION> <SECTNO>§ 405.1825</SECTNO> <SUBJECT>Witnesses at intermediary hearing.</SUBJECT> The hearing officer(s) may examine the witnesses and shall allow the parties and their representatives to do so. Parties to the proceedings may also cross-examine witnesses. </SECTION> <SECTION> <SECTNO>§ 405.1827</SECTNO> <SUBJECT>Record of intermediary hearing.</SUBJECT> A complete recordation of the proceedings at the intermediary hearing shall be made and transcribed in all cases. It shall be made available to any party upon request. The record will not be closed until a decision (see § 405.1831) has been issued. </SECTION> <SECTION> <SECTNO>§ 405.1829</SECTNO> <SUBJECT>Authority of hearing officer(s) at intermediary hearing.</SUBJECT> (a) The hearing officer(s) in exercising his authority must comply with all the provisions of title XVIII of the Act and regulations issued thereunder, as well as with CMS Rulings issued under the authority of the Administrator of the Centers for Medicare & Medicaid Services (see 42 CFR 401.108), <PRTPAGE P="126"/>and with the general instructions issued by the Centers for Medicare & Medicaid Services in accordance with the Secretary's agreement with the intermediary. (b) The determination of a fiscal intermediary that no payment may be made under title XVIII of the Act for any expense incurred for items and services furnished to an individual because such items and services are excluded from coverage pursuant to section 1862 of the Act, 42 U.S.C. 1395y (see subpart C of this part), shall not be reviewed by the hearing officer(s). Such determination shall be reviewed only in accordance with the applicable provisions of subparts G and H of this part. </SECTION> <SECTION> <SECTNO>§ 405.1831</SECTNO> <SUBJECT>Intermediary hearing decision and notice.</SUBJECT> The hearing officer(s) shall, on a timely basis, render a decision in writing based on the evidence in the record; such decision shall constitute the final determination of the intermediary. In such decision, he will cite applicable law, regulations, CMS Rulings, and general instructions of the Centers for Medicare & Medicaid Services, as well as findings on all the matters in issue at the hearing. A copy of the decision will be mailed to all parties to the hearing at their last known addresses. </SECTION> <SECTION> <SECTNO>§ 405.1833</SECTNO> <SUBJECT>Effect of intermediary hearing decision.</SUBJECT> The intermediary hearing decision provided for in § 405.1831 shall be final and binding upon all parties to the hearing unless such intermediary determination is revised in accordance with § 405.1885. </SECTION> <SECTION> <SECTNO>§ 405.1835</SECTNO> <SUBJECT>Right to Board hearing.</SUBJECT> (a) <E T="03">Criteria.</E> The provider (but no other individual, entity, or party) has a right to a hearing before the Board about any matter designated in § 405.1801(a)(1), if: (1) An intermediary determination has been made with respect to the provider; and (2) The provider has filed a written request for a hearing before the Board under the provisions described in § 405.1841(a)(1); and (3) The amount in controversy (as determined in § 405.1839(a)) is $10,000 or more. (b) <E T="03">Prospective payment exceptions.</E> Except with respect to matters for which administrative or judicial review is not permitted as specified in § 405.1804, hospitals that are paid under the prospective payment system are entitled to hearings before the Board under this section if they otherwise meet the criteria described in paragraph (a) of this section. (c) <E T="03">Right to hearing based on late intermediary determination about reasonable cost.</E> Notwithstanding the provisions of paragraph (a)(1) of this section, the provider also has a right to a hearing before the Board if an intermediary's determination concerning the amount of reasonable cost reimbursement due a provider is not rendered within 12 months after receipt by the intermediary of a provider's perfected cost report or amended cost report (as permitted or as required to furnish sufficient data for purposes of making such determination—see § 405.1803(a)) provided such delay was not occasioned by the fault of the provider. <CITA>[48 FR 39835, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1837</SECTNO> <SUBJECT>Group appeal.</SUBJECT> (a) <E T="03">Criteria for group appeals.</E> Subject to paragraph (b) of this section, a group of providers may bring an appeal before the Board but only if— (1) Each provider in the group is identified as one which would, upon the filing of a request for a hearing before the Board, but without regard to the $10,000 amount in controversy requirement, be entitled to a hearing under § 405.1835; (2) The matters at issue involve a common question of fact or of interpretation of law, regulations or CMS Rulings; and (3) The amount in controversy is, in the aggregate, $50,000 or more. (b) <E T="03">Providers under common ownership or control.</E> Effective April 20, 1983, any appeal filed by providers that are under common ownership or control must be brought by the providers as a group appeal in accordance with the provisions of paragraph (a) of this section with respect to any matters involving an issue common to the providers and for which the amount in controversy is, in the <PRTPAGE P="127"/>aggregate, $50,000 or more (see § 405.1841(a)(2)). A single provider involved in a group appeal that also wishes to appeal issues that are not common to the other providers in the group must file a separate hearing request (see § 405.1841(a)(1)) and must separately meet the requirements in § 405.1811 or § 405.1835, as applicable. <CITA>[48 FR 39836, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1839</SECTNO> <SUBJECT>Amount in controversy.</SUBJECT> (a) <E T="03">Single appeals.</E> The $1,000 amount in controversy required under § 405.1809 for an intermediary hearing and the $10,000 amount in controversy required under § 405.1835 for a Board hearing is, as applicable to the matters for which the provider has requested a hearing, the combined total of the amounts computed as follows: (1) <E T="03">Providers under prospective payment.</E> For providers that are paid under the prospective payment system, by deducting— (i) The total of the payment due the provider on other than a reasonable cost basis under the prospective payment system from the total amount that would be payable after a recomputation that takes into account any exclusion, exception, adjustment, or additional payment denied the provider under part 412 of this chapter, as applicable; (ii) The total of the payment due the provider on a reasonable cost basis under the prospective payment system from the total reimbursable costs claimed by the provider; and (iii) The adjusted total reimbursable costs due the provider on a reasonable cost basis under other than the prospective payment system from the total reimbursable costs claimed by the provider. (2) <E T="03">Providers not under prospective payment.</E> For providers that are not paid under the prospective payment system, by deducting the adjusted total reimbursable program costs due the provider on a reasonable cost basis from the total reimbursable costs claimed by the provider. (b) <E T="03">Group appeals.</E> The $50,000 amount in controversy required under § 405.1837 for group appeals to the Board is, as applicable to the common matters for which the group of providers have requested a hearing, the combined total of the amounts computed as follows: (1) <E T="03">Providers under prospective payment.</E> For providers that are paid under the prospective payment system, by deducting— (i) The total of the payment due the providers (in the aggregate) on other than a reasonable cost basis under the prospective payment system from the total amount that would be payable to the providers (in the aggregate) after a recomputation that takes into account any applicable exception, exclusion, adjustment, or additional payment denied the providers under part 412 of this chapter. (ii) The total of the payment due the providers (in the aggregate) on a reasonable cost basis under the prospective payment system from the total reimbursable costs claimed in the aggregate by the providers; and (iii) The adjusted total reimbursable costs due the providers (in the aggregate) on a reasonable cost basis under other than the prospective payment system from the total reimbursable costs claimed in the aggregate by the providers. (2) <E T="03">Providers not under prospective payment.</E> For providers that are not paid under the prospective payment system, by deducting the adjusted total reimbursable program costs due the providers (in the aggregate) on a reasonable cost basis from the total reimbursable costs claimed in the aggregate by the providers. <CITA>[49 FR 323, Jan. 3, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1841</SECTNO> <SUBJECT>Time, place, form, and content of request for Board hearing.</SUBJECT> (a) <E T="03">General requirements.</E> (1) The request for a Board hearing must be filed in writing with the Board within 180 days of the date the notice of the intermediary's determination was mailed to the provider or, where notice of the determination was not timely rendered, within 180 days after the expiration of the period specified in § 405.1835(c). Such request for Board hearing must identify the aspects of the determination with which the provider is dissatisfied, explain why the provider believes the determination is incorrect in such particulars, and be <PRTPAGE P="128"/>accompanied by any documenting evidence the provider considers necessary to support its position. Prior to the commencement of the hearing proceedings, the provider may identify in writing additional aspects of the intermediary's determination with which it is dissatisfied and furnish any documentary evidence in support thereof. (2) Effective April 20, 1983, any request for a Board hearing by providers that are under common ownership or control (see § 413.17 of this chapter) must be brought by the providers as a group appeal (see § 405.1837(b)) with respect to any matters at issue involving a question of fact or of interpretation of law, regulations, or CMS Rulings common to the providers and for which the amount in controversy is $50,000 or more in the aggregate. If a group appeal is filed, the provider seeking the appeal must be separately identified in the request for hearing, which must be prepared and filed consistently with the requirements of paragraph (a)(1) of this section. (b) <E T="03">Extension of time limit for good cause.</E> A request for a Board hearing filed after the time limit prescribed in paragraph (a) of this section shall be dismissed by the Board, except that for good cause shown, the time limit may be extended. However, no such extension shall be granted by the Board if such request is filed more than 3 years after the date the notice of the intermediary's determination is mailed to the provider. <CITA>[48 FR 39836, Sept. 1, 1983, as amended at 51 FR 34793, Sept. 30, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1842</SECTNO> <SUBJECT>Expediting Board proceedings.</SUBJECT> (a) <E T="03">Basis and purpose.</E> This section implements section 1878(f)(1) of the Social Security Act, as amended by section 955 of Public Law 96-499 (42 U.S.C. 1395oo(f)(1)). The amendment provides an opportunity for providers to obtain expedited administrative review when the Board determines that it does not have the authority to decide a question of law, regulation, or CMS Ruling relevant to the case (see § 405.1867). (b) <E T="03">Basic rule.</E> (1) Except as provided in paragraph (b)(4) of this section, a provider may submit a written request to the Board, with supporting documentation, to determine whether the Board has the authority to decide a question of law, regulations, or CMS Rulings relevant to and controlling upon an issue to be reviewed by the Board. The Board is required to make an expedited review determination in writing, either denying or granting the request, within 30 days after the date of receipt of the request, as defined in paragraph (1) of this section. The Board may also issue a determination on its own motion that it lacks authority to decide a question of law, regulations or CMS Rulings. (2) The Board must determine that the provider (including each provider in a group appeal) is entitled to a hearing under section 1878(a) of the Act before making the determination described in paragraph (b)(1) of this section. Thus, the provider must file (or have already filed) a written request for a Board hearing that meets the requirements in § 405.1841. The information and documentation required with respect to the filing of a request for a hearing is used by the Board to determine jurisdiction under section 1878(a) of the Act. (3) A provider's request for an expedited review determination cannot be considered to be filed with the Board, nor can the 30-day time period during which the Board is required to make an expedited review determination begin, until such time as the Board accepts jurisdiction of the case. (4) Proceedings conducted by the Board under an authority other than section 1878(a) of the Act and §§ 405.1835 through 405.1873 of this subpart are not hearings for purposes of this section and are not subject to the expedited Board proceedings set forth in this section. For example, proceedings concerning reimbursement for capital expenditures conducted under section 1122(f) of the Act and § 405.1890 of this subpart are not hearings for purposes of this section. (Section 1122(f) specifically bars any administrative or judicial review.) (c) <E T="03">“Own motion” review.</E> If the Board is considering issuing a determination on its own motion that it lacks the authority to decide a question of law, regulations, or CMS Rulings, it will notify <PRTPAGE P="129"/>the provider and intermediary of its proposed determination and allow them a reasonable period of time to file evidence or arguments either to support or oppose the proposed determination. (d) <E T="03">Provider requests.</E> (1) If a provider seeks an expedited Board proceeding, it must—(i) File its appropriately documented request in writing with the Board; and (ii) Send a copy of the request and documentation simultaneously to the intermediary. (2) The request to the Board for an expedited review determination must—(i) Identify the issues and the controlling law, regulation or CMS Ruling for which the Board is to make a determination; (ii) Allege and demonstrate that there are no factual issues in dispute; (iii) Contain an explanation of why the provider believes the Board cannot decide the legal issue or issues that are in dispute; and (iv) Include all other information or details that support the request. (3) If the information in the provider request is insufficient for the Board to determine whether it has the authority to decide an issue, the Board will request more information from the provider. Such a request will affect the 30-day time limit as provided in paragraph (i) of this section. If the provider does not send more information or sends inadequate information, the Board will determine that it has the authority to decide the issue and will begin the regular procedure for a hearing. (e) <E T="03">Intermediary participation.</E> (1) After receiving a copy of the provider's request for an expedited review determination, the intermediary may send comments to the Board on the provider's request and supporting documentation. The intermediary will send a copy of its comments to the provider simultaneously. (2) If the intermediary's comments raise questions about the provider's request for expedited review, the Board may request additional information from the provider as provided in paragraph (d)(3) of this section. (f) <E T="03">Criteria for a Board determination.</E> The Board will review all documentation forwarded by the provider and the intermediary relevant to the request for a Board determination concerning the Board's authority to decide an issue. In its review, the Board will consider— (1) The controlling facts in the case; (2) The applicability of law, regulations, or CMS rulings; (3) Whether there are factual issues for the Board to resolve; and (4) Whether there are legal issues within the authority of the Board to decide. (g) <E T="03">Board determination.</E> (1) Within 30 days after the date of receipt (as defined in paragraph (i) of this section) of a provider's request and all necessary documentation the Board will issue a determination concerning its authority to decide the question of law, regulations, or CMS Rulings relevant to the issues identified by the provider in its request. (2) If there are factual or legal issues in dispute on an issue within the authority of the Board to decide, the Board will not make an expedited review determination on the particular issue but will proceed with a hearing. The Board has the authority to decide when two or more issues are sufficiently related to preclude separation for purposes of an expedited review determination on one or more of them and a hearing on the other or others. (3) The Board will promptly notify the provider in writing of its determination and will send a copy of the determination to the intermediary. (4) The Board's determination concerning its authority or its lack of a determination is not subject to the Secretary's review under § 405.1875. (h) <E T="03">Effect of a Board decision.</E> (1) The Board's determination, issued on its own motion or at the request of a provider, that it lacks authority to decide a question of law, regulations or CMS Rulings is a final decision permitting a provider to seek judicial review with respect to the matter or matters in controversy contained in the determination, within 60 days of the date of the Board's determination. (2) After the Board has determined that it does not have the authority to decide an issue, the provider will not be granted a hearing on the same issue.<PRTPAGE P="130"/> (3) If the Board fails to issue an expedited review determination within 30 days of the date of receipt of a complete request (as determined under paragraph (i) of this section), the provider may, within 60 days from the end of that period, seek judicial review of the matters for which it requested the Board's determination. (4) If the Board fails to make an expedited review determination within the required 30 days, it will begin regular hearing procedures as though it has the authority to decide the issue. (5) If the provider seeks judicial review because the Board fails to make a determination as provided in paragraph (g)(1) of this section, it should notify the Board at the time it files for judicial review. The Board will not hold a hearing, even if one has been scheduled, on the matter or matters for which the provider is seeking judicial review. (6) The Board's determination does not affect the right of the provider to a Board hearing for issues for which the provider did not request expedited review, or for which the Board determines it does have the authority to decide, or for which the Board did not make a determination and the provider did not request judicial review. (i) <E T="03">Date of receipt.</E> For purposes of this section, the date of receipt of the provider's request is the later of— (1) The actual date of receipt by the Board of the information required under paragraph (d)(2) of this section, or of additional information requested by the Board under paragraph (d)(3) of this section, whichever the Board receives later; or (2) The date indicated on the Board's written notification to the provider that the Board has accepted jurisdiction of the case. (j) <E T="03">Examples.</E> Below are examples showing when a provider may expect to receive an expedited review determination, in relation to various circumstances affecting its request for the determination. (1) The provider requests a hearing and expedited review at or about the same time. If all information is complete, the Board could send notification that it has accepted jurisdiction of the case and the expedited review determination simultaneously. (2) The provider requests both a hearing and an expedited review determination, and supplies complete information. The Board accepts jurisdiction but, for example, because of the complexity of the case, the Board makes its expedited review determination within 30 days after it has accepted jurisdiction. (3) The provider requests both a hearing and an expedited review determination, but the request for a hearing does not contain enough information for the Board to determine jurisdiction. The Board would request more information to determine jurisdiction and would make its expedited review determination within 30 days after it has accepted jurisdiction. (4) The provider requests both a hearing and an expedited review determination, but does not send enough information for the Board to make an expedited review determination. Assuming the Board accepts jurisdiction, the Board would request more information about the request for expedited review and make its determination within 30 days after it receives the additional information. (5) The provider requests an expedited review determination after the Board has accepted jurisdiction. The Board would make its determination within 30 days after receipt of an appropriately documented request for an expedited review determination. <CITA>[47 FR 31690, July 22, 1982, as amended at 48 FR 22925, May 23, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1843</SECTNO> <SUBJECT>Parties to Board hearing.</SUBJECT> (a) The parties to the Board hearing shall be the provider, the intermediary (including the Centers for Medicare & Medicaid Services when acting directly as intermediary) that rendered the determination being appealed (see § 405.1833), and any other entity found by the intermediary to be a related organization of such provider. (b) Except as provided in paragraph (a), neither the Secretary nor the Centers for Medicare & Medicaid Services may be made a party to the hearing. <PRTPAGE P="131"/>However, the Board may call as a witness any employee or officer of the Department of Health and Human Services having personal knowledge of the facts and the issues in controversy in a hearing pending before the Board and may call as a consultant to the Board in connection with any such hearing any individual designated by the Secretary for such purpose. (See § 405.1863.) </SECTION> <SECTION> <SECTNO>§ 405.1845</SECTNO> <SUBJECT>Composition of Board.</SUBJECT> (a) The Board will consist of five members appointed by the Secretary. All shall be knowledgeable in the field of cost reimbursement. At least one shall be a certified public accountant. Two Board members shall be representative of providers of services. (b) The term of office for Board members shall be 3 years, except that initial appointments may be for such shorter terms as the Secretary may designate to permit staggered terms of office. No member shall serve more than two consecutive 3-year terms of office. The Secretary shall have the authority to terminate a Board member's term of office for good cause. (c) One member of the Board shall be designated by the Secretary as Chairman thereof and shall coordinate and direct the administrative activities of the Board, and shall have such other authority which may be granted to him by the Board. (d) A quorum shall be required for the rendering of Board decisions. Three members, at least one of whom is representative of providers of services, shall be required to constitute a quorum. The Chairman of the Board, with approval of the provider, may designate one or more Board members to conduct any hearing and to prepare a recommended decision (where less than a quorum conducts the hearing). (See § 405.1869.) <CITA>[39 FR 34515, Sept. 26, 1974, as amended at 41 FR 52051, Nov. 26, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1847</SECTNO> <SUBJECT>Disqualification of Board members.</SUBJECT> No Board member shall join in the conduct of a hearing in a case in which he is prejudiced or partial with respect to any party or in which he has any interest in the matter pending for decision before him. Notice of any objection which a party may have with respect to a Board member shall be presented in writing to such Board member by the objecting party at its earliest opportunity. The Board member shall consider the objection and shall, in his discretion, either proceed to join in the conduct of the hearing or withdraw. If he does not withdraw, the objecting party may petition the Board, presenting its objection and reasons therefor, and be entitled to a ruling thereon before the hearing can proceed. </SECTION> <SECTION> <SECTNO>§ 405.1849</SECTNO> <SUBJECT>Establishment of time and place of hearing by the Board.</SUBJECT> The Board shall fix the time and place for the hearing and shall mail written notice thereof to the parties at their last known addresses, not less than 30 days prior to the scheduled time. Either on its own motion or for good cause shown by a party, the Board may, as appropriate, reschedule, adjourn, postpone, or reopen the hearing, provided that reasonable written notice is given to the parties. </SECTION> <SECTION> <SECTNO>§ 405.1851</SECTNO> <SUBJECT>Conduct of Board hearing.</SUBJECT> The Board hearing shall be open to the parties, to representatives of the Centers for Medicare & Medicaid Services, and to such other persons as the Board deems necessary and proper. The Board shall inquire fully into all of the matters at issue and shall receive into evidence the testimony of witnesses and any documents which are relevant and material to such matters. If the Board believes that there is relevant and material evidence available which has not been presented at the hearing, it may at any time prior to the mailing of notice of the decision, reconvene the hearing for the receipt of such evidence. The order in which the evidence and the allegations shall be presented and the conduct of the hearing shall be at the discretion of the Board. </SECTION> <SECTION> <SECTNO>§ 405.1853</SECTNO> <SUBJECT>Prehearing discovery and other proceedings prior to the Board hearing.</SUBJECT> (a) Upon notification that a request for Board hearing has been filed, the intermediary shall forthwith review <PRTPAGE P="132"/>the materials submitted by the provider in accordance with § 405.1841. Simultaneously, the intermediary shall review the information which formed the basis for its determination of the amount of program reimbursement. Based on the findings of such review, the intermediary shall expeditiously attempt to join with the provider in written stipulations setting forth the issues that said review has resolved and designating the issues that remain for Board resolution. Having obtained such stipulations and being satisfied that no further agreements can be negotiated, the intermediary shall ensure that all available documentary evidence in support of each party's position is part of the record. Such evidence will ordinarily include a position paper from the provider, a position paper from the intermediary, and any documents which support the issues addressed in the stipulations. These materials, in addition to all relevant documents which formed the basis for its determination of the amount of program reimbursement, shall be forwarded to the Board within 60 days after the date of the provider's request for Board review. (b) Prehearing discovery shall be permitted upon timely request of a party. To be timely, a request for discovery and inspection shall be made before the beginning of the hearing. A reasonable time for inspection and reproduction of documents shall be provided by order of the Board. The Board's order on all discovery matters shall be final. (c) If, in the discretion of the Board, the purpose of defining the issues more clearly would be served, the Board may schedule a prehearing conference. For this purpose, a single member of the Board may be appointed to act for the Board with respect to prehearing activities. </SECTION> <SECTION> <SECTNO>§ 405.1855</SECTNO> <SUBJECT>Evidence at Board hearing.</SUBJECT> Evidence may be received at the Board hearing even though inadmissible under the rules of evidence applicable to court procedure. The Board shall give the parties opportunity for submission and consideration of facts and arguments and during the course of the hearing should, in ruling upon admissibility of evidence, exclude irrelevant, immaterial, or unduly repetitious evidence. The Board shall render a final ruling on the admissibility of evidence. </SECTION> <SECTION> <SECTNO>§ 405.1857</SECTNO> <SUBJECT>Subpoenas.</SUBJECT> When reasonably necessary for the full presentation of a case, the Board may, either upon its own motion or upon the request of a party, issue subpoenas for the attendance and testimony of witnesses and for the production of books, records, correspondence, papers, or other documents which are relevant and material to any matter in issue at the hearing. Parties who desire the issuance of a subpoena shall, not less than 10 days prior to the time fixed for the hearing, file with the Board a written request therefor, designating the witnesses or documents to be produced, and describing the address, or location thereof with sufficient particularity to permit such witnesses or documents to be found. The request for a subpoena shall state the pertinent facts which the party expects to establish by such witnesses or documents and whether such facts could be established by other evidence without the use of a subpoena. Subpoenas, as provided for above, shall be issued in the name of the Board, and the Centers for Medicare & Medicaid Services shall assume the cost of the issuance and the fees and mileage of any witness so subpoenaed, as provided in section 205(d) of the Act, 42 U.S.C. 405(d). </SECTION> <SECTION> <SECTNO>§ 405.1859</SECTNO> <SUBJECT>Witnesses.</SUBJECT> Witnesses at the hearing shall testify under oath or affirmation, unless excused by the Board for cause. The Board may examine the witnesses and shall allow the parties or their representatives to do so. Parties to the proceeding may also cross-examine witnesses. </SECTION> <SECTION> <SECTNO>§ 405.1861</SECTNO> <SUBJECT>Oral argument and written allegations.</SUBJECT> The parties, upon their request, shall be allowed a reasonable time for the presentation of oral argument or for the filing of briefs or other written statements of allegations as to facts or law. Copies of any brief or other written statement shall be filed in sufficient number that they may be made <PRTPAGE P="133"/>available to all parties and to the Centers for Medicare & Medicaid Services. </SECTION> <SECTION> <SECTNO>§ 405.1863</SECTNO> <SUBJECT>Administrative policy at issue.</SUBJECT> Where a party to the Board hearing puts into issue an administrative policy which is interpretative of the law or regulations, the Board will promptly notify to the Centers for Medicare & Medicaid Services. </SECTION> <SECTION> <SECTNO>§ 405.1865</SECTNO> <SUBJECT>Record of Board hearing.</SUBJECT> A complete record of the proceedings at the hearing shall be made and transcribed in all cases. It shall be made available to the parties upon request. The record will not be closed until a decision has been issued. </SECTION> <SECTION> <SECTNO>§ 405.1867</SECTNO> <SUBJECT>Sources of Board's authority.</SUBJECT> In exercising its authority to conduct the hearings described herein, the Board must comply with all the provisions of title XVIII of the Act and regulations issued thereunder, as well as CMS Rulings issued under the authority of the Administrator of the Centers for Medicare & Medicaid Services (see § 401.108 of this subchapter). The Board shall afford great weight to interpretive rules, general statements of policy, and rules of agency organization, procedure, or practice established by CMS. <CITA>[48 FR 22925, May 23, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1869</SECTNO> <SUBJECT>Scope of Board's decision-making authority.</SUBJECT> The Board shall have the power to affirm, modify, or reverse a determination of an intermediary with respect to a cost report and to make any other modifications on matters covered by such cost report (including modifications adverse to the provider or other parties) even though such matters were not considered in the intermediary's determination. The opinion of the majority of those Board members deciding the case will constitute the Board's decision. </SECTION> <SECTION> <SECTNO>§ 405.1871</SECTNO> <SUBJECT>Board hearing decision and notice.</SUBJECT> (a) The Board shall, as soon as practicable after the conclusion of its hearing, render a written decision based upon the record made at such hearing, the record established in support of the determination of the intermediary (see § 405.1803), and such other evidence as may be obtained or received by the Board. Such Board decision shall be supported by substantial evidence when the record of the Board hearing is viewed as a whole and shall cite applicable law, regulations, and CMS Rulings. A copy of the decision shall be mailed to all parties to the hearing at their last known addresses and, at the same time, to the Administrator and CMS. (b) The decision of the Board provided for in paragraph (a) of this section shall be final and binding upon all parties to the hearing before the Board unless it is reviewed by the Secretary in accordance with § 405.1875, or revised in accordance with § 405.1885. <CITA>[39 FR 34515, Sept. 26, 1974, as amended at 41 FR 52051, Nov. 26, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 48 FR 45773, Oct. 7, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1873</SECTNO> <SUBJECT>Board's jurisdiction.</SUBJECT> (a) <E T="03">Board decides jurisdiction.</E> The Board decides questions relating to its jurisdiction to grant a hearing, including (1) the timeliness of an intermediary determination (see § 405.1835(c)), and (2) the right of a provider to a hearing before the Board when the amount in controversy is in issue (see §§ 405.1835(a)(3) and 405.1837). (b) <E T="03">Matters not subject to board review.</E> (1) The determination of a fiscal intermediary that no payment may be made under title XVIII of the Act for any expenses incurred for items and services furnished to an individual because such items and services are excluded from coverage pursuant to section 1862 of the Act, 42 U.S.C. 1395y (see subpart C of this part), may not be reviewed by the Board. (Such determination shall be reviewed only in accordance with the applicable provisions of subpart G or H of this part.) (2) The Board may not review certain matters affecting payments to hospitals under the prospective payment system as provided in § 405.1804. <CITA>[48 FR 39836, Sept. 1, 1983]</CITA> </SECTION> <SECTION> <PRTPAGE P="134"/> <SECTNO>§ 405.1875</SECTNO> <SUBJECT>Administrator's review.</SUBJECT> (a) <E T="03">General rule.</E> (1) Except for a Board determination under § 405.1842 that it lacks the authority to decide an issue, the Administrator, at his or her discretion, may review any final decision of the Board, including a decision under § 405.1873 about the Board's jurisdiction to grant a hearing. The Administrator may exercise this discretion on his or her own motion, in response to a request from a party to a Board hearing or in response to a request from CMS. (2) The Office of the Attorney Advisory will examine the Board's decisions, the requests made by a party or CMS and any submission made in accordance with the provisions of this section in order to assist the Administrator in deciding whether to exercise this review authority. (b) <E T="03">Request for review.</E> A party or CMS requesting the Administrator to review a Board decision must file a written request with the Administrator within 15 days of the receipt of the Board decision. (c) <E T="03">Criteria for deciding whether to review.</E> In deciding whether to review a Board decision, either on his or her own motion or in response to a request from a party to the hearing or CMS, the Administrator will normally consider whether it appears that: (1) The Board made an erroneous interpretation of law, regulation or CMS Ruling; (2) The Board's decision is not supported by substantial evidence; or (3) The case presents a significant policy issue having a basis in law and regulations, and review is likely to lead to the issuance of a CMS Ruling or other directive needed to clarify a statutory or regulatory provision; (4) The Board has incorrectly assumed or denied jurisdiction or extended its authority to a degree not provided for by statute, regulation or CMS Ruling; and (5) The decision of the Board requires clarification, amplification, or an alternative legal basis for the decision. (d) <E T="03">Decision to review.</E> (1) Whether or not a party or CMS has requested review, the Administrator will promptly notify the parties and CMS whether he or she has decided to review a decision of the Board and, if so, will indicate the particular issues he or she will consider. (2) The Administrator may decline to review a case or any issue in a case even if a party has filed a written request for review under paragraph (b) of this section. (e) <E T="03">Written submissions.</E> (1) Within 15 days of receipt of a notice that the Administrator has decided to review a Board decision, a party or CMS may submit to the Administrator, in writing: (i) Proposed findings and conclusions; (ii) Supporting views or exceptions to the Board decision; (iii) Supporting reasons for the exceptions and proposed findings; and (iv) A rebuttal of the other party's request for review or other submissions already filed with the Administrator. (2) These submissions shall be limited to issues the Administrator has decided to review and confined to the record of the Board hearing. (3) A party or CMS, within 15 days of receipt of a notice that the Administrator has decided to review a decision, may also request that the decision be remanded and state reasons for doing so. Reasons for a request to remand may include new, substantial evidence concerning— (i) Issues presented to the Board; and (ii) New issues that have arisen since the case was presented to the Board. (4) A copy of any written submission made under this paragraph shall be sent simultaneously to each other party to the Board hearing and to CMS, if CMS has previously— (i) Requested that the Administrator review a Board decision or filed a written submission in response to a party's request for review. (ii) Responded to a party's request for review; or (iii) Submitted material after the Administrator has announced that he or she will review a Board decision. (f) <E T="03">Ex parte communications prohibited.</E> All communications from any of the parties or CMS about a Board decision being reviewed by the Administrator must be in writing and must contain a certification that copies have been served on the parties and CMS, as appropriate. The Administrator will not <PRTPAGE P="135"/>consider any communication that does not meet these requirements or is not submitted within the required time limits. (g) <E T="03">Administrator's decision.</E> (1) If the Administrator has notified the parties and CMS that he or she has decided to review a Board decision, the Administrator will affirm, reverse, modify or remand the case. (2) The Administrator will make this decision within 60 days after the provider received notification of the Board decision and will promptly mail a copy of the decision to each party and to CMS. (3) Any decision other than to remand will be confined to— (i) The record of the Board, as forwarded by the Board; (ii) Any materials submitted under paragraphs (b) or (e) of this section; and (iii) Generally known facts that are not subject to reasonable dispute. (4) The Administrator may rely on prior decisions of the Board, the Administrator and the courts, and other applicable law, whether or not cited by the parties and CMS. (h) <E T="03">Remand.</E> (1) A remand to the Board by the Administrator vacates the Board's decision. (2) The Administrator may direct the Board to take further action with respect to the development of additional facts or new issues, or to consider the applicability of laws or regulations other than those considered by the Board. The following are not acceptable bases for remand— (i) Presentation of evidence existing at the time of the Board hearing that was known or reasonably could have been known; (ii) Introduction of a favorable court case that was either not available in print at the time of the Board hearing or was decided after the Board hearing; (iii) Change of a party's representation before the Board; (iv) Presentation of an alternative legal basis concerning an issue in dispute; or (v) Attempted retraction of a waiver of a right made before or at the Board hearing. (3) After remand, the Board will take the action requested in the remand action and issue a new decision. (4) The new decision will be final unless the Administrator reverses, affirms, modifies, or again remands the decision in accordance with the provisions of the section. <CITA>[48 FR 45773, Oct. 7, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1877</SECTNO> <SUBJECT>Judicial review.</SUBJECT> (a) <E T="03">General rule.</E> Section 1878(f) of the Act permits a provider to obtain judicial review of a final decision of the Board, or of a reversal, affirmation, or modification by the Administrator of a Board decision, by filing a civil action pursuant to the Federal Rules of Civil Procedure within 60 days of the date on which the provider received notice of— (1) A final decision by the Board; or (2) Any reversal, affirmance, or modification by the Administrator. <FP>The Board's decision is not final if the Administrator reverses, affirms or modifies the decision within 60 days of the date on which the provider received notice of the decision.</FP> (b) <E T="03">Administrator declines to review a Board decision.</E> If the Administrator declines to review a Board decision, the provider must file its appeal within 60 days of receipt of the decision of the Board. (c) <E T="03">Administrator does not act after reviewing a Board decision.</E> If the Administrator notifies the parties that he or she has decided to review a Board decision and then does not make a decision within the 60 days allotted for his or her review, this subsequent inaction constitutes an affirmance allowing a provider an additional 60 days in which to file for judicial review, beginning with the date the Administrator's time expires for taking action under § 405.1875(g)(2). (d) <E T="03">Matters not subject to judicial review.</E> Certain matters affecting payments to hospital under the prospective payment system are not subject to judicial review, as provided in section 1886(d)(7) of the Act and § 405.1804. (e) <E T="03">Group appeals.</E> Any action under this section by providers that are under common ownership or control (see § 413.17 of this chapter) must be brought by the providers as a group <PRTPAGE P="136"/>with respect to any matter involving an issue common to the providers. (f) <E T="03">Venue for appeals.</E> An action for judicial review must be brought in the District Court of the United States for the judicial district in which the provider is located (or, effective April 20, 1983, in an action brought jointly by several providers, the judicial district in which the greatest number of such providers are located) or in the District Court for the District of Columbia. Effective April 20, 1983, any action for judicial review by providers under common ownership or control (§ 413.17 of this chapter), must be brought by such providers as a group with respect to any matter involving an issue common to the providers. (g) <E T="03">Service of process.</E> Process must be served as described under 45 CFR part 4. <CITA>[48 FR 39836, Sept. 1, 1983, as amended at 48 FR 45774, Oct. 7, 1983; 51 FR 34793, Sept. 30, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1881</SECTNO> <SUBJECT>Appointment of representative.</SUBJECT> A provider or other party may be represented by legal counsel or any other person it appoints to act as its representative at the proceedings, conducted in accordance with §§ 405.1819 and 405.1851. </SECTION> <SECTION> <SECTNO>§ 405.1883</SECTNO> <SUBJECT>Authority of representative.</SUBJECT> A representative appointed by a provider or other party may accept or give on behalf of the provider or other party any request or notice relative to any proceeding before a hearing officer or the Board. A representative shall be entitled to present evidence and allegations as to facts and law in any proceeding affecting the party he represents and to obtain information with respect to a request for an intermediary hearing or a Board hearing made in accordance with §§ 405.1811, 405.1835, or 405.1837 to the same extent as the party he represents. Notice to a provider or other party of any action, determination, or decision, or a request for the production of evidence by a hearing officer or the Board sent to the representative of the provider or other party shall have the same force and effect as if it had been sent to the provider or other party. </SECTION> <SECTION> <SECTNO>§ 405.1885</SECTNO> <SUBJECT>Reopening a determination or decision.