CODE OF FEDERAL REGULATIONS42
CONTAINING
A CODIFICATION OF DOCUMENTS
OF GENERAL APPLICABILITY
AND FUTURE EFFECT
Published by
the Office of the Federal Register
National Archives and Records
Administration
as a Special Edition of
the Federal Register
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Cite this Code:
The Code of Federal Regulations is a codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government. The Code is divided into 50 titles which represent broad areas subject to Federal regulation. Each title is divided into chapters which usually bear the name of the issuing agency. Each chapter is further subdivided into parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year and issued on a quarterly basis approximately as follows:
Title 1 through Title 16
Title 17 through Title 27
Title 28 through Title 41
Title 42 through Title 50
The appropriate revision date is printed on the cover of each volume.
The contents of the Federal Register are required to be judicially noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie evidence of the text of the original documents (44 U.S.C. 1510).
The Code of Federal Regulations is kept up to date by the individual issues of the Federal Register. These two publications must be used together to determine the latest version of any given rule.
To determine whether a Code volume has been amended since its revision date (in this case, October 1, 1999), consult the “List of CFR Sections Affected (LSA),” which is issued monthly, and the “Cumulative List of Parts Affected,” which appears in the Reader Aids section of the daily Federal Register. These two lists will identify the Federal Register page number of the latest amendment of any given rule.
Each volume of the Code contains amendments published in the Federal Register since the last revision of that volume of the Code. Source citations for the regulations are referred to by volume number and page number of the Federal Register and date of publication. Publication dates and effective dates are usually not the same and care must be exercised by the user in determining the actual effective date. In instances where the effective date is beyond the cut-off date for the Code a note has been inserted to reflect the future effective date. In those instances where a regulation published in the Federal Register states a date certain for expiration, an appropriate note will be inserted following the text.
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires Federal agencies to display an OMB control number with their information collection request.
Provisions that become obsolete before the revision date stated on the cover of each volume are not carried. Code users may find the text of provisions in effect on a given date in the past by using the appropriate numerical list of sections affected. For the period before January 1, 1986, consult either the List of CFR Sections Affected, 1949-1963, 1964-1972, or 1973-1985, published in seven separate volumes. For the period beginning January 1, 1986, a “List of CFR Sections Affected” is published at the end of each CFR volume.
(a) The incorporation will substantially reduce the volume of material published in the Federal Register.
(b) The matter incorporated is in fact available to the extent necessary to afford fairness and uniformity in the administrative process.
(c) The incorporating document is drafted and submitted for publication in accordance with 1 CFR part 51.
Properly approved incorporations by reference in this volume are listed in the Finding Aids at the end of this volume.
A subject index to the Code of Federal Regulations is contained in a separate volume, revised annually as of January 1, entitled CFR
An index to the text of “Title 3—The President” is carried within that volume.
The Federal Register Index is issued monthly in cumulative form. This index is based on a consolidation of the “Contents” entries in the daily Federal Register.
A List of CFR Sections Affected (LSA) is published monthly, keyed to the revision dates of the 50 CFR titles.
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For a legal interpretation or explanation of any regulation in this volume, contact the issuing agency. The issuing agency's name appears at the top of odd-numbered pages.
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Title 42—
The OMB control numbers for the Health Care Financing Administration 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.
Redesignation tables appear in the Finding Aids section of all volumes.
For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of Federal Regulations publication program is under the direction of Frances D. McDonald, assisted by Alomha S. Morris.
(This book contains parts 400 to 429)
Nomenclature changes affecting chapter IV appear at 53 FR 6634, Mar. 2, 1988; 53 FR 47201, Nov. 22, 1988; 56 FR 8852, Mar. 1, 1991 and 62 FR 46037, Aug. 29, 1997.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35.
In this chapter, unless the context indicates otherwise—
(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.
(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.
As used in connection with the Medicare program, unless the context indicates otherwise—
(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.
As used in connection with the Medicaid program, unless the context indicates otherwise—
This subpart collects and displays control numbers assigned by the Office of Management and Budget (OMB) to collections of information contained in HCFA regulations, in accordance with OMB's regulations for controlling paperwork burdens on the public, 5 CFR part 1320. HCFA 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.
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).
(a) The regulations in this subpart:
(1) Implement section 1106(a) of the Social Security Act as it applies to the Health Care Financing Administration (HCFA). The rules apply to information obtained by officers or employees of HCFA 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
(2) Relate to the availability to the public, under 5 U.S.C. 552, of records of HCFA 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).
For purposes of this subpart:
(a)
(b)
(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 of confidentiality and administrative necessity, 45 CFR part 5, subpart F, as supplemented by §§ 401.106 to 401.152 of this subpart.
(a)
(1) By publication in the
(2) By publication in the
(3) By other forms of publication, when incorporated by reference in the
(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
(b)
(a) After September 1981, a precedent final opinion or order or a statement of policy or interpretation that has not been published in the
(b) Precedent final opinions and orders and statements of policy and interpretation that were adopted by HCFA before October, 1981, and that have not been published in the
(c) HCFA Rulings are published under the authority of the Administrator, HCFA. They are binding on all HCFA Components, and on the Social Security Administration to the extent that components of the Social Security Administration adjudicate matters under the jurisdiction of HCFA.
The following publications containing information pertaining to the program, organization, functions, and procedures of HCFA 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)
(c) Compilation of the Social Security Laws.
(d) HCFA Rulings.
(e) Social Security Handbook. The information in the Handbook is not of precedent or interpretative force.
(f) Medicare/Medicaid Directory of Medical Facilities.
All HCFA 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 HCFA 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.
(a)
(b)
When HCFA 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.
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.
(a)
(b)
(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, HCFA 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)
(A) HCFA may release the accreditation survey of any home health agency; and
(B) HCFA 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, civil money penalties, temporary management and termination) taken by HCFA; 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)
(a)
(1) Any HCFA component;
(2) Director, Office of Public Affairs, HCFA 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.
(b)
(c)
(a)
(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 Health Care Financing Administration. 42 CFR chapter IV .
(4) HCFA Rulings.
(5) Social Security Handbook.
(b)
(1) Claims Manual of the Social Security Administration.
(2) Department Staff Manual on Organization, Department of Health and Human Services, Part F, HCFA.
(3) Parts 2 and 3 of the Part A
(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) HCFA Letters to State Agencies on Medicare.
(10) Skilled Nursing Facility Manual (HCFA 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.
(a)
(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 HCFA.
(3) Title 5, United States Code.
(4) Compilation of the Social Security Laws.
(5) HCFA Rulings.
(6) Social Security Handbook.
(b)
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)
(b)
(c)
(d)
(e) Upon written request, HCFA will release the accreditation survey of any home health agency.
(a) Except as provided in paragraph (b) of this section, the following information may be released to an officer or
(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 HCFA 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.
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:
(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
(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.
(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 HCFA 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 HCFA 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, HCFA and to the Director of Public Affairs in any HHS Regional Office. Those officers and employees of HCFA 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.
(a)
(1) Reproduction, duplication, or copying of records;
(2) Searches for records; and
(3) Certification or authentication of records.
(b)
(1)
(2)
(3)
(4)
(5) No charge will be made when the total amount does not exceed five dollars.
(c)
(d)
(a)
(b)
(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.
(a)
(b)
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).
(a)
(b)
(c)
(d)
(2)
(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)
(1) Preclude disposition by HCFA 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 HCFA may have under common law as a creditor.
(f)
(g)
For purposes of this subpart—
The failure of HCFA 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 HCFA has a claim for money or property.
(a)
(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)
(c)
(1)
(i) A request to HCFA; and
(ii) Any information required by HCFA to make a decision regarding the request.
(2)
(i) Total amount of the claim;
(ii) Debtor's ability to pay; and
(iii) Cost to HCFA of administering an installment agreement.
(d)
(2) Under regulations at § 405.350—405.358 of this chapter, HCFA 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.
(a)
(1) Bear a reasonable relation to the amount of the claim; and
(2) Be recoverable through enforced collection procedures.
(b)
(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)
(1)
(2)
(i) The likelihood that HCFA would have prevailed on the legal question(s) involved;
(ii) Whether and to what extent HCFA would have obtained a full or partial recovery of a judgment, depending on the availability of witnesses, or
(iii) The amount of court costs that would be assessed to HCFA.
(3)
(d)
(a)
(b)
(c)
(a)
(1)
(2)
(i) The applicable statute of limitations has been tolled, waived or has started running anew; or
(ii) Future collections may be made by HCFA through offset despite an applicable statute of limitations.
(b)
(1) A debtor cannot be located; or
(2) A debtor—
(i) Owns no substantial equity in property;
(ii) Is unable to make payment on HCFA's claim or is unable to effect a compromise; and
(iii) Has future prospects that justify retention of the claim.
(c)
(d)
(a)
(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.
(b)
(1)
(i) Judicial remedies available;
(ii) The debtor's future financial prospects; and
(iii) Exemptions available to the debtor under State or Federal law.
(2)
(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 HCFA to be too remote to justify retention of the claim.
(3)
(4)
(5)
(i) Efforts to obtain voluntary payment are unsuccessful; and
(ii) Evidence or witnesses necessary to prove the claim are unavailable.
(a)
(b)
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 HCFA appeal procedures.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
(b)
(1) Provides for the imposition of civil money penalties, assessments, and exclusions against persons that violate the provisions of the Act specified in
(2) Sets forth the appeal rights of persons subject to penalties, assessments, or exclusion and the procedures for reinstatement following exclusion.
(c)
(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)—
(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 who knowingly and willfully fails promptly to provide the appropriate diagnosis code or codes upon request by HCFA 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.)
(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)(3)—
(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
(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.
(d)
(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), and (j)(4).
(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)
(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), and (j)(4).
(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)(3), and (t)(2).
(2) HCFA 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 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)
(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)
For purposes of this part:
(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.
(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.
(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.
HCFA 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.
(a) If HCFA 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 HCFA 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 HCFA 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 HCFA or OIG considered when it determined the amount of 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.
(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 HCFA or OIG may impose the proposed penalty, assessment, or exclusion, or any less severe penalty, assessment, or suspension.
(b) HCFA 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.
(a) Whenever a penalty, assessment, or exclusion becomes final, HCFA 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 peer review 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, HCFA or OIG also notifies the public and specifies the effective date.
Penalties, assessments, and exclusions imposed under this part are in addition to any other penalties prescribed by law.
(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.
HCFA 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.
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 HCFA or OIG may represent the government in the hearing and appeals process.
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.
(a)
(b)
(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)
(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)
(2) HCFA 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 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
(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)).
(e)
(f)
(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)).
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 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 practitioners specified in section 1842(b)(18)(B) (§ 402.1(c)(11)).
(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
(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)).
(a)
(b)
(c)
(a)
(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)
(1)
(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
(2)
(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)
(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.
(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 HCFA 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.
A civil money penalty and assessment become collectible after the earliest of the following:
(a) Sixty days after the respondent receives HCFA'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.
(a) Once a determination by HHS has become final, HCFA 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 HCFA 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.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
(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)
(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.
(a) Except as specified in paragraph (d) of this section,
(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
(1)
(2)
(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),
(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
(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.
(a)
(b) The policy must comply with the provisions of the NAIC model standards, except as follows—
(1)
(2) The policy must meet the loss ratio standards specified in § 403.215.
(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.
(a)
(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)
(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.
(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)
(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.
(a) The emblem is a graphic symbol, approved by HHS, that indicates that HCFA 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 HCFA 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 HCFA for annual review in order to retain certification, if the State did not have an approved program (see § 403.239).
(a) To be certified by HCFA, 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 HCFA 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 HCFA/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 HCFA for review is accurate and complete and does not misrepresent any material fact.
(a) HCFA will review policies that the insuring organization voluntarily submits, except that HCFA 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, HCFA 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 HCFA certifies a policy, it will inform all State Commissioners and Superintendents of Insurance of that fact.
(a) HCFA certification of a policy that continues to meet the standards will remain in effect, if the insuring organization files the following material with HCFA 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 HCFA 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 HCFA 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 HCFA—
(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 HCFA, ends before the June 30 date of paragraph (b) of this section, the insuring organization must file the material with HCFA no later then the last day of that rate calculation period.
(a) A policy loses certification if—
(1) The insuring organization withdraws the policy from the voluntary certification program; or
(2) HCFA 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, HCFA 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.
(a) This section provides for administrative review if HCFA determines—
(1) Not to certify a policy; or
(2) That a policy no longer meets the standards for certification.
(b) If HCFA 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 HCFA 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 HCFA determination; and
(ii) Submit additional information to HCFA for review.
(4) That, if the insuring organization requests an administrative review, HCFA will conduct the review, as provided for in paragraph (c) of this section.
(5) That, in a case involving loss of certification, the HCFA 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 HCFA makes a final determination.
(c) If the insuring organization requests an administrative review, HCFA will conduct the review as follows—
(1) A HCFA official, not involved in the initial HCFA 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 HCFA for review, as specified in § 403.232(b) or § 403.239(a); and
(ii) Any additional information, that the insuring organization submits to HCFA.
(3) Within 15 days after the administrative review is completed, HCFA 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 HCFA's notice informing the insuring organization of the final decision.
(a)
(b)
(a)
(1) The initial calculation date may be before, the same as, or after the date the insuring organization sends the policy to HCFA 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 HCFA.
(b)
(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.
(a)
(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)
(2)
(A) Additional reserve; and
(B) The reserve for future contingent benefits.
(ii)
(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)
(iv)
(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)
(a)
(b)
(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)
(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)
(i) The unearned premium reserve;
(ii) The advance premium reserve; and
(iii) The reserve for rate credits.
(4)
(5)
(6)
(i) Accrue by the valuation date of the policy; and
(ii) Are paid or credited after the valuation date.
(a) For purposes of requesting HCFA certification under § 403.232, the insuring organization must submit the following loss ratio data to HCFA 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.
(b) For purposes of requesting continued HCFA certification under § 403.239(a), the insuring organization must submit the following to HCFA—
(1) A description of all changes in the loss ratio data, specified in paragraph (a) of this section, that occurred since HCFA 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 HCFA first certified the policy.
(a) For purposes of certification requests submitted under § 403.232(b) and subsequent review as specified in § 403.239(a),
(b)
(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.
(a)
(b)
(1) The basic requirements that a State reimbursement control system must meet in order to be approved by HCFA;
(2) A description of HCFA's review and evaluation procedures; and
(3) The conditions that apply if the system is approved.
For purposes of this subpart—
(a)
(b)
(2) The State system must apply to substantially all non-Federal acute care hospitals in the State.
(3) All hospitals covered by the system must have and maintain a utilization and quality control review agreement with a Peer Review 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 HCFA 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 HCFA, to review and monitor the State's assurances; and
(ii) Submission of the reports to HCFA 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)
(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 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)
(1)
(2)
(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.
(a)
(2)
(b)
(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
(2)
(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;
(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)
HCFA 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).
(a)
(b)
(c)
(d)
The Chief Executive Officer of the State is responsible for—
(a) Submittal of the application to HCFA for approval; and
(b) Supplying the assurances and necessary documentation as required under §§ 403.304 through 403.308.
HCFA will evaluate all State applications for approval of State systems and notify the State of its determination within 60 days.
(a)
(b)
(2) HCFA will notify the State of the results of its reconsideration within 60 days after it receives the request for reconsideration.
(a)
(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 HCFA's approval of the State's reporting forms and of provider cost reporting forms or other forms that have not been approved by HCFA but that are necessary for the collection of required information.
(b)
(a)
(b)
(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 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 HCFA 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. HCFA 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,
(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)
(d)
(e)
(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.
HCFA 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 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.
(a)
(2) HCFA 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) HCFA will give the State the opportunity to present evidence to refute the finding.
(4) HCFA will issue a final notice of termination upon a final review and determination on the State's evidence.
(b)
(a)
(b)
(1) Conditions of eligibility for the grant.
(2) Minimum levels of funding for those States qualifying for the grants.
(3) Reporting requirements.
(c)
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 HCFA 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 HCFA.
HCFA awards funds to States subject to congressional appropriations 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 is specified in the notice of grant award sent to each State. HCFA advises each State as to when to make application and provides information as to the timing of the grant award and the duration of the grant award. HCFA also provides an estimate of the amount of funds that may be available to the State.
(a)
(1) New program grants.
(2) Existing program enhancement grants.
(b)
(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)
(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 HCFA 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), HCFA determines a variable rate for each participating State for each grant period.
(d)
(a)
(b)
(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.
A State that receives a grant under this subpart must submit at least one annual report to HCFA and any additional reports as HCFA may prescribe in the notice of grant award. HCFA 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.
(a)
(b)
(c)
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).
Secs. 1102, 1862 and 1871 of the Social Security Act as amended (42 U.S.C.1302, 1395y, and 1395hh).
(a)
(1) HCFA uses the FDA categorization of a device as a factor in making Medicare coverage decisions; and
(2) HCFA 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)
(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 HCFA, when it notifies the sponsor, that the device is categorized by FDA as experimental/investigational (Category A) or non-experimental/investigational (Category B).
(c) HCFA uses the categorization of the device as a factor in making Medicare coverage decisions.
(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 HCFA, when it notifies the sponsor, that the device is categorized by FDA as non-experimental/investigational (Category B).
(2) HCFA 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 HCFA and the procedures described in paragraph (a)(2) of this section apply.
(a)
(b)
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.
(a)
(b)
(c)
(a)
(2) A sponsor may request review by HCFA 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 HCFA'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)
(c)
To the extent that HCFA relies on confidential commercial or trade secret information in any judicial proceeding, HCFA will maintain confidentiality of the information in accordance with Federal law.
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.
This subpart sets forth the policies and procedures for handling of incorrect payments and recovery of overpayments.
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 Health Care Financing Administration 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.
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.
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).
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.
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.
(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).)
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.
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).
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.
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.
For purposes of this subpart, the following definitions apply:
(a)
(1) Suspended, in whole or in part, by HCFA, an intermediary, or a carrier if HCFA, 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 HCFA has determined that the provider or supplier to whom payments are to be made has been overpaid.
(b)
(c)
(a)
(2)
(3)
(4)
(b)
(2)
(c)
(d)
(2)
(ii) Upon receipt of a request for an extension, HCFA notifies the provider or supplier of the requested extension. HCFA 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)
(ii) HCFA 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 HCFA 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)
(a)
(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.
(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)
(d)
(e)
(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.
(a)
(b)
(1) Impose a shorter period for rebuttal; or
(2) Extend the time within which the statement must be submitted.
(a)
(b)
(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)
(a)
(b)
(c)
(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)
(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)
(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)
(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)
(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)
(1) The exemptions available to the debtor under State or Federal law;
(2) The time necessary to collect the overpayment;
(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)
(2)
(j)
(a)
(b)
(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)
(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)
(2) HCFA 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)
(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.
(f)
(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)
(a)
(b)
(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)
(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 HCFA 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 HCFA, 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
(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)
(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
(ii) The current value of funds rate (this rate is published annually in the
(2) [Reserved]
(e)
(2)(i) If a cost report is filed and indicates that an amount is due HCFA, 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)
(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) HCFA 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)
(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)
(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)
(a)
(b)
(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)
(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)
(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.
Secs. 1102, 1802, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395a, and 1395hh).
For purposes of this subpart, the following definitions apply:
(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).
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.
(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.
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
(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 HCFA upon request.
(o) Be entered into for each opt-out period.
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.
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
(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.
(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.
(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—
(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 HCFA 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.
(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
(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.
(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.
(a) A determination by HCFA 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 HCFA 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.
An organization that has a contract with HCFA 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.
(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.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
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 HCFA 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.
(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
(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.
(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 HCFA 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 HCFA 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)
(c)
(d)
(e)
(2)
(3)
(4)
(5)
(f)
(2)
(i) Hospital outpatient departments, including clinics and emergency rooms; and
(ii) Comprehensive outpatient rehabilitation facilities.
(3)
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.
(4)
(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.
(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)
(ii)
(6)
(g)
(ii) HCFA 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 HCFA 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, HCFA 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)
(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.
(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)
(i)
(ii)
(iii)
(iv)
(v)
(3)
(ii)
(h)
(1)
(2)
(3)
(i)
(A) Explains the factors and data that HCFA 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 HCFA 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)
(A) Explains the factors and data that HCFA considered, including the economic justification for any uniform fee or payment limit established; and
(B) Responds to the public comments.
For
(a)
(b)
(c)
(d)
(a)
(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 HCFA; or
(ii) The prevailing charge that, on the basis of statistical data and methodology acceptable to HCFA, 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.
(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 HCFA, 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)
(c)
(d)
(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:
(3) If there is no methodological change, HCFA publishes a notice in the
“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
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.
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:
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.
(a)
(b)
(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)
(a)
(b)
(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.
(a)
(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
(b)
(c)
(1)
(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)
(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)
(d)
(a)
(b)
(c)
(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.
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 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
(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.
(a)
(b)
(c)
(a)
(b)
(c)
(a)
(b)
(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)
(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)
(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.
If screening mammography services are furnished to a beneficiary by a nonparticipating 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.
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).
(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)
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 § 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.
(a)
(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
(b)
(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 PRO);
(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 been made with respect to an individual.
(c)
(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.
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
(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.
(a)
(b)
(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.
(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 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.
(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).
The request for reconsideration shall be made in writing and filed at an office of the SSA or the HCFA or, in the case of a qualified railroad retirement
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 HCFA 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 HCFA may extend the time for filing the request for reconsideration.
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 HCFA 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 HCFA as of the date it is filed with the intermediary.
(a) In reconsidering an initial determination, the HCFA 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 HCFA or otherwise obtained by the intermediary or the HCFA; 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.
Written notice of the reconsidered determination shall be mailed by the HCFA 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).
The reconsidered determination is binding upon all parties unless—
(a) A request for a hearing is filed with SSA or HCFA 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.
(a)
(1) HCFA 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)
(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 HCFA Ruling that is invalid.
(c)
(i) At an office of SSA or HCFA; 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)
(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)
(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)
(1) The facts involved in the claim are not in dispute;
(2) Except as indicated in paragraph (f)(3) of this section, HCFA'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, HCFA 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)
(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)
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 HCFA;
(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.
The request for a hearing shall be made in writing and filed at an office of the SSA or the HCFA 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.
Regulations beginning at 20 CFR 404.967 regarding SSA Appeals Council Review are also applicable to DAB review of matters addressed by this subpart.
(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.
(a)
(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)
(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)
(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)
(2)
(3)
(ii) When HCFA does not issue a revised NCD, it returns the supplemented record to the court for review.
(iii) When HCFA 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.
(a)
(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.
(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)
(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.
For the purpose of determining whether a party to a reconsidered determination is entitled to a hearing, the amount in controversey after the reconsideration action rather than the amount in controversy initially at issue shall be controlling.
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.
(a)
(b)
(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.
(a) HCFA'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) HCFA'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, HCFA'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.
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).
(a) The Medicare carrier makes an initial determination when a request for payment for Part B benefits is submitted. If an individual beneficiary is 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.
As used in subpart H of this part, the term—
(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 HCFA 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.
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.
The parties to the initial determination (see § 405.803) may be any party described in § 405.802.
At 64 FR 52670, Sept. 30, 1999, § 405.805 was revised, effective Feb. 1, 2000. For the convenience of the user, the superseded text is set forth as follows:
The parties to the initial determination (see § 405.803) may be any party described in § 405.802(b).
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.
(a)
(b)
(1) In writing and filed at an office of the carrier, SSA, or HCFA.
(2) By telephone to the telephone number designated by the carrier as the appropriate number for the receipt of requests for review.
(c)
(2) The carrier may, upon request by the party, extend the period for requesting the review of the initial determination.
At 64 FR 52670, Sept. 30, 1999, § 405.807 was revised, effective Feb. 1, 2000. For the convenience of the user, the superseded text is set forth as follows:
(a)
(b)
(c)
(d)
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.
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.
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.
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).
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.
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.
(a)
(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
(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)
(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
(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 HCFA.
(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.
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.
Any hearing provided for in this subpart shall be conducted by a hearing officer designated by the appropriate official of the carrier.
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.
(a)
(b)
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
(a)
(b)
(c)
(d)
(e)
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.
(a)
(b)
(c)
(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)
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 HCFA. The record will also be transcribed and reproduced at the request of any party to the hearing provided the requesting party bears the cost.
(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.
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.
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 HCFA Rulings, national coverage decisions, and other policy statements, instructions, and guides issued by HCFA.
An initial or review determination of a carrier or a decision of a hearing officer may be reopened by such carrier or hearing officer:
(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.
(a)
(b)
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.
(a)
(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)
(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 HCFA Ruling that is invalid.
(a)
(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)
(c)
(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.
Regulations beginning at 20 CFR 404.967 regarding SSA Appeals Council Review are applicable to DAB review of matters addressed by this subpart.
(a)
(b)
(a)
(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)
(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)
(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)
(2)
(3)
(ii) When HCFA does not issue a revised NCD, it returns the supplemented record to the court for review.
(iii) When HCFA 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)
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.
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 HCFA or unless otherwise prohibited by law.
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.
(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 HCFA, 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 HCFA, 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 HCFA.
(d) A HCFA official, designated by the Administrator of HCFA, must make an appeal decision based on the evidence presented to the fair hearing officer and his or her decision. The HCFA official requests any additional information he or she deems necessary from either the carrier or the entity within two weeks of receipt by the HCFA of the appeal. Notice of the HCFA official's decision—
(1) Is issued within two weeks of when the last information is received is received by the HCFA official, or four weeks of when the information is requested, whichever is shorter, unless the party appealing the fair hearing decision requests a delay;
(2) Is sent by the HCFA 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 HCFA 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 HCFA has agreed, and provided sufficient assurance of its intent to comply fully with the supplier standards.
(a) HCFA'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) HCFA'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, HCFA'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.
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).
(a)
(1) With respect to a provider of services that has filed a cost report under
(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 HCFA 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.
(b)
(2)
(c)
(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.
(a)
(1)
(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)
(b)
(c)
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.
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.
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.
(a)
(b)
(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.
(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.
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.
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 Health Care Financing Administration are parties (see § 405.1819).
The intermediary hearing provided for in § 405.1809 shall be conducted by a hearing officer or panel of hearing officers designated by the intermediary.
The hearing shall be open to all parties thereto (see § 405.1815) and to representatives of the intermediary and of the Health Care Financing Administration (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).
(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.
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.
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.
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.
(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 HCFA Rulings issued under the authority of the Administrator of the Health Care Financing Administration (see 42 CFR 401.108),
(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.
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, HCFA Rulings, and general instructions of the Health Care Financing Administration, 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.
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.
(a)
(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)
(c)
(a)
(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 HCFA Rulings; and
(3) The amount in controversy is, in the aggregate, $50,000 or more.
(b)
(a)
(1)
(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)
(b)
(1)
(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)
(a)
(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 HCFA 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)
(a)
(b)
(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)
(d)
(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 HCFA 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)
(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)
(1) The controlling facts in the case;
(2) The applicability of law, regulations, or HCFA 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)
(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)
(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.
(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)
(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)
(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.
(a) The parties to the Board hearing shall be the provider, the intermediary (including the Health Care Financing Administration 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 Health Care Financing Administration may be made a party to the hearing.
(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.)
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.
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.
The Board hearing shall be open to the parties, to representatives of the Health Care Financing Administration, 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.
(a) Upon notification that a request for Board hearing has been filed, the intermediary shall forthwith 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.
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.
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 Health Care Financing Administration 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).
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.
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
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 Health Care Financing Administration.
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.
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 HCFA Rulings issued under the authority of the Administrator of the Health Care Financing Administration (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 HCFA.
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.
(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 HCFA 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 HCFA.
(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.
(a)
(b)
(2) The Board may not review certain matters affecting payments to hospitals under the prospective payment system as provided in § 405.1804.
(a)
(2) The Office of the Attorney Advisory will examine the Board's decisions, the requests made by a party or HCFA 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)
(c)
(1) The Board made an erroneous interpretation of law, regulation or HCFA 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 HCFA 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 HCFA Ruling; and
(5) The decision of the Board requires clarification, amplification, or an alternative legal basis for the decision.
(d)
(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)
(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 HCFA, 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 HCFA, if HCFA 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)
(g)
(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 HCFA.
(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 HCFA.
(h)
(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.
(a)
(1) A final decision by the Board; or
(2) Any reversal, affirmance, or modification by the Administrator.
(b)
(c)
(d)
(e)
(f)
(g)
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.
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.
(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) A determination or a hearing decision rendered by the intermediary shall be reopened and revised by the intermediary if, within the aforementioned 3-year period, the Health Care Financing Administration notifies the intermediary that such determination or decision is inconsistent with the applicable law, regulations, or general instructions issued by the Health Care Financing Administration in accordance with the Secretary's agreement with the intermediary.
(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) Paragraphs (a) and (b) of this section apply to determinations on cost
(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.
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.)
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.
(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.
(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.
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.
As used in this subpart, the following definitions apply:
(a)
(b)
(c)
(d)
(e)
(a)
(b)
(2)
(i)
(ii)
(3)
(c)
(a)
(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.
(b)
(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)
(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
(d)
(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)
(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)
(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)
(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.
HCFA designated ESRD networks in which the approved ESRD facilities collectively provide the necessary care for ESRD patients.
(a)
(b)
HCFA 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
(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 HCFA 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 HCFA, 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.
(a)
(b)
(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).
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.
In developing minimum utilization rates, the Secretary takes into account the performance of ESRD facilities, the
(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.
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)
(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)
(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 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.
Each hospital furnishing renal transplantation services must submit an annual report to HCFA 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.
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.
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.
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.
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).
Each facility must participate in network activities and pursue network goals.
The ESRD facility is in compliance with applicable Federal, State and local laws, and regulations.
(a)
(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)
(c)
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
(a)
(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)
(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)
(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
(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)
(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.
(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)
(f)
(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 carried out through regularly scheduled conferences, with participation by the staff involved in the patient's care.
(g)
(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)
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)
(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)
(1) The patient care plan is personalized for the individual, reflects the psychological, social, and functional needs of the patient, and indicates the ESRD 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
(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.
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)
(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.
(b)
(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)
(d)
(e)
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)
(b)
(c)
(d)
(e)
(f)
(g)
The physical environment in which ESRD services are furnished affords a functional, sanitary, safe, and comfortable setting for patients, staff, and the public.
(a)
(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 part 51.
(b)
(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)
(d)
(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 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.
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)
(1)
(2)
(3)
(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)
(c)
(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.
(a) A renal dialysis facility and a renal dialysis center (see § 405.2102(e)(2)) have in effect an affiliation agreement or arrangement with 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.
Treatment is under the general supervision of a Director who is a physician. The physician-director need not
(a)
(b)
(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.
Properly trained personnel are present in adequate numbers to meet the needs of the patients, including those arising from medical and nonmedical emergencies.
(a)
(b)
(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.
(c)
The facility must provide dialysis services, as well as adequate laboratory, social, and dietetic services to meet the needs of the ESRD patient.
(a)
(2)
(b)
(c)
(d)
(e)
(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)
(g)
(1)
(2)
(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)
(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)
(h)
(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.
(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.
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 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.
Kidney transplantation is furnished directly by a hospital that is participating as a provider of services in the Medicare program and is approved by HCFA 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
(a)
(b)
(c)
(d)
(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)
(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 HCFA 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 HCFA finds that the reason for termination has been removed and there is reasonable assurance that it will not recur.
(a)
(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)
(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)
(a)
(b)
If HCFA proposes to apply a sanction specified in § 405.2181(b), the following rules apply:
(a) HCFA gives the facility notice of the proposed sanction and 15 days in which to request a hearing.
(b) If the facility requests a hearing, HCFA provides an informal hearing by a HCFA 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, HCFA provides the facility and the public, at least 30 days before the effective date of the sanction, with a written notice that specifies the effective date and the reasons for the sanction.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
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.
(a)
(b)
(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.)
(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 HCFA to meet the requirements for receiving such a grant;
(3) Was treated by HCFA, 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.
(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.
(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.
(1) A doctor of medicine or osteopathy legally authorized to practice
(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).
(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.)
(a)
(b)
(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)
(1) Have both copies of the agreement signed by an authorized representative; and
(2) File them with the Secretary.
(d)
(e)
(f)
(a) Under the agreement, the rural health clinic agrees to the following:
(1)
(2)
(3)
(ii) As used in this section,
(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)
(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)
(a)
(2)
(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)
(b)
(i) No longer meets the conditions for certification under part 491 of this chapter; or
(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)
(3)
(c)
(d)
(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)
(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.
(a)
(2) Medicare payment for services covered under the Federally qualified health center benefit is not subject to the usual Part B deductible.
(b)
(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.
(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.
(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.
(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;
(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.
(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
(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.
(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.
(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, 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,
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.
(a)
(i) PHS recommends that the entity qualifies as a Federally qualified health center;
(ii) The Federally qualified health center assures HCFA 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 HCFA 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) HCFA 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, HCFA sends the entity two copies of the agreement. The entity must sign and return both copies of the agreement to HCFA.
(4) If HCFA accepts the agreement filed by the Federally qualified health center, HCFA 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)
(i) Meet the applicable requirements of the PHS Act, as specified in § 405.2401(b); and
(ii) Be recommended by PHS to HCFA as a Federally qualified health center.
(2) The PHS notifies HCFA of entities that meet the requirements specified in § 405.2401(b).
(c)
(d)
Under the agreement, the Federally qualified health center must agree to the following:
(a)
(2) Centers must promptly report to HCFA any changes that result in noncompliance with any of these requirements.
(b)
(2) For facilities that met all requirements on October 1, 1991, the effective date of the agreement can be October 1, 1991.
(c)
(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)
(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 HCFA was in effect; and
(iii) The amounts exceed the beneficiary's coinsurance liability.
(e)
(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 HCFA in accordance with § 405.2436(d).
(3) If the Federally qualified health center does not furnish treatment for certain illnesses and conditions to patients who are not Medicare beneficiaries, it need not furnish such treatment to Medicare beneficiaries.
(a)
(1) Filing with HCFA a written notice stating its intention to terminate the agreement; and
(2) Notifying HCFA of the date on which the Federally qualified health center requests that the termination take effect.
(b)
(i) The date proposed by the Federally qualified health center in its notice of intention to terminate, if that date is acceptable to HCFA; or
(ii) Except as specified in paragraph (2) of this section, a date set by HCFA, which is no later than 6 months after the date HCFA 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 HCFA's receipt of the Federally qualified health center's notice of intention to terminate if HCFA 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)
(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)
(3)
(d)
When HCFA has terminated an agreement with a Federally qualified health center, HCFA will not enter into another agreement with the Federally qualified health center to participate in the Medicare program unless HCFA—
(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.
(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 HCFA terminates the agreement, HCFA will notify the public through publication in at least one newspaper in general circulation in the Federally qualified health center's service area.
(a)
(2)
(3)
(b)
(c)
(d)
(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.
(a) For purposes of this section, the terms
(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.
(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.
(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.
(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.
(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
(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.
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.
(a)
(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)
(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)
(4)
(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).
(a)
(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:
(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)
(ii) In all other cases, payment is limited to one visit per day.
(b)
(c)
(a)
(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)
(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.
(a)
(b)
(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.
(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)
(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)
(2)
(a)
(b)
(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)
(d)
(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.
(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)
(f)
(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(d) 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.
(a)
(1) Maintain adequate financial and statistical records, in the form and containing the data required by HCFA, 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)
(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)
(2)
(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 HCFA may require to establish the payment rate.
(3)
(4)
(5)
(6)
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.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
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.
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.
(a)
(1) Are age 65 or over, or
(2) Have received social security or railroad retirement disability benefits for 25 months; or
(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)
(a)
(b)
(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)
(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)
(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 months after that first month, it is retroactive to the 6th month before the month of filing.
(e)
The following forms, available free of charge by mail from HCFA or at any Social Security branch or district office, are used to apply for Medicare entitlement under the circumstances indicated:
HCFA-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.)
HCFA-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).
(a)
(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)
(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.
(a)
(b)
(1)
(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)
(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)
(c)
(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)
(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.
(a)
(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)
(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)
(1)
(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)
(3)
(4)
(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)
(d)
(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 age 65 is automatically entitled to hospital insurance under § 406.10.)
(iv) The day of death.
(e)
(2)
(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.
(a)
(b)
(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.
(c)
(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)
(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)
(2)
(3)
(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.
(4)
(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)
(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.
(g)
(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
(a)
(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)
(c)
(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)
(1) Would meet the requirements of § 406.10, § 406.12, or § 406.13 if Medicare qualified government employment were social security covered employment; and
(2) Has filed an application for hospital insurance.
(f)
(2)
(ii) No months before January 1983 may be used to satisfy the qualifying period required for entitlement based on disability.
(3)
(ii) No months before April 1986 may be used to satisfy the qualifying period required for entitlement based on disability.
(a)
(b)
(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)
(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.
(a)
(b)
(2)
(c)
(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
(d)
(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)
(2)
(3)
(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.
(a)
(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 third month after the month of enrollment.
(b)
(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.
(a)
(1)
(2)
(3)
(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)
(b)
(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)
(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
(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)
(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)
(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.
(a)
(2)
(b)
(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)
(1)
(2)
(3)
(4)
(d)
(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)
(ii) Voluntary disenrollment is effective as follows:
(A) If the individual files a request within 30 days after the date of HCFA'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 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.
Any of the following actions or events ends entitlement to premium hospital insurance:
(a)
(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)
(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)
(d)
(2) HCFA 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)
(f)
(a)
(b)
(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.)
(c)
(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)
(2) The enrollee must pay by check or money order that is payable to “HCFA 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)
(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)
(a)
(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)
(c)
(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
(a)
(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)
(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)
(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)
(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)
(a) If an individual's enrollment or nonenrollment for premium hospital 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 HCFA 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.
(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.
(a)
(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)
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
(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)
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.
(a) An individual must meet the following requirements to be entitled to SMI:
(1)
(2)
(b) SMI pays only for covered expenses incurred during an individual's period of entitlement.
(a)
(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)
(1) Spying, sabotage, treason, or subversive activities under chapter 37, 105, or 115 of title 18 of the United States Code; or
(2) Conspiracy to establish dictatorship under section 4 of the Internal Security Act of 1950.
The following forms, available free of charge by mail from HCFA, or at any Social Security branch or district office, are used to apply for enrollment under the supplementary medical insurance program.
HCFA-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.)
HCFA-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.)
HCFA-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.)
HCFA-40-F—Application for Medical Insurance. (For use by beneficiaries residing outside the United States.)
HCFA-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.)
(a)
(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)
(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.
(a)
(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)
(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.
(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.
(a)
(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)
(2) The individual may decline enrollment by submitting to SSA or HCFA 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.
(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.
(a)
(2)
(b)
(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)
(d)
(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)
(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 HCFA during the initial enrollment period, a general enrollment period, or a special enrollment period as provided in § 407.20.
The following apply whether an individual is self-enrolled or automatically enrolled in SMI:
(a)
(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 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
(b)
(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)
An individual's entitlement will terminate for any of the following reasons:
(a)
(b)
(c)
(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)
(a)
(2)
(b)
(c)
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
(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.
(a)
(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)
(c)
(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.
(a)
(1)
(i) Receive SSI or SSP or both; and
(ii) Are covered under the State's Medicaid plan as categorically needy.
(2)
(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)
(4)
(5)
(6)
(7)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(a)
(1)
(2)
(3)
(4)
(5)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(a)
(2)
(i) The State gives HCFA 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 HCFA requests such an opinion.
(b)
(a)
(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)
(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)
(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)
(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)
An individual's coverage under a buy-in agreement terminates with the earliest of the following events:
(a)
(b)
(c)
(1) On the last day of the last month for which he or she is eligible for inclusion in the group, if HCFA 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 HCFA receives a State ineligibility notice later than the time specified in paragraph (c)(1) of this section. A notice received by HCFA after the 25th day of the month is considered to have been received in the following month.
(d)
(a)
(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)
(2) Voluntary disenrollment is effective as follows:
(i) If the individual files a request within 30 days after the date of HCFA'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.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(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. HCFA rules are set forth at 42 CFR part 401, subpart F.
(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 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.
As used in this part, unless the context indicates otherwise—
(a)
(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)
(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)
(2) A kidney donor who is an enrollee is not relieved of the obligation for premiums.
(a)
(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)
(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)
(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—
(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)
(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
(a)
(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)
(c)
(d)
(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.
(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 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).
(a)
(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)
(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)
(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)
(2)
(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)
(ii) However, a nonstandard premium is not precluded solely because the
(4)
(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)
(6)
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.
(a)
(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.
(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)
(1)
(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)
(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.
(a)
(b)
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.
(a)
(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)
(c)
(a)
(b)
SSA, acting as HCFA'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.)
(a)
(b)
(c)
(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.
(a)
(b)
(c)
(d)
(2) Subsequent special payments are reduced by the amount of the premium for as long as the enrollee receives special payments.
(a)
(2) The enrollee may, if he or she wishes, pay the premiums during suspension of benefits.
(b)
(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.
(a)
(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)
(1)
(ii) Those payments are sufficient to permit deduction of all overdue premiums.
(2)
(ii) Those benefits are sufficient to permit deduction of the full amount of the overdue premiums.
(3)
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.
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.
(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 HCFA 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) HCFA, 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 “HCFA 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.
(a)
(2) Subsequent billings are for periods of one month.
(b)
(2) Subsequent billings are for periods of three months.
If monthly benefits are less than monthly premiums, the following procedures apply:
(a)
(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)
(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.
(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 HCFA 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.
(a)
(b)
(2) A premium payment is considered to have been mailed 7 days before it is received by HCFA.
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.
(a)
(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)
(a)
(b)
(c)
(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.
HCFA 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)
(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)
(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)
(2) A group payer that is not an entity of State or local government must submit all enrollee authorizations to HCFA.
(3) A group payer that is an entity of State or local government may retain the authorizations and certify to HCFA 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 HCFA sends the group payer information about each enrollee, as necessary to carry out the group payment function.
(e)
(a)
(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)
(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)
(a)
(2) The enrollee must promptly notify both SSA and the group payer of any change of address.
(b)
(1) Make premium payments promptly upon receipt of notices;
(2) Promptly notify both HCFA 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 HCFA for the group payment process.
(c)
(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.
(a)
(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)
(c)
(2) However, if HCFA has information that clearly shows those premiums were paid from the enrollee's funds, it sends the refund to the enrollee.
(a) A group billing arrangement may be terminated either by the group payer or by HCFA upon 30 days' notice.
(b) HCFA 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 HCFA.
(a)
(2) In order to maintain confidentiality, HCFA 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)
(2) HCFA 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.
(a)
(b)
(2) HCFA 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.
(a)
(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
(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)
(1) The enrollee acted diligently to pay the premiums or to request relief upon receiving a premium notice very late in the grace period or shortly after its end, and the delayed notice was not the enrollee's fault. (For example, if the billing notice was misaddressed or lost in the mail, it would not be the enrollee's fault; if the enrollee had moved and not notified SSA of the new address, he or she would be responsible for the delay.)
(2) On the basis of information given by SSA, the enrollee could reasonably have believed that the premiums were being paid by deduction from benefits or by some other means. (An example would be a notice indicating that premiums would be paid by a State Medicaid agency or a group payer or would be deducted from the spouse's civil service annuity.)
(c)
(1) Received timely and adequate notice but failed to pay within the grace period, for example because of insufficient income or resources; or
(2) Appealed the termination more than one month after the month in which SSA sent the termination notice.
(a)
(b)
(a)
(2)
(b)
(1) By billing enrollees who pay the premiums directly to HCFA or to a designated agent in accordance with § 408.60.
(2) By deduction from any benefits payable to the enrollee or the estate of a deceased enrollee under Title II or XVIII of the Social Security Act, the Railroad Retirement Act or any act administered by the Office of Personnel Management in accordance with § 408.4(b) and Subpart C of this part (Deduction from Monthly Benefits); or
(3) By billing the estate of a deceased enrollee.
(c)
(1) The individual is not entitled to benefits under the Acts listed in paragraph (b)(2) of this section, is not currently enrolled for SMI or premium hospital insurance, and demonstrates, to HCFA's satisfaction, that he or she
(2) The individual has been dead more than 27 months (the maximum time allowed for claiming SMI benefits), and the legal representative of his or her estate demonstrates, to HCFA's satisfaction, that the estate is unable to pay the debt within a reasonable time.
(d)
(1) The individual enrolls again for premium hospital insurance or SMI. (Payment of overdue premiums is not a prerequisite for reenrollment.)
(2) The individual becomes entitled or reentitled to social security or railroad retirement benefits or a Federal civil service annuity.
If HCFA has received premiums for months after the enrollee's death, HCFA refunds those premiums as follows:
(a) To the person or persons who paid the premiums or, if the premiums were paid by the enrollee, to the representative of the enrollee's estate, if any.
(b) If refund cannot be made under paragraph (a) of this section, HCFA refunds the premiums to the enrollee's survivors in the following order of priority:
(1) The surviving spouse, if he or she was either living in the same household with the deceased at the time of death, or was, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased beneficiary;
(2) The child or children who were, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one child, in equal parts to each child);
(3) The parent or parents who were, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one parent, in equal parts to each parent);
(4) The surviving spouse who was not living in the same household with the deceased at the time of death and was not, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased beneficiary;
(5) The child or children who were not entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one child, in equal parts to each child);
(6) The parent or parents who were not entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one parent, in equal parts to each parent).
Sections 1102 and 1871 of the Social Security Act (U.S.C. 1302 and 1395hh).
Nomenclature changes to part 409 appear at 62 FR 46037, Aug. 29, 1997.
This part is based on the identified provisions of the following sections of the Social Security Act:
(a) Sections 1812 and 1813 establish the scope of benefits of the hospital insurance program under Medicare Part A and set forth deductible and coinsurance requirements.
(b) Sections 1814 and 1815 establish conditions for, and limitations on, payment for services furnished by providers.
(c) Section 1820 establishes the critical access hospital program.
(d) Section 1861 describes the services covered under Medicare Part A, and benefit periods.
(e) Section 1862(a) specifies exclusions from coverage; and section 1862(h) requires a registry of pacemakers.
(f) Section 1881 sets forth the rules for individuals who have end-stage renal disease (ESRD), for organ donors, and for dialysis, transplantation, and other services furnished to ESRD patients.
Subparts A through G of this part describe the benefits available under Medicare Part A and set forth the limitations on those benefits, including
As used in this part, unless the context indicates otherwise—
(a) Is primarily engaged in providing, by or under the supervision of doctors of medicine or osteopathy, inpatient services for the diagnosis, treatment, and care or rehabilitation of persons who are sick, injured, or disabled;
(b) Is not primarily engaged in providing skilled nursing care and related services for inpatients who require medical or nursing care;
(c) Provides 24-hour nursing service in accordance with Sec. 1861(e)(5) of the Act;
(d) If it is a U.S. hospital, is licensed, or approved as meeting the standards for licensing, by the State or local licensing agency; and
(e) If it is a foreign hospital, is licensed, or approved as meeting the standard for licensing, by the appropriate Canadian or Mexican licensing agency, and for purposes of furnishing non-emergency services to U.S. residents, is accredited by the Joint Commission on Accreditation of Hospitals (JCAH), or by a Canadian or Mexican program under standards that HCFA finds to be equivalent to those of the JCAH.
Hospital insurance (Part A of Medicare) helps pay for inpatient hospital or inpatient CAH services and posthospital SNF care. It also pays for home health services and hospice care. There are limitations on the number of days of care that Medicare can pay for and there are deductible and coinsurance amounts for which the beneficiary is responsible. For each type of service, certain conditions must be met as specified in the pertinent sections of this subpart and in part 418 of this chapter regarding hospice care. The special conditions for inpatient hospital services furnished by a qualified U.S., Canadian, or Mexican hospital are set forth in subparts G and H of part 424 of this chapter.
(a) Subject to the conditions, limitations, and exceptions set forth in this subpart, the term “inpatient hospital or inpatient CAH services” means the following services furnished to an inpatient of a participating hospital or of a participating CAH or, in the case of emergency services or services in foreign hospitals, to an inpatient of a qualified hospital:
(1) Bed and board.
(2) Nursing services and other related services.
(3) Use of hospital or CAH facilities.
(4) Medical social services.
(5) Drugs, biologicals, supplies, appliances, and equipment.
(6) Certain other diagnostic or therapeutic services.
(7) Medical or surgical services provided by certain interns or residents-in-training.
(8) Transportation services, including transport by ambulance.
(b)
(a)
(b)
(i) The patient's condition requires him or her to be isolated;
(ii) The hospital or CAH has no semiprivate or ward accommodations; or
(iii) The hospital's or CAH's semiprivate and ward accommodations are fully occupied by other patients, were so occupied at the time the patient was admitted to the hospital or CAH, respectively, for treatment of a condition that required immediate inpatient hospital or inpatient CAH care, and have been so occupied during the interval.
(2)
(3)
(i) None of the conditions of paragraph (b)(1) of this section is met; and
(ii) The private room was requested by the patient or a member of the family, who, at the time of the request, was informed what the hospital's or CAH's charge would be.
(a) Except as provided in paragraph (b) of this section, Medicare pays for nursing and related services, use of hospital or CAH facilities, and medical social services as inpatient hospital or inpatient CAH services only if those services are ordinarily furnished by the hospital or CAH, respectively, for the care and treatment of inpatients.
(b)
(a) Except as specified in paragraph (b) of this section, Medicare pays for drugs and biologicals as inpatient hospital or inpatient CAH services only if—
(1) They represent a cost to the hospital or CAH;
(2) They are ordinarily furnished by the hospital or CAH for the care and treatment of inpatients; and
(3) They are furnished to an inpatient for use in the hospital or CAH.
(b)
(a) Except as specified in paragraph (b) of this section, Medicare pays for supplies, appliances, and equipment as inpatient hospital or inpatient CAH services only if—
(1) They are ordinarily furnished by the hospital or CAH to inpatients; and
(2) They are furnished to inpatients for use in the hospital or CAH.
(b)
(1) The item is one that the beneficiary must continue to use after he or she leaves the hospital or CAH, for example, heart valves or a heart pacemaker, or
(2) The item is medically necessary to permit or facilitate the beneficiary's departure from the hospital or CAH and is required until the beneficiary can obtain a continuing supply. Tracheostomy or draining tubes are examples.
Medical or surgical services provided by an intern or a resident-in-training are included as “inpatient hospital or inpatient CAH services” if they are provided—
(a) By an intern or a resident-in-training under a teaching program approved by the Council on Medical Education of the American Medical Association, or the Bureau of Professional Education of the American Osteopathic Association;
(b) By an intern or a resident-in-training in the field of dentistry under a teaching program approved by the Council on Dental Education of the American Dental Association; or
(c) By an intern or a resident-in-training in the field of podiatry under a teaching program approved by the Council on Podiatry Education of the American Podiatry Association.
Diagnostic or therapeutic services other than those provided for in §§ 409.12, 409.13, and 409.14 are considered as inpatient hospital or inpatient CAH services if—
(a) They are furnished by the hospital or CAH, or by others under arrangements made by the hospital or CAH;
(b) Billing for those services is through the hospital or CAH; and
(c) The services are of a kind ordinarily furnished to inpatients either by the hospital or CAH or under arrangements made by the hospital or CAH.
(a)
(b)
(1) If the kidney is intended for an individual who has ESRD and is entitled to Medicare benefits or can be expected to become so entitled within a reasonable time; and
(2) Regardless of whether the donor is entitled to Medicare.
(a)
(2) The required information is set forth under 21 CFR part 805 of the FDA regulations and must be submitted in accordance with general instructions issued by HCFA.
(b)
(c)
(1) States the reasons for the determination;
(2) Grants the provider 45 days from the date of the notice to submit the information or evidence showing that the determination is in error; and
(3) Informs the provider of its right to hearing.
(d)
(a)
(1) Nursing care provided by or under the supervision of a registered professional nurse.
(2) Bed and board in connection with the furnishing of that nursing care.
(3) Physical, occupational, or speech therapy.
(4) Medical social services.
(5) Drugs, biologicals, supplies, appliances, and equipment.
(6) Services furnished by a hospital with which the SNF has a transfer agreement in effect under § 483.75(n) of this chapter.
(7) Other services that are generally provided by (or under arrangements made by) SNFs.
(b)
(2)
(c)
(1) The terms
(2) The term
(3) The term “swing-bed hospital” includes a CAH with swing-bed approval under subpart F of part 485 of this chapter.
(a)
(b)
(a)
(b)
(i) The patient's condition requires him to be isolated;
(ii) The SNF has no semiprivate or ward accommodations; or
(iii) The SNF semiprivate and ward accommodations are fully occupied by other patients, were so occupied at the time the patient was admitted to the SNF for treatment of a condition that required immediate inpatient SNF
(2)
(3)
(i) None of the conditions of paragraph (b)(1) of this section is met, and
(ii) The private room was requested by the patient or a member of the family who, at the time of request was informed what the charge would be.
Medicare pays for physical, occupational, or speech therapy as posthospital SNF care if—
(a) It is furnished by the facility or under arrangements made by the facility, and
(b) Billing for the therapy is by or through the facility.
Medicare pays for medical social services as posthospital SNF care, including—
(a) Assessment of the social and emotional factors related to the beneficiary's illness, need for care, response to treatment, and adjustment to care in the facility;
(b) Case work services to assist in resolving social or emotional problems that may have an adverse effect on the beneficiary's ability to respond to treatment; and
(c) Assessment of the relationship of the beneficiary's medical and nursing requirements to his or her home situation, financial resources, and the community resources available upon discharge from facility care.
(a)
(1) They represent a cost to the facility;
(2) They are ordinarily furnished by the facility for the care and treatment of inpatients; and
(3) They are furnished to an inpatient for use in the facility.
(b)
(c)
(1) Ordinarily furnished by the facility to inpatients; and
(2) Furnished to inpatients for use in the facility.
(d)
(1) The item is one that the beneficiary must continue to use after leaving, such as a leg brace; or
(2) The item is necessary to permit or facilitate the beneficiary's departure from the facility and is required until he or she can obtain a continuing supply, for example, sterile dressings.
(a)
(1) A participating hospital with which the SNF has in effect an agreement under § 483.75(n) of this chapter for the transfer of patients and exchange of medical records; or
(2) A hospital that has a swing-bed approval, and is furnishing services to an SNF-level inpatient of that hospital.
(b)
(1) By a participating hospital with which the SNF has in effect a transfer agreement as described in paragraph (a)(1) of this section; or
(2) By a hospital or a CAH that has a swing-bed approval, to its own SNF-level inpatient.
In addition to those services specified in §§ 409.21 through 409.26, Medicare pays as posthospital SNF care for such other diagnostic and therapeutic services as are generally provided by (or under arrangements made by) SNFs, including—
(a) Medical and other health services as described in subpart B of part 410 of this chapter, subject to any applicable limitations or exclusions contained in that subpart or in § 409.20(b);
(b) Respiratory therapy services prescribed by a physician for the assessment, diagnostic evaluation, treatment, management, and monitoring of patients with deficiencies and abnormalities of cardiopulmonary function; and
(c) Transportation by ambulance that meets the general medical necessity requirements set forth in § 410.40(d)(1) of this chapter.
Posthospital SNF care, including SNF-type care furnished in a hospital or CAH that has a swing-bed approval, is covered only if the beneficiary meets the requirements of this section and only for days when he or she needs and receives care of the level described in § 409.31. A beneficiary in an SNF is also considered to meet the level of care requirements of § 409.31 up to and including the assessment reference date for the 5-day assessment prescribed in § 413.343(b) of this chapter, when assigned to one of the Resource Utilization Groups that is designated (in the annual publication of Federal prospective payment rates described in § 413.345 of this chapter) as representing the required level of care. For the purposes of this section, the assessment reference date is defined in accordance with § 483.315(d) of this chapter, and must occur no later than the eighth day of posthospital SNF care.
(a)
(1) Have been hospitalized in a participating or qualified hospital or participating CAH, for medically necessary inpatient hospital or inpatient CAH care, for at least 3 consecutive calendar days, not counting the date of discharge; and
(2) Have been discharged from the hospital or CAH in or after the month he or she attained age 65, or in a month for which he or she was entitled to hospital or CAH insurance benefits on the basis of disability or end-stage renal disease, in accordance with part 406 of this chapter.
(b)
(2)
(a)
(1) Are ordered by a physician;
(2) Require the skills of technical or professional personnel such as registered nurses, licensed practical (vocational) nurses, physical therapists, occupational therapists, and speech pathologists or audiologists; and
(3) Are furnished directly by, or under the supervision of, such personnel.
(b)
(2) Those services must be furnished for a condition—
(i) For which the beneficiary received inpatient hospital or inpatient CAH services; or
(ii) Which arose while the beneficiary was receiving care in a SNF or swing-bed hospital for a condition for which he or she received inpatient hospital or inpatient CAH services.
(3) The daily skilled services must be ones that, as a practical matter, can only be provided in a SNF, on an inpatient basis.
(a) To be considered a skilled service, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel.
(b) A condition that does not ordinarily require skilled services may require them because of special medical complications. Under those circumstances, a service that is usually non-skilled (such as those listed in § 409.33(d)) may be considered skilled because it must be performed or supervised by skilled nursing or rehabilitation personnel. For example, a plaster cast on a leg does not usually require skilled care. However, if the patient has a preexisting acute skin condition or needs traction, skilled personnel may be needed to adjust traction or watch for complications. In situations of this type, the complications, and the skilled services they require, must be documented by physicians' orders and nursing or therapy notes.
(c) The restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities. For example, a terminal cancer patient may need some of the skilled services described in § 409.33.
(a)
(ii)
(2)
(ii)
(3)
(ii)
(b)
(2) Enteral feeding that comprises at least 26 per cent of daily calorie requirements and provides at least 501 milliliters of fluid per day.
(3) Nasopharyngeal and tracheostomy aspiration;
(4) Insertion and sterile irrigation and replacement of suprapubic catheters;
(5) Application of dressings involving prescription medications and aseptic techniques;
(6) Treatment of extensive decubitus ulcers or other widespread skin disorder;
(7) Heat treatments which have been specifically ordered by a physician as part of active treatment and which require observation by nurses to adequately evaluate the patient's progress;
(8) Initial phases of a regimen involving administration of medical gases;
(9) Rehabilitation nursing procedures, including the related teaching and adaptive aspects of nursing, that are part of active treatment, e.g., the
(c)
(2) Therapeutic exercises or activities: Therapeutic exercises or activities which, because of the type of exercises employed or the condition of the patient, must be performed by or under the supervision of a qualified physical therapist or occupational therapist to ensure the safety of the patient and the effectiveness of the treatment;
(3) Gait evaluation and training: Gait evaluation and training furnished to restore function in a patient whose ability to walk has been impaired by neurological, muscular, or skeletal abnormality;
(4) Range of motion exercises: Range of motion exercises which are part of the active treatment of a specific disease state which has resulted in a loss of, or restriction of, mobility (as evidenced by a therapist's notes showing the degree of motion lost and the degree to be restored);
(5) Maintenance therapy; Maintenance therapy, when the specialized knowledge and judgment of a qualified therapist is required to design and establish a maintenance program based on an initial evaluation and periodic reassessment of the patient's needs, and consistent with the patient's capacity and tolerance. For example, a patient with Parkinson's disease who has not been under a rehabilitation regimen may require the services of a qualified therapist to determine what type of exercises will contribute the most to the maintenance of his present level of functioning.
(6) Ultrasound, short-wave, and microwave therapy treatment by a qualified physical therapist;
(7) Hot pack, hydrocollator, infrared treatments, paraffin baths, and whirlpool; Hot pack hydrocollator, infrared treatments, paraffin baths, and whirlpool in particular cases where the patient's condition is complicated by circulatory deficiency, areas of desensitization, open wounds, fractures, or other complications, and the skills, knowledge, and judgment of a qualified physical therapist are required; and
(8) Services of a speech pathologist or audiologist when necessary for the restoration of function in speech or hearing.
(d)
(1) Administration of routine oral medications, eye drops, and ointments;
(2) General maintenance care of colostomy and ileostomy;
(3) Routine services to maintain satisfactory functioning of indwelling bladder catheters;
(4) Changes of dressings for noninfected postoperative or chronic conditions;
(5) Prophylactic and palliative skin care, including bathing and application of creams, or treatment of minor skin problems;
(6) Routine care of the incontinent patient, including use of diapers and protective sheets;
(7) General maintenance care in connection with a plaster cast;
(8) Routine care in connection with braces and similar devices;
(9) Use of heat as a palliative and comfort measure, such as whirlpool and hydrocollator;
(10) Routine administration of medical gases after a regimen of therapy has been established;
(11) Assistance in dressing, eating, and going to the toilet;
(12) Periodic turning and positioning in bed; and
(13) General supervision of exercises which have been taught to the patient; including the actual carrying out of maintenance programs, i.e., the performance of the repetitive exercises required to maintain function do not require the skills of a therapist and would not constitute skilled rehabilitation services (see paragraph (c) of this
(a) To meet the daily basis requirement specified in § 409.31(b)(1), the following frequency is required:
(1) Skilled nursing services or skilled rehabilitation services must be needed and provided 7 days a week; or
(2) As an exception, if skilled rehabilitation services are not available 7 days a week those services must be needed and provided at least 5 days a week.
(b) A break of one or two days in the furnishing of rehabilitation services will not preclude coverage if discharge would not be practical for the one or two days during which, for instance, the physician has suspended the therapy sessions because the patient exhibited extreme fatigue.
(a)
(b)
(2)
If a beneficiary is discharged from a facility after receiving posthospital SNF care, he or she is not entitled to additional services of this kind in the same benefit period unless—
(a) He or she is readmitted to the same or another facility within 30 calendar days following the day of discharge (or, before December 5, 1980, within 14 calendar days after discharge); or
(b) He or she is again hospitalized for at least 3 consecutive calendar days.
This subpart implements sections 1814(a)(2)(C), 1835(a)(2)(A), and 1861(m) of the Act with respect to the requirements that must be met for Medicare payment to be made for home health services furnished to eligible beneficiaries.
In order for home health services to qualify for payment under the Medicare program the following requirements must be met:
(a) The services must be furnished to an eligible beneficiary by, or under arrangements with, an HHA that—
(1) Meets the conditions of participation for HHAs at part 484 of this chapter; and
(2) Has in effect a Medicare provider agreement as described in part 489, subparts A, B, C, D, and E of this chapter.
(b) The physician certification and recertification requirements for home health services described in § 424.22.
(c) All requirements contained in §§ 409.42 through 409.47.
To qualify for Medicare coverage of home health services, a beneficiary must meet each of the following requirements:
(a)
(b)
(c)
(1) Intermittent skilled nursing services that meet the criteria for skilled services and the need for skilled services found in § 409.32. (Also see § 409.33(a) and (b) for a description of examples of skilled nursing and rehabilitation services.)
(2) Physical therapy services that meet the requirements of § 409.44(c).
(3) Speech-language pathology services that meet the requirements of § 409.44(c).
(4) Continuing occupational therapy services that meet the requirements of § 409.44(c) if the beneficiary's eligibility for home health services has been established by virtue of a prior need for intermittent skilled nursing care, speech-language pathology services, or physical therapy in the current or prior certification period.
(d)
(e)
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(b)
(i) In determining whether a service requires the skill of a licensed nurse, consideration must be given to the inherent complexity of the service, the condition of the beneficiary, and accepted standards of medical and nursing practice.
(ii) If the nature of a service is such that it can safely and effectively be performed by the average nonmedical person without direct supervision of a licensed nurse, the service cannot be regarded as a skilled nursing service.
(iii) The fact that a skilled nursing service can be or is taught to the beneficiary or to the beneficiary's family or friends does not negate the skilled aspect of the service when performed by the nurse.
(iv) If the service could be performed by the average nonmedical person, the absence of a competent person to perform it does not cause it to be a skilled nursing service.
(2) The skilled nursing care must be provided on a part-time or intermittent basis.