</SUBJECT> (a) A determination of an intermediary, a decision by a hearing officer or panel of hearing officers, a decision by the Board, or a decision of the Secretary may be reopened with respect to findings on matters at issue in such determination or decision, by such intermediary officer or panel of hearing officers, Board, or Secretary, as the case may be, either on motion of such intermediary officer or panel of hearing officers, Board, or Secretary, or on the motion of the provider affected by such determination or decision to revise any matter in issue at any such proceedings. Any such request to reopen must be made within 3 years of the date of the notice of the intermediary or Board hearing decision, or where there has been no such decision, any such request to reopen must be made within 3 years of the date of notice of the intermediary determination. No such determination or decision may be reopened after such 3-year period except as provided in paragraphs (d) and (e) of this section. (b)(1) An intermediary determination or an intermediary hearing decision must be reopened and revised by the intermediary if, within the 3-year period specified in paragraph (a) of this section, CMS— (i) Provides notice to the intermediary that the intermediary determination or the intermediary hearing decision is inconsistent with the applicable law, regulations, CMS ruling, or CMS general instructions in effect, and as CMS understood those legal provisions, at the time the determination or decision was rendered by the intermediary; and (ii) Explicitly directs the intermediary to reopen and revise the intermediary determination or the intermediary hearing decision. (2) A change of legal interpretation or policy by CMS in a regulation, CMS ruling, or CMS general instruction, whether made in response to judicial precedent or otherwise, is not a basis for reopening an intermediary determination or an intermediary hearing decision under this section. (3) Notwithstanding paragraph (b)(1)(i) of this section, CMS may direct <PRTPAGE P="137"/>the intermediary to reopen a particular intermediary determination or intermediary hearing decision in order to implement, for the same intermediary determination or intermediary decision— (i) A final agency decision under §§ 405.1833, 405.1871(b), 405.1875, or 405.1877(a) of this part; (ii) A final nonappealable court judgment; or (iii) An agreement to settle an administrative appeal or a lawsuit. (c) Jurisdiction for reopening a determination or decision rests exclusively with that administrative body that rendered the last determination or decision. (d) Notwithstanding the provisions of paragraph (a) of this section, an intermediary determination or hearing decision, a decision of the Board, or a decision of the Secretary shall be reopened and revised at any time if it is established that such determination or decision was procured by fraud or similar fault of any party to the determination or decision. (e) Notwithstanding an intermediary's discretion to reopen or not reopen an intermediary determination or an intermediary hearing decision under paragraphs (a) and (c) of this section, CMS may direct an intermediary to reopen, or not to reopen, an intermediary determination or an intermediary hearing decision in accordance with paragraphs (a) and (c) of this section. (f) Paragraphs (a) and (b) of this section apply to determinations on cost reporting periods ending on or after December 31, 1971. (See § 405.1801(c).) However, the 3-year period described shall also apply to determinations with respect to cost reporting periods ending prior to December 31, 1971, but only if the reopening action was undertaken after May 27, 1972 (the effective date of regulations which, prior to the publication of this subpart R, governed the reopening of such determinations). <CITA>[39 FR 34515, Sept. 26, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977, and amended at 50110, Aug. 1, 2002]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.1887</SECTNO> <SUBJECT>Notice of reopening.</SUBJECT> (a) All parties to any reopening described above shall be given written notice of the reopening. When such reopening results in any revision in the prior decision notice of said revision or revisions will be mailed to the parties with a complete explanation of the basis for the revision or revisions. Notices of reopenings by the Board shall also be sent to the Secretary. (b) In any such reopening, the parties to the prior decision shall be allowed a reasonable period of time in which to present any additional evidence or argument in support of their position. </SECTION> <SECTION> <SECTNO>§ 405.1889</SECTNO> <SUBJECT>Effect of a revision.</SUBJECT> Where a revision is made in a determination or decision on the amount of program reimbursement after such determination or decision has been reopened as provided in § 405.1885, such revision shall be considered a separate and distinct determination or decision to which the provisions of §§ 405.1811, 405.1835, 405.1875 and 405.1877 are applicable. (See § 405.1801(c) for applicable effective dates.) </SECTION> </SUBPART> <SUBPART> <RESERVED>Subparts S-T [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart U—Conditions for Coverage of Suppliers of End-Stage Renal Disease (ESRD) Services</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102, 1138, 1861, 1862(a), 1871, 1874, and 1881 of the Social Security Act (42 U.S.C. 1302, 1320b-8, 1395x, 1395y(a), 1395hh, 1395kk, and 1395rr), unless otherwise noted. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 41 FR 22511, June 3, 1976, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977. </SOURCE> <SECTION> <SECTNO>§ 405.2100</SECTNO> <SUBJECT>Scope of subpart.</SUBJECT> (a) The regulations in this subpart prescribe the role which End-Stage Renal Disease (ESRD) networks have in the ESRD program, establish the mechanism by which minimal utilization rates are promulgated and applied, under section 1881(b)(1) of the Act, and describe the health and safety requirements that facilities furnishing ESRD care to beneficiaries must meet. These regulations further prescribe the role of ESRD networks in meeting the requirements of section 1881(c) of the Act.<PRTPAGE P="138"/> (b) The general objectives of the ESRD program are contained in § 405.2101, and general definitions are contained in § 405.2102. The provisions of §§ 405.2110, 405.2112 and 405.2113 discuss the establishment and activities of ESRD networks, network organizations and membership requirements and restrictions for members of the medical review boards. Sections 405.2120 through 405.2124 discuss the establishment of minimal utilization rates and the requirements for approval of facilities with respect to such rates. Sections 405.2130 through 405.2140 discuss general requirements for, and description of, all facilities furnishing ESRD services. Sections 405.2160 through 405.2164 discuss specific requirements for facilities which furnish ESRD dialysis services. Sections 405.2170 and 405.2171 discuss specific requirements for facilities which furnish ESRD transplantation services. <CITA>[51 FR 30361, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2101</SECTNO> <SUBJECT>Objectives of the end-stage renal disease (ESRD) program.</SUBJECT> The objectives of the end-stage renal disease program are: (a) To assist beneficiaries who have been diagnosed as having end-stage renal disease (ESRD) to receive the care they need; (b) To encourage proper distribution and effective utlization of ESRD treatment resources while maintaining or improving the quality of care; (c) To provide the flexibility necessary for the efficient delivery of appropriate care by physicians and facilities; and (d) To encourage self-dialysis or transplantation for the maximum practical number of patients who are medically, socially, and psychologically suitable candidates for such treatment. <CITA>[43 FR 48950, Oct. 19, 1979]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2102</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this subpart, the following definitions apply: <E T="03">Agreement.</E> A written document executed between an ESRD facility and another facility in which the other facility agrees to assume responsibility for furnishing specified services to patients and for obtaining reimbursement for those services. <E T="03">Arrangement.</E> A written document executed between an ESRD facility and another facility in which the other facility agrees to furnish specified services to patients but the ESRD facility retains responsibility for those services and for obtaining reimbursement for them. <E T="03">Dialysis.</E> A process by which dissolved substances are removed from a patient's body by diffusion from one fluid compartment to another across a semipermeable membrane. The two types of dialysis that are currently in common use are hemodialysis and peritoneal dialysis. <E T="03">End-Stage Renal Disease (ESRD).</E> That stage of renal impairment that appears irreversible and permanent, and requires a regular course of dialysis or kidney transplantation to maintain life. <E T="03">ESRD facility.</E> A facility which is approved to furnish at least one specific ESRD service (see definition of “ESRD service”). Such facilities are: (a) <E T="03">Renal Transplantation Center.</E> A hospital unit which is approved to furnish directly transplantation and other medical and surgical specialty services required for the care of the ESRD transplant patients, including inpatient dialysis furnished directly or under arrangement. A Renal Transplantation Center may also be a Renal Dialysis Center. (b) <E T="03">Renal dialysis center.</E> A hospital unit which is approved to furnish the full spectrum of diagnostic, therapeutic, and rehabilitative services required for the care of ESRD dialysis patients (including inpatient dialysis furnished directly or under arrangement). A hospital need not provide renal transplantation to qualify as a renal dialysis center. (c) <E T="03">Renal dialysis facility.</E> A unit which is approved to furnish dialysis service(s) directly to ESRD patients. (d) <E T="03">Self-dialysis unit.</E> A unit that is part of an approved renal transplantation center, renal dialysis center, or renal dialysis facility, and furnishes self-dialysis services. (e) <E T="03">Special purpose renal dialysis facility.</E> A renal dialysis facility which is <PRTPAGE P="139"/>approved under § 405.2164 to furnish dialysis at special locations on a short-term basis to a group of dialysis patients otherwise unable to obtain treatment in the geographical area. The special locations must be either special rehabilitative (including vacation) locations serving ESRD patients temporarily residing there, or locations in need of ESRD facilities under emergency circumstances. <E T="03">ESRD service.</E> The type of care or services furnished to an ESRD patient. Such types of care are: (a) <E T="03">Transplantation service.</E> A process by which (1) a kidney is excised from a live or cadaveric donor, (2) that kidney is implanted in an ESRD patient, and (3) supportive care is furnished to the living donor and to the recipient following implantation. (b) <E T="03">Dialysis service—</E>(1) <E T="03">Inpatient dialysis.</E> Dialysis which, because of medical necessity, is furnished to an ESRD patient on a temporary inpatient basis in a hospital; (2) <E T="03">Outpatient dialysis.</E> Dialysis furnished on an outpatient basis at a renal dialysis center or facility. Outpatient dialysis includes: (i) <E T="03">Staff-assisted dialysis.</E> Dialysis performed by the staff of the center or facility. (ii) <E T="03">Self-dialysis.</E> Dialysis performed, with little or no professional assistance, by an ESRD patient who has completed an appropriate course of training. (3) <E T="03">Home dialysis.</E> Dialysis performed by an appropriately trained patient at home. (c) <E T="03">Self-dialysis and home dialysis training.</E> A program that trains ESRD patients to perform self-dialysis or home dialysis with little or no professional assistance, and trains other individuals to assist patients in performing self-dialysis or home dialysis. <E T="03">Furnishes directly.</E> The ESRD facility provides the service through its own staff and employees, or through individuals who are under direct contract to furnish such services personally for the facility (i.e., not through “agreements” or “arrangements”). <E T="03">Furnishes on the premises.</E> The ESRD facility furnishes services on its main premises; or on its other premises that are (a) contiguous with or in immediate proximity to the main premises, and under the direction of the same professional staff and governing body as the main premises, or (b) approved on a time-limited basis as a special purpose renal dialysis facility. <E T="03">Histocompatibility testing.</E> Laboratory test procedures which determine compatibility between a potential organ donor and a potential organ transplant recipient. <E T="03">Medical care criteria.</E> Predetermined elements against which aspects of the quality of a medical service may be compared. They are developed by professionals relying on professional expertise and on the professional literature. <E T="03">Medical care norms.</E> Numerical or statistical measures of usual observed performance. Norms are derived from aggregate information related to the health care provided to a large number of patients over a period of time. <E T="03">Medical care standards.</E> Professionally developed expressions of the range of acceptable variation from a norm or criterion. <E T="03">Medical care evaluation study</E> (<E T="03">MCE</E>). Review of health care services, usually performed retrospectively, in which an indepth assessment of the quality and/or utilization of such services is made. <E T="03">Network, ESRD.</E> All Medicare-approved ESRD facilities in a designated geographic area specified by CMS. <E T="03">Network organization.</E> The administrative governing body to the network and liaison to the Federal government. <E T="03">Organ procurement.</E> The process of acquiring donor kidneys. (See definition of <E T="03">Organ procurement organization</E> in § 485.302 of this chapter.) <E T="03">Qualified personnel.</E> Personnel that meet the requirements specified in this paragraph. (a) <E T="03">Chief executive officer.</E> A person who: (1) Holds at least a baccalaureate degree or its equivalent and has at least 1 year of experience in an ESRD unit; or (2) Is a registered nurse or physician director as defined in this definition; or (3) As of September 1, 1976, has demonstrated capability by acting for at least 2 years as a chief executive officer in a dialysis unit or transplantation program.<PRTPAGE P="140"/> (b) <E T="03">Dietitian.</E> A person who: (1) Is eligible for registration by the American Dietetic Association under its requirements in effect on June 3, 1976, and has at least 1 year of experience in clinical nutrition; or (2) Has a baccalaureate or advanced degree with major studies in food and nutrition or dietetics, and has at least 1 year of experience in clinical nutrition. (c) <E T="03">Medical record practitioner.</E> A person who: (1) Has graduated from a program for Medical Record Administrators accredited by the Council on Medical Education of the American Medical Association and the American Medical Record Association, and is eligible for certification as a Registered Record Administrator (RRA) by the American Medical Record Association under its requirements in effect on June 3, 1976. (2) Has graduated from a program for Medical Record Technicians approved jointly by the Council on Medical Education of the American Medical Association and the American Medical Record Association, and is eligible for certification as an Accredited Record Technician (ART) by the American Medical Record Association under its requirements in effect June 3, 1976, or (3) Has successfully completed and received a satisfactory grade in the American Medical Record Association's Correspondence Course for Medical Record Personnel approved by the Accrediting Commission of the National Home Study Council, and is eligible for certification as an Accredited Record Technician by the American Medical Record Association under its requirements in effect June 3, 1976. (d) <E T="03">Nurse responsible for nursing service.</E> A person who is licensed as a registered nurse by the State in which practicing, and (1) has at least 12 months of experience in clinical nursing, and an additional 6 months of experience in nursing care of the patient with permanent kidney failure or undergoing kidney transplantation, including training in and experience with the dialysis process; or (2) Has 18 months of experience in nursing care of the patient on maintenance dialysis, or in nursing care of the patient with a kidney transplant, including training in and experience with the dialysis process; (3) If the nurse responsible for nursing service is in charge of self-care dialysis training, at least 3 months of the total required ESRD experience is in training patients in self-care. (e) <E T="03">Physician-director.</E> A physician who: (1) Is board eligible or board certified in internal medicine or pediatrics by a professional board, and has had at least 12 months of experience or training in the care of patients at ESRD facilities; or (2) During the 5-year period prior to September 1, 1976, served for at least 12 months as director of a dialysis or transplantation program; (3) In those areas where a physician who meets the definition in paragraph (1) or (2) of this definition is not available to direct a participating dialysis facility, another physician may direct the facility, subject to the approval of the Secretary. (f) <E T="03">Social worker.</E> A person who is licensed, if applicable, by the State in which practicing, and (1) Has completed a course of study with specialization in clinical practice at, and holds a masters degree from, a graduate school of social work accredited by the Council on Social Work Education; or (2) Has served for at least 2 years as a social worker, 1 year of which was in a dialysis unit or transplantation program prior to September 1, 1976, and has established a consultative relationship with a social worker who qualifies under paragraph (f)(1) of this definition. (g) <E T="03">Transplantation surgeon.</E> A person who: (1) Is board eligible or board certified in general surgery or urology by a professional board; and (2) Has at least 12 months training or experience in the performance of renal transplantation and the care of patients with renal transplants. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48950, Oct. 19, 1978; 51 FR 30361, Aug. 26, 1986; 53 FR 6547, Mar. 1, 1988; 55 FR 9575, Mar. 14, 1990]</CITA> </SECTION> <SECTION> <PRTPAGE P="141"/> <SECTNO>§ 405.2110</SECTNO> <SUBJECT>Designation of ESRD networks.</SUBJECT> CMS designated ESRD networks in which the approved ESRD facilities collectively provide the necessary care for ESRD patients. (a) <E T="03">Effect on patient choice of facility.</E> The designation of networks does not require an ESRD patient to seek care only through the facilities in the designated network where the patient resides, nor does the designation of networks limit patient choice of physicians or facilities, or preclude patient referral by physicians to a facility in another designated network. (b) <E T="03">Redesignation of networks.</E> CMS will redesignate networks, as needed, to ensure that the designations are consistent with ESRD program experience, consistent with ESRD program objectives specified in § 405.2101, and compatible with efficient program administration. <CITA>[51 FR 30361, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2111</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 405.2112</SECTNO> <SUBJECT>ESRD network organizations.</SUBJECT> CMS will designate an administrative governing body (network organization) for each network. The functions of a network organization include but are not limited to the following: (a) Developing network goals for placing patients in settings for self-care and transplantation. (b) Encouraging the use of medically appropriate treatment settings most compatible with patient rehabilitation and the participation of patients, providers of services, and renal disease facilities in vocational rehabilitation programs. (c) Developing criteria and standards relating to the quality and appropriateness of patient care and, with respect to working with patients, facilities, and providers of services, for encouraging participation in vocational rehabilitation programs. (d) Evaluating the procedures used by facilities in the network in assessing patients for placement in appropriate treatment modalities. (e) Making recommendations to member facilities as needed to achieve network goals. (f) On or before July 1 of each year, submitting to CMS an annual report that contains the following information: (1) A statement of the network goals. (2) The comparative performance of facilities regarding the placement of patients in appropriate settings for— (i) Self-care; (ii) Transplants; and (iii) Vocational rehabilitation programs. (3) Identification of those facilities that consistently fail to cooperate with the goals specified under paragraph (f)(1) of this section or to follow the recommendations of the medical review board. (4) Identification of facilities and providers that are not providing appropriate medical care. (5) Recommendations with respect to the need for additional or alternative services in the network including self-dialysis training, transplantation and organ procurement. (g) Evaluating and resolving patient grievances. (h) Appointing a network council and a medical review board (each including at least one patient representative) and supporting and coordinating the activities of each. (i) Conducting on-site reviews of facilities and providers as necessary, as determined by the medical review board or CMS, using standards of care as specified under paragraph (c) of this section. (j) Collecting, validating, and analyzing such data as necessary to prepare the reports required under paragraph (f) of this section and the Secretary's report to Congress on the ESRD program and to assure the maintenance of the registry established under section 1881(c)(7) of the Act. <CITA>[53 FR 1620, Jan. 21, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2113</SECTNO> <SUBJECT>Medical review board.</SUBJECT> (a) <E T="03">General.</E> The medical review board must be composed of physicians, nurses, and social workers engaged in treatment relating to ESRD and qualified to evaluate the quality and appropriateness of care delivered to ESRD patients, and at least one patient representative.<PRTPAGE P="142"/> (b) <E T="03">Restrictions on medical review board members.</E> (1) A medical review board member must not review or provide advice with respect to any case in which he or she has, or had, any professional involvement, received reimbursement or supplied goods. (2) A medical review board member must not review the ESRD services of a facility in which he or she has a direct or indirect financial interest (as described in section 1126(a)(1) of the Act). <CITA>[51 FR 30361, Aug. 26, 1986, as amended at 53 FR 1620, Jan. 21, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2114</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 405.2120</SECTNO> <SUBJECT>Minimum utilization rates: general.</SUBJECT> Section 1881(b)(1) of the Social Security Act (42 U.S.C. 1395rr(b)(1)) authorizes the Secretary to limit payment for ESRD care to those facilities that meet the requirements that the Secretary may prescribe, including minimum utilization rates for covered transplantations. The minimum utilization rates, which are explained and specified in §§ 405.2121 through 405.2130, may be changed from time to time in accordance with program experience. Changes will be published as amendments to these regulations. <CITA>[55 FR 23440, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2121</SECTNO> <SUBJECT>Basis for determining minimum utilization rates.</SUBJECT> In developing minimum utilization rates, the Secretary takes into account the performance of ESRD facilities, the availability of care, the quality of care, and the efficient utilization of equipment and personnel, based on the following evidence: (a) Information on the geographic distribution of ESRD patients and facilities; (b) Information on quality of care; and (c) Information on operational and management efficiency. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept 30, 1977, as amended at 51 FR 30362, Aug. 26, 1986; 55 FR 23440, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2122</SECTNO> <SUBJECT>Types and duration of classification according to utilization rates.</SUBJECT> A renal transplantation center that meets all the other conditions for coverage of ESRD services will be classified according to its utilization rate(s) as follows: Unconditional status, conditional status, exception status, or not eligible for reimbursement for that ESRD service. Such classification will be based on previously reported utilization data (see § 405.2124, except as specified in paragraph (a) of this section), and will be effective until notification of subsequent classification occurs. (See § 405.2123 for reporting requirements; § 405.2124 for method of calculating rates: § 405.2130 for specific standards.) (a) <E T="03">Initial classification.</E> (1) A renal transplantation center that has not previously participated in the ESRD program will be granted conditional status if it submits a written plan, detailing how it will achieve the utilization rates for conditional status by the end of the second calendar year of its operation under the ESRD program, and the rates required for unconditional status by the end of its fourth calendar year of operation. (2) The renal transplantation center's performance will be evaluated at the end of the first calendar year to ascertain whether it is properly implementing the plan. (b) <E T="03">Exception status.</E> (1) A renal transplantation center that does not meet the minimum utilization rate for unconditional or conditional status may be approved by the Secretary for a time limited exception status if: (i) It meets all other conditions for coverage under this subpart; (ii) It is unable to meet the minimum utilization rate because it lacks a sufficient number of patients and is located in an area without a sufficient population base to support a center or facility which would meet the rate; and (iii) Its absence would adversely affect the achievement of ESRD program objectives. (2) A hospital that furnishes renal transplantation services primarily to pediatric patients and is approved as a renal dialysis center under this subpart, but does not meet the utilization <PRTPAGE P="143"/>standards prescribed in § 405.2130(a), may be approved by the Secretary for a time limited exception status if: (i) It meets all other conditions for coverage as a renal transplantation center; (ii) The surgery is performed under the direct supervision of a qualified transplantation surgeon (§ 405.2102) who is also performing renal transplantation surgery at an approved renal transplantation center that is primarily oriented to adult nephrology; (iii) It has an agreement, with the other hospital serviced by the surgeon, for sharing limited resources that are needed for kidney transplantation; and (iv) There are pediatric patients who need the surgery and who cannot obtain it from any other hospital located within a reasonable distance. <CITA>[43 FR 48951, Oct. 19, 1978, as amended at 45 FR 58124, Sept. 2, 1980; 51 FR 30362, Aug. 26, 1986; 55 FR 23440, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2123</SECTNO> <SUBJECT>Reporting of utilization rates for classification.</SUBJECT> Each hospital furnishing renal transplantation services must submit an annual report to CMS on its utilization rates. The report must include both the number of transplants performed during the most recent year of operation and the number performed during each of the preceding 2 calendar years. <CITA>[55 FR 23441, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2124</SECTNO> <SUBJECT>Calculation of utilization rates for comparison with minimal utilization rate(s) and notification of status.</SUBJECT> For purposes of classification the Secretary will use either the utilization rate for the preceding 12 months or the average utilization rate of the preceding 2 calendar years, whichever is higher. The Secretary will inform each ESRD facility and the network coordinating council of the network area in which the ESRD facility is located of the results of this classification. </SECTION> <SECTION> <SECTNO>§ 405.2130</SECTNO> <SUBJECT>Condition: Minimum utilization rates.</SUBJECT> Unless a renal transplantation center is granted an exception under § 405.2122(b), the center must meet the following minimum utilization rate(s) for unconditional or conditional status: (a) Unconditional status: 15 or more transplants performed annually. (b) Conditional status: 7 to 14 transplants performed annually. <CITA>[55 FR 23441, June 8, 1990]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2131</SECTNO> <SUBJECT>Condition: Provider status: Renal transplantation center or renal dialysis center.</SUBJECT> A renal transplantation center or a renal dialysis center (§ 405.2102(e) (1) or (2)) operated by a hospital may qualify for approval and be reimbursed under the ESRD program only if the hospital is otherwise an approved provider in the Medicare program. </SECTION> <SECTION> <SECTNO>§ 405.2132</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 405.2133</SECTNO> <SUBJECT>Condition: Furnishing data and information for ESRD program administration.</SUBJECT> The ESRD facility, laboratory performing histocompatibility testing, and organ procurement organization furnishes data and information in the manner and at the intervals specified by the Secretary, pertaining to its ESRD patient care activities and costs, for inclusion in a national ESRD medical information system and in compilations relevant to program administration, including claims processing and reimbursement. Such information is treated as confidential when it pertains to individual patients and is not disclosed except as authorized by Department regulations on confidentiality and disclosure (see 45 CFR parts 5, 5b, and part 401 of this chapter). <CITA>[53 FR 6548, Mar. 1, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2134</SECTNO> <SUBJECT>Condition: Participation in network activities.</SUBJECT> Each facility must participate in network activities and pursue network goals. <CITA>[51 FR 30362, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2135</SECTNO> <SUBJECT>Condition: Compliance with Federal, State and local laws and regulations.</SUBJECT> The ESRD facility is in compliance with applicable Federal, State and local laws, and regulations.<PRTPAGE P="144"/> (a) <E T="03">Standard: licensure.</E> Where State or applicable local law provides for the licensing of ESRD facilities, the facility is: (1) Licensed pursuant to such law; or (2) Approved by the agency of such State or locality responsible for such licensing as meeting the standards established for such licensing. (b) <E T="03">Standard: licensure or registration of personnel.</E> Each staff member is currently licensed or registered in accordance with applicable law. (c) <E T="03">Standard: conformity with other laws.</E> The facility is in conformity with applicable laws and regulations pertaining to fire safety, equipment, and other relevant health and safety requirements. </SECTION> <SECTION> <SECTNO>§ 405.2136</SECTNO> <SUBJECT>Condition: Governing body and management.</SUBJECT> The ESRD facility is under the control of an identifiable governing body, or designated person(s) so functioning, with full legal authority and responsibility for the governance and operation of the facility. The governing body adopts and enforces rules and regulations relative to its own governance and to the health care and safety of patients, to the protection of the patients' personal and property rights, and to the general operation of the facility. The governing body receives and acts upon recommendations from the network organization. The governing body appoints a chief executive officer who is responsible for the overall management of the facility. (a) <E T="03">Standard: disclosure of ownership.</E> The ESRD facility supplies full and complete information to the State survey agency (§ 405.1902(a)) as to the identity of: (1) Each person who has any direct or indirect ownership interest of 10 per centum or more in the facility, or who is the owner (in whole or in part) of any mortgage, deed of trust, note, or other obligation secured (in whole or in part) by the facility or any of the property or assets of the facility; (2) Each officer and director of the corporation, if the facility is organized as a corporation; and (3) Each partner, if the facility is organized as a partnership; and promptly reports to the State survey agency any changes which would affect the current accuracy of the information so required to be supplied. (b) <E T="03">Standard: Operational objectives.</E> The operational objectives of the ESRD facility, including the services that it provides, are established by the governing body and delineated in writing. The governing body adopts effective administrative rules and regulations that are designed to safeguard the health and safety of patients and to govern the general operations of the facility, in accordance with legal requirements. Such rules and regulations are in writing and dated. The governing body ensures that they are operational, and that they are reviewed at least annually and revised as necessary. If the ESRD facility is engaged in the practice of hemodialyzer reuse, the governing body ensures that there are written policies and procedures with respect to reuse, to assure that recommended standards and conditions are being followed, and requires that patients be informed of the policies and procedures. (1) The objectives of the facility are formulated in writing and clearly stated in documents appropriate for distribution to patients, facility personnel, and the public. (2) A description of the services provided by the facility, together with a categorical listing of the types of diagnostic and therapeutic procedures that may be performed, is readily available upon request to all concerned. (3) Admission criteria that insure equitable access to services are adopted by the facility and are readily available to the public. Access to the self-dialysis unit is available only to patients for whom the facility maintains patient care plans (see § 405.2137). (4) The operational objectives and administrative rules and regulations of the facility are reviewed at least annually and revised as necessary by the administrative staff, medical director, and other appropriate personnel of the facility, and are adopted when approved by the governing body. (c) <E T="03">Standard: chief executive officer.</E> The governing body appoints a qualified chief executive officer who, as the ESRD facility's administrator: Is responsible for the overall management <PRTPAGE P="145"/>of the facility; enforces the rules and regulations relative to the level of health care and safety of patients, and to the protection of their personal and property rights; and plans, organizes, and directs those responsibilities delegated to him by the governing body. Through meetings and periodic reports, the chief executive officer maintains on-going liaison among the governing body, medical and nursing personnel, and other professional and supervisory staff of the facility, and acts upon recommendations made by the medical staff and the governing body. In the absence of the chief executive officer, a qualified person is authorized in writing to act on the officer's behalf. (1) The governing body delineates in writing the responsibilities of the chief executive officer, and ensures that he/she is sufficiently free from other duties to provide effective direction and management of the operations and fiscal affairs of the facility. (2) The chief executive officer serves on a full-time or part-time basis, in accordance with the scope of the facility's operations and administrative needs, and devotes sufficient time to the conduct of such responsibilities. (3) The responsibilities of the chief executive officer include but are not limited to: (i) Implementing the policies of the facility and coordinating the provision of services, in accordance with delegations by the governing body. (ii) Organizing and coordinating the administrative functions of the facility, redelegating duties as authorized, and establishing formal means of accountability for those involved in patient care. (iii) Authorizing expenditures in accordance with established policies and procedures. (iv) Familiarizing the staff with the facility's policies, rules, and regulations, and with applicable Federal, State, and local laws and regulations. (v) Maintaining and submitting such records and reports, including a chronological record of services provided to patients, as may be required by the facility's internal committees and governing body, or as required by the Secretary. (vi) Participating in the development, negotiation, and implementation of agreements or contracts into which the facility may enter, subject to approval by the governing body of such agreements or contracts. (vii) Participating in the development of the organizational plan and ensuring the development and implementation of an accounting and reporting system, including annual development of a detailed budgetary program, maintenance of fiscal records, and quarterly submission to the governing body of reports of expenses and revenues generated through the facility's operation. (viii) Ensuring that the facility employs the number of qualified personnel needed; that all employees have appropriate orientation to the facility and their work responsibilities upon employment; and that they have an opportunity for continuing education and related development activities. (d) <E T="03">Standard: personnel policies and procedures.</E> The governing body, through the chief executive officer of the ESRD facility, is responsible for maintaining and implementing written personnel policies and procedures that support sound patient care and promote good personnel practices. These policies and procedures ensure that: (1) All members of the facility's staff are qualified to perform the duties and responsibilities assigned to them and meet such Federal, State, and local professional requirements as may apply. (2) A safe and sanitary environment for patients and personnel exists, and reports of incidents and accidents to patients and personnel are reviewed to identify health and safety hazards. Health supervision of personnel is provided, and they are referred for periodic health examinations and treatments as necessary or as required by Federal, State, and local laws. Procedures are established for routine testing to ensure detection of hepatitis and other infectious diseases. (3) If the services of trainees are utilized in providing ESRD services, such trainees are under the direct supervision of qualified professional personnel.<PRTPAGE P="146"/> (4) Complete personnel records are maintained on all personnel. These include health status reports, resumes of training and experience, and current job descriptions that reflect the employees' responsibilities and work assignments. (5) Personnel policies are written and made available to all personnel in the facility. The policies provide for an effective mechanism to handle personnel grievances. (6) All personnel of the facility participate in educational programs on a regular basis. These programs cover initial orientation, and continuing inservice training, including procedures for infection control. Records are maintained showing the content of training sessions and the attendance at such sessions. (7) Personnel manuals are maintained, periodically updated, and made available to all personnel involved in patient care. (e) <E T="03">Standard: use of outside resources.</E> If the ESRD facility makes arrangements for the provision of a specific service as authorized in this subpart, the responsibilities, functions, objectives, and the terms of each arrangement, including financial provisions and charges, are delineated in a document signed by an authorized representative of the facility and the person or agency providing the service. The chief executive officer when utilizing outside resource, as a consultant, assures that he is apprised of recommendations, plans for implementation, and continuing assessment through dated, signed reports, which are retained by the chief executive officer for follow-up action and evaluation of performance. (f) <E T="03">Standard: patient care policies.</E> The ESRD facility has written policies, approved by the governing body, concerning the provision of dialysis and other ESRD services to patients. The governing body reviews implementation of policies periodically to ensure that the intent of the policies is carried out. These policies are developed by the physician responsible for supervising and directing the provision of ESRD services, or the facility's organized medical staff (if there is one), with the advice of (and with provision for review of such policies from time to time, but at least annually, by) a group of professional personnel associated with the facility, including, but not limited to, one or more physicians and one or more registered nurses experienced in rendering ESRD care. (1) The patient care policies cover the following: (i) Scope of services provided by the facility (either directly or under arrangement). (ii) Admission and discharge policies (in relation to both in-facility care and home care). (iii) Medical supervision and physician services. (iv) Patient long term programs, patient care plans and methods of implementation. (v) Care of patients in medical and other emergencies. (vi) Pharmaceutical services. (vii) Medical records (including those maintained in the ESRD facility and in the patients' homes, to ensure continuity of care). (viii) Administrative records. (ix) Use and maintenance of the physical plant and equipment. (x) Consultant qualifications, functions, and responsibilities. (xi) The provision of home dialysis support services, if offered (see § 405.2163(e)). (2) The physician-director of the facility is designated in writing to be responsible for the execution of patient care policies. If the responsibility for day-to-day execution of patient care policies has been delegated by a physican director to (or, in the case of a self-dialysis unit, to another licensed health practitioner) a registered nurse, the physican-director provides medical guidance in such matters. (3) The facility policy provides that, whenever feasible, hours for dialysis are scheduled for patient convenience and that arrangements are made to accommodate employed patients who wish to be dialyzed during their non-working hours. (4) The governing body adopts policies to ensure there is evaluation of the progress each patient is making toward the goals stated in the patient's long term program and patient's care plan (see § 405.2137(a)). Such evaluations are <PRTPAGE P="147"/>carried out through regularly scheduled conferences, with participation by the staff involved in the patient's care. (g) <E T="03">Standard: medical supervision and emergency coverage.</E> The governing body of the ESRD dialysis and/or transplant facility ensures that the health care of every patient is under the continuing supervision of a physician and that a physician is available in emergency situations. (1) The physician responsible for the patient's medical supervision evaluates the patient's immediate and long-term needs and on this basis prescribes a planned regimen of care which covers indicated dialysis and other ESRD treatments, services, medications, diet, special procedures recommended for the health and safety of the patient, and plans for continuing care and discharge. Such plans are made with input from other professional personnel involved in the care of the patient. (2) The governing body ensures that there is always available medical care for emergencies, 24 hours a day, 7 days a week. There is posted at the nursing/monitoring station a roster with the names of the physicians to be called, when they are available for emergencies, and how they can be reached. (h) <E T="03">Standard: medical staff.