(3) The skilled nursing services must be reasonable and necessary for the treatment of the illness or injury.
(i) To be considered reasonable and necessary, the services must be consistent with the nature and severity of the beneficiary's illness or injury, his or her particular medical needs, and accepted standards of medical and nursing practice.
(ii) The skilled nursing care provided to the beneficiary must be reasonable within the context of the beneficiary's condition.
(iii) The determination of whether skilled nursing care is reasonable and necessary must be based solely upon the beneficiary's unique condition and individual needs, without regard to whether the illness or injury is acute, chronic, terminal, or expected to last a long time.
(c)
(1) Speech-language pathology services and physical or occupational therapy services must relate directly and specifically to a treatment regimen (established by the physician, after any needed consultation with the qualified therapist) that is designed to treat the beneficiary's illness or injury. Services
(2) Physical and occupational therapy and speech-language pathology services must be reasonable and necessary. To be considered reasonable and necessary, the following conditions must be met:
(i) The services must be considered under accepted standards of medical practice to be a specific, safe, and effective treatment for the beneficiary's condition.
(ii) The services must be of such a level of complexity and sophistication or the condition of the beneficiary must be such that the services required can safely and effectively be performed only by a qualified physical therapist or by a qualified physical therapy assistant under the supervision of a qualified physical therapist, by a qualified speech-language pathologist, or by a qualified occupational therapist or a qualified occupational therapy assistant under the supervision of a qualified occupational therapist (as defined in § 484.4 of this chapter). Services that do not require the performance or supervision of a physical therapist or an occupational therapist are not considered reasonable or necessary physical therapy or occupational therapy services, even if they are performed by or supervised by a physical therapist or occupational therapist. Services that do not require the skills of a speech-language pathologist are not considered to be reasonable and necessary speech-language pathology services even if they are performed by or supervised by a speech-language pathologist.
(iii) There must be an expectation that the beneficiary's condition will improve materially in a reasonable (and generally predictable) period of time based on the physician's assessment of the beneficiary's restoration potential and unique medical condition, or the services must be necessary to establish a safe and effective maintenance program required in connection with a specific disease, or the skills of a therapist must be necessary to perform a safe and effective maintenance program. If the services are for the establishment of a maintenance program, they may include the design of the program, the instruction of the beneficiary, family, or home health aides, and the necessary infrequent reevaluations of the beneficiary and the program to the degree that the specialized knowledge and judgment of a physical therapist, speech-language pathologist, or occupational therapist is required.
(iv) The amount, frequency, and duration of the services must be reasonable.
(a)
(b)
(1) The reason for the visits by the home health aide must be to provide hands-on personal care to the beneficiary or services that are needed to maintain the beneficiary's health or to facilitate treatment of the beneficiary's illness or injury. The physician's order must indicate the frequency of the home health aide services required by the beneficiary. These services may include but are not limited to:
(i) Personal care services such as bathing, dressing, grooming, caring for hair, nail and oral hygiene that are needed to facilitate treatment or to prevent deterioration of the beneficiary's health, changing the bed linens of an incontinent beneficiary, shaving, deodorant application, skin care with lotions and/or powder, foot care, ear care, feeding, assistance with elimination (including enemas unless the skills of a licensed nurse are required due to the beneficiary's condition, routine catheter care, and routine colostomy care), assistance with ambulation, changing position in bed, and assistance with transfers.
(ii) Simple dressing changes that do not require the skills of a licensed nurse.
(iii) Assistance with medications that are ordinarily self-administered and that do not require the skills of a licensed nurse to be provided safely and effectively.
(iv) Assistance with activities that are directly supportive of skilled therapy services but do not require the skills of a therapist to be safely and effectively performed, such as routine maintenance exercises and repetitive practice of functional communication skills to support speech-language pathology services.
(v) Routine care of prosthetic and orthotic devices.
(2) The services to be provided by the home health aide must be—
(i) Ordered by a physician in the plan of care; and
(ii) Provided by the home health aide on a part-time or intermittent basis.
(3) The services provided by the home health aide must be reasonable and necessary. To be considered reasonable and necessary, the services must—
(i) Meet the requirement for home health aide services in paragraph (b)(1) of this section;
(ii) Be of a type the beneficiary cannot perform for himself or herself; and
(iii) Be of a type that there is no able or willing caregiver to provide, or, if there is a potential caregiver, the beneficiary is unwilling to use the services of that individual.
(4) The home health aide also may perform services incidental to a visit that was for the provision of care as described in paragraphs (b)(3)(i) through (iii) of this section. For example, these incidental services may include changing bed linens, personal laundry, or preparing a light meal.
(c)
(1) The services are ordered by a physician and included in the plan of care.
(2)(i) The services are necessary to resolve social or emotional problems that are expected to be an impediment to the effective treatment of the beneficiary's medical condition or to his or her rate of recovery.
(ii) If these services are furnished to a beneficiary's family member or caregiver, they are furnished on a short-term basis and it can be demonstrated that the service is necessary to resolve a clear and direct impediment to the effective treatment of the beneficiary's medical condition or to his or her rate of recovery.
(3) The frequency and nature of the medical social services are reasonable and necessary to the treatment of the beneficiary's condition.
(4) The medical social services are furnished by a qualified social worker or qualified social work assistant under the supervision of a social worker as defined in § 484.4 of this chapter.
(5) The services needed to resolve the problems that are impeding the beneficiary's recovery require the skills of a social worker or a social work assistant under the supervision of a social worker to be performed safely and effectively.
(d)
(e)
(f)
(g)
(1) Approved by the Accreditation Council for Graduate Medical Education;
(2) In the case of an osteopathic hospital, approved by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association;
(3) In the case of an intern or resident-in-training in the field of dentistry, approved by the Council on Dental Education of the American Dental Association; or
(4) In the case of an intern or resident-in-training in the field of podiatry, approved by the Council on Podiatric Medical Education of the American Podiatric Medical Association.
Services that are allowable as administrative costs but are not separately billable include, but are not limited to, the following:
(a)
(b)
(c)
(d)
To be covered, home health services must be furnished in either the beneficiary's home or an outpatient setting as defined in this section.
(a)
(b)
(1) Require equipment that cannot be made available at the beneficiary's home; or
(2) Are furnished while the beneficiary is at the facility to receive services requiring equipment described in paragraph (b)(1) of this section.
(a)
(b)
(c)
(1) Generally, one visit may be covered each time an HHA employee or someone providing home health services under arrangements enters the beneficiary's home and provides a covered service to a beneficiary who meets the criteria of § 409.42 (confined to the home, under the care of a physician, in need of skilled services, and under a plan of care).
(2) If the HHA furnishes services in an outpatient facility under arrangements with the facility, one visit may be covered for each type of service provided.
(3) If two individuals are needed to provide a service, two visits may be covered. If two individuals are present, but only one is needed to provide the care, only one visit may be covered.
(4) A visit is initiated with the delivery of covered home health services and ends at the conclusion of delivery of covered home health services. In those circumstances in which all reasonable and necessary home health services cannot be provided in the course of a single visit, HHA staff or others providing services under arrangements with the HHA may remain at the beneficiary's residence between visits (for example, to provide non-covered services). However, if all covered services could be provided in the course of one visit, only one visit may be covered.
(a)
(1) A drug is any chemical compound that may be used on or administered to humans or animals as an aid in the diagnosis, treatment or prevention of disease or other condition or for the relief of pain or suffering or to control or improve any physiological pathologic condition.
(2) A biological is any medicinal preparation made from living organisms and their products including, but not limited to, serums, vaccines, antigens, and antitoxins.
(b)
(c)
(d)
(e)
(f)
(g)
The coinsurance liability of the beneficiary or other person for DME furnished as a home health service is 20 percent of the customary (insofar as reasonable) charge for the services.
(a)
(b)
(i) A hospital that meets the requirements of section 1861(e)(1) of the Act.
(ii) A CAH that meets the requirements of section 1820 of the Act.
(iii) A SNF that meets the requirements of sections 1819(a)(1) or 1861(y) of the Act.
(2) For purposes of ending a benefit period, a beneficiary was an inpatient of a SNF if his or her care in the SNF met the skilled level of care requirements specified in § 409.31(b) (1) and (3).
(c)
(i) A beneficiary's care met the skilled level of care requirements if inpatient SNF claims were paid for those services under Medicare or Medicaid, unless:
(A) Such payments were made under § 405.330 or Medicaid administratively necessary days provisions which result in payment for care not meeting the skilled level of care requirements, or
(B) A Medicare denial and a Medicaid payment are made for the same period, in which case the presumption in paragraph (c)(2)(ii) of this section applies;
(ii) A beneficiary's care met the skilled level of care requirements if a SNF claim was paid under section 1879(e) of the Social Security Act;
(iii) A beneficiary's care did not meet the skilled level of care requirements if a SNF claim was paid for the services under § 405.330;
(iv) A beneficiary's care did not meet the skilled level of care requirements if a Medicaid SNF claim was denied on the grounds that the services were not at the skilled level of care (even if paid under applicable Medicaid administratively necessary days provisions which result in payment for care not meeting the skilled level of care requirements);
(2) For purposes of determining whether a beneficiary was an inpatient of a SNF under paragraph (b)(2) of this section a beneficiary's care in a SNF is presumed—
(i) To have met the skilled level of care requirements during any period for which the beneficiary was assigned to one of the Resource Utilization Groups designated as representing the required level of care, as provided in § 409.30.
(ii) To have met the skilled level of care requirements if a Medicaid or Medicare claim was denied on grounds other than that the services were not at the skilled level of care;
(iii) Not to have met the skilled level of care requirements if a Medicare SNF claim was denied on the grounds that the services were not at the skilled level of care and payment was not made under § 405.330; or
(iv) Not to have met the skilled level of care requirements if no Medicare or Medicaid claim was submitted by the SNF.
(3) If information upon which to base a presumption is not readily available, the intermediary may, at its discretion review the beneficiary's medical records to determine whether he or she was an inpatient of a SNF as set forth under paragraph (b)(2) of this section.
(4) When the intermediary makes a benefit period determination based upon paragraph (c)(1) of this section, the beneficiary may seek to reverse the benefit period determination by timely appealing the prior Medicare SNF claim determination under part 405, subpart G of this chapter, or the prior Medicaid SNF claim under part 431, subpart E of this chapter.
(5) When the intermediary makes a benefit period determination under paragraph (c)(2) of this section, the beneficiary will be notified of the basis for the determination, and of his or her right to present evidence to rebut the determination that the skilled level of care requirements specified in § 409.31 (b)(1) and (b)(3) were or were not met on reconsideration and appeal under 42 CFR, part 405, subpart G of this chapter.
(d)
(1) Medicare will recognize only the initial level of care characterization for that prior SNF stay (or if appealed under 42 CFR part 405, subpart G of this chapter, the level of care determined under appeal); or
(2) If part of a prior SNF stay has one level of care characterization and another part has another level of care characterization, Medicare will recognize only the initial level of care characterization for a particular part of a prior SNF stay (or if appealed under 42 CFR part 405, subpart G of this chapter, the level of care determined under appeal).
(e)
(a)
(i) For the first 60 days (referred to in this subpart as
(ii) For the next 30 days (referred to in this subpart as
(2)
(3)
(i) The 60 full benefit days;
(ii) The 30 coinsurance days;
(iii) The remaining lifetime reserve days.
(b)
(c)
(d)
(1) For DME furnished by an HHA that is a nominal charge provider, Medicare Part A pays 80 percent of fair compensation.
(2) For DME furnished by an HHA that is not a nominal charge provider, Medicare Part A pays the lesser of the following:
(i) 80 percent of the reasonable cost of the service.
(ii) The reasonable cost of, or the customary charge for, the service, whichever is less, minus 20 percent of the customary (insofar as reasonable) charge for the service.
There is a lifetime maximum of 190 days on inpatient psychiatric hospital services available to any beneficiary. Therefore, once an individual receives benefits for 190 days of care in a psychiatric hospital, no further benefits of that type are available to that individual.
(a)
(2) Reduction is required only if the hospital was participating in Medicare
(3) The reduction applies only to the beneficiary's first benefit period. For subsequent benefit periods, the 90 benefit days, plus any remaining lifetime reserve days, subject to the 190 day lifetime limit on psychiatric hospital care, are available.
(b)
(2) After entitlement, all psychiatric care days, whether in a general or a psychiatric hospital, are counted toward the number of days available in the initial benefit period.
(c)
(2) During the 150-day period preceding Medicare entitlement, an individual had been a patient of a general hospital for 60 days of inpatient psychiatric care and had spent 90 days in a psychiatric hospital, ending with the first day of entitlement. During the initial benefit period, the beneficiary spent 90 days in a general hospital and received psychiatric care there. The 60 days spent in the general hospital for psychiatric treatment before entitlement do not reduce the benefits available in the first benefit period. Only the 90 days spent in the psychiatric hospital before entitlement reduce such benefits, leaving a total of 60 available psychiatric days. However, after entitlement, the reduction applies not only to days spent in a psychiatric hospital, but also to days of psychiatric treatment in a general hospital. Thus, Medicare payment could be made only for 60 of the 90 days spent in the general hospital.
(3) An individual was admitted to a general hospital for a mental condition and, after 10 days, transferred to a participating psychiatric hospital. The individual remained in the psychiatric hospital for 78 days before becoming entitled to hospital insurance benefits and for 130 days after entitlement. The beneficiary was then transferred to a general hospital and received treatment of a medical condition for 20 days. The 10 days spent in the general hospital during the 150-day pre-entitlement period have no effect on the inpatient hospital benefit days available to the individual for psychiatric care in the first benefit period, even though the general hospital stay was for a mental condition. Only the 78 days spent in the psychiatric hospital during the pre-entitlement period are subtracted from the 150 benefit days. Accordingly, the individual has 72 days of psychiatric care (150 days less 78 days) available in the first benefit period. Benefits could be paid for the individual's hospitalization during the first benefit period in the following manner. For the 130-day psychiatric hospital stay, 72 days (60 full benefit days and 12 coinsurance days), and for the general hospital stay, 20 days (18 coinsurance and 2 lifetime reserve days).
(a) Except as provided in paragraph (b) of this section for lifetime reserve days, all covered inpatient days and home health visits are counted toward the allowable amounts specified in §§ 409.61 through 409.63 if—
(1) They are paid for by Medicare; or
(2) They would be paid for by Medicare if the following requirements had been met:
(i) A proper and timely request for payment had been filed; and
(ii) The hospital, CAH, SNF, or home health agency had submitted all necessary evidence, including physician certification of need for services when such certification was required; or
(3) They could not be paid for because the total payment due was equal to, or less than, the applicable deductible and coinsurance amounts.
(b)
(a)
(2) It may be advantageous to elect not to use lifetime reserve days if the beneficiary has private insurance coverage that begins after the first 90 inpatient days in a benefit period, or if the daily charge is only slightly higher than the lifetime reserve days coinsurance amount. In such cases, the beneficiary may want to save the lifetime reserve days for future care that may be more expensive.
(3) If the beneficiary elects not to use lifetime reserve days for a particular hospital or CAH stay, they are still available for a later stay. However, once the beneficiary uses lifetime reserve days, they can never be renewed.
(4) If the beneficiary elects not to use lifetime reserve days, the hospital or CAH may require him or her to pay for any services furnished after the regular days are exhausted.
(b)
(c)
(1) The beneficiary; or
(2) If the beneficiary is physically or mentally unable to act, by the beneficiary's legal representative. In addition, if some other payment source is available, such as private insurance, any person authorized under § 405.1664 of this chapter to execute a request for payment for the beneficiary may file the election.
(d)
(2) The election may be filed at the time of admission to the hospital or CAH or at any time thereafter up to 90 days after the beneficiary's discharge.
(3) A retroactive election (that is, one made after lifetime reserve days have been used because the regular days were exhausted), is not acceptable unless it is approved by the hospital or CAH.
(e)
(2)
(i) If the beneficiary has one or more regular benefit days (see § 409.61(a)(1) of this chapter) remaining in the benefit period upon entering the hospital or CAH, an election not to use lifetime reserve days will apply automatically to all days that are not outlier days. The beneficiary may also elect not to use lifetime reserve days for outlier days but this election must apply to all outlier days.
(ii) If the beneficiary has no regular benefit days (see § 409.61(a)(1) of this chapter) remaining in the benefit period upon entering the hospital or
(a) Except as provided in paragraph (c) of this section, a beneficiary (or anyone authorized to execute a request for payment, if the beneficiary is incapacitated) may revoke an election not to use lifetime reserve days during hospitalization or within 90 days after discharge.
(b) The revocation must be submitted to the hospital or CAH in writing and identify the stay or stays to which it applies.
(c)
(1) After the beneficiary dies; or
(2) After the hospital or CAH has filed a claim under the supplementary medical insurance program (Medicare Part B), for medical and other health services furnished to the beneficiary on the days in question.
(a)
(1) The services were furnished before HCFA or the intermediary notified the hospital or CAH that the beneficiary had exhausted the available benefit days and was not entitled to have payment made for those services.
(2) At the time the hospital or CAH furnished the services, it was unaware that the beneficiary had exhausted the available benefit days and could reasonably have assumed that he or she was entitled to have payment made for these services.
(3) Payment would be precluded solely because the beneficiary has no benefit days available for the particular hospital or CAH stay.
(4) The hospital or CAH claims reimbursement for the services and refunds any payments made for those services by the beneficiary or by another person on his or her behalf.
(b)
(2) Payment may not be made under this section for any day after the hospital or CAH is notified that the beneficiary has exhausted the available benefit days.
(c)
(a)
(2) The hospital or CAH or SNF may charge these amounts to the beneficiary or someone on his or her behalf.
(b)
(2) Since the coinsurance amounts are, by statute, specific fractions of the deductible, they change when the deductible changes.
(a)
(2) Although the beneficiary may be hospitalized several times during a benefit period, the deductible is charged only once during that period. If the beneficiary begins more than one benefit period in the same year, a deductible is charged for each of those periods.
(3) For services furnished before January 1, 1982, the applicable deductible is the one in effect when the benefit period began.
(4) For services furnished after December 31, 1981, the applicable deductible is the one in effect during the calendar year in which the services were furnished.
(b)
(c)
(a)
(2) For each day from the 61st to the 90th day, the coinsurance amount is
(3) For each day from the 91st to the 150th day (lifetime reserve days), the coinsurance amount is
(4) For coinsurance days before January 1, 1982, the coinsurance amount is based on the deductible applicable for the calendar year in which the benefit period began. The coinsurance amounts do not change during a beneficiary's benefit period even though the coinsurance days may fall in a subsequent year for which a higher deductible amount has been determined.
(5) For coinsurance days after December 31, 1981, the coinsurance amount is based on the deductible applicable for the calendar year in which the services were furnished. For example, if an individual starts a benefit period by being admitted to a hospital in 1981 and remains in the hospital long enough to use coinsurance days in 1982, the coinsurance amount charged for those days is based on the 1982 inpatient hospital deductible.
(b)
(c)
(2) If the actual charge to the patient for the 91st through the 150th day (lifetime reserve days) is less than the coinsurance amount applicable for the calendar year in which the services were furnished, the beneficiary is deemed to have elected not to use the days because he or she would not benefit from using them.
(a)
(2) For each day from the 21st through the 100th day, the coinsurance
(3) For coinsurance days before January 1, 1982, the coinsurance amount is based on the deductible applicable for the year in which the benefit period began. The coinsurance amounts do not change during a beneficiary's benefit period even though the coinsurance days may fall in a subsequent year for which a higher deductible amount has been determined.
(4) For coinsurance days after December 31, 1981, the coinsurance amount is based on the deductible applicable for the calendar year in which the services were furnished.
(b)
(c)
(a)
(2) A unit of packed red cells is treated as the equivalent of a unit of whole blood.
(3) Medicare does not pay for the first 3 units of whole blood or units of packed red cells that a beneficiary receives, during a calendar year, as an inpatient of a hospital or CAH or SNF, or on an outpatient basis under Medicare Part B.
(4) The deductible does not apply to other blood components such as platelets, fibrinogen, plasma, gamma globulin, and serum albumin, or to the cost of processing, storing, and administering blood.
(5) The blood deductible is in addition to the inpatient hospital deductible and daily coinsurance.
(6) The Part A blood deductible is reduced to the extent that the Part B blood deductible has been applied. For example, if a beneficiary had received one unit under Medicare Part B, and later in the same benefit period received three units under Medicare Part A, Medicare Part A would pay for the third of the latter units. (As specified in § 410.161 of this chapter, the Part B blood deductible is reduced to the extent a blood deductible has been applied under Medicare Part A.)
(b)
(2)
(c)
(2)
(i) The blood or packed red cells has been replaced.
(ii) The provider (or its blood supplier) receives, from an individual or a blood bank, a replacement offer that meets the criteria specified in paragraph (d) of this section. The provider is precluded from charging even if it or its blood supplier rejects the replacement offer.
(iii) The provider obtained the blood or packed red cells at no charge other than a processing or service charge and it is therefore deemed to have been replaced.
(d)
(1) The replacement blood would not endanger the health of a recipient; and
(2) The prospective donor's health would not be endangered by making a blood donation.
The deductible and coinsurance requirements set forth in this subpart do not apply to any services furnished to an individual in connection with the donation of a kidney for transplant surgery.
(a)
(b)
(1) For emergency services furnished by a nonparticipating hospital, to the hospital or to the beneficiary, under the conditions prescribed in subpart G of part 424 of this chapter.
(2) For services furnished by a Canadian or Mexican hospital, to the hospital or to the beneficiary, under the conditions prescribed in subpart H of part 424 of this chapter.
(a) The amounts Medicare pays for hospital insurance benefits are generally determined in accordance with part 412 or part 413 of this chapter.
(b) Except as provided in §§ 409.61(d) and 409.89, hospital insurance benefits are subject to the deductible and coinsurance requirements set forth in subpart G of this part.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
Nomenclature changes to part 410 appear at 62 FR 46037, Aug. 29, 1997.
(a)
(b)
As used in this part—
(2) Provides 24-hour-a-day emergency care services;
(3) Provides day treatment or other partial hospitalization services, or psychosocial rehabilitation services;
(4) Provides screening for patients being considered for admission to State mental health facilities to determine the appropriateness of such admission;
(5) Provides consultation and education services; and
(6) Meets applicable licensing or certification requirements for CMHCs in the State in which it is located.
(a)
(1) Medical and other health services such as physicians' services, outpatient services furnished by a hospital or a CAH, diagnostic tests, outpatient physical therapy and speech pathology services, rural health clinic services, Federally qualified health center services, and outpatient renal dialysis services.
(2) Services furnished by ambulatory surgical centers (ASCs), home health agencies (HHAs), comprehensive outpatient rehabilitation facilities (CORFs), and partial hospitalization services provided by community mental health centers (CMHCs).
(3) Other medicial services, equipment, and supplies that are not covered under Medicare Part A hospital insurance.
(b)
(2) Specific rules on payment are set forth in subpart E of this part.
The following other rules of this chapter set forth additional policies and procedures applicable to four of the kinds of services covered under the SMI program:
(a) Part 405, subpart U: End-Stage Renal Disease services.
(b) Part 405, Subpart X: Rural Health Clinic and Federally Qualified Health Center services.
(c) Part 416: Ambulatory Surgical Center services.
(d) Part 493: Laboratory Services.
Subject to the conditions and limitations specified in this subpart, “medical and other health services” includes the following services:
(a) Physicians' services.
(b) Services and supplies furnished incident to a physician's professional services, of kinds that are commonly furnished in physicians' offices and are commonly either furnished without charge or included in the physicians' bills.
(c) Services and supplies, including partial hospitalization services, that are incident to physician services and are furnished to outpatients by or under arrangements made by a hospital or a CAH.
(d) Diagnostic services furnished to outpatients by or under arrangements made by a hospital or a CAH if the services are services that the hospital or CAH ordinarily furnishes to its outpatients for diagnostic study.
(e) Diagnostic laboratory and X-ray tests (including diagnostic mammography that meets the conditions for coverage specified in § 410.34(b) of this subpart) and other diagnostic tests.
(f) X-ray therapy and other radiation therapy services.
(g) Medical supplies, appliances, and devices.
(h) Durable medical equipment.
(i) Ambulance services.
(j) Rural health clinic services.
(k) Home dialysis supplies and equipment; on or after July 1, 1991, epoetin (EPO) for home dialysis patients, and, on or after January 1, 1994, for dialysis patients, competent to use the drug; self-care home dialysis support services; and institutional dialysis services and supplies.
(l) Pneumococcal vaccinations.
(m) Outpatient physical therapy and speech pathology services.
(n) Cardiac pacemakers and pacemaker leads.
(o) Additional services furnished to enrollees of HMOs or CMPs, as described in § 410.58.
(p) Hepatitis B vaccine.
(q) Blood clotting factors for hemophilia patients competent to use these factors without medical or other supervision.
(r) Screening mammography services.
(s) Federally qualified health center services.
(t) Services of a certified registered nurse anesthetist or an anesthesiologist's assistant.
(u) Prescription drugs used in immunosuppressive therapy.
(v) Clinical psychologist services and services and supplies furnished as an incident to the services of a clinical psychologist, as provided in § 410.71.
(w) Clinical social worker services, as provided in § 410.73.
(a)
(1)
(2)
(3)
(b)
Medicare part B pays for physicians' services and ambulance services furnished outside the United States if the services meet the applicable conditions of § 410.12 and are furnished in connection with covered inpatient hospital services that meet the specific requirements and conditions set forth in subpart H of part 424 of this chapter.
(a)
(b)
(1) A doctor of medicine or osteopathy, including an osteopathic practitioner recognized in section 1101(a)(7) of the Act.
(2) A doctor of dental surgery or dental medicine.
(3) A doctor of podiatric medicine.
(4) A doctor of optometry.
(5) A chiropractor who meets the qualifications specified in § 410.22
(c)
(a)
(i) Had preliminary education equal to the requirements for graduation from an accredited high school or other secondary school;
(ii) Graduated from a college of chiropractic approved by the State's chiropractic examiners after completing a course of study covering a period of not less than 3 school years of 6 months each year in actual continuous attendance and covering adequate courses of study in the subjects of anatomy, physiology, symptomatology and diagnosis, hygiene and sanitation, chemistry, histology, pathology, and principles and practice of chiropractic, including clinical instruction in vertebral palpation, nerve tracing and adjusting; and
(iii) Passed an examination prescribed by the State's chiropractic examiners covering the subjects specified in paragraph (a)(1)(ii) of this section.
(2) A chiropractor first licensed or authorized to practice after June 30, 1974, and an individual who begins studies in a chiropractic college after that date, must have—
(i) Had preliminary education equal to the requirements for graduation from an accredited high school or other secondary school;
(ii) Satisfactorily completed 2 years of pre-chiropractic study at the college level;
(iii) Satisfactorily completed a 4-year course of 8 months each year offered by a college or school of chiropractic approved by the State's chiropractic examiners and including at least 4,000 hours in courses in anatomy, physiology, symptomatology and diagnosis, hygiene and sanitation, chemistry, histology, pathology, principles and practice of chiropractic, and clinical instruction in vertebral palpation, nerve tracing and adjusting, plus courses in the use and effect of X-ray and chiropractic analysis;
(iv) Passed an examination prescribed by the State's chiropractic examiners covering the subjects specified in paragraph (a)(2)(iii) of this section; and
(v) Attained 21 years of age.
(b)
(2) Medicare Part B does not pay for X-rays or other diagnostic or therapeutic services furnished or ordered by a chiropractor.
The services of optometrists are covered only if related to the condition of aphakia (absence of the natural crystalline lens of the eye, regardless of whether an intraocular lens has been implanted). The following are examples of examination services that may be covered when furnished by optometrists:
(a) Case history (the determination of changing visual performance as it relates to the condition of aphakia).
(b) External examination (the inspection with illumination and magnification of eyelids and surrounding areas of the eye).
(c) Ophthalmoscopy (the inspection with illumination and magnification of the internal structure of the eye).
(d) Biomicroscopy (the inspection of frontal tissues of the eye, using illumination and magnification).
(e) Tonometry (the measurement of the internal pressure of the eye).
(f) Evaluation of visual fields (central and peripheral fields of vision).
(g) Evaluation of ocular motility (the determination of the ability of the eye to move efficiently).
(h) Evaluation of binocular function (the ability of the eye to obtain single, clear, two-eyed vision).
(i) Examination required to prescribe prosthetic lenses in connection with aphakia.
Medicare Part B pays for services furnished by a doctor of dental surgery or dental medicine within the scope of his or her license, if the services would be covered as physicians' services when performed by a doctor of medicine or osteopathy.
Surgery on the jaw or any adjoining structure; and
Reduction of a fracture of the jaw or other facial bone.
Medicare Part B pays for the services of a doctor of podiatric medicine, acting within the scope of his or her license, if the services would be covered as physicians' services when performed by a doctor of medicine or osteopathy.
(a) Medicare Part B pays for services and supplies incident to a physician's professional services, including drugs and biologicals that cannot be self-administered, if the services or supplies are of the type that are commonly furnished in a physician's office or clinic, and are commonly furnished either without charge, or included in the physician's bill.
(b) Drugs and biologicals are also subject to the limitations specified in § 410.29.
(a) Medicare Part B pays for hospital services and supplies furnished incident to physicians' services to outpatients, including drugs and biologicals that cannot be self-administered, if—
(1) They are furnished—
(i) By or under arrangements made by a participating hospital, except in
(ii) As an integral though incidental part of a physician's services; and
(2) In the case of partial hospitalization services, also meet the conditions of paragraph (d) of this section.
(b) Drugs and biologicals are also subject to the limitations specified in § 410.168.
(c) Rules on emergency services furnished to outpatients by nonparticipating hospitals are specified in § 410.168.
(d) Medicare Part B pays for partial hospitalization services if they are—
(1) Prescribed by a physician who certifies and recertifies the need for the services in accordance with subpart B of part 424 of this chapter; and
(2) Furnished under a plan of treatment as required under subpart B of part 424 of this chapter.
(a) Medicare Part B pays for hospital or CAH diagnostic services furnished to outpatients, including drugs and biologicals required in the performance of the services (even if those drugs or biologicals are self-administered), if those services meet the following conditions:
(1) They are furnished by or under arrangements made by a participating hospital or participating CAH, except in the case of an SNF resident as provided in § 411.15(p) of this chapter.
(2) They are ordinarily furnished by, or under arrangements made by, the hospital or CAH to its outpatients for the purpose of diagnostic study.
(3) They would be covered as inpatient hospital services if furnished to an inpatient.
(4) If furnished under arrangements, they are furnished in the hospital or CAH or in other facilities operated by or under the supervision of the hospital or its organized medical staff.
(b) Drugs and biologicals are also subject to the limitations specified in § 410.29(b) and (c).
(c) Rules on emergency services furnished to outpatients by nonparticipating hospitals are set forth in subpart G of part 424 of this chapter.
Medicare part B does not pay for the following:
(a) Except as provided in § 410.28(a) for outpatient diagnostic services and § 410.63(b) for blood clotting factors, and except for EPO, any drug or biological that can be self-administered.
(b) Any drug product that meets all of the following conditions:
(1) The drug product was approved by the Food and Drug Administration (FDA) before October 10, 1962.
(2) The drug product is available only through prescription.
(3) The drug product is the subject of a notice of opportunity for hearing issued under section 505(e) of the Federal Food, Drug, and Cosmetic Act and published in the
(4) The drug product is presently not subject to a determination by FDA, made under its efficacy review program, that there is a compelling justification of the drug product's medical need. (21 CFR 310.6 contains an explanation of the efficacy review program.)
(c) Any drug product that is identical, related, or similar, as defined in 21 CFR 310.6, to a drug product that meets the conditions of paragraph (b) of this section.
(a)
(1) The approved labeling includes the indication for preventing or treating the rejection of a transplanted organ or tissue.
(2) The approved labeling includes the indication for use in conjunction with immunosuppressive drugs to prevent or treat rejection of a transplanted organ or tissue.
(3) Have been determined by a carrier (in accordance with part 421, subpart C of this chapter), in processing a Medicare claim, to be reasonable and necessary for the specific purpose of preventing or treating the rejection of a patient's transplanted organ or tissue, or for use in conjunction with immunosuppressive drugs for the purpose of preventing or treating the rejection of a patient's transplanted organ or tissue. (In making these determinations, the carriers may consider factors such as authoritative drug compendia, current medical literature, recognized standards of medical practice, and professional medical publications.)
(b)
(1) For drugs furnished before 1995, for a period of up to 1 year beginning with the date of discharge from the hospital during which the covered transplant was performed.
(2) For drugs furnished during 1995, within 18 months after the date of discharge from the hospital during which the covered transplant was performed.
(3) For drugs furnished during 1996, within 24 months after the date of discharge from the hospital during which the covered transplant was performed.
(4) For drugs furnished during 1997, within 30 months after the date of discharge from the hospital during which the covered transplant was performed.
(5) For drugs furnished after 1997, within 36 months after the date of discharge from the hospital during which the covered transplant was performed.
(c)
(a)
(1) Is performed for the purpose of identifying bone mass, detecting bone loss, or determining bone quality.
(2) Is performed with either a bone densitometer (other than dual-photon absorptiometry) or with a bone sonometer system that has been cleared for marketing for this use by the FDA under 21 CFR part 807, or approved for marketing by the FDA for this use under 21 CFR part 814.
(3) Includes a physician's interpretation of the results of the procedure.
(b)
(1) Following an evaluation of the beneficiary's need for the measurement, including a determination as to the medically appropriate procedure to be used for the beneficiary, it is ordered by the physician or a qualified nonphysician practitioner (as these terms are defined in § 410.32(a)) treating the beneficiary.
(2) It is performed under the appropriate level of supervision of a physician (as set forth in § 410.32(b)).
(3) It is reasonable and necessary for diagnosing, treating, or monitoring the condition of a beneficiary who meets the conditions described in paragraph (d) of this section.
(c)
(2)
(i) Monitoring beneficiaries on long-term glucocorticoid (steroid) therapy of more than 3 months.
(ii) Allowing for a confirmatory baseline bone mass measurement (either central or peripheral) to permit monitoring of beneficiaries in the future if the initial test was performed with a technique that is different from the proposed monitoring method.
(d)
(1) A woman who has been determined by the physician (or a qualified nonphysician practitioner) treating her to be estrogen-deficient and at clinical risk for osteoporosis, based on her medical history and other findings.
(2) An individual with vertebral abnormalities as demonstrated by an x-ray to be indicative of osteoporosis, osteopenia, or vertebral fracture.
(3) An individual receiving (or expecting to receive) glucocorticoid (steroid) therapy equivalent to 7.5 mg of prednisone, or greater, per day for more than 3 months.
(4) An individual with primary hyperparathyroidism.
(5) An individual being monitored to assess the response to or efficacy of an FDA-approved osteoporosis drug therapy.
(e)
(a)
(1)
(2)
(3)
(b)
(2)
(i) Diagnostic mammography procedures, which are regulated by the Food and Drug Administration.
(ii) Diagnostic tests personally furnished by a qualified audiologist as defined in section 1861(ll)(3) of the Act.
(iii) Diagnostic psychological testing services personally furnished by a clinical psychologist or a qualified independent psychologist as defined in program instructions.
(iv) Diagnostic tests (as established through program instructions) personally performed by a physical therapist who is certified by the American Board of Physical Therapy Specialties as a qualified electrophysiologic clinical specialist and permitted to provide the service under State law.
(3)
(i)
(ii)
(iii)
(c)
(1) These services are furnished under the general supervision of a physician, as defined in paragraph (b)(3)(i) of this section.
(2) The supplier of these services meets the requirements set forth in part 486, subpart C of this chapter, concerning conditions for coverage for portable x-ray services.
(3) The procedures are limited to—
(i) Skeletal films involving the extremities, pelvis, vertebral column, or skull;
(ii) Chest or abdominal films that do not involve the use of contrast media; and
(iii) Diagnostic mammograms if the approved portable x-ray supplier, as defined in subpart C of part 486 of this chapter, meets the certification requirements of section 354 of the Public Health Service Act, as implemented by 21 CFR part 900, subpart B.
(d)
(1) A participating hospital or participating RPCH.
(2) A nonparticipating hospital that meets the requirements for emergency outpatient services specified in subpart G of part 424 of this chapter and the laboratory requirements specified in part 493 of this chapter.
(3) The office of the patient's attending or consulting physician if that physician is a doctor of medicine, osteopathy, podiatric medicine, dental surgery, or dental medicine.
(4) An RHC.
(5) A laboratory, if it meets the applicable requirements for laboratories of part 493 of this chapter, including the
(6) An FQHC.
(7) An SNF to its resident under § 411.15(p) of this chapter, either directly (in accordance with § 483.75(k)(1)(i) of this chapter) or under an arrangement (as defined in § 409.3 of this chapter) with another entity described in this paragraph.
(a)
(2)
(i) Diagnostic mammography procedures, which are regulated by the Food and Drug Administration.
(ii) Diagnostic tests personally furnished by a qualified audiologist as defined in section 1861(ll)(3) of the Act.
(iii) Diagnostic psychological testing services personally furnished by a clinical psychologist or a qualified independent psychologist as defined in program instructions.
(iv) Diagnostic tests (as established through program instructions) personally performed by a physical therapist who is certified by the American Board of Physical Therapy Specialties as a qualified electrophysiologic clinical specialist and permitted to provide the service under State law.
(b)
(2) The supervising physician must evidence proficiency in the performance and interpretation of each type of diagnostic procedure performed by the IDTF. The proficiency may be documented by certification in specific medical specialties or subspecialties or by criteria established by the carrier for the service area in which the IDTF is located. In the case of a procedure requiring the direct or personal supervision of a physician as set forth in § 410.32(b)(3)(ii) or (b)(3)(iii), the IDTF's supervising physician must personally furnish this level of supervision whether the procedure is performed in the IDTF or, in the case of mobile services, at the remote location. The IDTF must maintain documentation of sufficient physician resources during all hours of operations to assure that the required physician supervision is furnished. In the case of procedures requiring direct supervision, the supervising physician may oversee concurrent procedures.
(c)
(d)
(e)
(f)
(a)
(1)
(2)
(3)
(4)
(5)
(6)
(7) The term
(i) Must have a valid provisional certificate, or a valid certificate, that has been issued by FDA indicating that the supplier meets the certification requirements of section 354 of the PHS Act, as implemented by 21 CFR part 900, subpart B.
(ii) Has not been issued a written notification by FDA that states that the supplier must cease conducting mammography examinations because the supplier is not in compliance with certain critical certification requirements of section 354 of the PHS Act, implemented by 21 CFR part 900, subpart B.
(iii) Must not employ for provision of the professional component of mammography services a physician or physicians for whom the facility has received written notification by FDA that the physician (or physicians) is (or are) in violation of the certification requirements set forth in section 354 of the PHS Act, as implemented by 21 CFR 900.12(a)(1)(i).
(b)
(1) They are ordered by a doctor of medicine or osteopathy (as defined in section 1861(r)(1) of the Act).
(2) They are furnished by a supplier of diagnostic mammography services that meets the certification requirements of section 354 of the PHS Act, as implemented by 21 CFR part 900, subpart B.
(c)
(d)
(1) The service must be, at a minimum a two-view exposure (that is, a cranio-caudal and a medial lateral oblique view) of each breast.
(2) Payment may not be made for screening mammography performed on a woman under age 35.
(3) Payment may be made for only 1 screening mammography performed on a woman over age 34, but under age 40.
(4) For an asymptomatic woman over 39 years of age, payment may be made for a screening mammography performed after at least 11 months have passed following the month in which the last screening mammography was performed.
Medicare Part B pays for X-ray therapy and other radiation therapy services, including radium therapy and radioactive isotope therapy, and materials and the services of technicians administering the treatment.
(a) Medicare Part B pays for the following medical supplies, appliances and devices:
(1) Surgical dressings, and splints, casts, and other devices used for reduction of fractures and dislocations.
(2) Prosthetic devices, other than dental, that replace all or part of an internal body organ, including colostomy bags and supplies directly related to colostomy care, including—
(i) Replacement of prosthetic devices; and
(ii) One pair of conventional eyeglasses or conventional contact lenses furnished after each cataract surgery during which an intraocular lens is inserted.
(3) Leg, arm, back, and neck braces and artificial legs, arms, and eyes, including replacements if required because of a change in the individual's physical condition.
(b) As a requirement for payment, HCFA may determine through carrier instructions, or carriers may determine, that an item listed in paragraph (a) of this section requires a written physician order before delivery of the item.
(a)
(1)
(i) Screening fecal-occult blood tests.
(ii) Screening flexible sigmoidoscopies.
(iii) In the case of an individual at high risk for colorectal cancer, screening colonoscopies.
(iv) Screening barium enemas.
(v) Other tests or procedures, and modifications to tests under this paragraph, with such frequency and payment limits as HCFA determines appropriate, in consultation with appropriate organizations.
(2)
(3) An
(i) A close relative (sibling, parent, or child) who has had colorectal cancer or an adenomatous polyp;
(ii) A family history of familial adenomatous polyposis;
(iii) A family history of hereditary nonpolyposis colorectal cancer;
(iv) A personal history of adenomatous polyps; or
(v) A personal history of colorectal cancer; or
(vi) Inflammatory bowel disease, including Crohn's Disease, and ulcerative colitis.
(4)
(i) A screening double contrast barium enema of the entire colorectum (including a physician's interpretation of the results of the procedure); or
(ii) In the case of an individual whose attending physician decides that he or she cannot tolerate a screening double contrast barium enema, a screening single contrast barium enema of the entire colorectum (including a physician's interpretation of the results of the procedure).
(5) An
(b)
(c)
(2) For an individual 50 years of age or over, payment may be made for a screening fecal-occult blood test performed after at least 11 months have passed following the month in which the last screening fecal-occult blood test was performed.
(d)
(e)
(2) For an individual 50 years of age or over, payment may be made for a screening flexible sigmoidoscopy after at least 47 months have passed following the month in which the last screening flexible sigmoidoscopy or, as provided in paragraphs (h) and (i) of this section, the last screening barium enema was performed.
(f)
(g)
(2) Payment may be made for a screening colonoscopy performed for an individual who is at high risk for colorectal cancer as described in paragraph (a)(3) of this section, after at least 23 months have passed following the month in which the last screening colonoscopy was performed, or as provided in paragraphs (h) and (i) of this section, the last screening barium enema was performed.
(h)
(i)
(2) In the case of an individual who is at high risk for colorectal cancer, payment may be made for a screening barium enema examination performed after at least 23 months have passed following the month in which the last screening barium enema or the last screening colonoscopy was performed.
(a) Medicare Part B pays for the rental or purchase of durable medical equipment, including iron lungs, oxygen tents, hospital beds, and wheelchairs, if the equipment is used in the patient's home or in an institution that is used as a home.
(b) An institution that is used as a home may not be a hospital or a CAH or a SNF as defined in sections 1861(e)(1), 1861(mm)(1) and 1819(a)(1) of the Act, respectively.
(c) Wheelchairs may include a power-operated vehicle that may be appropriately used as a wheelchair, but only if the vehicle—
(1) Is determined to be necessary on the basis of the individual's medical and physical condition;
(2) Meets any safety requirements specified by HCFA; and
(3) Except as provided in paragraph (c)(2) of this section, is ordered in writing by a specialist in physical medicine, orthopedic surgery, neurology, or rheumatology, the written order is furnished to the supplier before the delivery of the vehicle to the beneficiary, and the beneficiary requires the vehicle and is capable of using it.
(4) A written prescription from the beneficiary's physician is acceptable for ordering a power-operated vehicle if a specialist in physical medicine, orthopedic surgery, neurology, or rheumatology is not reasonably accessible. For example, if travel to the specialist would be more than one day's trip from the beneficiary's home or if the beneficiary's medical condition precluded travel to the nearest available specialist, these circumstances would satisfy the “not reasonably accessible” requirement.
(d) Medicare Part B pays for medically necessary equipment that is used for treatment of decubitus ulcers if—
(1) The equipment is ordered in writing by the beneficiary's attending physician, or by a specialty physician on referral from the beneficiary's attending physician, and the written order is furnished to the supplier before the delivery of the equipment; and
(2) The prescribing physician has specified in the prescription that he or she will be supervising the use of the equipment in connection with the course of treatment.
(e) Medicare Part B pays for a medically necessary seat-lift if it—
(1) Is ordered in writing by the beneficiary's attending physician, or by a specialty physician on referral from the beneficiary's attending physician, and the written order is furnished to the supplier before the delivery of the seat-lift;
(2) Is for a beneficiary who has a diagnosis designated by HCFA as requiring a seat-lift; and
(3) Meets safety requirements specified by HCFA.
(f) Medicare Part B pays for transcutaneous electrical nerve stimulator units that are—
(1) Determined to be medically necessary; and
(2) Ordered in writing by the beneficiary's attending physician, or by a specialty physician on referral from the beneficiary's attending physician, and the written order is furnished to the supplier before the delivery of the unit to the beneficiary.
(g) As a requirement for payment, HCFA may determine through carrier instructions, or carriers may determine that an item of durable medical equipment requires a written physician order before delivery of the item.
(a).
(1) The supplier meets the applicable vehicle, staff, and billing and reporting requirements of § 410.41 and the service
(2) Medicare Part A payment is not made directly or indirectly for the services.
(b)
(1) Basic life support (BLS) services.
(2) Advanced life support (ALS) services.
(3) Paramedic ALS intercept services described in paragraph (c) of this section.
(c)
(1) Be furnished in a rural area (as defined in § 412.62(f) of this chapter).
(2) Be furnished under contract with one or more volunteer ambulance services that meet the following conditions:
(i) Are certified to furnish ambulance services as required under § 410.41.
(ii) Furnish services only at the BLS level.
(iii) Be prohibited by State law from billing for any service.
(3) Be furnished by a paramedic ALS intercept supplier that meets the following conditions:
(i) Is certified to furnish ALS services as required in § 410.41(b)(2).
(ii) Bills all the recipients who receive ALS intercept services fro the entity, regardless of whether or not those recipients are Medicare beneficiaries.
(d)
(i) The beneficiary is unable to get up from bed without assistance.
(ii) The beneficiary is unable to ambulate.
(iii) The beneficiary is unable to sit in a chair or wheelchair.
(2)
(3)
(i) For a resident of a facility who is under the care of a physician if the ambulance supplier obtains a written order from the beneficiary's attending physician, within 48 hours after the transport, certifying that the medical necessity requirements of paragraph (d)(1) of this section are met.
(ii) For a beneficiary residing at home or in a facility who is not under the direct care of a physician. A physician certification is not required.
(e)
(1) From any point of origin to the nearest hospital, CAH, or SNF that is capable of furnishing the required level and type of care for the beneficiary's illness or injury. The hospital or CAH must have available the type of physician or physician specialist needed to treat the beneficiary's condition.
(2) From a hospital, CAH, or SNF to the beneficiary's home.
(3) From a SNF to the nearest supplier of medically necessary services not available at the SNF where the beneficiary is a resident, including the return trip.
(4) For a beneficiary who is receiving renal dialysis for treatment of ESRD, from the beneficiary's home to the nearest facility that furnishes renal dialysis, including the return trip.
(f)
(a)
(1) Be specially designed to respond to medical emergencies or provide acute medical care to transport the sick and injured and comply with all State and local laws governing an emergency transportation vehicle.
(2) Be equipped with emergency warning lights and sirens, as required by State or local laws.
(3) Be equipped with telecommunications equipment as required by State or local law to include, at a minimum, one two-way voice radio or wireless telephone.
(4) Be equipped with a stretcher, linens, emergency medical supplies, oxygen equipment, and other lifesaving emergency medical equipment as required by State or local laws.
(b)
(i) Be certified as an emergency medical technician by the State or local authority where the services are furnished.
(ii) Be legally authorized to operate all lifesaving and life-sustaining equipment on board the vehicle.
(2)
(c)
(1) Bill for ambulance services using HCFA-designated procedure codes to describe origin and destination and indicate on claims form that the physician certification is on file.
(2) Upon a carrier's request, complete and return the ambulance supplier form designated by HCFA and provide the Medicare carrier with documentation of compliance with emergency vehicle and staff licensure and certification requirements in accordance with State and local laws.
(3) Upon a carrier's request, provide additional information and documentation as required.
(a) Partial hospitalization services are services that—
(1) Are reasonable and necessary for the diagnosis or active treatment of the individual's condition;
(2) Are reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization; and
(3) Include any of the following:
(i) Individual and group therapy with physicians or psychologists or other mental health professionals to the extent authorized under State law.
(ii) Occupational therapy requiring the skills of a qualified occupational therapist.
(iii) Services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients.
(iv) Drugs and biologicals furnished for therapeutic purposes, subject to the limitations specified in § 410.29.
(v) Individualized activity therapies that are not primarily recreational or diversionary.
(vi) Family counseling, the primary purpose of which is treatment of the individual's condition.
(vii) Patient training and education, to the extent the training and educational activities are closely and clearly related to the individual's care and treatment.
(viii) Diagnostic services.
(b) The following services are separately covered and not paid as partial hospitalization services:
(1) Physicians' services that meet the criteria of part 405, subpart F of this chapter for payment on a fee schedule basis in accordance with part 414 of this chapter.
(2) Physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act, that are furnished after December 31, 1990.
(3) Clinical psychologist services, as defined in section 1861(ii) of the Act, that are furnished after December 31, 1990.
(a) Medicare Part B pays for the following rural health clinic services, if they are furnished in accordance with the requirements and conditions specified in part 405, subpart X, and part 491 of this chapter:
(1) Physicians' services.
(2) Services and supplies furnished as an incident to physicians' professional services.
(3) Nurse practitioner and physician assistant services.
(4) Services and supplies furnished as an incident to nurse practitioners' or physician assistants' services.
(5) Visiting nurse services.
(b) Medicare pays for rural health clinic services when they are furnished at the clinic, at a hospital or other medical facility, or at the beneficiary's place of residence.
Medicare Part B pays for the following institutional dialysis services and supplies if they are furnished in approved ESRD facilities:
(a) All services, items, supplies, and equipment necessary to perform dialysis and drugs medically necessary in the treatment of the patient for ESRD.
(b) Routine dialysis monitoring tests (i.e., hematocrit and clotting time) used by the facility to monitor the patients' fluids incident to each dialysis treatment, when performed by qualified staff of the facility under the direction of a physician, as provided in § 405.2163(b) of this chapter, even if the facility does not meet the conditions for coverage of services of independent laboratories in subpart M of part 405 of this chapter.
(c) Routine diagnostic tests.
(d) Epoetin (EPO) and its administration.
(a) Medicare Part B pays for the following services, supplies, and equipment furnished to an ESRD patient in his or her home:
(1) Purchase or rental, installation, and maintenance of all dialysis equipment necessary for home dialysis, and reconditioning of this equipment. Dialysis equipment includes, but is not limited to, artificial kidney and automated peritoneal dialysis machines, and support equipment such as blood pumps, bubble detectors, and other alarm systems.
(2) Items and supplies required for dialysis, including (but not limited to) dialyzers, syringes and needles, forceps, scissors, scales, sphygmomanometer with cuff and stethoscope, alcohol wipes, sterile drapes, and rubber gloves.
(3) Home dialysis support services furnished by an approved ESRD facility, including periodic monitoring of the patient's home adaptation, emergency visits by qualified provider or facility personnel, any of the tests specified in paragraphs (b) through (d) of § 410.50, personnel costs associated with the installation and maintenance of dialysis equipment, testing and appropriate treatment of water, and ordering of supplies on an ongoing basis.
(4) On or after July 1, 1991, epoetin (EPO) for use at home by a home dialysis patient and, on or after January 1, 1994, by a dialysis patient, if it has been determined, in accordance with § 405.2163 of this chapter, that the patient is competent to use the drug safely and effectively.
(b) Home dialysis support services specified in paragraph (a)(3) of this section must be furnished in accordance with a written treatment plan that is prepared and reviewed by a team consisting of the individual's physician
Medicare Part B pays for medical and other health services covered under this subpart that are furnished in connection with a kidney donation—
(a) If the kidney is intended for an individual who has end-stage renal disease and is entitled to Medicare benefits; and
(b) Regardless of whether the donor is entitled to Medicare.
(a)
(b)
(1)
(2)
(i) High risk factors for cervical cancer:
(A) Early onset of sexual activity (under 16 years of age).
(B) Multiple sexual partners (five or more in a lifetime).
(C) History of a sexually transmitted disease (including HIV infection).
(D) Absence of three negative or any Pap smears within the previous 7 years.
(ii) High risk factor for vaginal cancer: DES (diethylstilbestrol)-exposed daughters of women who took DES during pregnancy.
(3)
(4)
(a) Medicare Part B pays for pneumococcal vaccine and its administration when reasonable and necessary for the prevention of disease, if the vaccine is ordered by a doctor of medicine or osteopathy.
(b) Medicare Part B pays for the influenza virus vaccine and its administration.
Services not usually covered under Medicare Part B may be covered as medical and other health services if they are furnished to an enrollee of an HMO or a CMP and the following conditions are met:
(a) The services are—
(1) Furnished by a physician assistant or nurse practitioner as defined in § 491.2 of this chapter, or are incident to services furnished by such a practitioner; or
(2) Furnished by a clinical psychologist as defined in § 417.416 of this chapter to an enrollee of an HMO or CMP that participates in Medicare under a risk-sharing contract, or are incident to those services.
(b) The services are services that would be covered under Medicare Part B if they were furnished by a physician or as incident to a physician's professional services.
(a)
(1) They are furnished to a beneficiary while he or she is under the care of a physician who is a doctor of medicine, osteopathy, or podiatric medicine.
(2) They are furnished under a written plan of treatment that meets the requirements of § 410.61.
(3) They are furnished—
(i) By a provider as defined in § 489.2 of this chapter, or by others under arrangements with, and under the supervision of, a provider; or
(ii) By or under the personal supervision of an occupational therapist in private practice as described in paragraph (c) of this section.
(b)
(c)
(1)
(i) Be legally authorized (if applicable, licensed, certified, or registered) to engage in the private practice of occupational therapy by the State in which he or she practices, and practice only within the scope of his or her license, certification, or registration.
(ii) Engage in the private practice of occupational therapy on a regular basis as an individual, in one of the following practice types:
(A) An unincorporated solo practice.
(B) A partnership or unincorporated group practice.
(C) An unincorporated solo practice, partnership, or group practice, a professional corporation or other incorporated occupational therapy practice. Private practice does not include any individual during the time he or she is working as an employee of a provider.
(iii) Bill Medicare only for services furnished in his or her private practice office space, or in the patient's home. A therapist's private practice office space refers to the location(s) where the practice is operated, in the State(s) where the therapist (and practice, if applicable) is legally authorized to furnish services, during the hours that the therapist engages in practice at that location. When services are furnished in private practice office space, that space must be owned, leased, or rented by the practice and used for the exclusive purpose of operating the practice. A patient's home does not include any
(iv) Treat individuals who are patients of the practice and for whom the practice collects fees for the services furnished.
(2)
(d)
(e)
(ii) In 2002 and thereafter, the limitation is determined by increasing the limitation in effect in the previous calendar year by the increase in the Medicare Economic Index for the current year.
(2) For purposes of applying the limitation, outpatient occupational therapy includes:
(i) Except as provided in paragraph (e)(3) of this section, outpatient occupational therapy services furnished under this section;
(ii) Outpatient occupational therapy services furnished by a comprehensive outpatient rehabilitation facility;
(iii) Outpatient occupational therapy services furnished by a physician or incident to a physician's service;
(iv) Outpatient occupational therapy services furnished by a nurse practitioner, clinical nurse specialist, or physician assistant or incident to their services.
(3) For purposes of applying the limitation, outpatient occupational therapy services excludes services furnished by a hospital directly or under arrangements.
(a)
(1) They are furnished to a beneficiary while he or she is under the care of a physician who is a doctor of medicine, osteopathy, or podiatric medicine.
(2) They are furnished under a written plan of treatment that meets the requirements of § 410.61.
(3) They are furnished—
(i) By a provider as defined in § 489.2 of this chapter, or by others under arrangements with, and under the supervision of, a provider; or
(ii) By or under the personal supervision of a physical therapist in private practice as described in paragraph (c) of this section.
(b)
(c)
(i) Be legally authorized (if applicable, licensed, certified, or registered) to engage in the private practice of physical therapy by the State in which he or she practices, and practice only within the scope of his or her license, certification, or registration.
(ii) Engage in the private practice of physical therapy on a regular basis as an individual, in one of the following practice types:
(A) An unincorporated solo practice.
(B) An unincorporated partnership or unincorporated group practice.
(C) An unincorporated solo practice, partnership, or group practice, or a
(iii) Bill Medicare only for services furnished in his or her private practice office space, or in the patient's home. A therapist's private practice office space refers to the location(s) where the practice is operated, in the State(s) where the therapist (and practice, if applicable) is legally authorized to furnish services, during the hours that the therapist engages in practice at that location. When services are furnished in private practice office space, that space must be owned, leased, or rented by the practice and used for the exclusive purpose of operating the practice. A patient's home does not include any institution that is a hospital, a CAH, or a SNF.
(iv) Treat individuals who are patients of the practice and for whom the practice collects fees for the services furnished.
(2)
(d)
(e)
(ii) In 2002 and thereafter, the limitation shall be determined by increasing the limitation in effect in the previous calendar year by the increase in the Medicare Economic Index for the current year.
(2) For purposes of applying the limitation, outpatient physical therapy includes:
(i) Except as provided in paragraph (e)(3) of this section, outpatient physical therapy services furnished under this section;
(ii) Except as provided in paragraph (e)(3) of this section outpatient speech-language pathology services furnished under § 410.62;
(iii) Outpatient physical therapy and speech-language pathology services furnished by a comprehensive outpatient rehabilitation facility;
(iv) Outpatient physical therapy and speech-language pathology services furnished by a physician or incident to a physician's service;
(v) Outpatient physical therapy and speech-language pathology services furnished by a nurse practitioner, clinical nurse specialist, or physician assistant or incident to their services.
(3) For purposes of applying the limitation, outpatient physical therapy excludes services furnished by a hospital or CAH directly or under arrangements.
(a)
(b)
(1) A physician.
(2) A physical therapist who furnishes the physical therapy services.
(3) A speech-language pathologist who furnishes the speech-language pathology services.
(4) An occupational therapist who furnishes the occupational therapy services.
(5) A nurse practitioner, a clinical nurse specialist, or a physician assistant.
(c)
(d)
(1) Are made in writing and signed by one of the following:
(i) The physician.
(ii) The physical therapist who furnishes the physical therapy services.
(iii) The occupational therapist who furnishes the physical therapy services.
(iv) The speech-language pathologist who furnishes the speech-language pathology services.
(v) A registered professional nurse or a staff physician, in accordance with oral orders from the physician, physical therapist, occupational therapist, or speech-language pathologist who furnishes the services.
(vi) A nurse practitioner, a clinical nurse specialist, or a physician assistant.
(2) The changes are incorporated in the plan immediately.
(e)
(2) Each review is dated and signed by the physician who performs it.
(a)
(1) They are furnished to a beneficiary while he or she is under the care of a physician who is a doctor of medicine or osteopathy.
(2) They are furnished under a written plan of treatment that—
(i) Is established by a physician or, effective January 1, 1982, by either a physician or the speech pathologist who will provide the services to the particular individual;
(ii) Is periodically reviewed by a physician; and
(iii) Meets the requirements of § 410.63.
(3) They are furnished by a provider as defined in § 489.2 of this chapter or by others under arrangements with, or under the supervision of, a provider.
(b)
(c)
(d)
Notwithstanding the exclusion from coverage of vaccines (see § 405.310 of this chapter) and self-administered drugs (see § 410.29), the following services are included as medical and other health services covered under § 410.10, subject to the specified conditions:
(a)
(1)
(ii) Hemophiliacs who receive Factor VIII or IX concentrates;
(iii) Clients of institutions for the mentally retarded;
(iv) Persons who live in the same household as a hepatitis B carrier;
(v) Homosexual men;
(vi) Illicit injectable drug abusers; and
(vii) Pacific Islanders (that is, those Medicare beneficiaries who reside on Pacific islands under U.S. jurisdiction, other than residents of Hawaii).
(2)
(ii) Workers in health care professions who have frequent contact with blood or blood-derived body fluids during routine work (including workers who work outside of a hospital and have frequent contact with blood or other infectious secretions); and
(iii) Heterosexually active persons with multiple sexual partners (that is, those Medicare beneficiaries who have had at least two documented episodes of sexually transmitted diseases within the preceding 5 years).
(3)
(b)
(a)
(2) The required information is set forth under 21 CFR part 805 of the FDA regulations and must be submitted in accordance with general instructions issued by HCFA.
(b)
(c)
(1) States the reasons for the determination;
(2) Grants the physician or provider 45 days from the date of the notice to submit the information or evidence showing that the determination is in error; and
(3) Informs the physician or provider of its right to hearing.
(d)
Conditions for payment of emergency outpatient services furnished by a nonparticipating U.S. hospital and for services furnished in Mexico or Canada are set forth in subparts G and H of part 424 of this chapter.
Medicare Part B pays for—
(a) Antigens that are furnished as services incident to a physician's professional services; or
(b) A supply of antigen sufficient for not more than 12 weeks that is—
(1) Prepared for a patient by a doctor of medicine or osteopathy who has examined the patient and developed a plan of treatment including dosage levels; and
(2) Administered—
(i) In accord with the plan of treatment developed by the doctor of medicine or osteopathy who prepared the antigen; and
(ii) By a doctor of medicine or osteopathy or by a properly instructed person under the supervision of a doctor of medicine or osteopathy.
(a)
(b)
(1) Works under the direction of an anesthesiologist;
(2) Is in compliance with all applicable requirements of State law, including any licensure requirements the State imposes on nonphysician anesthetists; and
(3) Is a graduate of a medical school-based anesthesiologist's assistant educational program that—
(A) Is accredited by the Committee on Allied Health Education and Accreditation; and
(B) Includes approximately two years of specialized basic science and clinical education in anesthesia at a level that builds on a premedical undergraduate science background.
(1) Is licensed as a registered professional nurse by the State in which the nurse practices;
(2) Meets any licensure requirements the State imposes with respect to non-physician anesthetists;
(3) Has graduated from a nurse anesthesia educational program that meets the standards of the Council on Accreditation of Nurse Anesthesia Programs, or such other accreditation organization as may be designated by the Secretary; and
(4) Meets the following criteria:
(i) Has passed a certification examination of the Council on Certification of Nurse Anesthetists, the Council on Recertification of Nurse Anesthetists, or any other certification organization that may be designated by the Secretary; or
(ii) Is a graduate of a program described in paragraph (3) of this definition and within 24 months after that graduation meets the requirements of paragraph (4)(i) of this definition.
(a)
(2) Medicare Part B covers services and supplies furnished as an incident to the services of a clinical psychologist if the following requirements are met:
(i) The services and supplies would be covered if furnished by a physician or as an incident to a physician's services.
(ii) The services or supplies are of the type that are commonly furnished in a physician's or clinical psychologist's office and are either furnished without charge or are included in the physician's or clinical psychologist's bill.
(iii) The services are an integral, although incidental, part of the professional services performed by the clinical psychologist.
(iv) The services are performed under the direct supervision of the clinical psychologist. For example, when services are performed in the clinical psychologist's office, the clinical psychologist must be present in the office suite and immediately available to provide assistance and direction throughout the time the service is being performed.
(v) The individual performing the service must be an employee of either
(b)
(c)
(d)
(1) Holds a doctoral degree in psychology; and
(2) Is licensed or certified, on the basis of the doctoral degree in psychology, by the State in which he or she practices, at the independent practice level of psychology to furnish diagnostic, assessment, preventive, and therapeutic services directly to individuals.
(e)
(1) Unless the beneficiary's primary care or attending physician has referred the beneficiary to the clinical psychologist, to inform the beneficiary that it is desirable for the clinical psychologist to consult with the beneficiary's attending or primary care physician (if the beneficiary has such a physician) to consider any conditions contributing to the beneficiary's symptoms.