</E> The governing body of the ESRD facility designates a qualified physician (see § 405.2102) as director of the ESRD services; the appointment is made upon the recommendation of the facility's organized medical staff, if there is one. The governing body establishes written policies regarding the development, negotiation, consummation, evaluation, and termination of appointments to the medical staff. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, and amended at 43 FR 48952, Oct. 19, 1978; 51 FR 30362, Aug. 26, 1986; 52 FR 36934, Oct. 2, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2137</SECTNO> <SUBJECT>Condition: Patient long-term program and patient care plan.</SUBJECT> Each facility maintains for each patient a written long-term program and a written patient care plan to ensure that each patient receives the appropriate modality of care and the appropriate care within that modality. The patient, or where appropriate, parent or legal guardian is involved with the health team in the planning of care. A copy of the current program and plan accompany the patient on interfacility transfer. (a) <E T="03">Standard: patient long-term program.</E> There is a written long-term program representing the selection of a suitable treatment modality (i.e., dialysis or transplantation) and dialysis setting (e.g., home, self-care) for each patient. (1) The program is developed by a professional team which includes but is not limited to the physician director of the dialysis facility or center where the patient is currently being treated, a physician director of a center or facility which offers self-care dialysis training (if not available at the location where the patient is being treated), a transplant surgeon, a qualified nurse responsible for nursing services, a qualified dietitian and a qualified social worker. (2) The program is formally reviewed and revised in writing as necessary by a team which includes but is not limited to the physician director of the dialysis facility or center where the patient is presently being treated, in addition to the other personnel listed in paragraph (a)(1) of this section at least every 12 months or more often as indicated by the patient's response to treatment (see § 405.2161(b)(1) and § 405.2170(a)). (3) The patient, parent, or legal guardian, as appropriate, is involved in the development of the patient's long-term program, and due consideration is given to his preferences. (4) A copy of the patient's long-term program accompanies the patient on interfacility transfer or is sent within 1 working day. (b) <E T="03">Standard: patient care plan.</E> There is a written patient care plan for each patient of an ESRD facility (including home dialysis patients under the supervision of the ESRD facility; see § 405.2163(e)), based upon the nature of the patient's illness, the treatment prescribed, and an assessment of the patient's needs. (1) The patient care plan is personalized for the individual, reflects the psychological, social, and functional needs of the patient, and indicates the ESRD <PRTPAGE P="148"/>and other care required as well as the individualized modifications in approach necessary to achieve the long-term and short-term goals. (2) The plan is developed by a professional team consisting of at least the physician responsible for the patient's ESRD care, a qualified nurse responsible for nursing services, a qualified social worker, and a qualified dietitian. (3) The patient, parent, or legal guardian, as appropriate, is involved in the development of the care plan, and due consideration is given to his preferences. (4) The care plan for patients whose medical condition has not become stabilized is reviewed at least monthly by the professional patient care team described in paragraph (b)(2) of this section. For patients whose condition has become stabilized, the care plan is reviewed every 6 months. The care plan is revised as necessary to insure that it provides for the patients ongoing needs. (5) If the patient is transferred to another facility, the care plan is sent with the patient or within 1 working day. (6) For a home-dialysis patient whose care is under the supervision of the ESRD facility, the care plan provides for periodic monitoring of the patient's home adaptation, including provisions for visits to the home by qualified facility personnel to the extent appropriate. (See § 405.2163(e).) (7) Beginning July 1, 1991, for a home dialysis patient, and beginning January 1, 1994, for any dialysis patient, who uses EPO in the home, the plan must provide for monitoring home use of EPO that includes the following: (i) Review of diet and fluid intake for indiscretions as indicated by hyperkalemia and elevated blood pressure secondary to volume overload. (ii) Review of medications to ensure adequate provision of supplemental iron. (iii) Ongoing evaluations of hematocrit and iron stores. (iv) A reevaluation of the dialysis prescription taking into account the patient's increased appetite and red blood cell volume. (v) A method for physician followup on blood tests and a mechanism (such as a patient log) for keeping the physician informed of the results. (vi) Training of the patient to identify the signs and symptoms of hypotension and hypertension. (vii) The decrease or discontinuance of EPO if hypertension is uncontrollable. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48952, Oct. 19, 1978; 59 FR 1284, Jan. 10, 1994; 59 FR 26958, May 25, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2138</SECTNO> <SUBJECT>Condition: Patients' rights and responsibilities.</SUBJECT> The governing body of the ESRD facility adopts written policies regarding the rights and responsibilities of patients and, through the chief executive officer, is responsible for development of, and adherence to, procedures implementing such policies. These policies and procedures are made available to patients and any guardians, next of kin, sponsoring agency(ies), representative payees (selected pursuant to section 205(j) of the Social Security Act and subpart Q of 20 CFR part 404), and to the public. The staff of the facility is trained and involved in the execution of such policies and procedures. The patients' rights policies and procedures ensure at least the following: (a) <E T="03">Standard: informed patients.</E> All patients in the facility: (1) Are fully informed of these rights and responsibilities, and of all rules and regulations governing patient conduct and responsibilities; (2) Are fully informed of services available in the facility and of related charges including any charges for services not covered under title XVIII of the Social Security Act; (3) Are fully informed by a physician of their medical condition unless medically contraindicated (as documented in their medical records); (4) Are fully informed regarding the facility's reuse of dialysis supplies, including hemodialyzers. If printed materials such as brochures are utilized to describe a facility and its services, they must contain a statement with respect to reuse; and (5) Are fully informed regarding their suitability for transplantation and home dialysis.<PRTPAGE P="149"/> (b) <E T="03">Standard: participation in planning.</E> All patients treated in the facility: (1) Are afforded the opportunity to participate in the planning of their medical treatment and to refuse to participate in experimental research; (2) Are transferred or discharged only for medical reasons or for the patient's welfare or that of other patients, or for nonpayment of fees (except as prohibited by title XVIII of the Social Security Act), and are given advance notice to ensure orderly transfer or discharge. (c) <E T="03">Standard: respect and dignity.</E> All patients are treated with consideration, respect, and full recognition of their individuality and personal needs, including the need for privacy in treatment. Provision is made for translators where a significant number of patients exhibit language barriers. (d) <E T="03">Standard: confidentiality.</E> All patients are ensured confidential treatment of their personal and medical records, and may approve or refuse release of such records to any individual outside the facility, except in case of their transfer to another health care institution or as required by Federal, State, or local law and the Secretary for proper administration of the program. (e) <E T="03">Standard: grievance mechanism.</E> All patients are encouraged and assisted to understand and exercise their rights. Grievances and recommended changes in policies and services may be addressed to facility staff, administration, the network organization, and agencies or regulatory bodies with jurisdiction over the facility, through any representative of the patient's choice, without restraint or interference, and without fear of discrimination or reprisal. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 51 FR 30362, Aug. 26, 1986; 52 FR 36934, Oct. 2, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2139</SECTNO> <SUBJECT>Condition: Medical records.</SUBJECT> The ESRD facility maintains complete medical records on all patients (including self-dialysis patients within the self-dialysis unit and home dialysis patients whose care is under the supervision of the facility) in accordance with accepted professional standards and practices. A member of the facility's staff is designated to serve as supervisor of medical records services, and ensures that all records are properly documented, completed, and preserved. The medical records are completely and accurately documented, readily available, and systematically organized to facilitate the compilation and retrieval of information. (a) <E T="03">Standard: medical record.</E> Each patient's medical record contains sufficient information to identify the patient clearly, to justify the diagnosis and treatment, and to document the results accurately. All medical records contain the following general categories of information: Documented evidence of assessment of the needs of the patient, whether the patient is treated with a reprocessed hemodialyzer, of establishment of an appropriate plan of treatment, and of the care and services provided (see § 405.2137(a) and (b)); evidence that the patient was informed of the results of the assessment described in § 405.2138(a)(5); identification and social data; signed consent forms referral information with authentication of diagnosis; medical and nursing history of patient; report(s) of physician examination(s); diagnostic and therapeutic orders; observations, and progress notes; reports of treatments and clinical findings; reports of laboratory and other diagnostic tests and procedures; and discharge summary including final diagnosis and prognosis. (b) <E T="03">Standard: protection of medical record information.</E> The ESRD facility safeguards medical record information against loss, destruction, or unauthorized use. The ESRD facility has written policies and procedures which govern the use and release of information contained in medical records. Written consent of the patient, or of an authorized person acting in behalf of the patient, is required for release of information not provided by law. Medical records are made available under stipulation of confidentiality for inspection by authorized agents of the Secretary, as required for administration of the ESRD program under Medicare. (c) <E T="03">Standard: medical records supervisor.</E> A member of the ESRD facility's staff is designated to serve as supervisor of the facility's medical records service. The functions of the medical <PRTPAGE P="150"/>records supervisor include, but are not limited to, the following: Ensuring that the records are documented, completed, and maintained in accordance with accepted professional standards and practices; safeguarding the confidentiality of the records in accordance with established policy and legal requirements; ensuring that the records contain pertinent medical information and are filed for easy retrieval. When necessary, consultation is secured from a qualified medical record practitioner. (d) <E T="03">Standard: Completion of medical records and centralization of clinical information.</E> Current medical records and those of discharged patients are completed promptly. All clinical information pertaining to a patient is centralized in the patient's medical record. Provision is made for collecting and including in the medical record medical information generated by self-dialysis patients. Entries concerning the daily dialysis process may either be completed by staff, or be completed by trained self-dialysis patients, trained home dialysis patients or trained assistants and countersigned by staff. (e) <E T="03">Standard: retention and preservation of records.</E> Medical records are retained for a period of time not less than that determined by the State statute governing records retention or statute of limitations; or in the absence of a State statute, 5 years from the date of discharge; or, in the case of a minor, 3 years after the patient becomes of age under State law, whichever is longest. (f) <E T="03">Standard: location and facilities.</E> The facility maintains adequate facilities, equipment, and space conveniently located, to provide efficient processing of medical records (e.g., reviewing, filing, and prompt retrieval) and statistical medical information (e.g., required abstracts, reports, etc.). (g) <E T="03">Standard: transfer of medical information.</E> The facility provides for the interchange of medical and other information necessary or useful in the care and treatment of patients transferred between treating facilities, or in determining whether such patients can be adequately cared for otherwise than in either of such facilities. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48952, Oct. 19, 1978; 52 FR 36934, Oct. 2, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2140</SECTNO> <SUBJECT>Condition: Physical environment.</SUBJECT> The physical environment in which ESRD services are furnished affords a functional, sanitary, safe, and comfortable setting for patients, staff, and the public. (a) <E T="03">Standard: building and equipment.</E> The physical structure in which ESRD services are furnished is constructed, equipped, and maintained to insure the safety of patients, staff, and the public. (1) Fire extinguishers are conveniently located on each floor of the facility and in areas of special hazard. Fire regulations and fire management procedures are prominently posted and properly followed. (2) All electrical and other equipment used in the facility is maintained free of defects which could be a potential hazard to patients or personnel. There is established a planned program of preventive maintenance of equipment used in dialysis and related procedures in the facility. (3) The areas used by patients are maintained in good repair and kept free of hazards such as those created by damaged or defective parts of the building. (4) [Reserved] (5)(i) The ESRD facility must employ the water quality requirements listed in paragraph (a)(5)(ii) of this section developed by the Association for the Advancement of Medical Instrumentation (AAMI) and published in “Hemodialysis Systems,” second edition, which is incorporated by reference. (ii) Required water quality requirements are those listed in sections 3.2.1, Water Bacteriology; 3.2.2, Maximum Level of Chemical Contaminants; and in Appendix B: Guideline for Monitoring Purity of Water Used for Hemodialysis as B1 through B5. (iii) Incorporation by reference of the AAMI's “Hemodialysis Systems,” second edition, 1992, was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR <PRTPAGE P="151"/>part 51.<E T="51">1</E> <FTREF/> If any changes in “Hemodialysis Systems,” second edition, are also to be incorporated by reference, a notice to that effect will be published in the <E T="04">Federal Register</E>. <FTNT> <E T="51">1</E> The publication entitled “Hemodialysis Systems,” second edition, 1992, is available for inspection at the CMS Information Resource Center, 7500 Security Boulevard, Baltimore, MD 21244-1850 and the Office of the Federal Register, 800 North Capitol Street, NW., Suite 700, Washington, DC. Copies may be purchased from the Association for the Advancement of Medical Instrumentation, 3300 Washington Boulevard, Suite 400, Arlington, VA 22201-4598. </FTNT> (b) <E T="03">Standard: favorable environment for patients.</E> The facility is maintained and equipped to provide a functional sanitary, and comfortable environment with an adequate amount of well-lighted space for the service provided. (1) There are written policies and procedures in effect for preventing and controlling hepatitis and other infections. These policies include, but are not limited to, appropriate procedures for surveillance and reporting of infections, housekeeping, handling and disposal of waste and contaminants, and sterilization and disinfection, including the sterilization and maintenance of equipment where dialysis supplies are reused, there are written policies and procedures covering the rinsing, cleaning, disinfection, preparation and storage of reused items which conform to requirements for reuse in § 405.2150. (2) Treatment areas are designed and equipped to provide adequate and safe dialysis therapy, as well as privacy and comfort for patients. The space for treating each patient is sufficient to accomodate medically needed emergency equipment and staff and to ensure that such equipment and staff can reach the patient in an emergency. There is sufficient space in units for safe storage of self-dialysis supplies. (3) There is a nursing/monitoring station from which adequate surveillance of patients receiving dialysis services can be made. (4) Heating and ventilation systems are capable of maintaining adequate and comfortable temperatures. (5) Each ESRD facility utilizing a central-batch delivery system provides, either on the premises or through affiliation agreement or arrangement (see § 405.2160) sufficient individual delivery systems for the treatment of any patient requiring special dialysis solutions. (c) <E T="03">Standard contamination prevention.</E> The facility employs appropriate techniques to prevent cross-contamination between the unit and adjacent hospital or public areas including, but not limited to, food service areas, laundry, disposal of solid waste and blood-contaminated equipment, and disposal of contaminants into sewage systems. Waste storage and disposal are carried out in accordance with applicable local laws and accepted public health procedures. The written patient care policies (see § 405.2136(f)(1)) specify the functions that are carried out by facility personnel and by the self-dialysis patients with respect to contamination prevention. Where dialysis supplies are reused, records are maintained that can be used to determine whether established procedures covering the rinsing, cleaning, disinfection, preparation and storage of reused items, conform to requirements for reuse in § 405.2150. (d) <E T="03">Standard: emergency preparedness.</E> Written policies and procedures specifically define the handling of emergencies which may threaten the health or safety of patients. Such emergencies would exist during a fire or natural disaster or during functional failures in equipment. Specific emergency preparedness procedures exist for different kinds of emergencies. These are reviewed and tested at least annually and revised as necessary by, or under the direction of, the chief executive officer. All personnel are knowledgeable and trained in their respective roles in emergency situations. (1) There is an established written plan for dealing with fire and other emergencies which, when necessary, is developed in cooperation with fire and other expert personnel. (2) All personnel are trained, as part of their employment orientation, in all aspects of preparedness for any emergency or disaster. The emergency preparedness plan provides for orientation and regular training and periodic drills for all personnel in all procedures so <PRTPAGE P="152"/>that each person promptly and correctly carries out a specified role in case of an emergency. (3) There is available at all times on the premises a fully equipped emergency tray, including emergency drugs, medical supplies, and equipment, and staff are trained in its use. (4) The staff is familiar with the use of all dialysis equipment and procedures to handle medical emergencies. (5) Patients are trained to handle medical and nonmedical emergencies. Patients must be fully informed regarding what to do, where to go, and whom to contact if a medical or nonmedical emergency occurs. <APPRO>(Secs. 1102, 1871, 1881(b), Social Security Act; 42 U.S.C. 1302, 1395hh, 1395rr(b))</APPRO> <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48952, Oct. 19, 1978; 45 FR 24839, Apr. 10, 1980; 52 FR 36934, Oct. 2, 1987; 60 FR 48043, Sept. 18, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2150</SECTNO> <SUBJECT>Condition: Reuse of hemodialyzers and other dialysis supplies.</SUBJECT> An ESRD facility that reuses hemodialyzers and other dialysis supplies meets the requirements of this section. Failure to meet any of paragraphs (a) through (c) of this section constitutes grounds for denial of payment for the dialysis treatment affected and termination from participation in the Medicare program. (a) <E T="03">Standard: Hemodialyzers.</E> If the ESRD facility reuses hemodialyzers, it conforms to the following: (1) <E T="03">Reuse guidelines.</E> Voluntary guidelines adopted by the AAMI (“Reuse of Hemodialyzers,” second edition). Incorporation by reference of the AAMI's “Reuse of Hemodialyzers,” second edition, 1993, was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.<E T="51">1</E> <FTREF/> If any changes in “Reuse of Hemodialyzers,” second edition, are also to be incorporated by reference, a notice to that effect will be published in the <E T="04">Federal Register</E>. <FTNT> <E T="51">1</E> The publication entitled “Reuse of Hemodialyzers,” second edition, 1993, is available for inspection at the CMS Information Resources Center, 7500 Security Boulevard, Baltimore, MD 21244-1850 and the Office of the Federal Register, 800 North Capitol Street, NW., Suite 700, Washington, DC. Copies may be purchased from the Association for the Advancement of Medical Instrumentation, 3300 Washington Boulevard, Suite 400, Arlington, VA 22201-4598. </FTNT> (2) <E T="03">Procedure for chemical germicides.</E> To prevent any risk of dialyzer membrane leaks due to the combined action of different chemical germicides, dialyzers are exposed to only one chemical germicide during the reprocessing procedure. If a dialyzer is exposed to a second germicide, the dialyzer must be discarded. (3) <E T="03">Surveillance of patient reactions.</E> In order to detect bacteremia and to maintain patient safety when unexplained events occur, the facility— (i) Takes appropriate blood cultures at the time of a febrile response in a patient; and (ii) If pyrogenic reactions, bacteremia, or unexplained reactions associated with ineffective reprocessing are identified, terminates reuse of hemodialyzers in that setting and does not continue reuse until the entire reprocessing system has been evaluated. (b) <E T="03">Standard: Transducer filters.</E> To control the spread of hepatitis, transducer filters are changed after each dialysis treatment and are not reused. (c) <E T="03">Standard: Bloodlines.</E> If the ESRD facility reuses bloodlines, it must— (1) Limit the reuse of bloodlines to the same patient; (2) Not reuse bloodlines labeled for “single use only”; (3) Reuse only bloodlines for which the manufacturer's protocol for reuse has been accepted by the Food and Drug Administration (FDA) pursuant to the premarket notification (section 510(k)) provision of the Food, Drug, and Cosmetic Act; and (4) Follow the FDA-accepted manufacturer's protocol for reuse of that bloodline. <CITA>[52 FR 36935, Oct. 2, 1987, as amended at 55 FR 18335, May 2, 1990; 60 FR 48044, Sept. 18, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2160</SECTNO> <SUBJECT>Condition: Affiliation agreement or arrangement.</SUBJECT> (a) A renal dialysis facility and a renal dialysis center (see § 405.2102(e)(2)) have in effect an affiliation agreement or arrangement with <PRTPAGE P="153"/>each other, in writing, for the provision of inpatient care and other hospital services. (b) The affiliation agreement or arrangement provides the basis for effective working relationships under which inpatient hospital care or other hospital services are available promptly to the dialysis facility's patients when needed. The dialysis facility has in its files documentation from the renal dialysis center to the effect that patients from the dialysis facility will be accepted and treated in emergencies. There are reasonable assurances that: (1) Transfer or referral of patients will be effected between the renal dialysis center and the dialysis facility whenever such transfer or referral is determined as medically appropriate by the attending physician, with timely acceptance and admission; (2) There will be interchange, within 1 working day, of the patient long-term program and patient care plan, and of medical and other information necessary or useful in the care and treatment of patients transferred or referred between the facilities, or in determining whether such patients can be adequately cared for otherwise than in either of such facilities; and (3) Security and accountability for patients' personal effects are assured. </SECTION> <SECTION> <SECTNO>§ 405.2161</SECTNO> <SUBJECT>Condition: Director of a renal dialysis facility or renal dialysis center.</SUBJECT> Treatment is under the general supervision of a Director who is a physician. The physician-director need not devote full time as Director but is responsible for planning, organizing, conducting, and directing the professional ESRD services and must devote sufficient time to carrying out these responsibilities. The director may also serve as the Chief Executive Officer of the facility. (a) <E T="03">Standard: qualifications.</E> The director of a dialysis facility is a qualified physician-director. (See § 405.2102.) (b) <E T="03">Standard: responsibilities.</E> The responsibilities of the physician-director include but are not limited to the following: (1) Participating in the selection of a suitable treatment modality, i.e., transplantation or dialysis, and dialysis setting, for all patients; (2) Assuring adequate training of nurses and technicians in dialysis techniques; (3) Assuring adequate monitoring of the patient and the dialysis process, including, for self-dialysis patients, assuring periodic assessment of patient performance of dialysis tasks; (4) Assuring the development and availability of a patient care policy and procedures manual and its implementation. As a minimum, the manual describes the types of dialysis used in the facility and the procedures followed in performance of such dialysis; hepatitis prevention and procedures for handling an individual with hepatitis; and a disaster preparedness plan (e.g., patient emergency, fire, flood); and (5) When self-dialysis training or home dialysis training is offered, assuring that patient teaching materials are available for the use of all trainees during training and at times other than during the dialysis procedure. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48952, Oct. 19, 1978; 51 FR 30362, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2162</SECTNO> <SUBJECT>Condition: Staff of a renal dialysis facility or renal dialysis center.</SUBJECT> Properly trained personnel are present in adequate numbers to meet the needs of the patients, including those arising from medical and nonmedical emergencies. (a) <E T="03">Standard: Registered nurse.</E> The dialysis facility employs at least one full time qualified nurse responsible for nursing service. (See § 405.2102.) (b) <E T="03">Standard: On-duty personnel.</E> Whenever patients are undergoing dialysis: (1) One currently licensed health professional (e.g., physician, registered nurse, or licensed practical nurse) experienced in rendering ESRD care is on duty to oversee ESRD patient care; (2) An adequate number of personnel are present so that the patient/staff ratio is appropriate to the level of dialysis care being given and meets the needs of patients; and (3) An adequate number of personnel are readily available to meet medical and nonmedical needs.<PRTPAGE P="154"/> (c) <E T="03">Standard: Self-care dialysis training personnel.</E> If the facility offers self-care dialysis training, a qualified nurse is in charge of such training (see § 405.2102.) <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 43 FR 48953, Oct. 19, 1978; 51 FR 30362, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2163</SECTNO> <SUBJECT>Condition: Minimal service requirements for a renal dialysis facility or renal dialysis center.</SUBJECT> The facility must provide dialysis services, as well as adequate laboratory, social, and dietetic services to meet the needs of the ESRD patient. (a) <E T="03">Standard: Outpatient dialysis services—</E>(1) <E T="03">Staff-assisted dialysis services.</E> The facility must provide all necessary institutional dialysis services and staff required in performing the dialysis. (2) <E T="03">Self-dialysis services.</E> If the facility offers self-dialysis services, it must provide all medically necessary supplies and equipment and any other service specified in the facility's patient care policies. (b) <E T="03">Standard: Laboratory services.</E> The dialysis facility makes available laboratory services (other than the specialty of tissue pathology and histocompatibility testing), to meet the needs of the ESRD patient. All laboratory services must be performed by an appropriately certified laboratory in accordance with part 493 of this chapter. If the renal dialysis facility furnishes its own laboratory services, it must meet the applicable requirements established for certification of laboratories found in part 493 of this chapter. If the facility does not provide laboratory services, it must make arrangements to obtain these services from a laboratory certified in the appropriate specialties and subspecialties of service in accordance with the requirements of part 493 of this chapter. (c) <E T="03">Standard: Social services.</E> Social services are provided to patients and their families and are directed at supporting and maximizing the social functioning and adjustment of the patient. Social services are furnished by a qualified social worker (§ 405.2102) who has an employment or contractual relationship with the facility. The qualified social worker is responsible for conducting psychosocial evaluations, participating in team review of patient progress and recommending changes in treatment based on the patient's current psychosocial needs, providing casework and groupwork services to patients and their families in dealing with the special problems associated with ESRD, and identifying community social agencies and other resources and assisting patients and families to utilize them. (d) <E T="03">Standard: Dietetic services.</E> Each patient is evaluated as to his nutritional needs by the attending physician and by a qualified dietician (§ 405.2102) who has an employment or contractual relationship with the facility. The dietician, in consultation with the attending physician, is responsible for assessing the nutritional and dietetic needs of each patient, recommending therapeutic diets, counseling patients and their families on prescribed diets, and monitoring adherence and response to diets. (e) <E T="03">Standard: Self-dialysis support services.</E> The renal dialysis facility or center furnishing self-dialysis training upon completion of the patient's training, furnishes (either directly, under agreement or by arrangement with another ESRD facility) the following services: (1) Surveillance of the patient's home adaptation, including provisions for visits to the home or the facility; (2) Consultation for the patient with a qualified social worker and a qualified dietitian; (3) A recordkeeping system which assures continuity of care; (4) Installation and maintenance of equipment; (5) Testing and appropriate treatment of the water; and (6) Ordering of supplies on an ongoing basis. (f) <E T="03">Standard: Participation in recipient registry.</E> The dialysis facility or center participates in a patient registry program with an OPO designated or redesignated under part 486, subpart G of this chapter, for patients who are awaiting cadaveric donor transplantation. (g) <E T="03">Use of EPO at home: Patient selection.</E> The dialysis facility, or the physician responsible for all dialysis-related services furnished to the patient, must <PRTPAGE P="155"/>make a comprehensive assessment that includes the following: (1) <E T="03">Pre-selection monitoring.</E> The patient's hematocrit (or hemoglobin), serum iron, transferrin saturation, serum ferritin, and blood pressure must be measured. (2) <E T="03">Conditions the patient must meet.</E> The assessment must find that the patient meets the following conditions: (i) On or after July 1, 1991, is a home dialysis patient or, on or after January 1, 1994, is a dialysis patient; (ii) Has a hematocrit (or comparable hemoglobin level) that is as follows: (A) For a patient who is initiating EPO treatment, no higher than 30 percent unless there is medical documentation showing the need for EPO despite a hematocrit (or comparable hemoglobin level) higher than 30 percent. (Patients with severe angina, severe pulmonary distress, or severe hypertension may require EPO to prevent adverse symptoms even if they have higher hematocrit or hemoglobin levels.) (B) For a patient who has been receiving EPO from the facility or the physician, between 30 and 33 percent. (iii) Is under the care of— (A) A physician who is responsible for all dialysis-related services and who prescribes the EPO and follows the drug labeling instructions when monitoring the EPO home therapy; and (B) A renal dialysis facility that establishes the plan of care and monitors the progress of the home EPO therapy. (3) <E T="03">Conditions the patient or the patient's caregiver must meet.</E> The assessment must find that the patient or a caregiver who assists the patient in performing self-dialysis meets the following conditions: (i) Is trained by the facility to inject EPO and is capable of carrying out the procedure. (ii) Is capable of reading and understanding the drug labeling. (iii) Is trained in, and capable of observing, aseptic techniques. (4) <E T="03">Care and storage of drug.</E> The assessment must find that EPO can be stored in the patient's residence under refrigeration and that the patient is aware of the potential hazard of a child's having access to the drug and syringes. (h) <E T="03">Use of EPO at home: Responsibilities of the physician or the dialysis facility.</E> The patient's physician or dialysis facility must— (1) Develop a protocol that follows the drug label instructions; (2) Make the protocol available to the patient to ensure safe and effective home use of EPO; and (3) Through the amounts prescribed, ensure that the drug “on hand” at any time does not exceed a 2-month supply. <CITA>[43 FR 48953, Oct. 19, 1978, as amended at 51 FR 30362, Aug. 26, 1986; 57 FR 7134, Feb. 28, 1992; 59 FR 1284, Jan. 10, 1994; 59 FR 26958, May 25, 1994; 59 FR 46513, Sept. 8, 1994; 61 FR 19743, May 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2164</SECTNO> <SUBJECT>Conditions for coverage of special purpose renal dialysis facilities.</SUBJECT> (a) A special purpose renal dialysis facility must comply with all conditions for coverage for renal dialysis facilities specified in §§ 405.2130 through 405.2164, with the exception of §§ 405.2134, and 405.2137 that relate to participation in the network activities and patient long-term programs. (b) A special purpose renal dialysis facility must consult with a patient's physician to assure that care provided in the special purpose dialysis facility is consistent with the patient's long-term program and patient care plan required under § 405.2137. (c) The period of approval for a special purpose renal dialysis facility may not exceed 8 calendar months in any calendar year. (d) A special purpose renal dialysis facility may provide services only to those patients who would otherwise be unable to obtain treatments in the geographical areas served by the facility. <CITA>[48 FR 21283, May 11, 1983, as amended at 51 FR 30362, Aug. 26, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2170</SECTNO> <SUBJECT>Condition: Director of a renal transplantation center.</SUBJECT> The renal transplantation center is under the general supervision of a qualified transplantation surgeon (§ 405.2102) or a qualified physician-director (§ 405.2102), who need not serve full time. This physician is responsible for planning, organizing, conducting, and directing the renal transplantation center and devotes sufficient time to <PRTPAGE P="156"/>carry out these responsibilities, which include but are not limited to the following: (a) Participating in the selection of a suitable treatment modality for each patient. (b) Assuring adequate training, of nurses in the care of transplant patients. (c) Assuring that tissue typing and organ procurement services are available either directly or under arrangement. (d) Assuring that transplantation surgery is performed under the direct supervision of a qualified transplantation surgeon. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 51 FR 30362, Aug. 26, 1986; 59 FR 46514, Sept. 8, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2171</SECTNO> <SUBJECT>Condition: Minimal service requirements for a renal transplantation center.</SUBJECT> Kidney transplantation is furnished directly by a hospital that is participating as a provider of services in the Medicare program and is approved by CMS as a renal transplantation center. The renal transplantation center is under the overall direction of a hospital administrator and medical staff; if operated by an organizational subsidiary, it is under the direction of an administrator and medical staff member (or committee) who are directly responsible to the hospital administrator and medical staff, respectively. Patients are accepted for transplantation only on the order of a physician and their care continues under the supervision of a physician. (a) <E T="03">Standard: participation in recipient registry.</E> The renal transplantation center participates in a patient registry program with an OPO certified or recertified under part 485, subpart D of this chapter for patients who are awaiting cadaveric donor transplantation. (b) <E T="03">Standard: social services.</E> Social services are provided to patients and their families and are directed at supporting and maximizing the social functioning and adjustment of the patient. Social services are furnished by a qualified social worker (§ 405.2102) who has an employment or contractual relationship with the facility. The qualified social worker is responsible for conducting psychosocial evaluations, participating in team review of patient progress and recommending changes in treatment based on the patient's current psychosocial needs, providing casework and groupwork services to patients and their families in dealing with the special problems associated with ESRD, and identifying community social agencies and other resources and assisting patients and families to utilize them. (c) <E T="03">Standard: dietetic services.</E> Each patient is evaluated as to his nutritional needs by the attending physician and a qualified dietician (§ 405.2102) who has an employment or contractual relationship with the facility. The dietician, in consultation with the attending physician, is responsible for assessing the nutritional and dietetic needs of each patient, recommending therapeutic diets, counseling patients and their families on prescribed diets, and monitoring adherence and response to diets. (d) <E T="03">Standard: Laboratory services:</E> (1) The renal transplantation center makes available, directly or under arrangements, laboratory services to meet the needs of ESRD patients. Laboratory services are performed in a laboratory facility certified in accordance with part 493 of this chapter. (2) Laboratory services for crossmatching of recipient serum and donor lymphocytes for pre-formed antibodies by an acceptable technique are available on a 24-hour emergency basis. (e) <E T="03">Standard: Organ procurement.</E> A renal transplantation center using the services of an organ procurement organization designated or redesignated under part 485, subpart D of this chapter to obtain donor organs has a written agreement covering these services. The renal transplantation center agrees to notify CMS in writing within 30 days of the termination of the agreement. <CITA>[41 FR 22511, June 3, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 51 FR 30362, Aug. 26, 1986; 53 FR 6548, Mar. 1, 1988; 57 FR 7134, Feb. 28, 1992; 59 FR 46514, Sept. 8, 1994]</CITA> </SECTION> <SECTION> <PRTPAGE P="157"/> <SECTNO>§ 405.2180</SECTNO> <SUBJECT>Termination of Medicare coverage.</SUBJECT> (a) Except as provided in § 405.2181, failure of a supplier of ESRD services to meet one or more of the conditions for coverage set forth in this subpart U will result in termination of Medicare coverage of the services furnished by that supplier. (b) If termination of coverage is based solely on a supplier's failure to participate in network activities and pursue network goals, as required by § 405.2134, coverage may be reinstated when CMS determines that the supplier is making reasonable and appropriate efforts to meet that condition. (c) If termination of coverage is based on failure to meet any of the other conditions specified in this subpart, coverage will not be reinstated until CMS finds that the reason for termination has been removed and there is reasonable assurance that it will not recur. <CITA>[53 FR 36277, Sept. 19, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2181</SECTNO> <SUBJECT>Alternative sanctions.</SUBJECT> (a) <E T="03">Basis for application of alternative sanctions.</E> CMS may, as an alternative to termination of Medicare coverage, impose one of the sanctions specified in paragraph (b) of this section if CMS finds that— (1) The supplier fails to participate in the activities and pursue the goals of the ESRD network that is designated to encompass its geographic area; and (2) This failure does not jeopardize patient health and safety. (b) <E T="03">Alternative sanctions.</E> The alternative sanctions that CMS may apply in the circumstances specified in paragraph (a) of this section include the following: (1) Denial of payment for services furnished to patients first accepted for care after the effective date of sanction as specified in the sanction notice. (2) Reduction of payments, for all ESRD services furnished by the supplier, by 20 percent for each 30-day period after the effective date of sanction. (3) Withholding of all payments, without interest, for all ESRD services furnished by the supplier to Medicare beneficiaries. (c) <E T="03">Duration of sanction.</E> An alternative sanction remains in effect until CMS finds that the supplier is in substantial compliance with the requirement to cooperate in the network plans and goals, or terminates coverage of the supplier's services for lack of compliance. <CITA>[53 FR 36277, Sept. 19, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2182</SECTNO> <SUBJECT>Notice of sanction and appeal rights: Termination of coverage.</SUBJECT> (a) <E T="03">Notice of sanction.</E> CMS gives the supplier and the general public notice of sanction and of the effective date of the sanction. The effective date of the sanction is at least 30 days after the date of the notice. (b) <E T="03">Appeal rights.</E> Termination of Medicare coverage of a supplier's ESRD services because the supplier no longer meets the conditions for coverage of its services is an initial determination appealable under part 498 of this chapter. <CITA>[53 FR 36277, Sept. 19, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2184</SECTNO> <SUBJECT>Notice of appeal rights: Alternative sanctions.</SUBJECT> If CMS proposes to apply a sanction specified in § 405.2181(b), the following rules apply: (a) CMS gives the facility notice of the proposed sanction and 15 days in which to request a hearing. (b) If the facility requests a hearing, CMS provides an informal hearing by a CMS official who was not involved in making the appealed decision. (c) During the informal hearing, the facility— (1) May be represented by counsel; (2) Has access to the information on which the allegation was based; and (3) May present, orally or in writing, evidence and documentation to refute the finding of failure to participate in network activities and pursue network goals. (d) If the written decision of the informal hearing supports application of the alternative sanction, CMS provides the facility and the public, at least 30 days before the effective date of the sanction, with a written notice that <PRTPAGE P="158"/>specifies the effective date and the reasons for the sanction. <CITA>[53 FR 36277, Sept. 19, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <RESERVED>Subparts V-W [Reserved]</RESERVED> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart X—Rural Health Clinic and Federally Qualified Health Center Services</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 43 FR 8261, Mar. 1, 1978, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 405.2400</SECTNO> <SUBJECT>Basis.</SUBJECT> Subpart X is based on the provisions of the following sections of the Act: Section 1833 sets forth the amounts of payment for supplementary medical insurance services. Section 1861(aa) sets forth the rural health clinic services and Federally qualified health center services covered by the Medicare program. <CITA>[60 FR 63176, Dec. 8, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2401</SECTNO> <SUBJECT>Scope and definitions.</SUBJECT> (a) <E T="03">Scope.</E> This subpart establishes the requirements for coverage and reimbursement of rural health clinic and Federally qualified health center services under Medicare. (b) <E T="03">Definitions.</E> As used in this subpart, unless the context indicates otherwise: <E T="03">Act</E> means the Social Security Act. <E T="03">Allowable costs</E> means costs that are incurred by a clinic or center and are reasonable in amount and proper and necessary for the efficient delivery of rural health clinic and Federally qualified health center services. <E T="03">Beneficiary</E> means an individual enrolled in the Supplementary Medical Insurance program for the Aged and Disabled (part of title XVIII of the Act). <E T="03">Coinsurance</E> means that portion of the clinic's charge for covered services for which the beneficiary is liable in addition to the deductible. <E T="03">Carrier</E> means an organization that has a contract with the Secretary to administer the benefits covered by this subpart. <E T="03">Covered services</E> means items or services for which the beneficiary is entitled to have payment made on his or her behalf under this subpart. <E T="03">Deductible</E> means: (1) The first $100 of expenses incurred by the beneficiary during any calendar year for items and services covered under Part B of title XVIII; and (2) The expenses incurred for the first 3 pints of blood or 3 units of packed red blood cells furnished to a beneficiary during any calendar year. (See §§ 410.160 and 410.161 of this chapter for greater detail.) <E T="03">Federally qualified health center</E> (FQHC) means an entity that has entered into an agreement with CMS to meet Medicare program requirements under §§ 405.2434 and— (1) Is receiving a grant under section 329, 330, or 340 of the Public Health Service Act, or is receiving funding from such a grant under a contract with the recipient of such a grant and meets the requirements to receive a grant under section 329, 330 or 340 of the Public Health Service Act; (2) Based on the recommendation of the PHS, is determined by CMS to meet the requirements for receiving such a grant; (3) Was treated by CMS, for purposes of part B, as a comprehensive federally funded health center (FFHC) as of January 1, 1990; or (4) Is an outpatient health program or facility operated by a tribe or tribal organizations under the Indian Self-Determination Act or by an Urban Indian organization receiving funds under title V of the Indian Health Care Improvement Act. <E T="03">CMS</E> stands for Centers for Medicare & Medicaid Services. <E T="03">Intermittent nursing care</E> means a medically predictable need for nursing care from time to time, but usually not less frequently than once every 60 days. <E T="03">Nurse-midwife</E> means a registered professional nurse who meets the following requirements: (1) Is currently licensed to practice in the State as a registered professional nurse. (2) Is legally authorized under State law or regulations to practice as a nurse-midwife.<PRTPAGE P="159"/> (3) Except as provided in paragraph (b)(10)(iv) of this section, has completed a program of study and clinical experience for nurse-midwives, as specified by the State. (4) If the State does not specify a program of study and clinical experience that nurse-midwives must complete to practice in that State, meets one of the following conditions: (i) Is currently certified as a nurse-midwife by the American College of Nurse-Midwives. (ii) Has satisfactorily completed a formal education program (of at least one academic year) that, upon completion, qualifies the nurse to take the certification examination offered by the American College of Nurse-Midwives. (iii) Has successfully completed a formal educational program for preparing registered nurses to furnish gynecological and obstetrical care to women during pregnancy, delivery, and the postpartum period, and care to normal newborns, and was practicing as a nurse-midwife for a total of 12 months during any 18-month period from August 8, 1976 to July 16, 1982. <E T="03">Nurse practitioner</E> and <E T="03">physician assistant</E> means individuals who meet the applicable education, training experience and other requirements of § 491.2 of this chapter. <E T="03">Part-time nursing care</E> means nursing care that is required on less than a full-time basis, that is, less than 8 hours a day or 40 hours a week. <E T="03">Physician</E> means the following: (1) A doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which the function is performed. (2) Within limitations as to the specific services furnished, a doctor of dentistry or dental or oral surgery, a doctor of optometry, a doctor of podiatry or surgical chiropody or a chiropractor. (See section 1861(r) of the Act for specific limitations.) (3) A resident (including residents as defined in § 415.152 of this chapter who meet the requirements in § 415.206(b) of this chapter for payment under the physician fee schedule). <E T="03">Reporting period</E> means a period of 12 consecutive months specified by the intermediary as the period for which a clinic or center must report its costs and utilization. The first and last reporting periods may be less than 12 months. <E T="03">Rural health clinic</E> means a facility that: (1) Has been determined by the Secretary to meet the requirements of section 1861(aa)(2) of the Act and part 491 of this chapter; and (2) Has filed an agreement with the Secretary in order to provide rural health clinic services under Medicare. (See § 405.2402.) <E T="03">Secretary</E> means the Secretary of Health and Human Services or his delegate. <E T="03">Visiting nurse services</E> means part-time or intermittent nursing care and related medical supplies (other than drugs or biologicals) furnished by a registered nurse or licensed practical nurse to a homebound patient. <SECAUTH>(Secs. 1102, 1833, 1861(aa), 1871, 1902(a)(13), Social Security Act; 49 Stat. 647, 79 Stat. 302, 322, and 331, 91 Stat. 1485 (42 U.S.C. 1302, 1395<E T="03">l</E>, 1395hh, 1395x(aa), and 1396(a)(13))</SECAUTH> <CITA>[43 FR 8261, Mar. 1, 1978, as amended at 43 FR 30526, July 14, 1978; 47 FR 21049, May 17, 1982; 47 FR 23448, May 28, 1982; 51 FR 41351, Nov. 14, 1986; 57 FR 24975, June 12, 1992; 59 FR 26958, May 25, 1994; 60 FR 63176, Dec. 8, 1995; 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2402</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> (a) <E T="03">Certification by the State survey agency.</E> The rural health clinic must be certified in accordance with part 491 of this chapter. (b) <E T="03">Acceptance of the clinic as qualified to furnish rural health clinic services.</E> If the Secretary, after reviewing the survey agency recommendation and other evidence relating to the qualifications of the rural health clinic, determines that it meets the requirements of this subpart and of part 491 of this chapter, he will send the clinic: (1) Written notice of the determination; and (2) Two copies of the agreement to be filed as required by section 1861(aa)(1) of the Act. (c) <E T="03">Filing of agreement by the rural health clinic.</E> If the rural health clinic wishes to participate in the program, it must:<PRTPAGE P="160"/> (1) Have both copies of the agreement signed by an authorized representative; and (2) File them with the Secretary. (d) <E T="03">Acceptance by the Secretary.</E> If the Secretary accepts the agreement filed by the rural health clinic, he will return to the clinic one copy of the agreement, with a notice of acceptance specifying the effective date. (e) <E T="03">Duration of agreement.</E> The agreement shall be for a term of one year and may be renewed annually by mutual consent of the Secretary and the rural health clinic. (f) <E T="03">Appeal rights.</E> If the Secretary does not certify a rural health clinic, or refuses to enter into or renew an agreement, the facility is entitled to a hearing in accordance with part 498 of this chapter. <CITA>[43 FR 8261, Mar. 1, 1978, as amended at 52 FR 22454, June 12, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2403</SECTNO> <SUBJECT>Content and terms of the agreement with the Secretary.</SUBJECT> (a) Under the agreement, the rural health clinic agrees to the following: (1) <E T="03">Maintaining compliance with conditions.</E> The clinic agrees to maintain compliance with the conditions set forth in part 491 of this chapter and to report promptly to CMS any failure to do so. (2) <E T="03">Charges to beneficiaries.</E> The clinic agrees not to charge the beneficiary or any other person for items and services for which the beneficiary is entitled to have payment made under the provisions of this part (or for which the beneficiary would have been entitled if the rural health clinic had filed a request for payment in accordance with § 410.165 of this chapter), except for any deductible or coinsurance amounts for which the beneficiary is liable under § 405.2410. (3) <E T="03">Refunds to beneficiaries.</E> (i) The clinic agrees to refund as promptly as possible any money incorrectly collected from beneficiaries or from someone on their behalf. (ii) As used in this section, <E T="03">money incorrectly collected</E> means sums collected in excess of the amount for which the beneficiary was liable under § 405.2410. It includes amounts collected at a time when the beneficiary was believed not to be entitled to Medicare benefits but: (A) The beneficiary is later determined to have been entitled to Medicare benefits; and (B) The beneficiary's entitlement period falls within the time the rural health clinic's agreement with the Secretary is in effect. (4) <E T="03">Beneficiary treatment.</E> (i) The clinic agrees to accept beneficiaries for care and treatment; and (ii) The clinic agrees not to impose any limitations on the acceptance of beneficiaries for care and treatment that it does not impose on all other persons. (b) <E T="03">Additional provisions.</E> The agreement may contain any additional provisions that the Secretary finds necessary or desirable for the efficient and effective administration of the Medicare program. <CITA>[43 FR 8261, Mar. 1, 1978, as amended at 51 FR 41351, Nov. 14, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2404</SECTNO> <SUBJECT>Terminations of agreements.</SUBJECT> (a) <E T="03">Termination by rural health clinic.</E> (1) <E T="03">Notice to Secretary.</E> If the clinic wishes to terminate its agreement it shall file with the Secretary a written notice stating the intended effective date of termination. (2) <E T="03">Action by the Secretary.</E> (i) The Secretary may approve the date proposed by the clinic, or set a different date no later than 6 months after the date of the clinic's notice. (ii) The Secretary may approve a date which is less than 6 months after the date of notice if he determines that termination on that date would not: (A) Unduly disrupt the furnishing of services to the community serviced by the clinic; or (B) Otherwise interfere with the effective and efficient administration of the Medicare program. (3) <E T="03">Cessation of business.</E> If a clinic ceases to furnish services to the community, that shall be deemed to be a voluntary termination of the agreement by the clinic, effective on the last day of business. (b) <E T="03">Termination by the Secretary.</E> (1) <E T="03">Cause for termination.</E> The Secretary may terminate an agreement if he determines that the rural health clinic: (i) No longer meets the conditions for certification under part 491 of this chapter; or<PRTPAGE P="161"/> (ii) Is not in substantial compliance with the provisions of the agreement, the requirements of this subpart, any other applicable regulations of this part, or any applicable provisions of title XVIII of the Act; or (iii) Has undergone a change of ownership. (2) <E T="03">Notice of termination.</E> The Secretary will give notice of termination to the rural health clinic at least 15 days before the effective date stated in the notice. (3) <E T="03">Appeal by the rural health clinic.</E> A rural health clinic may appeal the termination of its agreement in accordance with the provisions set forth in part 498 of this chapter. (c) <E T="03">Effect of termination.</E> Payment will not be available for rural health clinic services furnished on or after the effective date of termination. (d) <E T="03">Notice to the public.</E> Prompt notice of the date and effect of termination shall be given to the public, through publication in local newspapers: (1) By the clinic, after the Secretary has approved or set a termination date; or (2) By the Secretary, when he has terminated the agreement. (e) <E T="03">Conditions for reinstatement after termination of agreement by the Secretary.</E> When an agreement with a rural health clinic is terminated by the Secretary, the rural health clinic may not file another agreement to participate in the Medicare program unless the Secretary: (1) Finds that the reason for the termination of the prior agreement has been removed; and (2) Is assured that the reason for the termination will not recur. <CITA>[43 FR 8261, Mar. 1, 1978, as amended at 52 FR 22454, June 12, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2410</SECTNO> <SUBJECT>Application of Part B deductible and coinsurance.</SUBJECT> (a) <E T="03">Application of deductible.</E> (1) Medicare payment for rural health clinic services begins only after the beneficiary has incurred the deductible. (2) Medicare payment for services covered under the Federally qualified health center benefit is not subject to the usual Part B deductible. (b) <E T="03">Application of coinsurance.</E> (1) The beneficiary is responsible for a coinsurance amount which cannot exceed 20 percent of the clinic's reasonable customary charge for the covered service; and (2)(i) The beneficiary's deductible and coinsurance liability, with respect to any one item or service furnished by the rural health clinic, may not exceed a reasonable amount customarily charged by the clinic for that particular item or service. (ii) For any one item or service furnished by a Federally qualified health center, the coinsurance liability may not exceed 20 percent of a reasonable amount customarily charged by the center for that particular item or service. <CITA>[57 FR 24976, June 12, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2411</SECTNO> <SUBJECT>Scope of benefits.</SUBJECT> (a) Rural health clinic services reimbursable under this subpart are: (1) The physicians' services specified in § 405.2412; (2) Services and supplies furnished as an incident to a physician's professional service; (3) The nurse practitioner or physician assistant services specified in § 405.2414; (4) Services and supplies furnished as an incident to a nurse practitioner's or physician assistant's services; and (5) Visiting nurse services. (b) Rural health clinic services are reimbursable when furnished to a patient at the clinic, at a hospital or other medical facility, or at the patient's place of residence. </SECTION> <SECTION> <SECTNO>§ 405.2412</SECTNO> <SUBJECT>Physicians' services.</SUBJECT> (a) Physicians' services are professional services that are performed by a physician at the clinic or are performed away from the clinic by a physician whose agreement with the clinic provides that he or she will be paid by the clinic for such services. </SECTION> <SECTION> <SECTNO>§ 405.2413</SECTNO> <SUBJECT>Services and supplies incident to a physician's services.</SUBJECT> (a) Services and supplies incident to a physician's professional service are reimbursable under this subpart if the service or supply is: (1) Of a type commonly furnished in physicians' offices;<PRTPAGE P="162"/> (2) Of a type commonly rendered either without charge or included in the rural health clinic's bill; (3) Furnished as an incidental, although integral, part of a physician's professional services; (4) Furnished under the direct, personal supervision of a physician; and (5) In the case of a service, furnished by a member of the clinic's health care staff who is an employee of the clinic. (b) Only drugs and biologicals which cannot be self-administered are included within the scope of this benefit. </SECTION> <SECTION> <SECTNO>§ 405.2414</SECTNO> <SUBJECT>Nurse practitioner and physician assistant services.</SUBJECT> (a) Professional services are reimbursable under this subpart if: (1) Furnished by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner who is employed by, or receives compensation from, the rural health clinic; (2) Furnished under the medical supervision of a physician; (3) Furnished in accordance with any medical orders for the care and treatment of a patient prepared by a physician; (4) They are of a type which the nurse practitioner, physician assistant, nurse midwife or specialized nurse practitioner who furnished the service is legally permitted to perform by the State in which the service is rendered; and (5) They would be covered if furnished by a physician. (b) The physician supervision requirement is met if the conditions specified in § 491.8(b) of this chapter and any pertinent requirements of State law are satisfied. (c) The services of nurse practitioners, physician assistants, nurse midwives or specialized nurse practitioners are not covered if State law or regulations require that the services be performed under a physician's order and no such order was prepared. </SECTION> <SECTION> <SECTNO>§ 405.2415</SECTNO> <SUBJECT>Services and supplies incident to nurse practitioner and physician assistant services.</SUBJECT> (a) Services and supplies incident to a nurse practitioner's or physician assistant's services are reimbursable under this subpart if the service or supply is: (1) Of a type commonly furnished in physicians' offices; (2) Of a type commonly rendered either without charge or included in the rural health clinic's bill; (3) Furnished as an incidental, although integral part of professional services furnished by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner; (4) Furnished under the direct, personal supervision of a nurse practitioner, physician assistant, nurse midwife, specialized nurse practitioner or a physician; and (5) In the case of a service, furnished by a member of the clinic's health care staff who is an employee of the clinic. (b) The direct personal supervision requirement is met in the case of a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner only if such a person is permitted to supervise such services under the written policies governing the rural health clinic. (c) Only drugs and biologicals which cannot be self-administered are included within the scope of this benefit. </SECTION> <SECTION> <SECTNO>§ 405.2416</SECTNO> <SUBJECT>Visiting nurse services.</SUBJECT> (a) Visiting nurse services are covered if: (1) The rural health clinic is located in an area in which the Secretary has determined that there is a shortage of home health agencies; (2) The services are rendered to a homebound individual; (3) The services are furnished by a registered nurse, licensed practical nurse, or licensed vocational nurse who is employed by, or receives compensation for the services from the clinic; and (4) The services are furnished under a written plan of treatment that is: (i) Established and reviewed at least every 60 days by a supervising physician of the rural health clinic or established by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner and reviewed at least every 60 days by a supervising physician; and (ii) Signed by the nurse practitioner, physician assistant, nurse midwife, <PRTPAGE P="163"/>specialized nurse practitioner, or the supervising physician of the clinic. (b) The nursing care covered by this section includes: (1) Services that must be performed by a registered nurse, licensed practical nurse, or licensed vocational nurse if the safety of the patient is to be assured and the medically desired results achieved; and (2) Personal care services, to the extent covered under Medicare as home health services. These services include helping the patient to bathe, to get in and out of bed, to exercise and to take medications. (c) This benefit does not cover household and housekeeping services or other services that would constitute custodial care. (d) For purposes of this section, <E T="03">homebound</E> means an individual who is permanently or temporarily confined to his or her place of residence because of a medical or health condition. The individual may be considered homebound if he or she leaves the place of residence infrequently. For this purpose, “place of residence” does not include a hospital or long term care facility. </SECTION> <SECTION> <SECTNO>§ 405.2417</SECTNO> <SUBJECT>Visiting nurse services: Determination of shortage of agencies.</SUBJECT> A shortage of home health agencies exists if the Secretary determines that the rural health clinic: (a) Is located in a county, parish, or similar geographic area in which there is no participating home health agency or adequate home health services are not available to patients of the rural health clinic; (b) Has (or expects to have) patients whose permanent residences are not within the area serviced by a participating home health agency; or (c) Has (or expects to have) patients whose permanent residences are not within a reasonable traveling distance, based on climate and terrain, of a participating home health agency. </SECTION> <SUBJGRP> <HD SOURCE="HED">Federally Qualified Health Center Services</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 57 FR 24978, June 12, 1992, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 405.2430</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> (a) <E T="03">Filing procedures.</E> (1) In response to a request from an entity that wishes to participate in the Medicare program, CMS enters into an agreement with an entity when— (i) PHS recommends that the entity qualifies as a Federally qualified health center; (ii) The Federally qualified health center assures CMS that it meets the Federally qualified health center requirements specified in this subpart and part 491, as described in § 405.2434(a); and (iii) The FQHC terminates other provider agreements, unless the FQHC assures CMS that it is not using the same space, staff and resources simultaneously as a physician's office or another type of provider or supplier. A corporate entity may own other provider types as long as the provider types are distinct from the FQHC. (2) CMS sends the entity a written notice of the disposition of the request. (3) When the requirement of paragraph (a)(1) of this section is satisfied, CMS sends the entity two copies of the agreement. The entity must sign and return both copies of the agreement to CMS. (4) If CMS accepts the agreement filed by the Federally qualified health center, CMS returns to the center one copy of the agreement with the notice of acceptance specifying the effective date (see § 489.11), as determined under § 405.2434. (b) <E T="03">Recommendations by PHS about Federally qualified health centers.</E> (1) An entity must— (i) Meet the applicable requirements of the PHS Act, as specified in § 405.2401(b); and (ii) Be recommended by PHS to CMS as a Federally qualified health center. (2) The PHS notifies CMS of entities that meet the requirements specified in § 405.2401(b). (c) <E T="03">Provider-based and freestanding Federally qualified health centers.</E> The requirements and benefits under Medicare for provider-based or freestanding Federally qualified health centers are the same, except that payment methodologies differ, as described in § 405.2462.<PRTPAGE P="164"/> (d) <E T="03">Appeals.</E> An entity is entitled to a hearing in accordance with part 498 of this chapter when CMS fails to enter into an agreement with the entity. <CITA>[57 FR 24978, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2434</SECTNO> <SUBJECT>Content and terms of the agreement.</SUBJECT> Under the agreement, the Federally qualified health center must agree to the following: (a) <E T="03">Maintain compliance with the requirements.</E> (1) The Federally qualified health center must agree to maintain compliance with the Federally qualified health center requirements set forth in this subpart and part 491, except that the provisions of § 491.3 do not apply. (2) Centers must promptly report to CMS any changes that result in noncompliance with any of these requirements. (b) <E T="03">Effective date of agreement.</E> (1) Except as specified in paragraph (b)(2) of this section, the effective date of the agreement is the date CMS accepts the signed agreement, which assures that all Federal requirements are met. (2) For facilities that met all requirements on October 1, 1991, the effective date of the agreement can be October 1, 1991. (c) <E T="03">Charges to beneficiaries.</E> (1) The beneficiary is responsible for payment of a coinsurance amount which is 20 percent of the amount of Part B payment made to the Federally qualified health center for the covered services. There is no coinsurance for a second or third opinion obtained in accordance with section 1164 of the Act or for pneumococcal vaccine and its administration. (2) The beneficiary is responsible for blood deductible expenses, as specified in § 410.161. (3) The Federally qualified health center agrees not to charge the beneficiary (or any other person acting on behalf of a beneficiary) for any Federally qualified health center services for which the beneficiary is entitled to have payment made on his or her behalf by the Medicare program (or for which the beneficiary would have been entitled if the Federally qualified health center had filed a request for payment in accordance with § 410.165 of this chapter), except for coinsurance amounts. (4) The Federally qualified health center may charge the beneficiary for items and services that are not Federally qualified health center services. However, if the item or service is covered under Part B of Medicare, and the Federally qualified health center agrees to receive Part B payment under the assignment method, the Federally qualified health center may not charge the beneficiary more than 20 percent of the Part B payment. (d) <E T="03">Refunds to beneficiaries.</E> (1) The Federally qualified health center must agree to refund as promptly as possible any money incorrectly collected from Medicare beneficiaries or from someone on their behalf. (2) As used in this section, “money incorrectly collected” means any amount for covered services that is greater than the amount for which the beneficiary was liable because of the coinsurance requirements specified in part 410, subpart E. (3) Amounts also are considered incorrectly collected if the Federally qualified health center believed the beneficiary was not entitled to Medicare benefits but— (i) The beneficiary was later determined to have been so entitled; (ii) The beneficiary's entitlement period fell within the time the Federally qualified health center's agreement with CMS was in effect; and (iii) The amounts exceed the beneficiary's coinsurance liability. (e) <E T="03">Treatment of beneficiaries.</E> (1) The Federally qualified health center must agree to accept Medicare beneficiaries for care and treatment. (2) The Federally qualified health center may not impose any limitations with respect to care and treatment of Medicare beneficiaries that it does not also impose upon all other persons seeking care and treatment from the Federally qualified health center. Failure to comply with this requirement is a cause for termination of the Federally qualified health center's agreement with CMS in accordance with § 405.2436(d). (3) If the Federally qualified health center does not furnish treatment for <PRTPAGE P="165"/>certain illnesses and conditions to patients who are not Medicare beneficiaries, it need not furnish such treatment to Medicare beneficiaries. </SECTION> <SECTION> <SECTNO>§ 405.2436</SECTNO> <SUBJECT>Termination of agreement.</SUBJECT> (a) <E T="03">Termination by Federally qualified health center.</E> The Federally qualified health center may terminate its agreement by— (1) Filing with CMS a written notice stating its intention to terminate the agreement; and (2) Notifying CMS of the date on which the Federally qualified health center requests that the termination take effect. (b) <E T="03">Effective date.</E> (1) Upon receiving a Federally qualified health center's notice of intention to terminate the agreement, CMS will set a date upon which the termination takes effect. This effective date may be— (i) The date proposed by the Federally qualified health center in its notice of intention to terminate, if that date is acceptable to CMS; or (ii) Except as specified in paragraph (2) of this section, a date set by CMS, which is no later than 6 months after the date CMS receives the Federally qualified health center's notice of intention to terminate. (2) The effective date of termination may be less than 6 months following CMS's receipt of the Federally qualified health center's notice of intention to terminate if CMS determines that termination on such a date would not— (i) Unduly disrupt the furnishing of Federally qualified health center services to the community; or (ii) Otherwise interfere with the effective and efficient administration of the Medicare program. (3) The termination is effective at the end of the last day of business as a Federally qualified health center. (c) <E T="03">Termination by CMS.</E> (1) CMS may terminate an agreement with a Federally qualified health center if it finds that the Federally qualified health center— (i) No longer meets the requirements specified in this subpart; or (ii) Is not in substantial compliance with— (A) The provisions of the agreement; or (B) The requirements of this subpart, any other applicable regulations of this part, or any applicable provisions of title XVIII of the Act. (2) <E T="03">Notice by CMS.</E> CMS will notify the Federally qualified health center in writing of its intention to terminate an agreement at least 15 days before the effective date stated in the written notice. (3) <E T="03">Appeal.</E> A Federally qualified health center may appeal CMS's decision to terminate the agreement in accordance with part 498 of this chapter. (d) <E T="03">Effect of termination.</E> When a Federally qualified health center's agreement is terminated whether by the Federally qualified health center or CMS, payment will not be available for Federally qualified health center services furnished on or after the effective date of termination. </SECTION> <SECTION> <SECTNO>§ 405.2440</SECTNO> <SUBJECT>Conditions for reinstatement after termination by CMS.</SUBJECT> When CMS has terminated an agreement with a Federally qualified health center, CMS will not enter into another agreement with the Federally qualified health center to participate in the Medicare program unless CMS— (a) Finds that the reason for the termination no longer exists; and (b) Is assured that the reason for the termination of the prior agreement will not recur. </SECTION> <SECTION> <SECTNO>§ 405.2442</SECTNO> <SUBJECT>Notice to the public.</SUBJECT> (a) When the Federally qualified health center voluntarily terminates the agreement and an effective date is set for the termination, the Federally qualified health center must notify the public prior to a prospective effective date or on the actual day that business ceases, if no prospective date of termination has been set, through publication in at least one newspaper in general circulation in the area serviced by the Federally qualified health center of the— (1) Effective date of termination of the provision of services; and (2) Effect of termination of the agreement. (b) When CMS terminates the agreement, CMS will notify the public through publication in at least one newspaper in general circulation in the <PRTPAGE P="166"/>Federally qualified health center's service area. </SECTION> <SECTION> <SECTNO>§ 405.2444</SECTNO> <SUBJECT>Change of ownership.</SUBJECT> (a) <E T="03">What constitutes change of ownership—</E>(1) <E T="03">Incorporation.</E> The incorporation of an unincorporated FQHC constitutes change of ownership. (2) <E T="03">Merger.</E> The merger of the center corporation into another corporation, or the consolidation of two or more corporations, one of which is the center corporation, resulting in the creation of a new corporation, constitutes a change of ownership. (The merger of another corporation into the center corporation does not constitute change of ownership.) (3) <E T="03">Leasing.</E> The lease of all or part of an entity constitutes a change of ownership of the leased portion. (b) <E T="03">Notice to CMS.</E> A center which is contemplating or negotiating change of ownership must notify CMS. (c) <E T="03">Assignment of agreement.</E> When there is a change of ownership as specified in paragraph (a) of this section, the agreement with the existing center is automatically assigned to the new owner if it continues to meet the conditions to be a Federally qualified health center. (d) <E T="03">Conditions that apply to assigned agreements.</E> An assigned agreement is subject to all applicable statutes and regulations and to the terms and conditions under which it was originally issued including, but not limited to, the following: (1) Compliance with applicable health and safety standards. (2) Compliance with the ownership and financial interest disclosure requirements of part 420, subpart C of this subchapter. </SECTION> <SECTION> <SECTNO>§ 405.2446</SECTNO> <SUBJECT>Scope of services.</SUBJECT> (a) For purposes of this section, the terms <E T="03">rural health clinic</E> and <E T="03">clinic</E> when they appear in the cross references in paragraph (b) of this section also mean Federally qualified health centers. (b) FQHC services that are paid for under this subpart are outpatient services that include the following: (1) Physician services specified in § 405.2412. (2) Services and supplies furnished as an incident to a physician's professional services, as specified in § 405.2413. (3) Nurse practitioner or physician assistant services specified in § 405.2414. (4) Services and supplies furnished as an incident to a nurse practitioner or physician assistant services, as specified in § 405.2415. (5) Clinical psychologist and clinical social worker services specified in § 405.2450. (6) Services and supplies furnished as an incident to a clinical psychologist or clinical social worker services, as specified in § 405.2452. (7) Visiting nurse services specified in § 405.2416. (8) Nurse-midwife services specified in § 405.2401. (9) Preventive primary services specified in § 405.2448 of this subpart. (c) Federally qualified health center services are covered when provided in outpatient settings only, including a patient's place of residence, which may be a skilled nursing facility or a nursing facility or other institution used as a patient's home. (d) Federally qualified health center services are not covered in a hospital, as defined in section 1861(e)(1) of the Act. <CITA>[57 FR 24979, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2448</SECTNO> <SUBJECT>Preventive primary services.</SUBJECT> (a) Preventive primary services are those health services that— (1) A center is required to provide as preventive primary health services under section 329, 330, and 340 of the Public Health Service Act; (2) Are furnished by or under the direct supervision of a nurse practitioner, physician assistant, nurse midwife, specialized nurse practitioner, clinical psychologist, clinical social worker, or a physician; (3) In the case of a service, are furnished by a member of the center's health care staff who is an employee of the center or by a physician under arrangements with the center; and (4) Except as specifically provided in section 1861(s) of the Act, include only drugs and biologicals that cannot be self-administered.<PRTPAGE P="167"/> (b) Preventive primary services which may be paid for when provided by Federally qualified health centers are the following: (1) Medical social services. (2) Nutritional assessment and referral. (3) Preventive health education. (4) Children's eye and ear examinations. (5) Prenatal and post-partum care. (6) Perinatal services. (7) Well child care, including periodic screening. (8) Immunizations, including tetanus-diptheria booster and influenza vaccine. (9) Voluntary family planning services. (10) Taking patient history. (11) Blood pressure measurement. (12) Weight. (13) Physical examination targeted to risk. (14) Visual acuity screening. (15) Hearing screening. (16) Cholesterol screening. (17) Stool testing for occult blood. (18) Dipstick urinalysis. (19) Risk assessment and initial counseling regarding risks. (20) Tuberculosis testing for high risk patients. (21) For women only. (i) Clinical breast exam. (ii) Referral for mammography; and (iii) Thyroid function test. (c) Preventive primary services do not include group or mass information programs, health education classes, or group education activities, including media productions and publications. (d) Screening mammography is not considered a Federally qualified health center service, but may be provided at a Federally qualified health center if the center meets the requirements applicable to that service specified in § 410.34 of this subchapter. Payment is made under applicable Medicare requirements. (e) Preventive primary services do not include eyeglasses, hearing aids, or preventive dental services. <CITA>[57 FR 24980, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2450</SECTNO> <SUBJECT>Clinical psychologist and clinical social worker services.</SUBJECT> (a) For clinical psychologist or clinical social worker professional services to be payable under this subpart, the services must be— (1) Furnished by an individual who owns, is employed by, or furnishes services under contract to the FQHC; (2) Of a type that the clinical psychologist or clinical social worker who furnishes the services is legally permitted to perform by the State in which the service is furnished; (3) Performed by a clinical social worker or clinical psychologist who is legally authorized to perform such services under State law or the State regulatory mechanism provided by the law of the State in which such services are performed; and (4) Covered if furnished by a physician. (b) If State law prescribes a physician supervision requirement, it is met if the conditions specified in § 491.8(b) of this chapter and any pertinent requirements of State law are satisfied. (c) The services of clinical psychologists or clinical social workers are not covered if State law or regulations require that the services be performed under a physician's order and no such order was prepared. <CITA>[57 FR 24980, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2452</SECTNO> <SUBJECT>Services and supplies incident to clinical psychologist and clinical social worker services.</SUBJECT> (a) Services and supplies incident to a clinical psychologist's or clinical social worker's services are reimbursable under this subpart if the service or supply is— (1) Of a type commonly furnished in a physician's office; (2) Of a type commonly furnished either without charge or included in the Federally qualified health center's bill; (3) Furnished as an incidental, although integral part of professional services furnished by a clinical psychologist or clinical social worker; (4) Furnished under the direct, personal supervision of a clinical psychologist, clinical social worker or physician; and<PRTPAGE P="168"/> (5) In the case of a service, furnished by a member of the center's health care staff who is an employee of the center. (b) The direct personal supervision requirement in paragraph (a)(4) of this section is met only if the clinical psychologist or clinical social worker is permitted to supervise such services under the written policies governing the Federally qualified health center. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Payment for Rural Health Clinic and Federally Qualified Health Center Services</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 57 FR 24976, 24977, June 12, 1992, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 405.2460</SECTNO> <SUBJECT>Applicability of general payment exclusions.</SUBJECT> The payment conditions, limitations, and exclusions set out in subpart C of this part, part 410 and part 411 of this chapter are applicable to payment for services provided by rural health clinics and Federally qualified health centers, except that preventive primary services, as defined in § 405.2448, are covered in Federally qualified health centers and not excluded by the provisions of section 1862(a) of the Act. </SECTION> <SECTION> <SECTNO>§ 405.2462</SECTNO> <SUBJECT>Payment for rural health clinic and Federally qualified health center services.</SUBJECT> (a) <E T="03">Payment to provider-based rural health clinics and Federally qualified health centers.</E> A rural health clinic or Federally qualified health center is paid in accordance with parts 405 and 413 of this subchapter, as applicable, if: (1) The clinic or center is an integral and subordinate part of a hospital, skilled nursing facility or home health agency participating in Medicare (i.e., a provider of services); and (2) The clinic or center is operated with other departments of the provider under common licensure, governance and professional supervision. (b) <E T="03">Payment to independent rural health clinics and freestanding Federally qualified health centers.</E> (1) All other clinics and centers will be paid on the basis of an all-inclusive rate for each beneficiary visit for covered services. This rate will be determined by the intermediary, in accordance with this subpart and general instructions issued by CMS. (2) The amount payable by the intermediary for a visit will be determined in accordance with paragraph (b)(3) and (4) of this section. (3) <E T="03">Federally qualified health centers.</E> For Federally qualified health center visits, Medicare will pay 80 percent of the all-inclusive rate since no deductible is applicable to Federally qualified health center services. (4) <E T="03">Rural health clinics.</E> (i) If the deductible has been fully met by the beneficiary prior to the rural health clinic visit, Medicare pays 80 percent of the all-inclusive rate. (ii) If the deductible has not been fully met by the beneficiary before the visit, and the amount of the clinic's reasonable customary charge for the services that is applied to the deductible is— (A) Less than the all-inclusive rate, the amount applied to the deductible will be subtracted from the all-inclusive rate and 80 percent of the remainder, if any, will be paid to the clinic; (B) Equal to or exceeds the all-inclusive rate, no payment will be made to the clinic. (5) To receive payment, the clinic or center must follow the payment procedures specified in section 410.165 of this chapter. (6) Payment for treatment of mental psychoneurotic or personality disorders is subject to the limitations on payment in § 410.155(c). </SECTION> <SECTION> <SECTNO>§ 405.2463</SECTNO> <SUBJECT>What constitutes a visit.</SUBJECT> (a) <E T="03">Visit.