(2) If the beneficiary assents to the consultation, in accordance with accepted professional ethical norms and taking into consideration patient confidentiality—
(i) To attempt, within a reasonable time after receiving the consent, to consult with the physician; and
(ii) If attempts to consult directly with the physician are not successful, to notify the physician, within a reasonable time, that he or she is furnishing services to the beneficiary.
(3) Unless the primary care or attending physician referred the beneficiary to the clinical psychologist, to document, in the beneficiary's medical record, the date the patient consented or declined consent to consultation, the date of consultation, or, if attempts to consult did not succeed, the date and manner of notification to the physician.
(a)
(1) Possesses a master's or doctor's degree in social work;
(2) After obtaining the degree, has performed at least 2 years of supervised clinical social work; and
(3) Either is licensed or certified as a clinical social worker by the State in which the services are performed or, in the case of an individual in a State that does not provide for licensure or certification as a clinical social worker—
(i) Is licensed or certified at the highest level of practice provided by the laws of the State in which the services are performed; and
(ii) Has completed at least 2 years or 3,000 hours of post master's degree supervised clinical social work practice under the supervision of a master's degree level social worker in an appropriate setting such as a hospital, SNF, or clinic.
(b)
(1)
(2)
(i) Services furnished by a clinical social worker to an inpatient of a Medicare-participating hospital.
(ii) Services furnished by a clinical social worker to an inpatient of a Medicare-participating SNF.
(iii) Services furnished by a clinical social worker to a patient in a Medicare-participating dialysis facility if the services are those required by the conditions for coverage for ESRD facilities under § 405.2163 of this chapter.
(c)
(d)
(2) A clinical social worker or an attending or primary care physician may not bill Medicare or the beneficiary for the consultation that is required under paragraph (c) of this section.
(a)
(1) The services would be covered as physicians' services if furnished by a physician (a doctor of medicine or osteopathy, as set forth in section 1861(r)(1) of the Act).
(2) The physician assistant—
(i) Meets the qualifications set forth in paragraph (c) of this section;
(ii) Is legally authorized to perform the services in the State in which they are performed;
(iii) Performs services that are not otherwise precluded from coverage because of a statutory exclusion;
(iv) Performs the services under the general supervision of a physician (The supervising physician need not be physically present when the physician assistant is performing the services unless required by State law; however, the supervising physician must be immediately available to the physician assistant for consultation.);
(v) Furnishes services that are billed by the employer of a physician assistant; and
(vi) Performs the services—
(A) In all settings in either rural and urban areas; or
(B) As an assistant at surgery.
(b)
(1) Would be covered if furnished by a physician or as incident to the professional services of a physician;
(2) Are the type that are commonly furnished in a physician's office and are either furnished without charge or are included in the bill for the physician assistants' services;
(3) Are, although incidental, an integral part of the professional service performed by the physician;
(4) Are performed under the direct supervision of the physician assistant (that is, the physician assistant is physically present and immediately available); and
(5) Are performed by the employee of a physician assistant or an entity that employs both the physician assistant and the person providing the services.
(c)
(1) Have graduated from a physician assistant educational program that is accredited by the Commission on Accreditation of Allied Health Education Programs; or
(2) Have passed the national certification examination that is administered by the National Commission on Certification of Physician Assistants; and
(3) Be licensed by the State to practice as a physician assistant.
(d)
(1) Supervision of other nonphysician staff by a physician assistant does not constitute personal performance of a professional service by the physician assistant.
(2) The services are provided on an assignment-related basis, and the physician assistant may not charge a beneficiary for a service not payable under this provision. If a beneficiary has made payment for a service, the physician assistant must make the appropriate refund to the beneficiary.
(a)
(b)
(1) Possess a master's degree in nursing;
(2) Be a registered professional nurse who is authorized by the State in which the services are furnished, to practice as a nurse practitioner in accordance with State law; and,
(3) Be certified as a nurse practitioner by the American Nurses Credentialing Center or other recognized national certifying bodies that have established standards for nurse practitioners as defined in paragraphs (b)(1) and (2) of this section.
(c)
(1) Is legally authorized to perform them in the State in which they are performed;
(2) Is not performing services that are otherwise excluded from coverage because of one of the statutory exclusions; and
(3) Performs them while working in collaboration with a physician.
(i) Collaboration is a process in which a nurse practitioner works with one or more physicians to deliver health care services within the scope of the practitioner's expertise, with medical direction and appropriate supervision as provided for in jointly developed guidelines or other mechanisms as provided by the law of the State in which the services are performed.
(ii) In the absence of State law governing collaboration, collaboration is a process in which a nurse practitioner has a relationship with one or more physicians to deliver health care services. Such collaboration is to be evidenced by nurse practitioners documenting the nurse practitioners' scope of practice and indicating the relationships that they have with physicians to deal with issues outside their scope of practice. Nurse practitioners must document this collaborative process with physicians.
(iii) The collaborating physician does not need to be present with the nurse practitioner when the services are furnished or to make an independent evaluation of each patient who is seen by the nurse practitioner.
(d)
(1) Would be covered if furnished by a physician or as incident to the professional services of a physician;
(2) Are of the type that are commonly furnished in a physician's office and are either furnished without charge or are included in the bill for the nurse practitioner's services;
(3) Although incidental, are an integral part of the professional service performed by the nurse practitioner; and
(4) Are performed under the direct supervision of the nurse practitioner (that is, the nurse practitioner must be physically present and immediately available).
(e)
(1) Supervision of other nonphysician staff by a nurse practitioner does not constitute personal performance of a professional service by a nurse practitioner.
(2) The services are provided on an assignment-related basis, and a nurse practitioner may not charge a beneficiary for a service not payable under this provision. If a beneficiary has made payment for a service, the nurse practitioner must make the appropriate refund to the beneficiary.
(a)
(b)
(1) Be a registered nurse who is currently licensed to practice in the State where he or she practices and be authorized to perform the services of a clinical nurse specialist in accordance with State law;
(2) Have a master's degree in a defined clinical area of nursing from an accredited educational institution; and
(3) Be certified as a clinical nurse specialist by the American Nurses Credentialing Center.
(c)
(1) Is legally authorized to perform them in the State in which they are performed;
(2) Is not performing services that are otherwise excluded from coverage by one of the statutory exclusions; and
(3) Performs them while working in collaboration with a physician.
(i) Collaboration is a process in which a clinical nurse specialist works with one or more physicians to deliver health care services within the scope of the practitioner's expertise, with medical direction and appropriate supervision as provided for in jointly developed guidelines or other mechanisms as provided by the law of the State in which the services are performed.
(ii) In the absence of State law governing collaboration, collaboration is a process in which a clinical nurse specialist has a relationship with one or more physicians to deliver health care services. Such collaboration is to be evidenced by clinical nurse specialists documenting the clinical nurse specialists' scope of practice and indicating the relationships that they have with physicians to deal with issues outside their scope of practice. Clinical nurse specialists must document this collaborative process with physicians.
(iii) The collaborating physician does not need to be present with the clinical nurse specialist when the services are furnished, or to make an independent evaluation of each patient who is seen by the clinical nurse specialist.
(d)
(1) Would be covered if furnished by a physician or as incident to the professional services of a physician;
(2) Are of the type that are commonly furnished in a physician's office and are either furnished without charge or are included in the bill for the clinical nurse specialist's services;
(3) Although incidental, are an integral part of the professional service performed by the clinical nurse specialist; and
(4) Are performed under the direct supervision of the clinical nurse specialist (that is, the clinical nurse specialist must be physically present and immediately available).
(e)
(1) Supervision of other nonphysician staff by clinical nurse specialists does not constitute personal performance of a professional service by clinical nurse specialists.
(2) The services are provided on an assignment-related basis, and a clinical nurse specialist may not charge a beneficiary for a service not payable under this provision. If a beneficiary has made payment for a service, the clinical nurse specialist must make the appropriate refund to the beneficiary.
(a)
(1) Be a registered nurse who is legally authorized to practice as a nurse-midwife in the State where services are performed;
(2) Have successfully completed a program of study and clinical experience for nurse-midwives that is accredited by an accrediting body approved by the U.S. Department of Education; and
(3) Be certified as a nurse-midwife by the American College of Nurse-Midwives or the American College of Nurse-Midwives Certification Council.
(b)
(1) Are within the scope of practice authorized by the law of the State in which they are furnished and would otherwise be covered if furnished by a physician or as an incident to a physician's service; and
(2) Unless required by State law, are provided without regard to whether the certified nurse-midwife is under the supervision of, or associated with, a physician or other health care provider.
(c)
(1) They would be covered if furnished by a physician or as incident to the professional services of a physician.
(2) They are of the type that are commonly furnished in a physician's office and are either furnished without charge or are included in the bill for the certified nurse-midwife's services.
(3) Although incidental, they are an integral part of the professional service performed by the certified nurse-midwife.
(4) They are furnished under the direct supervision of a certified nurse-midwife (that is, the midwife is physically present and immediately available).
(d)
(1) Supervision of other nonphysician staff by a nurse-midwife does not constitute personal performance of a professional service by the nurse-midwife.
(2) The service is provided on an assignment-related basis, and a nurse-midwife may not charge a beneficiary for a service not payable under this provision. If the beneficiary has made payment for a service, the nurse-midwife must make the appropriate refund to the beneficiary.
(3) A nurse-midwife may provide services that he or she is legally authorized to perform under State law as a nurse-midwife, if the services would otherwise be covered by the Medicare program when furnished by a physician or incident to a physicians' professional services.
(a)
(1) The consulting practitioner is any of the following:
(i) A physician as described in § 410.20.
(ii) A physician assistant as defined in § 410.74.
(iii) A nurse practitioner as defined in § 410.75.
(iv) A clinical nurse specialist as described in § 410.76.
(v) A nurse-midwife as defined in § 410.77.
(2) The referring practitioner is any of the following:
(i) A physician as described in § 410.20.
(ii) A physician assistant as defined in § 410.74.
(iii) A nurse practitioner as defined in § 410.75.
(iv) A clinical nurse specialist as described in § 410.76.
(v) A nurse-midwife as defined in § 410.77.
(vi) A clinical psychologist as described at § 410.71.
(vii) A clinical social worker as defined in § 410.73.
(3) The services are furnished to a beneficiary residing in a rural area as defined in section 1886(d)(2)(D) of the Act, and the area is designated as a health professional shortage area (HPSA) under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A)). For purposes of this requirement, the beneficiary is deemed to be residing in such an area if the teleconsultation presentation takes place in such an area.
(4) The medical examination of the beneficiary is under the control of the consulting practitioner.
(5) As a condition of payment, the teleconsultation involves the participation of the referring practitioner, or a practitioner described in section 1842(b)(18)(C) of the Act (other than a certified registered nurse anesthetist or anesthesiologist assistant) who is an employee of the referring practitioner, as appropriate to the medical needs of the patient and as needed to provide information to and at the direction of the consultant.
(6) The consultation results in a written report that is furnished to the referring practitioner.
(b)
Home health services furnished under Medicare Part B are subject to the rules set forth in subpart E of part 409 of this chapter.
Subject to the conditions and limitations set forth in §§ 410.102 and 410.105, CORF services means the following services furnished to an outpatient of the CORF by personnel that meet the qualifications set forth in § 485.70 of this chapter.
(a)
(b)
(i) Testing and measurement of the function or dysfunction of the neuromuscular, musculoskeletal, cardiovascular and respiratory systems; and.
(ii) Assessment and treatment related to dysfunction caused by illness or injury, and aimed at preventing or reducing disability or pain and restoring lost function.
(2) The establishment of a maintenance therapy program for an individual whose restoration potential has been reached is a physical therapy service; however, maintenance therapy itself is not covered as part of these services.
(c)
(1) Teaching of compensatory techniques to permit an individual with a physical impairment or limitation to engage in daily activities.
(2) Evaluation of an individual's level of independent functioning.
(3) Selection and teaching of task-oriented therapeutic activities to restore sensory-integrative function; and
(4) Assessment of an individual's vocational potential, except when the assessment is related solely to vocational rehabilitation.
(d)
(e)
(2) These services include—
(i) Application of techniques for support of oxygenation and ventilation of the patient and for pulmonary rehabilitation.
(ii) Therapeutic use and monitoring of gases, mists, and aerosols and related equipment;
(iii) Bronchial hygiene therapy;
(iv) Pulmonary rehabilitation techniques such as exercise conditioning, breathing retraining and patient education in the management of respiratory problems.
(v) Diagnostic tests to be evaluated by a physician, such as pulmonary function tests, spirometry and blood gas analysis; and
(vi) Periodic assessment of chronically ill patients and their need for respiratory therapy.
(f)
(1) Prosthetic devices (excluding dental devices and renal dialysis machines), that replace all or part of an internal body organ or external body member (including contiguous tissue) or replace all or part of the function of a permanently inoperative or malfunctioning external body member or internal body organ; and
(2) Services necessary to design the device, select materials and components, measure, fit, and align the device, and instruct the patient in its use.
(g)
(1) Orthopedic devices that support or align movable parts of the body, prevent or correct deformities, or improve functioning; and
(2) Services necessary to design the device, select the materials and components, measure, fit, and align the device, and instruct the patient in its use.
(h)
(1) Assessment of the social and emotional factors related to the individual's illness, need for care, response to treatment, and adjustment to care furnished by the facility;
(2) Casework services to assist in resolving social or emotional problems that may have an adverse effect on the beneficiary's ability to respond to treatment; and
(3) Assessment of the relationship of the individual's medical and nursing requirements to his or her home situation, financial resources, and the community resources available upon discharge from facility care.
(i)
(1) Assessment, diagnosis and treatment of an individual's mental and emotional functioning as it relates to the individual's rehabilitation;
(2) Psychological evaluations of the individual's response to and rate of progress under the treatment plan; and
(3) Assessment of those aspects of an individual's family and home situation that affect the individual's rehabilitation treatment.
(j)
(k)
(1) Prescribed by a physician and administered by or under the supervision of a physician or a registered professional nurse; and
(2) Not excluded from Medicare Part B payment for reasons specified in § 410.29.
(l)
(1) Non-reusable supplies such as oxygen and bandages;
(2) Medical equipment and appliances; and
(3) Durable medical equipment of the type specified in § 410.38, (except renal dialysis systems) for use outside the CORF, whether purchased or rented.
(m)
None of the services specified in § 410.100 is covered as a CORF service if the service—
(a) Would not be covered as an inpatient hospital service if furnished to a hospital inpatient;
(b) Is not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. An example would be services furnished as part of a maintenance program involving repetitive activities that do not require the skilled services of nurses or therapists.
Services specified in § 410.100 and not excluded under § 410.102 are covered as CORF services if they are furnished by a participating CORF (that is, a CORF that meets the conditions of subpart B of part 485 of this chapter, and has in effect a provider agreement under part 489 of this chapter) and if the following requirements are met:
(a)
(1) The individual's significant medical history.
(2) Current medical findings.
(3) Diagnosis(es) and contraindications to any treatment modality.
(4) Rehabilitation goals, if determined.
(b)
(2) Except as provided in paragraph (b)(3) of this section, the services must be furnished on the premises of the CORF.
(3)
(ii) The single home visit specified in § 410.100(m) is also covered.
(c)
(i) Is established and signed by a physician before treatment is begun; and
(ii) Prescribes the type, amount, frequency, and duration of the services to be furnished, and indicates the diagnosis and anticipated rehabilitation goals.
(2) The plan must be reviewed at least every 60 days by a facility physician who, when appropriate, consults with the professional personnel providing the services.
(3) The reviewing physician must certify or recertify that the plan is being followed, the patient is making progress in attaining the rehabilitation goals, and the treatment is having no harmful effects on the patient.
Medicare part B covers partial hospitalization services furnished by or under arrangements made by a CMHC if they are provided by a CMHC as defined in § 410.2 that has in effect a provider agreement under part 489 of this chapter and if the services are—
(a) Prescribed by a physician and furnished under the general supervision of a physician;
(b) Subject to certification by a physician in accordance with § 424.24(e)(1) of this subchapter; and
(c) Furnished under a plan of treatment that meets the requirements of § 424.24(e)(2) of this subchapter.
(a)
(2) The services specified in paragraphs (b)(5) through (b)(14) of this section must be furnished by a facility that has in effect a provider agreement or other appropriate agreement to participate in Medicare.
(b)
(1) To the individual, or to a physician or other supplier on the individual's behalf, for medical and other health services furnished by the physician or other supplier.
(2) To a nonparticipating hospital on the individual's behalf for emergency outpatient services furnished by the hospital, in accordance with subpart G of part 424 of this chapter.
(3) To the individual, for emergency outpatient services furnished by a nonparticipating hospital, in accordance with § 424.53 of this chapter.
(4) To the individual, for physicians' services and ambulance services furnished outside the United States in accordance with § 424.53 of this chapter.
(5) To a provider on the individual's behalf for medical and other health services furnished by the provider (or by others under arrangements made with them by the provider).
(6) To a home health agency on the individual's behalf for home health services furnished by the home health agency.
(7) To a clinic, rehabilitation agency, or public health agency on the individual's behalf for outpatient physical therapy or speech pathology services furnished by the clinic or agency (or by others under arrangements made with them by the clinic or agency).
(8) To a rural health clinic or Federally qualified health center on the individual's behalf for rural health clinic or Federally qualified health center services furnished by the rural health clinic or Federally qualified health center, respectively.
(9) To an ambulatory surgical center (ASC) on the individual's behalf for covered ambulatory surgical center facility services that are furnished in connection with surgical procedures performed in an ASC, as provided in part 416 of this chapter.
(10) To a comprehensive outpatient rehabilitation facility (CORF) on the individual's behalf for comprehensive outpatient rehabilitation facility services furnished by the CORF.
(11) To a renal dialysis facility, on the individual's behalf, for institutional or home dialysis services, supplies, and equipment furnished by the facility.
(12) To a critical access hospital (CAH) on the individual's behalf for outpatient CAH services furnished by the CAH.
(13) To a community mental health center (CMHC) on the individual's behalf, for partial hospitalization services furnished by the CMHC (or by others under arrangements made with them by the CMHC).
(14) To an SNF for services (other than those described in § 411.15(p)(2) of this chapter) that are furnished to a resident (as defined in § 411.15(p)(3) of this chapter) of the SNF.
(15) To the qualified employer of a physician assistant for professional services furnished by the physician assistant and for services and supplies furnished incident to his or her services. Payment is made to the employer of a physician assistant regardless of whether the physician assistant furnishes services under a W-2, employer-employee employment relationship, or whether the physician assistant is an independent contractor who receives a 1099 reflecting the relationship. Both types of relationships must conform to the appropriate guidelines provided by the Internal Revenue Service. A qualified employer is not a group of physician assistants that incorporate to bill for their services. Payment is made only if no facility or other provider charges or is paid any amount for services furnished by a physician assistant.
(16) To a nurse practitioner or clinical nurse specialist for professional services furnished by a nurse practitioner or clinical nurse specialist in all settings in both rural and nonrural areas and for services and supplies furnished incident to those services. Payment is made only if no facility or other provider charges, or is paid, any amount for the furnishing of the professional services of the nurse practitioner or clinical nurse specialist.
(17) To a clinical psychologist on the individual's behalf for clinical psychologist services and for services and supplies furnished as an incident to his or her services.
(18) To a clinical social worker on the individual's behalf for clinical social worker services.
(a)
(i) Expenses incurred for services for which the beneficiary is entitled to have payment made under Medicare Part A or would be so entitled except for the application of the Part A deductible and coinsurance requirements.
(ii) Expenses incurred in meeting the Part B blood deductible (§ 410.161).
(iii) In the case of services payable under a formula that takes into account reasonable charges, reasonable costs, customary charges, customary (insofar as reasonable) charges, charges related to reasonable costs, fair compensation, a pre-treatment prospective payment rate, or a standard overhead amount, or any combination of two or more of these factors, expenses in excess of any factor taken into account under that formula.
(iv) Expenses in excess of the outpatient mental health treatment limitation described in § 410.155.
(v) In the case of expenses incurred for outpatient physical therapy services including speech-language pathology services, the expenses excluded are from the incurred expenses under § 410.60(e). In the case of expenses incurred for outpatient occupational therapy including speech-language pathology services, the expenses excluded are from the incurred expenses under § 410.59(e).
(2)
(i) The principles and procedures for determining reasonable costs and reasonable charges and the conditions for Medicare payment, as set forth in parts 405 (subparts E and X), 413, and 424 of this chapter.
(ii) The Part B annual deductible (§ 410.160).
(iii) The special rules for payment to health maintenance organizations (HMOs), health care prepayment plans (HCPPs), and competitive medical
(b)
(1) For services furnished by, or under arrangements made by, a provider other than a nominal charge provider, whichever of the following is less:
(i) 80 percent of the reasonable cost of the services.
(ii) The reasonable cost of, or the customary charges for, the services, whichever is less, minus 20 percent of the customary (insofar as reasonable) charges for the services.
(2) For services furnished by, or under arrangements made by, a nominal charge provider, 80 percent of fair compensation.
(3) For emergency outpatient hospital services furnished by a nonparticipating hospital that is eligible to receive payment for those services under subpart G of part 424 of this chapter, the amount specified in paragraph (b)(1) of this section.
(4) For services furnished by a person or an entity other than those specified in paragraphs (b)(1) through (b)(3) of this section, 80 percent of the reasonable charges or 80 percent of the payment amount computed on any other payment basis for the services.
(c)
(1) For services furnished by an HHA that is a nominal charge provider, 100 percent of fair compensation.
(2) For services furnished by an HHA that is not a nominal charge provider, the lesser of the reasonable cost of the services and the customary charges for the services.
(d)
(1)
(i) For DME furnished by an HHA that is a nominal charge provider, Medicare Part B pays 80 percent of fair compensation.
(ii) For DME furnished by an HHA that is not a nominal charge provider, Medicare Part B pays the lesser of the following:
(A) 80 percent of the reasonable cost of the service.
(B) The reasonable cost of, or the customary charge for, the service, whichever is less, minus 20 percent of the customary (insofar as reasonable) charge for the service.
(2)
(i) For used DME furnished by an HHA that is a nominal charge provider, Medicare Part B pays 100 percent of fair compensation.
(ii) For used DME furnished by an HHA that is not a nominal charge provider, Medicare Part B pays 100 percent of the reasonable cost of, or the customary charge for, the services, whichever is less.
(e)
(1) Except as provided in paragraph (d)(2) of this section, 80 percent of the per treatment prospective reimbursement rate established under § 413.170 of this chapter, for outpatient maintenance dialysis furnished by ESRD facilities approved in accordance with subpart U of part 405 of this chapter.
(2)
(f)
(g)
(1) For used DME furnished by, or under arrangements made by, a nominal charge provider, 100 percent of fair compensation.
(2) For used DME furnished by or under arrangements made by a provider that is not a nominal charge provider, 100 percent of the reasonable cost of the service or the customary charge for the service, whichever is less.
(3) For used DME furnished by other than a provider, 100 percent of the reasonable charge.
(h)
(1) For services furnished by a nominal charge provider, 100 percent of fair compensation.
(2) For services furnished by a provider that is not a nominal charge provider, the reasonable cost of the services or the customary charge for the service, whichever is less.
(3) For services furnished by other than a provider, a rural health clinic or a Federally qualified health center, 100 percent of the reasonable charge.
(4) For services furnished by a rural health clinic or a Federally qualified health center, 100 percent of the reasonable cost.
(i)
(j)
(k)
(l)
(a)
(b)
(i) Services furnished by physicians and other practitioners, whether furnished directly or as an incident to those practitioners' services.
(ii) Services provided by a CORF.
(2)
(i) Services furnished to a hospital inpatient.
(ii) Brief office visits for the sole purpose of monitoring or changing drug prescriptions used in the treatment of mental, psychoneurotic, or personality disorders.
(iii) Partial hospitalization services not directly provided by a physician.
(iv) Diagnostic services, such as psychological testing, that are performed to establish a diagnosis.
(v) Medical management, as opposed to psychotherapy, furnished to a patient diagnosed with Alzheimer's disease or a related disorder.
(c)
(2) A clinical social worker submitted a claim for $135 for outpatient treatment of a beneficiary's mental disorder. The Medicare approved amount was $120. Since clinical social workers must accept assignment, the beneficiary is not liable for the $15 in excess charges. The beneficiary previously satisfied $70 of the $100 annual Part B deductible, leaving $30 unmet.
(3) A physician who did not accept assignment submitted a claim for $780 for services in connection with the treatment of a mental disorder that did not require inpatient hospitalization. The Medicare approved amount was $750. Because the physician did not accept assignment, the beneficiary is liable for the $30 in excess charges. The beneficiary had not satisfied any of the $100 Part B annual deductible.
(4) A beneficiary's only Part B expenses during 1995 were for a physician's services in connection with the treatment of a mental disorder that initially required inpatient hospitalization. The remaining services were furnished on an outpatient basis. The beneficiary had not satisfied any of the $100 annual Part B deductible in 1995. The physician, who accepted assignment, submitted a claim for $780. The Medicare-approved amount was $750. The beneficiary incurred $350 of the approved amount while a hospital inpatient and incurred the remaining $400 of the approved amount for outpatient services. Only $400 of the approved amount is subject to the 62
(a)
(b)
(1) Home health services.
(2) Pneumococcal vaccines and their administration.
(3) Federally qualified health center services.
(4) ASC facility services furnished before July 1987 and physician services furnished before April 1988 that met the requirements for payment of 100 percent of the reasonable charges.
(5) Screening mammography services as described in § 410.34 (c) and (d).
(6) Screening pelvic examinations as described in § 410.56.
(c)
(2) The Part B annual deductible is applied to incurred expenses in the order in which claims for those expenses are processed by the Medicare program.
(3) Only one Part B annual deductible may be imposed for any calendar year and it may be met by any combination of expenses incurred in that year.
(d)
(i) Reduces the customary charges for the services by an amount equal to any unmet portion of the deductible for the calendar year, in accordance with paragraph (b) of this section. (The amount of this reduction is considered to be the amount of the deductible that is met on the basis of the services to which it is applied.)
(ii) Determines 20 percent of any remaining portion of the customary (insofar as reasonable) charge.
(iii) Determines the lesser of the reasonable cost of the services and the customary charges for the services.
(iv) Reduces the amount determined under paragraph (c)(1)(iii) of this section by the sum of the reduction made under paragraph (c)(1)(i) of this section and the amount determined under parargaph (c)(1)(ii) of this section.
(v) Reduces the reasonable cost of the services by the amount of the reduction made under paragraph (c)(1)(i) of this section and multiplies the result by 80 percent.
(2) In accordance with § 410.152(b)(1), the amount payable is the amount determined under paragraph (c)(1)(iv) of this section, or the amount determined under paragraph (c)(1)(v) of this section, whichever is less.
(e)
(f)
(2) From 1973 through 1981, the deductible was $60.
(3) From 1966 through 1972, the deductible was $50.
(g)
(h)
(2) Mr. B submitted a claim that included a $25 charge by a doctor for an examination to prescribe a hearing aid and an $80 charge for office surgery. This was the first claim relating to Mr. B's medical expenses processed in the calendar year. The carrier disallowed the $25 charge because the type of examination is not covered by Medicare. The carrier reduced the $80 surgery charge to a reasonable charge of $40. Only the $40 reasonable charge for covered services will count toward meeting Mr. B's deductible. Since the remainder of the surgery charge constitutes and excess over the reasonable charge, it cannot be applied to satisfy Mr. B's deductible.
(3) Mr. C became entitled to Medicare Part B benefits on July 1, 1982. He incurred expenses of $200 in July, August, and September. The carrier determined that the changes as submitted were reasonable. Even though Mr. C was entitled to benefits for only half the year, he must meet the full $75 deductible. Thus, $75 of this expense constitutes Mr. C's deductible. Medicare would pay $100, which is 80 percent of the remaining $125.
(a)
(2) A unit of packed red cells is treated as the equivalent of a pint of whole blood, which in this section is referred to as a unit of whole blood.
(3) Medicare does not pay for the first 3 units of whole blood or units of packed red cells that are furnished under Part A or Part B in a calendar year. The Part B blood deductible is reduced to the extent that a blood deductible has been applied under Part A.
(4) The blood deductible does not apply to other blood components such as platelets, fibrinogen, plasma, gamma globulin and serum albumin, or to the costs of processing, storing, and administering blood.
(5) The blood deductible is in addition to the Part B annual deductible specified in § 410.160.
(b)
(2) If the blood is furnished by a hospital or CAH, the rules set forth in § 409.87 (b), (c), and (d) of this chapter apply.
(3) If the blood is furnished by a physician, clinic, or other supplier that has accepted assignment of Medicare benefits, or claims payment under § 424.64 of this chapter because the beneficiary died without assigning benefits, the supplier may charge the beneficiary the reasonable charge for the first 3 units, to the extent that those units are not replaced.
Notwithstanding any other provisions of this chapter, there are no deductible or coinsurance requirements with respect to services furnished to an individual who donates a kidney for transplant surgery.
(a) Medicare Part B pays for covered rural health clinic and Federally qualified health center services if—
(1) The services are furnished in accordance with the requirements of subpart X of part 405 of this chapter and subpart A of part 491 of this chapter; and
(2) The clinic or center files a written request for payment on the form and in the manner prescribed by HCFA.
(b) Medicare Part B pays for covered ambulatory surgical center (ASC) services if—
(1) The services are furnished in accordance with the requirements of part 416 of this chapter; and
(2) The ASC files a written request for payment on the form and in the manner prescribed by HCFA.
Payment under Medicare Part B, for home health services, for medical and other health services, or for CORF services, may be made to the provider or facility only if the following conditions are met:
(a)
(b)
(2) For medical and other health services, a physician provides certification and recertification in accordance with § 424.24 of this chapter.
(3) For CORF services, a physician provides certification and recertification in accordance with § 424.27 of this chapter.
(c) In the case of home dialysis support services described in § 410.52, the services are furnished in accordance with a written plan prepared and periodically reviewed by a team that includes the patient's physician and other professionals familiar with the patient's condition as required by § 405.2137(b)(3) of this chapter.
Medicare Part B pays for partial hospitalization services furnished in a CMHC on behalf of an individual only if the following conditions are met:
(a) The CMHC files a written request for payment on the HCFA form 1450 and in the manner prescribed by HCFA; and
(b) The services are furnished in accordance with the requirements described in § 410.110.
(a) Medicare does not pay Part B benefits for services furnished to an individual who is not a citizen or a national of the United States if those services are furnished in any month for which the individual is not paid monthly social security cash benefits (or would not be paid if he or she were entitled to those benefits) because he or she has been outside the United States continuously for 6 full calendar months.
(b) Payment of benefits resumes with services furnished during the first full calendar month the alien is back in the United States.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
Nomenclature changes affecting part 411 appear at 60 FR 45370, Aug. 31, 1995.
(a)
(b)
(1) The particular types of services that are excluded;
(2) The circumstances under which Medicare denies payment for certain services that are usually covered; and
(3) The circumstances under which Medicare pays for services usually excluded from payment.
If a utilization and quality control peer review organization (PRO) has assumed review responsibility, in accordance with part 466 of this chapter, for services furnished to Medicare beneficiaries, Medicare payment is not made for those services unless the conditions of subpart C of part 466 of this chapter are met.
(a)
(1) The beneficiary has no legal obligation to pay for the service; and
(2) No other person or organization (such as a prepayment plan of which the beneficiary is a member) has a legal obligation to provide or pay for that service.
(b)
(1) State or local law requires those individuals or groups of individuals to repay the cost of medical services they receive while in custody.
(2) The State or local government entity enforces the requirement to pay by billing all such individuals, whether or not covered by Medicare or any other health insurance, and by pursuing collection of the amounts they owe in the same way and with the same vigor that it pursues the collection of other debts.
(a)
(b)
(1) For emergency hospital services, if the conditions of § 424.103 of this chapter are met;
(2) For services furnished by a participating Federal provider which HCFA has determined is providing services to the public generally as a community institution or agency;
(3) For services furnished by participating hospitals and SNFs of the Indian Health Service; and
(4) For services furnished under arrangements (as defined in § 409.3 of this chapter) made by a participating hospital.
(a)
(b)
(a)
(b)
(1) Services furnished under a health insurance plan established for employees of the government entity.
(2) Services furnished under a title of the Social Security Act other than title XVIII.
(3) Services furnished in or by a participating general or special hospital that—
(i) Is operated by a State or local government agency; and
(ii) Serves the general community.
(4) Services furnished in a hospital or elsewhere, as a means of controlling infectious diseases or because the individual is medically indigent.
(5) Services furnished by a participating hospital or SNF of the Indian Health Service.
(6) Services furnished by a public or private health facility that—
(i) Is not a Federal provider or other facility operated by a Federal agency;
(ii) Receives U.S. government funds under a Federal program that provides support to facilities that furnish health care services;
(iii) Customarily seeks payment for services not covered under Medicare from all available sources, including private insurance and patients' cash resources; and
(iv) Limits the amounts it collects or seeks to collect from a Medicare Part B beneficiary and others on the beneficiary's behalf to:
(A) Any unmet deductible applied to the charges related to the reasonable costs that the facility incurs in providing the covered services;
(B) Twenty percent of the remainder of those charges;
(C) The charges for noncovered services.
(7) Rural health clinic services that meet the requirements set forth in part 491 of this chapter.
(a)
(1) The United States includes the 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, The Northern Mariana Islands, and for purposes of services rendered on board ship, the territorial waters adjoining the land areas of the United States.
(2) Services furnished on board ship are considered to have been furnished in United States territorial waters if they were furnished while the ship was in a port of one of the jurisdictions listed in paragraph (a)(1) of this section, or within 6 hours before arrival at, or 6 hours after departure from, such a port.
(3) A hospital that is not physically situated in one of the jurisdictions listed in paragraph (a)(1) of this section is considered to be outside the United States, even if it is owned or operated by the United States Government.
(b)
Medicare does not pay for services that are required as a result of war, or an act of war, that occurs after the effective date of a beneficiary's current coverage for hospital insurance benefits or supplementary medical insurance benefits.
(a)
(1) An immediate relative of the beneficiary; or
(2) A member of the beneficiary's household.
(b)
(1) Husband or wife.
(2) Natural or adoptive parent, child, or sibling.
(3) Stepparent, stepchild, stepbrother, or stepsister.
(4) Father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law.
(5) Grandparent or grandchild.
(6) Spouse of grandparent or grandchild.
(c)
(1)
(ii) Charges for services furnished incident to a physician's professional services (for example by the physician's nurse or technician), only if the physician who ordered or supervised the services has an excluded relationship to the beneficiary.
(2)
(ii) Charges imposed by a partnership if any of the partners has an excluded relationship to the beneficiary.
(d)
The following services are excluded from coverage.
(a) Routine physical checkups such as—
(1) Examinations performed for a purpose other than treatment or diagnosis of a specific illness, symptom, complaint, or injury, except for screening mammography, colorectal cancer screening tests, or screening pelvic examinations that meet the criteria specified in paragraphs (k)(6), (k)(7), and (k)(8) of this section.
(2) Examinations required by insurance companies, business establishments, government agencies, or other third parties.
(b)
(1) Post-surgical prosthetic lenses customarily used during convalescence for eye surgery in which the lens of the eye was removed (e.g., cataract surgery);
(2) Prosthetic lenses for patients who lack the lens of the eye because of congenital absence or surgical removal; and
(3) One pair of conventional eyeglasses or conventional contact lenses furnished after each cataract surgery during which an intraocular lens is inserted.
(c)
(d)
(e)
(1) Vaccinations or inoculations directly related to the treatment of an injury or direct exposure such as antirabies treatment, tetanus antitoxin or booster vaccine, botulin antitoxin, antivenom sera, or immune globulin;
(2) Pneumococcal vaccinations that are reasonable and necessary for the prevention of illness;
(3) Hepatitis B vaccinations that are reasonable and necessary for the prevention of illness for those individuals, as defined in § 410.63(a) of this chapter, who are at high or intermediate risk of contracting hepatitis B; and
(4) Influenza vaccinations that are reasonable and necessary for the prevention of illness.
(f)
(g)
(h)
(i)
(1) The individual's underlying medical condition and clinical status; or
(2) The severity of the dental procedures.
(j)
(k)
(1) For the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.
(2) In the case of hospice services, for the palliation or management of terminal illness, as provided in part 418 of this chapter.
(3) In the case of pneumococcal vaccine for the prevention of illness.
(4) In the case of the patient outcome assessment program established under section 1875(c) of the Act, for carrying out the purpose of that section.
(5) In the case of hepatitis B vaccine, for the prevention of illness for those individuals at high or intermediate risk of contracting hepatitis B. (Section 410.63(a) of this chapter sets forth criteria for identifying those individuals.)
(6) In the case of screening mammography, for the purpose of early detection of breast cancer subject to the conditions and limitations specified in § 410.34 of this chapter.
(7) In the case of colorectal cancer screening tests, for the purpose of early detection of colorectal cancer subject to the conditions and limitations specified in § 410.37 of this chapter.
(8) In the case of screening pelvic examinations, for the purpose of early detection of cervical or vaginal cancer subject to the conditions and limitations specified in § 410.56 of this chapter.
(l)
(i)
(ii)
(iii)
(2)
(ii) Treatment of mycotic toenails may be covered if it is furnished no more often than every 60 days or the billing physician documents the need for more frequent treatment.
(iii) The services listed in paragraph (l)(1) of this section are not excluded if they are furnished—
(A) As an incident to, at the same time as, or as a necessary integral part of a primary covered procedure performed on the foot; or
(B) As initial diagnostic services (regardless of the resulting diagnosis) in connection with a specific symptom or complaint that might arise from a condition whose treatment would be covered.
(m)
(2)
(i) Physicians' services that meet the criteria of § 415.102(a) of this chapter for payment on a reasonable charge or fee schedule basis.
(ii) Physician assistant services, as defined in section 1861(s)(2)(K)(i) of the Act, that are furnished after December 31, 1990.
(iii) Certified nurse-midwife services, as defined in section 1861(ff) of the Act, that are furnished after December 31, 1990.
(iv) Qualified psychologist services, as defined in section 1861(ii) of the Act, that are furnished after December 31, 1990.
(v) Services of an anesthetist, as defined in § 410.69 of this chapter.
(n)
(1) Services of an assistant-at-surgery in a cataract operation (including subsequent insertion of an intraocular lens) unless, before the surgery is performed, the appropriate PRO or a carrier has approved the use of such an assistant in the surgical procedure based on the existence of a complicating medical condition.
(2) Services on an assistant-at-surgery in a surgical procedure (or class of surgical procedures) for which assistants-at-surgery on average are used in fewer than 5 percent of such procedures nationally.
(o)
(1) Categorized by the FDA as a non-experimental/investigational (Category B) device defined in § 405.201(b) of this chapter; and
(2) Furnished in accordance with the FDA-approved protocols governing clinical trials.
(p)
(i) Any physical, occupational, or speech-language therapy services regardless of whether or not the services are furnished by, or under the supervision of, a physician or other health care professional; and
(ii) Services furnished as an incident to the professional services of a physician or other health care professional specified in paragraph (p)(2) of this section.
(2)
(i) Physicians' services that meet the criteria of § 415.102(a) of this chapter for payment on a fee schedule basis, provided that the claim for payment includes the SNF's Medicare provider number in accordance with § 424.32(a)(2) of this chapter.
(ii) Services performed under a physician's supervision by a physician assistant who meets the applicable definition in section 1861(aa)(5) of the Act.
(iii) Services performed by a nurse practitioner or clinical nurse specialist who meets the applicable definition in section 1861(aa)(5) of the Act and is working in collaboration (as defined in section 1861(aa)(6) of the Act) with a physician.
(iv) Services performed by a certified nurse-midwife, as defined in section 1861(gg) of the Act.
(v) Services performed by a qualified psychologist, as defined in section 1861(ii) of the Act.
(vi) Services performed by a certified registered nurse anesthetist, as defined in section 1861(bb) of the Act.
(vii) Dialysis services and supplies, as defined in section 1861(s)(2)(F) of the Act.
(viii) Erythropoietin (EPO) for dialysis patients, as defined in section 1861(s)(2)(O) of the Act.
(ix) Hospice care, as defined in section 1861(dd) of the Act.
(x) An ambulance trip that initially conveys an individual to the SNF to be admitted as a resident, or that conveys an individual from the SNF in connection with one of the circumstances specified in paragraphs (p)(3)(i) through (p)(3)(iv) of this section as ending the individual's status as an SNF resident.
(xi)
(3)
(i) The beneficiary is admitted as an inpatient to a Medicare-participating hospital or CAH, or as a resident to another SNF;
(ii) The beneficiary receives services from a Medicare-participating home health agency under a plan of care;
(iii) The beneficiary receives outpatient services from a Medicare-participating hospital or CAH (but only with respect to those services that are beyond the general scope of SNF comprehensive care plans, as required under § 483.20 of this chapter); or
(iv) The beneficiary is formally discharged (or otherwise departs) from the SNF, unless the beneficiary is readmitted (or returns) to that or another SNF within 24 consecutive hours.
(a)
(i) A beneficiary entitled to Medicare on the basis of ESRD during the first 18 months of that entitlement;
(ii) A beneficiary who is age 65 or over, entitled to Medicare on the basis of age, and covered under the plan by virtue of his or her current employment status or the current employment status of a spouse of any age; or
(iii) A beneficiary who is under age 65, entitled to Medicare on the basis of disability, and covered under the plan by virtue of his or her current employment status or the current employment status of a family member.
(2) Section 1862(b)(2)(A)(ii) of the Act precludes Medicare payment for services to the extent that payment has been made or can reasonably be expected to be made promptly under any of the following:
(i) Workers' compensation.
(ii) Liability insurance.
(iii) No-fault insurance.
(b)
In this subpart B and in subparts C through H of this part, unless the context indicates otherwise—
(a) If HCFA takes action to recover conditional payments, the beneficiary must cooperate in the action.
(b) If HCFA's recovery action is unsuccessful because the beneficiary does not cooperate, HCFA may recover from the beneficiary.
If a Medicare conditional payment is made, the following rules apply:
(a)
(b)
(c)
(i) The amount of the Medicare primary payment.
(ii) The full primary payment amount that the primary payer is obligated to pay under this part without regard to any payment, other than a full primary payment that the primary payer has paid or will make, or, in the case of a third party payment recipient, the amount of the third party payment.
(2) If it is necessary for HCFA to take legal action to recover from the primary payer, HCFA may recover twice the amount specified in paragraph (c)(1)(i) of this section.
(d)
(e)
(f)
(2) However, HCFA will not recover its payment for particular services in the face of a claims filing requirement unless it has filed a claim for recovery by the end of the year following the year in which the Medicare intermediary or carrier that paid the claim has notice that the third party is primary to Medicare for those particular services. (A notice received during the last three months of a year is considered received during the following year.)
(g)
(h)
(i)
(2) The provisions of paragraph (i)(1) of this section also apply if a third party payer makes its payment to an entity other than Medicare when it is, or should be, aware that Medicare has made a conditional primary payment.
(3) In situations that involve procurement costs, the rule of § 411.37(b) applies.
(j)
(k)
(l)
(2)
(ii) HCFA will not recover from providers or suppliers that are in compliance with the requirements of § 489.20 of this chapter and can show that the reason they failed to file a proper claim is that the beneficiary, or someone acting on his or her behalf, failed to give, or gave erroneous, information regarding coverage that is primary to Medicare.
(m)
(2) In addition to its common law authority with respect to recovery of payments for items and services furnished on or after October 31, 1994, HCFA charges interest in accordance with section 1862(b)(2)(B)(i) of the Act. Under that provision—
(i) HCFA may charge interest if reimbursement is not made to the appropriate trust fund before the expiration of the 60-day period that begins on the date on which notice or other information is received by HCFA that payment has been or could be made under a primary plan;
(ii) Interest may accrue from the date when that notice or other information is received by HCFA and is charged until reimbursement is made; and
(iii) The rate of interest is that provided at 42 CFR 405.376(d).
(a) If a third party payer learns that HCFA has made a Medicare primary payment for services for which the third party payer has made or should have made primary payment, it must give notice to that effect to the Medicare intermediary or carrier that paid the claim.
(b) The notice must describe the specific situation and the circumstances (including the particular type of insurance coverage as specified in § 411.20(a)) and, if appropriate, the time period during which the insurer is primary to Medicare.
(c) If a plan is self-insured and self-administered, the employer must give the notice to HCFA. Otherwise, the insurer, underwriter, or third party administrator must give the notice.
(a)
(b)
(a) HCFA may waive recovery, in whole or in part, if the probability of recovery, or the amount involved, does not warrant pursuit of the claim.
(b) General rules applicable to compromise of claims are set forth in subpart F of part 401 and § 405.376 of this chapter.
(c) Other rules pertinent to recovery are contained in subpart C of part 405 of this chapter.
(a)
(b)
(a) The fact that Medicare payments are limited to the DRG amount, or the reasonable charge, reasonable cost, capitation or fee schedule rate, does not affect the amount that a third party payer may pay.
(b) With respect to workers' compensation plans, no-fault insurers, and employer group health plans, a provider or supplier may bill its full charges and expect those charges to be paid unless there are limits imposed by laws other than title XVIII of the Act or by agreements with the third party payer.
(a)
(2) Except as provided in paragraph (b) of this section, Medicare makes secondary payments, within the limits specified in paragraph (c) of this section and in § 411.33, to supplement the third party payment if that payment is less than the charges for the services and, in the case of services paid on other than a reasonable charge basis, less than the gross amount payable by Medicare under § 411.33(e).
(b)
(c)
(a)
(1) The actual charge by the supplier (or the amount the supplier is obligated to accept as payment in full if that is less than the charges) minus the amount paid by the third party payer.
(2) The amount that Medicare would pay if the services were not covered by a third party payer.
(3) The higher of the Medicare fee schedule, Medicare reasonable charge, or other amount which would be payable under Medicare (without regard to any applicable Medicare deductible or coinsurance amounts) or the third party payer's allowable charge (without regard to any deductible or co-insurance imposed by the policy or plan) minus the amount actually paid by the third party payer.
(b)
(1) Excess of actual charge minus the third party payment: $175−120=$55.
(2) Amount Medicare would pay if the services were not covered by a third party payer: .80×$125=$100.
(3) Third party payer's allowable charge without regard to its coinsurance (since that amount is higher than the Medicare fee schedule in this case) minus amount paid by the third party payer: $150−120=$30.
(c)-(d)[Reserved]
(e)
(1) The gross amount payable by Medicare (that is, the amount payable without considering the effect of the Medicare deductible and coinsurance or the payment by the third party payer), minus the applicable Medicare deductible and coinsurance amounts.
(2) The gross amount payable by Medicare, minus the amount paid by the third party payer.
(3) The provider's charges (or the amount the provider is obligated to accept as payment in full, if that is less than the charges), minus the amount payable by the third party payer.
(4) The provider's charges (or the amount the provider is obligated to accept as payment in full if that is less than the charges), minus the applicable
(f)
(i) The gross amount payable by Medicare minus the Medicare inpatient hospital deductible: $2,700−$520=$2,180.
(ii) The gross amount payable by Medicare minus the third party payment: $2,700−$2,360=$340.
(iii) The provider's charges minus the third party payment: $2,800−$2,360=$440.
(iv) The provider's charges minus the Medicare deductible: $2,800−$520=$2,280. Medicare's secondary payment is $340 and the combined payment made by the third party payer and Medicare on behalf of the beneficiary is $2,700. The $520 deductible was satisfied by the third party payment so that the beneficiary incurred no out-of-pocket expenses.
(2) A hospital furnished 1 day of inpatient hospital care in 1987 to a Medicare beneficiary. The provider's charges for Medicare-covered services totalled $750. The third party payer paid $450. No part of the Medicare inpatient hospital deductible had been met previously. The third party payment is credited toward that deductible. If the gross amount payable by Medicare in this case is $850, then as secondary payer, Medicare pays the lowest of the following amounts:
(i) The gross amount payable by Medicare minus the Medicare deductible: $850−$520=$330.
(ii) The gross amount payable by Medicare minus the third party payment: $850−$450=$400.
(iii) The provider's charges minus the third party payment: $750−$450=$300.
(iv) The provider's charges minus the Medicare deductible: $750−$520=$230. Medicare's secondary payment is $230, and the combined payment made by the third party payer and Medicare on behalf of the beneficiary is $680. The hospital may bill the beneficiary $70 (the $520 deductible minus the $450 third party payment). This fully discharges the beneficiary's deductible obligation.
(3) An ESRD beneficiary received 8 dialysis treatments for which a facility charged $160 per treatment for a total of $1,280. No part of the beneficiary's $75 Part B deductible had been met. The third party payer paid $1,024 for Medicare-covered services. The composite rate per dialysis treatment at this facility is $131 or $1,048 for 8 treatments. As secondary payer, Medicare pays the lowest of the following:
(i) The gross amount payable by Medicare minus the applicable Medicare deductible and coinsurance: $1,048−$75−$194.60=$778.40. (The coinsurance is calculated as follows: $1,048 composite rate−$75 deductible=$973×.20=$194.60).
(ii) The gross amount payable by Medicare minus the third party payment: $1,048−$1,024=$24.
(iii) The provider's charges minus the third party payment: $1,280−$1,024=$256.
(iv) The provider's charge minus the Medicare deductible and coinsurance: $1,280−$75−$194.60=1010.40. Medicare pays $24. The beneficiary's Medicare deductible and coinsurance were met by the third party payment.
(4) A hospital furnished 5 days of inpatient care in 1987 to a Medicare beneficiary. The provider's charges for Medicare-covered services were $4,000 and the gross amount payable was $3,500. The provider agreed to accept $3,000 from the third party as payment in full. The third party payer paid $2,900 due to a deductible requirement under the third party plan. Medicare considers the amount the provider is obligated to accept as full payment ($3,000) to be the provider charges. The Medicare secondary payment is the lowest of the following:
(i) The gross amount payable by Medicare minus the Medicare inpatient deductible: $3,500−$520=$2,980.
(ii) The gross amount payable by Medicare minus the third party payment: $3,500−$2,900=$600.
(iii) The provider's charge minus the third party payment: $3,000−$2,900=$100.
(iv) The provider's charges minus the Medicare inpatient deductible: $3,000−$520=$2,480. The Medicare secondary payment is $100. When Medicare is the secondary payer, the combined payment made by the third party payer and Medicare on behalf of the beneficiary is $3,000. The beneficiary has no liability for Medicare-covered services since the third party payment satisfied the $520 deductible.
(a)
(b)
(c)
(1) The amount paid or payable by the third party payer to the beneficiary. If this amount exceeds the amount payable by Medicare (without regard to deductible or coinsurance), the provider or supplier may retain the third party payment in full without violating the terms of the provider agreement or the conditions of assignment.
(2) The amount, if any, by which the applicable Medicare deductible and coinsurance amounts exceed any third party payment made or due to the beneficiary or to the provider or supplier for the medical services.
(3) The amount of any charges that may be made to a beneficiary under § 413.35 of this chapter when cost limits are applied to the services, or under § 489.32 of this chapter when the services are partially covered, but only to the extent that the third party payer is not responsible for those charges.
(d)
(a)
(i) Procurement costs are incurred because the claim is disputed; and
(ii) Those costs are borne by the party against which HCFA seeks to recover.
(2)
(b)
(c)
(1) Determine the ratio of the procurement costs to the total judgment or settlement payment.
(2) Apply the ratio to the Medicare payment. The product is the Medicare share of procurement costs.
(3) Subtract the Medicare share of procurement costs from the Medicare payments. The remainder is the Medicare recovery amount.
(d)
(e)
(1) Medicare payment.
(2) The total judgment or settlement amount, minus the party's total procurement cost.
(a)
(b)
(i) Payment has been made, or can reasonably be expected to be made promptly under a workers' compensation law or plan of the United States or a state; or
(ii) Payment could be made under the Federal Black Lung Program, but is precluded solely because the provider of the services has failed to secure, from the Department of Labor, a provider number to include in the claim.
(2) If the payment for a service may not be made under workers' compensation because the service is furnished by a source not authorized to provide that service under the particular workers' compensation program, Medicare pays for the service if it is a covered service.
(3) Medicare makes secondary payments in accordance with § 411.32 and § 411.33.
(a) The beneficiary is responsible for taking whatever action is necessary to obtain any payment that can reasonably be expected under workers' compensation.
(b) Except as specified in § 411.45(a), Medicare does not pay until the beneficiary has exhausted his or her remedies under workers' compensation.
(c) Except as specified in § 411.45(b), Medicare does not pay for services that would have been covered under workers' compensation if the beneficiary had filed a proper claim.
(d) However, if a claim is denied for reasons other than not being a proper claim, Medicare pays for the services if they are covered under Medicare.
A conditional Medicare payment may be made under either of the following circumstances:
(a) The beneficiary has filed a proper claim for workers' compensation benefits, but the intermediary or carrier determines that the workers' compensation carrier will not pay promptly. This includes cases in which a workers' compensation carrier has denied a claim.
(b) The beneficiary, because of physical or mental incapacity, failed to file a proper claim.
(a)
(b)
(2) If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. For example, if the parties to a settlement attempt to maximize the amount of disability benefits paid under workers' compensation by releasing the workers' compensation carrier from liability for medical expenses for a particular condition even though the facts show that the condition is work-related, Medicare will not pay for treatment of that condition.
(c)
(d)
(2)
(a)
(2) If the settlement does not give reasonable recognition to both elements of a workers' compensation award or does not apportion the sum granted, the portion to be considered as payment for medical expenses is computed as follows:
(i) Determine the ratio of the amount awarded (less the reasonable and necessary costs incurred in procuring the settlement) to the total amount that would have been payable under workers' compensation if the claim had not been compromised.
(ii) Multiply that ratio by the total medical expenses incurred as a result of the injury or disease up to the date of the settlement. The product is the amount of the workers' compensation settlement to be considered as payment for medical expenses.
(b)
(1) First to any beneficiary payments for services payable under workers' compensation but not covered under Medicare.
(2) Then to any beneficiary payments for services payable under workers' compensation and also covered under Medicare Part B. (These include deductible and coinsurance amounts and, in unassigned cases, the charge in excess of the reasonable charge.)
(3) Last to any beneficiary payments for services payable under workers' compensation and also covered under Medicare Part A. (These include Part A deductible and coinsurance amounts and charges for services furnished after benefits are exhausted.)
The Medicare reasonable charge for physicians' services was $7,000 and Medicare paid $5,600 (80 percent of the reasonable charge). The Part B deductible had been met. The Medicare payment rate for the hospital services was $8,000. Medicare paid the hospital $7,480 ($8,000—the Part A deductible of $520).
In this situation, the beneficiary's payments totalled $3,920:
The Medicare overpayment, for which the beneficiary is liable, would be $2,080 ($6,000-$3,920).
(a)
(b)
(1) The date a claim is filed with an insurer or a lien is filed against a potential liability settlement.
(2) The date the service was furnished or, in the case of inpatient hospital services, the date of discharge.
(c)
(1) Services for which payment has been made or can reasonably be expected to be made promptly under automobile no-fault insurance.
(2) Services furnished on or after November 13, 1989 for which payment has been made or can reasonably be expected to be made promptly under any no-fault insurance other than automobile no-fault.
(a) The beneficiary is responsible for taking whatever action is necessary to obtain any payment that can reasonably be expected under no-fault insurance.
(b) Except as specified in § 411.53, Medicare does not pay until the beneficiary has exhausted his or her remedies under no-fault insurance.
(c) Except as specified in § 411.53, Medicare does not pay for services that would have been covered by the no-fault insurance if the beneficiary had filed a proper claim.
(d) However, if a claim is denied for reasons other than not being a proper claim, Medicare pays for the services if they are covered under Medicare.
If HCFA has information that services for which Medicare benefits have been claimed are for treatment of an injury or illness that was allegedly caused by another party, a conditional Medicare payment may be made.
A conditional Medicare payment may be made in no-fault cases under either of the following circumstances:
(a) The beneficiary, or the provider or supplier, has filed a proper claim for no-fault insurance benefits but the intermediary or carrier determines that the no-fault insurer will not pay promptly for any reason other than the circumstances described in § 411.32(a)(1). This includes cases in which the no-fault insurance carrier has denied the claim.
(b) The beneficiary, because of physical or mental incapacity, failed to meet a claim-filing requirement stipulated in the policy.
(a)
(b)
(c)
(2)
(i) May not bill the liability insurer nor place a lien against the beneficiary's liability insurance settlement for Medicare covered services.
(ii) May only bill Medicare for Medicare-covered services; and
(iii) May bill the beneficiary only for applicable Medicare deductible and coinsurance amounts plus the amount of
(d)
(2)
(3)
(i) The limitations of paragraph (c)(2) of this section do not apply if the liability insurer pays within 120 days after the earlier of the following dates:
(A) The date the hospital files a claim with the insurer or places a lien against a potential liability settlement.
(B) The date the services were provided or, in the case of inpatient hospital services, the date of discharge.
(ii) If the liability insurer does not pay within the 120-day period, the hospital must withdraw its claim or lien and comply with the limitations imposed by paragraph (c)(2) of this section.
(a)
(i) Group health plans of employers that employ at least 20 employees and that cover Medicare beneficiaries age 65 or older who are covered under the plan by virtue of the individual's current employment status with an employer or the current employment status of a spouse of any age. (Section 1862(b)(1)(A))
(ii) Group health plans (without regard to the number of individuals employed and irrespective of current employment status) that cover individuals who have ESRD. Except as provided in § 411.163, group health plans are always primary payers throughout the first 18 months of ESRD-based Medicare eligibility or entitlement. (Section 1862(b)(1)(C))
(iii) Large group health plans (that is, plans of employers that employ at least 100 employees) and that cover Medicare beneficiaries who are under age 65, entitled to Medicare on the basis of disability, and covered under the plan by virtue of the individual's or a family member's current employment status with an employer. (Section 1862(b)(1)(B))
(2) Sections 1862(b)(1)(A), (B), and (C) of the Act provide that group health plans and large group health plans may not take into account that the individuals described in paragraph (a)(1) of this section are entitled to Medicare on the basis of age or disability, or eligible for, or entitled to Medicare on the basis of ESRD.
(3) Section 1862(b)(1)(A)(i)(II) of the Act provides that group health plans of employers of 20 or more employees must provide to any employee or spouse age 65 or older the same benefits, under the same conditions, that it provides to employees and spouses under 65. The requirement applies regardless of whether the individual or spouse 65 or older is entitled to Medicare.
(4) Section 1862(b)(1)(C)(ii) of the Act provides that group health plans may not differentiate in the benefits they provide between individuals who have ESRD and other individuals covered
(b)
(1) Medicare payment for services that are covered under a group health plan and are furnished to certain beneficiaries who are entitled on the basis of ESRD, age, or disability.
(2) The prohibition against taking into account Medicare entitlement based on age or disability, or Medicare eligibility or entitlement based on ESRD.
(3) The prohibition against differentiation in benefits between individuals who have ESRD and other individuals covered under the plan.
(4) The requirement to provide to those 65 or over the same benefits under the same conditions as are provided to those under 65.
(5) The appeals procedures for group health plans that HCFA determines are nonconforming plans.
As used in this subpart and in subparts F through H of this part—
(1) Is working for an employer; or
(2) Is not working for an employer but is receiving payments that are subject to FICA taxes, or would be subject to FICA taxes except that the employer is exempt from those taxes under the Internal Revenue Code.
(1) Is of, or contributed to by, one or more employers or employee organizations.
(2) If it involves more than one employer or employee organization, provides for common administration.
(3) Provides substantially the same benefits or the same benefit options to all those enrolled under the arrangement.
(1) A single employer or employee organization that employed at least 100 full-time or part-time employees on 50 percent or more of its regular business days during the previous calendar year; or
(2) Two or more employers, or employee organizations, at least one of which employed at least 100 full-time or part-time employees on 50 percent or more of its regular business days during the previous calendar year.
(1) In the case of employees, other employees enrolled or seeking to enroll in the plan; and
(2) In the case of other categories of individuals, other persons in any of those categories who are enrolled or seeking to enroll in the plan.
(a)
(ii) May not differentiate in the benefits it provides between individuals with ESRD and other individuals covered under the plan, on the basis of the existence of ESRD, or the need for dialysis, or in any other manner.
(2) The prohibitions of paragraph (a) of this section do not prohibit a plan from paying benefits secondary to Medicare after the first 18 months of ESRD-based eligibility or entitlement.
(b)
(1) May not take into account the age-based Medicare entitlement of an individual or spouse age 65 or older who is covered (or seeks to be covered) under the plan by virtue of current employment status; and
(2) Must provide, to employees age 65 or older and to spouses age 65 or older of employees of any age, the same benefits under the same conditions as it provides to employees and spouses under age 65.
(c)
(a)
(b)
(2) The provisions of section 1128A of the Act (other than subsections (a) and (b)) apply to the civil money penalty of up to $5,000 in the same manner as the provisions apply to a penalty or proceeding under section 1128A(a).
(a)
(1) The individual is actively working as an employee, is the employer (including a self-employed person), or is associated with the employer in a business relationship; or
(2) The individual is not actively working and—
(i) Is receiving disability benefits from an employer for up to 6 months (the first 6 months of employer disability benefits are subject to FICA taxes); or
(ii) Retains employment rights in the industry and has not had his employment terminated by the employer, if the employer provides the coverage (or has not had his membership in the employee organization terminated, if the employee organization provides the coverage), is not receiving disability
(b)
(1) Persons who are furloughed, temporarily laid off, or who are on sick leave;
(2) Teachers and seasonal workers who normally do not work throughout the year; and
(3) Persons who have health coverage that extends beyond or between active employment periods; for example, based on an hours bank arrangement. (Active union members often have hours bank coverage.)
(c)
(1) the individual has GHP or LGHP coverage based on employment, including coverage based on a certain number of hours worked for that employer or a certain level of commissions earned from work for that employer at any time; and
(2) the individual has current employment status with that employer, as defined in paragraph (a) of this section.
(d)
(e)
(i) The religious order pays FICA taxes on behalf of that member; or
(ii) The individual is receiving cash remuneration from the religious order.
(2)
(3)
(f)
The following rules apply in determining the number and size of employers, as required by the MSP provisions for the aged and disabled:
(a) All employers that are treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code (IRC) of 1986 (26 U.S.C. 52 (a)
(b) All employees of the members of an affiliated service group (as defined in section 414(m) of the IRC (26 U.S.C. 414m)) are treated as employed by a single employer.
(c) Leased employees (as defined in section 414(n)(2) of the IRC (26 U.S.C. 414(n)(2)) are treated as employees of the person for whom they perform services to the same extent as they are treated under section 414(n) of the IRC.
(d) In applying the IRC provisions identified in this section, HCFA relies upon regulations and decisions of the Secretary of the Treasury respecting those provisions.
(a)
(1) Failure to pay primary benefits as required by subparts F, G, and H of this part 411.
(2) Offering coverage that is secondary to Medicare to individuals entitled to Medicare.
(3) Terminating coverage because the individual has become entitled to Medicare, except as permitted under COBRA continuation coverage provisions (26 U.S.C. 4980B(f)(2)(B)(iv); 29 U.S.C. 1162.(2)(D); and 42 U.S.C. 300bb-2.(2)(D)).
(4) In the case of a LGHP, denying or terminating coverage because an individual is entitled to Medicare on the basis of disability without denying or terminating coverage for similarly situated individuals who are not entitled to Medicare on the basis of disability.
(5) Imposing limitations on benefits for a Medicare entitled individual that do not apply to others enrolled in the plan, such as providing less comprehensive health care coverage, excluding benefits, reducing benefits, charging higher deductibles or coinsurance, providing for lower annual or lifetime benefit limits, or more restrictive pre-existing illness limitations.
(6) Charging a Medicare entitled individual higher premiums.
(7) Requiring a Medicare entitled individual to wait longer for coverage to begin.
(8) Paying providers and suppliers less for services furnished to a Medicare beneficiary than for the same services furnished to an enrollee who is not entitled to Medicare.
(9) Providing misleading or incomplete information that would have the effect of inducing a Medicare entitled individual to reject the employer plan, thereby making Medicare the primary payer. An example of this would be informing the beneficiary of the right to accept or reject the employer plan but failing to inform the individual that, if he or she rejects the plan, the plan will not be permitted to provide or pay for secondary benefits.
(10) Including in its health insurance cards, claims forms, or brochures distributed to beneficiaries, providers, and suppliers, instructions to bill Medicare first for services furnished to Medicare beneficiaries without stipulating that such action may be taken only when Medicare is the primary payer.
(11) Refusing to enroll an individual for whom Medicare would be secondary payer, when enrollment is available to similarly situated individuals for whom Medicare would not be secondary payer.
(b)
(2) A GHP or LGHP may pay benefits secondary to Medicare for an aged or
(3) A GHP may terminate COBRA continuation coverage of an individual who becomes entitled to Medicare on the basis of ESRD, when permitted under the COBRA provisions.
(a) A “determination of nonconformance” is a HCFA determination that a GHP or LGHP is a nonconforming plan as provided in this section.
(b) HCFA makes a determination of nonconformance for a GHP or LGHP that, at any time during a calendar year, fails to comply with any of the following statutory provisions:
(1) The prohibition against taking into account that a beneficiary who is covered or seeks to be covered under the plan is entitled to Medicare on the basis of ESRD, age, or disability, or eligible on the basis of ESRD.
(2) The nondifferentiation clause for individuals with ESRD.
(3) The equal benefits clause for the working aged.
(4) The obligation to refund conditional Medicare primary payments.
(c) HCFA may make a determination of nonconformance for a GHP or LGHP that fails to respond to a request for information, or to provide correct information, either voluntarily or in response to a HCFA request, on the plan's primary payment obligation with respect to a given beneficiary, if that failure contributes to either or both of the following:
(1) Medicare erroneously making a primary payment.
(2) A delay or foreclosure of HCFA's ability to recover an erroneous primary payment.
(a)
(1) A copy of the employer's plan or policy that specifies the services covered, conditions of coverage, benefit levels and limitations with respect to persons entitled to Medicare on the basis of ESRD, age, or disability as compared to the provisions applicable to other enrollees and potential enrollees.
(2) An explanation of the plan's allegation that it does not owe HCFA any amount HCFA claims the plan owes as repayment for conditional or mistaken Medicare primary payments.
(b)
(a)
(1) On January 1, 1987 for MSP provisions that affect the disabled.
(2) On December 20, 1989 for MSP provisions that affect ESRD beneficiaries and the working aged.
(3) On August 10, 1993 for failure to refund mistaken Medicare primary payments.
(b)
(a)
(i) The determination.
(ii) The basis for the determination.
(iii) The right of the parties to request a hearing.
(iv) An explanation of the procedure for requesting a hearing.
(v) The tax that may be assessed by the IRS in accordance with section 5000 of the IRC.
(vi) The fact that if none of the parties requests a hearing within 65 days from the date of its notice, the determination is binding on all parties unless it is reopened in accordance with § 411.126.
(2) The notice also states that the plan must, within 30 days from the date on its notice, submit to HCFA the names and addresses of all employers and employee organizations that contributed to the plan during the calendar year for which HCFA has determined nonconformance.
(b)
(a)
(b)
(2) The request may include rationale showing why the parties believe that HCFA's determination is incorrect and supporting documentation.
(3) A request is considered filed on the date it is received by the appropriate office, as shown by the receipt date stamped on the request.
(a)
(2) If no party files a request within the 65-day period, the initial determination of nonconformance is binding upon all parties unless it is reopened in accordance with § 411.126.
(3) If more than one party requests a hearing the hearing officer conducts a single hearing in which all parties may participate.
(4)
(5)
(b)
(c)
(2) If the hearing officer approves the request, he or she—
(i) Provides a reasonable time for inspection and reproduction of documents; and
(ii) In ruling on discovery matters, is guided by the Federal Rules of Civil Procedure. (28 U.S.C.A. Rules 26-37)
(3) The hearing officer's orders on all discovery matters are final.
(d)
(e)
(2) Evidence may be received at any time before the conclusion of the hearing.
(3) The hearing officer gives the parties opportunity for submission and consideration of evidence and arguments and, in ruling on the admissibility of evidence, excludes irrelevant, immaterial, or unduly repetitious evidence.
(4) The hearing officer's ruling on admissibility of evidence is final and not subject to further review.
(f)
(i) The attendance and testimony of witnesses.
(ii) The production of books, records, correspondence, papers, or other documents that are relevant and material to any matter at issue.
(2) A party that wishes the issuance of a subpoena must, at least 10 days before the date fixed for the hearing, file with the hearing officer a written request that identifies the witnesses or documents to be produced and describes the address or location in sufficient detail to permit the witnesses or documents to be found.
(3) The request for a subpoena must state the pertinent facts that the party expects to establish by the witnesses or documents and whether those facts could be established by other evidence without the use of a subpoena.
(4) The hearing officer issues the subpoenas at his or her discretion, and HCFA assumes the cost of the issuance and the fees and mileage of any subpoenaed witness, in accordance with section 205(d) of the Act (42 U.S.C. 405(d)).
(g)
(h)
(i)
(a)
(2) If the decision is based on an oral hearing, the hearing officer mails the decision to all known parties within 120 days from the conclusion of the hearing.
(b)
(2) The hearing officer mails a copy of the decision to each of the parties,
(c)
(a)
(b)
(c)
(1) Review or decline to review the hearing officer's decision;
(2) Exercise this discretion on his or her own motion or in response to a request from any of the parties; and
(3) Delegate review responsibility to the Deputy Administrator. (As used in this section, the term “Administrator” includes “Deputy Administrator” if review responsibility has been delegated.)
(d)
(1) Whether the decision—
(i) Is based on a correct interpretation of law, regulation, or HCFA Ruling;
(ii) Is supported by substantial evidence;
(iii) Presents a significant policy issue having a basis in law and regulations;
(iv) Requires clarification, amplification, or an alternative legal basis for the decision; and
(v) Is within the authority provided by statute, regulation, or HCFA Ruling; and
(2) Whether review may lead to the issuance of a HCFA Ruling or other directive needed to clarify a statute or regulation.
(e)
(2) The notice of a decision to review identifies the specific issues the Administrator will consider.
(f)
(i) Proposed findings and conclusions.
(ii) Supporting views or exceptions to the hearing officer's decision.
(iii) Supporting reasons for the proposed findings and exceptions.
(iv) A rebuttal to another party's request for review or to other submissions already filed with the Administrator.
(2) The submissions must be limited to the issues the Administrator has decided to review and confined to the record established by the hearing officer.
(3) All communications from the parties concerning a hearing officer's decision being reviewed by the Administrator must be in writing (not in facsimile or other electronic medium) and must include a certification that copies have been sent to all other parties.
(4) The Administrator does not consider any communication that does not meet the requirements of this paragraph.
(g)
(i) The entire record developed by the hearing officer.
(ii) Any materials submitted in connection with the hearing or under paragraph (f) of this section.
(iii) Generally known facts not subject to reasonable dispute.
(2) The Administrator mails copies of the review decision to all parties within 120 days from the date of the hearing officer's decision.
(3) The Administrator's review decision may affirm, reverse, or modify the hearing decision or may remand the case to the hearing officer.
(h)
(i) Evidence that existed at the time of the hearing and that was known or could reasonably have been expected to be known.
(ii) A court case that was either not available at the time of the hearing or was decided after the hearing.
(iii) Change of the parties' representation.
(iv) An alternative legal basis for an issue in dispute.
(2)
(ii) The hearing officer takes the action in accordance with the Administrator's instructions in the remand notice and again issues a decision.
(iii) The Administrator may review or decline to review the hearing officer's remand decision in accordance with the procedures set forth in this section.
(i)
(a) A determination that a GHP or LGHP is a nonconforming GHP or the decision or revised decision of a hearing officer or of the HCFA Administrator may be reopened within 12 months from the date on the notice of determination or decision or revised decision, for any reason by the entity that issued the determination or decision.
(b) The decision to reopen or not to reopen is not appealable.
(a)
(b)
This subpart sets forth special rules that apply to individuals who are eligible for, or entitled to, Medicare on the basis of ESRD. (Section 406.13 of this chapter contains the rules for eligibility and entitlement based on ESRD.)
(a)
(2)
(3)
(b)
(2) GHP actions that constitute differentiation in plan benefits (and that may also constitute “taking into account” Medicare eligibility or entitlement) include, but are not limited to the following:
(i) Terminating coverage of individuals with ESRD, when there is no basis for such termination unrelated to ESRD (such as failure to pay plan premiums) that would result in termination for individuals who do not have ESRD.
(ii) Imposing on persons who have ESRD, but not on others enrolled in the plan, benefit limitations such as less comprehensive health plan coverage, reductions in benefits, exclusions of benefits, a higher deductible or coinsurance, a longer waiting period, a lower annual or lifetime benefit limit, or more restrictive preexisting illness limitations.
(iii) Charging individuals with ESRD higher premiums.
(iv) Paying providers and suppliers less for services furnished to individuals who have ESRD than for the same services furnished to those who do not have ESRD, such as paying 80 percent of the Medicare rate for renal dialysis on behalf of a plan enrollee who has ESRD and the usual, reasonable and customary charge for renal dialysis on behalf of an enrollee who does not have ESRD.
(v) Failure to cover routine maintenance dialysis or kidney transplants, when a plan covers other dialysis services or other organ transplants.
(c)
(d)
(2) Example—
Mr. Smith works for employer A, and he and his wife are covered through employer A's GHP (Plan A). Neither is eligible for Medicare nor has ESRD. Mrs. Smith works
Mr. Jones also works for employer A, and he and his wife are covered by Plan A. Mrs. Jones does not have other GHP coverage. Mrs. Jones develops ESRD and becomes entitled to Medicare on that basis. Plan A pays primary to Medicare during the first 18 months of Medicare entitlement based on ESRD. When Medicare becomes the primary payer, the plan converts Mrs. Jones' coverage to a Medicare supplement policy. That policy pays Medicare deductible and coinsurance amounts but does not pay for items and services not covered by Medicare, which plan A would have covered. That conversion is impermissible because the plan is providing a lower level of coverage for Mrs. Jones, who has ESRD, than it provides for Mrs. Smith, who does not. In other words, if Plan A pays secondary to primary payers other than Medicare, it must provide the same level of secondary benefits when Medicare is primary in order to comply with the nondifferentiation provision.
(a)
(2)
(3)
(i) Is required to keep in effect under COBRA continuation requirements (as explained in the footnote to § 411.161(a)(3)), even after the individual becomes entitled to Medicare; or
(ii) Voluntarily keeps in effect after the individual becomes entitled to Medicare on the basis of ESRD, even though not obligated to do so under the COBRA provisions.
(4)
(i) Primary payments only for Medicare covered services that are—
(A) Furnished to Medicare beneficiaries who have declined to enroll in the GHP;
(B) Not covered under the plan;
(C) Covered under the plan but not available to particular enrollees because they have exhausted their benefits; or
(D) Furnished to individuals whose COBRA continuation coverage has been terminated because of the individual's Medicare entitlement.
(ii) Secondary payments, within the limits specified in §§ 411.32 and 411.33, to supplement the amount paid by the GHP if that plan pays only a portion of the charge for the services.
(b)
(i) The month in which the individual initiated a regular course of renal dialysis; or
(ii) In the case of an individual who received a kidney transplant, the first month in which the individual became entitled to Medicare, or, if earlier, the first month for which the individual would have been entitled to Medicare benefits if he or she had filed an application for such benefits.
(2) For individuals other than those specified in paragraph (b)(1) of this section, the coordination period begins with the earlier of—
(i) The first month in which the individual becomes entitled to Medicare part A on the basis of ESRD; or
(ii) The first month the individual would have become entitled to Medicare part A on the basis of ESRD if he or she had filed an application for such benefits.
(c)
(2) The coordination period for the following individuals ends with the earlier of the 12th month of eligibility or the 12th month of entitlement to Medicare part A:
(i) Individuals, other than those specified in paragraph (c)(1) of this section, who became entitled to Medicare part A solely on the basis of ESRD during December 1989 and January 1990.
(ii) Individuals, other than those specified in paragraph (c)(1) of this section, who could have become entitled to Medicare Part A solely on the basis of ESRD during December 1989 and January 1990 if they had filed an application.
(iii) Individuals who become entitled to Medicare part A on the basis of ESRD after September 1997.
(iv) Individuals who can become entitled to Medicare part A on the basis of ESRD after September 1997.
(3) The coordination period for the following individuals ends with the earlier of the end of the 18th month of eligibility or the 18th month of entitlement to Medicare part A:
(i) Individuals, other than those specified in paragraph (c)(1) of this section, who become entitled to Medicare part A on the basis of ESRD from February 1990 through April 1997.
(ii) Individuals, other than those specified in paragraph (c)(1) of this section, who could become entitled to Medicare part A on the basis of ESRD from February 1990 through April 1997 if they would file an application.
(4) The coordination periods for the following individuals ends September 30, 1998:
(i) Individuals who become entitled to Medicare part A on the basis of ESRD from May 1997, through September 1997.
(ii) Individuals who could become entitled to Medicare part A on the basis of ESRD from May 1997, through September 1997, if they would file an application.
(d)
(1) An individual began dialysis on November 4, 1989. He did not initiate a course in self-dialysis training nor did he receive a kidney transplant during the first 3 calendar months of dialysis. Thus, he became entitled to Medicare on February 1, 1990. Since this individual began dialysis before December 1989, the 12-month period began with the first month of dialysis, November 1989, and ended October 31, 1990. The coordination period in this case is 9 months, February 1990 through October 1990.
(2) An individual began dialysis on January 29, 1990. He did not initiate a course in self-dialysis training nor did he receive a kidney transplant during the first 3 calendar months of dialysis. Thus, he became entitled to Medicare on April 1, 1990. Since the individual began dialysis after November 1989, and became entitled to Medicare after January 1990, the coordination period began with the first month of entitlement, April 1990, and ended September 30, 1991, the end of the 18th month of entitlement.
(3) An individual began a regular course of maintenance dialysis on February 10, 1990. He did not initiate a course of self-dialysis training nor did he receive a kidney transplant during the first 3 calendar months of dialysis. Thus, he became entitled to Medicare on May 1, 1990. Medicare is secondary
(4) The same facts exist as in the example under paragraph (d)(3), except that the individual began a course of self-dialysis training during the first 3 calendar months of dialysis. Thus, the effective date of his Medicare entitlement is February 1, 1990, and Medicare is secondary payer from February 1, 1990 through July 1991, a total of 18 months.
(5) An individual began dialysis on September 15, 1990. He did not initiate a course of self-dialysis training nor did he receive a kidney transplant during the first 3 calendar months of dialysis. Thus, he became entitled to Medicare effective December 1, 1990. Medicare is secondary payer from December 1, 1990 through May 1992, a total of 18 months.
(6) An individual began dialysis on November 17, 1990. He initiates a course of self-dialysis training in January 1991, and thus becomes entitled to Medicare effective November 1, 1990. Medicare is secondary payer from November 1, 1990, through April 1992, a total of 18 months.
(7) An individual began a regular course of dialysis on December 10, 1990. He does not initiate a course of self-dialysis training nor does he receive a kidney transplant. He decides to delay his enrollment in Medicare because his employer group health plan pays charges in full and he does not wish to incur part B premiums at this time. However, in March 1992, he files for part A and part B Medicare entitlement, and stipulates that he wants his Medicare entitlement to be effective March 1, 1992 (one year later than he could have become entitled). Since this individual could have been entitled to Medicare as early as March 1, 1991, Medicare is secondary payer only from March 1, 1992, through August 1992, a period of 6 months.
(8) The same facts exist as in the example under paragraph (d)(7) of this section, except that the individual defers Medicare entitlement beyond August 1992. (For purposes of this example, Medicare entitlement is not retroactive, but rather takes effect after August 1992.) There would be no period during which Medicare is secondary payer in this situation. This is because Medicare entitlement does not begin until after the 18-month period expires as specified in paragraph (c)(3)(ii) of this section. Medicare would become primary payer as of the effective date of Medicare entitlement. The employer plan is required to pay primary from December 1, 1990, through August 1992, a total of 21 months.
(9) An individual becomes entitled to Medicare on December 1, 1997. The employer plan is primary payer, and Medicare is secondary payer, from December 1, 1997, through November 30, 1998, a period of 12 months. Medicare becomes primary payer on December 1, 1998, because the extension of the coordination period from 12 to 18 months applies only to items and services furnished before October 1, 1998.
(10) An individual becomes entitled to Medicare on August 1, 1997. Medicare is secondary payer from August 1, 1997, through September 30, 1998, a period of 14 months. Medicare becomes primary payer on October 1, 1998, because the coordination period has expired.
(e)[Reserved]
(f)
(a)
(b)
(2)
(i) Is primary payer from the first month of dual eligibility/entitlement through August 9, 1993;
(ii) Is secondary payer from August 10, 1993, through the 18th month of ESRD-based eligibility or entitlement; and
(iii) Again becomes primary payer after the 18th month of ESRD-based eligibility or entitlement.
(3)
(i) Is secondary payer during the first 18 months of ESRD-based eligibility or entitlement; and
(ii) Becomes primary after the 18th month of ESRD-based eligibility or entitlement.
(4)
(A) The individual is already entitled on the basis of age or disability when he or she becomes eligible on the basis of ESRD.
(B) The MSP prohibition against “taking into account” age-based or disability-based entitlement does not apply because plan coverage was not “by virtue of current employment status” or the employer had fewer than 20 employees (in the case of the aged) or fewer than 100 employees (in the case of the disabled).
(C) The plan is paying secondary to Medicare because the plan had justifiably taken into account the age-based or disability-based entitlement.
(ii)
(c)
(2) (Rule (b)(2).) Miss B, who has GHP coverage, became entitled to Medicare on the basis of ESRD in July 1992, and also entitled on the basis of disability in June 1993. Medicare was primary payer from June 1993 through August 9, 1993, because the plan permissibly took into account the ESRD-based entitlement (ESRD was not the “sole” basis of Medicare entitlement); secondary payer from August 10, 1993, through December 1993, the 18th month of ESRD-based entitlement (the plan is no longer permitted to take into account ESRD-based entitlement that is not
(3) (Rule (b)(3).) Mr. C, who is 67 years old and entitled to Medicare on the basis of age, has GHP coverage by virtue of current employment status. Mr. C is diagnosed as having ESRD and begins a course of maintenance dialysis on June 27, 1993. Effective September 1, 1993, Mr. C. is eligible for Medicare on the basis of ESRD. Medicare, which was secondary because Mr. C's GHP coverage was by virtue of current employment, continues to be secondary payer through February 1995, the 18th month of ESRD-based eligibility, and becomes primary payer beginning March 1995.
(4) (Rule (b)(3).) Mr. D retired at age 62 and maintained GHP coverage as a retiree. In January 1994, at the age of 64, Mr. D became entitled to Medicare based on ESRD. Seven months into the 18-month coordination period (July 1994) Mr. D turned age 65. The coordination period continues without regard to age-based entitlement, with the retirement plan continuing to pay primary benefits through June 1995, the 18th month of ESRD-based entitlement. Thereafter, Medicare becomes the primary payer.
(5) (Rule (b)(3).) Mrs. E retired at age 62 and maintained GHP coverage as a retiree. In July 1994, she simultaneously became eligible for Medicare based on ESRD (maintenance dialysis began in April 1994) and entitled based on age. The retirement plan must pay benefits primary to Medicare from July 1994 through December 1995, the first 18 months of ESRD-based eligibility. Thereafter, Medicare becomes the primary payer.
(6) (Rule (b)(3).) Mr. F, who is 67 years of age, is working and has GHP coverage because of his employment status, subsequently develops ESRD, and begins a course of maintenance dialysis in October 1994. He becomes eligible for Medicare based on ESRD effective January 1, 1995. Under the working aged provision, the plan continues to pay primary to Medicare through December 1994. On January 1, 1995, the working aged provision ceases to apply and the ESRD MSP provision takes effect. In September 1995, Mr. F retires. The GHP must ignore Mr. F's retirement status and continue to pay primary to Medicare through June 1996, the end of the 18-month coordination period.
(7) (Rule (b)(4).) Mrs. G, who is 67 years of age, is retired. She has GHP retirement coverage through her former employer. Her plan permissibly took into account her age-based Medicare entitlement when she retired and is paying benefits secondary to Medicare. Mrs. G subsequently develops ESRD and begins a course of maintenance dialysis in October 1995. She automatically becomes eligible for Medicare based on ESRD effective January 1, 1996. The plan continues to be secondary on the basis of Mrs. G's age-based entitlement as long as the plan does not differentiate in the services it provides to Mrs. G and does not do anything else that would constitute “taking into account” her ESRD-based eligibility.
(a)
(1) The beneficiary, the provider, or the supplier that has accepted assignment files a proper claim under the group health plan and the plan denies the claim in whole or in part; or
(2) The beneficiary, because of physical or mental incapacity, fails to file a proper claim.
(b)
(1) The claim is denied for one of the following reasons:
(i) It is alleged that the group health plan is secondary to Medicare.
(ii) The group health plan limits its payments when the individual is entitled to Medicare.
(iii) Failure to file a proper claim if that failure is for any reason other than the physical or mental incapacity of the beneficiary.
(2) The group health plan fails to furnish information requested by HCFA
(a)
(i) Individuals who are entitled to Medicare on the basis of age; and
(ii) GHPs of at least one employer of 20 or more employees that cover those individuals.
(2) Under these provisions, the following rules apply:
(i) An employer is considered to employ 20 or more employees if the employer has 20 or more employees for each working day in each of 20 or more calendar weeks in the current calendar year or the preceding calendar year.
(ii) The plan may not take into account the Medicare entitlement of—
(A) An individual age 65 or older who is covered or seeks to be covered under the plan by virtue of current employment status; or
(B) The spouse, including divorced or common-law spouse age 65 or older of an individual (of any age) who is covered or seeks to be covered by virtue of current employment status. (Section 411.108 gives examples of actions that constitute “taking into account.”)
(iii) Regardless of whether entitled to Medicare, employees and spouses age 65 or older, including divorced or common-law spouses of employees of any age, are entitled to the same plan benefits under the same conditions as employees and spouses under age 65.
(b) [Reserved]
(c)
(2) The period during which an individual is considered to be “aged” begins on the first day of the month in which that individual attains age 65.
(3) For services furnished before May 1986, the period during which an individual is considered “aged” ends as follows:
(i) For services furnished before July 18, 1984, it ends on the last day of the month in which the individual attains age 70.
(ii) For services furnished between July 18, 1984 and April 30, 1986, it ends on the last day of the month
(4) For services furnished on or after May 1, 1986, the period has no upper age limit.
(a)
(1) Is aged;
(2) Is entitled to Medicare Part A benefits under § 406.10 of this chapter; and
(3) Meets one of the following conditions:
(i) Is covered under a GHP of an employer that has at least 20 employees (including a multi-employer plan in which at least one of the participating employers meets that condition), and coverage under the plan is by virtue of the individual's current employment status.
(ii) Is the aged spouse (including a divorced or common-law spouse) of an individual (of any age) who is covered under a GHP described in paragraph (a)(3)(i) of this section by virtue of the individual's current employment status.
(b)
(1) The individuals are covered by virtue of current employment status with an employer that has fewer than 20 employees; and
(2) The plan requests an exception and identifies the individuals for whom it requests the exception as meeting the conditions specified in paragraph (b)(1) of this section.
(c)
(1) Medicare is primary payer for that individual; and
(2) The plan may not offer that individual coverage complementary to Medicare.
(d)
(1) The employer provides the same GHP coverage to retirees; or
(2) The premiums for the plan are paid from a retirement or pension fund.
(e)
(f)
(i) Was receiving, from an employer, disability payments that were subject to tax under the Federal Insurance Contributions Act (FICA); and
(ii) For the month before the month of attainment of age 65, was not entitled to disability benefits under title II of the Act and 20 CFR 404.315 of the SSA regulations.
(2) For services furnished on or after July 17, 1987, an individual is considered employed if he or she receives, from an employer, disability benefits that are subject to tax under FICA, even if he or she was entitled to Social Security disability benefits before attaining age 65.
(g)
(a)
(1) Furnished to Medicare beneficiaries who have declined to enroll in the GHP;
(2) Not covered by the plan for any individuals or spouses who are enrolled by virtue of the individual's current employment status;
(3) Covered under the plan but not available to particular individuals or spouses enrolled by virtue of current employment status because they have exhausted their benefits under the plan;
(4) Furnished to individuals whose COBRA continuation coverage has been terminated because of the individual's Medicare entitlement; or
(5) Covered under COBRA continuation coverage notwithstanding the individual's Medicare entitlement.
(b)
(1) The beneficiary, the provider, or the supplier that has accepted assignment has filed a proper claim under the group health plan and the plan has denied the claim in whole or in part; or
(2) The beneficiary, because of physical or mental incapacity, failed to file proper claim.
(c)
(1) The claim is denied for one of the following reasons:
(i) It is alleged that the group health plan is secondary to Medicare.
(ii) The plan limits its payments when the individual is entitled to Medicare.
(iii) The plan covers the services for individuals or spouses who are enrolled in the plan by virtue of current employment status and are under age 65 but not for individuals and spouses who are enrolled on the same basis but are age 65 or older.
(iv) Failure to file a proper claim if that failure is for any reason other than physical or mental incapacity of the beneficiary.
(2) The group health plan fails to furnish information requested by HCFA and necessary to determine whether the employer plan is primary to Medicare.
(a) This subpart is based on certain provisions of section 1862(b) of the Act, which impose specific requirements and limitations with respect to—
(1) Individuals who are entitled to Medicare on the basis of disability; and
(2) Large group health plans (LGHPs) that cover those individuals.
(b) Under these provisions, the LGHP may not take into account the Medicare entitlement of a disabled individual who is covered (or seeks to be covered) under the plan by virtue of his or her own current employment status or that of a member of his or her family. (§ 411.108 gives examples of actions that constitute taking into account.)
As used in this subpart—
(a) Medicare benefits are secondary to benefits payable by an LGHP for services furnished during any month in which the individual—
(1) Is entitled to Medicare Part A benefits under § 406.12 of this chapter;
(2) Is covered under an LGHP; and
(3) Has LGHP coverage by virtue of his or her own or a family member's current employment status.
(b)
(a)
(1) Furnished to Medicare beneficiaries who have declined to enroll in the GHP;
(2) Not covered under the plan for the disabled individual or similarly situated individuals;
(3) Covered under the plan but not available to particular disabled individuals because they have exhausted their benefits under the plan;
(4) Furnished to individuals whose COBRA continuation coverage has been terminated because of the individual's Medicare entitlement; or
(5) Covered under COBRA continuation coverage notwithstanding the individual's Medicare entitlement.
(b)
(1) The beneficiary, the provider, or the supplier that has accepted assignment has filed a proper claim with the LGHP and the LGHP has denied the claim in whole or in part.
(2) The beneficiary, because of physical or mental incapacity, failed to file a proper claim.
(c)
(1) The LGHP denies the claim in whole or in part for one of the following reasons:
(i) It is alleged that the LGHP is secondary to Medicare.
(ii) The LGHP limits its payments when the individual is entitled to Medicare.
(iii) The LGHP does not provide the benefits to individuals who are entitled to Medicare on the basis of disability and covered under the plan by virtue of current employment status but does provide the benefits to other similarly situated individuals enrolled in the plan.
(iv) The LGHP takes into account entitlement to Medicare in any other way.
(v) There was failure to file a proper claim for any reason other than physical or mental incapacity of the beneficiary.
(2) The LGHP, an employer or employee organization, or the beneficiary fails to furnish information that is requested by HCFA and that is necessary to determine whether the LGHP is primary to Medicare.
(d)
(a) This subpart implements section 1877 of the Act, which generally prohibits a physician from making a referral under Medicare for clinical laboratory services to an entity with which the physician or a member of the physician's immediate family has a financial relationship.
(b) This subpart does not provide for exceptions or immunity from civil or criminal prosecution or other sanctions applicable under any State laws or under Federal law other than section 1877 of the Act. For example, although a particular arrangement involving a physician's financial relationship with an entity may not prohibit the physician from making referrals to the entity under this subpart, the arrangement may nevertheless violate another provision of the Act or other laws administered by HHS, the Federal Trade Commission, the Securities and Exchange Commission, the Internal Revenue Service, or any other Federal or State agency.
(c) This subpart requires, with some exceptions, that certain entities furnishing covered items or services under Part A or Part B report information concerning their ownership, investment, or compensation arrangements in the form, manner, and at the times specified by HCFA.
As used in this subpart, unless the context indicates otherwise:
(1) An ownership or investment interest that exists in the entity through equity, debt, or other means and includes an interest in an entity that holds an ownership or investment interest in any entity providing laboratory services; or
(2) A compensation arrangement with the entity.
(1) Each physician who is a
(2) Except as provided in paragraphs (2)(i) and (2)(ii) of this definition, substantially all of the patient care services of the physicians who are members of the group (that is, at least 75 percent of the total patient care services of the group practice members) are furnished through the group and billed in the name of the group and the amounts received are treated as receipts of the group. “Patient care services” are measured by the total patient care time each member spends on these services. For example, if a physician practices 40 hours a week and spends 30 hours on patient care services for a group practice, the physician has spent 75 percent of his or her time providing countable patient care services.
(i) The “substantially all” test does not apply to any group practice that is located solely in an HPSA, as defined in this section, and
(ii) For group practices located outside of an HPSA (as defined in this section) any time spent by group practice members providing services in an HPSA should not be used to calculate whether the group practice located outside the HPSA has met the “substantially all” test, regardless of whether the members' time in the HPSA is spent in a group practice, clinic, or office setting.
(3) The practice expenses and income are distributed in accordance with methods previously determined.
(1) Means either of the following:
(i) Except as provided in paragraph (2) of this definition, the request by a physician for, or ordering of, any item or service for which payment may be made under Medicare Part B, including a request for a consultation with another physician and any test or procedure ordered by or to be performed by (or under the supervision of) that other physician.
(ii) Except as provided in paragraph (2) of this definition, a request by a physician that includes the provision of laboratory services or the establishment of a plan of care by a physician that includes the provision of laboratory services.
(2) Does not include a request by a pathologist for clinical diagnostic laboratory tests and pathological examination services if—
(i) The request is part of a consultation initiated by another physician; and
(ii) The tests or services are furnished by or under the supervision of the pathologist.
(1) The forgiveness of amounts owed for inaccurate tests or procedures, mistakenly performed tests or procedures, or the correction of minor billing errors.
(2) The furnishing of items, devices, or supplies that are used solely to collect, transport, process, or store specimens for the entity furnishing the items, devices, or supplies or are used solely to order or communicate the results of tests or procedures for the entity.
(3) A payment made by an insurer or a self-insured plan to a physician to satisfy a claim, submitted on a fee-for-service basis, for the furnishing of health services by that physician to an individual who is covered by a policy with the insurer or by the self-insured plan, if—
(i) The health services are not furnished, and the payment is not made, under a contract or other arrangement between the insurer or the plan and the physician;
(ii) The payment is made to the physician on behalf of the covered individual and would otherwise be made directly to the individual; and
(iii) The amount of the payment is set in advance, does not exceed fair market value, and is not determined in a manner that takes into account directly or indirectly the volume or value of any referrals.
(a)
(b)
(c)
(d)
The prohibition on referrals set forth in § 411.353 does not apply to the following types of services:
(a)
(b)
(1) They are furnished personally by one of the following individuals:
(i) The referring physician.
(ii) A physician who is a member of the same group practice as the referring physician.
(iii) Individuals who are directly supervised by the referring physician or, in the case of group practices, by another physician in the same group practice as the referring physician.
(2) They are furnished in one of the following locations:
(i) A building in which the referring physician (or another physician who is a member of the same group practice) furnishes physicians' services unrelated to the furnishing of clinical laboratory services.
(ii) A building that is used by the group practice for the provision of some or all of the group's clinical laboratory services.
(3) They are billed by one of the following:
(i) The physician performing or supervising the service.
(ii) The group practice of which the performing or supervising physician is a member.
(iii) An entity that is wholly owned by the physician or the physician's group practice.
(c)
(1) An HMO or a CMP in accordance with a contract with HCFA under section 1876 of the Act and part 417, subparts J through M, of this chapter.
(2) A health care prepayment plan in accordance with an agreement with HCFA under section 1833(a)(1)(A) of the Act and part 417, subpart U, of this chapter.
(3) An organization that is receiving payments on a prepaid basis for the enrollees through a demonstration project under section 402(a) of the Social Security Amendments of 1967 (42 U.S.C. 1395b-1) or under section 222(a) of the Social Security Amendments of 1972 (42 U.S.C. 1395b-1 note).
(4) A qualified health maintenance organization (within the meaning of section 1310(d) of the Public Health Service Act).
(5) A coordinated care plan (within the meaning of section 1851(a)(2)(A) of the Act) offered by an organization in accordance with a contract with HCFA under section 1857 of the Act and part 422 of this chapter.
(d)
For purposes of § 411.353, the following ownership or investment interests do not constitute a financial relationship:
(a)
(1) They are either—
(i) Listed for trading on the New York Stock Exchange, the American Stock Exchange, or any regional exchange in which quotations are published on a daily basis, or foreign securities listed on a recognized foreign, national, or regional exchange in which quotations are published on a daily basis; or
(ii) Traded under an automated interdealer quotation system operated by the National Association of Securities Dealers.
(2) In a corporation that had—
(i) Until January 1, 1995, total assets at the end of the corporation's most recent fiscal year exceeding $100 million; or
(ii) Stockholder equity exceeding $75 million at the end of the corporation's most recent fiscal year or on average during the previous 3 fiscal years.
(b)
(c)
(1) A laboratory that is located in a rural area (that is, a laboratory that is
(i) The laboratory testing that is referred by a physician who has (or whose immediate family member has) an ownership or investment interest in the rural laboratory is either—
(A) Performed on the premises of the rural laboratory; or
(B) If not performed on the premises, the laboratory performing the testing bills the Medicare program directly for the testing.
(ii) Substantially all of the laboratory tests furnished by the entity are furnished to individuals who reside in a rural area. Substantially all means no less than 75 percent.
(2) A hospital that is located in Puerto Rico.
(3) A hospital that is located outside of Puerto Rico if one of the following conditions is met:
(i) The referring physician is authorized to perform services at the hospital, and the physician's ownership or investment interest is in the entire hospital and not merely in a distinct part or department of the hospital.
(ii) Until January 1, 1995, the referring physician's ownership or investment interest does not relate (directly or indirectly) to the furnishing of clinical laboratory services.
For purposes of § 411.353, the following compensation arrangements do not constitute a financial relationship:
(a)
(1) The agreement is set out in writing and is signed by the parties and specifies the premises covered by the lease.
(2) The term of the agreement is at least 1 year.
(3) The space rented or leased does not exceed that which is reasonable and necessary for the legitimate business purposes of the lease or rental and is used exclusively by the lessee when being used by the lessee, except that the lessee may make payments for the use of space consisting of common areas if the payments do not exceed the lessee's pro rata share of expenses for the space based upon the ratio of the space used exclusively by the lessee to the total amount of space (other than common areas) occupied by all persons using the common areas.
(4) The rental charges over the term of the lease are set in advance and are consistent with fair market value.
(5) The charges are not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties.
(6) The agreement would be commercially reasonable even if no referrals were made between the lessee and the lessor.
(b)
(1) A rental or lease agreement is set out in writing and signed by the parties and specifies the equipment covered by the lease.
(2) The equipment rented or leased does not exceed that which is reasonable and necessary for the legitimate business purposes of the lease or rental and is used exclusively by the lessee when being used by the lessee.
(3) The lease provides for a term of rental or lease of at least 1 year.
(4) The rental charges over the term of the lease are set in advance, are consistent with fair market value, and are not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties.
(5) The lease would be commercially reasonable even if no referrals were made between the parties.
(c)
(1) The employment is for identifiable services.
(2) The amount of the remuneration under the employment is—
(i) Consistent with the fair market value of the services; and
(ii) Except as provided in paragraph (c)(4) of this section, is not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician.
(3) The remuneration is provided under an agreement that would be commercially reasonable even if no referrals were made to the employer.
(4) Paragraph (c)(2)(ii) of this section does not prohibit payment of remuneration in the form of a productivity bonus based on services performed personally by the physician (or immediate family member of the physician).
(d)
(i) The arrangement is set out in writing, is signed by the parties, and specifies the services covered by the arrangement.
(ii) The arrangement covers all of the services to be furnished by the physician (or an immediate family member of the physician) to the entity.
(iii) The aggregate services contracted for do not exceed those that are reasonable and necessary for the legitimate business purposes of the arrangement.
(iv) The term of the arrangement is for at least 1 year.
(v) The compensation to be paid over the term of the arrangement is set in advance, does not exceed fair market value, and, except in the case of a physician incentive plan, is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties.
(vi) The services to be furnished under the arrangement do not involve the counseling or promotion of a business arrangement or other activity that violates any State or Federal law.
(2)
(i) No specific payment is made directly or indirectly under the plan to a physician or a physician group as an inducement to reduce or limit medically necessary services furnished with respect to a specific individual enrolled in the entity.
(ii) In the case of a plan that places a physician or a physician group at substantial financial risk as determined by the Secretary under section 1876(i)(8)(A)(ii) of the Act, the plan complies with any requirements the Secretary has imposed under that section.
(iii) Upon request by the Secretary, the entity provides the Secretary with access to descriptive information regarding the plan, in order to permit the Secretary to determine whether the plan is in compliance with the requirements of paragraph (d)(2) of this section.
(3) Until January 1, 1995, the provisions in paragraph (d)(1) and (2) of this section do not apply to any arrangements that meet the requirements of section 1877(e)(2) or section 1877(e)(3) of the Act as they read before they were amended by the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66).
(e)
(1) The arrangement and its terms are in writing and signed by both parties.
(2) The arrangement is not conditioned on the physician's referral of patients to the hospital.
(3) The hospital does not determine (directly or indirectly) the amount or value of the remuneration to the physician based on the volume or value of any referrals the physician generates for the hospital.
(4) The physician is not precluded from establishing staff privileges at another hospital or referring business to another entity.
(f)
(g)
(2) Remuneration provided by a hospital to a physician if the remuneration does not relate to the furnishing of clinical laboratory services.
(h)
(1) With respect to services provided to an inpatient of the hospital, the arrangement is pursuant to the provision of inpatient hospital services under section 1861(b)(3) of the Act.
(2) The arrangement began before December 19, 1989, and has continued in effect without interruption since then.
(3) With respect to the clinical laboratory services covered under the arrangement, substantially all of these services furnished to patients of the hospital are furnished by the group under the arrangement.
(4) The arrangement is in accordance with an agreement that is set out in writing and that specifies the services to be furnished by the parties and the compensation for services furnished under the agreement.
(5) The compensation paid over the term of the agreement is consistent with fair market value, and the compensation per unit of services is fixed in advance and is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties.
(6) The compensation is provided in accordance with an agreement that would be commercially reasonable even if no referrals were made to the entity.
(i)
(1) To a laboratory in exchange for the provision of clinical laboratory services; or
(2) To an entity as compensation for other items or services that are furnished at a price that is consistent with fair market value.
(a) Except as provided in paragraph (b) of this section, a group practice (as defined in section 1877(h)(4) of the Act and § 411.351) must submit a written statement to its carrier annually to attest that, during the most recent 12-month period (calendar year, fiscal year, or immediately preceding 12-month period) 75 percent of the total patient care services of group practice members was furnished through the group, was billed under a billing number assigned to the group, and the amounts so received were treated as receipts of the group.
(b) A newly-formed group practice (one in which physicians have recently begun to practice together) or any group practice that has been unable in the past to meet the requirements of section 1877(h)(4) of the Act must—
(1) Submit a written statement to attest that, during the next 12-month period (calendar year, fiscal year, or next 12 months), it expects to meet the 75-percent standard and will take measures to ensure the standard is met; and
(2) At the end of the 12-month period, submit a written statement to attest that it met the 75-percent standard during that period, billed for those services under a billing number assigned to the group, and treated amounts received for those services as receipts of the group. If the group did not meet the standard, any Medicare payments made for clinical laboratory services furnished by the group during
(c) Once any group has chosen whether to use its fiscal year, the calendar year, or some other 12-month period, the group practice must adhere to this choice.
(d) The attestation must contain a statement that the information furnished in the attestation is true and accurate and must be signed by a group representative.
(e) A group that intends to meet the definition of a group practice in order to qualify for an exception described in §§ 411.355 through 411.357, must submit the attestation required by paragraph (a) or paragraph (b)(1) of this section, as applicable, to its carrier no later than 60 days after receipt of the attestation instructions from its carrier.
(a)
(b)
(c)
(1) The name and unique physician identification number (UPIN) of each physician who has a financial relationship with the entity;
(2) The name and UPIN of each physician who has an immediate relative (as defined in § 411.351) who has a financial relationship with the entity;
(3) The covered items and services provided by the entity; and
(4) With respect to each physician identified under paragraphs (c)(1) and (c)(2) of this section, the nature of the financial relationship (including the extent and/or value of the ownership or investment interest or the compensation arrangement, if requested by HCFA).
(d)
(e)
(f)
(g)
(a)
(b)
(1) The request must involve an existing arrangement or one into which the requestor, in good faith, specifically plans to enter. The planned arrangement may be contingent upon the party or parties receiving a favorable advisory opinion. HCFA does not consider, for purposes of an advisory opinion, requests that present a general question of interpretation, pose a hypothetical situation, or involve the activities of third parties.
(2) The requestor must be a party to the existing or proposed arrangement.
(c)
(1) Whether the fair market value was, or will be, paid or received for any goods, services, or property; and
(2) Whether an individual is a bona fide employee within the requirements of section 3121(d)(2) of the Internal Revenue Code of 1986.
(d)
(e)
(1) The request is not related to a named individual or entity;
(2) HCFA is aware that the same, or substantially the same, course of action is under investigation, or is or has been the subject of a proceeding involving the Department of Health and Human Services or another governmental agency; or
(3) HCFA believes that it cannot make an informed opinion or could only make an informed opinion after extensive investigation, clinical study, testing, or collateral inquiry.
(f)
(a)
(b)
(1) The name, address, telephone number, and Taxpayer Identification Number of the requestor.
(2) The names and addresses, to the extent known, of all other actual and potential parties to the arrangement that is the subject of the request.
(3) The name, title, address, and daytime telephone number of a contact person who will be available to discuss the request with HCFA on behalf of the requestor.
(4) A complete and specific description of all relevant information bearing on the arrangement, including—
(i) A complete description of the arrangement that the requestor is undertaking, or plans to undertake, including: the purpose of the arrangement; the nature of each party's (including each entity's) contribution to the arrangement; the direct or indirect relationships between the parties, with an emphasis on the relationships between physicians involved in the arrangement (or their immediate family members who are involved) and any entities that provide designated health services; the types of services for which a physician wishes to refer, and whether the referrals will involve Medicare or Medicaid patients;
(ii) Complete copies of all relevant documents or relevant portions of documents that affect or could affect the arrangement, such as personal services or employment contracts, leases, deeds, pension or insurance plans, financial statements, or stock certificates (or, if these relevant documents do not yet exist, a complete description, to the best of the requestor's knowledge, of what these documents are likely to contain);
(iii) Detailed statements of all collateral or oral understandings, if any; and
(iv) Descriptions of any other arrangements or relationships that could affect HCFA's analysis.
(5) Complete information on the identity of all entities involved either directly or indirectly in the arrangement, including their names, addresses, legal form, ownership structure, nature of the business (products and services) and, if relevant, their Medicare and Medicaid provider numbers. The requestor must also include a brief description of any other entities that could affect the outcome of the opinion, including those with which the requestor, the other parties, or the immediate family members of involved physicians, have any financial relationships (either direct or indirect, and as defined in section 1877(a)(2) of the Act and § 411.351), or in which any of the parties holds an ownership or control interest as defined in section 1124(a)(3) of the Act.
(6) A discussion of the specific issues or questions the requestor would like HCFA to address including, if possible, a description of why the requestor believes the referral prohibition in section 1877 of the Act might or might not be triggered by the arrangement and which, if any, exceptions to the prohibition the requestor believes might apply. The requestor should attempt to designate which facts are relevant to each issue or question raised in the request and should cite the provisions of law under which each issue or question arises.
(7) An indication of whether the parties involved in the request have also asked for or are planning to ask for an advisory opinion on the arrangement in question from the OIG under section 1128D(b) of the Act (42 U.S.C. 1320a-7d(b)) and whether the arrangement is or is not, to the best of the requestor's knowledge, the subject of an investigation.
(8) The certification(s) described in § 411.373. The certification(s) must be signed by—
(i) The requestor, if the requestor is an individual;
(ii) The chief executive officer, or comparable officer, of the requestor, if the requestor is a corporation;
(iii) The managing partner of the requestor, if the requestor is a partnership; or
(iv) A managing member, if the requestor is a limited liability company.
(9) A check or money order payable to HCFA in the amount described in § 411.375(a).
(c)
(a) Every request must include the following signed certification: “With knowledge of the penalties for false statements provided by 18 U.S.C. 1001 and with knowledge that this request for an advisory opinion is being submitted to the Department of Health and Human Services, I certify that all of the information provided is true and correct, and constitutes a complete description of the facts regarding which an advisory opinion is sought, to the best of my knowledge and belief.”
(b) If the advisory opinion relates to a proposed arrangement, in addition to the certification required by paragraph (a) of this section, the following certification must be included and signed by the requestor: “The arrangement described in this request for an advisory opinion is one into which [the requestor], in good faith, plans to enter.” This statement may be made contingent on a favorable advisory opinion, in which case the requestor should add one of the following phrases to the certification:
(1) “if HCFA issues a favorable advisory opinion.”
(2) “if HCFA and the OIG issue favorable advisory opinions.”
(a)
(b)
(c)
(2) In its request for an advisory opinion, the requestor may designate a triggering dollar amount. If HCFA estimates that the costs of processing the advisory opinion request have reached or are likely to exceed the designated triggering dollar amount, HCFA notifies the requestor.
(3) If HCFA notifies the requestor that the actual or estimated cost of processing the request has reached or is likely to exceed the triggering dollar amount, HCFA stops processing the request until the requestor makes a written request for HCFA to continue. If HCFA is delayed in processing the request for an advisory opinion because of this procedure, the time within which HCFA must issue an advisory opinion is suspended until the requestor asks HCFA to continue working on the request.
(4) If the requestor chooses not to pay for HCFA to complete an advisory opinion, or withdraws the request, the requestor is still obligated to pay for all costs HCFA has identified as costs it incurred in processing the request for an advisory opinion, up to that point.
(5) If the costs HCFA has incurred in responding to the request are greater than the amount the requestor has paid, HCFA, before issuing the advisory opinion, notifies the requestor of any additional amount that is due. HCFA does not issue an advisory opinion until the requestor has paid the full amount that is owed. Once the requestor has paid HCFA the total amount due for the costs of processing the request, HCFA issues the advisory opinion. The time period HCFA has for issuing advisory opinions is suspended from the time HCFA notifies the requestor of the amount owed until the time HCFA receives full payment.
(d)
(2) The time period for issuing an advisory opinion is suspended from the time that HCFA notifies the requestor that it needs an outside expert opinion until the time HCFA receives that opinion.
(a) HCFA may request expert advice from qualified sources if HCFA believes that the advice is necessary to respond to a request for an advisory opinion. For example, HCFA may require the use of accountants or business experts to assess the structure of a complex business arrangement or to ascertain a physician's or immediate family member's financial relationship with entities that provide designated health services.
(b) If HCFA determines that it needs to obtain expert advice in order to issue a requested advisory opinion, HCFA notifies the requestor of that fact and provides the identity of the appropriate expert and an estimate of the costs of the expert advice. As indicated in § 411.375(d), the requestor must pay the estimated cost of the expert advice.
(c) Once HCFA has received payment for the estimated cost of the expert advice, HCFA arranges for the expert to provide a prompt review of the issue or issues in question. HCFA considers any additional expenses for the expert advice, beyond the estimated amount, as part of the costs HCFA has incurred in responding to the request, and the responsibility of the requestor, as described in § 411.375(c).
The party requesting an advisory opinion may withdraw the request before HCFA issues a formal advisory opinion. This party must submit the withdrawal in writing to the same address as the request, as indicated in § 411.372(a). Even if the party withdraws the request, the party must pay the costs the Department has expended in processing the request, as discussed in § 411.375. HCFA reserves the right to keep any request for an advisory opinion and any accompanying documents and information, and to use them for any governmental purposes permitted by law.
(a) Upon receiving a request for an advisory opinion, HCFA promptly makes an initial determination of whether the request includes all of the information it will need to process the request.
(b) Within 15 working days of receiving the request, HCFA—
(1) Formally accepts the request for an advisory opinion;
(2) Notifies the requestor about the additional information it needs, or
(3) Declines to formally accept the request.
(c) If the requestor provides the additional information HCFA has requested, or otherwise resubmits the request, HCFA processes the resubmission in accordance with paragraphs (a) and (b) of this section as if it were an initial request for an advisory opinion.
(d) Upon accepting the request, HCFA notifies the requestor by regular U.S. mail of the date that HCFA formally accepted the request.
(e) The 90-day period that HCFA has to issue an advisory opinion set forth in § 411.380(c) does not begin until HCFA has formally accepted the request for an advisory opinion.
(a) HCFA considers an advisory opinion to be issued once it has received payment and once the opinion has been dated, numbered, and signed by an authorized HCFA official.
(b) An advisory opinion contains a description of the material facts known to HCFA that relate to the arrangement that is the subject of the advisory opinion, and states HCFA's opinion about the subject matter of the request based on those facts. If necessary, HCFA includes in the advisory opinion material facts that could be
(c)(1) HCFA issues an advisory opinion, in accordance with the provisions of this part, within 90 days after it has formally accepted the request for an advisory opinion, or, for requests that HCFA determines, in its discretion, involve complex legal issues or highly complicated fact patterns, within a reasonable time period.
(2) If the 90th day falls on a Saturday, Sunday, or Federal holiday, the time period ends at the close of the first business day following the weekend or holiday;
(3) The 90-day period is suspended from the time HCFA—
(i) Notifies the requestor that the costs have reached or are likely to exceed the triggering amount as described in § 411.375(c)(2) until HCFA receives written notice from the requestor to continue processing the request;
(ii) Requests additional information from the requestor until HCFA receives the additional information;
(iii) Notifies the requestor of the full amount due until HCFA receives payment of this amount; and
(iv) Notifies the requestor of the need for expert advice until HCFA receives the expert advice.
(d) After HCFA has notified the requestor of the full amount owed and has received full payment of that amount, HCFA issues the advisory opinion and promptly mails it to the requestor by regular first class U.S. mail.
Any advice HCFA gives in an opinion does not prejudice its right to reconsider the questions involved in the opinion and, if it determines that it is in the public interest, to rescind or revoke the opinion. HCFA provides notice to the requestor of its decision to rescind or revoke the opinion so that the requestor and the parties involved in the requestor's arrangement may discontinue any course of action they have taken in accordance with the advisory opinion. HCFA does not proceed against the requestor with respect to any action the requestor and the involved parties have taken in good faith reliance upon HCFA's advice under this part, provided—
(a) The requestor presented to HCFA a full, complete and accurate description of all the relevant facts; and
(b) The parties promptly discontinue the action upon receiving notice that HCFA had rescinded or revoked its approval, or discontinue the action within a reasonable “wind down” period, as determined by HCFA.
(a) Advisory opinions that HCFA issues and releases in accordance with the procedures set forth in this subpart are available to the public.
(b) Promptly after HCFA issues an advisory opinion and releases it to the requestor, HCFA makes available a copy of the advisory opinion for public inspection during its normal hours of operation and on the DHHS/HCFA web site.
(c) Any predecisional document, or part of such predecisional document, that is prepared by HCFA, the Department of Justice, or any other Department or agency of the United States in connection with an advisory opinion request under the procedures set forth in this part is exempt from disclosure under 5 U.S.C. 552, and will not be made publicly available.
(d) Documents submitted by the requestor to HCFA in connection with a request for an advisory opinion are available to the public to the extent they are required to be made available by 5 U.S.C. 552, through procedures set forth in 45 CFR part 5.
(e) Nothing in this section limits HCFA's obligation, under applicable laws, to publicly disclose the identity of the requesting party or parties, and the nature of the action HCFA has taken in response to the request.
The procedures described in this subpart constitute the only method by
An advisory opinion issued by HCFA does not apply in any way to any individual or entity that does not join in the request for the opinion. Individuals or entities other than the requestor(s) may not rely on an advisory opinion.
The failure of a party to seek or to receive an advisory opinion may not be introduced into evidence to prove that the party either intended or did not intend to violate the provisions of sections 1128, 1128A or 1128B of the Act.
(a) An advisory opinion states only HCFA's opinion regarding the subject matter of the request. If the subject of an advisory opinion is an arrangement that must be approved by or is regulated by any other agency, HCFA's advisory opinion cannot be read to indicate HCFA's views on the legal or factual issues that may be raised before that agency.
(b) An advisory opinion that HCFA issues under this part does not bind or obligate any agency other than the Department. It does not affect the requestor's, or anyone else's, obligations to any other agency, or under any statutory or regulatory provision other than that which is the specific subject matter of the advisory opinion.
(a)
(1) The services were funished by a provider or by a practitioner or supplier that had accepted assignment of benefits for those services.
(2) Neither the beneficiary nor the provider, practitioner, or supplier knew, or could reasonably have been expected to know, that the services were excluded from coverage under § 411.15 (g) or (k).
(b)
(i) The day on which the beneficiary has been determined, under § 411.404, to have knowledge, actual or imputed, that the services were excluded from coverage by reason of § 411.15(g) or § 411.15(k).
(ii) The day on which the provider has been determined, under § 411.406 to have knowledge, actual or imputed, that the services are excluded from coverage by reason of § 411.15(g) or § 411.15(k).
(2)
(a)
(1) The beneficiary paid the provider, practitioner, or supplier some or all of the charges for the excluded services.
(2) The beneficiary did not know and could not reasonably have been expected to know that the services were not covered.
(3) The provider, practitioner, or supplier knew, or could reasonably have been expected to know that the services were not covered.
(4) The beneficiary files a proper request for indemnification before the end of the sixth month after whichever of the following is later:
(i) The month is which the beneficiary paid the provider, practitioner, or supplier.
(ii) The month in which the intermediary or carrier notified the beneficiary (or someone on his or her behalf) that the beneficiary would not be liable for the services.
(b)
(c)
(a)
(b)
(c)
(1) The PRO, intermediary, or carrier.
(2) The group or committee responsible for utilization review for the provider that furnished the services.
(3) The provider, practitioner, or supplier that furnished the service.
(a)
(b)
(c)
(d)
(1) The services were not covered; or
(2) The beneficiary no longer needed covered services.
(e)
(1) Its receipt of HCFA notices, including manual issuances, bulletins, or other written guides or directives from intermediaries, carriers, or PROs, including notification of PRO screening criteria specific to the condition of the beneficiary for whom the furnished services are at issue and of medical procedures subject to preadmission review by a PRO.
(2)
(3) Its knowledge of what are considered acceptable standards of practice by the local medical community.
(a)
(b)
(1) A physician who does not request a review within 30 days after receipt of the denial notice makes the refund within that time period; or
(2) A physician who files a request for review within 30 days after receipt of the denial notice makes the refund within 15 days after receiving notice of an initial adverse review determination, whether or not the physician further appeals the initial adverse review determination.
(c)
(d)
(1) The physician did not know, and could not reasonably have been expected to know, that Medicare would not pay for the service; or
(2) Before the service was provided—
(i) The physician informed the beneficiary, or someone acting on the beneficiary's behalf, in writing that the physician believed Medicare was likely to deny payment for the specific service; and
(ii) The beneficiary (or someone eligible to sign for the beneficiary under § 424.36(b) of this chapter) signed a statement agreeing to pay for that service.
(e)
(f)
(1) The notice must—
(i) Be in writing, using approved notice language;
(ii) Cite the particular service or services for which payment is likely to be denied; and
(iii) Cite the physician's reasons for believing Medicare payment will be denied.
(2) The notice is not acceptable evidence if—
(i) The physician routinely gives this notice to all beneficiaries for whom he or she furnishes services; or
(ii) The notice is no more than a statement to the effect that there is a possibility that Medicare may not pay for the service.
(g)
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
(b)
(a)
(b)
(2) The full prospective payment amount, as determined under subpart D, E, or G and under subpart M of this part, is made for each stay during which there is at least one Medicare payable day of care. Payable days of care, for purposes of this paragraph include the following:
(i) Limitation of liability days payable under the payment procedures for custodial care and services that are not reasonable and necessary as specified in § 411.400 of this chapter.
(ii) Guarantee of payment days, as authorized under § 409.68 of this chapter, for inpatient hospital services furnished to an individual whom the hospital has reason to believe is entitled to Medicare benefits at the time of admission.
(c)
(1) Operating costs for routine services (as described in § 413.53(b) of this chapter), such as the costs of room, board, and routine nursing services;
(2) Operating costs for ancillary services, such as radiology and laboratory services furnished to hospital inpatients;
(3) Special care unit operating costs (intensive care type unit services, as described in § 413.53(b) of this chapter);
(4) Malpractice insurance costs related to services furnished to inpatients; and
(5) Preadmission services otherwise payable under Medicare Part B furnished to a beneficiary during the 3 calendar days immediately preceding the date of the beneficiary's admission to the hospital that meet the following conditions:
(i) The services are furnished by the hospital or by an entity wholly owned or operated by the hospital. An entity is wholly owned by the hospital if the
(ii) For services furnished after January 1, 1991, the services are diagnostic (including clinical diagnostic laboratory tests).
(iii) For services furnished on or after October 1, 1991, the services are furnished in connection with the principal diagnosis that requires the beneficiary to be admitted as an inpatient and are not the following:
(A) Ambulance services.
(B) Maintenance renal dialysis.
(d)
(e)
(1) Capital-related costs for cost reporting periods beginning before October 1, 1991, and an allowance for return on equity, as described in §§ 413.130 and 413.157, respectively, of this chapter.
(2) Direct medical education costs for approved nursing and allied health education programs as described in § 413.85 of this chapter.
(3) Costs for direct medical and surgical services of physicians in teaching hospitals exercising the election in § 405.521 of this chapter.
(4) Heart, kidney, liver, lung, and pancreas acquisition costs incurred by approved transplantation centers.
(5) The costs of qualified nonphysician anesthetists' services, as described in § 412.113(c).
(f)
(1) Outlier cases, as described in subpart F of this part.
(2) The indirect costs of graduate medical education, as specified in subparts F and G of this part and in § 412.105 for inpatient operating costs and in § 412.322 for inpatient capital-related costs.
(3) Costs excluded from the prospective payment rates under paragraph (e) of this section, as provided in § 412.115.
(4) Bad debts of Medicare beneficiaries, as provided in § 412.115(a).
(5) ESRD beneficiary discharges if such discharges are ten percent or more of the hospital's total Medicare discharges, as provided in § 412.104.
(6) Serving a disproportionate share of low-income patients, as provided in § 412.106 for inpatient operating costs and § 412.320 for inpatient capital-related costs.
(7) The direct graduate medical education costs for approved residency programs in medicine, osteopathy, dentistry, and podiatry as described in § 413.86 of this chapter.
(8) For discharges on or after June 19, 1990, and before October 1, 1994, and for discharges on or after October 1, 1997, a payment amount per unit for blood clotting factor provided to Medicare inpatients who have hemophilia.
(a)
(1) The patient is formally released from the hospital; or
(2) The patient dies in the hospital.
(b)
(1) From a hospital to the care of another hospital that is—
(i) Paid under the prospective payment system; or
(ii) Excluded from being paid under the prospective payment system because of participation in an approved Statewide cost control program as described in subpart C of part 403 of this chapter.
(2) From one inpatient area or unit of a hospital to another inpatient area or unit of the hospital that is paid under the prospective payment system.
(c)
(1) To a hospital or distinct part hospital unit excluded from the prospective payment system under subpart B of this part.
(2) To a skilled nursing facility.
(3) To home under a written plan of care for the provision of home health services from a home health agency and those services begin within 3 days after the date of discharge.
(d)
(e)
(f)
(2)
(i) 50 percent of the appropriate prospective payment rate (as determined under subparts D and M of this part) for the first day of the stay; and
(ii) 50 percent of the amount calculated under paragraph (f)(1) of this section for each day of the stay, up to the full DRG payment.
(3)
(4)
(a)
(2) The hospital is paid the applicable prospective payment rate for inpatient operating costs and capital-related costs for each discharge occurring on or after the first day of its first cost reporting period subject to the applicable prospective payment system.
(3) If a discharged beneficiary was admitted to the hospital before the first day of the hospital's first cost reporting period subject to the prospective
(b)
(a)
(2)
(b)
(2) HCFA publishes a
(a)
(b)
(1) Clinically coherent; and
(2) Embraces an acceptable range of resource consumption.
(c)
(2)
(3)
(d)
(i) A potentially substantial adverse impact on the health and safety of beneficiaries; or
(ii) A significant and unwarranted fiscal impact on hospitals or the Medicare program.
(2)
(e)
(a) Except for services described in paragraph (b) of this section, all covered inpatient hospital services furnished to beneficiaries during subject cost reporting periods are paid for under the prospective payment systems.
(b) Inpatient hospital services will not be paid for under the prospective payment systems under any of the following circumstances:
(1) The services are furnished by a hospital (or hospital unit) explicitly excluded from the prospective payment systems under §§ 412.23, 412.25, 412.27, and 412.29.
(2) The services are emergency services furnished by a nonparticipating hospital in accordance with § 424.103 of this chapter.
(3) The services are paid for by an HMO or competitive medical plan (CMP) that elects not to have HCFA make payments directly to a hospital for inpatient hospital services furnished to the HMO's or CMP's Medicare enrollees, as provided in § 417.240(d) and § 417.586 of this chapter.
(a)
(b)
(c)
(1) Veterans Administration hospitals.
(2) Hospitals reimbursed under State cost control systems approved under part 403 of this chapter.
(3) Hospitals reimbursed in accordance with demonstration projects authorized under section 402(a) of Public Law 90-248 (42 U.S.C. 1395b-1) or section 222(a) of Public Law 92-603 (42 U.S.C. 1395b-1 (note)).
(4) Nonparticipating hospitals furnishing emergency services to Medicare beneficiaries.
(d)
(e)
(1)
(2)
(3)
(4)
(5)
(i) The hospital performs the basic functions specified in §§ 482.21 through 482.27, 482.30, and 482.42 of this chapter through the use of employees or under contracts or other agreements with entities other than the hospital occupying space in the same building or on the same campus, or a third entity that controls both hospitals. Food and dietetic services and housekeeping, maintenance, and other services necessary to maintain a clean and safe physical environment could be obtained under contracts or other agreements with the hospital occupying space in the same building or on the same campus, or with a third entity that controls both hospitals.
(ii) For the same period of at least 6 months used to determine compliance with the criterion regarding the age of patients in § 412.23(d)(2) or the length-of-stay criterion in § 412.23(e)(2), or for hospitals other than children's or long-term care hospitals, for a period of at least 6 months immediately preceding the first cost reporting period for which exclusion is sought, the cost of the services that the hospital obtained under contracts or other agreements with the hospital occupying space in the same building or on the same campus, or with a third entity that controls both hospitals, is no more than 15 percent of the hospital's total inpatient operating costs, as defined in § 412.2(c). For purposes of this paragraph (e)(5)(ii), however, the costs of preadmission services are those specified under § 413.40(c)(2) rather than those specified under § 412.2(c)(5).