</E> (1) A visit is a face-to-face encounter between a clinic or center patient and a physician, physician assistant, nurse practitioner, nurse-midwife, or visiting nurse. (2) For FQHCs, a visit also means a face-to-face encounter between a patient and a qualified clinical psychologist or clinical social worker. (3) Encounters with more than one health professional and multiple encounters with the same health professional that take place on the same day and at a single location constitute a single visit, except when one of the following conditions exist:<PRTPAGE P="169"/> (i) After the first encounter, the patient suffers illness or injury requiring additional diagnosis or treatment. (ii) For FQHCs, the patient has a medical visit and an other health visit, as defined in paragraphs (b) and (c) of this section. (4) <E T="03">Payment.</E> (i) Medicare pays for two visits per day when the conditions in paragraph (a)(3) of this section are met. (ii) In all other cases, payment is limited to one visit per day. (b) <E T="03">Medical visit.</E> For purposes of paragraph (a)(3) of this section, a medical visit is a face-to-face encounter between an FQHC patient and a physician, physician assistant, nurse practitioner, nurse-midwife, or visiting nurse. (c) <E T="03">Other health visit.</E> For purposes of paragraph (a)(3) of this section, an other health visit is a face-to-face encounter between an FQHC patient and a clinical psychologist, clinical social worker, or other health professional for mental health services. <CITA>[61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2464</SECTNO> <SUBJECT>All-inclusive rate.</SUBJECT> (a) <E T="03">Determination of rate.</E> (1) An all-inclusive rate is determined by the intermediary at the beginning of the reporting period. (2) The rate is determined by dividing the estimated total allowable costs by estimated total visits for rural health clinic or Federally qualified health center services. (3) The rate determination is subject to any tests of reasonableness that may be established in accordance with this subpart. (b) <E T="03">Adjustment of rate.</E> (1) The intermediary, during each reporting period, periodically reviews the rate to assure that payments approximate actual allowable costs and visits for rural health clinic or Federally qualified health center services and adjusts the rate if: (i) There is a significant change in the utilization of clinic or center services; (ii) Actual allowable costs vary materially from the clinic or center's allowable costs; or (iii) Other circumstances arise which warrant an adjustment. (2) The clinic or center may request the intermediary to review the rate to determine whether adjustment is required. </SECTION> <SECTION> <SECTNO>§ 405.2466</SECTNO> <SUBJECT>Annual reconciliation.</SUBJECT> (a) <E T="03">General.</E> Payments made to a rural health clinic or a Federally qualified health center during a reporting period are subject to reconciliation to assure that those payments do not exceed or fall short of the allowable costs attributable to covered services furnished to Medicare beneficiaries during that period. (b) <E T="03">Calculation of reconciliation.</E> (1) The total reimbursement amount due the clinic or center for covered services furnished to Medicare beneficiaries is based on the report specified in § 405.2470(c)(2) and is calculated by the intermediary as follows: (i) The average cost per visit is calculated by dividing the total allowable cost incurred for the reporting period by total visits for rural health clinic or Federally qualified health center services furnished during the period. The average cost per visit is subject to tests of reasonableness which may be established in accordance with this subpart. (ii) The total cost of rural health clinic or Federally qualified health center services furnished to Medicare beneficiaries is calculated by multiplying the average cost per visit by the number of visits for covered rural health clinic or Federally qualified health center services by beneficiaries. (iii) For rural health clinics, the total reimbursement due the clinic is 80 percent of the amount calculated by subtracting the amount of deductible incurred by beneficiaries that is attributable to rural health clinic services from the cost of these services. The reimbursement computation for Federally qualified health centers does not include a reduction related to the deductible because Federally qualified health center services are not subject to a deductible. (iv) For rural health clinics and FQHCs, payment for pneumococcal and influenza vaccine and their administration is 100 percent of Medicare reasonable cost.<PRTPAGE P="170"/> (2) The total reimbursement amount due is compared with total payments made to the clinic or center for the reporting period, and the difference constitutes the amount of the reconciliation. (c) <E T="03">Notice of program reimbursement.</E> The intermediary sends written notice to the clinic or center: (1) Setting forth its determination of the total reimbursement amount due the clinic or center for the reporting period and the amount, if any, of the reconciliation; and (2) Informing the clinic or center of its right to have the determination reviewed at a hearing under the procedures set forth in subpart R of this part. (d) <E T="03">Payment of reconciliation amount</E>—(1) <E T="03">Underpayments.</E> If the total reimbursement due the clinic or center exceeds the payments made for the reporting period, the intermediary makes a lump-sum payment to the clinic or center to bring total payments into agreement with total reimbursement due the clinic or center. (2) <E T="03">Overpayments</E>. If the total payments made to a clinic or center for the reporting period exceed the total reimbursement due the clinic or center for the period, the intermediary arranges with the clinic or center for repayment through a lump-sum refund, or, if that poses a hardship for the clinic or center, through offset against subsequent payments or a combination of offset and refund. The repayment must be completed as quickly as possible, generally within 12 months from the date of the notice of program reimbursement. A longer repayment period may be agreed to by the intermediary if the intermediary is satisfied that unusual circumstances exist which warrant a longer period. <CITA>[57 FR 24976, June 12, 1992, as amended at 61 FR 14657, Apr. 3, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 405.2468</SECTNO> <SUBJECT>Allowable costs.</SUBJECT> (a) <E T="03">Applicability of general Medicare principles.</E> In determining whether and to what extent a specific type or item of cost is allowable, such as interest, depreciation, bad debts and owner compensation, the intermediary applies the principles for reimbursement of provider costs, as set forth in part 413 of this subchapter. (b) <E T="03">Typical rural health clinic and Federally qualified health center costs.</E> The following types and items of cost are included in allowable costs to the extent that they are covered and reasonable: (1) Compensation for the services of a physician, physician assistant, nurse practitioner, nurse-midwife, visiting nurse, qualified clinical psychologist, and clinical social worker who owns, is employed by, or furnishes services under contract to an FQHC. (RHCs are not paid for services furnished by contracted individuals other than physicians.) (2) Compensation for the duties that a supervising physician is required to perform under the agreement specified in § 491.8 of this chapter. (3) Costs of services and supplies incident to the services of a physician, physician assistant, nurse practitioner, nurse-midwife, qualified clinical psychologist, or clinical social worker. (4) Overhead costs, including clinic or center administration, costs applicable to use and maintenance of the entity, and depreciation costs. (5) Costs of services purchased by the clinic or center. (c) <E T="03">Tests of reasonableness for rural health clinic cost and utilization.</E> Tests of reasonableness authorized by sections 1833(a) and 1861(v)(1)(A) of the Act may be established by CMS or the carrier with respect to direct or indirect overall costs, costs of specific items and services, or costs of groups of items and services. Those tests include, but are not limited to, screening guidelines and payment limitations. (d) <E T="03">Screening guidelines.</E> (1) Costs in excess of amounts established by the guidelines are not included unless the clinic or center provides reasonable justification satisfactory to the intermediary. (2) Screening guidelines are used to assess the costs of services, including the following: (i) Compensation for the professional and supervisory services of physicians and for the services of physician assistants, nurse practitioners, and nurse-midwives.<PRTPAGE P="171"/> (ii) Services of physicians, physician assistants, nurse practitioners, nurse-midwives, visiting nurses, qualified clinical psychologists, and clinical social workers. (iii) The level of administrative and general expenses. (iv) Staffing (for example, the ratio of other clinic or center personnel to physicians, physician assistants, and nurse practitioners). (v) The reasonableness of payments for services purchased by the clinic or center, subject to the limitation that the costs of physician services purchased by the clinic or center may not exceed amounts determined under the applicable provisions of subpart E of part 405 or part 415 of this chapter. (e) <E T="03">Payment limitations.</E> Limits on payments may be set by CMS, on the basis of costs estimated to be reasonable for the provision of such services. (f) <E T="03">Graduate medical education.</E> (1) Effective for that portion of cost reporting periods occurring on or after January 1, 1999, if an RHC or an FQHC incurs “all or substantially all” of the costs for the training program in the nonhospital setting as defined in § 413.86(b) of this chapter, the RHC or FQHC may receive direct graduate medical education payment for those residents. (2) Direct graduate medical education costs are not included as allowable cost under § 405.2466(b)(1)(i); and therefore, are not subject to the limit on the all-inclusive rate for allowable costs. (3) Allowable graduate medical education costs must be reported on the RHC's or the FQHC's cost report under a separate cost center. (4) Allowable graduate medical education costs are non-reimbursable if payment for these costs are received from a hospital or a Medicare+Choice organization. (5) Allowable direct graduate medical education costs under paragraphs (f)(6) and (f)(7)(i) of this section, are subject to reasonable cost principles under part 413 and the reasonable compensation equivalency limits in §§ 415.60 and 415.70 of this chapter. (6) The allowable direct graduate medical education costs are those costs incurred by the nonhospital site for the educational activities associated with patient care services of an approved program, subject to the redistribution and community support principles in § 413.85(c). (i) The following costs are allowable direct graduate medical education costs to the extent that they are reasonable— (A) The costs of the residents' salaries and fringe benefits (including travel and lodging expenses where applicable). (B) The portion of teaching physicians' salaries and fringe benefits that are related to the time spent teaching and supervising residents. (C) Facility overhead costs that are allocated to direct graduate medical education. (ii) The following costs are not allowable graduate medical education costs— (A) Costs associated with training, but not related to patient care services. (B) Normal operating and capital-related costs. (C) The marginal increase in patient care costs that the RHC or FQHC experiences as a result of having an approved program. (D) The costs associated with activities described in § 413.85(h) of this chapter. (7) Payment is equal to the product of— (i) The RHC's or the FQHC's allowable direct graduate medical education costs; and (ii) Medicare's share, which is equal to the ratio of Medicare visits to the total number of visits (as defined in § 405.2463). (8) Direct graduate medical education payments to RHCs and FQHCs made under this section are made from the Federal Supplementary Medical Insurance Trust Fund. <CITA>[43 FR 8261, Mar. 1, 1978. Redesignated and amended at 57 FR 24977, June 12, 1992; 60 FR 63176, Dec. 8, 1995; 61 FR 14658, Apr. 3, 1996; 63 FR 41002, July 31, 1998; 66 FR 39932, Aug. 1, 2001]</CITA> </SECTION> <SECTION> <PRTPAGE P="172"/> <SECTNO>§ 405.2470</SECTNO> <SUBJECT>Reports and maintenance of records.</SUBJECT> (a) <E T="03">Maintenance and availability of records.</E> The rural health clinic or Federally qualified health center must: (1) Maintain adequate financial and statistical records, in the form and containing the data required by CMS, to allow the intermediary to determine payment for covered services furnished to Medicare beneficiaries in accordance with this subpart; (2) Make the records available for verification and audit by HHS or the General Accounting Office; (3) Maintain financial data on an accrual basis, unless it is part of a governmental institution that uses a cash basis of accounting. In the latter case, appropriate depreciation on capital assets is allowable rather than the expenditure for the capital asset. (b) <E T="03">Adequacy of records</E>. (1) The intermediary may suspend reimbursement if it determines that the clinic or center does not maintain records that provide an adequate basis to determine payments under Medicare. (2) The suspension continues until the clinic or center demonstrates to the intermediary's satisfaction that it does, and will continue to, maintain adequate records. (c) <E T="03">Reporting requirements—</E>(1) <E T="03">Initial report.</E> At the beginning of its initial reporting period, the clinic or center must submit an estimate of budgeted costs and visits for rural health clinic or Federally qualified health center services for the reporting period, in the form and detail required by CMS, and such other information as CMS may require to establish the payment rate. (2) <E T="03">Annual reports.</E> Within 90 days after the end of its reporting period, the clinic or center must submit, in such form and detail as may be required by CMS, a report of: (i) Its operations, including the allowable costs actually incurred for the period and the actual number of visits for rural health clinic or Federally qualified health center services furnished during the period; and (ii) The estimated costs and visits for rural health clinic services or Federally qualified health center services for the succeeding reporting period and such other information as CMS may require to establish the payment rate. (3) <E T="03">Late reports.</E> If the clinic or center does not submit an adequate annual report on time, the intermediary may reduce or suspend payments to preclude excess payment to the clinic or center. (4) <E T="03">Inadequate reports.</E> If the clinic or center does not furnish a report or furnishes a report that is inadequate for the intermediary to make a determination of program payment, CMS may deem all payments for the reporting period to be overpayments. (5) <E T="03">Postponement of due date.</E> For good cause shown by the clinic or center, the intermediary may, with CMS's approval, grant a 30-day postponement of the due date for the annual report. (6) <E T="03">Reports following termination of agreement or change of ownership.</E> The report from a clinic or center which voluntarily or involuntarily ceases to participate in the Medicare program or experiences a change in ownership (see §§ 405.2436-405.2438) is due no later than 45 days following the effective date of the termination of agreement or change of ownership. </SECTION> <SECTION> <SECTNO>§ 405.2472</SECTNO> <SUBJECT>Beneficiary appeals.</SUBJECT> A beneficiary may request a hearing by an intermediary (subject to the limitations and conditions set forth in subpart H of this part) if: (a) The beneficiary is dissatisfied with an intermediary's determination denying a request for payment made on his or her behalf by a rural health clinic or Federally qualified health center; or (b) The beneficiary is dissatisfied with the amount of payment; or (c) The beneficiary believes the request for payment is not being acted upon with reasonable promptness. <CITA>[43 FR 8261, Mar. 1, 1978. Redesignated and amended at 57 FR 24978, June 12, 1992]</CITA> </SECTION> </SUBJGRP> </SUBPART> </PART> <PART> <EAR>Pt. 406</EAR> <HD SOURCE="HED">PART 406—HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>406.1</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> <SECTNO>406.2</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>406.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>406.5</SECTNO> <SUBJECT>Basis of eligibility and entitlement.<PRTPAGE P="173"/> </SUBJECT> <SECTNO>406.6</SECTNO> <SUBJECT>Application or enrollment for hospital insurance.</SUBJECT> <SECTNO>406.7</SECTNO> <SUBJECT>Forms to apply for entitlement under Medicare Part A.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Hospital Insurance Without Monthly Premiums</HD> <SECTNO>406.10</SECTNO> <SUBJECT>Individual age 65 or over who is entitled to social security or railroad retirement benefits, or who is eligible for social security benefits.</SUBJECT> <SECTNO>406.11</SECTNO> <SUBJECT>Individual age 65 or over who is not eligible as a social security or railroad retirement benefits beneficiary, or on the basis of government employment.</SUBJECT> <SECTNO>406.12</SECTNO> <SUBJECT>Individual under age 65 who is entitled to social security or railroad retirement disability benefits.</SUBJECT> <SECTNO>406.13</SECTNO> <SUBJECT>Individual who has end-stage renal disease.</SUBJECT> <SECTNO>406.15</SECTNO> <SUBJECT>Special provisions applicable to Medicare qualified government employment.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Premium Hospital Insurance</HD> <SECTNO>406.20</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> <SECTNO>406.21</SECTNO> <SUBJECT>Individual enrollment.</SUBJECT> <SECTNO>406.22</SECTNO> <SUBJECT>Effect of month of enrollment on entitlement.</SUBJECT> <SECTNO>406.24</SECTNO> <SUBJECT>Special enrollment period.</SUBJECT> <SECTNO>406.26</SECTNO> <SUBJECT>Enrollment under State buy-in.</SUBJECT> <SECTNO>406.28</SECTNO> <SUBJECT>End of entitlement.</SUBJECT> <SECTNO>406.32</SECTNO> <SUBJECT>Monthly premiums.</SUBJECT> <SECTNO>406.33</SECTNO> <SUBJECT>Determination of months to be counted for premium increase: Enrollment.</SUBJECT> <SECTNO>406.34</SECTNO> <SUBJECT>Determination of months to be counted for premium increase: Reenrollment.</SUBJECT> <SECTNO>406.38</SECTNO> <SUBJECT>Prejudice to enrollment rights because of Federal Government error.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Special Circumstances That Affect Entitlement to Hospital Insurance</HD> <SECTNO>406.50</SECTNO> <SUBJECT>Nonpayment of benefits on behalf of certain aliens.</SUBJECT> <SECTNO>406.52</SECTNO> <SUBJECT>Conviction of certain offenses.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 48 FR 12536, Mar. 25, 1983, unless otherwise noted. Redesignated at 51 FR 41338, Nov. 14, 1986. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 406.1</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> Sections 226, 226A, 1818 and 1818A of the Social Security Act and section 103 of Public Law 89-97 establish the conditions for entitlement to hospital insurance benefits. Sections 202 (t) and (u) of the Act specify limitations that apply to certain aliens and to persons convicted of certain offenses. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 56 FR 38078, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.2</SECTNO> <SUBJECT>Scope.</SUBJECT> Subparts A through D of this part specify the conditions of eligibility for hospital insurance and set forth certain specific conditions that affect entitlement to benefits. Hospital insurance is authorized under Part A of title XVIII and is also referred to as Medicare Part A. It includes inpatient hospital care, posthospital SNF care, home health services, and hospice care. <CITA>[48 FR 56026, Dec. 16, 1983, as amended at 50 FR 33033, Aug. 16, 1985. Redesignated and amended at 51 FR 41338, Nov. 14, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">First month of eligibility</E> means the first month in which an individual meets all the requirements for entitlement to hospital insurance except application or enrollment if that is required. <E T="03">First month of entitlement</E> means the first month for which the individual meets all the requirements for entitlement to Part A benefits. <E T="03">Insured individual</E> means an individual who has the number of quarters of coverage required for monthly social security benefits. <E T="03">Quarter of coverage</E> means a calendar quarter that is counted toward the number of covered quarters required to make the individual eligible for monthly social security benefits. A quarter is counted if during that quarter (or that calendar year) the individual earned a required minimum amount of money. (For details, see 20 CFR part 404, subpart B.) </SECTION> <SECTION> <SECTNO>§ 406.5</SECTNO> <SUBJECT>Basis of eligibility and entitlement.</SUBJECT> (a) <E T="03">Hospital insurance without premiums.</E> Hospital insurance is available to most individuals without payment of a premium if they: (1) Are age 65 or over, or (2) Have received social security or railroad retirement disability benefits for 25 months; or<PRTPAGE P="174"/> (3) Have end-stage renal disease. Subpart B of this part explains the requirements such individuals must meet to obtain hospital insurance without premiums. (b) <E T="03">Premium hospital insurance.</E> Many individuals who are age 65 or over, but do not meet the requirements set forth in subpart B of this part, and certain individuals under age 65, may obtain the benefits by paying a premium. Section 406.20 of this part explains the requirements individuals must meet to obtain premium hospital insurance. <CITA>[48 FR 12536, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 56 FR 38078, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.6</SECTNO> <SUBJECT>Application or enrollment for hospital insurance.</SUBJECT> (a) <E T="03">Basic provision.</E> In most cases, eligibility for Medicare Part A is a result of entitlement to monthly social security or railroad retirement cash benefits or eligibility for monthly social security cash benefits. This section specifies the individuals who need not file an application to become entitled to hospital insurance, those who must file an application, and those who must enroll. (b) <E T="03">Individuals who need not file an application for hospital insurance.</E> An individual who meets any of the following conditions need not file an application for hospital insurance: (1) Is under age 65 and has been entitled, for more than 24 months, to monthly social security or railroad retirement benefits based on disability. (2) At the time of attainment of age 65, is entitled to monthly social security or railroad retirement benefits. (3) Establishes entitlement to monthly social security or railroad retirement benefits at any time after attaining age 65. (c) <E T="03">Individuals who must file an application for hospital insurance.</E> An individual must file an application for hospital insurance if he or she seeks entitlement to hospital insurance on the basis of— (1) The transitional provisions set forth in § 406.11; (2) Deemed entitlement to disabled widow's or widower's benefit under certain circumstances as provided in § 406.12; (3) A diagnosis of end-stage renal disease, as specified in § 406.13; (4) Effective January 1, 1981, eligibility for social security cash benefits, as specified in § 406.10(a)(3), if the individual has attained age 65 without applying for those benefits; or (5) The special provisions applicable to government employment as set forth in § 406.15. (d) <E T="03">When application is deemed to be filed.</E> (1) An application based on the transitional provisions or on ESRD is deemed to be filed in the first month of eligibility if it is filed not more than 3 months before the first month, and is retroactive to that month if filed within 12 months after the first month. An application filed more than 12 months after the first month of eligibility is retroactive to the 12th month before the month it is filed. (2) An application for deemed entitlement to disabled widow's or widower's benefits, that is filed before the first month in which the individual meets all conditions of entitlement for this benefit, will be deemed a valid application if those conditions are met before an initial determination, reconsideration, or hearing decision is made on the application. If the conditions are met after the date of any hearing decision, a new application will have to be filed. An application validly filed within 12 months after the first month of eligibility is retroactive to that first month. If filed more than 12 months after that first month, it is retroactive to the 12th month before the month of filing. (3) Effective June 8, 1980, an application based on eligibility for social security benefits at or after age 65, that is filed before the first month in which the individual meets all eligibility conditions for this benefit, will be deemed a valid application if those conditions are met before an initial determination, reconsideration, or hearing decision is made on the application. If the conditions are met after the date of any hearing decision, a new application will have to be filed. (4) Effective March 1, 1981, an application under § 406.10 that is validly filed within 6 months after the first month of eligibility is retroactive to that first month. If filed more than 6 <PRTPAGE P="175"/>months after that first month, it is retroactive to the 6th month before the month of filing. (e) <E T="03">Individuals who must enroll for hospital insurance.</E> An individual who must pay a monthly premium for hospital insurance must enroll in accordance with the procedures set forth in § 406.21. <CITA>[48 FR 12536, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 53 FR 47202, Nov. 22, 1988; 61 FR 40345, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.7</SECTNO> <SUBJECT>Forms to apply for entitlement under Medicare Part A.</SUBJECT> The following forms, available free of charge by mail from CMS or at any Social Security branch or district office, are used to apply for Medicare entitlement under the circumstances indicated: <EXTRACT> CMS-18-F-5—Application for Hospital Insurance Entitlement. (For use by individuals who are not eligible for retirement benefits under Title II of the Social Security Act or under the Railroad Retirement Act. This form may also be used for enrollment in the supplementary medical insurance program.) CMS-43—Application for Health Insurance Benefits under Medicare for Individuals with End Stage Renal Disease (ESRD). (An initial application for entitlement by individuals with ESRD). </EXTRACT> <FP>As an alternative, an individual may use the application for monthly social benefits to apply also for Medicare entitlement if he or she is eligible for hospital insurance at that time.</FP> <CITA>[53 FR 6633, Mar. 2, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Hospital Insurance Without Monthly Premiums</HD> <SECTION> <SECTNO>§ 406.10</SECTNO> <SUBJECT>Individual age 65 or over who is entitled to social security or railroad retirement benefits, or who is eligible for social security benefits.</SUBJECT> (a) <E T="03">Requirements.</E> An individual is entitled to hospital insurance benefits under section 226 of the Act if he or she has attained aged 65 and is: (1) Entitled to monthly social security benefits under section 202 of the Social Security Act; (2) A qualified railroad retirement beneficiary who has been certified as such to the Social Security Administration by the Railroad Retirement Board in accordance with section 7(d) of the Railroad Retirement Act of 1974; or (3) Effective January 1, 1981, eligible for monthly social security benefits under section 202 of the Act and has filed an application for hospital insurance. (b) <E T="03">Beginning and end of entitlement.</E> (1) Entitlement begins with the first day of the first month in which the individual meets the requirements of paragraph (a) of this section. (2) Entitlement continues until the individual dies or no longer meets the requirements of paragraph (a) of this section. An individual is not entitled to railroad retirement benefits and is neither entitled to, nor eligible for, monthly social security benefits in the month in which he or she dies. However, an individual who meets all other requirements for hospital insurance entitlement is entitled to hospital insurance in the month in which he or she dies if he or she— (i) Would have been entitled to monthly railroad retirement benefits or social security benefits in that month if he or she had not died; or (ii) Has filed an application for hospital insurance and would have been eligible for monthly social security benefits in that month if he or she had not died. </SECTION> <SECTION> <SECTNO>§ 406.11</SECTNO> <SUBJECT>Individual age 65 or over who is not eligible as a social security or railroad retirement benefits beneficiary, or on the basis of government employment.</SUBJECT> (a) <E T="03">Basis.</E> Section 103 of the law that established the Medicare program in 1965 (Pub. L. 89-97) provided for eligibility for certain individuals who were age 65 or would soon attain age 65 but would not be able to qualify for social security or railroad retirement benefits. (b) <E T="03">Requirements.</E> Unless he or she is excluded under paragraph (c) of this section, an individual age 65 or over who does not meet the requirements of § 406.10 or § 406.15 (and who would not meet those requirements if he or she filed an application), is entitled to Medicare Part A benefits if he or she meets the following requirements: (1) <E T="03">Age and quarters of coverage.</E> (i) He or she attained age 65 before 1968; or<PRTPAGE P="176"/> (ii) If he or she attained age 65 in 1968 or later, he or she must have at least 3 quarters of coverage for each year that elapsed after 1966 and before the year in which he or she attained age 65. (The quarters of coverage may have been acquired at any time, not necessarily during the elapsed years.) (2) <E T="03">Residence and citizenship.</E> He or she is a resident of the United States and— (i) A citizen of the United States; or (ii) An alien lawfully admitted for permanent residence who has continuously resided in the United States for 5 years immediately preceding the first month in which he or she meets all other requirements for entitlement to hospital insurance. (3) <E T="03">Application.</E> He or she has filed an application for Medicare Part A no earlier than the third month before the first month of eligibility. (c) <E T="03">Bases for exclusion.</E> An individual who meets the requirements of paragraph (b) of this section is excluded from Medicare Part A if he or she— (1) Has been convicted of spying, sabotage, or treason, sedition, and subversive action under chapter 37, 105, or 115 of title 18 of the United States Code; (2) Has been convicted of conspiracy to establish a dictatorship under section 4 of the Internal Security Act of 1950; (3) On February 16, 1965, was or could have been covered under the Federal Employees Health Benefits Act (FEHBA) of 1959; or (4) In his or her first month of eligibility; (i) Is covered by an enrollment under the FEHBA; or (ii) Could have been covered by an enrollment under that Act if he or she (or any other person who could provide him or her with coverage) was a Federal employee at any time after February 15, 1965, and had enrolled and retained coverage under that Act. (d) <E T="03">End of exclusion.</E> An individual excluded under paragraph (c)(3) or (4) of this section can become entitled beginning with the first month in which he or she loses the right to FEHBA coverage solely because he or she or the other person leaves Federal employment. (e) <E T="03">Beginning and end of entitlement.</E> (1) Entitlement begins— (i) In the first month of eligibility if the application is filed no later than 12 months after the first month of eligibility: (ii) In the 12th month before the month of application if the application is filed more than 12 months after the first month of eligibility. (2) Entitlement continues until death or until the month before the month in which the individual becomes entitled under § 406.10 or § 406.15. <CITA>[48 FR 12536, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 53 FR 47202, Nov. 22, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.12</SECTNO> <SUBJECT>Individual under age 65 who is entitled to social security or railroad retirement disability benefits.</SUBJECT> (a) <E T="03">Basic requirements.</E> An individual under age 65 is entitled to hospital insurance benefits if, for 25 months, he or she has been— (1) Entitled or deemed entitled to social security disability benefits as an insured individual, child, widow, or widower who is “under a disability” or (2) A disabled qualified beneficiary certified under Section 7(d) of the Railroad Retirement Act. (b) <E T="03">Previous periods of disability benefits entitlement.</E> Months of a previous period of entitlement or deemed entitlement to disability benefits count toward the 25-month requirement if any of the following conditions is met: (1) Entitlement was as an insured individual or a disabled qualified railroad retirement beneficiary, and the previous period ended within the 60 months preceding the month in which the current disability began. (2) Entitlement was as a disabled child, widow, or widower, and the previous period ended within the 84 months preceding the month in which the current disability began. (3) The previous period ended on or after March 1, 1988 and the current impairment is the same as, or directly related to, the impairment on which the previous period of entitlement was based. (c) <E T="03">Deemed entitlement to disabled widow's or widower's monthly benefits.</E> (1) <E T="03">Purpose.</E> The provisions of paragraphs (c) (2), (3), and (4) of this section are intended to enable individuals—<PRTPAGE P="177"/> (i) To meet the 25-month requirement of paragraph (a) of this section; or (ii) To retain hospital insurance entitlement when they are no longer entitled to monthly disability benefits. (2) <E T="03">Deemed entitlement for certain individuals entitled to old-age insurance benefits.</E> An individual who becomes entitled to monthly old-age insurance benefits before age 65, is, by law, precluded from establishing or retaining entitlement to disabled widow's or widower's monthly benefits. However, for purposes of meeting the 25-month requirement, a widow or widower who meets all other requirements for disability benefits and is excluded solely because of entitlement to old-age insurance benefits, shall be deemed to be (or to continue to be) entitled to disability benefits. A widow or widower who is not entitled to disability benefits for the month before attaining age 60 must file two applications, one for old-age insurance benefits and one for hospital insurance. (3) <E T="03">Deemed entitlement for certain individuals entitled to mother's benefits.</E> An individual entitled to mother's insurance benefits under section 202(g) of the Social Security Act cannot at the same time be entitled to disabled widow's benefits. However, if she applies for hospital insurance, she will be deemed to be entitled to disabled widow's monthly benefits in the first month (of the 12 months before application) in which she would have been entitled to those benefits if she had filed an application for them. (4) <E T="03">Deemed entitlement for certain individuals entitled to father's benefits.</E> An individual who is entitled to father's insurance benefits under section 202(g) of the Act cannot at the same time be entitled to disabled widower's benefits. However, if he applies for hospital insurance benefits, he will be deemed to be entitled to disabled widower's monthly benefits as follows: (i) If he applied for hospital insurance benefits before May 1984, he was deemed entitled to disabled widower's benefits for any month after April 1981 for which he would have been entitled to those benefits if he had filed an application for them. (ii) If he applies for hospital insurance benefits in or after May 1984, he is deemed entitled to disabled widower's benefits for any month, up to 12 months before the month of application, for which he would have been entitled to those benefits if he had filed an application for them. (iii) Hospital insurance entitlement under this paragraph (c)(4) could not begin before May 1983. (5) <E T="03">Deemed retroactive entitlement for certain disabled widows and widowers.</E> In some cases, disabled widows or widowers cannot become entitled to monthly cash benefits before the month in which they file application. However, for purposes of meeting the 25-month requirement, disability benefit entitlement will be deemed to have begun with the earliest month (of the 12 months before the application for cash benefits) in which the individual met all the requirements except the filing of an application. (This provision is effective for applications filed on or after January 1, 1978.) (d) <E T="03">When entitlement begins and ends.</E> (1) Entitlement to hospital insurance begins with the 25th month of an individual's entitlement or deemed entitlement to disability benefits. Although an individual is not entitled to disability benefits for the month in which he or she dies, for purposes of this paragraph the individual will be deemed to be entitled for the month of death. (2) Except as provided in paragraph (e) of this section, entitlement to hospital insurance ends with the earliest of the following: (i) The last day of the last month in which he or she was entitled or deemed entitled to disability benefits or was qualified as a disabled railroad retirement beneficiary, if he or she was notified of the termination of entitlement before that month. (ii) The last day of the month following the month in which he or she is mailed a notice that his or her entitlement or deemed entitlement to disability benefits, or his or her status as a qualified disabled railroad retirement beneficiary, has ended. (iii) The last day of the month before the month he or she attains age 65. (An individual who is entitled to social security or railroad retirement cash benefits for the month of attainment of <PRTPAGE P="178"/>age 65 is automatically entitled to hospital insurance under § 406.10.) (iv) The day of death. (e) <E T="03">Continuation of Medicare entitlement when disability benefit entitlement</E> ends because of substantial gainful activity (SGA)—(1) <E T="03">Definitions.</E> As used in this section— <E T="03">Trial work period</E> means the 9-month period provided under title II of the Act and as defined 20 CFR 404.1592, during which the individual may test his or her ability to work and still receive disability cash benefits; and <E T="03">Reentitlement period</E> means a period as defined in 20 CFR 404.1592a that begins with the first month after the trial work period and ends with the 36th month after the trial work period or, if earlier, with the first month in which the impairment no longer exists or is no longer disabling. (During the reentitlement period, benefits may be discontinued because of SGA. However, if SGA is later discontinued, benefits may be reinstated without a new application and a new disability determination.) (2) <E T="03">Duration of continued Medicare entitlement.</E> Effective January 1, 1988, if an individual's entitlement to disability benefits or status as a qualified disabled railroad retirement beneficiary ends because he or she engaged in, or demonstrated the ability to engage in, substantial gainful activity after the 36 months following the end of the trial work period, Medicare entitlement continues until the earlier of the following: (i) The last day of the 24th month following the first month of SGA occurring after the 15th month of the individual's reentitlement period or, if later, the end of the month following the month the individual's disability benefit entitlement ends. (ii) The last day of the month following the month in which notice is mailed to the individual indicating that he or she is no longer entitled to hospital insurance because of an event or circumstance (for example, there has been medical improvement, or the disabled widow has remarried) that would terminate disability benefit entitlement if it had not already been terminated because of substantial gainful activity. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47202, Nov. 22, 1988; 56 FR 38078, Aug. 12, 1991; 56 FR 50058, Oct. 3, 1991; 61 FR 40345, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.13</SECTNO> <SUBJECT>Individual who has end-stage renal disease.</SUBJECT> (a) <E T="03">Statutory basis and applicability.</E> This section explains the conditions of entitlement to hospital insurance benefits on the basis of end-stage renal disease, and specifies the beginning and end of the period of entitlement. It implements section 226A of the Social Security Act. (b) <E T="03">Definitions.</E> As used in this section: <E T="03">End-stage renal disease</E> (ESRD) means that stage of kidney impairment that appears irreversible and permanent and requires a regular course of dialysis or kidney transplantation to maintain life. <E T="03">Child</E> or <E T="03">spouse</E> means a child or spouse whose relationship to the parent or spouse meets the relationship requirements for entitlement to child's monthly social security benefits or to wife's, husband's, widow's, widower's, mother's or father's monthly benefits, as set forth in 20 CFR part 404. However, the duration of relationship requirements apply only to divorced spouses. (See 20 CFR 404.331.) <E T="03">Dependent child</E> means a person who, on the first day he or she has end-stage renal disease, is unmarried and meets the dependency requirements for entitlement to child's social security benefits on the basis of a parent's earnings (see 20 CFR 404.350-404.365) and who— (1) Is under age 22; (2) Is under a disability that began before age 22; or (3) Is under age 26, is receiving at least one-half support from that parent, and has continuously received at least one-half support from that parent since the day before attaining age 22. <E T="03">One-half support</E> means regular contributions, in cash or in kind, that equals or exceeds one-half of the child's total support. (c) <E T="03">Requirements.</E> An individual is entitled to hospital insurance benefits if—<PRTPAGE P="179"/> (1) He or she is medically determined to have ESRD; (2) He or she is: (i) Fully or currently insured under the social security program (title II of the Act) or would be fully or currently insured if his or her employment (after 1936) as defined under the Railroad Retirement Act were considered “employment” under the Social Security Act; (ii) Entitled to monthly social security or railroad retirement benefits; or (iii) The spouse or dependent child of a person who meets the requirements of paragraph (c)(2)(i) or (c)(2)(ii) of this section; (3) He or she has filed an application for Medicare Part A; and (4) He or she has satisfied the waiting period explained in paragraph (e) of this section. (d) <E T="03">Filing an application.</E> (1) An individual may obtain an application form, and help in completing it, from any social security office. (2) An application is not valid if it is filed earlier than the third month before the month in which the individual meets the conditions of paragraphs (c)(1), (c)(2), and (c)(4) of this section. (3) If an individual who has ESRD dies before he or she has filed an application, or is unable to file because of physical or mental condition, a relative or other person responsible for his or her affairs may file in his or her behalf. If a responsible person is not available, the hospital or dialysis facility that furnished treatment may file the application. (e) <E T="03">Beginning of entitlement—</E>(1) <E T="03">Basic limitations.</E> Entitlement can begin no earlier than the first month in which the individual meets the conditions specified in paragraph (c) of this section, or the 12th month before the month of application, whichever is later. (2) <E T="03">Waiting period.</E> Entitlement begins on the first day of the third month after the month in which the individual initiates a regular course of renal dialysis, if the course is maintained throughout the waiting period, unless entitlement would begin earlier under paragraph (e) (3) or (4) of this section. This means that if dialysis began in January, entitlement would begin April 1. (3) <E T="03">Exceptions: Early kidney transplant.