(iii) For the same period of at least 6 months used to determine compliance with the criterion regarding the age of inpatients in § 412.23(d)(2) or the length-of-stay criterion in § 412.23(e)(2), or for hospitals other than children's or long-term care hospitals, for the period of at least 6 months immediately preceding the first cost reporting period for which exclusion is sought, the hospital has an inpatient population of whom at least 75 percent were referred to the hospital from a source other than another hospital occupying space in the same building or on the same campus.
(f)
(g)
(h)
(2) Except as provided in paragraph (h)(3) of this section, effective for cost reporting periods beginning on or after October 1, 1999, a hospital that has a satellite facility must meet the following criteria in order to be excluded from the prospective payment systems for any period:
(i) In the case of a hospital (other than a children's hospital) that was excluded from the prospective payment systems for the most recent cost reporting period beginning before October 1, 1997, the hospital's number of State-licensed and Medicare-certified beds, including those at the satellite facilities, does not exceed the hospital's number of State-licensed and Medicare-certified beds on the last day of the hospital's last cost reporting period beginning before October 1, 1997.
(ii) The satellite facility independently complies with—
(A) For psychiatric hospitals, the requirements under § 412.23(a);
(B) For rehabilitation hospitals, the requirements under § 412.23(b)(2);
(C) For children's hospitals, the requirements under § 412.23(d)(2); or
(D) For long-term care hospitals, the requirements under §§ 412.23(e)(1) through (e)(3)(i).
(iii) The satellite facility meets all of the following requirements:
(A) It maintains admission and discharge records that are separately identified from those of the hospital in which it is located and are readily available.
(B) It has beds that are physically separate from (that is, not commingled with) the beds of the hospital in which it is located.
(C) It is serviced by the same fiscal intermediary as the hospital of which it is a part.
(D) It is treated as a separate cost center of the hospital of which it is a part.
(E) For cost reporting and apportionment purposes, it uses an accounting system that properly allocates costs and maintains adequate statistical data to support the basis of allocation.
(F) It reports its costs on the cost report of the hospital of which it is a part, covering the same fiscal period and using the same method of apportionment as the hospital of which it is a part.
(3) Except as provided in paragraph (h)(4) of this section, the provisions of paragraph (h)(2) of this section do not apply to—
(i) Any hospital structured as a satellite facility on September 30, 1999, and excluded from the prospective payment systems on that date, to the extent the hospital continues operating under the same terms and conditions, including the number of beds and square footage considered, for purposes of Medicare participation and payment, to be part of the hospital, in effect on September 30, 1999; or
(ii) Any hospital excluded from the prospective payment systems under § 412.23(e)(2).
(4) In applying the provisions of paragraph (h)(3) of this section, any hospital structured as a satellite facility on September 30, 1999, may increase or decrease the square footage of the satellite facility or may decrease the number of beds in the satellite facility if these changes are made necessary by relocation of a facility—
(i) To permit construction or renovation necessary for compliance with changes in Federal, State, or local law; or
(ii) Because of catastrophic events such as fires, floods, earthquakes, or tornadoes.
Hospitals that meet the requirements for the classifications set forth in this section may not be reimbursed under the prospective payment systems.
(a)
(1) Be primarily engaged in providing, by or under the supervision of a psychiatrist, psychiatric services for the diagnosis and treatment of mentally ill persons; and
(2) Meet the conditions of participation for hospitals and special conditions of participation for psychiatric hospitals set forth in part 482 of this chapter.
(b)
(1) Have a provider agreement under part 489 of this chapter to participate as a hospital.
(2) Except in the case of a newly participating hospital seeking exclusion for its first 12-month cost reporting period, as described in paragraph (b)(8) of this section, show that during its most recent 12-month cost reporting period, it served an inpatient population of whom at least 75 percent required intensive rehabilitative services for the treatment of one or more of the following conditions:
(i) Stroke.
(ii) Spinal cord injury.
(iii) Congenital deformity.
(iv) Amputation.
(v) Major multiple trauma.
(vi) Fracture of femur (hip fracture).
(vii) Brain injury.
(viii) Polyarthritis, including rheumatoid arthritis.
(ix) Neurological disorders, including multiple sclerosis, motor neuron diseases, polyneuropathy, muscular dystrophy, and Parkinson's disease.
(x) Burns.
(3) Have in effect a preadmission screening procedure under which each prospective patient's condition and medical history are reviewed to determine whether the patient is likely to benefit significantly from an intensive inpatient hospital program or assessment.
(4) Ensure that the patients receive close medical supervision and furnish, through the use of qualified personnel, rehabilitation nursing, physical therapy, and occupational therapy, plus, as needed, speech therapy, social or psychological services, and orthotic and prosthetic services.
(5) Have a director of rehabilitation who—
(i) Provides services to the hospital and its inpatients on a full-time basis;
(ii) Is a doctor of medicine or osteopathy;
(iii) Is licensed under State law to practice medicine or surgery; and
(iv) Has had, after completing a one-year hospital internship, at least two years of training or experience in the medical-management of inpatients requiring rehabilitation services.
(6) Have a plan of treatment for each inpatient that is established, reviewed, and revised as needed by a physician in consultation with other professional personnel who provide services to the patient.
(7) Use a coordinated multidisciplinary team approach in the rehabilitation of each inpatient, as documented by periodic clinical entries made in the patient's medical record to note the patient's status in relationship to goal attainment, and that team conferences are held at least every two weeks to determine the appropriateness of treatment.
(8) A hospital that seeks exclusion as a rehabilitation hospital for the first full 12-month cost reporting period that occurs after it becomes a Medicare participating hospital may provide a written certification that the inpatient population it intends to serve meets the requirements of paragraph (b)(2) of this section, instead of showing that it has treated such a population during its most recent 12-month cost reporting period. The written certification is also effective for any cost reporting period of not less than one month and not more than 11 months
(9) For cost reporting periods beginning on or after October 1, 1991, if a hospital is excluded from the prospective payment systems for a cost reporting period under paragraph (b)(8) of this section, but the inpatient population it actually treated during that period does not meet the requirements of paragraph (b)(2) of this section, HCFA adjusts payments to the hospital retroactively in accordance with the provisions in § 412.130 of this part.
(c)[Reserved]
(d)
(1) Have a provider agreement under part 489 of this chapter to participate as a hospital; and
(2) Be engaged in furnishing services to inpatients who are predominantly individuals under the age of 18.
(e)
(1) The hospital must have a provider agreement under part 489 of this chapter to participate as a hospital and an average inpatient length of stay greater than 25 days as calculated under paragraph (e)(3) of this section.
(2) For cost reporting periods beginning on or after August 5, 1997, a hospital that was first excluded from the prospective payment system under this section in 1986 must have an average inpatient length of stay of greater than 20 days, as calculated under paragraph (e)(3) of this section, and must demonstrate that at least 80 percent of its annual Medicare inpatient discharges in the 12-month cost reporting period ending in fiscal year 1997 have a principal diagnosis that reflects a finding of neoplastic disease as defined in paragraph (f)(1)(iv) of this section.
(3) The average inpatient length of stay is calculated_
(i) By dividing the number of total inpatient days (less leave or pass days) by the number of total discharges for the hospital's most recent complete cost reporting period;
(ii) If a change in the hospital's average length-of-stay is indicated, by the same method for the immediately preceding 6-month period; or
(iii) If a hospital has undergone a change of ownership (as described in § 489.18 of this chapter) at the start of a cost reporting period or at any time within the preceding 6 months, the hospital may be excluded from the prospective payment system as a long-term care hospital for a cost reporting period if, for the 6 months immediately preceding the start of the period (including time before the change of ownership), the hospital has the required average length of stay, continuously operated as a hospital, and continuously participated as a hospital in Medicare.
(f)
(i) It was recognized as a comprehensive cancer center or clinical cancer research center by the National Cancer Institute of the National Institutes of Health as of April 20, 1983.
(ii) It is classified on or before December 31, 1990, or, if on December 19, 1989, the hospital was located in a State operating a demonstration project under section 1814(b) of the Act, the classification is made on or before December 31, 1991.
(iii) It demonstrates that the entire facility is organized primarily for treatment of and research on cancer (that is, the facility is not a subunit of an acute general hospital or university-based medical center).
(iv) It shows that at least 50 percent of its total discharges have a principal diagnosis that reflects a finding of neoplastic disease. (The principal diagnosis for this purpose is defined as the condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital. For the purposes of meeting this
(2)
(i) Licensed for fewer than 50 acute care beds as of August 5, 1997;
(ii) Is located in a State that as of December 19, 1989, was not operating a demonstration project under section 1814(b) of the Act; and
(iii) Demonstrates that, for the 4-year period ending on December 31, 1996, at least 50 percent of its total discharges have a principal diagnosis that reflects a finding of neoplastic disease as defined in paragraph (f)(1)(iv) of this section.
(g)
(h)
(a)
(1) Be part of an institution that—
(i) Has in effect an agreement under part 489 of this chapter to participate as a hospital;
(ii) Is not excluded in its entirety from the prospective payment systems; and
(iii) Has enough beds that are not excluded from the prospective payment systems to permit the provision of adequate cost information, as required by § 413.24(c) of this chapter.
(2) Have written admission criteria that are applied uniformly to both Medicare and non-Medicare patients.
(3) Have admission and discharge records that are separately identified from those of the hospital in which it is located and are readily available.
(4) Have policies specifying that necessary clinical information is transferred to the unit when a patient of the hospital is transferred to the unit.
(5) Meet applicable State licensure laws.
(6) Have utilization review standards applicable for the type of care offered in the unit.
(7) Have beds physically separate from (that is, not commingled with) the hospital's other beds.
(8) Be serviced by the same fiscal intermediary as the hospital.
(9) Be treated as a separate cost center for cost finding and apportionment purposes.
(10) Use an accounting system that properly allocates costs.
(11) Maintain adequate statistical data to support the basis of allocation.
(12) Report its costs in the hospital's cost report covering the same fiscal period and using the same method of apportionment as the hospital.
(13) As of the first day of the first cost reporting period for which all other exclusion requirements are met, the unit is fully equipped and staffed and is capable of providing hospital inpatient psychiatric or rehabilitation care regardless of whether there are any inpatients in the unit on that date.
(b)
(1)
(2)
(3)
(i) To permit construction or renovation necessary for compliance with changes in Federal, State, or local law affecting the physical facility; or
(ii) Because of catastrophic events such as fires, floods, earthquakes, or tornadoes.
(c)
(1) The status of a hospital unit may be changed from not excluded to excluded only at the start of the cost reporting period. If a unit is added to a hospital after the start of a cost reporting period, it cannot be excluded from the prospective payment systems before the start of a hospital's next cost reporting period.
(2) The status of a hospital unit may be changed from excluded to not excluded at any time during a cost reporting period, but only if the hospital notifies the fiscal intermediary and the HCFA Regional Office in writing of the change at least 30 days before the date of the change, and maintains the information needed to accurately determine costs that are or are not attributable to the excluded unit. A change in the status of a unit from excluded to not excluded that is made during a cost reporting period must remain in effect for the rest of that cost reporting period.
(d)
(e)
(2) Except as provided in paragraph (e)(3) of this section, effective for cost reporting periods beginning on or after October 1, 1999, a hospital unit that establishes a satellite facility must meet the following requirements in order to be excluded from the prospective payment systems for any period:
(i) In the case of a unit excluded from the prospective payment systems for the most recent cost reporting period beginning before October 1, 1997, the unit's number of State-licensed and Medicare-certified beds, including those at the satellite facility, does not exceed the unit's number of State-licensed and Medicare-certified beds on the last day of the unit's last cost reporting period beginning before October 1, 1997.
(ii) The satellite facility independently complies with—
(A) For a rehabilitation unit, the requirements under § 412.23(b)(2); or
(B) For a psychiatric unit, the requirements under § 412.27(a).
(iii) The satellite facility meets all of the following requirements:
(A) It maintains admission and discharge records that are separately identified from those of the hospital in which it is located and are readily available.
(B) It has beds that are physically separate from (that is, not commingled with) the beds of the hospital in which it is located.
(C) It is serviced by the same fiscal intermediary as the hospital unit of which it is a part.
(D) It is treated as a separate cost center of the hospital unit of which it is a part.
(E) For cost reporting and apportionment purposes, it uses an accounting system that properly allocates costs and maintains adequate statistical data to support the basis of allocation.
(F) It reports its costs on the cost report of the hospital of which it is a part, covering the same fiscal period and using the same method of apportionment as the hospital of which it is a part.
(3) Except as specified in paragraph (e)(4) of this section, the provisions of paragraph (e)(2) of this section do not apply to any unit structured as a satellite facility on September 30, 1999, and excluded from the prospective payment systems on that date, to the extent the unit continues operating under the same terms and conditions, including the number of beds and square footage considered to be part of the unit, in effect on September 30, 1999.
(4) In applying the provisions of paragraph (h)(3) of this section, any unit structured as a satellite facility as of September 30, 1999, may increase or decrease the square footage of the satellite facility or may decrease the number of beds in the satellite facility at any time, if these changes are made necessary by relocation of the facility—
(i) To permit construction or renovation necessary for compliance with changes in Federal, State, or local law affecting the physical facility; or
(ii) Because of catastrophic events such as fires, floods, earthquakes, or tornadoes.
In order to be excluded from the prospective payment systems, a psychiatric unit must meet the following requirements:
(a) Admit only patients whose admission to the unit is required for active treatment, of an intensity that can be provided appropriately only in an inpatient hospital setting, of a psychiatric principal diagnosis that is listed in the Third Edition of the American Psychiatric Association's Diagnostic and Statistical Manual, or in Chapter Five (“Mental Disorders”) of the International Classification of Diseases, Ninth Revision, Clinical Modification.
(b) Furnish, through the use of qualified personnel, psychological services, social work services, psychiatric nursing, occupational therapy, and recreational therapy.
(c) Maintain medical records that permit determination of the degree and intensity of the treatment provided to individuals who are furnished services in the unit, and that meet the following requirements:
(1)
(i) The identification data must include the inpatient's legal status.
(ii) A provisional or admitting diagnosis must be made on every inpatient at the time of admission, and must include the diagnoses of intercurrent diseases as well as the psychiatric diagnoses.
(iii) The reasons for admission must be clearly documented as stated by the inpatient or others significantly involved, or both.
(iv) The social service records, including reports of interviews with inpatients, family members, and others must provide an assessment of home plans and family attitudes, and community resource contacts as well as a social history.
(v) When indicated, a complete neurological examination must be recorded at the time of the admission physical examination.
(2)
(i) Be completed within 60 hours of admission;
(ii) Include a medical history;
(iii) Contain a record of mental status;
(iv) Note the onset of illness and the circumstances leading to admission;
(v) Describe attitudes and behavior;
(vi) Estimate intellectual functioning, memory functioning, and orientation; and
(vii) Include an inventory of the inpatient's assets in descriptive, not interpretative fashion.
(3)
(i) Each inpatient must have an individual comprehensive treatment plan that must be based on an inventory of the inpatient's strengths and disabilities. The written plan must include a substantiated diagnosis; short-term and long-term goals; the specific treatment modalities utilized; the responsibilities of each member of the treatment team; and adequate documentation to justify the diagnosis and the treatment and rehabilitation activities carried out; and
(ii) The treatment received by the inpatient must be documented in such a way as to assure that all active therapeutic efforts are included.
(4)
(5)
(d) Meet special staff requirements in that the unit must have adequate numbers of qualified professional and supportive staff to evaluate inpatients, formulate written, individualized, comprehensive treatment plans, provide active treatment measures and engage in discharge planning, as follows:
(1)
(i) Evaluate inpatients;
(ii) Formulate written, individualized, comprehensive treatment plans;
(iii) Provide active treatment measures; and
(iv) Engage in discharge planning.
(2)
(i) The clinical director, service chief, or equivalent must meet the training and experience requirements for examination by the American Board of Psychiatry and Neurology or the American Osteopathic Board of Neurology and Psychiatry.
(ii) The director must monitor and evaluate the quality and appropriateness of services and treatment provided by the medical staff.
(3)
(i) The director of psychiatric nursing services must be a registered nurse who has a master's degree in psychiatric or mental health nursing, or its equivalent, from a school of nursing accredited by the National League for
(ii) The staffing pattern must ensure the availability of a registered nurse 24 hours each day. There must be adequate numbers of registered nurses, licensed practical nurses, and mental health workers to provide the nursing care necessary under each inpatient's active treatment program.
(4)
(5)
(6)
(i) The program must be appropriate to the needs and interests of inpatients and be directed toward restoring and maintaining optimal levels of physical and psychosocial functioning.
(ii) The number of qualified therapists, support personnel, and consultants must be adequate to provide comprehensive therapeutic activities consistent with each inpatient's active treatment program.
In order to be excluded from the prospective payment systems, a rehabilitation unit must meet the following requirements:
(a) Have met either the requirements for—
(1) New units under § 412.30(a); or
(2) Converted units under § 412.30(b).
(b) Have in effect a preadmission screening procedure under which each prospective patient's condition and medical history are reviewed to determine whether the patient is likely to benefit significantly from an intensive inpatient program or assessment.
(c) Ensure that the patients receive close medical supervision and furnish, through the use of qualified personnel, rehabilitation nursing, physical therapy, and occupational therapy, plus, as needed, speech therapy, social services or psychological services, and orthotic and prosthetic services.
(d) Have a plan of treatment for each inpatient that is established, reviewed, and revised as needed by a physician in consultation with other professional personnel who provide services to the patient.
(e) Use a coordinated multidisciplinary team approach in the rehabilitation of each inpatient, as documented by periodic clinical entries made in the patient's medical record to note the patient's status in relationship to goal attainment, and that team conferences are held at least every two weeks to determine the appropriateness of treatment.
(f) Have a director of rehabilitation who—
(1) Provides services to the unit and to its inpatients for at least 20 hours per week;
(2) Is a doctor of medicine or osteopathy;
(3) Is licensed under State law to practice medicine or surgery; and
(4) Has had, after completing a one-year hospital internship, at least two years of training or experience in the medical management of inpatients requiring rehabilitation services.
(a)
(b)
(i) Has not previously sought exclusion for any rehabilitation unit; and
(ii) Has obtained approval, under State licensure and Medicare certification, for an increase in its hospital bed capacity that is greater than 50 percent of the number of beds in the unit.
(2) A hospital that seeks exclusion of a new rehabilitation unit may provide a written certification that the inpatient population the hospital intends the unit to serve meets the requirements of § 412.23(b)(2) instead of showing that the unit has treated such a population during the hospital's most recent cost reporting period.
(3) The written certification described in paragraph (a)(2) of this section is effective for the first full cost reporting period during which the unit is used to provide hospital inpatient care. If the hospital has not previously participated in the Medicare program as a hospital, the written certification also is effective for any cost reporting period of not less than 1 month and not more than 11 months occurring between the date the hospital began participating in Medicare and the start of the hospital's regular 12-month cost reporting period.
(4) If a hospital that has not previously participated in the Medicare program seeks exclusion of a rehabilitation unit, it may designate certain beds as a new rehabilitation unit for the first full 12-month cost reporting period that occurs after it becomes a Medicare-participating hospital. The written certification described in paragraph (b)(2) of this section also is effective for any cost reporting period of not less than 1 month and not more than 11 months occurring between the date the hospital began participating in Medicare and the start of the hospital's regular 12-month cost reporting period.
(5) A hospital that has undergone a change of ownership or leasing as defined in § 489.18 of this chapter is not considered to have participated previously in the Medicare program.
(c)
(d)
(1)
(i) The hospital's State-licensed and Medicare-certified bed capacity increases at the start of the cost reporting period for which the hospital seeks to increase the size of its excluded rehabilitation unit, or at any time after the start of the preceding cost reporting period; and
(ii) The hospital has obtained approval, under State licensure and Medicare certification, for an increase in its hospital bed capacity that is greater than 50 percent of the number of beds it seeks to add to the unit.
(2)
(i) Bed capacity is considered to be existing bed capacity if it does not
(ii) A hospital may increase the size of its excluded rehabilitation unit through conversion of existing bed capacity only if it shows that, for all of the hospital's most recent cost reporting period of at least 12 months, the beds have been used to treat an inpatient population meeting the requirements of § 412.23(b)(2).
(e)
(a) A hospital must meet the conditions of this subpart to receive payment under the prospective payment systems for inpatient hospital services furnished to Medicare beneficiaries.
(b) If a hospital fails to comply fully with these conditions with respect to inpatient hospital services furnished to one or more Medicare beneficiaries, HCFA may, as appropriate—
(1) Withhold Medicare payment (in full or in part) to the hospital until the hospital provides adequate assurances of compliance; or
(2) Terminate the hospital's provider agreement.
(a)
(b)
(1) The applicable deductible and coinsurance amounts under §§ 409.82, 409.83, and 409.87 of this chapter.
(2) Noncovered items and services, furnished at any time during a covered stay, unless they are excluded from coverage only on the basis of the following:
(i) The exclusion of custodial care under § 405.310(g) of this chapter (see paragraph (c) of this section for when charges may be made for custodial care).
(ii) The exclusion of medically unnecessary items and services under § 405.310(k) of this chapter (see paragraphs (c) and (d) of this section for when charges may be made for medically unnecessary items and services).
(iii) The exclusion under § 405.310(m) of this chapter of nonphysician services furnished to hospital inpatients by other than the hospital or a provider or supplier under arrangements made by the hospital.
(iv) The exclusion of items and services furnished when the patient is not entitled to Medicare Part A benefits under subpart A of part 406 of this chapter (see paragraph (e) of this section for when charges may be made for items and services furnished when the patient is not entitled to benefits).
(v) The exclusion of items and services furnished after Medicare Part A benefits are exhausted under § 409.61 of this chapter (see paragraph (e) of this section for when charges may be made for items and services furnished after benefits are exhausted).
(c)
(1) The hospital (acting directly or through its utilization review committee) determines that the beneficiary no longer requires inpatient hospital care. (The phrase “inpatient hospital care” includes cases where a beneficiary needs a SNF level of care, but, under Medicare criteria, a SNF-level bed is not available. This also means that a hospital may find that a patient awaiting SNF placement no longer requires inpatient hospital care because either a SNF-level bed has become available or the patient no longer requires SNF-level care.)
(2) The attending physician agrees with the hospital's determination in writing (for example, by issuing a written discharge order). If the hospital believes that the beneficiary does not require inpatient hospital care but is unable to obtain the agreement of the physician, it may request an immediate review of the case by the PRO. Concurrence by the PRO in the hospital's determination will serve in lieu of the physician's agreement.
(3) The hospital (acting directly or through its utilization review committee) notifies the beneficiary (or person acting on his or her behalf) in writing that—
(i) In the hospital's opinion, and with the attending physician's concurrence or that of the PRO, the beneficiary no longer requires inpatient hospital care;
(ii) Customary charges will be made for continued hospital care beyond the second day following the date of the notice;
(iii) The PRO will make a formal determination on the validity of the hospital's finding if the beneficiary remains in the hospital after he or she is liable for charges;
(iv) The determination of the PRO made after the beneficiary received the purportedly noncovered services will be appealable by the hospital, the attending physician, or the beneficiary under the appeals procedures that apply to PRO determinations affecting Medicare Part A payment; and
(v) The charges for continued care will be invalid and refunded if collected by the hospital, to the extent that a finding is made that the beneficiary required continued care beyond the point indicated by the hospital.
(4) If the beneficiary remains in the hospital after the appropriate notification, and the hospital, the physician who concurred in the hospital determination on which the notice was based, or PRO subsequently finds that the beneficiary requires an acute level of inpatient hospital care, the hospital may not charge the beneficiary for continued care until the hospital once again determines that the beneficiary no longer requires inpatient care, secures concurrence, and notifies the beneficiary, as required in paragraphs (c)(1), (c)(2), and (c)(3) of this section.
(d)
(1) In the hospital's opinion, which has been agreed to by the intermediary, the services to be furnished are not considered reasonable and necessary under Medicare.
(2) Customary charges will be made if he or she receives the services.
(3) If the beneficiary receives the services, a formal determination on the validity of the hospital's finding is made by the intermediary and, to the extent that the decision requires the exercise of medical judgment, the PRO.
(4) The determination is appealable by the hospital, the attending physician, or the beneficiary under the appeals procedure that applies to determinations affecting Medicare Part A payment.
(5) The charges for the services will be invalid and, to the extent collected, will be refunded by the hospital if the services are found to be covered by Medicare.
(e)
(f)
(g)
(2) The hospital must identify such cases to the PRO or intermediary in accordance with HCFA instructions.
Beginning on November 15, 1984, a hospital must have an agreement with a PRO to have the PRO review, on an ongoing basis, the following:
(a) The medical necessity, reasonableness and appropriateness of hospital admissions and discharges.
(b) The medical necessity, reasonableness and appropriateness of inpatient hospital care for which additional payment is sought under the outlier provisions of §§ 412.82 and 412.84 of this chapter.
(c) The validity of the hospital's diagnostic and procedural information.
(d) The completeness, adequacy, and quality of the services furnished in the hospital.
(e) Other medical or other practices with respect to beneficiaries or billing for services furnished to beneficiaries.
(a)
(b)
Notice to Physicians: Medicare payment to hospitals is based in part on each patient's principal and secondary diagnoses and the major procedures performed on the patient, as attested to by the patient's attending physician by virtue of his or her signature in the medical record. Anyone who misrepresents, falsifies, or conceals essential information required for payment of Federal funds, may be subject to fine, imprisonment, or civil penalty under applicable Federal laws.
(c)
(a) If HCFA determines, on the basis of information supplied by a PRO that a hospital has misrepresented admissions, discharges, or billing information, or has taken an action that results in the unnecessary admission of an individual entitled to benefits under Part A, unnecessary multiple admissions of an individual, or other inappropriate medical or other practices with respect to beneficiaries or billing for services furnished to beneficiaries, HCFA may as appropriate—
(1) Deny payment (in whole or in part) under Part A with respect to inpatient hospital services provided with respect to such an unnecessary admission or subsequent readmission of an individual; or
(2) Require the hospital to take other corrective action necessary to prevent or correct the inappropriate practice.
(b) When payment with respect to admission of an individual patient is denied by a PRO under paragraph (a)(1) of this section, and liability is not waived in accordance with §§ 405.330 through 405.332 of this chapter, notice and appeals are provided under procedures established by HCFA to implement the provisions of section 1155 of the Act, Right to Hearing and Judicial Review.
(c) A determination under paragraph (a) of this section, if it is related to a pattern of inappropriate admissions and billing practices that has the effect of circumventing the prospective payment systems, is referred to the Department's Office of Inspector General, for handling in accordance with § 1001.301 of this title.
(a) The applicable payments made under the prospective payment systems, as described in subparts H and M of this part, are payment in full for all inpatient hospital services, as defined in § 409.10 of this chapter, other than physicians' services to individual patients reimbursable on a reasonable charge basis (in accordance with the criteria of § 415.102(a) of this chapter).
(b) HCFA does not pay any provider or supplier other than the hospital for services furnished to a beneficiary who is an inpatient, except for physicians' services reimbursable under § 405.550(b) of this chapter and services of an anesthetist employed by a physician reimbursable under § 415.102(a) of this chapter.
(c) The hospital must furnish all necessary covered services to the beneficiary either directly or under arrangements (as defined in § 409.3 of this chapter).
All hospitals participating in the prospective payment systems must meet the recordkeeping and cost reporting requirements of §§ 413.20 and 413.24 of this chapter.
(a)
(b)
(c)
(1) The classification of a particular discharge is based, as appropriate, on the patient's age, sex, principal diagnosis (that is, the diagnosis established after study to be chiefly responsible for causing the patient's admission to the hospital), secondary diagnoses, procedures performed, and discharge status.
(2) Each discharge is assigned to only one DRG (related, except as provided in paragraph (c)(3) of this section, to the patient's principal diagnosis) regardless of the number of conditions treated or services furnished during the patient's stay.
(3) When the discharge data submitted by a hospital show a surgical procedure unrelated to a patient's principal diagnosis, the bill is returned to the hospital for validation and reverification. HCFA's DRG classification system provides a DRG, and an appropriate weighting factor, for the group of cases for which the unrelated diagnosis and procedure are confirmed.
(d)
(2) The intermediary reviews the hospital's request and any additional information and decides whether a change in the DRG assignment is appropriate. If the intermediary decides that a higher-weighted DRG should be assigned, the case will be reviewed by the appropriate PRO as specified in § 466.71(c)(2) of this chapter.
(3) Following the 60-day period described in paragraph (d)(1) of this section, the hospital may not submit additional information with respect to the DRG assignment or otherwise revise its claim.
(e)
(a)
(b)
(c)
(1) Updating for fiscal year 1983 by the estimated average rate of change of hospital costs industry-wide between the cost reporting period used under paragraph (b) of this section and fiscal year 1983; and
(2) Projecting for fiscal year 1984 by the applicable percentage increase in the hospital market basket for fiscal year 1984.
(d)
(1) Adjusting for area variations in case mix among hospitals;
(2) Excluding an estimate of indirect medical education costs;
(3) Adjusting for area variations in hospital wage levels; and
(4) Adjusting for the effects of a higher cost of living for hospitals located in Alaska and Hawaii.
(e)
(f)
(i) The term
(ii) The term
(A) A Metropolitan Statistical Area (MSA) or New England County Metropolitan Area (NECMA), as defined by the Executive Office of Management and Budget; or
(B) The following New England counties, which are deemed to be parts of urban areas under section 601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21, 42 U.S.C. 1395ww (note)): Litchfield County, Connecticut; York County, Maine; Sagadahoc County, Maine; Merrimack County, New Hampshire; and Newport County, Rhode Island.
(iii) The term
(iv) The phrase
(2) For hospitals within an MSA or NECMA that crosses census division boundaries, the following provisions apply:
(i) The MSA or NECMA is deemed to belong to the census division in which most of the hospitals within the MSA or NECMA are located.
(ii) If a hospital would receive a lower Federal rate because most of the hospitals are located in a census division with a lower Federal rate than the rate applicable to the census division in which the hospital is located, the payment rate will not be reduced for the hospital's cost reporting period beginning before October 1, 1984.
(iii) If an equal number of hospitals within the MSA or NECMA are located in each census division, such hospitals are deemed to be in the census division with the higher Federal rate.
(g)
(1) The amount of payment that would have been made under Medicare Part B for nonphysician services to hospital inpatients during the first cost reporting period subject to prospective payment were it not for the fact that such services must be furnished either directly by hospitals or under arrangements in order for any Medicare payment to be made after September 30, 1983 (the effective date of § 405.310(m) of this chapter).
(2) The amount of FICA taxes that would be incurred during the first cost reporting period subject to the prospective payment system, by hospitals that had not incurred such taxes for any or all of their employees during the base period described in paragraph (c) of this section.
(h)
(i)
(2) The aggregate payments considered under this paragraph exclude payments for per case review by a utilization and quality control peer review organization, as allowed under section 1866(a)(1)(F) of the Act.
(j)
(1) For hospitals located in an urban area in the United States or in that region respectively, the rate equals the product of—
(i) The adjusted average standardized amount (computed under paragraphs (c) through (i) of this section) for hospitals located in an urban area in the United States or in that region; and
(ii) The weighting factor determined under § 412.60(b) for that DRG.
(2) For hospitals located in a rural area in the United States or in that region respectively, the rate equals the product of—
(i) The adjusted average standardized amount (computed under paragraphs (c) through (i) of this section) for hospitals located in a rural area in the United States or that region; and
(ii) The weighting factor determined under § 412.60(b) for that DRG.
(k)
(a)
(2) Each such rate is determined for hospitals located in urban or rural areas within the United States and within each such region respectively, as described in paragraphs (b) through (g) of this section.
(b)
(2) For hospitals within an MSA or NECMA that crosses census division boundaries, the following provisions apply:
(i) The MSA or NECMA is deemed to belong to the census division in which most of the hospitals within the MSA or NECMA are located.
(ii) A hospital that met the conditions specified in § 412.62(f)(2)(ii) and therefore did not receive a lower Federal rate that would have applied for cost reporting periods beginning before October 1, 1984, receives the lower Federal rate applicable to all hospitals in the MSA or NECMA in which it is located effective with the hospital's cost reporting period that begins on or after October 1, 1984.
(iii) The higher Federal rate is payable to all hospitals in the MSA or NECMA if an equal number of hospitals within the MSA or NECMA are located in each census division.
(3) For discharges occurring on or after October 1, 1988, a hospital located in a rural county adjacent to one or more urban areas is deemed to be located in an urban area and receives the Federal payment amount for the urban area to which the greater number of workers in the county commute if the rural county would otherwise be considered part of an urban area, under the standards for designating MSAs or NECMAs if the commuting rates used in determining outlying counties were determined on the basis of the aggregate number of resident workers who commute to (and, if applicable under the standards, from) the central county or central counties of all adjacent MSAs or NECMAs. These EOMB standards are set forth in the notice of final standards for classification of MSAs published in the
(4) For purposes of this section, any change in an MSA or NECMA designation is recognized on the October 1 following the effective date of the change.
(5) For discharges occurring on or after October 1, 1988, for hospitals that consist of two or more separately located inpatient hospital facilities the national adjusted prospective payment rate is based on the geographic location of the hospital facility at which the discharge occurs.
(c)
(2) Each of those amounts is equal to the respective adjusted average standardized amount computed for fiscal year 1984 under § 412.62(g)—
(i) Increased for fiscal year 1985 by the applicable percentage increase in the hospital market basket;
(ii) Adjusted by the estimated amount of Medicare payment for nonphysician services furnished to hospital inpatients that would have been paid under Part B were it not for the fact that such services must be furnished either directly by hospitals or under arrangements;
(iii) Reduced by a proportion equal to the proportion (estimated by HCFA) of the total amount of prospective payments that are additional payment amounts attributable to outlier cases under subpart F of this part; and
(iv) Adjusted for budget neutrality under paragraph (h) of this section.
(3) For fiscal year 1986 and thereafter. HCFA computes, for urban and rural hospitals in the United States and for urban and rural hospitals in each region, average standardized amount equal to the respective adjusted average standardized amounts computed for the previous fiscal year—
(i) Increased by the applicable percentage increase determined under paragraphs (d) through (g) of this section;
(ii) Adjusted by the estimated amount of Medicare payment for nonphysician services furnished to hospital inpatients that would have been paid under Part B were it not for the fact that such services must be furnished either directly by hospitals or under arrangements; and
(iii) For discharges occurring on or after October 1, 1985 and before October 1, 1986, reduced by a proportion (estimated by HCFA) of the amount of payments based on the total amount of prospective payments that are additional payment amounts attributable to outlier cases under subpart F of this part, and for discharges occurring on or after October 1, 1986, reduced by a proportion (estimated by HCFA) of the amount of payments that, based on the total amount of prospective payments for urban hospitals and the total amount of prospective payments for rural hospitals, are additional payments attributable to outlier cases in such hospitals under subpart F of this part.
(4) For fiscal years 1987 through 1990 HCFA standardizes the average standardized amounts by excluding an estimate of the payments for hospitals that serve a disproportionate share of low-income patients.
(5) For fiscal year 1987 onward, HCFA restandardizes the average standardized amounts by excluding an estimate of indirect medical education payments.
(6) For fiscal year 1988 and thereafter, HCFA computes average standardized amounts for hospitals located in large urban areas, other urban areas, and rural areas. The term
(d)
(i) For discharges occurring on or after October 1, 1985 and before May 1. 1986, zero percent; and
(ii) For discharges occurring on or after May 1, 1986, one-half of one percent.
(2) For purposes of determining the standardized amounts for discharges occurring on or after October 1, 1986, the applicable percentage increase for fiscal year 1986 is deemed to have been one-half of one percent.
(e)
(f)
(i) For discharges occurring on or after October 1, 1987 and before November 21, 1987, zero percent;
(ii) For discharges occurring on or after November 21, 1987 and before April 1, 1988, 2.7 percent; and
(iii) For discharges occurring on or after April 1, 1988 and before October 1, 1988—
(A) 3.0 percent for hospitals located in rural areas;
(B) 1.5 percent for hospitals located in large urban areas; and
(C) 1.0 percent for hospitals located in other urban areas.
(2) For purposes of determining the standardized amounts for discharges occurring on or after October 1, 1988 (for Federal fiscal year 1989), the applicable percentage change for fiscal year 1988 is deemed to have been—
(i) 3.0 percent for hospitals located in rural areas;
(ii) 1.5 percent for hospitals located in large urban areas; and
(iii) 1.0 percent for hospitals located in other urban areas.
(g)
(1) Minus 1.5 percentage points for hospitals located in rural areas;
(2) Minus 2.0 percentage points for hospitals in large urban areas; and
(3) Minus 2.5 percentage points for hospitals in other urban areas.
(h)
(i) For discharges occurring on or after October 1, 1989 and before January 1, 1990, 5.5 percent; and
(ii) For discharges occurring on or after January 1, 1990 and before October 1, 1990—
(A) 9.72 percent for hospitals located in rural areas;
(B) 5.62 percent for hospitals located in large urban areas; and
(C) 4.97 percent for hospitals located in other urban areas.
(2) For purposes of determining the standardized amounts for discharges occurring on or after October 1, 1990, the applicable percentage change for fiscal year 1990 is deemed to have been the percentage change provided for in paragraph (h)(1)(ii) of this section.
(i)
(i) For discharges occurring on or after October 1, 1990 and before October 21, 1990, 5.2 percent;
(ii) For discharges occurring on or after October 21, 1990 and before January 1, 1991, 0.0 percent; and
(iii) For discharges occurring on or after January 1, 1991 and before October 1, 1991—
(A) 4.5 percent for hospitals located in rural areas; and
(B) 3.2 percent for hospitals located in large urban areas and other urban areas.
(2) For purposes of determining the standardized amounts for discharges
(j)
(1) Minus 0.6 percentage points for hospitals located in rural areas.
(2) Minus 1.6 percentage points for hospitals located in large urban areas and other urban areas.
(k)
(1) Minus 0.55 percentage points for hospitals located in rural areas.
(2) Minus 1.55 percentage points for hospitals located in large urban areas and other urban areas.
(l)
(1) Minus 1.0 percentage point for hospitals located in rural areas.
(2) Minus 2.5 percentage points for hospitals located in large urban areas and other urban areas.
(m)
(1) Plus, for hospitals located in rural areas, the percentage increase necessary so that the average standardized amounts computed under paragraph (c) through (i) of this section are equal to the average standardized amounts for hospitals located in an urban area other than a large urban area.
(2) Minus 2.5 percentage points for hospitals located in large urban areas and other urban areas.
(n)
(o)
(p)
(q)
(r)
(s)
(t)
(u)
(2) The aggregate payments considered under this paragraph exclude payments for per case review by a utilization and quality control peer review organization, as allowed under section 1866(a)(1)(F) of the Act.
(v)
(1) For hospitals located in a large urban area in the United States or that region respectively, the rate equals the product of—
(i) The adjusted average standardized amount (computed under paragraph (c) of this section) for the fiscal year for hospitals located in a large urban area in the United States or in that region; and
(ii) The weighting factor determined under § 412.60(b) for that DRG.
(2) For hospitals located in an other area in the United States or that region respectively, the rate equals the product of—
(i) The adjusted average standardized amount (computed under paragraph (c) of this section) for the fiscal year for hospitals located in an other area in the United States or that region; and
(ii) The weighting factor (determined under § 412.60(b)) for that DRG.
(w)
(2)(i) HCFA makes a midyear correction to the wage index for an area only if a hospital can show that—
(A) The intermediary or HCFA made an error in tabulating the hospital's data; and
(B) The hospital could not have known about the error, or did not have the opportunity to correct the error, before the beginning of the Federal fiscal year.
(ii) A midyear correction to the wage index is effective prospectively from the date the change is made to the wage index.
(3) Revisions to the wage index resulting from midyear corrections to the wage index values are incorporated in the wage index values for other areas at the beginning of the next Federal fiscal year.
(4) The effect on program payments of midyear corrections to the wage index values is taken into account in establishing the standardized amounts for the following Federal fiscal year.
(5) If a judicial decision reverses a HCFA denial of a hospital's wage data revision request, HCFA pays the hospital by applying a revised wage index that reflects the revised wage data as if HCFA's decision had been favorable rather than unfavorable.
For
For discharges occurring on or after April 1, 1988, and before October 1, 1996, payments to a hospital are based on the greater of the national average standardized amount or the sum of 85 percent of the national average standardized amount and 15 percent of the average standardized amount for the region in which the hospital is located.
(a)
(2) If the hospital's last cost reporting period ending before September 30, 1983 is for less than 12 months, the base period will be the hospital's most recent 12-month or longer cost reporting period ending before such short reporting period, with an appropriate adjustment for inflation. (The rules applicable to new hospitals are set forth in § 412.74.)
(b)
(1) Medical education costs as described in § 413.85 of this chapter.
(2) Capital-related costs as described in § 413.130 of this chapter.
(3) Kidney acquisition costs incurred by hospitals approved as renal transplantation centers as described in § 412.100. Kidney acquisition costs in the base year will be determined by multiplying the hospital's average kidney acquisition cost per kidney times the number of kidney transplants covered by Medicare Part A during the base period.
(4) Higher costs that were incurred for purposes of increasing base-year costs.
(5) One-time nonrecurring higher costs or revenue offsets that have the effect of distorting base-year costs as an appropriate basis for computing the hospital-specific rate.
(6) Higher costs that result from changes in hospital accounting principles initiated in the base year.
(7) The costs of qualified nonphysician anesthetists' services, as described in § 412.113(c).
(c)
(i) Services paid for under Medicare Part B during the hospital's base year that will be paid for under prospective payments. The base-year costs may be increased to include estimated payments for certain services previously billed as physicians' services before the effective date of § 415.102(a) of this chapter, and estimated payments for nonphysicians' services that were not furnished either directly or under arrangements before October 1, 1983 (the effective date of § 405.310(m) of this chapter), but may not include the costs of anesthetists' services for which a physician employer continues to bill under § 405.553(b)(4) of this chapter.
(ii) The payment of FICA taxes during cost reporting periods subject to the prospective payment system, if the hospital had not paid such taxes for all its employees during its base period and will be required to participate effective January 1, 1984.
(2) If a hospital requests that its base-period costs be adjusted under paragraph (c)(1) of this section, it must timely provide the intermediary with sufficient documentation to justify the adjustment, and adequate data to compute the adjusted costs. The intermediary decides whether to use part or all of the data on the basis of audit,
(d)
(a)
(1)
(ii) The intermediary may also initiate changes to the estimation—
(A) For any reason before the date the hospital becomes subject to prospective payment; and
(B) Before November 16, 1983, for corrections to take into account inadvertent omissions in the hospital's previous submissions related to changes made by the prospective payment legislation for purposes of estimating the base-period costs.
(iii) Such omissions pertain to adjustments to exclude capital-related costs and the direct medical education costs of approved educational activities and to adjustments specified in § 412.71(c).
(iv) The intermediary must notify the provider of any change to the hospital-specific amount as a result of the provider's request within 30 days of receipt of the additional data.
(v) Any change to base-period costs made under this paragraph (a)(1) will be made effective retroactively, beginning with the first day of the affected hospital's fiscal year.
(2)
(ii) The intermediary may also identify such errors and initiate their correction during this period.
(iii) The intermediary will either make an appropriate adjustment or notify the hospital that no adjustment is warranted within 30 days of receipt of the hospital's report of an error.
(iv) Corrections of errors of calculation will be effective with the first day of the hospital's first cost reporting period subject to the prospective payment system.
(3)
(A) A reopening and revision of the hospital's base-year notice of amount of program reimbursement under §§ 405.1885 through 405.1889 of this chapter.
(B) A prehearing order or finding issued during the provider payment appeals process by the appropriate reviewing authority under § 405.1821 or § 405.1853 of this chapter that resolved a matter at issue in the hospital's base-year notice of amount of program reimbursement.
(C) An affirmation, modification, or reversal of a Provider Reimbursement Review Board decision by the Administrator of HCFA under § 405.1875 of this chapter that resolved a matter at issue in the hospital's base-year notice of amount of program reimbursement.
(D) An administrative or judicial review decision under §§ 405.1831, 405.1871, or 405.1877 of this chapter that is final
(ii) The intermediary will recalculate the hospital's base-year costs, incorporating the additional costs recognized as allowable for the hospital's base year. Adjustments to base-year costs to take into account these additional costs—
(A) Will be effective with the first day of the hospital's first cost reporting period beginning on or after the date of the revision, order or finding, or review decision; and
(B) Will not be used to recalculate the hospital-specific portion as determined for fiscal years beginning before the date of the revision, order or finding, or review decision.
(4)
(i) The intermediary will recalculate the hospital's base-year costs to reflect the modification determined appropriate as a result of the appeal; and
(ii) Such adjustments will be effective retroactively to the time of the intermediary's initial estimation of base-year costs.
(5)
(b)
(2) In any administrative or judicial review of whether the intermediary used the best data available at the time, as required by § 412.71(d), an intermediary's estimation will be revised on the basis of this review only if the estimation was unreasonable and clearly erroneous in light of the data available at the time the estimation was made.
(3) Specifically excluded from administrative or judicial review are any issues based on data, information, or arguments not presented to the intermediary at the time of the estimation.
(a)
(b)
(1) The hospital's estimated case-mix index.
(2) The average case-mix index for the appropriate classifications of all hospitals subject to cost limits established under § 413.30 of this chapter for cost reporting periods beginning on or
(c)
(2)
(3)
(A) Zero percent for the first seven months of the hospital's cost reporting period; and
(B) One-half of one percent for the remaining five months of the hospital's cost reporting period.
(ii) For purposes of determining the updated base-year costs for cost reporting periods beginning in Federal fiscal year 1987 (that is, on or after October 1, 1986 and before October 1, 1987), the update factor for the previous cost reporting period is deemed to have been one-half of one percent.
(4)
(5)
(A) For the first 51 days of the hospital's cost reporting period, by zero percent.
(B) For the next 132 days of the hospital's cost reporting period, by 2.7 percent.
(C) For the remainder of the hospital's cost reporting period, by—
(
(
(
(ii) For purposes of determining the updated base-year costs for cost reporting periods beginning in Federal fiscal year 1989 (that is, beginning on or after October 1, 1988 and before October 1, 1989), the update factor for the cost reporting period beginning during federal Fiscal year 1988 is deemed to have been—
(A) 3.0 percent for hospitals located in rural areas;
(B) 1.5 percent for hospitals located in large urban areas; and
(C) 1.0 percent for hospitals located in other urban areas.
(6)
(7)
(A) For cost reporting periods beginning on or after October 1, 1989 and before January 1, 1990, by 5.5 percent for discharges occurring before January 1, 1990 and by the factors set forth in paragraph (c)(7)(i)(B) of this section for discharges occurring on or after January 1, 1990.
(B) For cost reporting periods beginning on or after January 1, 1990 and before October 1, 1990, by—
(
(
(
(ii) For discharges occurring on or after October 21, 1990 and before January 1, 1991, the base-period cost per discharge, updated as set forth in paragraph (c)(7)(i) of this section, is reduced by 5.5 percent.
(iii) For purposes of determining the updated base-period costs for cost reporting periods beginning in Federal fiscal year 1991 (that is, beginning on or after October 1, 1990 and before October 1, 1991), the update factor for the cost reporting period beginning during Federal fiscal year 1990 is deemed to
(8)
(ii) For discharges occurring on or after October 21, 1990 and before January 1, 1991, the base-period cost per discharge is updated by 0.0 percent.
(iii) For purposes of determining the updated base period costs for cost reporting periods beginning in Federal fiscal year 1992, the update factor for the cost reporting period beginning during Federal fiscal year 1991 is deemed to have been the percentage change provided for in paragraph (c)(8)(i) of this section.
(9)
(10)
(11)
(12)
(d)
(2)
(e)
(a)
(2)
(ii) If the hospital does not have a cost reporting period ending on or after September 30, 1987 and before September 30, 1988 and does have a cost reporting period beginning on or after October 1, 1986 and before October 1, 1987, that cost reporting period is the base period unless the cost reporting period is for less than 12 months. In that case, the base period is the hospital's most recent 12-month or longer cost reporting period ending before the short cost reporting period.
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i) Any modifications that are determined as a result of administrative or judicial review of the hospital-specific rate determinations; or
(ii) Any additional costs that are recognized as allowable costs for the hospital's base period as a result of administrative or judicial review of the base-period notice of amount of program reimbursement.
(2) With respect to either the hospital-specific rate determination or the amount of program reimbursement determination, the actions taken on administrative or judicial review that provide a basis for recalculations of the hospital-specific rate include the following:
(i) A reopening and revision of the hospital's base-period notice of amount of program reimbursement under §§ 405.1885 through 405.1889 of this chapter.
(ii) A prehearing order or finding issued during the provider payment appeals process by the appropriate reviewing authority under § 405.1821 or § 405.1853 of this chapter that resolved a matter at issue in the hospital's base-period notice of amount of program reimbursement.
(iii) An affirmation, modification, or reversal of a Provider Reimbursement Review Board decision by the Administrator of HCFA under § 405.1875 of this chapter that resolved a matter at issue in the hospital's base-period notice of amount of program reimbursement.
(iv) An administrative or judicial review decision under §§ 405.1831, 405.1871,
(v) A final, nonappealable court judgment relating to the base-period costs.
(3) The adjustments to the hospital-specific rate made under paragraphs (h) (1) and (2) of this section are effective retroactively to the time of the intermediary's initial determination of the rate.
If a hospital's base-year costs, as estimated for purposes of determining the hospital-specific portion, are determined, by criminal conviction or imposition of a civil money penalty or assessment, to include costs that were unlawfully claimed, the hospital's base-period costs are adjusted to remove the effect of the excess costs, and HCFA recovers both the excess costs reimbursed for the base period and the additional amounts paid due to the inappropriate increase of the hospital-specific portion of the hospital's transition payment rates.
(a)
(i) The beneficiary's length-of-stay (including days at the SNF level of care if a SNF bed is not available in the area) exceeds the mean length-of-stay for the applicable DRG by the lesser of the following:
(A) A fixed number of days, as specified by HCFA; or
(B) A fixed number of standard deviations, as specified by HCFA.
(ii) The beneficiary's length-of-stay does not exceed criteria established under paragraph (a)(1)(i) of this section, but the hospital's charges for covered services furnished to the beneficiary, adjusted to operating costs and capital costs by applying cost-to-charge ratios as described in § 412.84(h), exceed the DRG payment for the case plus a fixed dollar amount (adjusted for geographic variation in costs) as specified by HCFA.
(2)
(b)
(1) For transfer cases paid in accordance with § 412.4(f)(1), the applicable factor is equal to the length of stay plus 1 day.
(2) For transfer cases paid in accordance with § 412.4(f)(2), the applicable factor is equal to 0.5 plus the product of the length of stay plus 1 day multiplied by 0.5.
(c)
(a) For discharges occurring before October 1, 1997, if the hospital stay reflected by a discharge includes covered days of care beyond the applicable threshold criterion, the intermediary will make an additional payment, on a per diem basis, to the discharging hospital for those days. A special request or submission by the hospital is not necessary to initiate this payment. However, a hospital may request payment for day outliers before the medical review required in paragraph (b) of this section.
(b) The PRO must review and approve to the extent required by HCFA—
(1) The medical necessity and appropriateness of the admission and outlier services in the context of the entire stay;
(2) The validity of the diagnostic and procedural coding; and
(3) The granting of grace days.
(c) Except as provided in § 412.86, the per diem payment made under paragraph (a) of this section is derived by taking a percentage of the average per diem payment for the applicable DRG, as calculated by dividing the Federal prospective payment rate for inpatient operating costs and inpatient capital-related costs determined under subpart D of this part, by the arithmetic mean length of stay for that DRG. HCFA issues the applicable percentage of the average per diem payment in the annual publication of the prospective payment rates in accordance with § 412.8(b).
(d) Any days in a covered stay identified as noncovered reduce the number of days reimbursed at the day outlier rate but not to exceed the number of days that occur after the day outlier threshold.
(a) A hospital may request its intermediary to make an additional payment for inpatient hospital services that meet the criteria established in accordance with § 412.80(a).
(b) The hospital must request additional payment—
(1) With initial submission of the bill; or
(2) Within 60 days of receipt of the intermediary's initial determination.
(c) Except as specified in paragraph (e) of this section, an additional payment for a cost outlier case is made prior to medical review.
(d) As described in paragraph (f) of this section, the PRO reviews a sample of cost outlier cases after payment. The charges for any services identified as noncovered through this review are denied and any outlier payment made for these services are recovered, as appropriate, after a determination as to the provider's liability has been made.
(e) If the PRO finds a pattern of inappropriate utilization by a hospital, all cost outlier cases from that hospital are subject to medical review, and this review may be conducted prior to payment until the PRO determines that appropriate corrective actions have been taken.
(f) The PRO reviews the cost outlier cases, using the medical records and itemized charges, to verify the following:
(1) The admission was medically necessary and appropriate.
(2) Services were medically necessary and delivered in the most appropriate setting.
(3) Services were ordered by the physician, actually furnished, and not duplicatively billed.
(4) The diagnostic and procedural codings are correct.
(g) The intermediary bases the operating and capital costs of the discharge
(h) The operating cost-to-charge ratio and, effective with cost reporting periods beginning on or after October 1, 1991, the capital cost-to-charge ratio used to adjust covered charges are computed annually by the intermediary for each hospital based on the latest available settled cost report for that hospital and charge data for the same time period as that covered by the cost report. Statewide cost-to-charge ratios are used in those instances in which a hospital's operating or capital cost-to-charge ratios fall outside reasonable parameters. HCFA sets forth these parameters and the statewide cost-to-charge ratios in each year's annual notice of prospective payment rates published under § 412.8(b).
(i) If any of the services are determined to be noncovered, the charges for these services will be deducted from the requested amount of reimbursement but not to exceed the amount claimed above the cost outlier threshold.
(j) Except as provided in paragraph (k) of this section, the additional amount is derived by first taking 80 percent of the difference between the hospital's adjusted operating cost for the discharge (as determined under paragraph (g) of this section) and the operating threshold criteria established under § 412.80(a)(1)(ii); 80 percent is also taken of the difference between the hospital's adjusted capital cost for the discharge (as determined under paragraph (g) of this section) and the capital threshold criteria established under § 412.80(a)(1)(ii). The resulting capital amount is then multiplied by the applicable Federal portion of the payment as determined in § 412.340(a) or § 412.344(a).
(k) For discharges occurring on or after April 1, 1988, the additional payment amount for the DRGs related to burn cases, which are identified in the most recent annual notice of prospective payment rates published in accordance with § 412.8(b), is computed under the provisions of paragraph (j) of this section except that the payment is made using 90 percent of the difference between the hospital's adjusted cost for the discharge and the threshold criteria.
For discharges occurring before October 1, 1997, if a discharge that qualifies for an additional payment under the provisions of § 412.82 has charges adjusted to costs that exceed the cost outlier threshold criteria for an extraordinarily high-cost case as set forth in § 412.80(a)(1)(ii), the additional payment made for the discharge is the greater of—
(a) The applicable per diem payment computed under § 412.82 (c) or (d); or
(b) The payment that would be made under § 412.84 (i) or (j) if the case had not met the day outlier criteria threshold set forth in § 412.80(a)(1)(i).
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(a)
(1) The hospital is located between 25 and 35 miles from other like hospitals and meets one of the following criteria:
(i) No more than 25 percent of residents who become hospital inpatients or no more than 25 percent of the Medicare beneficiaries who become hospital inpatients in the hospital's service area are admitted to other like hospitals located within a 35-mile radius of the hospital, or, if larger, within its service area;
(ii) The hospital has fewer than 50 beds and the intermediary certifies that the hospital would have met the criteria in paragraph (a)(1)(i) of this section were it not for the fact that some beneficiaries or residents were forced to seek care outside the service area due to the unavailability of necessary specialty services at the community hospital; or
(iii) Because of local topography or periods of prolonged severe weather conditions, the other like hospitals are inaccessible for at least 30 days in each 2 out of 3 years.
(2) The hospital is located between 15 and 25 miles from other like hospitals but because of local topography or periods of prolonged severe weather conditions, the other like hospitals are inaccessible for at least 30 days in each 2 out of 3 years.
(3) Because of distance, posted speed limits, and predictable weather conditions, the travel time between the hospital and the nearest like hospital is at least 45 minutes.
(b)
(ii) If a hospital is seeking sole community hospital classification under paragraph (a)(1)(i) or (a)(1)(ii) of this section, the hospital must include the following information with its request:
(A) The hospital must provide patient origin data (for example, the number of patients from each zip code from which the hospital draws inpatients) for all inpatient discharges to document the boundaries of its service area.
(B) The hospital must provide patient origin data from all other hospitals located within a 35 mile radius of it or, if larger, within its service area, to document that no more than 25 percent of either all of the population or the Medicare beneficiaries residing in the hospital's service area and hospitalized for inpatient care were admitted to other like hospitals for care.
(iii)(A) If the hospital is unable to obtain the information required under paragraph (b)(1)(ii)(A) of this section concerning the residences of Medicare beneficiaries who were inpatients in other hospitals located within a 50 mile radius of the hospital or, if larger, within the hospital's service area, the hospital may request that HCFA provide this information.
(B) If a hospital obtains the information as requested under paragraph (b)(1)(iii)(A) of this section, that information is used by both the intermediary and HCFA in making the determination of the residences of Medicare beneficiaries under paragraphs (b)(1)(iii) and (b)(1)(iv) of this section, regardless of any other information concerning the residences of Medicare beneficiaries submitted by the hospital.
(iv) The intermediary reviews the request and send the request, with its recommendation, to HCFA.
(v) HCFA reviews the request and the intermediary's recommendation and forward its approval or disapproval to the intermediary.
(2)
(ii) When a court order or a determination by the Provider Reimbursement Review Board (PRRB) reverses an HCFA denial of sole community hospital status and no further appeal is made, the sole community hospital status is effective as follows:
(A) If the hospital's application was submitted prior to October 1, 1983, its status as a sole community hospital is effective at the start of the cost reporting period for which it sought exemption from the cost limits.
(B) If the hospital's application for sole community hospital status was filed on or after October 1, 1983, the effective date is 30 days after the date of HCFA's original written notification of denial.
(iii) When a hospital is granted retroactive approval of sole community hospital status by a court order or a PRRB decision and the hospital wishes its sole community hospital status terminated before the date of the court order or PRRB determination, it must submit written notice to the HCFA regional office within 90 days of the court order or PRRB decision. A written request received after the 90-day period is effective no later than 30 days after the request is submitted.
(iv) A hospital classified as a sole community hospital receives a payment djustment, as described in paragraph (d) of this section, effective with discharges occurring on or after 30 days after the date of HCFA's approval of the classification.
(3)
(4)
(ii) The cancellation becomes effective no later than 30 days after the date the hospital submits its request.
(iii) If a hospital requests that its sole community hospital classification be cancelled, it may not be reclassified as a sole community hospital unless it meets the following conditions:
(A) At least one full year has passed since the effective date of its cancellation.
(B) The hospital meets the qualifying criteria set forth in paragraph (a) of this section in effect at the time it reapplies.
(5)
(c)
(1) The term
(2) The term
(3) The term
(d)
(i) The Federal payment rate applicable to the hospitals as determined under § 412.63, subject to the regional floor defined in § 412.70(c)(6).
(ii) The hospital-specific rate as determined under § 412.73.
(iii) The hospital-specific rate as determined under § 412.75.
(2)
(e)
(2) To qualify for a payment adjustment on the basis of a decrease in discharges, a sole community hospital must submit its request no later than 180 days after the date on the intermediary's Notice of Amount of Program Reimbursement—
(i) Submit to the intermediary documentation demonstrating the size of the decrease in discharges, and the resulting effect on per discharge costs; and
(ii) Show that the decrease is due to circumstances beyond the hospital's control.
(3) The intermediary determines a lump sum adjustment amount not to exceed the difference between the hospital's Medicare inpatient operating costs and the hospital's total DRG revenue for inpatient operating costs based on DRG-adjusted prospective payment rates for inpatient operating costs (including outlier payments for inpatient operating costs determined under subpart F of this part and additional payments made for inpatient operating costs for hospitals that serve a disproportionate share of low-income patients as determined under § 412.106 and for indirect medical education costs as determined under § 412.105).
(i) In determining the adjustment amount, the intermediary considers—
(A) The individual hospital's needs and circumstances, including the reasonable cost of maintaining necessary core staff and services in view of minimum staffing requirements imposed by State agencies;
(B) The hospital's fixed (and semi-fixed) costs, other than those costs paid on a reasonable cost basis under part 413 of this chapter; and
(C) The length of time the hospital has experienced a decrease in utilization.
(ii) The intermediary makes its determination within 180 days from the date it receives the hospital's request and all other necessary information.
(iii) The intermediary determination is subject to review under subpart R of part 405 of this chapter.
(a)
(b)
(1) The hospital is located in a rural area (as defined in § 412.63(b)) and has the following number of beds, as determined under the provisions of § 412.105(b), available for use:
(i) Effective for discharges occurring before April 1, 1988, the hospital has 500 or more beds.
(ii) Effective for discharges occurring on or after April 1, 1988, the hospital has 275 or more beds during its most recently completed cost reporting period unless the hospital submits written documentation with its application that its bed count has changed since the close of its most recently completed cost reporting period for one or more of the following reasons:
(A) Merger of two or more hospitals.
(B) Reopening of acute care beds previously closed for renovation.
(C) Transfer to the prospective payment system of acute care beds previously classified as part of an excluded unit.
(D) Expansion of acute care beds available for use and permanently
(2) The hospital shows that—(i) At least 50 percent of its Medicare patients are referred from other hospitals or from physicians not on the staff of the hospital; and
(ii) At least 60 percent of the hospital's Medicare patients live more than 25 miles from the hospital, and at least 60 percent of all the services that the hospital furnishes to Medicare beneficiaries are furnished to beneficiaries who live more than 25 miles from the hospital.
(c)
(1)
(i) For hospitals applying for rural referral center status for cost reporting periods beginning on or after October 1, 1985 and before October 1, 1986, the national or regional case-mix index value; or
(ii) For hospitals applying for rural referral center status for cost—reporting periods beginning on or after October 1, 1986, the national case-mix index value as established by HCFA or the median case-mix index value for urban hospitals located in each region. In calculating the median case-mix index for each region, HCFA excludes the case-mix indexes of hospitals receiving indirect medical education payments as provided in § 412.105.
(2)
(A) For hospitals applying for rural referral center status for cost reporting periods beginning on or after October 1, 1985 and before October 1, 1986, the number of discharges under either the national or regional criterion; or
(B) For hospitals applying for rural referral center status for cost reporting periods beginning on or after October 1, 1986, 5,000 discharges or, if less, the median number of discharges for urban hospitals located in each region.
(ii) For cost reporting periods beginning on or after January 1, 1986, an osteopathic hospital, recognized by the American Osteopathic Healthcare Association (or any successor organization), that is located in a rural area must have at least 3,000 discharges during its most recently completed cost reporting period to meet the number of discharges criterion. The 3,000 discharches benchmark is also used in evaluating an osteopathic hospital for purposes of the triennial review.
(3)
(i) Are certified as specialists by one of the Member Boards of the American Board of Medical Specialties or the Advisory Board of Osteopathic Specialists.
(ii) Have completed the current training requirements for admission to the certification examination of one of the Member Boards of the American Board of Medical Specialties or the Advisory Board of Osteopathic Specialists.
(iii) Have successfully completed a residency program in a medical specialty accredited by the Accreditation Council of Graduate Medical Education or the American Osteopathic Association.
(4)
(5)
(d)
(e)-(f) [Reserved]
(g)
(2) The cancellation becomes effective no later than 30 days after the date the hospital submits its request.
(3) If a hospital requests that its referral center status be canceled, it may not be reclassified as a referral center unless it meets the qualifying criteria set forth in paragraph (a) of this section in effect at the time it reapplies.
(h)
(1)
(2)
(3)
(4)
(i)
(1)
(2)
(3)
(4)
For
(a)
(b)
(c)
(a)
(2) Kidney acquisition costs are treated apart from the prospective payment rate for inpatient operating costs, and payment to the hospital is adjusted in each reporting period to reflect an amount necessary to compensate the hospital for reasonable expenses of kidney acquisition.
(b)
(1) Tissue typing, including tissue typing furnished by independent laboratories;
(2) Donor and recipient evaluation;
(3) Other costs associated with excising kidneys, such as donor general routine and special care services;
(4) Operating room and other inpatient ancillary services applicable to the donor;
(5) Preservation and perfusion costs;
(6) Charges for registration of recipient with a kidney transplant registry;
(7) Surgeons' fees for excising cadaver kidneys;
(8) Transportation;
(9) Costs of kidneys acquired from other providers or kidney procurement organizations;
(10) Hospital costs normally classified as outpatient costs applicable to kidney excisions (services include donor and donee tissue typing, work-up, and related services furnished prior to admission);
(11) Costs of services applicable to kidney excisions which are rendered by residents and interns not in approved teaching programs; and
(12) All pre-admission physicians services, such as laboratory, electroencephalography, and surgeon
Effective on or after October 1, 1983, a hospital reclassified as rural, as defined in § 412.62(f), may receive an adjustment to its rural Federal payment amount for operating costs for two successive fiscal years.
(a)
(b)
(a)
(b)
(1) The payment is based on the estimated weekly cost of dialysis and the average length of stay of ESRD beneficiaries for the hospital.
(2) The estimated weekly cost of dialysis is the average number of dialysis sessions furnished per week during the 12-month period that ended June 30, 1983 multiplied by the average cost of dialysis for the same period.
(3) The average cost of dialysis includes only those costs determined to be directly related to the dialysis service. (These costs include salary, employee health and welfare, drugs, supplies, and laboratory services.)
(4) The average cost of dialysis is reviewed and adjusted, if appropriate, at the time the composite rate reimbursement for outpatient dialysis is reviewed.
(5) The payment to a hospital equals the average length of stay of ESRD beneficiaries in the hospital, expressed as a ratio to one week, times the estimated weekly cost of dialysis multiplied by the number of ESRD beneficiary discharges except for those excluded under paragraph (a) of this section. This payment is made only on the Federal portion of the payment rate.
HCFA makes an additional payment to hospitals for indirect medical education costs using the following procedures:
(a)
(1) The hospital's ratio of full-time equivalent residents, except as limited under paragraph (f) of this section, to the number of beds (as determined in paragraph (b) of this section). Except for the special circumstances for affiliated groups and new programs described in paragraphs (f)(1)(vi) and
(2) The hospital's DRG revenue for inpatient operating costs based on DRG-adjusted prospective payment rates for inpatient operating costs, excluding outlier payments for inpatient operating costs determined under subpart F of this part and additional payments made under the provisions of § 412.106 .
(b)
(c)
(d)
(1)
(2)
(3)
(i) For discharges occurring on or after October 1, 1988, and before October 1, 1997, 1.89.
(ii) For discharges occurring during fiscal year 1998, 1.72.
(iii) For discharges occurring during fiscal year 1999, 1.6.
(iv) For discharges occurring during fiscal year 2000, 1.47.
(v) For discharges occurring on or after October 1, 2000, 1.35.
(e)
(f)
(i) The resident must be enrolled in an approved teaching program. An approved teaching program is one that meets one of the following requirements:
(A) Is approved by one of the national organizations listed in § 415.200(a) of this chapter.
(B) May count towards certification of the participant in a specialty or subspecialty listed in the current edition of either of the following publications:
(
(
(C) Is approved by the Accreditation Council for Graduate Medical Education (ACGME) as a fellowship program in geriatric medicine.
(D) Is a program that would be accredited except for the accrediting agency's reliance upon an accreditation standard that requires an entity to perform an induced abortion or require, provide, or refer for training in the performance of induced abortions, or make arrangements for such training, regardless of whether the standard provides exceptions or exemptions.
(ii) In order to be counted, the resident must be assigned to one of the following areas:
(A) The portion of the hospital subject to the prospective payment system.
(B) The outpatient department of the hospital.
(C) Effective for discharges occurring on or after October 1, 1997, the time spent by a resident in a nonhospital setting in patient care activities under an approved medical residency training program is counted towards the determination of full-time equivalency if the criteria set forth at § 413.86(f)(4) are met.
(iii) Full-time equivalent status is based on the total time necessary to fill a residency slot. No individual may be counted as more than one full-time equivalent. If a resident is assigned to more than one hospital, the resident counts as a partial full-time equivalent based on the proportion of time worked in any of the areas of the hospital listed in paragraph (f)(1)(ii) of this section, to the total time worked by the resident. A part-time resident or one working in an area of the hospital other than those listed under paragraph (f)(1)(ii) of this section (such as a freestanding family practice center or an excluded hospital unit) would be counted as a partial full-time equivalent based on the proportion of time assigned to an area of the hospital listed in paragraph (f)(1)(ii) of this section, compared to the total time necessary to fill a full-time internship or residency slot.
(iv) Effective for discharges occurring on or after October 1, 1997, the total number of full-time equivalent residents in the fields of allopathic and osteopathic medicine in either a hospital or nonhospital setting that meets the criteria listed in paragraph (f)(1)(ii) of this section may not exceed the number of such full-time equivalent residents in the hospital with respect to the hospital's most recent cost reporting period ending on or before December 31, 1996.
(v) For a hospital's cost reporting periods beginning on or after October 1, 1997, and before October 1, 1998, the total number of full-time equivalent residents for payment purposes is equal to the average of the actual full-time equivalent resident counts (subject to the requirements listed in paragraphs (f)(1)(ii)(C) and (f)(1)(iv) of this section) for that cost reporting period and the preceding cost reporting period. For a hospital's cost reporting periods beginning on or after October 1, 1998, the total number of full-time equivalent residents for payment purposes is equal to the average of the actual full-time equivalent resident count (subject to the requirements set forth in paragraphs (f)(1)(ii)(C) and (f)(1)(iv) of this section) for that cost reporting period and the preceding two cost reporting periods.
(vi) Hospitals that are part of the same affiliated group (as described in § 413.86(b)) may elect to apply the limit at paragraph (f)(1)(iv) of this section on an aggregate basis.
(vii) If a hospital establishes a new medical residency training program, the hospital's FTE cap may be adjusted in accordance with the provisions of § 413.86(g)(6)(i) through (iv).
(2) To include a resident in the full-time equivalent count for a particular cost reporting period, the hospital must furnish the following information. The information must be certified by an official of the hospital and, if different, an official responsible for administering the residency program.
(i) A listing, by specialty, of all residents assigned to the hospital and providing services to the hospital during the cost reporting period.
(ii) The name and social security number of each resident.
(iii) The dates the resident is assigned to the hospital.
(iv) The dates the resident is assigned to other hospitals or other freestanding providers and any nonprovider setting during the cost reporting period.
(v) The proportion of the total time necessary to fill a residency slot that the resident is assigned to an area of the hospital listed under paragraph (f)(1)(ii) of this section.
(3) Fiscal intermediaries must verify the correct count of residents.
(g)
For
(a)
(i) The number of beds in a hospital is determined in accordance with § 412.105(b).
(ii) The number of patient days includes only those days attributable to areas of the hospital that are subject to the prospective payment system and excludes all others.
(iii) The hospital's location, in an urban or rural area, is determined in accordance with the definitions in § 412.62(f).
(2) The payment adjustment is applied to the hospital's DRG revenue for inpatient operating costs based on DRG-adjusted prospective payment rates for inpatient operating costs, excluding outlier payments for inpatient operating costs under subpart F of this part and additional payments made under the provisions of § 412.105.
(b)
(2)
(i) Determines the number of covered patient days that—
(A) Are associated with discharges occurring during each month; and
(B) Are furnished to patients who during that month were entitled to both Medicare Part A and SSI, excluding those patients who received only State supplementation;
(ii) Adds the results for the whole period; and
(iii) Divides the number determined under paragraph (b)(2)(ii) of this section by the total number of patient days that—
(A) Are associated with discharges that occur during that period; and
(B) Are furnished to patients entitled to Medicare Part A.
(3)
(4)
(i) A patient is deemed eligible for Medicaid on a given day if the patient is eligible for medical assistance under an approved State Medicaid plan on such day, regardless of whether particular items or services were covered or paid under the State plan.
(ii) The hospital has the burden of furnishing data adequate to prove eligibility for each Medicaid patient day claimed under this paragraph, and of verifying with the State that a patient was eligible for Medicaid during each claimed patient hospital day.
(5)
(c)
(1) The hospital's disproportionate patient percentage, as determined under paragraph (b)(5) of this section, is at least equal to one of the following:
(i) 15 percent, if the hospital is located in an urban area and has 100 or more beds, or is located in a rural area and has 500 or more beds.
(ii) 30 percent, if the hospital is located in a rural area and either has more than 100 beds and fewer than 500 beds or is classified as a sole community hospital under § 412.92 of this subpart.
(iii) 40 percent, if the hospital is located in an urban area and has fewer than 100 beds.
(iv) 45 percent, if the hospital is located in a rural area and has 100 or fewer beds.
(2) The hospital is located in an urban area, has 100 or more beds, and can demonstrate that, during its cost reporting period, more than 30 percent of its net inpatient care revenues are derived from State and local government payments for care furnished to indigent patients.
(d)
(2)
(A) If the hospital's disproportionate patient percentage is greater than 20.2 percent, the applicable payment adjustment factor is as follows:
(
(
(
(
(B) If the hospital's disproportionate patient percentage is less than 20.2 percent, the applicable payment adjustment factor is as follows:
(
(
(ii) If the hospital meets the criteria of paragraph (c)(1)(ii) of this section, the payment adjustment factor is equal to one of the following:
(A) If the hospital is classified as a rural referral center, the payment adjustment factor is 4 percent plus 60 percent of the difference between the hospital's disproportionate patient percentage and 30 percent.
(B) If the hospital is classified as a sole community hospital, the payment adjustment factor is 10 percent.
(C) If the hospital is classified as both a rural referral center and a sole community hospital, the payment adjustment factor is the greater of 10 percent or 4 percent plus 60 percent of the difference between the hospital's disproportionate patient percentage and 30 percent.
(D) If the hospital is not classified as either a sole community hospital or a
(iii) If the hospital meets the criteria of paragraph (c)(1)(iii) of this section, the payment adjustment factor is equal to 5 percent.
(iv) If the hospital meets the criteria of paragraph (c)(1)(iv) of this section, the payment adjustment factor is 4 percent.
(v) If the hospital meets the criteria of paragraph (c)(2) of this section, the payment adjustment factor is as follows:
(A) 30 percent for discharges occurring on or after April 1, 1990 and before October 1, 1991.
(B) 35 percent for discharges occurring on or after October 1, 1991.
(e)
(1) For FY 1998, 1 percent.
(2) For FY 1999, 2 percent.
(3) For FY 2000, 3 percent.
(4) For FY 2001, 4 percent.
(5) For FY 2002, 5 percent.
(6) For FYs 2003 and thereafter, 0 percent.
(a)
(1) For FY 1998, 0.5 percent.
(2) For FY 1999, 0.3 percent.
(b)
(1)
(i) The indirect medical education adjustment made under § 412.105.
(ii) The disproportionate share adjustment made under § 412.106.
(2)
(3)
(a)
(i) The hospital has 100 or fewer beds as defined in § 412.105(b) during the cost reporting period.
(ii) The hospital is not also classified as a sole community hospital under § 412.92.
(iii) At least 60 percent of the hospital's inpatient days or discharges were attributable to individuals receiving Medicare part A benefits during the hospital's cost reporting period as follows, subject to the provisions of paragraph (a)(1)(iv) of this section:
(A) The hospital's cost reporting period ending on or after September 30, 1987 and before September 30, 1988.
(B) If the hospital does not have a cost reporting period that meets the criterion set forth in paragraph (a)(1)(iii)(A) of this section, the hospital's cost reporting period beginning
(iv) If the cost reporting period determined under paragraph (a)(1)(iii) of this section is for less than 12 months, the hospital's most recent 12-month or longer cost reporting period before the short period is used.
(2)
(b)
(c)
(1) The Federal payment rate applicable to the hospital as determined under § 412.63, subject to the regional floor defined in § 412.70(c)(6).
(2) The amount, if any, determined as follows:
(i) For discharges occurring during the first three 12-month cost reporting periods that begin on or after April 1, 1990, 100 percent of the amount that the Federal rate determined under paragraph (c)(1) of this section is exceeded by the higher of the following:
(A) The hospital-specific rate as determined under § 412.73.
(B) The hospital-specific rate as determined under § 412.75.
(ii) For discharges occurring during any subsequent cost reporting period (or portion thereof) and before October 1, 1994, and for discharges occurring on or after October 1, 1997 and before October 1, 2001, 50 percent of the amount that the Federal rate determined under paragraph (c)(1) of this section is exceeded by the higher of the following:
(A) The hospital-specific rate as determined under § 412.73.
(B) The hospital-specific rate as determined under § 412.75.
(d)
(2) To qualify for a payment adjustment on the basis of a decrease in discharges, a Medicare-dependent, small rural hospital must submit its request no later than 180 days after the date on the intermediary's Notice of Amount of Program Reimbursement and it must—
(i) Submit to the intermediary documentation demonstrating the size of the decrease in discharges and the resulting effect on per discharge costs; and
(ii) Show that the decrease is due to circumstances beyond the hospital's control.
(3) The intermediary determines a lump sum adjustment amount not to exceed the difference between the hospital's Medicare inpatient operating costs and the hospital's total DRG revenue for inpatient operating costs based on DRG-adjusted prospective payment rates for inpatient operating costs (including outlier payments for inpatient operating costs determined under subpart F of this part and additional payments made for inpatient operating costs hospitals that serve a disproportionate share of low-income patients as determined under § 412.106 and
(i) In determining the adjustment amount, the intermediary considers—
(A) The individual hospital's needs and circumstances, including the reasonable cost of maintaining necessary core staff and services in view of minimum staffing requirements imposed by State agencies;
(B) The hospital's fixed (and semi-fixed) costs, other than those costs paid on a reasonable cost basis under part 413 of this chapter; and
(C) The length of time the hospital has experienced a decrease in utilization.
(ii) The intermediary makes its determination within 180 days from the date it receives the hospital's request and all other necessary information.
(iii) The intermediary determination is subject to review under subpart R of part 405 of this chapter.
(a)
(b)
(1) Is located outside any area that is a Metropolitan Statistical Area as defined by the Office of Management and Budget or that has been recognized as urban under § 412.62;
(2) Is not deemed to be located in an urban area under § 412.63;
(3) Is not classified as an urban hospital for purposes of the standardized payment amount by HCFA or the Medicare Geographic Classification Review Board; or
(4) Is not located in a rural county that has been redesignated to an adjacent urban area under § 412.232.
(c)
(2)
(i) The hospital must submit its request to its intermediary no later than 180 days after the date on the intermediary's notice of program reimbursement.
(ii) The request must include documentation specifically identifying the increased costs resulting from the hospital's participation in a rural health network and show that the increased costs during the cost reporting period will result in increased costs in subsequent cost reporting periods that are not already accounted for under the prospective payment system payment.
(iii) The hospital must show that the cost increases are incremental costs that would not have been incurred in the absence of the hospital's membership in a rural health network.
(iv) The hospital must show that the cost increases do not include amounts for start-up and one-time, nonrecurring costs attributable to its membership in a rural health network.
(3)
(i) The hospital's documentation and the intermediary's verification of that documentation.
(ii) The intermediary's analysis and recommendation of the request.
(iii) The hospital's Medicare cost report for the year in which the increase in costs occurred and the prior year.
(4)
(d)
(e)
Under the prospective payment systems, Medicare's total payment for inpatient hospital services furnished to a Medicare beneficiary by a hospital will equal the sum of the payments listed in §§ 412.112 through 412.115, reduced by the amounts specified in § 412.120.
A hospital is paid the following amounts on a per case basis:
(a) The appropriate prospective payment rate for inpatient operating costs for each discharge as determined in accordance with subparts D, E, and G of this part.
(b) Effective for cost reporting periods beginning on or after October 1, 1991, the appropriate prospective payment rate for capital-related costs for each discharge as determined in accordance with subpart M of this part.
(c) The appropriate outlier payment amounts determined under subpart F of this part.
(a)
(2)
(A) Three and one-half percent for payments attributable to portions of cost reporting periods occurring during Federal FY 1987;
(B) Seven percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) occurring during fiscal year 1988 and before January 1, 1988;
(C) Twelve percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) in fiscal year 1988 occurring on or after January 1, 1988;
(D) Fifteen percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) occurring during fiscal year 1989 and beginning on or after January 1,
(E) Ten percent for payments attributable to portions of cost-reporting periods occurring on or after October 1, 1991 and before the beginning of the hospital's first cost-reporting period beginning on or after October 1, 1991.
(ii) If a hospital's cost reporting period encompasses more than one Federal fiscal year, the reductions to capital-related payments are determined on a prorated monthly basis.
(3) For cost-reporting periods beginning on or after October 1, 1991, a hospital with a hospital-specific rate above the Federal capital rate is paid a hold-harmless payment for old capital determined in accordance with subpart M of this part.
(b)
(2) For cost reporting periods beginning on or after July 1, 1985, payment for the direct medical education costs of interns and residents in approved programs is made as described in § 413.86 of this chapter.
(3) Except as provided in § 413.86(c) of this chapter, for cost reporting periods during the prospective payment transition period, the costs of medical education must be determined in a manner that is consistent with the treatment of these costs for purposes of determining the hospital-specific portion of the payment rate as provided in subpart E of this part.
(c)
(2)(i) For cost reporting periods, or any part of a cost reporting period, beginning on or after January 1, 1989, through any part of a cost reporting period occurring before January 1, 1990, payment is determined on a reasonable cost basis for anesthesia services provided in a hospital by qualified nonphysician anesthetists employed by the hospital or obtained under arrangement, if the hospital demonstrates to its intermediary prior to April 1, 1989 that it meets the following criteria:
(A) The hospital is located in a rural area as defined in § 412.62(f) and is not deemed to be located in an urban area under the provisions of § 412.64(b)(3).
(B) The hospital must have employed or contracted with a qualified nonphysician anesthetist, as defined in § 410.66 of this chapter, as of January 1, 1988 to perform anesthesia services in that hospital. The hospital may employ or contract with more than one anesthetist; however, the total number of hours of service furnished by the anesthetists may not exceed 2,080 hours per year.
(C) The hospital must provide data for its entire patient population to demonstrate that, during calendar year 1987, its volume of surgical procedures (inpatient and outpatient) requiring anesthesia services did not exceed 250 procedures. For purposes of this section, a
(D) Each qualified nonphysician anesthetist employed by or under contract with the hospital has agreed in writing not to bill on a reasonable charge basis for his or her patient care in that hospital.
(ii) To maintain its eligibility for reasonable cost payment under paragraph (c)(2)(i) of this section in calendar years after 1989, a qualified hospital must demonstrate prior to January 1 of each respective year that for the prior year its volume of surgical procedures requiring anesthesia service did not exceed 500 procedures.
(iii) A hospital that did not qualify for reasonable cost payment for nonphysician anesthetist services furnished in calendar year 1989 can qualify for reasonable cost payment in subsequent calendar years, if it meets the criteria in § 412.113(c)(2)(i) (A), (B) and (D) above, and demonstrates to its intermediary prior to the start of the calendar year that it met these criteria. The hospital must provide data for its entire patient population to demonstrate that, during calendar year 1987 and the year immediately preceding its election of reasonable cost payment, its volume of surgical procedures (inpatient and outpatient) requiring anesthesia services did not exceed 500 procedures.
(iv) For administrative purposes for the calendar years after 1990, the volume of surgical procedures for the immediately preceding year is the sum of the surgical procedures for the nine month period ending September 30, annualized for the twelve month period.
(d)
For
(a)
(b)
(c)
(a)
(b)
(i)
(ii)
(iii)
(A) Is located in a rural area as defined in § 412.62(f); and
(B) Has 100 or fewer beds available for use.
(2)
(3)
(ii) For purposes of determining periodic interim payments under this paragraph, a hospital's estimated average prospective payment amount is computed as follows:
(A) If a hospital has no payment experience under the prospective payment system for operating costs, the intermediary computes the hospital's estimated average prospective payment amount for operating costs by multiplying its payment rates as determined under § 412.70(c), but without adjustment by a DRG weighting factor, by the hospital's case-mix index, and subtracting from this amount estimated deductibles and coinsurance.
(B) Effective for cost-reporting periods beginning on or after October 1, 1991, the intermediary computes a hospital's estimated average prospective payment amount for capital-related costs by multiplying its prospective payment rate as determined under § 412.340 or § 412.344(a), as applicable, and under § 412.308 for cost reporting periods beginning on or after October 1, 2001 but without adjustment by a DRG weighting factor, by the hospital's case-mix index. The intermediary may take into account estimated additional payments per discharge under § 412.348. If the hospital is paid under § 412.344(a)(1), the intermediary includes an estimated payment for old capital costs per discharge.
(C) If a hospital has payment experience under the prospective payment system for operating costs, and, for cost reporting periods beginning on or after October 1, 1991, for inpatient capital-related costs, the intermediary computes a hospital's estimated average prospective payment amount for operating costs and capital-related costs based on that payment experience, adjusted for projected changes, and subtracts from this amount estimated deductibles and coinsurance.
(4)
(ii)
(A) A hospital no longer meets the requirements of § 413.64(h);
(B) A hospital is receiving payment under the criterion in paragraph (b)(1)(i) of this section and the intemediary meets the prompt payment requirements of section 1816(c)(2) of the Act for three consecutive calendar months; or
(C) A hospital that is receiving payment under the criterion set forth in paragraph (b)(1)(iii) of this section no longer meets the criterion.
(iii)
(c)
(d)
(2)
(e)
(f)
(i) There is a delay by the intermediary in making payment to the hospital.
(ii) Due to an exceptional situation, there is a temporary delay in the hospital's preparation and submittal of bills to the intermediary beyond its normal billing cycle.
(2)
(3)
(4)
(a)
(b)
(1) If workers' compensation pays, in accordance with the applicable provisions of §§ 405.316 through 405.321 of this chapter.
(2) If automobile medical, no-fault, or liability insurance pays, in accordance with the applicable provisions of §§ 405.322 through 405.325 of this chapter.
(3) If an employer group health plan which is primary to Medicare pays for services to ESRD beneficiaries, in accordance with the applicable provisions of §§ 405.326 through 405.329 of this chapter.
(4) If an employer group health plan which is primary to Medicare pays for services to employees age 65-69 and their spouses age 65-69, in accordance with the applicable provisions of §§ 405.340 through 405.344 of this chapter.
When a hospital's ownership changes, as described in § 489.18 of this chapter, the following rules apply:
(a) Payment for the operating and capital-related costs of inpatient hospital services for each patient, including outlier payments, as provided in § 412.112, and payments for hemophilia clotting factor costs under § 412.115(b), are made to the entity that is the legal owner on the date of discharge. Payments are not prorated between the buyer and seller.
(1) The owner on the date of discharge is entitled to submit a bill for all inpatient hospital services furnished to a beneficiary regardless of when the beneficiary's coverage began or ended during a stay, or of how long the stay lasted.
(2) Each bill submitted must include all information necessary for the intermediary to compute the payment amount, whether or not some of that information is attributable to a period during which a different party legally owned the hospital.
(b) Other payments under § 412.113 and payments for bad debts as described in § 412.115(a), are made to each owner or operator of the hospital (buyer and seller) in accordance with the principles of reasonable cost reimbursement.
(a)
(1) A hospital that was excluded from the prospective payment system as a new rehabilitation hospital for a cost reporting period beginning on or after October 1, 1991 based on a certification under § 412.23(b)(8) regarding the inpatient population the hospital planned to treat during that cost reporting period, if the inpatient population actually treated in the hospital during that cost reporting period did not meet the requirements of § 412.23(b)(2).
(2) A hospital that had a unit excluded from the prospective payment system as a new rehabilitation unit for a cost reporting period beginning on or after October 1, 1991 based on a certification under § 412.30(a) regarding the inpatient population the hospital planned to treat in that unit during that period, if the inpatient population actually treated in the unit during
(3) A hospital that added new beds to its existing rehabilitation unit for a cost reporting period beginning on or after October 1, 1991 based on a certification under § 412.30(c) regarding the inpatient population the hospital planned to treat in these new beds during that cost reporting period, if the inpatient population actually treated in the new beds during that cost reporting period did not meet the requirements of § 412.23(b)(2).
(b)
(1) The intermediary calculates the difference between the amounts actually paid during the cost reporting period for which the hospital, unit, or beds were first excluded as a new hospital, new unit, or newly added beds, and the amount that would have been paid under the prospective payment systems for services furnished during that period.
(2) The intermediary makes a retroactive adjustment for the difference between the amount paid to the hospital based on the exclusion and the amount that would have been paid under the prospective payment systems.
Beginning with discharges occurring on or after October 1, 1987, hospitals located in Puerto Rico are subject to the rules governing the prospective payment system for inpatient operating costs. Except as provided in this subpart, the provisions of subparts A, B, C, F, G, and H of this part apply to hospitals located in Puerto Rico. Except for § 412.60, which deals with DRG classification and weighting factors, the provisions of subparts D and E, which describe the methodology used to determine prospective payment rates for inpatient operating costs for hospitals, do not apply to hospitals located in Puerto Rico. Instead, the methodology for determining prospective payment rates for inpatient operating costs for these hospitals is set forth in §§ 412.204 through 412.212.
(a)
(1) 75 percent of the Puerto Rico prospective payment rate for inpatient operating costs, as determined under § 412.208 or § 412.210; and
(2) 25 percent of a national prospective payment rate for inpatient operating costs, as determined under § 412.212.
(b)
(1) 50 percent of the Puerto Rico prospective payment rate for inpatient operating costs, as determined under § 412.208 or § 412.210; and
(2) 50 percent of a national prospective payment rate for inpatient operating costs, as determined under § 412.212.
(a)
(b)
(c)
(d)
(1) Adjusting for variations in case mix among hospitals;
(2) Excluding an estimate of indirect medical education costs;
(3) Adjusting for area variations in hospital wage levels; and
(4) Excluding an estimate of the payments for hospitals that serve a disproportionate share of low-income patients.
(e)
(f)
(i) The term
(ii) The term
(iii) The term
(2) A hospital classified as rural is deemed to be urban and receives the urban Puerto Rico payment amount if the county in which it is located meets the following criteria:
(i) At least 95 percent of the perimeter of the rural county is contiguous with urban counties.
(ii) The county was reclassified from an urban area to a rural area after April 20, 1983, as described in § 412.62(f)(1)(iv).
(iii) At least 15 percent of employed workers in the county commute to the central county of one of the adjacent MSAs.
(g)
(h)
(1) For hospitals located in an urban area, the rate equals the product of—
(i) The average standardized amount (computed under paragraphs (c) through (g) of this section) for hospitals located in an urban area; and
(ii) The weighting factor determined under § 412.60(b) for that DRG.
(2) For hospitals located in a rural area, the rate equals the product of—
(i) The average standardized amount (computed under paragraphs (c) through (g) of this section) for hospitals located in a rural area; and
(ii) The weighting factor determined under § 412.60(b) for that DRG.
(i)
(a)
(2) The rate is determined for hospitals located in large urban, other urban, or rural areas within Puerto Rico, as described in paragraphs (b) through (e) of this section.
(b)
(2) For discharges occurring on or after October 1, 1988, a hospital located in a rural county adjacent to one or more urban areas is deemed to be located in an urban area and receives the Federal payment amount for the urban area to which the greatest number of workers in the county commute if the rural county would otherwise be considered part of an urban area, under the standards for designating MSAs if the commuting rates used in determining outlying counties were determined on the basis of the aggregate number of resident workers who commute to (and, if applicable under the standards, from) the central county or central counties of all adjacent MSAs.
(3) For discharges occurring on or after October 1, 1988, for hospitals that consist of two or more separately located inpatient hospital facilities, the national adjusted prospective payment rate for inpatient operating costs is based on the geographic location of the hospital at which the discharge occurs.
(c)
(1) Increased by the applicable percentage changes determined under § 412.63 (g) and (h); and
(2) Reduced by a proportion equal to the proportion (estimated by HCFA) of the total amount of prospective payments that are additional payment amounts to hospitals located in Puerto Rico attributable to outlier cases under subpart F of this part.
(d)
(1) For hospitals located in a large urban or other urban area in Puerto Rico, the rate equals the product of—
(i) The average standardized amount (computed under paragraph (c) of this section) for the fiscal year for hospitals located in a large urban or other urban area; and
(ii) The weighting factor determined under § 412.60(b) for that DRG.
(2) For hospitals located in a rural area in Puerto Rico, the rate equals the product of—
(i) The average standardized amount (computed under paragraph (c) of this section) for the fiscal year for hospitals located in a rural area; and
(ii) The weighting factor (determined under § 412.60(b)) for that DRG.
(e)
(a)
(b)
(1) National urban adjusted standardized amount determined under § 412.63(j)(1)(i); and
(2) National rural adjusted average standardized amount determined under § 412.63(j)(2)(i).
(c)
(1) The national average standardized amount computed under paragraph (b) of this section; and
(2) The weighting factor (determined under § 412.60(b)) for that DRG.
(d)
Subpart G of this part sets forth rules for special treament of certain facilities under the prospective payment system for inpatient operating costs. The following sections in subpart G of this part do not apply to hospitals located in Puerto Rico:
(a) Section 412.92, sole community hospitals.
(b) Section 412.96, referral centers.
(a)
(2)
(3)
(i) A hospital that is a rural referral center, a sole community hospital, or both does not have to demonstrate a close proximity to the area to which it seeks redesignation.
(ii) If a hospital that is a rural referral center, a sole community hospital, or both qualifies for urban redesignation, it is redesignated to the urban area that is closest to the hospital. If
(iii) If a sole community hospital or rural referral center loses its special status as a result of redesignation, the hospital is considered to retain its special status for the purpose of applicability of the special rules in paragraph (a)(3) of this section.
(iv) A hospital that is redesignated under paragraph (a)(3) of this section may not be redesignated in the same fiscal year under paragraph (a)(2) of this section.
(4)
(5)
(i) An individual hospital may not be redesignated to another area for purposes of the wage index if the pre-reclassified average hourly wage for that area is lower than the pre-reclassified average hourly wage for the area in which the hospital is located.
(ii) For redesignations effective in fiscal years 1997 and 1998 and 2002 and thereafter, a hospital may not be redesignated for purposes of the standardized amount if the area to which the hospital seeks redesignation does not have a higher standardized amount than the standardized amount the hospital currently receives.
(iii) A hospital may not be redesignated to more than one area.
(b)
(1) The distance from the hospital to the area is no more than 15 miles for an urban hospital and no more than 35 miles for a rural hospital.
(2) At least 50 percent of the hospital's employees reside in the area.
(c)
(1) To demonstrate proximity to the area, the hospital must submit evidence of the shortest route over improved roads to the area and the distance of that route.
(2) For employee address data, the hospital must submit current payroll records that include information that establishes the home addresses by zip code of its employees.
(d)
(2)
(3)
(i) For hospital-specific data, the hospital must provide data from its most recently settled and most recently filed cost report.
(ii) For data on other hospitals, the hospital must base its application on the most recent revisions to the prospective payment rates for inpatient operating costs, as published in the
(e)
(i) The hospital's incurred wage costs are comparable to hospital wage costs in an urban or other rural area;
(ii) The hospital has the necessary geographic relationship as specified in paragraphs (a) and (b) of this section;
(iii) The hospital's average hourly wage is at least 108 percent of the average hourly wage of hospitals in the area in which the hospital is located; and
(iv) One of the following conditions apply:
(A) The hospital's average hourly wage is equal to at least 84 percent of the average hourly wage of hospitals in the area to which it seeks redesignation; or
(B) For redesignations effective before fiscal year 1999, the hospital's average hourly wage weighted for occupational categories is at least 90 percent of the average hourly wages of hospitals in the area to which it seeks redesignation.
(2)
(i) For hospital-specific data, the hospital must provide data from the HCFA hospital wage survey used to construct the wage index in effect for prospective payment purposes during the fiscal year prior to the fiscal year for which the hospital requests reclassification.
(ii) For data of other hospitals, the hospital must provide data concerning the following:
(A) The average hourly wage in the area in which the hospital is located and the average hourly wage in the area to which the hospital seeks reclassification. The wage data are taken from the HCFA hospital wage survey used to construct the wage index in effect for prospective payment purposes during the fiscal year prior to the fiscal year for which the hospital requests reclassification and;
(B) If the hospital is requesting reclassification under § 412.230(e)(1)(iv)(B), occupational-mix data to demonstrate the average occupational mix for each employment category in the area to which the hospital seeks reclassification. Occupational-mix data can be obtained from surveys conducted by the American Hospital Association.
(3)
(4)
(i) Its average hourly wage is at least 108 percent of the average hourly wage of all other hospitals in the area in which the hospital is located.
(ii) It pays at least 40 percent of the adjusted uninflated wages in the MSA.
(iii) It was approved for redesignation under this paragraph (e) for each year from fiscal year 1992 through fiscal year 1997.
(a)
(1) The county in which the hospitals are located must be adjacent to the MSA or NECMA to which they seek redesignation.
(2) All hospitals in a rural county must apply for redesignation as a group.
(3) The hospitals must demonstrate that the rural county in which they are located currently meets the criteria for metropolitan character under paragraph (b) of this section and the wage criteria under paragraph (c) of this section.
(4) The hospitals may be redesignated only if one of the following conditions is met:
(i) The pre-reclassified average hourly wage for the area to which they seek redesignation is higher than the pre-reclassified average hourly wage for the area in which they are currently located.
(ii) The standardized amount for the area to which they seek redesignation is higher than the standardized amount for the area in which they are located.
(b)
(c)
(1)
(2)
(d)
(ii) The MGCRB only considers data developed by the Bureau of the Census.
(2)
(i) For hospital-specific data, the hospitals must provide data from the HCFA wage survey used to construct the wage index in effect for prospective payment purposes during the fiscal year prior to the fiscal year for which the hospitals request reclassification.
(ii) For data for other hospitals, the hospitals must provide the following:
(A) The average hourly wage in the adjacent area, which is taken from the HCFA hospital wage survey used to construct the wage index in effect for prospective payment purposes during the fiscal year prior to the fiscal year for which the hospitals request reclassification.
(B) Occupational-mix data to demonstrate the average occupational mix for each employment category in the adjacent area. Occupational-mix data can be obtained from surveys conducted by the American Hospital Association.
(a)
(1) All hospitals in an urban county must apply for redesignation as a group.
(2) The county in which the hospitals are located must be adjacent to the urban area to which they seek redesignation.
(3) The county in which the hospitals are located must be part of the Consolidated Metropolitan Statistical Area (CMSA) that includes the urban area to which they seek redesignation.
(4) The hospitals may be redesignated only if one of the following conditions is met.
(i) The pre-reclassified average hourly wage for the area to which they seek redesignation is higher than the pre-reclassified average hourly wage for the area in which they are currently located.
(ii) The standardized amount for the area to which they seek redesignation is higher than the standardized amount for the area in which they are currently located.
(b)
(1)
(2)
(c)
(2)
(d)
(2)
(a)
(2) All the hospitals in a NECMA may qualify for redesignation by meeting the criteria in either § 412.234 or in paragraph (c) of this section.
(b)
(c)
(2) The hospitals must demonstrate that the NECMA to which they are designated would be combined as part of the NECMA to which they seek redesignation if the criteria for combining NECMAs were the same as the criteria used for combining MSAs.
(d)
(2) To meet the criterion in paragraph (b) of this section or the criteria in paragraph (c) of this section, hospitals must submit data from the Bureau of the Census.
(a)
(b)
(a)
(b)
(a)
(b)
(a)
(b)
(a)
(b)
(a)
(1) An application must be mailed or delivered to the MGCRB, with a copy to HCFA, and may not be submitted through the facsimile (FAX) process or by other electronic means.
(2) A complete application must be received not later than the first day of the 13-month period preceding the Federal fiscal year for which reclassification is requested.
(3) The filing date of an application is the date the application is received by the MGCRB.
(b)
(1) The Federal fiscal year for which the hospital is applying for redesignation.
(2) Which criteria constitute the basis of the request for reclassification.
(3) An explanation of how the hospital or hospitals meet the relevant criteria in §§ 412.230 through 412.236, including any necessary data to support the application.
(c)
(2) At the request of the hospital, the MGCRB may, for good cause, grant a hospital that has submitted an application by September 1, an extension beyond September 1 to complete its application.
(d)
(2) Within 20 days of receipt of the hospital's request for appeal, the Administrator will affirm the dismissal or reverse the dismissal and remand the case to the MGCRB to determine whether reclassification is appropriate.
(e)
(a) The party or parties to an MGCRB proceeding are the hospital or group of hospitals requesting a change in geographic designation.
(b) HCFA has 30 days from the date of receipt of notice of a complete application to submit written comments and recommendations (with a copy to the hospital) for consideration by the MGCRB.
(c) The hospital has 15 days from the date of receipt of HCFA's comments to submit written comments to the MGCRB, with a copy to HCFA, for the purpose of responding to HCFA's comments.
If the MGCRB decides that an oral hearing is necessary, it sets the time and place for the hearing and notifies the parties in writing, with a copy to HCFA, not less than 10 days before the time scheduled for the hearing. The MGCRB may reschedule, adjourn, postpone, or reconvene the hearing provided that reasonable written notice is given to the parties, with a copy to HCFA.
(a)
(b)
(c)
(d)
(a)
(b)
(c)
(2) The provisions in paragraph (c)(1) of this section do not apply to the following:
(i) Communications among MGCRB members and staff.
(ii) Communications concerning the MGCRB's administrative functions or procedures.
(iii) Requests from the MGCRB to a party or HCFA for a document.
(iv) Material that the MGCRB includes in the record after notice and an opportunity to comment.
(d)
A hospital may obtain the average hourly wage data necessary to prepare its application to the MGCRB from
(a)
(b)
(c)
(d)
Witnesses at an oral hearing testify under oath or affirmation, unless excused by the MGCRB for cause. The MGCRB may examine the witnesses and may allow the parties or their representatives to also examine any witnesses called.
A complete record of the proceedings before the MGCRB is made in all cases. The record will not be closed until a decision has been issued by the MGCRB. A transcription of an oral hearing will be made at a party's request, at the expense of the requesting party.
(a)
(1) At any time before the MGCRB issues a decision on the application; or
(2) After the MGCRB issues a decision, provided that the request for withdrawal is received by the MGCRB within 45 days of publication of HCFA's annual notice of proposed rulemaking concerning changes to the inpatient hospital prospective payment system and proposed payment rates for the fiscal year for which the application has been filed.
(b)
(c)
(2) Within 20 days of receipt of the hospital's request for appeal, the Administrator affirms or reverses the denial.
(a)
(b)
(c)
(1) A one-year automatic renewal of its decision.
(2) An abbreviated application and decision process for renewals.
(a)
(b)
(a)
(b)
(2) The request for review may contain proposed findings of fact and conclusions of law, exceptions to the MGCRB's decision, and supporting reasons therefor.
(3) Within 15 days of receipt of the hospital's request for review, HCFA may submit to the Administrator, in writing, with a copy to the party, comments and recommendations concerning the hospital's submission.
(4) Within 10 days of receipt of HCFA's submission, the hospital may submit in writing, with a copy to HCFA, a response to the Administrator.
(c)
(2) The Administrator promptly notifies the hospital that he or she has decided to review a decision of the MGCRB. The notice of review indicates the particular issues to be considered and includes copies of any comments submitted to the Administrator by HCFA staff concerning the MGCRB decision.
(3) Within 15 days of the receipt of the Administrator's notice of review, the hospital may submit a response in writing to the Administrator, with a copy of HCFA.
(d)
(1) The MGCRB made an erroneous interpretation of law, regulation, or HCFA Ruling.
(2) The MGCRB's decision is not supported by substantial evidence.
(3) The case presents a significant policy issue having a basis in law and regulations, and review is likely to lead to issuance of a HCFA Ruling or other directive needed to clarify a provision in the law or regulations.
(4) The decision of the MGCRB requires clarification, amplication, or an alternative legal basis.
(5) The MGCRB has incorrectly extended its authority to a degree not provided for by law, regulation, or HCFA Ruling.
(e)
(f)
(2) The Administrator issues a decision in writing to the party with a copy to HCFA—
(i) Not later than 90 days following receipt of the party's request for review; or
(ii) Not later than 105 days following issuance of the MGCRB decision in the case of review at the discretion of the Administrator.
(3) The Administrator's decision issued under § 412.278 (a) or (c) is the final Departmental decision, unless it is amended under § 412.278(g). The final Departmental decision is not subject to judicial review.
(4) The Administrator's decision is not subject to judicial review.
(g)
(i) The hospital's request for amendment must be received by the Administrator within 10 days after the date the Administrator issues a decision. The request for amendment must be in writing, with a copy to HCFA.
(ii) The Administrator promptly reviews the hospital's request and amends the decision, if necessary, within 5 days following receipt of the hospital's request for amendment.
(2)
(a)
(b)
(a)
(b)
(1) A hospital that builds new or replacement facilities at the same or another location even if coincidental with a change of ownership, a change in management, or a lease arrangement.
(2) A hospital that closes and subsequently reopens.
(3) A hospital that has been in operation for more than 2 years but has participated in the Medicare program for less than 2 years.
(4) A hospital that changes its status from a hospital that is excluded from the prospective payment systems to a hospital that is subject to the capital prospective payment systems.
(a)
(b)
(1) Allowable depreciation on assets based on the useful life guidelines used to determine depreciation expense in the hospital's base period.
(2) Allowable capital-related interest expense. Except as provided below, the amount of allowable capital-related interest expense that will be recognized as old capital is limited to the amount the hospital was legally obligated to pay as of December 31, 1990. Any allowable interest expense in excess of this limitation will be recognized as new capital.
(i) An increase in interest expense is recognized if the increase is due to periodic fluctuations of rates in variable interest rate loans or at the time of conversion from a variable rate loan to a fixed rate loan when no other changes in the terms of the loan are made.
(ii) If the terms of a debt instrument are revised after December 31, 1990, the
(iii) If short-term financing was used to acquire old capital assets and the debt is extended or “rolled-over”, a portion of the extended debt will be recognized as old capital. The portion will equal the ratio of the net book value as of the beginning of the applicable cost reporting period for depreciable assets that were in use in the base year, to the net book value as of the beginning of the base year cost reporting period for those assets. The net book value for the base year will not be adjusted to exclude assets that have been fully depreciated or removed from service since the base year. If the debt is related to specific assets, the ratio will be determined based on the values for those assets. The ratio will exclude assets that were acquired with other identifiable debt instruments. For purposes of this paragraph, short term financing is a debt that becomes due in no later than the earlier of 5 years or half of the average useful life of the assets to which the debt is related.
(iv) If old capital indebtedness is commingled with new capital debt, the allowable interest expense will be apportioned to old capital costs based on the ratio of the portion of the loan principal related to old capital indebtedness to the total loan principal.
(v) Investment income, excluding income from funded depreciation accounts, is used to reduce old capital interest expense based on the ratio of total old capital interest expense to total allowable interest expense in each cost reporting period.
(3) Allowable capital-related lease and rental costs for land and depreciable assets that were obligated as of December 31, 1990.
(i) Lease renewals up to the annual lease payment level obligated as of December 31, 1990 are recognized provided the same asset remains in use, the asset has a useful life of at least 3 years, and the annual lease payment is $1,000 or more for each item or service.
(ii) If a hospital-owned asset is sold or given to another party and that same asset is then leased back by the hospital, the amount of allowable capital-related costs recognized as old capital costs is limited to the amount allowed for that asset in the last cost reporting period that it was owned by the hospital.
(iii) If an entire hospital is leased without assumption of the hospital's asset costs after December 31, 1990, the amount of allowable capital-related costs recognized as old capital costs is limited to the amount allowed for old capital costs in the base year or the last cost reporting period these costs were recognized under this subpart, whichever is later.
(4) The portion of allowable costs for other capital-related expenses (including but not limited to, taxes, insurance, license and royalty fees on depreciable assets) resulting from applying the ratio of the hospital's gross old asset value to total asset value in each cost reporting period.
(5) The appropriate portion of the capital-related costs of related organizations under § 413.17 that would be recognized as old capital costs if these costs had been incurred directly by the hospital.
(6) Obligated capital costs that are recognized as old capital costs in accordance with paragraph (c) of this section.
(7) If a hospital had nonreimbursable costs applicable to an old capital asset as of December 31, 1990 that subsequently become allowable inpatient capital-related costs, the allowable costs for such an asset that are attributable to inpatient hospital services are recognized as old capital costs if a portion of the asset was in use for inpatient hospital care on December 31, 1990 and the costs meet all other provisions for recognition of old capital costs contained in this section.
(c)
(i)
(A) The obligation must arise from a binding written agreement that was executed on or before December 31, 1990 and that obligates the hospital on or before December 31, 1990.
(B) The capital asset must be put in use for patient care before October 1, 1994 except as provided in paragraph (c)(1)(iv) of this section.
(C) The hospital notifies the intermediary of the existence of obligated capital costs as provided in paragraph (c)(1)(v) of this section.
(D) The amount that is recognized as old capital cost is limited to the lesser of the actual allowable costs when the asset is put in use or the estimated costs of the capital expenditure at the time it was obligated as provided in paragraph (c)(1)(vi) of this section.
(ii)
(A) There was a binding contractual agreement that was executed on or before December 31, 1990 and obligates the hospital on or before December 31, 1990 for the lease or purchase of the item of equipment on or before December 31, 1990.
(B) There was a binding contractual agreement that was executed on or before December 31, 1990 and obligates the hospital on or before December 31, 1990 for financing the acquisition of the equipment; the item of equipment costs at least $100,000; and the item was specifically listed in an equipment purchase plan approved by the Board of Directors on or before December 31, 1990.
(iii)
(iv)
(A) The hospital must submit its request for an extended deadline with documentation of the extraordinary circumstances by the later of January 1, 1993 or 180 days after the extraordinary circumstance.
(B) The intermediary reviews the request and verifies the hospital's documentation, and forwards the request to HCFA within 60 days. Within 90 days, HCFA notifies the intermediary of its decision and, if an extension is granted, of the revised deadline for putting the asset in use for patient care service.
(v) The hospital must submit to its intermediary the binding agreement and supporting documents that relate to the obligated capital expenditure by the later of October 1, 1992, or within 90 days after the start of the hospital's first cost reporting period beginning on or after October 1, 1991. This documentation must include a project description (including details of any phased construction or financing) and an estimate of costs that were prepared no later than December 31, 1990.
(vi)
(B)
(C)
(vii)
(B) The intermediary advises the hospital of its determination by the later of the end of the hospital's first cost reporting period subject to the capital prospective payment system or 9 months after the receipt of the hospital's notification under paragraph (c)(1)(v) of this section.
(C) The actual amount that will be recognized as old capital costs is based on the lesser of the allowable costs for the asset when it is put into patient use or the amounts determined under paragraph (c)(1)(vi) of this section.
(viii)
(2)
(A) The hospital is required under State law to obtain preapproval of the capital project or acquisition by a designated State or local planning authority in the State in which it is located.
(B) The hospital filed an initial application for a certificate of need on or before December 31, 1989 that includes a detailed description of the project and its estimated cost and had not received approval or disapproval on or before September 30, 1990. If the hospital received conditional approval on or before September 30, 1990, the hospital's intermediary assesses the nature of the conditions. The hospital will be considered to have received approval for the project as of September 30, 1990 if the intermediary determines that the hospital received sufficient approval for the project to proceed without significant delay.
(C) The hospital expended the lesser of $750,000 or 10 percent of the estimated cost of the project on or before December 31, 1990; and
(D) The hospital put the asset into patient use on or before the later of September 30, 1996 or 4 years from the date the certificate of need was approved.
(ii) The provisions of paragraphs (c)(1) (iv) through (viii) of this section apply to projects that meet the criteria in paragraph (c)(2)(i) of this section.
(3)
(A) The hospital received any required certificate of need approval on or before December 31, 1990.
(B) The hospital's Board of Directors formally authorized the project with a detailed description of its scope and costs on or before December 31, 1990.
(C) The estimated cost of the project as of December 31, 1990 exceeds 5 percent of the hospital's total patient revenues during its base year.
(D) The capitalized cost that had been incurred for the project as of December 31, 1990 exceeded the lesser of $750,000 or 10 percent of the estimated project cost.
(E) The hospital began actual construction or renovation (“groundbreaking”) on or before March 31, 1991.
(F) The project is completed before October 1, 1994.
(ii) The provisions of paragraphs (c)(1) (iv) through (viii) of this section apply to projects that meet the criteria in paragraph (c)(3)(i) of this section.
(d)
(2)
(3)
(4) Hospitals may elect the simplified cost allocation methodology under the terms and conditions provided in the instructions for HCFA Form 2552.
(a)
(b)
(c)
(d)
(a)
(b)
(1) HCFA determines the standard Federal rate by adjusting the FY 1992
(2) Effective FY 1994, the standard Federal rate used to determine the Federal rate each year under paragraph (c) of this section is reduced by 7.4 percent.
(3) Effective FY 1996, the standard Federal rate used to determine the Federal rate each year under paragraph (c) of this section is reduced by 0.28 percent to account for the effect of the revised policy for payment of transfers under § 412.4(d).
(4) Effective FY 1998, the unadjusted standard Federal capital payment rate in effect on September 30, 1997, used to determine the Federal rate each year under paragraph (c) of this section is reduced by 15.68 percent.
(5) For discharges occurring on or after October 1, 1997 through September 30, 2002, the unadjusted standard Federal capital payment rate as in effect on September 30, 1997, used to determine the Federal rate each year under paragraph (c) of this section is further reduced by 2.1 percent.
(c)
(1)
(i)
(ii)
(2)
(3)
(4)
(ii) HCFA makes an adjustment to the Federal rate so that estimated aggregate payments for the fiscal year based on the Federal rate after any changes resulting from the annual reclassification and recalibration of the DRG weight in accordance with § 412.60(e) and in the geographic adjustment factors described in § 412.312(b)(2) equal estimated aggregate payments based on the Federal rate that would have been made without such changes.
(a)
(b)
(2)
(ii)
(iii)
(3)
(4)
(c)
(d)
(a)
(b)
(c)
(a)
(1) The hospital is located, for purposes of receiving payment under § 412.63(a), in an urban area, has 100 or more beds as determined in accordance with § 412.105(b) and serves low-income patients, as determined under § 412.106(b).
(2) The hospital meets the criteria in § 412.106(c)(2).
(b)
(2) If a hospital meets the criteria in § 412.106(c)(2) for purposes of hospital inpatient operating prospective payments, the disproportionate share adjustment factor is the factor that results from deeming the hospital to have the same disproportionate share patient percentage that would yield its operating disproportionate share adjustment.
(a)
(1) The hospital's number of full-time equivalent residents as determined under § 412.105(f).
(2) The hospital's average daily census is determined by dividing the total number of inpatient days in the acute inpatient area of the hospital by the number of days in the cost reporting period.
(3) The measurement of teaching activity is the ratio of the hospital's full-time equivalent residents to average daily census. This ratio cannot exceed 1.5.
(b)
(a)
(b)
(2) For the third year through the remainder of the transition period, the hospital is paid based on the fully prospective payment methodology or the hold-harmless payment methodology using the base period determined under § 412.328(a)(2).
(3) If the hospital is paid under the hold-harmless methodology described in § 412.344, the hold-harmless payment for old capital costs described in § 412.344(a)(1) is payable for up to and including 8 years and may continue beyond the first cost reporting period beginning on or after October 1, 2000.
(c)
(a)
(2)
(3)
(b)
(ii)
(iii)
(2)
(3)
(ii) For base year cost reporting periods ending after December 31, 1990 but beginning before October 1, 1991, HCFA determines a transfer adjustment factor as described in paragraph (b)(3)(i) of this section for a hospital using the applicable base year MEDPAR data on file as of the December 31 or June 30 occurring at least 6 months after the close of the approved base year.
(iii) For base year cost reporting periods beginning on or after October 1, 1991, the intermediary determines the transfer adjustment factor in place of HCFA as described in paragraph (b)(3)(i) of this section based on the most recent billing data available as of the date of the final determination of the hospital-specific rate.
(c)
(i) If the case is not a transfer, the factor equals 1.0.
(ii) If the case is a transfer, the factor equals the lesser of 1.0 or the ratio of the length of stay for the case divided by the geometric mean length of stay for the DRG.
(2)
(d)
(e)
(1)
(2)
(3)
(4)
(5)
(6)
(f)
(ii) The hospital may request redetermination for any cost reporting period beginning subsequent to the base period but no later than the later of the hospital's cost reporting period beginning in FY 1994 or the cost reporting period beginning after obligated capital that is recognized as old capital under § 412.302(b) is put in use.
(iii) The hospital must request a redetermination in writing no later than the date the cost report must be filed with the hospital's intermediary for the first cost reporting period beginning on or after October 1, 1991 or the cost reporting period that will serve as the new base period, whichever is later. The hospital's redetermination request must include the cost report for the new base period and an estimate of the revised hospital-specific rate indicating that the new rate exceeds the hospital's current hospital-specific rate.
(2)
(3)
(i) Divides the hospital's old capital costs for the new base period by the number of Medicare discharges in that cost reporting period (consistent with paragraph (b) of this section);
(ii) Divides the old capital costs per discharge by the hospital's transfer adjusted case-mix value for the new base period (consistent with paragraph (c) of this section);
(iii) Applies an update factor, if appropriate, to account for inflation occurring subsequent to the new base year, an exceptions payment adjustment factor, and a budget neutrality adjustment factor (consistent with paragraphs (d) and (e) of this section).
(4)
(5)
(g)
(2)
(ii) The final determination of the hospital-specific rate is effective retroactively to the beginning of the hospital's first cost reporting period beginning on or after October 1, 1991 or, in the case of a redetermination of the hospital-specific rate under § 412.328(f), to the beginning of the new base period.
(iii) The final determination of the hospital-specific rate is subject to administrative and judicial review in accordance with subpart R of part 405 of this chapter, governing provider reimbursement determinations and appeals.
(iv) The intermediary adjusts the hospital-specific rate to reflect any revisions that result from administrative or judicial review of the final determination of hospital-specific rate. The revised determination is effective retroactively to the same extent as in paragraph (g)(2)(ii) of this section.
(a)
(1)
(2)
(3)
(b)
(1)
(2)
(3)
(c)
(1)
(ii)
(2)
(3)
The payment amount for each discharge (as defined in § 412.4(a)) based on the hospital-specific rate determined under § 412.328 (e) or (f) is determined by multiplying the applicable hospital-specific rate by the DRG weighting factor applicable to the discharge under § 412.60 and the applicable hospital-specific rate percentage for the pertinent cost reporting period under § 412.340.
(a)
(1)
(2)
(b)
(c)
(2)
(ii) If the hospital-specific rate is redetermined in accordance with § 412.328(f), the intermediary makes a new determination of the applicable payment methodology. The new determination is effective retroactively to the beginning of the new base period.
(iii) If the hospital-specific rate is revised under § 412.328(g) as a result of administrative or judicial review, the intermediary makes a new determination of the applicable payment methodology. The new determination is effective retroactively to the beginning of the hospital's first cost reporting period beginning on or after October 1, 1991 or to the beginning of the new base period.
(d)
(1) For a hospital paid under the fully prospective payment methodology in the last hospital cost reporting period beginning before October 1, 1993, the intermediary compares the hospital's FY 1994 hospital-specific rate with the hospital's FY 1994 Federal rate (after taking into account the estimated effect of the payment adjustments and outlier payments).
(i) A hospital with a FY 1994 hospital-specific rate that is above the FY 1994 adjusted Federal rate is paid under the hold-harmless payment methodology described in § 412.344.
(ii) Subject to the provisions of § 412.328(f), a hospital with a FY 1994 hospital-specific rate that is below the FY 1994 adjusted Federal rate continues to be paid under the fully prospective payment methodology as described in § 412.340.
(iii) The intermediary notifies the hospital of the new determination of the hospital's payment methodology within 90 days of the hospital's first cost reporting period beginning on or after October 1, 1993. The new determination is effective to the beginning of the hospital's first cost reporting period beginning on or after October 1, 1993.
(2) A hospital paid under the hold-harmless payment methodology in the last cost reporting period beginning before October 1, 1993, will continue to be paid in accordance with the provisions of § 412.344.
A hospital paid under the fully prospective payment methodology receives a payment per discharge based on a proportion of the hospital-specific rate and the Federal rate as follows:
(a)
(1) 85 percent of reasonable costs for old capital costs (100 percent for sole community hospitals) plus an amount for new capital costs based on a proportion of the Federal rate. The proportion is equal to the ratio of the hospital's Medicare inpatient costs for new capital to total Medicare inpatient capital costs; or
(2) 100 percent of the Federal rate.
(3)
(ii) A hospital that does not maintain records that are adequate to identify its old capital costs is deemed to have elected payment per discharge based on 100 percent of the Federal rate.
(b)
(c)
(d)
(2) The final determination of the amount payable under paragraph (a) of this section is based on final settlement of the Medicare cost report for the applicable cost reporting period and is effective retroactively to the beginning of that cost reporting period. This final determination is subject to administrative and judicial review in accordance with subpart R of part 405 of this chapter, governing provider reimbursement determinations and appeals.
(a)
(b)
(c)
(i) 90 percent for sole community hospitals.
(ii) 80 percent for hospitals located in an urban area for purposes of § 412.63(a) with at least 100 beds, as determined under § 412.105(b), that have a disproportionate share patient percentage of at least 20.2 percent as determined under § 412.106(b), and for hospitals located in an urban area for purposes of § 412.63(a) with at least 100 beds that qualify for disproportionate share payments under § 412.106(c)(2).
(iii) 70 percent for all other hospitals.
(2) When it is necessary to adjust the minimum payment levels set by class of hospitals specified in paragraphs (c)(1)(i) and (g)(6) of this section, HCFA will adjust those levels for each class of hospitals in one percentage point increments as necessary to satisfy the requirement specified in paragraph (h) of this section that total estimated payments under the exception process not exceed 10 percent of the total estimated capital prospective payments (exclusive of hold-harmless payments for old capital) for the same fiscal year.
(d)
(e)
(2)
(f)
(2) A hospital must apply to its HCFA Regional Office by the later of October 1, 1992 or 180 days after the extraordinary circumstance causing the unanticipated expenditures for a determination by HCFA of whether the hospital is eligible for an additional payment based on the nature of the circumstances and the amount of financial loss documented by the hospital.
(3) Except for sole community hospitals, the additional payment is based on a minimum payment amount of 85 percent for Medicare's share of allowable capital-related costs attributable to the extraordinary circumstances. For sole community hospitals, the minimum payment amount is 100 percent.
(4) The minimum payment level applicable under paragraph (c)(1) of this section is adjusted to take into account the 85 percent minimum payment level (100 percent for sole community hospitals) under paragraph (f)(3) of this section for the unanticipated capital-related costs. The additional payment for the cost reporting period equals the difference between the adjusted minimum payment level and the
(g)
(1)
(i) Sole community hospitals.
(ii) Hospitals located in an urban area under § 412.63(a) with at least 100 beds, as determined under § 412.105(b), that either have a disproportionate share of at least 20.2 percent as determined under § 412.106(b) or qualify for disproportionate share payments under § 412.106(c)(2).
(iii) Hospitals with a combined inpatient Medicare and Medicaid utilization of at least 70 percent.
(2)
(3)
(4)
(i) The overall average occupancy rate in its metropolitan statistical area is at least 80 percent; or
(ii) After completion of the project, its capacity is no more than 80 percent of its prior capacity (in terms of bed size).
(5)
(i) $200 million; or
(ii) 100 percent of its operating cost during the first 12 month cost reporting period beginning on or after October 1, 1991.
(6)
(7)
(8)
(ii)
(B) Any amount by which the hospital's current year Medicare inpatient operating and capital prospective payment system payments (excluding, if applicable, 75 percent of the hospital's operating prospective payment system disproportionate share payments) exceed its Medicare inpatient operating
(h)
For FY 1992 through FY 1995, HCFA will determine an adjustment to the hospital-specific rate and the Federal rate proportionately so that the estimated aggregate payments under this subpart for inpatient hospital capital costs each fiscal year will equal 90 percent of what HCFA estimates would have been paid for capital-related costs on a reasonable cost basis under § 413.130 of this chapter.
Except as provided in § 412.374, hospitals located in Puerto Rico are subject to the rules in this subpart governing the prospective payment system for inpatient hospital capital-related costs.
(a) Payments for capital-related costs to hospitals located in Puerto Rico that are paid under the prospective payment system are equal to the sum of the following:
(1) 50 percent of a Puerto Rico capital rate based on data from Puerto Rico hospitals only, which is determined in accordance with procedures for developing the Federal rate; and
(2) 50 percent of the Federal rate, as determined under § 412.308.
(b) Effective for fiscal year 1998, the Puerto Rico capital rate described in paragraph (a) of this section in effect on September 30, 1997, is reduced by 15.68 percent.
(c) For discharges occurring on or after October 1, 1997 through September 30, 2002, the Puerto Rico capital rate described in paragraph (a) of this section in effect on September 30, 1997 is further reduced by 2.1 percent.
Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and (n), 1871, 1881, 1883, and 1886 of the Social Security Act (42 U.S.C. 1302, 1395f(b), 1395g, 1395l, 1395l(a), (i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww).
(a)
(B) Section 1814(b) of the Act (for Part A) and section 1833(a) (for Part B) provide for payment on the basis of the lesser of a provider's reasonable costs or customary charges.
(C) Section 1861(v) of the Act defines “reasonable cost”.
(ii)
(B) Section 1814(j) of the Act provides for exceptions to the “lower of costs or charges” provisions.
(C) Sections 1815(a) and 1833(e) of the Act provide the Secretary with authority to request information from providers to determine the amount of Medicare payment due providers.
(D) Section 1833(a)(4) and (i)(3) of the Act provide for payment of a blended amount for certain surgical services furnished in a hospital's outpatient department.
(E) Section 1833(n) of the Act provides for payment of a blended amount for outpatient hospital diagnostic procedures such as radiology.
(F) Section 1834(c)(1)(C) of the Act establishes the method for determining Medicare payment for screening mammograms performed by hospitals.
(G) Section 1834(g) of the Act provides that payment for critical access hospital (CAH) outpatient services is the reasonable costs of the CAH in providing these services, as determined in accordance with section 1861(v)(1)(A) of the Act and the applicable principles of cost reimbursement in this part and in part 415 of this chapter.
(H) Section 1881 of the Act authorizes payment for services furnished to ESRD patients.
(I) Section 1883 of the Act provides for payment for post-hospital SNF care furnished by a rural hospital that has swing-bed approval.
(J) Sections 1886(a) and (b) of the Act impose a ceiling on the rate of increase in hospital inpatient costs.
(K) Section 1886(h) of the Act provides for payment to a hospital for the services of interns and residents in approved teaching programs on the basis of a “per resident” amount.
(2)
(i) Hospitals and critical access hospitals (CAHs);
(ii) Skilled nursing facilities (SNFs);
(iii) Home health agencies (HHAs);
(iv) Comprehensive outpatient rehabilitation facilities (CORFs);
(v) End-stage renal disease (ESRD) facilities;
(vi) Providers of outpatient physical therapy and speech pathology services (OPTs); and
(vii) Organ procurement agencies (OPAs) and histocompatibility laboratories.
(viii) Community mental health centers (CMHCs) but only for purposes of furnishing partial hospitalization services.