</E> If the individual receives a transplant, entitlement begins with the first day of the month in which the transplant was performed. However, if the individual is admitted as an inpatient to a hospital that is an approved renal transplantation center or renal dialysis center (see § 405.2102) for procedures preliminary to transplant surgery, entitlement begins— (i) On the first day of the month in which he or she initially enters the hospital, if the transplant is performed in that month or in either of the next 2 months; or (ii) On the first day of the second month before the month of kidney transplantation, if the transplant is delayed more than 2 months after the month of initial hospital stay. <FP>For example, if an individual enters the hospital in January, and the transplant is performed in January, February, or March, entitlement would begin January 1. However, if the transplant is performed in April, entitlement would begin February 1.</FP> (4) <E T="03">Exceptions: Self-dialysis training.</E> Entitlement begins on the first day of the month in which a regular course of renal dialysis began if: (i) Before the end of the waiting period, the individual participates in a self-dialysis training program offered by a participating Medicare facility that is approved to provide such training; (ii) The patient's physician has certified that it is reasonable to expect the individual will complete the training program and will self-dialyze on a regular basis; and (iii) The regular course of dialysis is maintained throughout the time that would otherwise be the waiting period (unless it is terminated earlier because the individual dies). (f) <E T="03">End of entitlement.</E> Entitlement ends with— (1) The end of the 12th month after the month in which a regular course of dialysis ends; or (2) The end of the 36th month after the month in which the individual has received a kidney transplant.<PRTPAGE P="180"/> (g) <E T="03">Resumption of entitlement.</E> Entitlement is resumed under the following conditions: (1) An individual who initiates a regular course of renal dialysis or has a kidney transplant during the 12-month period after the previous course of dialysis ended is entitled to Part A benefits and eligible to enroll in Part B with the month the regular course of dialysis is resumed or the month the kidney is transplanted. (2) An individual who initiates a regular course of renal dialysis or has a kidney transplant during the 36-month period after an earlier kidney transplant is entitled to Part A benefits and eligible to enroll in Part B with the month the regular course of dialysis begins or with the month the subsequent kidney transplant occurs. (3) An individual who initiates a regular course of renal dialysis more than 12 months after the previous course of regular dialysis ended or more than 36 months after the month of a kidney transplant is eligible to enroll in Part A and Part B with the month in which the regular course of dialysis is resumed. If he or she is otherwise entitled under the conditions specified in paragraph (c) of this section, including the filing of an application, entitlement begins with the month in which dialysis is initiated or resumed, without a waiting period, subject to the limitations of paragraph (e)(1) of this section. <CITA>[48 FR 12536, Mar. 25, 1983, as amended at 60 FR 22535, May 8, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.15</SECTNO> <SUBJECT>Special provisions applicable to Medicare qualified government employment.</SUBJECT> (a) <E T="03">Definition.</E> As used in this section, <E T="03">Medicare-qualified government employment</E> means Federal, State, or local government employment that is subject only to the hospital insurance portion of the tax imposed by the Federal Insurance Contributions Act (F.I.C.A.). This includes— (1) Wages paid for Federal employment after December 1982. (2) Wages paid to State and local government employees hired after March 31, 1986. (3) Wages paid to State and local government employees hired before April 1, 1986 but whose employment after March 31, 1986 is covered, for Medicare purposes only, under an agreement under section 218 of the Act. (b) <E T="03">Crediting of wages that are taxable only for Medicare purposes.</E> Medicare qualified government employment is credited in the same way and in the same amount as social security covered employment is credited for monthly social security cash benefit purposes. However, since only the Medicare portion (not the social security portion) of the F.I.C.A. tax is imposed, Medicare qualified government employment does not help qualify the individual for monthly Social Security cash benefits. (c) <E T="03">Required quarters of coverage.</E> (1) To qualify for hospital insurance on the basis of Medicare qualified government employment, an individual must have the number of quarters of coverage necessary to qualify for hospital insurance under § 406.10, § 406.12, or § 406.13. (2) An individual who has worked in Medicare qualified government employment may qualify for hospital insurance on the basis of Medicare qualified government employment exclusively, or a combination of Medicare qualified government employment and social security covered employment. (d) <E T="03">Transitional provision for Federal employment.</E> Any individual who was a Federal employee at any time both during and before January 1983 will receive credit for quarters of Federal employment before January 1983 without paying tax. This transitional provision applies even if the Federal employee did not receive Federal wages for January 1983, for instance, because he or she was on approved leave without pay or on loan to a State or foreign agency. (e) <E T="03">Conditions of entitlement.</E> An individual who has worked in Medicare qualified government employment (or any related individual who would be entitled to social security cash benefits on the employee's record if Medicare qualified government employment qualified for those benefits) is entitled to hospital insurance benefits if he or she— (1) Would meet the requirements of § 406.10, § 406.12, or § 406.13 if Medicare qualified government employment <PRTPAGE P="181"/>were social security covered employment; and (2) Has filed an application for hospital insurance. <FP>For purposes of this section not more than 12 months before the month of application may be counted towards the 25-month qualifying period specified in § 406.12(a).</FP> (f) <E T="03">Beginning and end of entitlement—</E>(1) <E T="03">Basic rule.</E> Subject to the limitations specified in paragraph (f)(2) and (f)(3) of this section, entitlement begins and ends as specified in § 406.10, § 406.12 or § 406.13, whichever is used to establish hospital insurance entitlement for the Federal, State, or local government employee or related individual. (2) <E T="03">Limitations: Federal government employment.</E> (i) Hospital insurance entitlement based on Federal employment could not begin before January 1983. (ii) No months before January 1983 may be used to satisfy the qualifying period required for entitlement based on disability. (3) <E T="03">Limitations: State and local government employment.</E> (i) Hospital insurance entitlement based on State or local government employment cannot begin before April 1986. (ii) No months before April 1986 may be used to satisfy the qualifying period required for entitlement based on disability. <CITA>[53 FR 47202, Nov. 22, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Premium Hospital Insurance</HD> <SECTION> <SECTNO>§ 406.20</SECTNO> <SUBJECT>Basic requirements.</SUBJECT> (a) <E T="03">General provisions.</E> Hospital insurance benefits are available to most individuals age 65 or over and to certain individuals under age 65 who do not qualify for those benefits under subpart B of this part and are willing to pay a monthly premium. This is called premium hospital insurance. (b) <E T="03">Eligibility of individuals age 65 or over to enroll for premium hospital insurance.</E> Any individual is eligible to enroll for Medicare Part A if he or she— (1) Has attained age 65; (2) Is a resident of the United States and is either— (i) A citizen of the United States; or (ii) An alien lawfully admitted for permanent residence who has resided in the United States continuously for the 5-year period immediately preceding the month in which he or she meets all other requirements; (3) Is not eligible for Part A benefits under subpart B of this part; and (4) Is entitled to supplementary medical insurance (Part B of Medicare) or is eligible and has enrolled for it during an enrollment period. (c) <E T="03">Eligibility of individuals under age 65 to enroll for premium hospital insurance.</E> An individual who has not attained age 65 is eligible to enroll for Medicare Part A if he or she meets the following conditions: (1) Has been entitled to Medicare Part A (under § 406.12 or § 406.15) on the basis of entitlement or deemed entitlement to social security disability benefits, as provided under section 226(b) of the Act. (2) Continues to have a disabling physical or mental impairment. (3) Loses entitlement to disability benefits (and therefore also loses entitlement to Medicare Part A under § 406.12) solely because his or her earnings exceed the amount allowed under the social security regulations pertaining to “substantial gainful activity” (20 CFR 404.1571-404.1574); and (4) Is not otherwise entitled to Medicare Part A. <CITA>[56 FR 38078, Aug. 12, 1991; 56 FR 50058, Oct. 3, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.21</SECTNO> <SUBJECT>Individual enrollment.</SUBJECT> (a) <E T="03">Basic provision.</E> An individual who meets the requirements of § 406.20 (b) or (c) may enroll for premium hospital insurance only during his or her “initial enrollment period”, a “general enrollment period”, a “special enrollment period”, or, for HMO/CMP enrollees, a “transfer enrollment period”, as set forth in paragraphs (b) through (f) of this section. (b) <E T="03">Initial enrollment periods—</E>(1) <E T="03">Initial enrollment period for individual age 65 or over.</E> The initial enrollment period extends for 7 months, from the third month before the month the individual first meets the requirements of § 406.20 (b)(1) through (b)(3) through the third month after that first month of eligibility.<PRTPAGE P="182"/> (2) <E T="03">Initial enrollment period of individual under age 65.</E> The initial enrollment period begins with the month in which the individual receives notice that entitlement to Medicare Part A will end because he or she has lost entitlement to disability benefits solely because of earnings in excess of the amounts allowed under the social security regulations on substantial gainful activity (20 CFR 404.1571-404.1574). It continues for 7 full months after that month. (c) <E T="03">General enrollment period.</E> (1) Except as specified in paragraph (c)(4) of this section, the general enrollment period extends from January 1 to March 31 of each calendar year. (2) General enrollment periods are for individuals who do not enroll during the special enrollment period, who failed to enroll during the initial enrollment period, or whose previous period of entitlement had terminated. (3) If the individual enrolls or reenrolls during a general enrollment period, his or her entitlement begins on July 1 of the calendar year. (4) During the period April 1 through September 30, 1981, the general enrollment period was any time after the end of the individual's initial enrollment period. Any eligible individual whose initial enrollment period has ended, or whose previous period of entitlement had terminated, could enroll or reenroll during that 6-month period. (d) <E T="03">“Deemed” initial enrollment period for individual age 65 or over.</E> (1) If an individual who has attained age 65 fails to enroll during the initial enrollment period because of reliance on incorrect documentary information which led him or her to believe that he or she was not yet age 65, an initial enrollment period may be established for him or her as though he or she had attained age 65 on the date indicated by the incorrect documentary information. (2) The deemed initial enrollment period will be used to determine the individual's premium and right to enroll in a general enrollment period if such use is advantageous to the individual. (e) [Reserved] (f) <E T="03">Transfer enrollment period for HMO/CMP enrollees.</E> (1) <E T="03">Terminology. HMO</E> or <E T="03">CMP</E> means an eligible organization as defined in § 417.401 which has a contract with CMS under part 417, subpart L of this chapter. (2) <E T="03">Basic rule.</E> Effective February 1, 1991, individuals enrolled in an HMO or CMP under part 417, subpart K of this chapter who meet the requirements of § 406.20(b) may enroll in premium hospital insurance during a transfer enrollment period. This transfer enrollment period begins with any month or any part of a month in which the individual is enrolled in an HMO or CMP and ends with the last day of the 8th consecutive month in which the individual is no longer enrolled in the HMO or CMP. (3) <E T="03">Effective date of coverage.</E> (i) If the individual enrolls in premium hospital insurance while still enrolled in an HMO or CMP, or during the first month that he or she is no longer enrolled in the HMO or CMP, part A coverage will begin on the first day of the month of part A enrollment, or, at the option of the individual, on the first day of any of the following 3 months. (ii) If the individual enrolls in premium hospital insurance during any of the last 7 months of the transfer enrollment period, coverage will begin on the first day of the month after the month of enrollment. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47203, Nov. 22, 1988; 56 FR 38079, Aug. 12, 1991; 57 FR 36014, Aug. 12, 1992; 61 FR 40345, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.22</SECTNO> <SUBJECT>Effect of month of enrollment on entitlement.</SUBJECT> (a) <E T="03">Individual age 65 or over.</E> For an individual who has attained age 65, the following rules apply: (1) If the individual enrolls during the 3 months before the first month of eligibility, entitlement begins with the first month of eligibility. (2) If the individual enrolls in the first month of eligibility, entitlement begins with the following month. (3) If the individual enrolls during the month after the first month of eligibility, entitlement begins with the second month after the month of enrollment. (4) If the individual enrolls in either of the last 2 months of the enrollment period, entitlement begins with the <PRTPAGE P="183"/>third month after the month of enrollment. (b) <E T="03">Individual under age 65.</E> For an individual who has not attained age 65, the following rules apply: (1) If the individual enrolls before the month in which he or she meets the requirements of § 406.20(c), entitlement begins with the month in which the individual meets those requirements. (2) If the individual enrolls in the month in which he or she first meets the requirements of § 406.20(c), entitlement begins with the following month. (3) If the individual enrolls in the month following the month in which he or she meets the requirements of § 406.20(c), entitlement begins with the second month after the month of enrollment. (4) If the individual enrolls more than one month after the month in which he or she first meets the requirements of § 406.20(c), entitlement begins with the third month after the month of enrollment. <CITA>[56 FR 38079, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.24</SECTNO> <SUBJECT>Special enrollment period.<E T="51">1</E> <FTREF/> </SUBJECT> <FTNT> <E T="51">1</E> Before August 1986, SEPs were available only for enrollment in supplementary medical insurance, not for enrollment in premium hospital insurance. </FTNT> (a) <E T="03">Terminology.</E> As used in this subpart, the following terms have the indicated meanings. (1) <E T="03">Current employment status</E> has the meaning given this term in § 411.104 of this chapter. (2) <E T="03">Family member</E> has the meaning given this term in § 411.201 of this chapter. (3) <E T="03">Group health plan (GHP)</E> and <E T="03">large group health plan (LGHP)</E> have the meanings given those terms in § 411.101 of this chapter, except that the “former employee” language of those definitions does not apply with respect to SEPs because— (i) Section 1837(i)(1)(A) of the Act explicitly requires that GHP coverage of an individual age 65 or older, be by reason of the individual's (or the individual's spouse's) current employment status; and (ii) The sentence following section 1837(i)(1)(B), of the Act refers to “large group health plan”. Under section 1862(b)(1)(B)(i), as amended by OBRA '93, LGHP coverage of a disabled individual must be “by virtue of the individual's or a family member's current employment status with an employer”. (4) <E T="03">Special enrollment period (SEP)</E> is a period provided by statute to enable certain individuals to enroll in Medicare without having to wait for the general enrollment period. (b) <E T="03">Duration of SEP.</E> <E T="51">2</E> <FTREF/> (1) The SEP includes any month during any part of which— <FTNT> <E T="51">2</E> Before March 1995, SEPs began on the first day of the first month the individual was no longer covered under a GHP or LGHP by reason of current employment status. </FTNT> (i) An individual over age 65 is enrolled in a GHP by reason of the current employment status of the individual or the individual's spouse; or (ii) An individual under age 65 and disabled— (A) Is enrolled in a GHP by reason of the current employment status of the individual or the individual's spouse; or (B) Is enrolled in an LGHP by reason of the current employment status of the individual or a member of the individual's family. (2) The SEP ends on the last day of the eighth consecutive month during which the individual is at no time enrolled in a GHP or an LGHP by reason of current employment status. (c) <E T="03">Conditions for use of a SEP.</E> <E T="51">3</E> <FTREF/> In order to use a SEP, the individual must meet the following conditions: <FTNT> <E T="51">3</E> Before August 10, 1993, an individual under age 65 could qualify for a SEP only if he or she had LGHP coverage as an “active individual”, which the statute defined as “an employee, employer, self-employed individual (such as the employer), individual associated with the employer in a business relationship, or as a member of the family of any of those persons”. </FTNT> (1) When first eligible to enroll for premium hospital insurance under § 406.20(b) or (c), the individual was— (i) Age 65 or over and covered under a GHP by reason of the current employment status of the individual or the individual's spouse; (ii) Under age 65 and covered under an LGHP by reason of the current employment status of the individual or a member of the individual's family ; or<PRTPAGE P="184"/> (iii) Under age 65 and covered under a GHP by reason of the current employment status of the individual or the individual's spouse. (2) For all the months thereafter, the individual has maintained coverage either under hospital insurance or a GHP or LGHP. (d) <E T="03">Special rule: Additional SEPs.</E> (1) Generally, if an individual fails to enroll during any available SEP, he or she is not entitled to any additional SEPs. (2) However, if an individual fails to enroll during a SEP, because coverage under the same or a different GHP or LGHP was restored before the end of that particular SEP, that failure to enroll does not preclude additional SEPs. (e) <E T="03">Effective date of coverage.</E> (1) If the individual enrolls in a month during any part of which he or she is covered under a GHP or LGHP on the basis of current employment status, or in the first full month when no longer so covered, coverage begins on the first day of the month of enrollment or, at the individual's option, on the first day of any of the three following months. (2) If the individual enrolls in any month of the SEP other than the months specified in paragraph (e)(1) of this section, coverage begins on the first day of the month following the month of enrollment. <CITA>[61 FR 40346, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.26</SECTNO> <SUBJECT>Enrollment under State buy-in.</SUBJECT> (a) <E T="03">Enrollment of QMBs under a State buy-in agreement—</E>(1) <E T="03">Effective date.</E> Beginning with calendar year 1990, a State may request and be granted a modification of its buy-in agreement to include enrollment and payment of Part A premiums for QMBs (as defined in section 1905(p)(1) of the Act) who can become entitled to Medicare Part A only by paying a premium. (2) <E T="03">Amount of premium.</E> Premiums paid under State buy-in are not subject to increase because of late enrollment or reenrollment. (b) <E T="03">Beginning of coverage under buy-in.</E> The coverage period begins with the latest of the following: (1) The third month following the month in which the agreement modification covering QMBs is effectuated. (2) The first month in which the individual is entitled to premium hospital insurance under § 406.20(b) and has QMB status. (3) The date specified in the agreement modification. (c) <E T="03">End of coverage under buy-in.</E> Buy-in coverage ends with the earlier of the following: (1) <E T="03">Death.</E> Coverage ends on the last day of the month in which the QMB dies. (2) <E T="03">Loss of QMB status.</E> If the individual loses eligibility for QMB status, coverage ends on the last day of the month in which CMS receives the State's notice of ineligibility. (3) <E T="03">Termination of buy-in agreement.</E> If the State's buy-in agreement is terminated, coverage ends on the last day of the last month for which the agreement is in effect. (4) <E T="03">Entitlement to premium-free Part A.</E> If the individual becomes entitled to premium-free Part A, buy-in coverage ends on the last day of entitlement to premium Part A. (d) <E T="03">Continuation of coverage: Individual enrollment following termination of buy-in coverage</E>—(1) <E T="03">Deemed enrollment.</E> If coverage under a buy-in agreement ends because the agreement is terminated or the individual loses QMB status, the individual— (i) Is considered to have enrolled during his or her initial enrollment period; and (ii) Is entitled to Part A benefits and liable for Part A premiums beginning with the first month for which he or she is no longer covered under the buy-in agreement. (2) <E T="03">Voluntary termination.</E> (i) An individual may voluntarily terminate entitlement acquired under paragraph (d)(1) of this section by filing, with SSA or CMS, a request for disenrollment. (ii) Voluntary disenrollment is effective as follows: (A) If the individual files a request within 30 days after the date of CMS's notice that buy-in coverage has ended, the individual's entitlement ends on the last day of the last month for which the State paid the premium. (B) If the individual files the request more than 30 days but not more than 6 <PRTPAGE P="185"/>months after buy-in coverage ends, entitlement ends on the last day of the month in which the request is filed. (C) If the individual files the request later than the 6th month after buy-in coverage ends, entitlement ends at the end of the month after the month in which request is filed. <CITA>[56 FR 38080, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.28</SECTNO> <SUBJECT>End of entitlement.</SUBJECT> Any of the following actions or events ends entitlement to premium hospital insurance: (a) <E T="03">Filing of request for termination.</E> The beneficiary may at any time give CMS or the Social Security Administration written notice that he or she no longer wishes to participate in the premium hospital insurance program. (1) If he or she files the notice before entitlement begins, he or she will be deemed not to have enrolled. (2) If he or she files the notice after entitlement begins, that entitlement will end at the close of the month following the month in which he or she filed the notice. (b) <E T="03">Eligibility for hospital insurance without premiums.</E> (1) If an individual meets the eligibility requirements for hospital insurance specified in § 406.10, § 406.11, § 406.13 or § 406.15, entitlement to premium hospital insurance ends with the month before the month in which he or she meets those requirements. (2) If an individual meets the requirements of § 406.10, § 406.11, § 406.13, or § 406.15, he or she will be deemed to have filed the required application for hospital insurance benefits in his or her first month of eligibility under that section. (c) <E T="03">End of entitlement to supplementary medical insurance (SMI) for individual who has attained age 65.</E> In the case of an individual enrolled on the basis of § 406.20(b), entitlement to premium hospital insurance ends on the same date that entitlement to SMI ends. (d) <E T="03">Nonpayment of premium.</E> (1) If an individual fails to pay the premium bill, entitlement will end on the last day of the third month after the billing month. (2) CMS may reinstate entitlement if the individual shows good cause for failure to pay on time, and pays all overdue premiums within 3 calendar months after the date specified in paragraph (d)(1) of this section. (e) <E T="03">Death.</E> Entitlement ends with the day of death. (A premium is due for the month of death.) (f) <E T="03">End of disabling impairment for individual under age 65.</E> In the case of an individual enrolled on the basis of § 406.20(c), entitlement to premium hospital insurance ends on the last day of the month after the month in which the individual is notified that he or she no longer has a disabling impairment. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47204, Nov. 22, 1988. Redesignated and amended at 56 FR 38080, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.32</SECTNO> <SUBJECT>Monthly premiums.</SUBJECT> (a) <E T="03">Promulgation and effective date.</E> Beginning with 1984, premiums are promulgated each September, effective for the succeeding calendar year. (b) <E T="03">Monthly premiums: Determination of dollar amount.</E> (1) Effective for calendar years beginning January 1989, the dollar amount is determined based on an estimate of one-twelfth of the average per capita costs for benefits and administrative costs that will be payable with respect to individuals age 65 or over from the Federal Hospital Insurance Trust Fund during the succeeding calendar year. (2) Before 1989, the dollar amount was determined by multiplying $33 by the ratio of the next year's inpatient deductible to $76, which was the inpatient deductible determined for 1973. (Because of cost controls, the deductible actually charged for that year was $72.) (3) Effective for months beginning January 1994, if an individual meets the requirements in paragraph (c) of this section, the monthly premium determined under paragraph (b)(1) of this section is reduced in each month in which the individual meets the requirements by 25 percent in 1994, 30 percent in 1995, 35 percent in 1996, 40 percent in 1997 and 45 percent in 1998 and thereafter. (4) The amount determined under paragraphs (b) (1), (2), or (3) of this section is rounded to the next nearest multiple of $1. (Fifty cents is rounded to the next higher dollar.)<PRTPAGE P="186"/> (c) <E T="03">Qualifying for a reduction in monthly premium.</E> An individual who qualifies for the reduction described in paragraph (b)(3) of this section must be an individual who— (1) Has 30 or more quarters of coverage (QCs) as defined in 20 CFR 404.140 through 404.146; (2) Has been married for at least the previous one year period to a worker who has 30 or more QCs; (3) Had been married to a worker who had 30 or more QCs for a period of at least one year before the death of the worker; (4) Is divorced from, after at least 10 years of marriage to, a worker who had 30 or more QCs at the time the divorce became final; or (5) Is divorced from, after at least 10 years of marriage to, a worker who subsequently died and who had 30 or more QCs at the time the divorce became final. (d) <E T="03">Monthly premiums: Increase for late enrollment and for reenrollment.</E> For an individual who enrolls after the close of the initial enrollment period or reenrolls, the amount of the monthly premium, as determined under paragraph (b) of this section, is increased by 10 percent for each full 12 months in the periods described in §§ 406.33 and 406.34. Effective beginning with premiums due for July 1986, the premium increase is limited to 10 percent and is payable for twice the number of full 12-month periods determined under those sections. (e) <E T="03">Collection of monthly premiums.</E> (1) CMS will bill the enrollee on a monthly basis and include an addressed return envelope with the bill. (2) The enrollee must pay by check or money order that is payable to “CMS Medicare Insurance,” and shows his or her name and the claim number that appears on his or her Medicare card. He or she must return the bill with the check or money order. (f) <E T="03">Months for which payment is due.</E> (1) A premium payment is due for each month beginning with the first month of coverage and continuing through the month of death or if earlier, the month in which coverage ends. (2) A premium is due for the month of death if coverage is still in effect, even if the individual dies on the first day of the month. (g) <E T="03">Option for group payments.</E> A public or private organization may pay the premiums on behalf of one or more enrollees under a contract or other arrangement with CMS if CMS determines that this method of payment is administratively feasible. (The rules set forth in subpart E of part 408 of this chapter, for SMI premiums, also apply to group payment of Part A premiums.) <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47203, Nov. 22, 1988; 56 FR 8839, Mar. 1, 1991. Redesignated and amended at 56 FR 38079, 38080, Aug. 12, 1991; 57 FR 36014, Aug. 12, 1992; 57 FR 58717, Dec. 11, 1992; 59 FR 26959, May 25, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.33</SECTNO> <SUBJECT>Determination of months to be counted for premium increase: Enrollment.</SUBJECT> (a) <E T="03">Enrollment before April 1, 1981, or after September 30, 1981.</E> The months to be counted for premium increase are the months from the end of the initial enrollment period through the end of the general enrollment period, the special enrollment period, or the transfer enrollment period in which the individual enrolls, excluding the following: (1) Any months before September 1973. (2) For premiums due for months after May 1986, any months beginning with January 1983 during which the individual was enrolled in an employer group health plan based on the current employment of the individual or the individual's spouse. (3) Any months during the 7-month special enrollment period under § 406.21(e) during which premium hospital insurance coverage is in effect. (4) Any months that the individual was enrolled in an HMO or CMP under part 417, subpart K of this chapter as described in § 406.21(f). (b) <E T="03">Enrollment during the period April 1 through September 30, 1981.</E> The months to be counted for premium increase are the months from the end of the initial enrollment period through the month in which the individual enrolled, excluding any months before September 1973. (c) <E T="03">Examples.</E> (1) John F's initial enrollment period ended July 1979 but he did not enroll until January 1980. The <PRTPAGE P="187"/>months to be counted are August 1979 through March 1980. Since only 8 months elapsed, there is no premium increase. (2) Mary T's initial enrollment period ended in April 1980 but she did not enroll until May 1981. The months to be counted are May 1980 through May 1981. Since 13 months has elapsed, the premium would be increased by 10 percent. (3) Effective with July 1986, Mary T, in Example 2, would no longer have to pay an increased premium because she had paid it for twice the number of full 12-month periods during which she could have been, but was not, enrolled in the program. (4) Vincent C's initial enrollment period ended August 31, 1986. He was covered under his wife's employer group health plan until she retired on May 31, 1989. He enrolled during June 1989, the first month of the special enrollment period under § 406.21(e). No months are countable for premium increase purposes because the exclusions of paragraph (a) of this section apply to all months. (5) Terry P enrolled in the 1987 general enrollment period, with coverage effective July 1987. There were 28 months after the end of his initial enrollment period through the end of the 1987 general enrollment period. His premium is increased by 10 percent. The increase will be eliminated after he has paid the additional 10 percent for 48 months. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986, as amended at 53 FR 47203, Nov. 22, 1988. Further redesignated and amended at 57 FR 36014, Aug. 12, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.34</SECTNO> <SUBJECT>Determination of months to be counted for premium increase: Reenrollment.</SUBJECT> (a) <E T="03">First reenrollment before April 1, 1981 or after September 30, 1981.</E> The months to be counted for premium increase are: (1) The months specified in § 406.33(a) or (b); plus (2) The months from the end of the first period of entitlement through the end of the general enrollment period in which the individual reenrolled. (b) <E T="03">First reenrollment during the period April 1, 1981</E> through September 30, 1981. The months to be counted for premium increase are— (1) The months specified in § 406.33(a); plus (2) The months from the end of the first period of entitlement through the month in which the individual reenrolled. (c) <E T="03">Subsequent reenrollment during the period April 1, 1981 through September 30, 1981.</E> The months to be counted for premium increase are— (1) The months specified in paragraph (a) of this section; plus (2) The months from April 1981 through the month in which the individual reenrolled for the second time. (Since only one reenrollment was permitted before April 1981, any months from the end of the individual's first enrollment period of entitlement through March 1981 are not counted.) (d) <E T="03">Subsequent reenrollment after September 30, 1981.</E> The months to be counted for premium increase are— (1) The months specified in paragraph (a) or (b) of this section, for the first and second periods of coverage; plus (2) The months from the end of each subsequent period of entitlement through the end of the general enrollment period in which the individual reenrolled, excluding any months before April 1981. (e) <E T="03">Example.</E> Peter M enrolled during his initial enrollment period, terminated his first coverage period in August 1979 and reenrolled for the first time in January 1980. The 7 months to be counted (September 1979 through March, 1980) were not enough to require any increase in the premium. Peter terminated his second period of coverage in February 1981 and reenrolled for the second time in July 1981. Since the 4 months (April through July 1981), when added to the previous 7 months, bring the total to only 11 months, no premium increase is required. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986. Further redesignated and amended at 57 FR 58717, Dec. 11, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.38</SECTNO> <SUBJECT>Prejudice to enrollment rights because of Federal Government error.</SUBJECT> (a) If an individual's enrollment or nonenrollment for premium hospital <PRTPAGE P="188"/>insurance is unintentional, inadvertent, or erroneous because of the error, misrepresentation, or inaction of a Federal employee, or any person authorized by the Federal Government to act on its behalf, the Social Security Administration or CMS may take whatever action it determines is necessary to provide appropriate relief. (b) The action may include— (1) Designation of a special initial or general enrollment period; (2) Designation of an entitlement period; (3) Adjustment of premiums; (4) Any combination of the actions specified in paragraph (b) (1) through (3) of this section; or (5) Any other remedial action which may be necessary to correct or eliminate the effects of such error, misrepresentation, or inaction. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986. Further redesignated at 56 FR 38080, Aug. 12, 1991]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Special Circumstances That Affect Entitlement to Hospital Insurance</HD> <SECTION> <SECTNO>§ 406.50</SECTNO> <SUBJECT>Nonpayment of benefits on behalf of certain aliens.</SUBJECT> (a) Hospital insurance benefit payments may not be made for services furnished to an alien in any month in which his or her monthly social security benefits are suspended (or would be suspended if he or she were entitled to those benefits) because the alien remains outside the United States for more than 6 months. (b) Benefits will be payable beginning with services furnished in the first full calendar month the alien is back in the United States. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986. Further redesignated at 57 FR 58717, Dec. 11, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 406.52</SECTNO> <SUBJECT>Conviction of certain offenses.</SUBJECT> (a) <E T="03">Penalty that affects entitlement.</E> (1) If an individual is convicted of any of the crimes listed in § 406.11(c) (1) and (2), the court may impose, in addition to all other penalties, a penalty that affects entitlement to hospital insurance, beginning with the month of conviction. (2) The additional penalty is that the individual's income (or the income of the insured individual on whose earnings record he or she became or seeks to become entitled) for the year of conviction and any previous year may not be counted in determining the insured status necessary for entitlement to hospital insurance. (b) <E T="03">Effect of pardon.</E> If the President of the United States pardons the convicted individual, that individual regains (or may again seek) entitlement effective with the month following the month in which the pardon is granted. <CITA>[48 FR 12536, Mar. 25, 1983. Redesignated at 51 FR 41338, Nov. 14, 1986. Further redesignated at 57 FR 58717, Dec. 11, 1992]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 407</EAR> <HD SOURCE="HED">PART 407—SUPPLEMENTARY MEDICAL INSURANCE (SMI) ENROLLMENT AND ENTITLEMENT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>407.1</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> <SECTNO>407.2</SECTNO> <SUBJECT>General description of program.</SUBJECT> <SECTNO>407.4</SECTNO> <SUBJECT>Basic requirements for entitlement.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Individual Enrollment and Entitlement for SMI</HD> <SECTNO>407.10</SECTNO> <SUBJECT>Eligibility to enroll.</SUBJECT> <SECTNO>407.11</SECTNO> <SUBJECT>Forms used to apply for enrollment under Medicare Part B.</SUBJECT> <SECTNO>407.12</SECTNO> <SUBJECT>General enrollment provisions.</SUBJECT> <SECTNO>407.14</SECTNO> <SUBJECT>Initial enrollment period.</SUBJECT> <SECTNO>407.15</SECTNO> <SUBJECT>General enrollment period.</SUBJECT> <SECTNO>407.17</SECTNO> <SUBJECT>Automatic enrollment.</SUBJECT> <SECTNO>407.18</SECTNO> <SUBJECT>Determining month of automatic enrollment.</SUBJECT> <SECTNO>407.20</SECTNO> <SUBJECT>Special enrollment period related to coverage under group health plans.</SUBJECT> <SECTNO>407.22</SECTNO> <SUBJECT>Request for individual enrollment.</SUBJECT> <SECTNO>407.25</SECTNO> <SUBJECT>Beginning of entitlement: Individual enrollment.</SUBJECT> <SECTNO>407.27</SECTNO> <SUBJECT>Termination of entitlement: Individual enrollment.</SUBJECT> <SECTNO>407.30</SECTNO> <SUBJECT>Limitations on enrollment.</SUBJECT> <SECTNO>407.32</SECTNO> <SUBJECT>Prejudice to enrollment rights because of Federal Government misrepresentation, inaction, or error.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—State Buy-in Agreements</HD> <SECTNO>407.40</SECTNO> <SUBJECT>Enrollment under a State buy-in agreement.</SUBJECT> <SECTNO>407.42</SECTNO> <SUBJECT>Buy-in groups available to the 50 States, the District of Columbia, and the Northern Mariana Islands.</SUBJECT> <SECTNO>407.43</SECTNO> <SUBJECT>Buy-in groups available to Puerto Rico, Guam, the Virgin Islands, and American Samoa.<PRTPAGE P="189"/> </SUBJECT> <SECTNO>407.45</SECTNO> <SUBJECT>Termination of State buy-in agreements.</SUBJECT> <SECTNO>407.47</SECTNO> <SUBJECT>Beginning of coverage under a State buy-in agreement.</SUBJECT> <SECTNO>407.48</SECTNO> <SUBJECT>Termination of coverage under a State buy-in agreement.</SUBJECT> <SECTNO>407.50</SECTNO> <SUBJECT>Continuation of coverage: Individual enrollment following end of coverage under a State buy-in agreement.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 53 FR 47204, Nov. 22, 1988, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 407.1</SECTNO> <SUBJECT>Basis and scope.</SUBJECT> (a) <E T="03">Statutory basis.</E> The supplementary medical insurance (SMI) program is authorized by Part B of title XVIII of the Social Security Act. (1) Section 1831 of the Act establishes the program. (2) Sections 1836 and 1837 set forth the eligibility and enrollment requirements. (3) Section 1838 specifies the entitlement periods, which vary depending on the time and method of enrollment and on the basis for termination. (4) Section 1843 sets forth the requirements for State buy-in agreements under which States may enroll, and pay the SMI premiums for, eligible individuals who are also eligible for cash assistance or Medicaid. (5) Section 104(b) of the Social Security Amendments of 1965 (Pub. L. 89-87) specifies the limitations that apply to certain aliens and persons convicted of subversive activities. (b) <E T="03">Scope.</E> This part sets forth the eligibility, enrollment, and entitlement requirements and procedures for supplementary medical insurance. (The rules about premiums are in part 408 of this chapter.) </SECTION> <SECTION> <SECTNO>§ 407.2</SECTNO> <SUBJECT>General description of program.</SUBJECT> Part B of Title XVIII of the Act provides for voluntary “supplementary medical insurance” available to most individuals age 65 or over and to disabled individuals who are under age 65 and entitled to hospital insurance. The SMI program is financed by premiums paid by (or for) each individual enrolled in the program, plus contributions from Federal funds. It covers certain physicians' services, outpatient services, home health services, services furnished by rural health clinics (RHCs), Federally qualified health centers (FQHCS), ambulatory surgical centers (ASCs), and comprehensive outpatient rehabilitation facilities (CORFs), and other medical and other health services. <CITA>[57 FR 24980, June 12, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.4</SECTNO> <SUBJECT>Basic requirements for entitlement.</SUBJECT> (a) An individual must meet the following requirements to be entitled to SMI: (1) <E T="03">Eligibility.</E> The individual must meet the eligibility requirements specified in § 407.10(a). (2) <E T="03">Enrollment.</E> The individual must enroll for SMI, or must be enrolled by a State under a buy-in agreement as specified in § 407.40. (b) SMI pays only for covered expenses incurred during an individual's period of entitlement. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Individual Enrollment and Entitlement for SMI</HD> <SECTION> <SECTNO>§ 407.10</SECTNO> <SUBJECT>Eligibility to enroll.</SUBJECT> (a) <E T="03">Basic rule.</E> Except as specified in paragraph (b) of this section, an individual is eligible to enroll for SMI if he or she— (1) Is entitled to hospital insurance under any of the rules set forth in §§ 406.10 through 406.15 of this chapter; or (2) Meets the following requirements: (i) Has attained age 65. (An individual is considered to have attained age 65 on the day before the 65th anniversary of his or her birth.) (ii) Is a resident of the United States. (iii) Is a citizen of the United States, or an alien lawfully admitted for permanent residence who has resided continuously in the United States during the 5 years preceding the month in which he or she applies for enrollment. (b) <E T="03">Exception.</E> An individual is not eligible to enroll for SMI if he or she has been convicted of— (1) Spying, sabotage, treason, or subversive activities under chapter 37, 105, or 115 of title 18 of the United States Code; or<PRTPAGE P="190"/> (2) Conspiracy to establish dictatorship under section 4 of the Internal Security Act of 1950. </SECTION> <SECTION> <SECTNO>§ 407.11</SECTNO> <SUBJECT>Forms used to apply for enrollment under Medicare Part B.