(3)
(b)
(c)
(d)
(2) Payment to short-term general hospitals located in the 50 States and the District of Columbia for the operating costs of hospital inpatient services for cost reporting periods beginning on or after October 1, 1983, and for the capital-related costs of inpatient services for cost reporting periods beginning on or after October 1, 1991, are determined prospectively on a per discharge basis under part 412 of this chapter except as follows:
(i) Payment for capital-related costs for cost reporting periods beginning before October 1, 1991, medical education costs, kidney acquisition costs, and the costs of certain anesthesia services, is described in § 412.113 of this chapter.
(ii) Payment to children's, psychiatric, rehabilitation and long-term hospitals (as well as separate psychiatric and rehabilitation units (distinct parts) of short-term general hospitals), which are excluded from the prospective payment system under subpart B of part 412 of this chapter, and to hospitals outside the 50 States and the District of Columbia is on a reasonable cost basis, subject to the provisions of § 413.40.
(iii) Payment to hospitals subject to a State reimbursement control system is described in paragraph (e) of this section.
(e)
(f)
(g)
(2) The amount paid for services (other than those described in § 411.15(p)(2) of this chapter)—
(i) That are furnished in cost reporting periods beginning on or after July 1, 1998, to a resident who is in a covered Part A stay, is determined in accordance with the prospectively determined payment rates for SNFs established under section 1888(e) of the Act, as set forth in subpart J of this part.
(ii) That are furnished on or after July 1, 1998, to a resident who is not in a covered Part A stay, is determined in accordance with any applicable Part B fee schedule or, for a particular item or service to which no fee schedule applies, by using the existing payment
(a) In formulating methods for making fair and equitable reimbursement for services rendered beneficiaries of the program, payment is to be made on the basis of current costs of the individual provider, rather than costs of a past period or a fixed negotiated rate. All necessary and proper expenses of an institution in the production of services, including normal standby costs, are recognized. Furthermore, the share of the total institutional cost that is borne by the program is related to the care furnished beneficiaries so that no part of their cost would need to be borne by other patients. Conversely, costs attributable to other patients of the institution are not to be borne by the program. Thus, the application of this approach, with appropriate accounting support, will result in meeting actual costs of services to beneficiaries as such costs vary from institution to institution. However, payments to providers of services for services furnished Medicare beneficiaries are subject to the provisions of §§ 413.13 and 413.30.
(b) Putting these several points together, certain tests have been evolved for the principles of reimbursement and certain goals have been established that they should be designed to accomplish. In general terms, these are the tests or objectives:
(1) That the methods of reimbursement should result in current payment so that institutions will not be disadvantaged, as they sometimes are under other arrangements, by having to put up money for the purchase of goods and services well before they receive reimbursement.
(2) That, in addition to current payment, there should be retroactive adjustment so that increases in costs are taken fully into account as they actually occurred, not just prospectively.
(3) That there be a division of the allowable costs between the beneficiaries of this program and the other patients of the provider that takes account of the actual use of services by the beneficiaries of this program and that is fair to each provider individually.
(4) That there be sufficient flexibility in the methods of reimbursement to be used, particularly at the beginning of the program, to take account of the great differences in the present state of development of recordkeeping.
(5) That the principles should result in the equitable treatment of both nonprofit organizations and profit-making organizations.
(6) That there should be a recognition of the need of hospitals and other providers to keep pace with growing needs and to make improvements.
(c) As formulated herein, the principles given recognition to such factors as depreciation, interest, bad debts, educational costs, compensation of owners, and an allowance for a reasonable return on equity capital (in the case of certain proprietary providers). With respect to allowable costs some items of inclusion and exclusion are:
(1) An appropriate part of the net cost of approved educational activities will be included.
(2) Costs incurred for research purposes, over and above usual patient care, will not be included.
(3) [Reserved]
(4) The value of services provided by nonpaid workers, as members of an organization (including services of members of religious orders) having an agreement with the provider to furnish such services, is includable in the amount that would be paid others for similar work.
(5) Discounts and allowances received on the purchase of goods or services are reductions of the cost to which they relate.
(6) Bad debts growing out of the failure of a beneficiary to pay the deductible, or the coinsurance, will be reimbursed (after bona fide efforts at collection).
(7) Charity and courtesy allowances are not includable, although “fringe benefit” allowances for employees under a formal plan will be includable as part of their compensation.
(8) A reasonable allowance of compensation for the services of owners in profitmaking organizations will be allowed providing their services are actually performed in a necessary function.
(9) Reasonable cost of physicians' direct medical and surgical services (including supervision of interns and residents in the care of individual patients) furnished in a teaching hospital may be reimbursed as a provider cost (as described in § 415.162 of this chapter) if elected as provided for in § 415.160 of this chapter.
(d) In developing these principles of reimbursement for the Medicare program, all of the considerations inherent in allowances for depreciation were studied. The principles, as presented, provide options to meet varied situations. Depreciation will essentially be on an historical cost basis but since many institutions do not have adequate records of old assets, the principles provide an optional allowance in lieu of such depreciation for assets acquired before 1966. For assets acquired after 1965, the historical cost basis must be used. All assets actually in use for production of services for Medicare beneficiaries will be recognized even though they may have been fully or partially depreciated for other purposes. Assets financed with public funds may be depreciated. Although funding of depreciation is not required, there is an incentive for it since income from funded depreciation is not considered as an offset which must be taken to reduce the interest expense that is allowable as a program cost.
(e) A return on the equity capital of proprietary facilities, as described in § 413.157, is an allowance in addition to the reasonable cost of covered services furnished to beneficiaries.
(f) Renal dialysis items and services furnished under the ESRD provision are reimbursed and reported under §§ 413.170 and 413.174 respectively. For special rules concerning health maintenance organizations (HMOs), and providers of services and other health care facilities that are owned or operated by an HMO, or related to an HMO by common ownership or control, see §§ 417.242(b)(14) and 417.250(c) of this chapter.
(a)
(b)
(2)
(c)
(2) The costs of providers' services vary from one provider to another and the variations generally reflect differences in scope of services and intensity of care. The provision in Medicare for payment of reasonable cost of services is intended to meet the actual costs, however widely they may vary from one institution to another. This is subject to a limitation if a particular institution's costs are found to be substantially out of line with other institutions in the same area that are similar in size, scope of services, utilization, and other relevant factors.
(3) The determination of reasonable cost of services must be based on cost related to the care of Medicare beneficiaries. Reasonable cost includes all necessary and proper expenses incurred in furnishing services, such as administrative costs, maintenance costs, and premium payments for employee health and pension plans. It includes both direct and indirect costs and normal standby costs. However, if the provider's operating costs include amounts not related to patient care, specifically not reimbursable under the program, or flowing from the provision of luxury items or services (that is, those items or services substantially in excess of or more expensive than those generally considered necessary for the provision of needed health services), such amounts will not be allowable. The reasonable cost basis of reimbursement contemplates that the providers of services would be reimbursed the actual costs of providing quality care however widely the actual costs may vary from provider to provider and from time to time for the same provider.
(a)
(b)
(2)
(c)
(ii)
(iii)
(2)
(A) The rate-of-increase limits under § 413.40, effective with cost reporting periods beginning on or after October 1, 1982; or
(B) The prospective payment system under Part 412 of this chapter, effective with cost reporting periods beginning on or after October 1, 1983.
(ii)
(iii)
(B)
(iv)
(3)
(4)
(d)
(1) Payments made to a provider as reimbursement for bad debts arising from noncollection of Medicare deductible and coinsurance amounts (§ 413.80);
(2) Amounts that represent the recovery of excess depreciation resulting from termination in the Medicare program or a decrease in Medicare utilization (§ 413.134(d)(3)) applicable to prior cost reporting periods;
(3) Amounts that result from a disposition of depreciable assets (§ 413.134(f)), applicable to prior cost reporting periods;
(4) Payments to funds for the donated services of teaching physicians (§ 413.85); and
(5) Graduate medical education costs for cost reporting periods beginning on or after July 1, 1985.
(e)
(2)
(i) Did not actually impose charges in the case of most patients liable for payment for its services on a charge basis; or
(ii) Failed to make a reasonable effort to collect those charges.
(f)
(2)
(i)
(ii)
(iii)
(B) For HHAs, the determination of nominal charges for all items and services other than durable medical equipment is made on an aggregate basis. The nominal charge determination for durable medical equipment is made separately from other items or services furnished by HHAs.
(C) For cost reporting periods beginning on or after July 1, 1985, graduate medical education payments (or a provider's graduate medical education reasonable costs if supported by appropriate data) are included in reasonable costs when making the nominal charge determination.
(g)
(i) Any amounts attributable to physician services not reimbursable to the provider on a reasonable cost basis as described in §§ 415.55 through 415.70 of this chapter; and
(ii) All costs and charges for noncovered provider services.
(2)
(h)
(2)
(i) If total charges for services provided in that subsequent period exceed the total reasonable cost of the services; and
(ii) To the extent that accumulation of the costs being carried forward and the costs for the services provided in that subsequent period do not exceed the customary charges for those services.
(3)
(4)
(5)
(ii)
(A) If total charges for the services provided in that subsequent period exceed the total reasonable cost of the services; and
(B) To the extent that accumulation of the costs being carried forward and the costs for the services provided in that subsequent period do not exceed the customary charges for those services.
(iii)
(iv)
(a)
(b)
(2)
(3)
(c)
(2) If the provider obtains items of services, facilities, or supplies from an
(d)
(i) The supplying organization is a bona fide separate organization;
(ii) A substantial part of its business activity of the type carried on with the provider is transacted with others than the provider and organizations related to the supplier by common ownership or control and there is an open, competitive market for the type of services, facilities, or supplies furnished by the organization;
(iii) The services, facilities, or supplies are those that commonly are obtained by institutions such as the provider from other organizations and are not a basic element of patient care ordinarily furnished directly to patients by such institutions; and
(iv) The charge to the provider is in line with the charge for such services, facilities, or supplies in the open market and no more than the charge made under comparable circumstances to others by the organization for such services, facilities, or supplies.
(2) In such cases, the charge by the supplier to the provider for such services, facilities, or supplies is allowable as cost.
(a)
(b)
(c)
(1) The provider has an adequate ongoing system for furnishing the records needed to provide accurate cost data and other information capable of verification by qualified auditors and adequate for cost reporting purposes under section 1815 of the Act; and
(2) No financial arrangements exist that will thwart the commitment of the Medicare program to reimburse providers the reasonable cost of services furnished beneficiaries. The data and information to be examined include cost, revenue, statistical, and other information pertinent to reimbursement including, but not limited to, that described in paragraph (d) of this section and in § 413.24.
(d)
(i) Assure proper payment by the program, including the extent to which there is any common ownership or control (as described in § 413.17(b)(2) and (3)) between providers or other organizations, and as may be needed to identify the parties responsible for submitting program cost reports;
(ii) Receive program payments; and
(iii) Satisfy program overpayment determinations.
(2) The provider must permit the intermediary to examine such records and documents as are necessary to ascertain information pertinent to the determination of the proper amount of program payments due. These records include, but are not limited to, matters pertaining to—
(i) Provider ownership, organization, and operation;
(ii) Fiscal, medical, and other recordkeeping systems;
(iii) Federal income tax status;
(iv) Asset acquisition, lease, sale, or other action;
(v) Franchise or management arrangements;
(vi) Patient service charge schedules;
(vii) Costs of operation;
(viii) Amounts of income received by source and purpose; and
(ix) Flow of funds and working capital.
(3) The provider, upon request, must furnish the intermediary copies of patient service charge schedules and changes thereto as they are put into effect. The intermediary will evaluate such charge schedules to determine the extent to which they may be used for determining program payment.
(e)
(a)
(b)
(2)
(c)
(d)
(1)
(2)
(ii)
(3)
(4)
(5)
(A) The institution is located in a rural area as defined in § 482.66 of this chapter.
(B) On the first day of the cost reporting period, the hospital and distinct part SNF have fewer than 50 beds in total (with the exception of beds for newborns and beds in intensive care type inpatient units).
(ii) In applying the optional reimbursement method, only those beds located in the hospital general routine service area and in the distinct part SNF certified by Medicare are combined into a single cost center for purposes of cost finding.
(iii) The reasonable cost of the routine extended care services is determined in accordance with § 413.114(c). The reasonable cost of the hospital general routine services is determined in accordance with § 413.53(a)(2).
(iv) The hospital must make its election to use the optional swing-bed reimbursement method in writing to the intermediary before the beginning of the hospital's cost reporting year. The hospital must make any request to revoke the election in writing before the
(v) The intermediary must approve requests to terminate use of the optional swing-bed reimbursement method. If a hospital terminates use of this optional method, no further elections may be made by the facility to use the optional method.
(e)
(f)
(1)
(2)
(ii) Extensions of the due date for filing a cost report may be granted by the intermediary only when a provider's operations are significantly adversely affected due to extraordinary circumstances over which the provider has no control, such as flood or fire.
(3)
(i) Provider requests the change in writing from its intermediary;
(ii) Intermediary receives the request at least 120 days before the close of the new reporting period requested by the provider; and
(iii) Intermediary determines that good cause for the change exists. Good cause would not be found to exist if the effect is to change the initial date that a hospital would be affected by the rate of increase ceiling (see § 413.40), or be paid under the prospective payment systems (see part 412 of this chapter).
(4)
(ii) Effective for cost reporting periods beginning on or after October 1, 1989, for hospitals, and cost reporting periods ending on or after February 1, 1997, for skilled nursing facilities and home health agencies, a provider is required to submit cost reports in a standardized electronic format. The provider's electronic program must be capable of producing the HCFA standardized output file in a form that can be read by the fiscal intermediary's automated system. This electronic file, which must contain the input data required to complete the cost report and the data required to pass specified edits, is forwarded to the fiscal intermediary for processing through its system.
(iii) The fiscal intermediary stores the provider's as-filed electronic cost report and may not alter that file for any reason. The fiscal intermediary makes a “working copy” of the as-filed electronic cost report to be used, as necessary, throughout the settlement process (that is, desk review, processing audit adjustments, final settlement, etc). The provider's electronic program must be able to disclose if any changes have been made to the as-filed electronic cost report after acceptance by the intermediary. If the as-filed electronic cost report does not pass all specified edits, the fiscal intermediary rejects the cost report and returns it to the provider for correction. For purposes of the requirements in paragraph (f)(2) of this section concerning due
(iv) Effective for cost reporting periods ending on or after September 30, 1994, for hospitals, and cost reporting periods ending on or after, February 1, 1997, for skilled nursing facilities and home health agencies, a provider must submit a hard copy of a settlement summary, a statement of certain worksheet totals found within the electronic file, and a statement signed by its administrator or chief financial officer certifying the accuracy of the electronic file or the manually prepared cost report. During a transition period, skilled nursing facilities and home health agencies must submit a hard copy of the completed cost report forms in addition to the electronic file. The following statement must immediately precede the dated signature of the provider's administrator or chief financial officer:
I hereby certify that I have read the above certification statement and that I have examined the accompanying electronically filed or manually submitted cost report and the Balance Sheet Statement of Revenue and Expenses prepared by
(v) A provider may request a delay or waiver of the electronic submission requirement in paragraph (f)(4)(ii) of this section if this requirement would cause a financial hardship or if the provider qualifies as a low or no Medicare utilization provider. The provider must submit a written request for delay or waiver with necessary supporting documentation to its intermediary no later than 30 days after the end of its cost reporting period. The intermediary reviews the request and forwards it, with a recommendation for approval or denial, to HCFA central office within 30 days of receipt of the request. HCFA central office either approves or denies the request and notifies the intermediary within 60 days of receipt of the request.
(5) An acceptable cost report submission is defined as follows:
(i) All providers—The provider, must complete and submit the required cost reporting forms, including all necessary signatures. A cost report is rejected for lack of supporting documentation only if it does not include the Provider Cost Reimbursement Questionnaire. Additionally, a cost report for a teaching hospital is rejected for lack of supporting documentation if the cost report does not include a copy of the Intern and Resident Information System diskette.
(ii) For providers that are required to file electronic cost reports—In addition to the requirements of paragraphs (f)(4) and (f)(5)(i) of this section, the provider must submit its cost reports in an electronic cost report format in conformance with the requirements contained in the Electronic Cost Report (ECR) Specifications Manual (unless the provider has received an exemption from HCFA).
(iii) The intermediary makes a determination of acceptability within 30 days of receipt of the provider's cost report. If the cost report is considered unacceptable, the intermediary returns the cost report with a letter explaining the reasons for the rejection. When the cost report is rejected, it is deemed an unacceptable submission and treated as if a report had never been filed.
(g)
(h)
(2) If a full or simplified cost report is waived, the provider must submit within the same time period required for full or simplified cost reports:
(i) The cost reporting forms prescribed by HCFA for this situation; and
(ii) Any other financial and statistical data the intermediary requires.
(a)
(2)
(b)
(i) Type of services furnished.
(ii) Geographical area where services are furnished, allowing for grouping of noncontiguous areas having similar demographic and economic characteristics.
(iii) Size of institution.
(iv) Nature and mix of services furnished.
(v) Type and mix of patients treated.
(2) HCFA bases its estimates of the costs necessary for efficient delivery of health services on cost reports or other data providing indicators of current costs. HCFA adjusts current and past period data to arrive at estimated costs for the prospective periods to which limits are applied.
(3) Before the beginning of a cost period to which revised limits will be applied, HCFA publishes a notice in the
(4) In establishing limits under paragraph (b)(1) of this section, HCFA may find it inappropriate to apply particular limits to a class of SNFs or HHAs due to the characteristics of the SNF or HHA class, the data on which HCFA bases those limits, or the method by which HCFA determines the limits. In these cases, HCFA may exclude that class of SNFs or HHAs from the limits, explaining the basis of the exclusion in the notice setting forth the limits for the appropriate cost reporting periods.
(c)
(1)
(2)
(d)
(e)
(1)
(i) Actual cost of services furnished by a SNF or HHA exceeds the applicable limit because the services are atypical in nature and scope, compared to the services generally furnished by SNFs or HHAs similarly classified; and
(ii) Atypical services are furnished because of the special needs of the patients treated and are necessary in the efficient delivery of needed health care.
(2)
(3)
(i) Is located in an area (for example, a resort area) that has a population that varies significantly during the year.
(ii) Is furnishing services in an area for which the appropriate health planning agency has determined does not have a surplus of beds or services and has certified that the beds or services furnished by the SNF or HHA are necessary.
(iii) Meets occupancy or capacity standards established by the Secretary.
(4)
(5)
(f)
(a)
(1) The intermediary determines that the charges have been calculated properly in accordance with the provisions of this section;
(2) The services are not emergency services as defined in paragraph (d) of this section;
(3) The admitting physician has no direct or indirect financial interest in such provider;
(4) HCFA has provided notice to the public through notice in a newspaper of general circulation servicing the provider's locality and such other notice as the Secretary may require, of any charges the provider is authorized to impose on individuals entitled to benefits under Medicare on account of costs in excess of the costs determined to be necessary in the efficient delivery of needed health services under Medicare; and
(5) The provider has, in the manner described in paragraph (e) of this section, identified such charges to such individual or person acting on his behalf as charges to meet the costs in excess of the costs determined to be necessary in the efficient delivery of needed health services under Medicare.
(b)
(2) If a provider does not have a second preceding cost period and is a new provider as defined in § 413.30(e), the provider, subject to validation by the intermediary, will estimate the current cost of the service to which a limit is being applied. Such amount will be adjusted to an amount equivalent to costs in the second preceding year by use of a factor to be developed based on estimates of cost increases during the preceding two years and published by SSA or HCFA. The amount thus derived will be used in lieu of the second preceding cost period amount in determining the charge to the beneficiary.
(3) To obtain consideration of such a request, the provider must submit to the intermediary a statement indicating the chagre for which it is seeking validation and providing the data and method used to determine the amount. Such statement should include the—
(i) Provider's name and number;
(ii) Identity of class and prospective cost limit for the class in which the provider has been included;
(iii) Amount of charge and cost period in which the charge is to be imposed;
(iv) Cost and customary charge for items and services furnished to beneficiaries; and
(v) Cost period ending date of the second reporting period immediately preceding the cost period in which the charge is to be imposed. The intermediary may request such additional information as it finds necessary with respect to the request.
(c)
(2)
(d)
(e)
(a)
(2)
(A) Hospitals reimbursed in accordance with section 1814(b)(3) of the Act or under State reimbursement control systems that have been approved under section 1886(c) of the Act and subpart C of part 403 of this chapter; or
(B) Hospitals that are paid under the prospective payment systems for inpatient hospital services in accordance
(ii) For cost reporting periods beginning on or after October 1, 1983, this section applies to hospitals excluded from the prospective payment system in accordance with § 412.23 of this chapter, and psychiatric and rehabilitation units excluded from the prospective payment system in accordance with §§ 412.25 through 412.30 of this chapter.
(3)
(A) The patient is subsequently readmitted to the hospital-within-a-hospital directly from the other hospital; and
(B) The hospital-within-a-hospital has discharged to the other hospital and subsequently readmitted more than 5 percent (that is, in excess of 5.0 percent) of the total number of inpatients discharged from the hospital-within-a-hospital in that cost reporting period.
(A) The date the patient has exhausted Medicare Part A hospital inpatient benefits (including the election to use lifetime reserve days) during his or her spell of illness.
(B) The date the patient is formally released as specified in § 412.4(a)(1) of this chapter.
(C) The date the patient is transferred to another facility.
(D) The date the patient dies.
(b)
(i) The target amount established under this provision remains applicable to a hospital or excluded hospital unit, as described in §§ 412.25 through 412.30 of this chapter, despite intervening cost reporting periods during which the hospital or excluded hospital unit is not subject to the ceiling as a result of other provisions of the law or regulations, or nonparticipation in the Medicare program, unless the hospital or excluded hospital unit qualifies as a new hospital or excluded part hospital unit under the provisions of paragraph (f) of this section.
(ii) The base period for a newly established excluded unit is the first cost reporting period of at least 12 months following the unit's certification to participate in the Medicare program.
(iii) When the operational structure of a hospital or unit changes (that is, a freestanding hospital becomes an excluded unit or an excluded unit becomes a freestanding hospital, or an entity of a multicampus hospital becomes a newly created hospital or unit or a hospital or unit becomes a part of a multicampus hospital), the base period for the hospital or unit that changed its operational structure is the first cost reporting period of at least 12 months effective with the revised Medicare certification classification.
(iv)
(A) Determine the hospital's inpatient operating costs per case for each of the five most recent settled cost reports as of August 5, 1997.
(B) For each of the five cost reports, update the operating costs per case by the applicable update factors up to the hospital's cost reporting period beginning during FY 1998.
(C) Exclude the highest and lowest of the five updated amounts determined under paragraph (b)(1)(iv)(B) of this section.
(D) Compute the average for the remaining three updated amounts for operating cost per case.
(v)
(A) Its Medicare inpatient operating costs exceed 115 percent of the ceiling.
(B) The hospital would have had a disproportionate patient percentage (as defined in § 412.106) equal to or greater than 70 percent if it were a prospective payment hospital.
(2)
(i) Begin on or after October 1, 1982; and
(ii) Immediately follow the base period established under paragraph (b)(1) of this section unless the exception in
(3)
(c)
(2) Preadmission services otherwise payable under Medicare Part B furnished to a beneficiary during the calendar day immediately preceding the date of the beneficiary's admission to the hospital that meet the following conditions:
(i) The services are furnished by the hospital or any entity wholly owned or operated by the hospital. An entity is wholly owned by the hospital if the hospital is the sole owner of the entity. An entity is wholly operated by a hospital if the hospital has exclusive responsibility for conducting and overseeing the entity's routine perations, regardless of whether the hospital also has policymaking authority over the entity.
(ii) For services furnished after January 1, 1991, the services are diagnostic (including clinical diagnostic laboratory tests).
(iii) For services furnished on or after October 1, 1991, the services are furnished in connection with the principal diagnosis that requires the beneficiary to be admitted as an inpatient and are not the following:
(A) Ambulance services.
(B) Maintenance renal dialysis.
(3)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(A) The percentage increase in the market basket, if inpatient operating costs are equal to or exceed the ceiling amount by 10 percent or more of the ceiling.
(B) The percentage increase in the market basket minus .25 percentage points for each percentage point by which inpatient operating costs are less than 10 percent over the ceiling (but not less than 0), if inpatient operating costs exceed the ceiling by less than 10 percent of the ceiling.
(C) The greater of the percentage increase in the market basket minus 2.5 percentage points or 0 percent, if inpatient operating costs are equal to or less than the ceiling but greater than 66.7 percent of the ceiling.
(D) 0 percent, if inpatient operating costs do not exceed 66.7 percent of the ceiling.
(viii)
(4)
(i) Except as provided in paragraph (c)(4)(iv) of this section, and subject to the provisions of paragraph (c)(4)(iii) of this section, for the first cost reporting period to which this ceiling applies, the target amount equals the hospital's allowable net inpatient operating costs per case for the hospital's base period increased by the update factor for the subject period.
(ii) Subject to the provisions of paragraph (c)(4)(iii) of this section, for subsequent cost reporting periods, the target amount equals the hospital's target amount for the previous cost reporting period increased by the update factor for the subject cost reporting period, unless the provisions of paragraph (c)(5)(ii) of this section apply.
(iii) In the case of a psychiatric hospital or unit, rehabilitation hospital or unit, or long-term care hospital, the target amount is the lower of—
(A) The hospital-specific target amount (the net allowable costs in a base period increased by the applicable update factors); or
(B) One of the following for the applicable cost reporting period—
(
(
(iv) For purposes of the limits on target amounts established under paragraph (c)(4)(iii) of this section, each hospital or unit that qualifies for exclusion as a member of only one class of excluded facility (psychiatric hospital or unit, rehabilitation hospital or unit, or long-term care hospital) will be subject to the limit applicable to that class. If a hospital or unit qualifies to be classified in more than one way under the exclusion criteria in subpart B of part 412 of this chapter, the hospital's or unit's target amount may not exceed the lowest applicable limit.
(v) In the case of a hospital that received payments under paragraph (f)(2)(ii) of this section as a newly created hospital or unit, to determine the
(5)
(ii) In the case of cost reporting periods of less than 12 months, the target amount determined for a hospital's first cost reporting period beginning in a Federal fiscal year applies to subsequent periods beginning in the same Federal fiscal year.
(d)
(ii) The hospital's actual allowable costs will be determined without regard to the lesser of cost or charges provisions of § 413.13, and in accordance with the provisions of paragraphs (d)(2) or (d)(3) of this section, as applicable.
(2)
(i) Net inpatient operating costs plus 15 percent of the difference between inpatient operating costs and the ceiling; or
(ii) Net inpatient operating costs plus 2 percent of the ceiling.
(3)
(i) If a hospital's allowable net inpatient operating costs do not exceed 110 percent of the ceiling (or the adjusted ceiling, if applicable), payment will be the ceiling (or the adjusted ceiling, if applicable);
(ii) If a hospital's allowable net inpatient operating costs are greater than 110 percent of the ceiling (or the adjusted ceiling, if applicable), payment will be the ceiling (or the adjusted ceiling, if applicable) plus the lesser of:
(A) 50 percent of the allowable net inpatient operating costs in excess of 110 percent of the ceiling (or the adjusted ceiling, if applicable); or
(B) 10 percent of the ceiling (or the adjusted ceiling, if applicable).
(4)
(i) 50 percent of the amount by which the operating costs are less than the expected costs for the period; or
(ii) 1 percent of the ceiling.
(5)
(i) The hospital's target amount.
(ii) The hospital's trended costs.
(A) For a hospital for which its cost reporting period ending during fiscal year 1996 was its third or subsequent full cost reporting period, trended costs are the lesser of the allowable inpatient operating costs per discharge or the target amount for the cost reporting period ending in fiscal year 1996, increased in a compounded manner for each succeeding fiscal year by the market basket percentage increase;
(B) For all other hospitals, trended costs are the allowable inpatient operating costs per discharge for its third full cost reporting period increased in a compounded manner for each succeeding fiscal year by the market basket increase.
(iii) The hospital's expected costs. The hospital's expected costs are the
(e)
(2)
(3)
(4)
(ii) The final decision is subject to review under the provider reimbursement determination and appeal procedures in subpart R of part 405 of this chapter, provided the hospital has received an NPR for the cost reporting period in question, and the NPR disallows costs for which the hospital had requested an adjustment (see the definitions in § 405.1801(a) of this chapter and the provisions regarding a provider's right to a Board hearing in § 405.1835 of this chapter).
(5)
(6)
(f)
(A) Has operated as the type of hospital for which HCFA granted it approval to participate in the Medicare program, under present or previous ownership (or both), for less than 2 full years; and
(B) Has provided the type of hospital inpatient services for which HCFA granted it approval to participate in the Medicare program, for less than 2 years.
(ii)
(2)
(B) Within 180 days of the date a hospital is excluded from the prospective
(C) A decision issued under paragraph (f)(2)(ii)(B) of this section is considered final unless the hospital submits additional information and requests a review of the decision no later than 180 days after the date on the intermediary's notice of the decision. The final decision is subject to review under subpart R of part 405 of this chapter, provided the hospital has received a notice of program reimbursement (NPR) for the cost reporting period in question and the NPR does not reflect an exemption (see the definitions in § 405.1801(a) of this chapter and the provisions regarding a provider's right to a Board hearing in § 405.1835 of this chapter).
(ii)
(B) The national median of the target amounts is the FY 1996 median target amount—
(
(
(3)
(g)
(ii) When the hospital requests an adjustment, HCFA makes an adjustment only to the extent that the hospital's operating costs are reasonable, attributable to the circumstances specified separately, identified by the hospital, and verified by the intermediary.
(iii) When the hospital requests an adjustment, HCFA makes an adjustment only if the hospital's operating costs exceed the rate-of-increase ceiling imposed under this section.
(iv) In the case of a psychiatric hospital or unit, rehabilitation hospital or unit, or long-term care hospital, the amount of payment under paragraph (g)(3) of this section may not exceed the payment amount based on the target amount determined under paragraph (c)(4)(iii) of this section.
(v) In the case of a hospital or unit that received a revised FY 1998 target amount under the rebasing provisions of paragraph (b)(1)(iv) of this section, the amount of an adjustment payment for a cost reporting period is based on a comparison of the hospital's operating costs for the cost reporting period to the average costs and statistics for the cost reporting periods used to determine the FY 1998 rebased target amount.
(2)
(3)
(ii)
(A) FICA taxes (if the hospital did not incur costs for FICA taxes in its base period).
(B) Services billed under part B of Medicare during the base period, but paid under part A during the subject cost reporting period.
(C) Malpractice insurance costs (if malpractice costs were not included in the base year operating costs).
(D) Increases in service intensity or length of stay attributable to changes in the type of patient served.
(E) A change in the inpatient hospital services that a hospital provides, and that are customarily provided directly by similar hospitals, such as an addition or discontinuation of services or treatment programs.
(F) The manipulation of discharges to increase reimbursement.
(iii)
(4)
(ii)
(A) The rate of increase in the average hourly wage in the geographic area (determined by applying the applicable increase in the area wage index value to the rate of increase in the national average hourly earnings for hospital workers).
(B) The rate of increase in the hospital's average hourly wage.
(5)
(h)[Reserved]
(i)
(A) The actual allowable inpatient costs of the hospital in the cost reporting period that would be affected by the revised ceiling exceed the target amount established under paragraph (c) of this section.
(B) The hospital documents that the higher costs are the result of substantial and permanent changes in furnishing patient care services since the base period. In making this determination, HCFA takes into consideration the following factors:
(
(
(
(C) The adjustments described in paragraph (g) of this section would not result in recognition of the reasonable and necessary costs of providing inpatient services.
(ii) The revised ceiling is based on the necessary and proper costs incurred during the new base period.
(A) Increases in overhead costs (for example, administrative and general costs and housekeeping costs) are not taken into consideration unless the hospital documents that these increases result from substantial and permanent changes in furnishing patient care services.
(B) In determining whether wage increases are necessary and proper, HCFA takes into consideration whether increases in wages and wage-related costs for hospitals in the labor market area exceed the national average increase.
(2)
(3)
(j)
(a) Consistent with prevailing practice in which third-party organizations pay for health care on a cost basis, reimbursement under the Medicare program involves a determination of—
(1) Each provider's allowable costs for producing services; and
(2) The share of these costs which is to be borne by Medicare. The provider's costs are to be determined in accordance with the principles reviewed in the preceding discussion relating to allowable costs. The share to be borne by Medicare is to be determined in accordance with principles relating to apportionment of cost.
(b) In the study and consideration devoted to the method of apportioning costs, the objective has been to adopt methods for use under Medicare that would, to the extent reasonably possible, result in the program's share of a provider's total allowable costs being the same as the program's share of the provider's total services. This result is essential for carrying out the statutory directive that the program's payments to providers should be such that the costs of covered services for beneficiaries would not be passed on to nonbeneficiaries, nor would the cost of services for nonbeneficiaries be borne by the program.
(c) A basic factor bearing upon apportionment of costs is that Medicare beneficiaries are not a cross section of the total population. Nor will they constitute a cross section of all patients receiving services from most of the providers that participate in the program. Available evidence shows that the use of services by persons age 65 and over differs significantly from other groups. Consequently, the objective sought in the determination of the Medicare share of a provider's total costs means that the methods used for apportionment must take into account the differences in the amount of services received by patients who are beneficiaries and other patients serviced by the provider.
(d) The method of cost reimbursement most widely used at the present
(e) In considering the average-per-diem method of apportioning cost for use under the program, the difficulty encountered is that the preponderance of presently available evidence strongly indicates that the over-age 65 patient is not typical from the standpoint of average-per-diem cost. On the average this patient stays in the hospital twice as long and therefore the ancillary services that he uses are averaged over the longer period of time, resulting in an average-per-diem cost for the aged alone, significantly below the average-per-diem for all patients.
(f) Moreover, the relative use of services by aged patients as compared to other patients differs significantly among institutions. Consequently, considerations of equity among institutions are involved as well as that of effectiveness of the apportionment method under the program in accomplishing the objective of paying each provider fully, but only for services to beneficiaries.
(g) A further consideration of long-range importance is that the relative use of services by aged and other patients can be expected to change, possibly to a significant extent in future years. The ability of apportionment methods used under the program to reflect such change is an element of flexibility which has been regarded as important in the formulation of the cost reimbursement principles.
(h) An alternative to the relative number of days of care as a basis for apportioning costs is the relative amount of charges billed by the provider for services to patients. The amount of charges is the basis upon which the cost of hospital care is distributed among patients who pay directly for the services they receive. Payment for services on the basis of charges applies generally under insurance programs in which individuals are indemnified for incurred expenses, a form of health insurance widely held throughout the United States. Also, charges to patients are commonly a factor in determining the amount of payment to hospitals under insurance programs providing service benefits, many of which pay “costs or charges, whichever is less” and some of which pay exclusively on the basis of charges. In all of these instances, the provider's own charge structure and method of itemizing services for the purpose of assessing charges is utilized as a measure of the amount of services received and as the basis for allocating responsibility for payment among those receiving the provider's services.
(i) An increasing number of third-party purchasers who pay for services on the basis of cost are developing methods that utilize charges to measure the amount of services for which they have responsibility for payment. In this approach, the amount of charges for such services as a proportion of the provider's total charges to all patients is used to determine the proportion of the provider's total costs for which the third-party purchaser assumes responsibility. The approach is subject to numerous variations. It can be applied to the total of charges for all services combined or it can be applied to components of the provider's activities for which the amount of costs and charges are ascertained through a breakdown of data from the provider's accounting records.
(j) For the application of the approach to components, which represent types of services, the breakdown of total costs is accomplished by “cost-finding” techniques under which indirect costs and nonrevenue activities are allocated to revenue producing components for which charges are made as services are furnished.
(a)
(1)
(ii)
(A) Multiply the average cost per diem (as defined in paragraph (b) of this section) by the total number of Medicare patient days (including private room days whether or not medically necessary);
(B) Add the product of the average per diem private room cost differential (as defined in paragraph (b) of this section) and the number of medically necessary private room days used by beneficiaries; and
(C) Effective October 1, 1990, do not include private rooms furnished for SNF-type and NF-type services under the swing-bed provision in the number of days in paragraphs (a)(1)(ii)(A) and (B) of this section.
(2)
(ii) The cost per diem attributable to the routine SNF-type services covered by Medicare is based on the regional Medicare swing-bed SNF rate in effect for a given calendar year, as described in § 413.114(c). The Medicare SNF rate applies only to days covered and paid as Medicare days. When Medicare coverage runs out, the Medicare rate no longer applies.
(iii) The cost per diem attributable to all non-Medicare swing-bed days is based on the average statewide Medicaid NF rate for the prior calendar year, adjusted to approximate the average NF rate for the current calendar year.
(iv) The sum of total Medicare SNF-type days multiplied by the cost per diem attributable to Medicare SNF-type services and the total NF-type days multiplied by the cost per diem attributable to all non-Medicare days is subtracted from total inpatient general routine service costs. The cost per diem for inpatient routine hospital care is computed based on the remaining inpatient routine service costs.
(3)
(b)
(1) For cost reporting periods beginning on or after October 1, 1982, subject to the provisions on swing-bed hospitals, the average cost of general routine services net of the private room cost differential. The average cost per diem is computed by the following methodology:
(i) Determine the total private room cost differential by multiplying the average per diem private room cost differential determined in paragraph (c) of this section by the total number of private room patient days.
(ii) Determine the total inpatient general routine service costs net of the total private room cost differential by subtracting the total private room cost differential from total inpatient general routine service costs.
(iii) Determine the average cost per diem by dividing the total inpatient general routine service cost net of private room cost differential by all inpatient general routine days, including total private room days.
(2) For swing-bed hospitals, the amount computed by—(i) Subtracting the routine costs associated with Medicare SNF-type days and non-Medicare NF-type days from the total allowable inpatient cost for routine services (excluding the cost of services provided in intensive care units, coronary care units, and other intensive care type inpatient hospital units and nursery costs); and
(ii) Dividing the remainder (excluding the total private room cost differential) by the total number of inpatient hospital days of care (excluding Medicare SNF-type days and non-Medicare NF-type days of care, days of care in intensive care units, coronary care units, and other intensive care type inpatient hospital units; and newborn days; but including total private room days).
(c)
(1) Determine the average per diem private room charge differential by subtracting the average per diem charge for all semi-private room accommodations from the average per diem charge for all private room accommodations. The average per diem charge for private room accommodations is determined by dividing the total charges for private room accommodations by the total number of days of care furnished in private room accommodations. The average per diem charge for semi-private accommodations is determined by dividing the total charges for semi-private room accommodations by the total number of days of care furnished in semi-private accommodations.
(2) Determine the inpatient general routine cost to charge ratio by dividing total inpatient general routine service cost by the total inpatient general routine service charges.
(3) Determine the average per diem private room cost differential by multiplying the average per diem private room charge differential determined in paragraph (c)(1) of this section by the ratio determined in paragraph (c)(2) of this section.
(d)
(1) Is in a hospital;
(2) Is physically and identifiably separate from general routine patient care areas, including subintensive or intermediate care units, and ancillary service areas. There cannot be a concurrent sharing f nursing staff between an intensive care type unit and units or areas furnishing different levels or types of care. However, two or more intensive care type units that concurrently share nursing staff can be reimbursed as one combined intensive care type unit if all other criteria are met. Float nurses (nurses who work in different units on an as-needed basis) can be utilized in the intensive care type unit. If a float nurse works in two different units during the same eight hour shift, then the costs must be allocated to the appropriate units depending upon the time spent in those units. The hospital must maintain adequate records to support the allocation. If such records are not available, then the costs must be allocated to the general routine services cost areas;
(3) Has specific written policies that include criteria for admission to, and discharge from, the unit;
(4) Has registered nursing care available on a continuous 24-hour basis with at least one registered nurse present in the unit at all times;
(5) Maintains a minimum nurse-patient ratio of one nurse to two patients per patient day. Included in the calculation of this nurse-patient ratio are registered nurses, licensed vocational nurses, licensed practical nurses, and nursing assistants who provide patient care. Not included are general support personnel such as ward clerks, custodians, and housekeeping personnel; and
(6) Is equipped, or has available for immediate use, life-saving equipment necessary to treat the critically ill patients for which it is designed. This equipment may include, but is not limited to, respiratory and cardiac monitoring equipment, respirators, cardiac defibrillators, and wall or canister oxygen and compressed air.
(e)
(i) The following example illustrates how costs would be determined, using only inpatient data, for cost reporting periods beginning on or after October 1, 1982, based on apportionment of—
(A) The average cost per diem for general routine services (subject to the private room differential provisions of paragraph (a)(1)(iii) of this section);
(B) The average cost per diem for each intensive care type unit;
(C) The ratio of beneficiary charges to total charges applied to cost by department.
(ii) The following illustrates how apportionment based on an average cost per diem for general routine services is determined.
(2)
(a) The fiscal intermediaries will establish a basis for interim payments to each provider. This may be done by one of several methods. If an intermediary is already paying the provider on a cost basis, the intermediary may adjust its rate of payment to an estimate of the result under the Medicare principles of reimbursement. If no organization is paying the provider on a cost basis, the intermediary may obtain the previous year's financial statement from the provider and, by applying the principles of reimbursement, compute or approximate an appropriate rate of payment. The interim payment may be related to the last year's average per diem, or to charges, or to any other ready basis of approximating costs.
(b) At the end of the period, the actual apportionment, based on the cost finding and apportionment methods selected by the provider, determines the Medicare reimbursement for the actual services provided to beneficiaries during the period.
(c) Basically, therefore, interim payments to providers will be made for services throughout the year, with final settlement on a retroactive basis at the end of the accounting period. Interim payments will be made as often as possible and in no event less frequently than once a month. The retroactive payments will take fully into account the costs that were actually incurred and settle on an actual, rather than on an estimated basis.
(a)
(b)
(c)
(1) If the intermediary is already paying the provider on a cost or cost-related basis, the intermediary will adjust its rate of payment to the program's principles of reimbursement. This rate may be either an amount per inpatient day, or a percent of the provider's charges for services furnished to the program's beneficiaries.
(2) If an organization other than the intermediary is paying the provider for services on a cost or cost-related basis, the intermediary may obtain from that organization or from the provider itself the rate of payment being used and other cost information as may be needed to adjust that rate of payment to give recognition to the program's principles of reimbursement.
(3) It no organization is paying the provider on a cost or cost-related basis, the intermediary will obtain the previous year's financial statement from the provider. By analysis of such statement in light of the principles of reimbursement, the intermediary will compute an appropriate rate of payment.
(4) After the initial interim rate has been set, the provider may at any time request, and be allowed, an appropriate increase in the computed rate, upon presentation of satisfactory evidence to the intermediary that costs have increased. Likewise, the intermediary may adjust the interim rate of payment if it has evidence that actual costs may fall significantly below the computed rate.
(d)
(i) If there is a provider or providers comparable in substantially all relevant factors to the provider for which the rate is needed, the intermediary will base an interim rate of payment on the costs of the comparable provider.
(ii) If there are no substantially comparable providers from whom data are available, the intermediary will determine an interim rate of payment based on the budgeted or projected costs of the provider.
(2) Under either method, the intermediary will review the provider's cost experience after a period of three months. If need for an adjustment is indicated, the interim rate of payment will be adjusted in line with the provider's cost experience.
(e)
(f)
(2) In order to reimburse the provider as quickly as possible, an initial retroactive adjustment will be made as soon as the cost report is received. For this purpose, the costs will be accepted as reported, unless there are obvious errors or inconsistencies, subject to later audit. When an audit is made and the final liability of the program is determined, a final adjustment will be made.
(3) To determine the retroactive adjustment, the amount of the provider's total allowable cost apportioned to the program for the reporting year is computed. This is the total amount of reimbursement the provider is due to receive from the program and the beneficiaries for covered services furnished during the reporting period. The total of the interim payments made by the program in the reporting year and the deductibles and coinsurance amounts receivable from beneficiaries is computed. The difference between the reimbursement due and the payments made is the amount of the retroactive adjustment.
(g)
(h)
(2)
(i) Part A inpatient hospital services furnished in hospitals that are excluded from the prospective payment systems under subpart B of part 412 of this chapter.
(ii) Part A services furnished in hospitals receiving payment in accordance with a demonstration project authorized under section 402(a) of Public Law 90-248 (42 U.S.C. 1395b-1) or section 222(a) of Public Law 92-603 (42 U.S.C. 1395b-1 (note)), or a State reimbursement control system approved under section 1886(c) of the Act and subpart C of part 403 of this chapter, if that type of payment is specifically approved by HCFA as an integral part of the demonstration or control system. If that type of payment is not an integral part of the demonstration or control system, PIP is available for the hospital under paragraph (h)(1)(i) of this section for hospitals excluded from the prospective payment systems or under § 412.116(b) of this chapter for prospective payment hospitals.
(iii) Part A SNF services furnished in cost reporting periods beginning before July 1, 1998. (For services furnished in subsequent cost reporting periods, see § 413.350 regarding periodic interim payments for skilled nursing facilities).
(iv) Part A and Part B HHA services.
(v) Part A services furnished in hospitals paid under the prospective payment system, including distinct part psychiatric or rehabilitation units, as described in § 412.116(b) of this chapter.
(vi) Services furnished in a hospice as specified in part 418 of this chapter. Payment on a PIP basis is described in § 418.307 of this chapter.
(3) Any participating provider furnishing the services described in paragraph (h)(1) of this section that establishes to the satisfaction of the intermediary that it meets the following requirements may elect to be reimbursed under the PIP method, beginning with the first month after its request that the intermediary finds administratively feasible:
(i) The provider's estimated total Medicare reimbursement for inpatient services is at least $25,000 a year computed under the PIP formula or, in the case of an HHA, either its estimated—
(A) Total Medicare reimbursement for Part A and Part B services is at least $25,000 a year computed under the PIP formula; or
(B) Medicare reimbursement computed under the PIP formula is at least 50 percent of estimated total allowable cost.
(ii) The provider has filed at least one completed Medicare cost report accepted by the intermediary as providing an accurate basis for computation of program payment (except in the case of a provider requesting reimbursement under the PIP method upon first entering the Medicare program).
(iii) The provider has the continuing capability of maintaining in its records the cost, charge, and statistical data needed to accurately complete a Medicare cost report on a timely basis.
(iv) The provider has repaid or agrees to repay any outstanding current financing payment in full, such payment to be made before the effective date of its requested conversion from a regular interim payment method to the PIP method.
(4) No conversion to the PIP method may be made with respect to any provider until after that provider has repaid in full its outstanding current financing payment.
(5) The intermediary's approval of a provider's request for reimbursement under the PIP method will be conditioned upon the intermediary's best judgment as to whether payment can be made to the provider under the PIP method without undue risk of its resulting in an overpayment because of greatly varying or substantially declining Medicare utilization, inadequate billing practices, or other circumstances. The intermediary may terminate PIP reimbursement to a provider at any time it determines that the provider no longer meets the qualifying requirements or that the provider's experience under the PIP method shows that proper payment cannot be made under this method.
(6) Payment will be made biweekly under the PIP method unless the provider requests a longer fixed interval (not to exceed one month) between payments. The payment amount will be computed by the intermediary to approximate, on the average, the cost of covered inpatient or home health services furnished by the provider during the period for which the payment is to be made, and each payment will be made two weeks after the end of such period of services. Upon request, the intermediary will, if feasible, compute the provider's payments to recognize significant seasonal variation in Medicare utilization of services on a quarterly basis starting with the beginning of the provider's reporting year.
(7) A provider's PIP amount may be appropriately adjusted at any time if the provider presents or the intermediary otherwise obtains evidence relating to the provider's costs or Medicare utilization that warrants such adjustment. In addition, the intermediary will recompute the payment immediately upon completion of the desk review of a provider's cost report and also at regular intervals not less often than quarterly. The intermediary may make a retroactive lump sum interim payment to a provider, based upon an increase in its PIP amount, in order to bring past interim payments for the provider's current cost reporting period into line with the adjusted payment amount. The objective of intermediary monitoring of provider costs and utilization is to assure payments approximating, as closely as possible, the reimbursement to be determined at settlement for the cost reporting period. A significant factor in evaluating the amount of the payment in terms of the realization of the projected Medicare utilization of services
(i)
(j)
(2)
(3)
(a) Except as provided in paragraph (b) of this section, payment for inpatient and outpatient services of a CAH is the reasonable costs of the CAH in providing such services, as determined in accordance with section 1861(v)(1)(A) of the Act and the applicable principles of cost reimbursement in this part and in part 415 of this chapter.
(b) The following payment principles are excluded when determining payment for CAH inpatient and outpatient services:
(1) For inpatient services—
(i) Lesser of cost or charges;
(ii) Ceilings on hospital operating costs; and
(iii) Reasonable compensation equivalent (RCE) limits for physician services to providers;
(2) For outpatient services—
(i) Lesser of costs or charges;
(ii) RCE limits;
(iii) Any type of reduction to operating or capital costs under § 413.124 or § 413.130(j)(7) of this part;
(iv) Blended payment amounts for ASC, radiology, and other diagnostic services; and
(v) Clinical laboratory fee schedule.
(a)
(b)
(c)
(d)
(a)
(b)
(2)
(3)
(c)
(d)
(e)
(1) The debt must be related to covered services and derived from deductible and coinsurance amounts.
(2) The provider must be able to establish that reasonable collection efforts were made.
(3) The debt was actually uncollectible when claimed as worthless.
(4) Sound business judgment established that there was no likelihood of recovery at any time in the future.
(f)
(g)
(h)
(1) For cost reporting periods beginning during fiscal year 1998, by 25 percent;
(2) For cost reporting periods beginning during fiscal year 1999, by 40 percent; and
(3) For cost reporting periods beginning during a subsequent fiscal year, by 45 percent.
(i)
(a)
(2)
(b)
(c)
(d)
(1) Orientation and on-the-job training;
(2) Part-time education for bona fide employees at properly accredited academic or technical institutions (including other providers) devoted to undergraduate or graduate work;
(3) Costs, including associated travel expense, or sending employees to educational seminars and workshops that increase the quality of medical care or operating efficiency of the provider;
(4) Maintenance of a medical library;
(5) Training of a patient or patient's family in the use of medical appliances;
(6) Clinical training of students not enrolled in an approved education program operated by the provider; and
(7) Other activities that do not involve the actual operation of an approved education program including the costs of interns and residents in anesthesiology who are employed to replace anesthetists.
(e)
(f)
(g)
(h)
(2) Medicare+Choice organizations may receive direct graduate medical education payments if all of the following conditions are met:
(i) The resident spends his or her time in patient care activities.
(ii) The Medicare+Choice organization incurs “all or substantially all” of the costs for the training program in the nonhospital setting as defined in § 413.86(b).
(iii) There is a written agreement between the Medicare+Choice organization and the nonhospital site that indicates the Medicare+Choice organization will incur the costs of the resident's salary and fringe benefits and provide reasonable compensation to the nonhospital site for teaching activities.
(3) A Medicare+Choice organization's allowable direct graduate medical education costs, subject to the redistribution and community support principles in § 413.85(c), consist of—
(i) Residents' salaries and fringe benefits (including travel and lodging where applicable); and
(ii) Reasonable compensation to the nonhospital site for teaching activities related to the training of medical residents.
(4) The direct graduate medical education payment is equal to the product of—
(i) The lower of—
(A) The Medicare+Choice organization's allowable direct graduate medical education costs per resident as defined in paragraph (h)(3) of this section; or
(B) The national average per resident amount; and
(ii) Medicare's share, which is equal to the ratio of the number of Medicare beneficiaries enrolled to the total number of individuals enrolled in the Medicare+Choice organization.
(5) Direct graduate medical education payments made to Medicare+Choice organizations under this section are made from the Federal Supplementary Medical Insurance Trust Fund.
(a)
(2)
(b)
(1) Two or more hospitals located in the same urban or rural area (as those terms are defined in § 412.62(f) of this subchapter) or in contiguous areas if individual residents work at each of the hospitals during the course of the program; or
(2) If the hospitals are not located in the same or a contiguous urban or
(i) As the sponsor, primary clinical site or major participating institution for one or more of the programs as these terms are used in
(ii) As the sponsor or under “affiliations and outside rotations” for one or more programs in operation in
(3) The hospitals are under common ownership.
(1) Is approved by one of the national organizations listed in § 415.152 of this chapter.
(2) May count towards certification of the participant in a specialty or subspecialty listed in the current edition of either of the following publications:
(i) The Directory of Graduate Medical Education Programs published by the American Medical Association, and available from American Medical Association, Department of Directories and Publications, 515 North State Street, Chicago, Illinois 60610; or
(ii) The Annual Report and Reference Handbook published by the American Board of Medical Specialties, and available from American Board of Medical Specialties, One Rotary Center, suite 805, Evanston, Illinois 60201.
(3) Is approved by the Accreditation Council For Graduate Medical Education (ACGME) as a fellowship program in geriatric medicine.
(4) Is a program that would be accredited except for the accrediting agency's reliance upon an accreditation standard that requires an entity to perform an induced abortion or require, provide, or refer for training in the performance of induced abortions, or make arrangements for such training, regardless of whether the standard provides exceptions or exemptions.
(1) The Liaison Committee on Medical Education of the American Medical Association.
(2) The American Osteopathic Association.
(3) The Commission on Dental Accreditation.
(4) The Council on Podiatric Medical Education.
(c)
(d)
(1)
(2)
(3)
(i) 20 percent for 1998;
(ii) 40 percent for 1999;
(iii) 60 percent in 2000;
(iv) 80 percent in 2001; and
(v) 100 percent in 2002 and subsequent years.
(4)
(5)
(e)
(A) Determine the allowable graduate medical education costs for the cost reporting period beginning on or after October 1, 1983 but before October 1, 1984. In determining these costs, graduate medical education costs allocated to the nursery cost center, research and other nonreimbursable cost centers, and hospital-based providers that are not participating in Medicare are excluded and graduate medical education costs allocated to distinct-part hospital units and hospital-based providers that participate in Medicare are included.
(B) Divide the costs calculated in paragraph (e)(1)(i)(A) of this section by the average number of FTE residents working in all areas of the hospital complex (including those areas whose costs were excluded under paragraph (e)(1)(i)(A) of this section) for its cost reporting period beginning on or after October 1, 1983 but before October 1, 1984.
(ii) In determining the base-period per resident amount under paragraph (e)(1)(i) of this section, the intermediary—
(A) Verifies the hospital's base-period graduate medical education costs and the hospital's average number of FTE residents;
(B) Excludes from the base-period graduate medical education costs any nonallowable or misclassified costs, including those previously allowed under § 412.113(b)(3) of this chapter; and
(C) Upon a hospital's request, includes graduate medical education costs that were misclassified as operating costs during the hospital's prospective payment base year and were not allowable under § 412.113(b)(3) of this chapter during the graduate medical education base period. These costs may be included only if the hospital requests an adjustment of its prospective payment hospital-specific rate or target amount as described in paragraph (k)(1) of this section.
(iii) If the hospital's cost report for its GME base period is no longer subject to reopening under § 405.1885 of this chapter, the intermediary may modify the hospital's base-period costs solely for purposes of computing the per resident amount.
(iv) If the intermediary modifies a hospital's base-period graduate medical education costs as described in paragraph (e)(1)(ii)(B) of this section, the hospital may request an adjustment of its prospective payment hospital-specific rate or target amount as described in paragraph (k)(1) of this section.
(v) The intermediary notifies each hospital that either had direct graduate medical education costs or received indirect education payment in its cost reporting period beginning on or after October 1, 1984 and before October 1, 1985 of its base-period average per resident amount. A hospital may appeal this amount within 180 days of the date of that notice.
(2)
(i) If a hospital's base period began on or after October 1, 1983 and before July 1, 1984, the amount is adjusted by the percentage change in the CPI-U that occurred between the hospital's base period and the first cost reporting period to which the provisions of this section apply. The adjusted amount is then increased by one percent.
(ii) If a hospital's base period began on or after July 1, 1984 and before October 1, 1984, the amount is increased by one percent.
(3)
(i) Except as provided in paragraph (e)(3)(ii) of this section, each hospital's per resident amount for the previous cost reporting is adjusted by the projected change in the CPI-U for the 12-month cost reporting period. This adjustment is subject to revision during the settlement of the cost report to reflect actual changes in the CPI-U that occurred during the cost reporting period.
(ii) For cost reporting periods beginning on or after October 1, 1993 through September 30, 1995, each hospital's per resident amount for the previous cost reporting period will not be adjusted for any resident FTEs who are not either a primary care resident or an obstetrics and gynecology resident.
(4)
(A) The hospital's actual costs, incurred in connection with the graduate medical education program for the hospital's first cost reporting period in which residents were on duty during the first month of the cost reporting period.
(B) The mean value of per resident amounts of hospitals located in the same geographic wage area, as that term is used in the prospective payment system under part 412 of this chapter, for cost reporting periods beginning in the same fiscal years. If there are fewer than three amounts that can be used to calculate the mean value, the calculation of the per resident amounts includes all hospitals in the hospital's region as that term is used in § 412.62(f)(1)(i).
(ii)
(iii)
(f)
(1) Residents in an approved program working in all areas of the hospital complex may be counted.
(2) No individual may be counted as more than one FTE. Except as provided in paragraphs (f)(3) and (4) of this section, if a resident spends time in more than one hospital or, in a nonprovider setting, the resident counts as partial FTE based on the proportion of time worked at the hospital to the total time worked. A part-time resident counts as a partial FTE based on the proportion of allowable time worked compared to the total time necessary to fill a full-time internship or residency slot.
(3) On or after July, 1, 1987 and for portions of cost reporting periods occurring before January 1, 1999, the time residents spend in nonprovider settings such as freestanding clinics, nursing homes, and physicians' offices in connection with approved programs is not excluded in determining the number of FTE residents in the calculation of a hospital's resident count if the following conditions are met—
(i) The resident spends his or her time in patient care activities.
(ii) There is a written agreement between the hospital and the outside entity that states that the resident's compensation for training time spent outside of the hospital setting is to be paid by the hospital.
(4) For portions of cost reporting periods occurring on or after January 1, 1999, the time residents spend in nonprovider settings such as freestanding clinics, nursing homes, and physicians' offices in connection with approved programs may be included in determining the number of FTE residents in the calculation of a hospital's resident count if the following conditions are met—
(i) The resident spends his or her time in patient care activities.
(ii) The written agreement between the hospital and the nonhospital site must indicate that the hospital will incur the cost of the resident's salary and fringe benefits while the resident is training in the nonhospital site and the hospital is providing reasonable compensation to the nonhospital site for supervisory teaching activities. The agreement must indicate the compensation the hospital is providing to the nonhospital site for supervisory teaching activities.
(iii) The hospital must incur all or substantially all of the costs for the training program in the nonhospital setting in accordance with the definition in paragraph (b) of this section.
(g)
(1) For purposes of this section, an initial residency period is the number of years necessary to satisfy the minimum requirements for certification in a specialty or subspecialty, plus one year. Effective August 10, 1993, residents or fellows in an approved preventive medicine residency or fellowship program may also be counted as a full FTE resident for up to two additional years beyond the initial residency period limitations. Effective July 1, 1995, an initial residency period is defined as the minimum number of years required for board eligibility. An initial residency period may not exceed five years in order to be counted toward determining FTE status except in the case of fellows in an approved geriatric program whose initial residency period may last up to two additional years. For combined residency programs, an
(i) For residency programs other than those specified in paragraphs (g)(1)(ii) and (g)(1)(iii) of this section, the initial residency period is the minimum number of years of formal training necessary to satisfy the requirements for initial board eligibility in the particular specialty for which the resident is training, as specified in the most recently published edition of the Graduate Medical Education Directory.
(ii) For residency programs in osteopathy, dentistry, and podiatry, the minimum requirement for certification in a specialty or subspecialty is the minimum number of years of formal training necessary to satisfy the requirements of the appropriate approving body listed in § 415.152 of this chapter.
(iii) For residency programs in geriatric medicine, accredited by the appropriate approving body listed in 415.152 of this chapter, these programs are considered approved programs on the later of—
(A) The starting date of the program within a hospital; or
(B) The hospital's cost reporting periods beginning on or after July 1, 1985.
(iv) The time spent in residency programs that do not lead to certification in a specialty or subspecialty, but that otherwise meet the definition of approved programs, as described in paragraph (b) of this section, is counted toward the initial residency period limitation.
(2) If the resident is in an initial residency period, the weighting factor is one.
(3) If the resident is not in an initial residency period, the weighting factor is 1.00 during the period beginning on or after July 1, 1985 and before July 1, 1986, .75 during the period beginning on or after July 1, 1986 and before July 1, 1987 and is .50 thereafter without regard to the hospital's cost reporting period.
(4) For purposes of determining direct graduate medical education payment, for cost reporting periods beginning on or after October 1, 1997, a hospital's unweighted FTE count for residents in allopathic and osteopathic medicine may not exceed the hospital's unweighted FTE count for these residents for the most recent cost reporting period ending on or before December 31, 1996. If the hospital's number of FTE residents in a cost reporting period beginning on or after October 1, 1997, exceeds the limit described in this paragraph (g), the hospital's weighted FTE count (before application of the limit) will be reduced in the same proportion that the number of FTE residents for that cost reporting period exceeds the number of FTE residents for the most recent cost reporting period ending on or before December 31, 1996. Hospitals that are part of the same affiliated group may elect to apply the limit on an aggregate basis. The fiscal intermediary may make appropriate modifications to apply the provisions of this paragraph (g)(4) based on the equivalent of a 12-month cost reporting period.
(5) For purposes of determining direct graduate medical education payment, for the hospital's first cost reporting period beginning on or after October 1, 1997, the hospital's weighted FTE count is equal to the average of the weighted FTE count for the payment year cost reporting period and the preceding cost reporting period. For cost reporting periods beginning on or after October 1, 1998, the hospital's weighted FTE count is equal to the average of the weighted FTE count for the payment year cost reporting period and the preceding two cost reporting periods. The fiscal intermediary may make appropriate modifications to apply the provisions of this paragraph based on the equivalent of 12-month cost reporting periods. If a hospital qualifies for an adjustment to the limit established under paragraph (g)(4) of this section for new medical residency programs created under paragraph
(6) If a hospital establishes a new medical residency training program as defined in paragraph (g)(9) of this section on or after January 1, 1995, the hospital's FTE cap described under paragraph (g)(4) of this section may be adjusted as follows:
(i) If a hospital had no allopathic or osteopathic residents in its most recent cost reporting period ending on or before December 31, 1996, and it establishes a new medical residency training program on or after January 1, 1995, the hospital's unweighted FTE resident cap under paragraph (g)(4) of this section may be adjusted based on the product of the highest number of residents in any program year during the third year of the first program's existence for all new residency training programs and the number of years in which residents are expected to complete the program based on the minimum accredited length for the type of program. The adjustment to the cap may not exceed the number of accredited slots available to the hospital for the new program.
(A) If the residents are spending an entire program year (or years) at one hospital and the remainder of the program at another hospital, the adjustment to each respective hospital's cap is equal to the product of the highest number of residents in any program year during the third year of the first program's existence and the number of years the residents are training at each respective hospital.
(B) Prior to the implementation of the hospital's adjustment to its FTE cap beginning with the fourth year of the hospital's residency program(s), the hospital's cap may be adjusted during each of the first 3 years of the hospital's new residency program using the actual number of residents participating in the new program. The adjustment may not exceed the number of accredited slots available to the hospital for each program year.
(C) Except for rural hospitals, the cap will not be adjusted for new programs established more than 3 years after the first program begins training residents.
(D) An urban hospital that qualifies for an adjustment to its FTE cap under paragraph (g)(6)(i) of this section is not permitted to be part of an affiliated group for purposes of establishing an aggregate FTE cap.
(E) A rural hospital that qualifies for an adjustment to its FTE cap under paragraph (g)(6)(i) of this section is permitted to be part of an affiliated group for purposes of establishing an aggregate FTE cap.