</SUBJECT> The following forms, available free of charge by mail from CMS, or at any Social Security branch or district office, are used to apply for enrollment under the supplementary medical insurance program. <EXTRACT> CMS-4040—Application for Enrollment in the Supplementary Medical Insurance Program. (This form is used for enrollment by individuals who are not eligible for monthly benefits or for hospital insurance.) CMS-40-B—Application for Medical Insurance. (For general use by the SSA District Office in requesting medical insurance protection during the general enrollment period or during the initial enrollment period if the enrollee is not subject to automatic enrollment is SMI.) CMS-40-D—Application for Enrollment in the Supplementary Medical Insurance Program. (This form is mailed to individuals who do not have current supplementary medical insurance because of prior refusals, voluntary withdrawal, or premium default from prior coverage. It is used during the annual general enrollment period.) CMS-40-F—Application for Medical Insurance. (For use by beneficiaries residing outside the United States.) CMS-18-F-5—Application for Hospital Insurance Entitlement. (For use by individuals who are not eligible for retirement benefits under Title II of the Social Security Act or under the Railroad Retirement Act. This form may also be used for enrollment in the supplementary medical insurance program.) </EXTRACT> <FP>As an alternative, the individual may request enrollment by answering the Part B enrollment questions on an application for monthly Social Security benefits, or by signing a simple statement of request, if he or she is eligible to enroll at that time.</FP> </SECTION> <SECTION> <SECTNO>§ 407.12</SECTNO> <SUBJECT>General enrollment provisions.</SUBJECT> (a) <E T="03">Opportunity to enroll.</E> (1) An individual who is eligible to enroll for SMI may do so during an initial enrollment period or a general enrollment period as specified in §§ 407.14, and 407.15. An individual who meets the conditions specified in § 407.20 may enroll during a special enrollment period, as provided in that section. (2) An individual who fails to enroll during his or her initial enrollment period or whose enrollment has been terminated may enroll or reenroll during a general enrollment period, or, if he or she meets the specified conditions, during a special enrollment period. (b) <E T="03">Enrollment periods ending on a nonworkday.</E> (1) If an enrollment period ends on a Federal nonworkday, that period is automatically extended to the next succeeding workday. (2) A Federal nonworkday is any Saturday, Sunday, or Federal legal holiday or a day that is declared by statute or executive order to be a day on which Federal employees are not required to work. </SECTION> <SECTION> <SECTNO>§ 407.14</SECTNO> <SUBJECT>Initial enrollment period.</SUBJECT> (a) <E T="03">Duration.</E> (1) The initial enrollment period is the 7-month period that begins 3 months before the month an individual first meets the eligibility requirements of § 407.10 and ends 3 months after that first month of eligibility. (2) In determining the initial enrollment period of an individual who is age 65 or over and eligible for enrollment solely because of entitlement to hospital insurance, the individual is considered as first meeting the eligibility requirements for SMI n the first day he or she becomes entitled to hospital insurance or would have been entitled if he or she filed an application for that program. (b) <E T="03">Deemed initial enrollment period.</E> (1) SSA or CMS will establish a deemed initial enrollment period for an individual who fails to enroll during the initial enrollment period because of a belief, based on erroneous documentary evidence, that he or she had not yet attained age 65. The period will be established as though the individual had attained age 65 on the date indicated by the incorrect information. (2) A deemed initial enrollment period established under paragraph (b)(1) of this section is used to determine the individual's premium and right to enroll in a general enrollment period if that is advantageous to the individual. </SECTION> <SECTION> <PRTPAGE P="191"/> <SECTNO>§ 407.15</SECTNO> <SUBJECT>General enrollment period.</SUBJECT> (a) Except as specified in paragraph (b) of this section, the general enrollment period is January through March of each calendar year. (b) An unlimited general enrollment period existed between April 1 and September 30, 1981. Any eligible individual whose initial enrollment period had ended, or whose previous period of entitlement had terminated, could have enrolled or reenrolled during any month of that 6-month period. </SECTION> <SECTION> <SECTNO>§ 407.17</SECTNO> <SUBJECT>Automatic enrollment.</SUBJECT> (a) <E T="03">Who is automatically enrolled.</E> An individual is automatically enrolled for SMI if he or she: (1) Resides in the United States, except in Puerto Rico; (2) Becomes entitled to hospital insurance under any of the provisions set forth in §§ 406.10 through 406.15 of this chapter; and (3) Does not decline SMI enrollment. (b) <E T="03">Opportunity to decline automatic enrollment.</E> (1) SSA will notify an individual that he or she is automatically enrolled under paragraph (a) of this section and grant the individual a specified period (at least 2 months after the month the notice is mailed) to decline enrollment. (2) The individual may decline enrollment by submitting to SSA or CMS a signed statement that he or she does not wish SMI. (3) The statement must be submitted before entitlement begins, or if later, within the time limits set in the notice of enrollment. </SECTION> <SECTION> <SECTNO>§ 407.18</SECTNO> <SUBJECT>Determining month of automatic enrollment.</SUBJECT> (a) An individual who is automatically enrolled in SMI under § 407.17 will have the month of enrollment determined in accordance with paragraphs (b) through (f) of this section. The month of enrollment determines the month of entitlement. (b) An individual is automatically enrolled in the third month of the initial enrollment period if he or she— (1) Is entitled to social security benefits under section 202 of the Act on the first day of the initial enrollment period; (2) Is entitled to hospital insurance based on end-stage renal disease; on entitlement to disability benefits as a social security or railroad retirement beneficiary; or on deemed entitlement to disability benefits on the basis of Medicare-qualified government employment; or (3) Establishes entitlement to hospital insurance by filing an application and meeting all other requirements (as set forth in subpart B of part 406 of this chapter) during the first 3 months of the initial enrollment period. (c) If an individual establishes entitlement to hospital insurance on the basis of an application filed in the last 4 months of the SMI initial enrollment period, he or she is automatically enrolled for SMI in the month in which the application is filed. (d) If an individual establishes entitlement to hospital insurance on the basis of an application filed after the SMI initial enrollment period but not during a general enrollment period in effect before April 1, 1981, or after September 30, 1981, he or she is automatically enrolled for SMI on the first day of the next general enrollment period. (e) If the individual establishes entitlement to hospital insurance on the basis of an application filed during a SMI general enrollment period in effect before April 1, 1981 or after September 30, 1981, he or she is automatically enrolled on the first day of that period. (f) If an individual established entitlement to hospital insurance on the basis of an application filed during the general enrollment period of April 1, 1981, through September 30, 1981, he or she was automatically enrolled for SMI on the first day of the month in which the application was filed. </SECTION> <SECTION> <SECTNO>§ 407.20</SECTNO> <SUBJECT>Special enrollment period related to coverage under group health plans.</SUBJECT> (a) <E T="03">Terminology—</E>(1) <E T="03">Group health plan (GHP) and large group health plan (LGHP).</E> These terms have the meanings given them in § 411.101 of this chapter except that the “former employee” language of those definitions does not apply with respect to SEPs for the reasons specified in § 406.24(a)(3) of this chapter.<PRTPAGE P="192"/> (2) <E T="03">Special enrollment period (SEP).</E> This term has the meaning set forth in § 406.24(a)(4) of this chapter. In order to use a SEP, an individual must meet the conditions of paragraph (b) and of paragraph (c) or (d) of this section, as appropriate. (b) <E T="03">General rule.</E> All individuals must meet the following conditions: (1) They are eligible to enroll for SMI on the basis of age or disability, but not on the basis of end-stage renal disease. (2) When first eligible for SMI coverage (4th month of their initial enrollment period), they were covered under a GHP or LGHP on the basis of current employment status or, if not so covered, they enrolled in SMI during their initial enrollment period; and (3) For all months thereafter, they maintained coverage under either SMI or a GHP or LGHP. (Generally, if an individual fails to enroll in SMI during any available SEP, he or she is not entitled to any additional SEPs. However, if an individual fails to enroll during a SEP because coverage under the same or a different GHP or LGHP was restored before the end of that particular SEP, that failure to enroll does not preclude additional SEPs.) (c) <E T="03">Special rule: Individual age 65 or over.</E> For an individual who is or was covered under a GHP, coverage must be by reason of the current employment status of the individual or the individual's spouse. (d) <E T="03">Special rules: Disabled individual.</E> <E T="51">4</E> <FTREF/> Individuals entitled on the basis of disability (but not on the basis of end-stage renal disease) must meet conditions that vary depending on whether they were covered under a GHP or an LGHP. <FTNT> <E T="51">4</E> Under the current statute, the SEP provision applicable to disabled individuals covered under an LGHP expires on September 1998. Unless Congress changes that date, the last SEP available under those provisions will begin with June 1998. </FTNT> (1) For a disabled individual who is or was covered under a GHP, coverage must be on the basis of the current employment status of the individual or the individual's spouse. (2) For a disabled individual who is or was covered under an LGHP, coverage must be as follows: (i) Before August 10, 1993, as an “active individual”, that is, as an employee, employer, self-employed individual (such as the employer), individual associated with the employer in a business relationship, or as a member of the family of any of those persons. (ii) On or after August 10, 1993, by reason of current employment status of the individual or a member of the individual's family. (e) <E T="03">Effective date of coverage.</E> The rule set forth in § 406.24(d) for Medicare Part A applies equally to Medicare Part B. <CITA>[61 FR 40346, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.22</SECTNO> <SUBJECT>Request for individual enrollment.</SUBJECT> (a) A request for enrollment is required of an individual who meets the eligibility requirements of § 407.10 and desires SMI, if the individual— (1) Is not entitled to hospital insurance; (2) Has previously declined enrollment in SMI; (3) Has had a previous period of SMI entitlement which terminated; (4) Resides in Puerto Rico or outside the United States; or (5) Is enrolling or reenrolling during a special enrollment period under § 407.20. (b) A request for enrollment under paragraph (a) of this section must: (1) Be signed by the individual or someone acting in his or her behalf; and (2) Be filed with SSA or CMS during the initial enrollment period, a general enrollment period, or a special enrollment period as provided in § 407.20. </SECTION> <SECTION> <SECTNO>§ 407.25</SECTNO> <SUBJECT>Beginning of entitlement: Individual enrollment.</SUBJECT> The following apply whether an individual is self-enrolled or automatically enrolled in SMI: (a) <E T="03">Enrollment during initial enrollment period.</E> (1) If an individual enrolls during the first three months of the initial enrollment period, entitlement begins with the first month of eligibility. (2) If an individual enrolls during the fourth month of the initial enrollment period, entitlement begins with the following month. (3) If an individual enrolls during the fifth month of the initial enrollment <PRTPAGE P="193"/>period, entitlement begins with the second month after the month of enrollment. (4) If an individual enrolls in either of the last two months of the initial enrollment period, entitlement begins with the third month after the month of enrollment. (5) Example. An individual first meets the eligibility requirements for enrollment in April. The initial enrollment period is January through July. The month in which the individual enrolls determines the month that begins the period of entitlement, as follows: <GPOTABLE CDEF="xs60,r10" COLS="2" OPTS="L2,i1"> <BOXHD> <CHED H="1">Enrolls in initial enrollment period</CHED> <CHED H="1">Entitlement begins on—</CHED> </BOXHD> <ROW> <ENT I="01">January </ENT> <ENT>April 1 (month eligibility requirements first met).</ENT> </ROW> <ROW> <ENT I="01">February </ENT> <ENT>April 1.</ENT> </ROW> <ROW> <ENT I="01">March</ENT> <ENT>April 1.</ENT> </ROW> <ROW> <ENT I="01">April</ENT> <ENT>May 1 (month following month of enrollment).</ENT> </ROW> <ROW> <ENT I="01">May</ENT> <ENT>July 1 (second month after month of enrollment).</ENT> </ROW> <ROW> <ENT I="01">June </ENT> <ENT>September 1 (third month after month of enrollment).</ENT> </ROW> <ROW> <ENT I="01">July </ENT> <ENT>October 1 (third month after month of enrollment).</ENT> </ROW> </GPOTABLE> (b) <E T="03">Enrollment on reenrollment during general enrollment period.</E> (1) if an individual enrolls or reenrolls during a general enrollment period before April 1, 1981 or after September 30, 1981, entitlement begins on July 1 of that calendar year. (2) If an individual enrolled or reenrolled during the general enrollment period between April 1, 1981 and September 20, 1981, entitlement began with the third month after the month in which the enrollment request was filed. (c) <E T="03">Enrollment or reenrollment during a SEP.</E> The rules set forth in § 406.24(d) of this chapter apply. <CITA>[53 FR 47204, Nov. 22, 1988, as amended at 61 FR 40347, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.27</SECTNO> <SUBJECT>Termination of entitlement: Individual enrollment.</SUBJECT> An individual's entitlement will terminate for any of the following reasons: (a) <E T="03">Death.</E> Entitlement to SMI ends on the last day of the month in which the individual dies. (b) <E T="03">Termination of hospital insurance benefits.</E> If an individual's entitlement to hospital insurance ends before the month in which he or she attains age 65, entitlement to SMI will end on the same day unless it has been previously terminated in accordance with paragraph (c) or (d) of this section. (c) <E T="03">Request by individual.</E> An individual may at any time give CMS or SSA written notice that he or she no longer wishes to participate in SMI, and request disenrollment. (1) Before July 1987, entitlement ended at the end of the calendar quarter after the quarter in which the individual filed the disenrollment request. (2) For disenrollment requests filed in or after July 1987, entitlement ends at the end of the month after the month in which the individual files the disenrollment request. (d) <E T="03">Nonpayment of premiums.</E> If an individual fails to pay the premiums, entitlement will end as provided in the rules for SMI premiums, set forth in part 408 of this chapter. </SECTION> <SECTION> <SECTNO>§ 407.30</SECTNO> <SUBJECT>Limitations on enrollment.</SUBJECT> (a) <E T="03">Initial enrollment periods</E>—(1) <E T="03">Individual under age 65.</E> An individual who has not attained age 65 may have one or more periods of entitlement to hospital insurance, based on disability. Since each period of disability entitlement entitles the individual to hospital insurance and since entitlement to hospital insurance makes the individual eligible for SMI enrollment, an individual may have an SMI initial enrollment period for each continous period of entitlement to hospital insurance. (2) <E T="03">Individuals who have attained age 65.</E> An individual who has attained age 65 may not have more than one initial enrollment period on the basis of age. However, if the individual develops ESRD after age 65, he or she may have another initial enrollment period based on meeting the requirements of § 406.13 of this chapter. (b) <E T="03">Number of enrollments.</E> There is no limitation on the number of enrollments. (c) <E T="03">Coverage under buy-in agreements.</E> For purposes of paragraph (a) of this section, the continued enrollment of an individual following the end of coverage under a State buy-in agreement in considered an initial enrollment. </SECTION> <SECTION> <PRTPAGE P="194"/> <SECTNO>§ 407.32</SECTNO> <SUBJECT>Prejudice to enrollment rights because of Federal Government misrepresentation, inaction, or error.</SUBJECT> If an individual's enrollment or nonenrollment in SMI is unintentional, inadvertent, or erroneous because of the error, misrepresentation, on inaction of a Federal employee or any person authorized by the Federal Government to act in its behalf, the Social Security Administration or CMS may take whatever action it determines is necessary to provide appropriate relief. The action may include: (a) Designation of a special initial or general enrollment period; (b) Designation of an entitlement period based on that enrollment period; (c) Adjustment of premiums; (d) Any combination of actions under paragraphs (a) through (c) of this section; or (e) Any other remedial action that may be necessary to correct or eliminate the effects of the error, misrepresentation, or inaction. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—State Buy-In Agreements</HD> <SECTION> <SECTNO>§ 407.40</SECTNO> <SUBJECT>Enrollment under a State buy-in agreement.</SUBJECT> (a) <E T="03">Statutory basis.</E> (1) Section 1843 of the Act, as amended through 1969, permitted a State to enter into an agreement with the Secretary to enroll in the SMI program certain individuals who are eligible for SMI and who are members of the buy-in group specified in the agreement. A buy-in group could include certain individuals receiving Federally-aided State cash assistance (with the option of excluding individuals also entitled to social security benefits or railroad retirement benefits) or could include all individuals eligible for Medicaid. Before 1981, December 31, 1969 was the last day on which a State could request a buy-in agreement or a modification to include a coverage group broader than the one originally selected. (2) Section 945(e) of the Omnibus Reconciliation Act of 1980 (Pub. L. 96-499) further amended section 1843 to provide that, during calendar year 1981, a State could request a buy-in agreement if it did not already have one, or request a broader coverage group for an existing agreement. (3) Several laws enacted during 1980-1987 had the effect of requiring that the buy-in groups available under section 1843 of the Act be expanded to include certain individuals who lose eligibility for cash assistance payments but are treated as if they were cash assistance recipients for Medicaid eligibility purposes. (4) Section 301(e)(1) of the Medicare Catastrophic Coverage Act of 1988 (Pub. L. 100-360) amends section 1843 of the Act to restore the 1981 provisions on a permanent basis, effective “after 1988.” (5) The same section 301, as amended by section 608(d)(14)(H) of the Family Support Act of 1988 (Pub. L. 100-485), further amended section 1843 of the Act, beginning January 1, 1989, to establish a new buy-in category consisting of Qualified Medicare Beneficiaries and to provide that a State may request a buy-in agreement if it does not already have one, or request a broader buy-in group for the existing agreement. (b) <E T="03">Definitions.</E> As used in this section, unless the context indicates otherwise— <E T="03">Cash assistance</E> means any of the following kinds of monthly cash benefits, authorized by specified titles of the Act and, for convenience, represented by initials, as follows: <E T="03">AABD</E> stands for aid to the aged, blind or disabled under the first title XVI of the Act in effect until December 31, 1973. <E T="03">AB</E> stands for aid to the blind under title X of the Act. <E T="03">AFDC</E> stands for aid to families with dependent children under Part A of title IV of the Act. <E T="03">APTD</E> stands for aid to the permanently and totally disabled under title XIV of the Act. <E T="03">OAA</E> stands for old-age assistance under title I of the Act. <E T="03">SSI</E> stands for supplemental security income for the aged, blind, and disabled under the second title XVI of the Act, effective January 1, 1974. <E T="03">SSP</E> stands for State supplementary payments, whether mandatory or optional, to an aged, blind, or disabled individual under the second title XVI or the Act.<PRTPAGE P="195"/> <E T="03">Qualified Medicare Beneficiary</E> or <E T="03">QMB</E> means an individual who meets the definition in § 400.200 of this chapter and, therefore, is eligible to have the State Medicaid agency pay Medicare cost sharing amounts on his or her behalf. <E T="03">Railroad retirement beneficiary</E> means an individual entitled to receive an annuity under the Railroad Retirement Act of 1974. <E T="03">State</E> means one of the 50 States, the District of Columbia, Guam, Puerto Rico, the Virgin Islands, American Samoa, or the Northern Mariana Islands, except when reference is made to “the 50 States”. <E T="03">State buy-in agreement</E> or <E T="03">buy-in agreement</E> means an agreement authorized by section 1843 of the Act, under which a State secures SMI or premium HI coverage for individuals who are members of the buy-in group specified in the agreement, by enrolling them and paying the premiums on their behalf. (c) <E T="03">Basic rules.</E> (1) A State that has a buy-in agreement in effect must enroll any individual who is eligible to enroll in SMI under § 407.10. (2) Any State that does not have a buy-in agreement in effect may request buy-in for any one of the groups specified in §§ 407.42 and 407.43. (3) Any State that does have an agreement may request a modification to cover a broader buy-in group or cancel its current agreement and request a new agreement to cover a narrower group. <CITA>[56 FR 38080, Aug. 12, 1991; 56 FR 50058, Oct. 3, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.42</SECTNO> <SUBJECT>Buy-in groups available to the 50 States, the District of Columbia, and the Northern Mariana Islands.</SUBJECT> (a) <E T="03">Categories included in the buy-in groups.</E> The buy-in groups that are available to the 50 States, the District of Columbia, and the Northern Mariana Islands are specified in paragraph (b) of this section in terms of the following categories: (1) <E T="03">Category A:</E> Individuals who— (i) Receive SSI or SSP or both; and (ii) Are covered under the State's Medicaid plan as categorically needy. (2) <E T="03">Category B:</E> Individuals who— (i) Under the Act or any other provision of Federal law are treated, for Medicaid eligibility purposes, as though they were receiving SSI or SSP; and (ii) Are covered under the State's Medicaid plan as categorically needy. (3) <E T="03">Category C:</E> Individuals who are receiving AFDC. (4) <E T="03">Category D:</E> Individuals who, under the Act or any other provision of Federal law, are treated, for Medicaid eligibility purposes, as though they were receiving AFDC. (5) <E T="03">Category E:</E> Individuals who, in accordance with § 435.114 or § 435.134 of this chapter, are covered under the State's Medicaid plan despite the increase in social security benefits provided by Public Law 92-336. (6) <E T="03">Category F:</E> Individuals who are Qualified Medicare Beneficiaries.<E T="51">1</E> <FTREF/> <FTNT> <E T="51">1</E> Rules for buy-in for premium hospital insurance for QMBs are set forth in § 406.26 of this chapter. </FTNT> (7) <E T="03">Category G:</E> All other individuals who are eligible for Medicaid. (b) <E T="03">Buy-in groups available.</E> Any of the 50 States, the District of Columbia, and the Northern Mariana Islands may buy-in for one of the following groups: (1) <E T="03">Group 1:</E> Categories A through G. (2) <E T="03">Group 2:</E> Categories A through F. (3) <E T="03">Group 3:</E> Categories A through E. (4) <E T="03">Group 4:</E> Categories A, B, and F, individuals in categories C and D who are not social security or railroad retirement beneficiaries, and individuals in category E who are included in that category (in accordance with § 435.134 of this chapter) because they received OAA, AB, APTD, or AABD in August 1972 or would have been eligible to receive such cash assistance for that month if they had applied or had not been institutionalized. (5) <E T="03">Group 5:</E> Categories A and B, individuals in categories C and D who are not social security or railroad retirement beneficiaries, and individuals in category E who are included in that category (in accordance with § 435.134 of this chapter) because they received OAA, AB, APTD, or AABD in August 1972 or would have been eligible to receive such cash assistance for that month if they had applied or had not been institutionalized. (6) <E T="03">Group 6:</E> Categories A, B, and F, and individuals in category E who are <PRTPAGE P="196"/>included in that category (in accordance with § 435.134 of this chapter) because they received AABD in August 1972 or would have been eligible to receive AABD for that month if they had applied or had not been institutionalized. This option is available only to those States that had an AABD program as of December 31, 1973. (7) <E T="03">Group 7:</E> Categories A and B, and individuals in category E who are included in that category (in accordance with § 435.134 of this chapter) because they received AABD in August 1972 or would have been eligible to receive AABD for that month if they had applied or had not been institutionalized. This option is available only to those States that had an AABD program as of December 31, 1973. <CITA>[56 FR 38081, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.43</SECTNO> <SUBJECT>Buy-in groups available to Puerto Rico, Guam, the Virgin Islands, and American Samoa.</SUBJECT> (a) <E T="03">Categories included in buy-in groups.</E> The buy-in groups that are available to Puerto Rico, Guam, the Virgin Islands, and American Samoa, which are not covered by the SSI program, are described in paragraph (b) of this section in terms of the following categories: (1) <E T="03">Category A:</E> Individuals receiving OAA, AB, APTD, or AFDC. (2) <E T="03">Category B:</E> Individuals who, under the Act or any other provision of Federal law, are treated, for Medicaid eligibility purposes, as though they were receiving AFDC. (3) <E T="03">Category C:</E> Individuals who, in accordance with § 436.112 of this chapter, are covered under the State's Medicaid plan despite the increase in social security benefits provided by Public Law 92-336. (4) <E T="03">Category D:</E> Individuals who are Qualified Medicare Beneficiaries.<E T="51">1</E> <FTREF/> <FTNT> <E T="51">1</E> Rules for buy-in for premium hospital insurance for QMBs are set forth in § 406.26 of this chapter. </FTNT> (5) <E T="03">Category E:</E> All other individuals who are eligible for Medicaid. (b) <E T="03">Buy-in groups available.</E> Puerto Rico, Guam, the Virgin Islands, and American Samoa may choose any of the following coverage groups: (1) <E T="03">Group 1:</E> Categories A through E. (2) <E T="03">Group 2:</E> Categories A through D. (3) <E T="03">Group 3:</E> Categories A through C. (4) <E T="03">Group 4:</E> Individuals in category D, and individuals in categories A and B who are not social security or railroad retirement beneficiaries. (5) <E T="03">Group 5:</E> Individuals in categories A and B who are not social security or railroad retirement beneficiaries. (6) <E T="03">Group 6:</E> Individuals in category D, individuals in category A who are receiving OAA, and individuals in category C who are included in that category (in accordance with § 436.112 of this chapter) because they received OAA for August 1972 or would have been eligible to receive OAA for that month if they had applied or had not been institutionalized. (7) <E T="03">Group 7:</E> Individuals in category A who are receiving OAA, and individuals in category C who are included in that category (in accordance with § 436.112 of this chapter) because they received OAA for August 1972 or would have been eligible to receive OAA for that month if they had applied or had not been institutionalized. (8) <E T="03">Group 8:</E> Individuals in category D and individuals in category A who are receiving OAA and are not social security or railroad retirement beneficiaries. (9) <E T="03">Group 9:</E> Individuals in category A who are receiving OAA and are not social security or railroad retirement beneficiaries. <CITA>[56 FR 38082, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.45</SECTNO> <SUBJECT>Termination of State buy-in agreements.</SUBJECT> (a) <E T="03">Termination by the State—</E>(1) <E T="03">Termination after advance notice.</E> A State may terminate its buy-in agreement after giving CMS 3 months, advance notice. (2) <E T="03">Termination without advance notice.</E> A State may terminate its buy-in agreement without advance notice if— (i) The State gives CMS written certification to the effect that it is no longer legally able to comply with one or more of the provisions of the agreement; and (ii) Submits a supporting opinion from the appropriate State legal officer, if CMS requests such an opinion. (b) <E T="03">Termination by CMS.</E> If CMS, after giving the State notice and opportunity for hearing, finds that the State <PRTPAGE P="197"/>has failed to comply substantially with one or more of the provisions of the agreement, other than the requirement for timely payment of premiums, CMS will give the State written notice to the effect that the agreement will terminate on the date indicated in the notice unless, before that date, CMS finds that there is no longer that failure to comply. (Rules for collection of overdue premiums, including assessment of interest and offset against FFP due the State, are those set forth in the Notice published on September 30, 1985 at 50 FR 39784.) </SECTION> <SECTION> <SECTNO>§ 407.47</SECTNO> <SUBJECT>Beginning of coverage under a State buy-in agreement.</SUBJECT> (a) <E T="03">General rule.</E> The beginning of an individual's coverage period depends on two factors: (1) The individual's meeting the SMI eligibility requirements and the requirements for being a member of the buy-in group; and (2) The effective date of the buy-in agreement or agreement modification that covers the group to which the individual belongs, and which may not be earlier than the third month after the month in which the agreement or modification is executed. (b) <E T="03">Application of general rule: Medicaid eligibles who are, or are treated as, cash assistance recipients.</E> For Medicaid eligibles who are, or are treated as, cash assistance recipients (that is, are members of categories A through E of § 407.42(a) or categories A through C of § 407.43(a)), coverage begins with the later of the following: (1) The first month in which the individual— (i) Meets the SMI eligibility requirements specified in § 407.10; and (ii) Is a member of one of those categories. (2) The month in which the buy-in agreement is effective. (c) <E T="03">Application of general rule: Qualified Medicare Beneficiaries.</E> For individuals who are QMBs (that is, are members of category F of § 407.42 or category D of § 407.43(a)), coverage begins with the later of the following: (1) The first month in which the individual meets the SMI eligibility requirements specified in § 407.10, and has QMB status. (2) The month in which the buy-in agreement or agreement modification covering QMBs is effective. (d) <E T="03">Application of general rule: Other individuals eligible for Medicaid.</E> For individuals who are members of category G of § 407.42(a) or category E of § 407.43(a), coverage begins with the later of the following: (1) The second month after the month in which the individual— (i) Meets the SMI eligibility requirements specified in § 407.10; and (ii) Is determined to be eligible for Medicaid. (2) The month in which the buy-in agreement or agreement modification is effective. (e) <E T="03">Coverage based on erroneous report.</E> If the State erroneously reports to SSA that an individual is a member of its coverage group, the rules of paragraphs (a) through (d) of this section apply, and coverage begins as though the individual were in fact a member of the group. Coverage will end only as provided in § 407.48. <CITA>[56 FR 38082, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.48</SECTNO> <SUBJECT>Termination of coverage under a State buy-in agreement.</SUBJECT> An individual's coverage under a buy-in agreement terminates with the earliest of the following events: (a) <E T="03">Death.</E> Coverage ends on the last day of the month in which the individual dies. (b) <E T="03">Loss of entitlement to hospital insurance benefits before age 65.</E> If an individual loses entitlement to hospital insurance benefits before attaining age 65, coverage ends on the last day of the last month for which he or she is entitled to hospital insurance. (c) <E T="03">Loss of eligibility for the buy-in group.</E> If an individual loses eligibility for inclusion in the buy-in group, buy-in coverage ends as follows: (1) On the last day of the last month for which he or she is eligible for inclusion in the group, if CMS determines ineligibility or receives a State ineligibility notice by the 25th day of the second month after the month in which the individual becomes ineligible for inclusion in the group. (2) On the last day of the second month before the month in which CMS receives a State ineligibility notice <PRTPAGE P="198"/>later than the time specified in paragraph (c)(1) of this section. A notice received by CMS after the 25th day of the month is considered to have been received in the following month. (d) <E T="03">Termination or modification of buy-in agreement.</E> If the State's buy-in agreement is terminated, or modified to substitute a narrower buy-in group, coverage ends on the last day of the last month for which the agreement was in effect, or covered the broader buy-in group. <CITA>[53 FR 47204, Nov. 22, 1988, as amended at 56 FR 38082, Aug. 12, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 407.50</SECTNO> <SUBJECT>Continuation of coverage: Individual enrollment following end of coverage under a State buy-in agreement.</SUBJECT> (a) <E T="03">Deemed enrollment.</E> When coverage under a buy-in agreement ends because the agreement terminates, or is modified to substitute a narrower buy-in group, or because the individual is no longer eligible for inclusion in the buy-in group, the individual— (1) Is considered to have enrolled during his or her initial enrollment period; and (2) Will be entitled to SMI on this basis and liable for SMI premiums beginning with the first month for which he or she is no longer covered under the buy-in agreement. (b) <E T="03">Voluntary termination.</E> (1) An individual may voluntarily terminate entitlement acquired under paragraph (a) of this section by filing, with SSA or CMS, a request for disenrollment. (2) Voluntary disenrollment is effective as follows: (i) If the individual files a request within 30 days after the date of CMS's notice that buy-in coverage has ended, the individual's entitlement ends on the last day of the last month for which the State paid the premium. (ii) If the individual files the request more than 30 days but not more than 6 months after buy-in coverage ends, entitlement ends on the last day of the month in which the request is filed. (iii) If the individual files the request later than the 6th month after buy-in coverage ends, entitlement ends at the end of the month after the month in which request is filed.<E T="51">1</E> <FTREF/> <FTNT> <E T="51">1</E> For requests filed before July 1987, entitlement ended on the last day of the calendar quarter after the quarter in which the disenrollment request was filed. </FTNT> <CITA>[53 FR 47204, Nov. 22, 1988, as amended at 56 FR 38082, Aug. 12, 1991]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 408</EAR> <HD SOURCE="HED">PART 408—PREMIUMS FOR SUPPLEMENTARY MEDICAL INSURANCE</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>408.1</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> <SECTNO>408.2</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> <SECTNO>408.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>408.4</SECTNO> <SUBJECT>Payment obligations.</SUBJECT> <SECTNO>408.6</SECTNO> <SUBJECT>Methods and priorities for payment.</SUBJECT> <SECTNO>408.8</SECTNO> <SUBJECT>Grace period and termination date.</SUBJECT> <SECTNO>408.10</SECTNO> <SUBJECT>Claim for monthly benefits pending concurrently with request for SMI enrollment.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Amount of Monthly Premium</HD> <SECTNO>408.20</SECTNO> <SUBJECT>Monthly premiums.</SUBJECT> <SECTNO>408.22</SECTNO> <SUBJECT>Increased premiums for late enrollment and for reenrollment.</SUBJECT> <SECTNO>408.24</SECTNO> <SUBJECT>Individuals who enrolled or reenrolled before April 1, 1981 or after September 30, 1981.</SUBJECT> <SECTNO>408.25</SECTNO> <SUBJECT>Individuals who enrolled or reenrolled between April 1 and September 30, 1981.</SUBJECT> <SECTNO>408.26</SECTNO> <SUBJECT>Examples.</SUBJECT> <SECTNO>408.27</SECTNO> <SUBJECT>Rounding the monthly premium.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Deduction From Monthly Benefits</HD> <SECTNO>408.40</SECTNO> <SUBJECT>Deduction from monthly benefits: Basic rules.</SUBJECT> <SECTNO>408.42</SECTNO> <SUBJECT>Deduction from railroad retirement benefits.</SUBJECT> <SECTNO>408.43</SECTNO> <SUBJECT>Deduction from social security benefits.</SUBJECT> <SECTNO>408.44</SECTNO> <SUBJECT>Deduction from civil service annuities.</SUBJECT> <SECTNO>408.45</SECTNO> <SUBJECT>Deduction from age 72 special payments.</SUBJECT> <SECTNO>408.46</SECTNO> <SUBJECT>Effect of suspension of social security benefits.</SUBJECT> <SECTNO>408.47</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>408.50</SECTNO> <SUBJECT>When premiums are considered paid.</SUBJECT> <SECTNO>408.52</SECTNO> <SUBJECT>Change from direct remittance to deduction.</SUBJECT> <SECTNO>408.53</SECTNO> <SUBJECT>Change from partial direct remittance to full deduction.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Direct Remittance: Individual Payment</HD> <SECTNO>408.60</SECTNO> <SUBJECT>Direct remittance: Basic rules.<PRTPAGE P="199"/> </SUBJECT> <SECTNO>408.62</SECTNO> <SUBJECT>Initial and subsequent billings.</SUBJECT> <SECTNO>408.63</SECTNO> <SUBJECT>Billing procedures when monthly benefits are less than monthly premiums.</SUBJECT> <SECTNO>408.65</SECTNO> <SUBJECT>Payment options.</SUBJECT> <SECTNO>408.68</SECTNO> <SUBJECT>When premiums are considered paid.</SUBJECT> <SECTNO>408.70</SECTNO> <SUBJECT>Change from quarterly to monthly payments.</SUBJECT> <SECTNO>408.71</SECTNO> <SUBJECT>Change from deduction or State payment to direct remittance.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Direct Remittance: Group Payment</HD> <SECTNO>408.80</SECTNO> <SUBJECT>Basic rules.</SUBJECT> <SECTNO>408.82</SECTNO> <SUBJECT>Conditions for group billing.</SUBJECT> <SECTNO>408.84</SECTNO> <SUBJECT>Billing and payment procedures.</SUBJECT> <SECTNO>408.86</SECTNO> <SUBJECT>Responsibilities under group billing arrangement.</SUBJECT> <SECTNO>408.88</SECTNO> <SUBJECT>Refund of group payments.</SUBJECT> <SECTNO>408.90</SECTNO> <SUBJECT>Termination of group billing arrangement.</SUBJECT> <SECTNO>408.92</SECTNO> <SUBJECT>Change from group payment to deduction or individual payment.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Termination and Reinstatement of Coverage</HD> <SECTNO>408.100</SECTNO> <SUBJECT>Termination of coverage for nonpayment of premiums.</SUBJECT> <SECTNO>408.102</SECTNO> <SUBJECT>Reconsideration of termination.</SUBJECT> <SECTNO>408.104</SECTNO> <SUBJECT>Reinstatement procedures.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Collection of Unpaid Premiums; Refund of Excess Premiums After the Death of the Enrollee</HD> <SECTNO>408.110</SECTNO> <SUBJECT>Collection of unpaid premiums.</SUBJECT> <SECTNO>408.112</SECTNO> <SUBJECT>Refund of excess premiums after the enrollee dies.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Supplementary Medical Insurance Premium Surcharge Agreements</HD> <SECHD>Sec.</SECHD> <SECTNO>408.200</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> <SECTNO>408.201</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>408.202</SECTNO> <SUBJECT>Conditions for participation.</SUBJECT> <SECTNO>408.205</SECTNO> <SUBJECT>Application procedures.</SUBJECT> <SECTNO>408.207</SECTNO> <SUBJECT>Billing and payment procedures.</SUBJECT> <SECTNO>408.210</SECTNO> <SUBJECT>Termination of SMI premium surcharge agreement. </SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 52 FR 48115, Dec. 18, 1987, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 408.1</SECTNO> <SUBJECT>Statutory basis.</SUBJECT> (a) This part implements certain provisions of sections 1837 through 1840 and 1881(d) of the Social Security Act (the Act) and conforms to other regulations that implement section 1843 of the Act. Section 1838(b) requires regulations to establish when an individual's coverage ends because of nonpayment of premiums. It also specifies that those regulations may provide a grace period for payment of overdue premiums without loss of coverage. Section 1839 sets forth the specific procedures for determining the amount of the monthly premium and section 1840 establishes the rules for payment of premiums. Section 1843 provides that a State may enter into a buy-in agreement to secure SMI coverage for certain individuals by enrolling them in the SMI program and paying the premiums on their behalf. Section 1881(d) provides that Medicare payment, for the reasonable charges incurred in connection with a kidney donation, shall be made (without regard to deductible, premium, or coinsurance provisions of title XVIII) as prescribed in regulations. (b) The Federal Claims Collection Act (31 U.S.C. 3711), as implemented by 4 CFR parts 101-105, provides the basic authority for recovery of debts owed the United States government and specifies the conditions for the suspension or termination of collection action. Departmental regulations at 45 CFR part 30, updated by a final rule published on January 5, 1987 (52 FR 260) set forth procedures for the exercise of the Department's authority to collect and dispose of debts and were intended to complement rules applicable to particular programs. CMS rules are set forth at 42 CFR part 401, subpart F. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4158, Feb. 12, 1988, as amended at 56 FR 48112, Sept. 24, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.2</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> (a) This part sets forth the policies and procedures for determining the amount of monthly supplementary medical insurance (SMI) premiums, for the payment, collection, or refund of premiums, for termination of coverage because of nonpayment of premiums, and for reinstatement of coverage if certain conditions are met. It conforms to subpart C of part 407 of this chapter, which sets forth the requirements for State buy-in agreements. These policies are intended to protect enrollee <PRTPAGE P="200"/>coverage to the maximum degree compatible with maintaining the integrity of the SMI program. (b) Policies that apply to premiums that certain individuals must pay in order to become entitled to Medicare Part A hospital insurance benefits, are set forth in part 406 of this chapter. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this part, unless the context indicates otherwise— <E T="03">Enrollee</E> means an individual who is enrolled in the SMI program under Medicare Part B. <E T="03">Taxable year</E> means the 12-month period (calendar or fiscal year) for which the individual files his or her income tax return. </SECTION> <SECTION> <SECTNO>§ 408.4</SECTNO> <SUBJECT>Payment obligations.</SUBJECT> (a) <E T="03">Month for which payment is due.</E> (1) A payment is due for each month, beginning with the first month of SMI coverage and continuing through the month of death or, if earlier, the month in which coverage terminates. (2) A premium is due for the month of death, if SMI coverage is still in effect, even though the individual dies on the first day of the month. (b) <E T="03">Overdue premiums.</E> (1) Overdue premiums constitute an obligation enforceable against the enrollee or the enrollee's estate. (2) Overdue premiums are collected— (i) By deduction from social security or railroad retirement benefits or Federal civil service annuities; (ii) Directly from the enrollee or the enrollee's estate; or (iii) By offset against any SMI payments payable to the enrollee or the enrollee's estate. (3) Interest is not charged on overdue premiums, except under a State buy-in agreement, as provided in § 408.6(c)(4). (c) <E T="03">Premiums not required for certain kidney donors.</E> (1) No premiums are required for SMI benefits related to the donation of a kidney if the donor is not an enrollee. (2) A kidney donor who is an enrollee is not relieved of the obligation for premiums. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.6</SECTNO> <SUBJECT>Methods and priorities for payment.</SUBJECT> (a) <E T="03">Methods of payment</E>—(1) <E T="03">General rules.</E> Premiums are paid by one of the following four methods: (i) Payment by a State under a buy-in agreement. (ii) Deduction from monthly railroad retirement of social security cash benefits or Federal civil service annuities. (iii) Direct remittance on an individual basis, by or on behalf of the enrollee. (iv) Direct remittance on a group basis, by an employer, union, lodge or other organization, or by an entity of State or local government. (2) <E T="03">Special situations.</E> (i) If the monthly social security benefit or age 72 special benefit is less than the monthly premium, the benefit is withheld and the enrollee is required to pay the balance through direct remittance. (This situation may arise if the individual first becomes eligible for social security benefits after December 31, 1981, and is, therefore, not eligible for the fixed minimum, or receives age 72 special benefits that are reduced because the individual receives a government pension.) (ii) If the monthly railroad retirement benefit or civil service annuity payment is less than the premium, the monthly payment is not withheld and the enrollee is required to pay the total premium by direct remittance. (b) <E T="03">Priorities for payment.</E> (1) If an enrollee is enrolled under a State buy-in agreement— (i) SMI premiums may not be deducted from monthly cash benefits or annuities; and (ii) The enrollee may not be required to pay by direct remittance. (2) If an enrollee is not covered under a State buy-in agreement, but is receiving a monthly benefit or an annuity specified in paragraph (a)(1)(ii) of this section—<PRTPAGE P="201"/> (i) The premiums are deducted from that benefit or annuity; or (ii) If the monthly benefit or payment is less than the monthly premium, the rules of paragraph (a)(2) of this section apply. (3) If an enrollee is neither covered under a State buy-in agreement, nor receiving monthly benefits or annuity payments, the premiums must be paid totally by direct remittance. (c) <E T="03">Payment by a State under a buy-in agreement.</E> (1) A buy-in agreement is an agreement under which a State, through enrollment and payment of SMI premiums, secures SMI benefits for individuals who are eligible for that program and also eligible for certain other cash or medical benefits. (Policies on enrollment under State buy-in agreements are contained in subpart C of part 407 of this chapter.) (2) The State pays the premiums for each month for which an individual is covered under the agreement. (3) If an individual's coverage under a State buy-in agreement terminates, his coverage continues on an individual enrollment basis. The premiums are then deducted from benefits, as set forth in subpart C of this part, or paid by direct remittance in accordance with subpart D or subpart E of this part. (4) Policy on collection of premiums from buy-in States is set forth in a <E T="04">Federal Register</E> notice published on September 30, 1985 at 50 FR 39784. </SECTION> <SECTION> <SECTNO>§ 408.8</SECTNO> <SUBJECT>Grace period and termination date.</SUBJECT> (a) <E T="03">Grace period</E>. (1) For all initial premium payments (monthly or quarterly), and subsequent monthly or quarterly payments, the grace period ends with the last day of the third month after the billing month. (2) For payments required because the monthly benefit is less than the monthly premium, the grace period ends on April 30 of the year following the calendar year which the premiums are due. (b) <E T="03">Extension of grace period: Last day is nonwork day.</E> If the last day of the grace period is a Saturday, Sunday, legal holiday, or a day that, by statute or executive order, is a nonwork day for Federal employees, the grace period is extended to the next succeeding work day. (c) <E T="03">Termination date.</E> The end of the grace period is the termination date for SMI coverage if overdue premiums have not been paid by that date in accordance with § 408.68. (d) <E T="03">Extension of grace period for good cause.</E> (1) CMS may reinstate entitlement, without interruption of coverage, if the individual shows good cause for failure to pay within the initial grace period, and pays all overdue premiums within three calendar months after the termination date. (2) Good cause will be found if the individual establishes, by a credible statement, that failure to pay premiums within the initial grace period was due to conditions over which he or she had no control, or which he or she could not reasonably have been expected to foresee. <CITA>[52 FR 48115, Dec. 18, 1987, as amended at 56 FR 48112, Sept. 24, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.10</SECTNO> <SUBJECT>Claim for monthly benefits pending concurrently with request for SMI enrollment.</SUBJECT> (a) If it is clear that an individual who applies for social security or railroad retirement benefits and for SMI will be entitled to monthly benefits, the application for monthly benefits is processed simultaneously with the request for SMI enrollment. (1) If monthly benefits are paid, the SMI premiums are deducted from those benefits. (2) If monthly benefits are suspended (for instance, because the individual's earnings exceed the maximum allowed by law), the enrollee is billed for direct remittance. (b) If it is clear that an individual will be entitled to SMI, but there is substantial question as to eligibility for monthly benefits, the request for SMI enrollment is processed separately. (1) When SMI enrollment is approved, the enrollee is billed for direct remittance. (2) When the application for monthly benefits is adjudicated, the following rules apply: (i) If monthly benefits are paid, the SMI premiums are deducted from those benefits, with appropriate adjustments <PRTPAGE P="202"/>for any premiums already paid by direct remittance. (ii) If the application for monthly benefits is approved but the benefits are suspended, the grace period is as set forth in § 408.8(a). (iii) If the application for monthly benefits is denied, the grace period is as set forth in § 408.8(a)(1). <CITA>[52 FR 48115, Dec. 18, 1987, as amended at 56 FR 48112, Sept. 24, 1991]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Amount of Monthly Premiums</HD> <SECTION> <SECTNO>§ 408.20</SECTNO> <SUBJECT>Monthly premiums.</SUBJECT> (a) <E T="03">Statutory provisions.</E> (1) The law established a monthly premium of $3 for the initial period of the program. It also set forth criteria and procedures for the Secretary to follow each December, beginning with December 1968, to determine and promulgate the standard monthly premium for the 12-month period beginning with July of the following year. (2) The law was amended in 1983 to require that the Secretary promulgate the standard monthly premium in September of that year, and each year thereafter, to be effective for the 12 months beginning with the following January. (3) The standard monthly premium applies to individuals who enroll during their initial enrollment periods. In other situations, that premium may be increased or decreased as specified in this subpart. (4) The law was further amended in 1984 to include a temporary “hold harmless” provision (set forth in paragraph (e) of this section), that was subsequently extended and finally made permanent in 1988. (b) <E T="03">Criteria and procedures for the period from July 1976 through December 1983, the period from January 1991 through December 1995, and for periods after December 1998.</E> (1) For periods from July 1976 through December 1983 and after December 1998, the Secretary determines and promulgates as the standard monthly premium (for disabled as well as aged enrollees) the lower of the following: (i) The actuarial rate for the aged. (ii) The monthly premium promulgated the previous December for the year beginning July 1, increased by a percentage that is the same as the latest cost-of-living increase in old age insurance benefits that occurred before the current promulgation. (Because of the change in the effective dates of the premium amount (under paragraph (a)(2) of this section), there was no increase in the standard monthly premium for the period July 1983 through December 1983.) (2) For periods after December 1998, the Secretary determines the standard monthly premium in the manner specified in paragraph (b)(1) of this section, but promulgates it in September for the following calendar year. (3) The premiums for calendar years 1991 through 1995 are those amounts as specified by section 1839(e)(1)(B) of the Act as follows: (i) In 1991, $29.90; (ii) In 1992, $31.80; (iii) In 1993, $36.60; (iv) In 1994, $41.10; and (v) In 1995, $46.10. (c) <E T="03">Premiums for calendar years 1984 through 1990 and 1996 through 1998.</E> For calendar years 1984 through 1990 and 1996 through 1998, the standard monthly premium for all enrollees— (1) Is equal to 50 percent of the actuarial rate for enrollees age 65 or over, that is, is calculated on the basis of 25 percent of program costs without regard to any cost-of-living increase in old age insurance benefits; and (2) Is promulgated in the preceding September. (d) <E T="03">Limitation on increase of standard premium: 1987 and 1988.</E> If there is no cost-of-living increase in old age or disability benefits for December 1985 or December 1986, the standard monthly premiums for 1987 and 1988 (promulgated in September 1986 and September 1987, respectively) may not be increased. (e) <E T="03">Nonstandard premiums for certain cases</E>—(1) <E T="03">Basic rule.</E> A nonstandard premium may be established in individual cases only if the individual is entitled to old age or disability benefits for the months of November and December, and actually receives the corresponding benefit checks in December and January.<PRTPAGE P="203"/> (2) <E T="03">Special rules: Calendar years 1987 and 1988.</E> For calendar years 1987 and 1988, the following rules apply: (i) A nonstandard premium may be established if there is a cost-of-living increase in old age or disability benefits but, because the increase in the standard premium is greater than the cost-of-living increase, the beneficiary would receive a lower cash benefit in January than he or she received in December. (ii) A nonstandard premium may not be established if the reduction in the individual's benefit would result, in whole or in part, from any circumstance other than the circumstance described in paragraph (e)(2)(i) of this section. (3) <E T="03">Special rule: Calendar years after 1988.</E> (i) Beginning with calendar year 1989, a premium increase greater than the cost-of-living increase is still a prerequisite for a nonstandard premium. (ii) However, a nonstandard premium is not precluded solely because the cash benefit is further reduced as a result of government pension offset or workers' compensation payment. (4) <E T="03">Amount of nonstandard premium.</E> The nonstandard premium is the greater of the following: (i) The premium paid for December. (ii) The standard premium promulgated for January, reduced as necessary to compensate for— (A) The fact that the cost-of-living increase was less than the increase in the standard premium; or (B) The further reduction in benefit because of government pension offset or workers' compensation payments. (5) <E T="03">Effective dates of nonstandard premium.</E> A nonstandard premium established under this paragraph (e) continues in effect for the rest of the calendar year even if later there are retroactive adjustments in benefit payments. (The nonstandard premium could be affected by a determination that the individual had not established, or had lost, entitlement to monthly benefits for November or December, or both.) (6) <E T="03">Effect of late enrollment or reenrollment.</E> A nonstandard premium is subject to increase for late enrollment or reenrollment as required under other sections of this subpart. The increase is computed on the basis of the standard premium and added to the nonstandard premium. <CITA>[56 FR 8839, Mar. 1, 1991, as amended at 59 FR 26959, May 25, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.22</SECTNO> <SUBJECT>Increased premiums for late enrollment and for reenrollment.</SUBJECT> For an individual who enrolls after expiration of his or her initial enrollment period or reenrolls after termination of a coverage period, the standard monthly premium determined under § 408.20 is increased by ten percent for each full twelve months in the periods specified in §§ 408.24 and 408.25. </SECTION> <SECTION> <SECTNO>§ 408.24</SECTNO> <SUBJECT>Individuals who enrolled or reenrolled before April 1, 1981 or after September 30, 1981.</SUBJECT> (a) <E T="03">Enrollment.</E> For an individual who first enrolled before April 1, 1981 or after September 30, 1981, the period <E T="03">includes</E> the number of months elapsed between the close of the individual's initial enrollment period and the close of the enrollment period in which he or she first enrolled, and <E T="03">excludes</E> the following: (1) The three months of January through March 1968, if the individual first enrolled before April 1968. (2) Any months before January 1973 during which the individual was precluded from enrolling or reenrolling by the 3-year limitation on enrollment or reenrollment that was in effect before October 30, 1972. (3) Any months in or before a period of coverage under a State buy-in agreement. (4) For an individual under age 65, any month before his or her current continuous period of entitlement to hospital insurance. (5) For an individual age 65 or older, any month before the month he or she attained age 65. (6) For premiums due for months beginning with September 1984 and ending with May 1986, the following: (i) Any months after December 1982 during which the individual was— (A) Age 65 to 69; (B) Entitled to hospital insurance (Medicare Part A); and (C) Covered under a group health plan (GHP) by reason of current employment status.<PRTPAGE P="204"/> (ii) Any months of SMI coverage for which the individual enrolled during a special enrollment period as provided in § 407.20 of this chapter. (7) For premiums due for months beginning with June 1986, the following: (i) Any months after December 1982 during which the individual was: (A) Age 65 or over; and (B) Covered under a GHP by reason of current employment status. (ii) Any months of SMI coverage for which the individual enrolled during a special enrollment period as provided in § 407.20 of this chapter. (8) For premiums due for months beginning with January 1987, the following: (i) Any months after December 1986 and before October 1998 during which the individual was: (A) A disabled Medicare beneficiary under age 65; (B) Not eligible for Medicare on the basis of end stage renal disease, under § 406.13 of this chapter; and (C) Covered under an LGHP as described in § 407.20 of this chapter. (ii) Any months of SMI coverage for which the individual enrolled during a special enrollment period as provided in § 407.20 of this chapter. (9) For premiums due for months beginning with July 1990, the following: (i) Any months after December 1986 during which the individual met the conditions of paragraphs (a)(8)(i)(A) and (a)(8)(i)(B) of this section, and was covered under a GHP by reason of the current employment status of the individual or the individual's spouse. (ii) Any months of SMI coverage for which the individual enrolled during a special enrollment period as provided in § 407.20 of this chapter. (b) <E T="03">Reenrollment.</E> For an individual who reenrolled before April 1, 1981 or after September 30, 1981, the period: (1) <E T="03">Includes</E> the following: (i) The number of months elapsed between the close of the individual's initial enrollment period and the close of the enrollment period in which he or she first enrolled; plus (ii) The number of months elapsed between the individual's initial period of coverage and the close of the enrollment period in which he or she reenrolled; plus (iii) The number of months elapsed between each subsequent period of coverage and the close of the enrollment period in which he or she reenrolled. (2) <E T="03">Excludes</E> the following: (i) The periods specified in paragraphs (a)(1) through (a)(9) of this section; and (ii) Any month before April 1981 during which the individual was precluded from reenrolling by the two-enrollment limitation in effect before that date. <CITA>[52 FR 48118, Dec. 18, 1987, as amended at 53 FR 6648, Mar. 2, 1988; 61 FR 40347, Aug. 2, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.25</SECTNO> <SUBJECT>Individuals who enrolled or reenrolled between April 1 and September 30, 1981.</SUBJECT> (a) <E T="03">Basic rules.</E> Except as specified in paragraph (b) of this section, the rules set forth in § 408.24 apply to an individual who enrolled or reenrolled between April 1 and September 30, 1981. (b) <E T="03">Exception.</E> For an individual who enrolled or reenrolled between April 1 and September 30, 1981, the months to be counted ran through the month in which he or she reenrolled. (During those 6 months, continuous open enrollment was in effect and there was no 3-month “general enrollment period”.) </SECTION> <SECTION> <SECTNO>§ 408.26</SECTNO> <SUBJECT>Examples.</SUBJECT> <E T="03">Example 1.</E> Mr. J, who became age 65 and otherwise eligible for enrollment in November 1965, first enrolls in March 1968. The months to be included in determining the amount of the increase in Mr. J's premiums begin with June 1966 (the first month after the close of his initial enrollment period) and extend through December 1967 (the period January through March of 1968 is excluded in determining the total months) for a total of 19 months. Since there is only one full 12-month period in 19 months, Mr. J's premiums will be 10 percent greater than if he had enrolled in his initial enrollment period. <E T="03">Example 2.</E> Mr. V, who enrolled in December 1965, voluntarily terminates his enrollment effective midnight December 31, 1967. He enrolls for a second time in January 1969. The months to be included in determining the amount of the increase in Mr. V's premiums are January 1968 through March 1969, a total of 15 months. Since this totals one full 12-month period. Mr. V's <PRTPAGE P="205"/>monthly premium, will be increased by 10 percent. <E T="03">Example 3.</E> Ms. N becomes age 65 in July 1965 and first enrolls in December 1967. She pays premiums increased by 10 percent above the regular rate, beginning July 1968, the first month of her SMI coverage. Ms. N fails to pay the premiums for the calendar quarter ending June 30, 1970, and her coverage is terminated on that date, the end of her grace period. Ms. N enrolls for a second time in January 1971. The months to be included in determining the amount of the increase in Ms. N's premiums are June 1966 through December 1967, a total of 19 months, and July 1970 through March 1971, a total of 9 months, for a grand total of 28 months. Since this totals two full 12-month periods, Ms. N's monthly premium will be increased by 20 percent. <E T="03">Example 4.</E> Mr. X attained age 65 in August 1966 and enrolled during his initial enrollment period. His coverage was terminated effective June 30, 1968, for nonpayment of premiums. He reenrolls in March 1973. For purposes of computing any applicable premium increase, he will not be charged any months between March 1971 (the end of the last general enrollment period during which he was eligible to reenroll under the law in effect before October 30, 1972) and January 1973. Therefore, he will be charged 36 months (July 1968-March 1971 plus January 1973-March 1973) and his premiums for his second period of coverage will be increased 30 percent. <E T="03">Example 5.</E> Ms. C, who attained age 65 in August 1973, had two periods of supplementary medical insurance coverage, both of which were terminated because of nonpayment of premiums: August 1973 through April 1975 and July 1977 through August 1978. She reenrolls in July 1981. The months to be included in determining the amount of premium increase are May 1975 through March 1977 (23 months) and April 1981 through July 1981 (4 months) for a total of 27 months. The 31 months from September 1978 through March 1981 may not be counted because Ms. C was prevented from reenrolling by the two-enrollment limitation in effect before April 1, 1981. For Ms. C, the standard monthly premium would be increased by 20 percent. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.27</SECTNO> <SUBJECT>Rounding the monthly premium.</SUBJECT> Any monthly premium that is not a multiple of 10 cents is rounded to the nearest multiple of 10 cents, and any odd mulitple of 5 cents is rounded to the next higher multiple of 10 cents. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Deduction From Monthly Benefits</HD> <SECTION> <SECTNO>§ 408.40</SECTNO> <SUBJECT>Deduction from monthly benefits: Basic rules.</SUBJECT> (a) <E T="03">Deduction from monthly benefits.</E> (1) Enrollees who are receiving monthly benefits do not have the option of paying by direct remittance to avoid deduction. (2) If the enrollee is entitled to more than one type of monthly benefit, the order of priority for deduction is as follows: (i) Railroad retirement benefits. (ii) Social security benefits. (iii) Civil service annuities. (b) <E T="03">Deduction from initial or reinstated benefits.</E> When an enrollee receives a monthly benefit check after an initial award or after a period of suspension, that check is, if administratively feasible, reduced or increased to deduct unpaid premiums or refund premiums paid in advance by direct remittance. (c) <E T="03">Ongoing deductions.</E> The premium for each month is deducted from the cash benefit for the preceding month, e.g., the premium for March is deducted from the benefit for February, which is paid at the beginning of March. </SECTION> <SECTION> <SECTNO>§ 408.42</SECTNO> <SUBJECT>Deduction from railroad retirement benefits.</SUBJECT> (a) <E T="03">Responsibility for deductions.</E> If an enrollee is entitled to railroad retirement benefits, his or her SMI premiums are deducted from those benefits by the Railroad Retirement Board (RRB) even though he or she is also entitled to social security benefits or a civil service annuity, or both.<PRTPAGE P="206"/> (b) <E T="03">Action when benefits are suspended.</E> If the railroad retirement benefits are suspended, the RRB sends premium notices requesting direct remittance, to be made in accordance with the rules set forth in Subpart D of this part. </SECTION> <SECTION> <SECTNO>§ 408.43</SECTNO> <SUBJECT>Deduction from social security benefits.</SUBJECT> SSA, acting as CMS's agent, deducts the premiums from the monthly social security benefits if the enrollee is not entitled to railroad retirement benefits. (If the benefit is less than the monthly premium, the benefit is withheld and the enrollee is required to pay the balance through direct remittance.) </SECTION> <SECTION> <SECTNO>§ 408.44</SECTNO> <SUBJECT>Deduction from civil service annuities.</SUBJECT> (a) <E T="03">Responsibility for deductions.</E> If an enrollee is not entitled to railroad retirement benefits or social security benefits, and is receiving a civil service annuity, the premiums are deducted from that annuity by the Office of Personnel Management (OPM) on the basis of a notice from SSA indicating that the annuitant is entitled to SMI. (b) <E T="03">Deduction of spouse's premiums.</E> If the annuitant's spouse is also enrolled for SMI and is not entitled to a civil service annuity or to social security or railroad retirement benefits, and the annuitant gives written consent, OPM also deducts the spouse's premium from the annuitant's monthly check. (c) <E T="03">Withdrawal of annuitant's consent.</E> (1) If an annuitant wishes to withdraw consent for deduction of the spouse's premium, he or she must send written notice of withdrawal to OPM. (2) The withdrawal notice is effective with the third month after the month in which it is received, or with the month specified in the notice, whichever is later. </SECTION> <SECTION> <SECTNO>§ 408.45</SECTNO> <SUBJECT>Deduction from age 72 special payments.</SUBJECT> (a) <E T="03">Deduction of premiums.</E> SMI premiums are deducted from age 72 special payments made under section 228 of the Act or the payments are withheld under procedures that correspond to the rules set forth in §§ 408.40 and 408.43. (b) <E T="03">Collection of premiums while age 72 special payments are suspended.</E> If the age 72 special payments are suspended, CMS or its agent notifies the enrollee to pay premiums by direct remittance, in accordance with the rules set forth in § 408.60. (c) <E T="03">Grace period.</E> The grace period ends with the last day of the third month after the billing month. (d) <E T="03">Resumption of age 72 special payments.</E> (1) If age 72 special payments are resumed before the end of the grace period and all premium arrears can be deducted from those special payments, SMI coverage continues and the enrollee need not pay by direct remittance. (2) Subsequent special payments are reduced by the amount of the premium for as long as the enrollee receives special payments. </SECTION> <SECTION> <SECTNO>§ 408.46</SECTNO> <SUBJECT>Effect of suspension of social security benefits.</SUBJECT> (a) <E T="03">Benefit payments to be resumed during the taxable year.</E> (1) If social security benefit payments are scheduled to be resumed during the enrollee's current taxable year, the enrollee is not billed. (2) The enrollee may, if he or she wishes, pay the premiums during suspension of benefits. (b) <E T="03">Benefit payments not to be resumed during the enrollee's current taxable year.</E> (1) If social security benefits are suspended for a period that will not permit collection of all premiums due from monthly benefits payable in the enrollee's current taxable year, CMS or its agents bill the enrollee and require direct remittance in accordance with subpart D of this part. (2) The first billing is for whatever premiums are necessary to place the enrollee in a quarterly cycle. (3) Thereafter, the billing is on a quarterly basis. (Quarters for different enrollees are staggered throughout the year.) (4) The enrollee has the option of paying premiums for more than one quarter at the same time. </SECTION> <SECTION> <PRTPAGE P="207"/> <SECTNO>§ 408.47</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 408.50</SECTNO> <SUBJECT>When premiums are considered paid.</SUBJECT> (a) <E T="03">Actual deduction.</E> A premium is considered paid if it is actually deducted from a monthly benefit check. Therefore— (1) The premium is “paid” even if SSA later finds that the benefit was paid in error; but (2) A finding that a monthly benefit was erroneously withheld does not constitute payment of the premium for that month. Since there was no payment, there was no deduction. The enrollee is billed and continuance of coverage depends on payment of premiums before the end of the grace period or extended grace period. (b) <E T="03">Payment within the grace period.</E> Overdue premiums are considered paid within the grace period in the following situations: (1) <E T="03">Benefits are resumed during the grace period.</E> (i) Monthly cash benefit payments are payable for the last month of the initial grace period or for earlier months on the basis of a notice filed by the enrollee before the initial grace period ends; and (ii) Those payments are sufficient to permit deduction of all overdue premiums. (2) <E T="03">Annual earnings report or other report submitted during the grace period shows a benefit is due.</E> (i) Before the end of the grace period, the enrollee submits a report clearly showing that monthly cash benefits, previously withheld, are payable; and (ii) Those benefits are sufficient to permit deduction of the full amount of the overdue premiums. (3) <E T="03">Premium arrears are paid by direct remittance.</E> The enrollee makes a direct remittance payment of all overdue premiums before the end of the grace period. <CITA>[52 FR 48115, Dec. 18, 1987; 53 FR 4159, Feb. 12, 1988; 56 FR 48112, Sept. 24, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 408.52</SECTNO> <SUBJECT>Change from direct remittance to deduction.</SUBJECT> If a direct remittance enrollee becomes entitled to monthly benefits— (a) The SMI premiums are deducted from those benefits; and (b) The enrollee is notified of the deduction and of any adjustment of the initial benefit check that is required to collect overdue premiums or refund premiums paid in advance. </SECTION> <SECTION> <SECTNO>§ 408.53</SECTNO> <SUBJECT>Change from partial direct remittance to full deduction.</SUBJECT> If a benefit that was less than the premium (and therefore required direct remittance of the difference) is increased to an amount equal to, or greater than, the premium— (a) The full premium is paid from the benefit; and (b) Any amounts the enrollee had paid toward premiums not yet due are refunded. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Direct Remittance: Individual Payment</HD> <SECTION> <SECTNO>§ 408.60</SECTNO> <SUBJECT>Direct remittance: Basic rules.</SUBJECT> (a) Premiums not deducted from monthly benefits under Subpart C of this part or paid by a State buy-in agreement must be paid by direct remittance to CMS or its agents, by or on behalf of the enrollee. (b) Quarterly payment is preferred as more cost-effective, but monthly payment is accepted if the enrollee is unwilling or unable to make quarterly payments or is also paying hospital insurance premiums, which must be paid every month. (c) CMS, directly or through its agents, sends quarterly or monthly premium bills and includes an addressed return envelope with the bill. (d) The individual must— (1) Send a check or money order that is drawn payable to “CMS Medicare Insurance” and show the enrollee's name and claim number as it appears on the Medicare card; and (2) Return the bill with the check or money order in the preaddressed envelope. </SECTION> <SECTION> <SECTNO>§ 408.62</SECTNO> <SUBJECT>Initial and subsequent billings.</SUBJECT> (a) <E T="03">Monthly billing.</E> (1) The first premium bill is for the period from the first month of coverage (or the first month of change from deduction or State buy-in payment) through the end of the first month after the month of billing.<PRTPAGE P="208"/> (2) Subsequent billings are for periods of one month. (b) <E T="03">Quarterly billing.</E> (1) The first premium bill is for the period from the first month of coverage (or of change from deduction or State buy-in payment) through the third month after the month of billing. (2) Subsequent billings are for periods of three months. </SECTION> <SECTION> <SECTNO>§ 408.63</SECTNO> <SUBJECT>Billing procedures when monthly benefits are less than monthly premiums.</SUBJECT> If monthly benefits are less than monthly premiums, the following procedures apply: (a) <E T="03">Notice of amount due.</E> At the beginning of SMI entitlement, and at the beginning of each succeeding calendar year, SSA— (1) Notifies the enrollee of the amount of benefits payable for the rest of the year and the total premiums due for those same months; and (2) Bills the enrollee for the difference. (b) <E T="03">Notice of amount overdue.</E> At the beginning of each succeeding calendar year, SSA— (1) Notifies the enrollee of any amounts overdue for premiums for the preceding calendar year; and (2) Indicates that if the amount still overdue on April 30 is equal to or greater than the premium for 3 months, SMI coverage will terminate on that date. </SECTION> <SECTION> <SECTNO>§ 408.65</SECTNO> <SUBJECT>Payment options.</SUBJECT> (a) The enrollee is not asked to pay premiums at the time of enrollment but is instructed to pay them upon receipt of a premium bill from CMS or its agents. (b) However, if the enrollee wishes, he or she may pay from one to 12 months or from one to four quarters at the time of enrollment. </SECTION> <SECTION> <SECTNO>§ 408.68</SECTNO> <SUBJECT>When premiums are considered paid.</SUBJECT> (a) <E T="03">Payment by check.</E> The premium is considered paid if the check is paid by the bank the first or second time it is presented for payment. (b) <E T="03">Payment within the grace period.</E> (1) A premium is considered paid within the grace period if it is delivered personally, or mailed on or before the last day of that period. (2) A premium payment is considered to have been mailed 7 days before it is received by CMS. </SECTION> <SECTION> <SECTNO>§ 408.70</SECTNO> <SUBJECT>Change from quarterly to monthly payments.</SUBJECT> If an enrollee requests change from quarterly to monthly payment— (a) If the enrollee is paid up under the quarterly cycle, the first monthly bill is for one month. (b) If the enrollee is not paid up under the quarter system, the first bill includes all premiums due. </SECTION> <SECTION> <SECTNO>§ 408.71</SECTNO> <SUBJECT>Change from deduction or State payment to direct remittance.</SUBJECT> (a) <E T="03">Basis for change.</E> An SMI enrollee is required to pay by direct remittance in any of the following circumstances: (1) The enrollee's entitlement to social security or railroad retirement benefits ends for any reason other than death. (2) The premiums can no longer be deducted from the civil service annuity of the enrollee or the enrollee's spouse. (3) The enrollee no longer qualifies for coverage under a State buy-in agreement, and is not entitled to social security or railroad retirement monthly benefits. (b) <E T="03">Billing.</E> When any of the events specified in paragraph (a) of this section occurs (or as soon thereafter as possible), CMS or its agents bill the enrollee for direct remittance, in accordance with this subpart. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Direct Remittance: Group Payment</HD> <SECTION> <SECTNO>§ 408.80</SECTNO> <SUBJECT>Basic rules.</SUBJECT> (a) <E T="03">Sources of group payment.</E> An employer, a lodge, union, or other organization may pay SMI premiums on behalf of one or more enrollees. (b) <E T="03">Informal arrangement.</E> Enrollees may turn over their premium notices to their employer, union, lodge, or other organization and that organization may send a single payment (with the premium notices attached so that the payments can readily be identified with the appropriate enrollees) to the CMS Premium Collection Center. Prompt payment is essential since SMI <PRTPAGE P="209"/>coverage terminates if premiums are not paid by the end of the grace period. (c) <E T="03">Group billing arrangement.</E> CMS may send a single notice for the premiums due from a group of enrollees if the following conditions are met: (1) The group payer— (i) Uses funds other than the enrollees' to pay all or a substantial part of the premiums; or (ii) Deducts the premiums from periodic payments it makes to the enrollees in the group. (2) The enrollee's rights are protected and enrollees are not required to pay the costs of having their premiums paid on a group basis. </SECTION> <SECTION> <SECTNO>§ 408.82</SECTNO> <SUBJECT>Conditions for group billing.</SUBJECT> CMS agrees to a group billing arrangement only if the following conditions are met: (a) Conditions the group payer must meet. The group payer submits a written request for group billing— (1) Showing that all or part of the payments are made from the payer's funds or from funds due the enrollees and in the payer's possession; and (2) Agreeing not to charge the enrollees for the service of paying the premiums or for the administrative costs such as recordkeeping and postage. (b) <E T="03">Enrollees eligible for group payment.</E> (1) Group payment may be made only on behalf of individuals who are already enrolled and are being billed for direct remittance. (2) Group payment may not be made for enrollees whose premiums are being deducted from monthly benefits in accordance with Subpart C of this part or being paid by the State under a buy-in agreement. (c) <E T="03">Protection of enrollee's rights.</E> The use of group billing must not jeopardize the enrollees' right— (1) To confidentiality of personal information; (2) To terminate enrollment; (3) To resume individual payment of premiums if he or she wishes; and (4) To receive notice of any action that affects the SMI benefits. (d) <E T="03">Authorization by the enrollee.</E> (1) To ensure maximum feasible protection of the rights specified in paragraph (c) of this section, each enrollee must give written authorization as specified in § 408.84(a)(2). (2) A group payer that is not an entity of State or local government must submit all enrollee authorizations to CMS. (3) A group payer that is an entity of State or local government may retain the authorizations and certify to CMS that it has on file an authorization for each enrollee included in the group. (4) It is on the basis of the enrollee's authorization that CMS sends the group payer information about each enrollee, as necessary to carry out the group payment function. (e) <E T="03">Size of group.</E> The number of enrollees must be at least 20, which is the minimum size sufficient to make group billing efficient. (Smaller groups may use the informal procedure described in § 408.80(b).) </SECTION> <SECTION> <SECTNO>§ 408.84</SECTNO> <SUBJECT>Billing and payment procedures.</SUBJECT> (a) <E T="03">Initial premium notice.</E> (1) CMS or its agent always sends the initial premium notice to the enrollee. (2) An enrollee who wishes to have the premiums paid on a group basis must give the notice to the group payer, along with written authorization for sending subsequent notices to the group payer and for release of the information required for the group payment process. (b) <E T="03">Monthly billings.</E> Group premiums are billed on a monthly basis. However, the group payer may pay up to 12 months in advance. (c) Group payers must make their payments within 30 days after billing, to avoid infringing on the 90-day grace period during which the premiums may be paid by the enrollee if he or she is dropped from the group. (d) <E T="03">Effect of group payment.</E> Payment by a group payer is considered payment by the enrollee. </SECTION> <SECTION> <SECTNO>§ 408.86</SECTNO> <SUBJECT>Responsibilities under group billing arrangement.</SUBJECT> (a) <E T="03">Enrollee responsibilities.</E> (1) The enrollee is still responsible for premium payments; the group payer simply acts as his agent. If the agent fails to pay, or identifies the payment incorrectly, <PRTPAGE P="210"/>SSA notifies both the agent and the enrollee that the enrollee's account is delinquent. If an enrollee fails to take action on that notice, entitlement is terminated for nonpayment of premiums. (2) The enrollee must promptly notify both SSA and the group payer of any change of address. (b) <E T="03">Group payer's responsibilities.</E> The group payer must— (1) Make premium payments promptly upon receipt of notices; (2) Promptly notify both CMS and the enrollee when it drops an enrollee from the group; (3) Make payments in a way that facilitates efficient and economical processing; and (4) Maintain the confidentiality of the personal information obtained from CMS for the group payment process. (c) <E T="03">CMS responsibilities.</E> CMS— (1) Sends the bill to the group payer upon authorization from the enrollee; (2) Notifies both the payer and the enrollee if the payer fails to make timely payments; and (3) Refunds excess premiums in accordance with § 408.88. </SECTION> <SECTION> <SECTNO>§ 408.88</SECTNO> <SUBJECT>Refund of group payments.</SUBJECT> (a) <E T="03">Basis for refund.</E> Group payments are refunded only in the following circumstances: (1) The premium was for a month after the month in which the enrollee's SMI coverage terminated or the enrollee died. (2) The premium was for a month after the month in which the group payer gave notice (before the 26th day of that month) that the enrollee was no longer eligible for group payment and was being dropped from the group. (b) <E T="03">Example.</E> F is the wife of J who is a retiree of Corporation X. That corporation pays premiums on behalf of all of its retirees and their dependents. F obtains a divorce from J on October 20 and thus disqualifies herself for further premium payments by the corporation. The corporation gives notice on November 10 that a refund is due because F has been dropped from the list of persons for whom it has agreed to pay premiums. The premium paid for December would be refunded to the group payer. (c) <E T="03">To whom refund is made.</E> (1) CMS ordinarily refunds to the group payer the premiums specified in paragraph (a) of this section. (2) However, if CMS has information that clearly shows those premiums were paid from the enrollee's funds, it sends the refund to the enrollee. </SECTION> <SECTION> <SECTNO>§ 408.90</SECTNO> <SUBJECT>Termination of group billing arrangement.</SUBJECT> (a) A group billing arrangement may be terminated either by the group payer or by CMS upon 30 days' notice. (b) CMS may terminate the arrangement if it finds that the group payer is not acting in the best interest of the enrollees or that, for any other reason, the arrangement has proved inconvenient for CMS. </SECTION> <SECTION> <SECTNO>§ 408.92</SECTNO> <SUBJECT>Change from group payment to deduction or individual payment.</SUBJECT> (a) <E T="03">Enrollee excluded from group payment arrangement because of entitlement to monthly benefits.</E> (1) When an enrollee becomes entitled to monthly benefits from which premiums can be deducted as specified in subpart C of this part, CMS notifies the group payer to discontinue payment for that enrollee. (2) In order to maintain confidentiality, CMS does not explain to the group payer the reason for excluding the enrollee from the group payment arrangement. (3) The enrollee's premiums are thereafter deducted from the monthly benefits, in accordance with subpart C of this part. (b) <E T="03">Enrollee no longer eligible for the group.</E> (1) When an enrollee is no longer eligible to be included in the group (for instance because he or she is no longer employed by the group payer or has terminated union or lodge membership), the group payer must promptly notify CMS and the enrollee. (2) CMS or its agents resume sending individual bills to the enrollee, for direct remittance subject to the grace period and termination dates specified in § 408.8. </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="211"/> <HD SOURCE="HED">Subpart F—Termination and Reinstatement of Coverage</HD> <SECTION> <SECTNO>§ 408.100</SECTNO> <SUBJECT>Termination of coverage for nonpayment of premiums.</SUBJECT> (a) <E T="03">Effective date of termination.</E> Termination is effective on the last day of the grace period. The determination is not made until 15 days after that day to allow for processing of remittances mailed late in the grace period, as provided in § 408.68. (b) <E T="03">Notice of termination.</E> (1) SSA sends the enrollee notice of termination between 15 and 30 days after the end of the grace period and includes information regarding the enrollee's right of appeal. (2) CMS notifies any intermediary or carrier that had previously been informed that the enrollee had met the SMI deductible for the year in which the termination is effective. </SECTION> <SECTION> <SECTNO>§ 408.102</SECTNO> <SUBJECT>Reconsideration of termination.</SUBJECT> (a) <E T="03">Basic rules.</E> Coverage may be reinstated without interruption of benefits if the following conditions are met: (1) The enrollee appeals the termination by the end of the month following the month in which SSA sent the notice of termination. (2) The enrollee alleges and it is found that the enrollee did not receive timely and adequate notice that the premiums were overdue. (3) The enrollee pays, within 30 days after SSA's subsequent request for payment, all premiums due through the month in which he or she appealed the termination. (b) <E T="03">Basis for reinstating coverage.</E> Coverage may be reinstated if the evidence establishes one of the following: (1) The enrollee acted diligently to pay the premiums or to request relief upo