(ii) If a hospital had allopathic or osteopathic residents in its most recent cost reporting period ending on or before December 31, 1996, the hospital's unweighted FTE cap may be adjusted for new medical residency training programs established on or after January 1, 1995 and on or before August 5, 1997. The adjustment to the hospital's FTE resident limit for the new program is based on the product of the highest number of residents in any program year during the third year of the newly established program and the number of years in which residents are expected to complete each program based on the minimum accredited length for the type of program.
(A) If the residents are spending an entire program year (or years) at one hospital and the remainder of the program at another hospital, the adjustment to each respective hospital's cap is equal to the product of the highest number of residents in any program year during the third year of the first program's existence and the number of years the residents are training at each respective hospital.
(B) Prior to the implementation of the hospital's adjustment to its FTE cap beginning with the fourth year of the hospital's residency program, the
(iii) If a hospital with allopathic or osteopathic residents in its most recent cost reporting period ending on or before December 31, 1996, is located in a rural area (or other hospitals located in rural areas that added residents under paragraph (g)(6)(i) of this section), the hospital's unweighted FTE limit may be adjusted in the same manner described in paragraph (g)(6)(ii) of this section to reflect the increase for residents in the new medical residency training programs established after August 5, 1997. For these hospitals, the limit will be adjusted for additional new programs but not for expansions of existing or previously existing programs.
(iv) A hospital seeking an adjustment to the limit on its unweighted resident count policy must provide documentation to its fiscal intermediary justifying the adjustment.
(7) A hospital that began construction of its facility prior to August 5, 1997, and sponsored new medical residency training programs on or after January 1, 1995 and on or before August 5, 1997, that either received initial accreditation by the appropriate accrediting body or temporarily trained residents at another hospital(s) until the facility was completed, may receive an adjustment to its FTE cap.
(i) The newly constructed hospital's FTE cap is equal to the lesser of:
(A) The product of the highest number of residents in any program year during the third year of the newly established program and the number of years in which residents are expected to complete the programs based on the minimum accredited length for each type of program; or
(B) The number of accredited slots available to the hospital for each year of the programs.
(ii) If the new medical residency training programs sponsored by the newly constructed hospital have been in existence for 3 years or more by the time the residents begin training at the newly constructed hospital, the newly constructed hospital's cap will be based on the number of residents training in the third year of the programs begun at the temporary training site.
(iii) If the new medical residency training programs sponsored by the newly constructed hospital have been in existence for less than 3 years by the time the residents begin training at the newly constructed hospital, the newly constructed hospital's cap will be based on the number of residents training at the newly constructed hospital in the third year of the programs (including the years at the temporary training site).
(iv) A hospital that qualifies for an adjustment to its FTE cap under paragraph (g)(7) of this section may be part of an affiliated group for purposes of establishing an aggregate FTE cap.
(v) The provisions of this paragraph (g)(7) are applicable during portions of cost reporting periods occurring on or after October 1, 1999.
(8) A hospital may receive a temporary adjustment to its FTE cap to reflect residents added because of another hospital's closure if the hospital meets the following criteria:
(i) The hospital is training additional residents from a hospital that closed on or after July 1, 1996.
(ii) No later than 60 days after the hospital begins to train the residents, the hospital submits a request to its fiscal intermediary for a temporary adjustment to its FTE cap, documents that the hospital is eligible for this temporary adjustment by identifying the residents who have come from the closed hospital and have caused the hospital to exceed its cap, and specifies the length of time the adjustment is needed.
(iii) For purposes of paragraph (g)(8) of this section, “closure” means the hospital terminates its Medicare agreement under the provisions of § 489.52 of this chapter.
(9) For purposes of paragraph (g) of this section, a new medical residency training program means a medical residency that receives initial accreditation by the appropriate accrediting
(h)
(i) Has passed FMGEMS; or
(ii) Before July 1, 1986, received certification from, or passed an examination of, the Educational Committee for Foreign Medical Graduates.
(2) Before July 1, 1986, the weighting factor for a foreign medical graduate is 1.0 times the weight determined under the provisions of paragraph (g) of this section. On or after July 1, 1986, and before July 1, 1987, the weighting factor for a graduate of a foreign medical school who was in a residency program both before and after July 1, 1986 but who does not meet the requirements set forth in paragraph (h)(1) of this section is .50 times the weight determined under the provisions of paragraph (g) of this section.
(3) On or after July 1, 1987, these foreign medical graduates are not counted in determining the number of FTE residents.
(4) During the cost reporting period in which a foreign medical graduate passes FMGEMS, the weighting factor for that resident is determined under the provisions of paragraph (g) of this section for the part of the cost reporting period beginning with the month the resident passes the test.
(5) On or after September 1, 1989, the National Board of Medical Examiners Examination, Parts I and II, may be substituted for FMGEMS for purposes of the determination made under paragraphs (h)(1) and (h)(4) of this section.
(6) On or after June 1, 1992, the United States Medical Licensing Examination may be substituted for the FMGEMS for purposes of the determination made under paragraphs (h)(1) and (h)(4) of this section. On or after July 1, 1993 only the results of steps I and II of the United States Medical Licensing Examination shall be accepted for purposes of making this determination.
(i) To include a resident in the FTE count for a particular cost reporting period, the hospital must furnish the following information.
(1) The name and social security number of the resident.
(2) The type of residency program in which the individual participates and the number of years the resident has completed in all types of residency programs.
(3) The dates the resident is assigned to the hospital and any hospital-based providers.
(4) The dates the resident is assigned to other hospitals, or other freestanding providers, and any nonprovider setting during the cost reporting period, if any.
(5) The name of the medical, osteopathic, dental, or podiatric school from which the resident graduated and the date of graduation.
(6) If the resident is an FMG, documentation concerning whether the resident has satisfied the requirements of paragraph (h) of this section.
(7) The name of the employer paying the resident's salary.
(j)
(2) For hospitals making this election, the base-period costs for the purpose of determining the per resident amount are adjusted to take into account the change in the order by which they allocate administrative and general costs to interns and residents in approved program cost centers.
(3) Per resident amounts are determined for the base period and updated as described in paragraph (e) of this section. For cost reporting periods beginning on or after January 1, 1986, payment is made based on the methodology described in paragraph (d) of this section.
(k)
(ii)
(iii)
(2)
(ii)
(iii)
(a)
(b)
(1) An individual hospital that is operating one or more approved medical residency training programs as defined in § 413.86(b) of this chapter; or
(2) Two or more hospitals that are operating approved medical residency training programs as defined in § 413.86(b) of this chapter and that submit a residency reduction application as a single entity.
(c)
(2) The incentive payments will be determined as specified under paragraph (g) of this section.
(d)
(1) A description of the operation of a plan for reducing the full-time equivalent (FTE) residents in its approved medical residency training programs, consistent with the percentage reduction requirements specified in paragraphs (g)(2) and (g)(3) of this section;
(2) An election of the period of residency training years during which the reductions will occur. The reductions must be fully implemented by not later than the fifth residency training year in which the plan is effective;
(3) FTE counts for the base number of residents, as defined in paragraph (g)(1) of this section, with a breakdown of the number of primary care residents compared to the total number of residents; and the direct and indirect FTE counts of the entity on June 30, 1997. For joint applicants, these counts must be provided individually and collectively;
(4) Data on the annual and cumulative targets for reducing the number of FTE residents and the ratios of the number of primary care residents to the total number of residents for the base year and for each year in the 5-year reduction period. For joint applicants, these data must be provided individually and collectively;
(5) An agreement to not reduce the proportion of its primary care residents to its total number of residents below the proportion that exists in the base year, as specified in paragraph (g)(1) of this section;
(6) An agreement to comply with data submission requirements deemed necessary by HCFA to make annual incentive payments during the 5-year residency reduction plan, and to fully cooperate with additional audit and monitoring activities deemed necessary by HCFA;
(7) For a qualifying entity that is a member of an affiliated group as defined in § 413.86(b), a statement that all members of the group agree to an aggregate FTE cap that reflects—
(i) The reduction in the qualifying entity's FTE count as specified in the plan during each year of the plan; and
(ii) The 1996 FTE count of the other hospital(s) in the affiliated group.
(8) A statement indicating voluntary participation in the plan under the terms of this section, signed by each hospital that is part of the applying entity.
(e)
(f)
(g)
(A) The number of FTE residents in all approved medical residency training programs of the qualifying entity (before application of weighting factors under § 413.86(g)) for the most recent residency training year ending June 30, 1996; or
(B) The number of FTE residents in all approved medical residency training programs of the qualifying entity (before application of weighting factors under § 413.86(g)) for any subsequent residency training year that ends before the date the entity submits its plan to the fiscal intermediary and HCFA.
(ii) The residency training year used to determine the base number of residents is the “base year” for determining reduction requirements.
(iii) The qualifying entity's base number of residents may not be adjusted to reflect adjustments that may otherwise be made to the entity's FTE caps for new medical residency training programs.
(2)
(i) If the base number of residents exceeds 750, residents, by at least 20 percent of the base number.
(ii) If the base number of residents exceeds 600 but is less than or equal to 750 residents—
(A) By 150 residents; or
(B) By 20 percent, if the qualifying entity increases the number of primary care residents included in the base number by at least 20 percent.
(iii) If the base number of residents is 600 or less residents—
(A) By 25 percent; or
(B) By 20 percent, if the qualifying entity increases the number of primary care residents included in the base number of residents by at least 20 percent.
(3)
(i) By 25 percent; or
(ii) By 20 percent, if the qualifying entity increases the number of primary care residents included in the base number of residents by at least 20 percent.
(4)
(5)
(ii) An entity may update annual reduction targets specified in its plan only if—
(A) It has failed to meet a specified annual target for a plan year in the 5-year period; and
(B) It wishes to adjust future annual targets for the remaining years of the plan in order to comply with its cumulative target.
(iii) An updated plan allowed under paragraph (g)(5)(ii) of this section must be submitted prior to the beginning of each July 1 medical residency training year during the plan years.
(h)
(i)
(ii)
(iii)
(iv)
(2) The determination of the amounts under paragraph (h)(1) of this section for any year is based on the applicable Medicare statutory provisions in effect on the application deadline date for the voluntary reduction plan specified under paragraph (e) of this section.
(i)
(1) 100 percent for the first and second residency training years;
(2) 75 percent for the third year;
(3) 50 percent for the fourth year; and
(4) 25 percent for the fifth year.
(j)
(k)
(2)
(i) Fails to reduce the base number of residents by the percentages specified in paragraphs (g)(2) and (g)(3) of this section by the end of the fifth residency training year; or
(ii) Increases the number of FTE residents above the number of residents permitted under the voluntary residency reduction plan as of the completion date of the plan.
(l)
(2)
(i)
(ii)
(a)
(b)
(2) If research is conducted in conjunction with, and as a part of, the care of patients, the costs of usual patient care and studies, analyses, surveys, and related activities to serve the provider's administrative and program needs are allowable costs in the determination of payment under Medicare.
Costs incurred by a provider to obtain a surety bond required by part 489, subpart F of this chapter are not included as allowable costs.
(a)
(b)
(c)
(a)
(b)
(2)
(3)
(c)
(d)
(2) As with discounts, allowances, and rebates received from purchases of goods or services, refunds of previous expense payments are clearly reductions in costs and must be reflected in the determination of allowable costs. This treatment is equitable and is in accord with that generally followed by other governmental programs and third-party payment organizations paying on the basis of cost.
(a)
(b)
(2)
(c)
(2)
(i)
(B) If, within the 1-year time limit, the provider furnishes to the intermediary sufficient written justification (based upon documented evidence) for nonpayment of the liability , the intermediary may grant an extension for good cause. The extension may not exceed 3 years beyond the end of the cost reporting year in which the liability was incurred.
(ii)
(B) If the provider's vacation policy, or its policy for all-inclusive paid days off, is not consistent for all employees, liquidation of the liability must be made within 2 years after the close of the cost reporting period in which the liability is accrued.
(C) If payment is not made within the required time period or if benefits are forfeited by the employee, an adjustment to disallow the accrued cost is made in the current period (that is, the latest year in which payment should have been made or the year in which the benefits are forfeited) rather than in the period in which the cost was accrued and claimed for Medicare payment. However, an intermediary may choose to require the adjustment in the period in which the cost was accrued and claimed for Medicare payment if the cost report for that period is open or can be reopened as provided in § 405.1885 of this chapter, and if the intermediary believes the adjustment is more appropriate in that period.
(iii)
(B) If the sick leave plan grants employees the nonforfeitable right to demand cash payment for unused sick leave at the end of each year, sick pay is includable in allowable costs, without funding, in the cost reporting period in which it is earned.
(C) Sick pay paid on any basis other than that specified in paragraphs (c)(2)(iii) (A) or (B) of this section can be claimed for Medicare payment only on a cash basis for the year in which the benefits are paid.
(iv)
(v)
(vi)
(B)
(vii)
(B) Accrued liability related to contributions to a funded deferred compensation plan must be liquidated within 1 year after the end of the cost reporting period in which the liability is incurred. An extension, not to exceed 3 years beyond the end of the cost reporting year in which the liability was incurred, may be granted by the intermediary for good cause if the provider, within the 1-year time limit, furnishes to the intermediary sufficient written justification for non-payment of the liability.
(C) Postretirement benefit plans (including those addressed in Statement of Financial Accounting Standards No. 106 (December 1990)) are deferred compensation arrangements and thus are subject to the provisions of this section regarding deferred compensation and to applicable program instructions for determining Medicare payment for deferred compensation.
(viii)
At 64 FR 51909, Sept. 27, 1999, § 413.100 was amended by revising paragraph (c)(2)(vi), effective Nov. 26, 1999. For the convenience of the user, the superseded text is set forth as follows:
(c) * * *
(2) * * *
(vi)
(a)
(b)
(i) Salary amounts paid for managerial, administrative, professional, and other services.
(ii) Amounts paid by the institution for the personal benefit of the proprietor.
(iii) The cost of assets and services that the proprietor receives from the institution.
(iv) Deferred compensation.
(2)
(i) Be such an amount as would ordinarily be paid for comparable services by comparable institutions; and
(ii) Depend upon the facts and circumstances of each case.
(3)
(i) Such that had the owner not furnished the services, the institution would have had to employ another person to perform the services; and
(ii) Pertinent to the operation and sound conduct of the institution.
(c)
(2) Ordinarily, compensation paid to proprietors is a distribution of profits. However, if a proprietor furnishes necessary services for the institution, the institution is in effect employing his services, and a reasonable compensation for these services is an allowable cost. In corporate providers, the salaries of owners who are also employees are subject to the same requirements of reasonableness. If the services are furnished on less than a full-time basis, the allowable compensation should reflect an amount proportionate to a full-time basis. Reasonableness of compensation may be determined by reference to, or in comparison with, compensation paid for comparable services and responsibilities in comparable institutions; or it may be determined by other appropriate means.
(a)
(b)
(2)
(3)
(4)
(5)
(6)
(7)
(c)
(2) If therapy services are performed under arrangements at a provider site on a full-time or regular part-time basis, the reasonable cost of such services may not exceed the amount determined by taking into account the total number of hours of services furnished by the therapist, the adjusted hourly salary equivalency amount appropriate for the particular therapy in the geographical area in which the services are furnished and a standard travel allowance.
(3) If therapy services are performed under arrangements on a limited part-time or intermittent basis at the provider site, the reasonable cost of such services is evaluated on a reasonable rate per unit of service basis, except that payment for these services, in the aggregate, during the cost reporting period, may not exceed the amount that would be determined to be reasonable under paragraph (c)(2) of this section, had a therapist furnished the provider or other organization furnishing the services under arrangements 15 hours of service per week on a regular part-time basis for the weeks in which services were furnished by the non-employee therapist.
(4) If an HHA furnishes services under arrangements at the patient's residence or in other situations in which therapy services are not performed at the provider's site, the reasonable cost of such services is evaluated as follows:
(i)
(ii)
(iii)
(5) If therapy services are performed in situations where compensation to a therapist employed by the provider is based, at least in part, on a fee-for-service or on a percentage of income (or commission), the guidelines will apply. The entire compensation will be subject to the guidelines in cases where the nature of the arrangements is most like an under “arrangement” situation, although technically the provider may treat the therapists as employees. The intent of this section is to prevent an employment relationship from being used to circumvent the guidelines.
(6) These provisions are applicable to individual therapy services or disciplines by means of separate guidelines by geographical area and apply to costs incurred after issuance of the guidelines but no earlier than the beginning of the provider's cost reporting period described in paragraph (a) of this section. Until a guideline is issued for a specific therapy or discipline, costs are evaluated so that such costs do not exceed what a prudent and cost-conscious buyer would pay for the given service.
(d)
(e)
(2) If a therapist performing services under arrangements furnishes equipment and supplies used in furnishing therapy services, the guideline amount may be supplemented by the cost of the equipment and supplies, provided the cost does not exceed the amount the provider, as a prudent and cost-conscious buyer, would have been able to include as allowable cost.
(f)
(1)
(2)
(3)
(g)
(a)
(b)
(i) Any date on which a bed is available for the patient in a Medicare-participating SNF located within the hospital's geographic region;
(ii) The date that a hospital learns that a bed is available in a Medicare-participating SNF; or
(iii) If the notice is prospective, the date that a bed will become available in a Medicare-participating SNF.
(c)
(1) The reasonable cost of routine SNF services is based on the average Medicare rate per patient day for routine services provided in freestanding SNFs in the region where the swing-bed hospital is located. The rates are calculated using the regions as defined in section 1886(d)(2)(D) of the Social Security Act. The rates are based on the most recent year for which settled cost reporting period data are available, increased in a compounded manner, using the increase applicable to the SNF routine cost limits, up to and including the calendar year for which the rates are in effect. If the current Medicare swing-bed rate for routine extended care services furnished by a swing-bed hospital during a calendar year is less than the rate for the prior calendar year, payment is made based on the prior calendar year's rate.
(2) The reasonable cost of ancillary services furnished as posthospital SNF care is determined in the same manner as the reasonable cost of other ancillary services furnished by the hospital in accordance with § 413.55(a)(1).
(d)
(i) If there is an available SNF bed in the geographic region, a posthospital SNF care patient must be transferred within 5 days (excluding weekends and holidays) of the availability date, unless the patient's physician certifies within the 5-day period that transfer is not medically appropriate.
(ii) The number of patient days for posthospital SNF care in a cost reporting period does not exceed 15 percent of the product of the number of days in the period and the average number of
(2)
(ii) The hospital must not seek payment for posthospital SNF care in a cost reporting period to the extent that they exceed 15 percent of the product of the number of days in the period and the average number of licensed beds in the period. In those States that do not license hospital beds, the hospital must use the average number of hospital beds reported on its most recent CON, excluding bassinets.
(3)
(a)
(b)
(c)
(1) The hospital's reasonable cost or customary charges, as determined in accordance with § 413.13, reduced by deductibles and coinsurance; or
(2) The blended payment amount as described in paragraph (d) of this section, which is based on hospital-specific cost and charge data and rates paid to free-standing ASCs.
(d)
(i) 75 percent of the hospital-specific amount (the lesser of the hospital's reasonable cost or customary charges, reduced by deductibles and coinsurance); and
(ii) 25 percent of the ASC payment amount (that is, 80 percent of the result obtained by subtracting the deductibles from the sum of the standard overhead amounts.)
(2) For the period of time beginning with the first day of a hospital's cost reporting period that begins on or after
(3) For portions of cost reporting periods beginning on or after January 1, 1991, the blended payment amount is equal to 42 percent of the hospital-specific amount and 58 percent of the ASC payment amount.
(4) For cost reporting periods beginning on or after October 1, 1988 and before January 1, 1995, the blended payment amount is equal to the sum of 75 percent of the hospital-specific amount and 25 percent of the ASC payment amount for a hospital that makes an application to its fiscal intermediary and meets the following requirements.
(i) More than 60 percent of the hospital's inpatient hospital discharges, as described in § 412.60 of this chapter, occurring during its cost reporting period beginning on or after October 1, 1986 and before October 1, 1987, are classified in diagnosis related groups 36 through 74.
(ii) During its cost reporting period beginning on or after October 1, 1986 and before October 1, 1987, more than 30 percent of the hospital's total revenues is derived from outpatient services.
(e)
(a)
(2) For purposes of this section—
(i) Radiology services include diagnostic and therapeutic radiology, nuclear medicine, CAT scan procedures, magnetic resonance imaging, ultrasound and other imaging services; and
(ii) Other diagnostic procedures are those identified by HCFA, and do not include diagnostic radiology procedures or diagnostic laboratory tests.
(b)
(i) The hospital's reasonable cost or customary charges, as determined in accordance with § 413.13, reduced by the applicable Part B annual deductible and coinsurance amounts.
(ii) The blended payment amount described in paragraph (b)(2) of this section.
(2) The blended payment amount for hospital outpatient radiology services furnished on or after October 1, 1988, but before October 1, 1989, is equal to the sum of—
(i) 65 percent of the hospital-specific amount (the hospital's reasonable cost or customary charges, whichever is less, reduced by the applicable Part B annual deductible and coinsurance amounts); and
(ii) 35 percent of a prevailing charge or fee schedule amount that is calculated as 80 percent of the amount determined by subtracting the applicable Part B annual deductible from 62 percent of the prevailing charges (or for services furnished on or after January 1, 1989, the fee schedule amount established) for the same services when furnished by participating physicians in their offices in the same locality.
(3) For hospital outpatient radiology services furnished on or after October 1, 1989, the blended payment amount is equal to the sum of 50 percent of the hospital-specific amount and 50 percent of the fee schedule amount.
(4) For hospital outpatient radiology services furnished on or after January 1, 1991, the blended payment amount is equal to the sum of 42 percent of the
(c)
(i) The hospital's reasonable cost or customary charges, as determined in accordance with § 414.13, reduced by the applicable Part B annual deductible and coinsurance amounts.
(ii) The blended payment described in paragraph (c)(2) of this section.
(2) The blended payment amount for other diagnostic procedures furnished on or after October 1, 1989, but before October 1, 1990, is equal to the sum of—
(i) 65 percent of the hospital-specific amount (the hospital's reasonable cost or customary charges, whichever is less, reduced by the applicable Part B annual deductible and coinsurance amounts); and
(ii) 35 percent of a prevailing charge amount that is calculated as 80 percent of the amount determined by subtracting the applicable Part B annual deductible from 42 percent of the prevailing charges for the same services furnished by participating physicians in their offices in the same locality.
(3) For other diagnostic procedures performed by a hospital on or after October 1, 1990, the blended payment is equal to 50 percent of the hospital-specific amount and 50 percent of the prevailing charge amount.
(a)
(b)
(a) Except for sole community hospitals, as defined in § 412.92, and critical access hospitals, the reasonable costs of outpatient hospital services (other than capital-related costs of such services) are reduced by 5.8 percent for services rendered during portions of cost reporting periods occurring on or after October 1, 1990, and before October 1, 1998.
(b) For purposes of determining the blended payment amounts of ambulatory surgical center approved surgical procedures performed in the hospital outpatient setting under § 413.118 and hospital outpatient radiology services and other diagnostic procedures under § 413.122, the reduction is applicable only to the hospital-specific portion of the blended payment amounts.
(a) For additional rules on the allowability of certain costs incurred by home health agencies, see §§ 409.46 and 409.49(b) of this chapter.
(b) The reasonable cost of outpatient rehabilitation services furnished by a home health agency to homebound patients who are not entitled to home health benefits may not exceed the amounts payable under the physician fee schedule for comparable services effective January 1, 1999.
(a)
(1) Net depreciation expense as determined under §§ 413.134, 413.144, and
(2) Taxes on land or depreciable assets used for patient care.
(3) Leases and rentals, including license and royalty fees, for the use of depreciable assets or land, as described in paragraph (b) of this section.
(4) The costs of betterments and improvements as described in paragraph (c) of this section.
(5) The costs of minor equipment that are capitalized, rather than expensed, as described in paragraph (d) of this section.
(6) Insurance expense on depreciable assets, as described in paragraph (e) of this section.
(7) Interest expense as determined under § 413.153, subject to the qualifications of paragraph (f) of this section.
(8) For certain proprietary providers, return on equity capital, as determined under § 413.157.
(9) The capital-related costs of related organizations (as described in § 413.17), as determined in accordance with paragraph (g) of this section.
(10) Debt issuance costs, debt discounts, and debt redemption costs, if the associated debt was incurred to acquire land or depreciable assets used for patient care or to refinance existing debt for which the original purpose was to acquire land or depreciable assets used for patient care.
(11) The apportionment of the capital-related costs of jointly owned assets among the owners must be on a basis that reflects the relative use by each owner, rather than the ownership share or the amount of time the asset is located at each owners site.
(b)
(2) For sale and leaseback agreements for hospitals and SNFs entered into before October 23, 1992 and for sale and leaseback agreements for other providers entered into at any time, a provider may include incurred rental charges in its capital-related costs, as specified in a sale and leaseback agreement with a nonrelated purchaser (including shared service organizations not related within the meaning of § 413.17) involving plant facilities or equipment only if the following conditions are met:
(i) The rental charges are reasonable based on the following—
(A) Consideration of rental charges of comparable facilities and market conditions in the area;
(B) The type, expected life, condition, and value of the facilities or equipment rented; and
(C) Other provisions of the rental agreements.
(ii) Adequate alternative facilities or equipment that would serve the purpose are not or were not available at lower cost.
(iii) The leasing was based on economic and technical considerations.
(3) If the conditions of paragraph (b)(2) of this section are not met, the amount a provider may include in its capital-related costs as rental or lease expense under a sale and leaseback agreement may not exceed the amount that the provider would have included in its capital-related costs had the provider retained legal title to the facilities or equipment, such as interest on mortgage, taxes, depreciation, and insurance costs.
(4) For sale and leaseback agreements for hospitals and SNFs entered into on or after October 23, 1992, the amount a provider may include in its capital-related costs as rental or lease expense may not exceed the amount that the provider would have included in its capital-related costs had the provider retained legal title to the facilities or equipment, such as interest expense on mortgages, taxes, depreciation, and insurance costs (the costs of ownership). This limitation applies both on an annual basis and over the useful life of the asset.
(i) If in the early years of the lease, the annual rental or lease costs are less
(ii) If in the early years of the lease, the annual rental or lease costs exceed the annual costs of ownership, but in the later years of the lease the annual rental or lease costs are less than the annual costs of ownership, the provider may carry forward amounts of rental or lease costs that were not included in capital-related costs in the early years of the lease due to the costs of ownership limitation, and include these amounts in capital-related costs in the years of the lease when the annual rental or lease costs are less than the annual costs of ownership.
(iii) In any given year the amount of actual annual rental or lease costs plus the amount carried forward to that year may not exceed the amount of the costs of ownership for that year.
(iv) In the aggregate, the amount of rental or lease costs included in capital-related costs may not exceed the amount of the costs of ownership that the provider could have included in capital-related costs had the provider retained legal title to the asset.
(5) For lease purchase transactions entered into before October 23, 1992, a lease that meets the following conditions establishes a virtual purchase:
(i) The rental charge exceeds rental charges of comparable facilities or equipment in the area.
(ii) The term of the lease is less than the useful life of the facilities or equipment.
(iii) The provider has the option to renew the lease at a significantly reduced rental, or the provider has the right to purchase the facilities or equipment at a price that appears to be significantly less than what the fair market value of the facilities or equipment would be at the time acquisition by the provider is permitted.
(6)(i) If a lease is a virtual purchase under paragraph (b)(5) of this section, the rental charge is includable in capital-related costs only to the extent that it does not exceed the amount that the provider would have included in capital-related costs if it had legal title to the asset (the cost of ownership), such as straight-line depreciation, insurance, and interest. A provider may not include in its capital-related costs accelerated depreciation in this situation.
(ii) The difference between the amount of rent paid and the amount of rent allowed as capital-related costs is considered a deferred charge and is capitalized as part of the historical cost of the asset when the asset is purchased.
(iii) If an asset is returned to the owner, instead of being purchased, the deferred charge may be included in capital-related costs in the year the asset is returned.
(iv) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase still exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to an amount not in excess of the cost of ownership.
(v) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase no longer exists, the deferred charge may be included in the capital-related costs to the extent of increasing the reduced rental to a fair rental value.
(7) Amounts included in lease or rental payments for repair or maintenance agreements are excluded from capital-related costs. If no amount is identified in the lease or rental agreement for maintenance, the entire lease payment is considered a capital-related cost subject to the provisions of paragraph (b)(1) of this section.
(8) For lease purchase transactions entered into on or after October 23, 1992, a lease that meets any one of the following conditions establishes a virtual purchase:
(i) The lease transfers title of the facilities or equipment to the lessee during the lease term.
(ii) The lease contains a bargain purchase option.
(iii) The lease term is at least 75 percent of the useful life of the facilities or equipment. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment.
(iv) The present value of the minimum lease payments (payments to be made during the lease term including bargain purchase option, guaranteed residual value, and penalties for failure to renew) equals at least 90 percent of the fair market value of the leased property. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment. Present value is computed using the lessee's incremental borrowing rate, unless the interest rate implicit in the lease is known and is less than the lessee's incremental borrowing rate, in which case the interest rate implicit in the lease is used.
(9)(i) If a lease establishes a virtual purchase under paragraph (b)(8) of this section, the rental charge is includable in capital-related costs to the extent that it does not exceed the amount that the provider would have included in capital-related costs if it had legal title to the asset (the cost of ownership). The cost of ownership includes straight-line depreciation, insurance, and interest. For purposes of computing the limitation on allowable rental cost in this paragraph, a provider may not include accelerated depreciation.
(ii) The difference between the amount of rent paid and the amount of rent allowed as capital-related costs is considered a deferred charge and is capitalized as part of the historical cost of the asset when the asset is purchased.
(iii) If an asset is returned to the owner instead of being purchased, the deferred charge may be included in capital-related costs in the year the asset is returned.
(iv) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase still exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to an amount not in excess of the cost of ownership.
(v) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase no longer exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to a fair rental value.
(vi) If the lessee becomes the owner of the leased asset (either by operation of the lease or by other means), the amount considered as depreciation, for the purpose of having computed the limitation on rental charges in paragraph (b)(9)(i) of this section, must be used in calculating the limitation on adjustments for the purpose of determining any gain or loss under § 413.134(f) upon disposal of an asset.
(c)
(2) A provider must capitalize and prorate the costs of betterments and improvements over the remaining estimated useful life of the asset, as modified by the betterment or improvement.
(d)
(1) The net book value of minor equipment at the time the provider enters the program is prorated over three years (that is, one-third of the net book value is written off each year), and new purchases are also prorated over a 3-year period; or
(2) The cost of minor equipment is prorated over their actual useful lives.
(e)
(2) If an insurance policy also provides protection for other than the replacement of depreciable assets or to pay capital-related costs in the case of business interruption insurance, only that portion of the premium related to the replacement of depreciable assets or to pay capital-related costs in the case of business interruption insurance is includable in capital-related costs.
(f)
(g)
(i) Acquiring land or depreciable assets (either through purchase or lease) used for patient care; or
(ii) Refinancing existing debt, if the original purpose of the refinanced debt was to acquire land or depreciable assets used for patient care.
(2) If investment income offset is required under § 413.153(b)(2)(iii), only that portion of investment income that bears the same relationship to total investment income, as the portion of capital-related interest expense bears to total interest expense, is offset against capital-related costs.
(h)
(ii) If the costs of the services, facilities or supplies being furnished exceed the open market price, or if the provisions of § 413.17(d) apply, no part of the cost to the provider of the services, facilities, or supplies are considered capital-related costs, unless the services, facilities, or supplies would otherwise be considered capital-related.
(2)
(i) The capital-related equipment is leased or rented (as described in paragraph (b) of this section) by the provider;
(ii) The capital-related equipment is located on the provider's premises, or is located offsite and is on real estate owned, leased or rented by the provider; and
(iii) The capital-related portion of the charge is separately specified in the charge to the provider.
(i)
(1) Costs incurred for the repair or maintenance of equipment or facilities.
(2) Amounts included in rentals or lease payments for repair or maintenance agreements.
(3) Interest expense incurred to borrow working capital (for operating expenses).
(4) General liability insurance or any other form of insurance to provide protection other than for the replacement of depreciable assets or to pay capital-related costs in the case of business interruption.
(5) Taxes other than those assessed on the basis of some valuation of land or depreciable assets used for patient care. (Taxes not related to patient care, such as income taxes, are not allowable, and are therefore not included among either capital-related or operating costs.)
(6) The costs of minor equipment that are charged off to expense rather than capitalized as described in paragraph (d) of this section.
(7) The costs incurred for maintenance and repair insurance agreements (commonly referred to as maintenance agreements).
(j)
(i) 15 percent for portions of cost reporting periods occurring on or after October 1, 1989, through September 30, 1991; and
(ii) 10 percent for portions of cost reporting periods occurring on or after October 1, 1991, through September 30, 1998.
(2) For purposes of determining the blended payment amounts for hospital outpatient services under § 413.118 and § 413.122, the reduction is applicable only to the hospital-specific portion of the blended amounts.
(a)
(1) Identifiable and recorded in the provider's accounting records;
(2) Based on the historical cost of the asset, except as specified in paragraph (j) of this section regarding donated assets; and
(3) Prorated over the estimated useful life of the asset using—
(i) The straight-line method; or
(ii) Accelerated depreciation under a declining balance method (not to exceed double the straight-line rate) or the sum-of-the-years' digits method in the following situations:
(A) Depreciable assets for which accelerated depreciation was used for Medicare purposes before August 1, 1970, including those assets for which a timely request to change from straight-line depreciation to accelerated depreciation was received by an intermediary before August 1, 1970;
(B) Depreciable assets acquired before August 1, 1970, if no election to use straight-line or accelerated depreciation was in effect on August 1, 1970, and the provider was participating in the program on August 1, 1970;
(C) Depreciable assets of a provider if construction of such depreciable asset began before February 5, 1970, and the provider was participating in the program on February 5, 1970; or
(D) Depreciable assets of a provider if a valid written contract was entered into by a provider participating in the program before February 5, 1970, for construction, acquisition, or for the permanent financing thereof, and such contract was binding on a provider on February 5, 1970, and at all times thereafter; or
(iii) A declining balance method, not to exceed 150 percent of the straight-line rate, for a depreciable asset acquired after July 31, 1970; however, this declining balance method may be used only if the cash flow from depreciation on the total assets of the institution during the reporting period, including straight-line depreciation on the assets in question, is insufficient (assuming funding of available capital not required currently for amortization and assuming reasonable interest income on such funds) to supply the funds required to meet the reasonable principal amortization schedules on the capital debts related to the provider's total depreciable assets. For each depreciable asset for which a provider requests authorization to use a declining balance method for Medicare reimbursement purposes, but not to exceed 150 percent of the straight-line rate, the provider must demonstrate to the intermediary's satisfaction that the required cash flow need exists. For each depreciable asset in which a provider justifies the use of accelerated depreciation, the intermediary must give written approval for the use of a depreciation method other than straight-line before basing any interim payment on this accelerated depreciation or making its reasonable cost determination which includes an allowance for such depreciation.
(b)
(i)
(B)
(
(
(
(
(
(
(ii)
(
(
(
(B) For purposes of applying paragraph (b)(1)(ii)(A) of this section, an asset not in existence as of July 18, 1984 includes any asset that physically existed, but was not owned by a hospital or SNF participating in the Medicare program as of July 18, 1984.
(C) The acquisition cost to the owner of record is subject to any limitation on historical costs described in paragraphs (b)(1)(i) or (g)(1) and (2) of this section, and is not reduced by any depreciation taken by the owner of record. This limitation on historical cost is also applied to the purchase of land, a capital asset that is neither depreciable nor amortizable under any circumstances. (See §§ 413.153(d) and
(D) Acquisition cost to the owner of record includes the costs of betterments or improvements that extend the estimated useful life of an asset at least two years beyond its original estimated useful life or increase the productivity of an asset significantly over its original productivity.
(E) For assets acquired prior to a hospital's or SNF's entrance into the Medicare program, the acquisition cost to the owner of record is the historical cost of the asset when acquired, rather than when the hospital or SNF entered the program.
(F) For assets subject to the optional depreciation allowance as described in § 413.139, the acquisition cost to the owner of record is the historical cost established for those assets when the hospital or SNF changed to actual depreciation as described in § 413.139(e). If the hospital or SNF did not change to actual depreciation, as described in § 413.139(e), for optional allowance assets, the acquisition cost to the owner of record is established by reference to the hospital's or SNF's recorded historical cost of the asset when acquired. If the hospital or SNF has no historical cost records for optional allowance assets, the acquisition cost to the owner of record is established by appraisal.
(G) The historical cost of an asset acquired on or after July 18, 1984 may not include costs attributable to the negotiation or settlement of the sale or purchase (by acquisition, merger, or consolidation) of any capital asset for which any payment was previously made under the Medicare program. The costs to be excluded include, but are not limited to, appraisal costs (except those incurred at the request of the intermediary under paragraph (f)(2)(iv) of this section), legal fees, accounting and administrative costs, travel costs, and the costs of feasibility studies.
(iii)
(2)
(3)
(4)
(5)
(6)
(7)
(i)
(A) The edition of the American Hospital Association useful life guidelines, as specified in HCFA Medicare program manuals; or
(B) A different useful life specifically requested by the provider and approved by the intermediary. A different useful life may be approved by the intermediary if the provider's request is properly supported by acceptable factors that affect the determination of useful life. However, such factors as an expected early sale, retirement, demolition or abandonment of an asset, or termination of the provider from the Medicare program may not be used.
(ii)
(iii)
(8)
(9)
(c)
(d)
(2)
(3)
(ii)
(B)
(
(
(
(
(C)
(
(
(
(e)
(1)
(2)
(ii) Borrowing for a purpose for which funded depreciation account funds should have been used makes the borrowing unnecessary to the extent that funded depreciation account funds were available at the time of the borrowing. Available funds in the funded depreciation account, to the extent of the unnecessary borrowing, are called “tainted” funds. Interest expense incurred on borrowing for a capital purpose is not an allowable cost to the extent that funded depreciation account funds were available at the time of the borrowing.
(iii) A provider can remove the “unnecessary” characterization of borrowing, and thereby cure tainted funded depreciation, by using the tainted funds for a proper purpose described in paragraph (e)(3)(i) of this section. However, any funded depreciation that existed at the time of the unnecessary borrowing and is not classified as tainted must be used before any of the tainted funds.
(iv) When only a portion of the borrowing is considered unnecessary under paragraph (e)(2)(ii) of this section, subsequent repayments of such borrowing from general funds are applied first to the allowable portion of the borrowing and then, when all of the allowable borrowing is repaid, to the unallowable portion of the borrowing. When funds from the funded depreciation account are used for the repayment of the unnecessary borrowing, an equivalent amount of tainted funds is cured without regard to the provisions of paragraphs (e)(2)(ii) and (e)(3)(i)(C) of this section. Similarly, where general funds are used to pay for the unallowable borrowing after the necessary borrowing has been repaid, an equivalent amount of tainted funded depreciation is cured without regard to the provisions of paragraphs (e)(2)(ii) and (e)(3)(i)(C) of this section.
(3)
(B)
(C)
(ii)
(B) Improper withdrawals from funded depreciation are made on a last-in, first-out basis. If improper withdrawals are made, interest expense is reduced in accordance with section § 413.153(c)(3).
(C) Improper withdrawals will result in the offset of otherwise allowable interest expense under the offset provisions in § 413.153(c)(3).
(4)
(ii) Loans from funded depreciation to the general fund are considered investments of funded depreciation, but do not have to meet the readily marketable test described in paragraph (e) of this section. Loans made from funded depreciation are subject to the requirement that funded depreciation must be available for the acquisition of depreciable assets used to furnish patient care, or for other capital purposes related to patient care. Costs incurred to secure lines of credit from lending institutions to ensure such availability are not allowable costs.
(iii) Funding of depreciation from general funds will not be recognized to the extent of any outstanding loans from the funded depreciation account to the general fund. Deposits from the general fund into the funded depreciation account must be first applied to reduce any loans outstanding from the funded depreciation to the general fund. When the loans are repaid in full, general funds deposited in the funded depreciation account are considered as repayments of the general fund. Therefore, any subsequent interest expense of the general fund paid to the funded depreciation fund is not an allowable cost.
(iv) A provider may loan its funded depreciation to a related organization for any purpose subject to the following conditions:
(A) Authorization for such a loan by the provider's appropriate managing body of the provider, such as Board of Trustees or Board of Directors, must be on file.
(B) The funded depreciation loaned must remain available, as specified in paragraph (e)(2) of this section, to the provider making the loan. Costs incurred for lines of credit to assure such availability are not allowable costs. During the period of time that the loan is outstanding, if the provider making the loan resorts to outside borrowing for a purpose for which its funded depreciation should have been used, interest expense on an amount of the outside borrowing up to the amount of the funded depreciation that should have been available would be disallowed as unnecessary.
(C) Such loans shall be considered investments of the provider's funded depreciation, but the requirement that funded depreciation be invested in readily marketable investments as required in paragraph (e) of this section is waived for such loans.
(D) The funded depreciation account must earn interest on such loans at a rate that does not exceed the rate that would be charged for a comparable loan from an independent lending institution. This investment income will not be used to reduce the provider's interest expense if all the other conditions in paragraph (e) of this section are met. If the entity borrowing the funds is another provider participating in the Medicare program, the interest expense incurred on such loans would be allowable if the loan meets all of the interest expense requirements specified in § 413.153. (For purposes of § 413.153(b)(3)(ii), such loans are not considered to be with a related lender.)
(f)
(2)
(i) Except as specified in paragraph (f)(3) of this section, gains and losses realized from the bona fide sale or scrapping of depreciable assets are included in the determination of allowable cost only if the sale or scrapping occurs while the provider is participating in Medicare. The extent to which such gains and losses are included is calculated by prorating the basis for depreciation of the asset in accordance with the proportion of the asset's useful life for which the provider participated in Medicare. For purposes of this paragraph (f)(2)(i), scrapping refers to the physical removal from the provider's premises of tangible personal properties that are no longer useful for their intended purpose and are only salable for their scrap or junk value.
(ii) If the total amount of gains or losses realized from bona fide sales or scrapping does not exceed $5,000 within the cost reporting period or if the provider's cumulative utilization under the Medicare program is less than 5 percent, the net amount of gains or losses realized from sale or scrapping will be allowed as a depreciation adjustment in the period of disposal. For purposes of this paragraph (f)(2)(ii), the provider's cumulative Medicare utilization precentage is determined by comparing the cumulative total of the Medicare inpatient days for all reporting periods in which depreciation on the asset disposed of was claimed under the Medicare program to the cumulative total of inpatient days of the participating provider for the same reporting periods.
(iii) If the conditions specified in paragraph (f)(2)(ii) of this section are not met, the adjustment to reimbursable cost in the reporting period of asset disposition is calculated as follows:
(A) The total amount of gains or losses shall be allocated to all reporting periods under the Medicare program, based on the ratio of the depreciation allowed on the assets in each reporting period to the total depreciation allowed under the Medicare program.
(B) The results of this allocation are multiplied by the ratio of Medicare reimbursable cost to total allowable cost for each reporting period.
(C) The results of this multiplication are then added.
(D) Effective for cost reporting periods beginning on or after October 1, 1991, no adjustment will be made for the portion of gains or losses allocated to inpatient hospital services for which the hospital was paid under the fully prospective payment methodology as described in § 412.340 of this chapter or under the hold-harmless methodology based on the Federal rate as described in § 412.344(a)(1) of this chapter for new capital costs or in § 412.344(a)(2) of this chapter.
(iv) If a provider sells more than one asset for a lump sum sales price, the gain or loss on the sale of each depreciable asset must be determined by allocating the lump sum sales price among all the assets sold, in accordance with the fair market value of each asset as it was used by the provider at the time of sale. If the buyer and seller cannot agree on an allocation of the sales price, or if they do agree but there is insufficient documentation of the current fair market value of each asset, the intermediary for the selling provider will require an appraisal by an independent appraisal expert to establish the fair market value of each asset
(3)
(4)
(5)
(ii) If losses resulting from the demolition or abandonment of depreciable assets do not exceed $5,000 within the cost-reporting period, the losses are to be allowed in the period of disposal.
(iii) If losses exceed $5,000 and, at the date of disposition, the demolished or abandoned assets are at least 80 percent depreciated as computed under the straight-line method, such losses are includable in the determination of allowable cost under the Medicare program in the period of disposal and the procedure provided in paragraph (f)(2)(iii) of this section must be used in determining the adjustment to reimbursable cost.
(iv) Losses in excess of $5,000 resulting from the demolition or abandonment of assets, which at the date of disposition are not 80 percent depreciated as computed under the straight-line method, must be capitalized as a deferred charge and amortized as follows:
(A) If the State Health Planning and Development Agency (SHPDA) designated under section 1521 of the Public Health Service Act approves the demolition or abandonment of a depreciable asset as being consistent with the health systems plan of the health service area in which the provider is located, the net loss realized shall be capitalized as a deferred charge and amortized over the remaining life of the demolished or abandoned asset, or at the rate of $5,000 per year, whichever is greater. If no SHPDA exists or if such agency is unable or unwilling to perform this function, the provider must submit a request for approval to the intermediary. The intermediary, after reviewing this request and before issuing the approval, will submit the request along with its recommendation to the appropriate Regional Office for its approval.
(B) If a provider fails to obtain approval as specified in paragraph (f)(5)(iv)(A) of this section, a loss is not allowable unless the demolished or abandoned asset is replaced. If the asset is replaced, the loss resulting from the unapproved demolition or abandonment must be capitalized as a deferred charge and amortized over the estimated useful life of the replacement asset or at the rate of $5,000 per year, whichever is greater.
(v) If a loss resulting from the demolition or abandonment is deferred and amortized and the provider terminates
(vi) Losses on demolition must include the demolition cost incurred by the provider for razing and removal of the asset, less any salvage value recovered by the provider. However, if a provider demolishes a depreciable asset for the purpose of preparing land for future sale, the net demolition cost incurred by the provider (razing and removal costs less salvage recovered) is considered a capital expenditure and added to the historical basis of the land.
(vii) If a provider purchases land on which there is a building, no depreciation will be allowed under the Medicare program unless the building is used in providing patient care. If the building is demolished, the entire purchase price and demolition cost shall be considered the historical cost of the land. If the building is used for patient care, but demolished within 5 years of purchase, the entire purchase price, less allowed depreciation, plus demolition cost will be considered the historical cost of the land.
(6)
(ii) The net allowable loss from involuntary conversion must consist of the undepreciated cost of unrecovered book value of the asset, less amounts received from insurance proceeds gifts, and grants received from local, State, or Federal government, or any other source as a result of the involuntary conversion.
(iii) If the asset is replaced and the net allowable loss in any cost-reporting period does not exceed $5,000, the entire amount must be included in allowable cost in the period in which the loss is incurred. If the asset is replaced and the net allowable loss in any cost-reporting period exceeds $5,000, the loss must be capitalized as a deferred charge and amortized over the useful life of the replacement or restored asset. If a replaced or restored asset ceases to be used in the provision of patient care services or the provider terminates its participation in the Medicare program, the unamortized deferred charge remaining at that time will not be included in determining allowable cost under the Medicare program.
(iv) If the provider fails to replace or restore an involuntarily converted asset, the loss is not included in determining allowable cost. However, if the provider intends to replace or restore the asset but is unable to do so because the designated SHPDA finds such replacement or restoration to be inconsistent with the health systems plan of the provider's health service area, the loss is allowable so long as the provider continues to participate in Medicare. In this case, the loss must be capitalized as a deferred charge and amortized over the remaining life of the involuntarily converted asset, or at the rate of $5,000 per year, whichever is greater.
(v) If a gain is realized from an involuntary conversion of depreciable assets, the net amount realized reduces the basis of the restored or replacement asset. If the asset is not restored or replaced, the gain is to be treated in accordance with paragraph (f)(2) of this section.
(7)
(8)
(g)
(i) Total price paid for the facility by the purchaser, as allocated to the individual assets of the facility;
(ii) Total fair market value of the facility at the time of the sale, as allocated to the individual assets; or
(iii) Combined fair market value of the individually identified assets at the time of the sale.
(2)
(3)
(i) The allowable acquisition cost of the asset to the owner of record as of July 18, 1984 (or, in the case of an asset not in existence as of July 18, 1984, the first owner of record of the asset);
(ii) The acquisition cost to the new owner; or
(iii) The fair market value of the asset on the date of acquisition.
(4)
(5)
(h)
(i) The rental charges are reasonable based on consideration of rental charges of comparable facilities and market conditions in the area; the type, expected life, condition, and value of the facilities or equipment rented; and other provisions of the rental agreement;
(ii) Adequate alternate facilities or equipment that would serve the purpose are not or were not available at lower cost; and
(iii) The leasing was based on economic and technical considerations.
(2) If the conditions of paragraph (h)(1) of this section are not met, the amount a provider may include in its allowable costs as rental or lease expense under a sale and leaseback agreement may not exceed the amount that the provider would have included in its allowable costs had the provider retained legal title to the facilities or
(3) For hospitals and SNFs entering into sale and leaseback agreements on or after October 23, 1992, the amount a provider may include in its allowable costs as rental or lease expense may not exceed the amount that the provider would have included in its allowable costs had the provider retained legal title to the facilities or equipment, such as interest expense on mortgages, taxes, depreciation, and insurance costs (the costs of ownership). This limitation applies both on an annual basis and over the useful life of the asset.
(i) If in the early years of the lease, the annual rental or lease costs are less than the annual costs of ownership, but in the later years of the lease the annual rental or lease costs are more than the annual costs of ownership, in the years that the annual rental or lease costs are more than the costs of ownership the provider may include in allowable costs annually the actual amount of rental or lease costs. The aggregate rental or lease costs included in allowable costs may not exceed the aggregate costs of ownership that would have been included in allowable costs over the useful life of the asset had the provider retained legal title to the asset.
(ii) If in the early years of the lease, the annual rental or lease costs exceed the annual costs of ownership, but in the later years of the lease the annual rental or lease costs are less than the annual costs of ownership, the provider may carry forward amounts of rental or lease costs that were not included in allowable costs in the early years of the lease due to the costs of ownership limitation, and include these amounts in allowable costs in the years of the lease when the annual rental or lease costs are less than the annual costs of ownership. In any given year the amount of actual annual rental or lease costs plus the amount carried forward to that year may not exceed the amount of the costs of ownership for that year.
(iii) In the aggregate, the amount of rental or lease costs included in allowable costs may not exceed the amount of the costs of ownership that the provider could have included in allowable costs had the provider retained legal title to the asset.
(4) For lease transactions of all providers entered into before October 23, 1992, a lease that meets the following conditions establishes a virtual purchase:
(i) The rental charge exceeds rental charges of comparable facilities or equipment in the area.
(ii) The term of the lease is less than the useful life of the facilities or equipment.
(iii) The provider has the option to renew the lease at a significantly reduced rental, or the provider has the right to purchase the facilities or equipment at a price that appears to be significantly less than what the fair market value of the facilities or equipment would be at the time acquisition by the provider is permitted.
(5)(i) If a lease is a virtual purchase under paragraph (h)(4) of this section, the rental charge is includable in allowable costs only to the extent that it does not exceed the amount that the provider would have included in allowable costs if it had legal title to the asset (the cost of ownership), such as straight-line depreciation, insurance, and interest. For purposes of computing the limitation on allowable rental cost in this paragraph, a provider may not include accelerated depreciation.
(ii) The difference between the amount of rent paid and the amount of rent allowed as rental expense is considered a deferred charge and must be capitalized as part of the historical cost of the asset when the asset is purchased.
(iii) If an asset is returned to the owner instead of being purchased, the deferred charge may be expensed in the year the asset is returned.
(iv) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase still exists, the deferred charge may be expensed to the extent of increasing the reduced rental to an amount not in excess of the cost of ownership.
(v) If the term of the lease is extended for an additional period of time
(6) For lease transactions entered into on or after October 23, 1992, a lease that meets any one of the following conditions establishes a virtual purchase:
(i) The lease transfers title of the facilities or equipment to the lessee during the lease term.
(ii) The lease contains a bargain purchase option.
(iii) The lease term is 75 percent or more of the useful life of the facilities or equipment. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment.
(iv) The present value of the minimum lease payments (that is, payments to be made during the lease term, including bargain purchase option, guaranteed residual value, or penalties for failure to renew) equals 90 percent or more of the fair market value of the leased property. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment. The present value is computed using the lessee's incremental borrowing rate, unless the interest rate implicit in the lease is known and is less than the lessee's incremental borrowing rate, in which case, the interest rate implicit in the lease is used.
(7)(i) If a lease is a virtual purchase under paragraph (h)(6) of this section, the rental charge is includable in allowable costs only to the extent that it does not exceed the amount that the provider would have included in allowable costs if it had legal title to the asset (the costs of ownership), such as straight-line depreciation, insurance, and interest. For purposes of computing the limitation on allowable rental cost as described in this paragraph, a provider may not include accelerated depreciation in its allowable costs.
(ii) The difference between the amount of rent paid and the amount of rent allowed as rental expense is considered a deferred charge and is capitalized as part of the historical cost of the asset when the asset is purchased.
(iii) If an asset is returned to the owner instead of being purchased, the deferred charge may be expensed in the year the asset is returned.
(iv) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase still exists, the deferred charge may be expensed to the extent of increasing the reduced rental to an amount not in excess of the cost of ownership.
(v) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase no longer exists, the deferred charge may be expensed to the extent of increasing the reduced rental to a fair rental value.
(vi) If the lessee becomes the owner of the leased asset (either by operation of the lease or by other means), the amount considered as depreciation, for the purpose of having computed the limitation expressed in paragraph (h)(7)(i) of this section, must be used in calculating the limitation on adjustments to depreciation for the purpose of determining any gain or loss upon disposal of an asset under paragraph (f) of this section.
(i)
(1) The historical cost incurred by the present owner in acquiring the asset under a bona fide sale. The historical cost may not exceed the lower of current reproduction cost adjusted for straight-line depreciation over the life of the asset to the time of the purchase of fair market value at the time of the purchase.
(2) The fair market value at the time of donation under a bona fide donation of the asset (subject to the limitations set forth under paragraph (i) of this section). An asset is considered donated when a governmental entity acquires the asset without assuming the functions for which the transferor used the asset or making any payment for it in the form of cash, property, or services.
(3) If neither paragraph (h) (1) nor (2) of this section applies, for example, the transfer was solely to facilitate administration or to reallocate jurisdictional responsibility, or the transfer constituted a taking over in whole or in part of the function of one governmental entity by another governmental entity, the basis for depreciation is—
(i) With respect to an asset on which the transferor has claimed depreciation under the Medicare program, the transferor's basis under the Medicare program prior to the transfer. The method of depreciation used by the transferee may be the same as that used by the transferor, or the transferee may change the method, as permitted under paragraph (d)(2) of this section; or
(ii) With respect to an asset on which the transferor has not claimed depreciation under the Medicare program, the cost incurred by the transferor in acquiring the asset (not to exceed the basis that would have been recognized had the transferor participated in the Medicare program) less depreciation calculated on the straight-line basis over the life of the asset to the time of transfer.
(j)
(2)
(i) The fair market value at the time of donation; or
(ii) The net book value in the hands of the owner last participating in the Medicare program.
(3)
(k)
(l)
(2)
(i)
(ii)
(3)
(i)
(ii)
(a)
(b)
(2)
(c)
(d)
(2) If used as a base for determining the optional allowance for depreciation, neither the 1965 operating costs nor the current year's allowable costs
(e)
(2) If the provider desires to change to actual depreciation but either has no historical cost records or has incomplete records, the determination of historical cost may be made through appropriate means involving expert consultation with the determination being subject to review and approval by the intermediary.
(f)
The provider keeps its records on a calendar year basis. The current year's actual allowable cost and the actual operating cost for 1965 did not include any actual depreciation, allowance in lieu of specific recognition of other costs, or return on equity capital. However, such costs have been adjusted to exclude estimated depreciation on rented depreciable-type assets.
(g)
Assume in this illustration that the provider had elected to use the declining balance method in computing its allowable depreciation and the rental expense for depreciable-type assets was $3,500. In that case, it would include in its 1966 allowable cost not only the $46,000 allowance based on operating costs but also $36,000 (in this instance 2×straight-line rate is used) in actual depreciation and the rental expense of $3,500—or a total of $85,500 covering all its depreciable assets.
(a)
(b)
(c)
(d)
(a)
(b)
(a)(1)
(i) Judicial review by a Federal court (as described in § 413.64(j));
(ii) An interest assessment on a determined overpayment (as described in § 405.377 of this chapter); or
(iii) Interest on funds borrowed to repay an overpayment (as described in § 413.64(j) or § 405.378 of this chapter), 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).
(2)
(b)
(2)
(i) It is incurred on a loan made to satisfy a financial need of the provider. Loans that result in excess funds or investments are not considered necessary.
(ii) It is incurred on a loan made for a purpose reasonably related to patient care.
(iii) It is reduced by investment income except income from—
(A) Gifts, grants, and endowments, whether held separately or pooled with other funds;
(B) Funded depreciation that meets the program's qualifying criteria;
(C) The provider's qualified pension funds;
(D) The provider's deferred compensation funds that meet the program's qualifying criteria; and
(E) The provider's self-insurance trust funds that meet the program's qualifying criteria.
(iv) It is not reduced by interest received as a result of judicial review by a Federal court (as described in § 413.64(j)).
(3)
(i) Incurred at a rate not in excess of what a prudent borrower would have had to pay in the money market existing at the time the loan was made; and
(ii) Paid to a lender not related through control or ownership, or personal relationship to the borrowing organization. However, interest is allowable if paid on loans from the provider's donor-restricted funds, the funded depreciation account, or the provider's qualified pension fund.
(4)
(c)
(2) Exceptions to the general rule regarding interest on loans from controlled sources of funds are made in the following circumstances. Interest on loans to providers by partners, stockholders, or related organizations made prior to July 1, 1966, is allowable as cost, provided that the terms and conditions of payment of such loans have been maintained in effect without modification subsequent to July 1, 1966. If the general fund of a provider “borrows” from a donor-restricted fund and pays interest to the restricted fund, this interest expense is an allowable cost. The same treatment is accorded interest paid by the general fund on money “borrowed” from the funded depreciation account of the provider or from the provider's qualified pension fund. In addition, if a provider operated by members of a religious order borrows from the order, interest paid to the order is an allowable cost.
(3) If funded depreciation is used for purposes other than improvement, replacement, or expansion of facilities or equipment related to patient care, allowable interest expense is reduced to adjust for offsets not made in prior years for earnings on funded depreciation. A similar treatment is accorded deposits in the provider's qualified pension fund if such deposits are used for other than the purpose for which the fund was established.
(d)
(i) For loans made to finance acquisition of a facility, that portion of the cost that exceeds—
(A) Historical cost as determined under § 413.134(b); or
(B) The cost basis determined under § 413.134(g); and
(ii) Loans made to finance capital stock acquisitions, mergers, or consolidations for which revaluation of assets is not allowed under § 413.134(k).
(2) In determining whether a loan was made for the purpose of acquiring
(3) When a provider borrows funds, but only some of the funds are necessary, repayments of the loan (principal and interest portions) are applied first to pay for the necessary portion of the loan. Only after all of the necessary portion of the loan (principal and interest) has been repaid are any repayments applied to the unnecessary portion of the loan. Repayments toward non-allowable borrowing pertaining to assets or activities not related to patient care are considered investments, and the provisions of paragraph (b)(2)(iii) of this section are applied.
(e)
(f)
(2)
(3)
(ii) A constant effective yield rate is determined and applied to the book value (outstanding loan balance including prior accrued interest) of the bond at the beginning of each period to determine the total interest for the period.
(iii) If the interest computation period involves portions of more than one cost reporting period, the amount of interest for that computation period shall be apportioned to each cost reporting period.
(iv) An example of the computation of interest using the effective interest method follows:
Life of zero coupon bond: 15 years.
Value at maturity: $50,000.
Bondholder pays $6,996 for the bond.
Annual interest rate is 13.5506% compounded semi-annually.
From the table below, interest for the first year would be $980.11 ($474.00 plus $506.11).
(a)
(b)
(1)
(2)
(i) 150 percent for cost reporting periods beginning before April 20, 1983.
(ii) 100 percent for cost reporting periods beginning on or after April 20, 1983 and before October 1, 1986.
(iii) 75 percent for cost reporting periods beginning on or after October 1, 1986 and before October 1, 1987.
(iv) 50 percent for cost reporting periods beginning on or after October 1, 1987 and before October 1, 1988.
(v) 25 percent for cost reporting periods beginning on or after October 1, 1988 and before October 1, 1989.
(vi) Zero percent for cost reporting periods beginning on or after October 1, 1989.
(3)
(ii) There is no allowance for return for SNF services furnished on or after October 1, 1993.
(4)
(ii) There is no allowance for return for outpatient hospital services furnished on or after January 1, 1988.
(5)
(ii) For cost reporting periods beginning on or after July 6, 1987, there is no allowance for return on equity capital for nonhospital and non-SNF providers.
(c)
(i) The provider's investment in plant, property, and equipment related to patient care (net of depreciation) and funds deposited by a provider who leases plant, property, or equipment related to patient care and is required by the terms of the lease to deposit such funds (net of noncurrent debt related
(ii) Net working capital maintained for necessary and proper operation of patient care activities. However, debt representing loans from partners, stockholders, or related organizations on which interest payments would be allowable as costs but for the provisions of § 413.153(b)(3)(ii), is not subtracted in computing the amount of equity capital in order that the proceeds from such loans be treated as part of the provider's equity capital. In computing the amount of equity capital upon which a return is allowable, investment in facilities is recognized on the basis of the historical cost, or other basis, used for depreciation and other purposes under Part A of Medicare.
(2)
(3)
(4)
This subpart implements sections 1881 (b)(2) and (b)(7) of the Act by—
(a) Setting forth the principles and authorities under which HCFA is authorized to establish a prospective payment system for outpatient maintenance dialysis furnished in or under the supervision of an ESRD facility approved under subpart U of part 405 of this chapter (referred to as “facility” in this section). For purposes of this section and § 413.172 through § 413.198, “outpatient maintenance dialysis” means outpatient dialysis, home dialysis, self-dialysis, and home dialysis training, as defined in § 405.2102 (f)(2)(ii), (f)(2)(iii), and (f)(3) of this chapter, and includes all items and services specified in §§ 410.50 and 410.52 of this chapter.
(b) Providing procedures and criteria under which a facility may receive an exception to the prospective payment rates; and
(c) Establishing procedures that a facility must follow to appeal its payment amount under the prospective payment system.
(a) Payments for outpatient maintenance dialysis are based on rates set prospectively by HCFA.
(b) All approved ESRD facilities must accept the prospective payment rates established by HCFA as payment in full for covered outpatient maintenance dialysis.
(c) HCFA publishes the methodology used to establish payment rates and the changes specified in § 413.196(b) in the
(a)
(1) Differentiates between hospital-based facilities and independent ESRD facilities;
(2) Effectively encourages efficient delivery of dialysis services; and
(3) Provides incentives for increasing the use of home dialysis.
(b)
(c)
(1) Facility and hospital are subject to the bylaws and operating decisions of a common governing board. This governing board, which has final administrative responsibility, approves all personnel actions, appoints medical staff, and carries out similar management functions;
(2) Facility's director or administrator is under the supervision of the hospital's chief executive officer and reports through him or her to the governing board;
(3) Facility personnel policies and practices conform to those of the hospital;
(4) Administrative functions of the facility (for example, records, billing, laundry, housekeeping, and purchasing) are integrated with those of the hospital; and
(5) Facility and hospital are financially integrated, as evidenced by the cost report, which reflects allocation of overhead to the facility through the required step-down methodology.
(d)
(1) An agreement between a facility and a hospital concerning patient referral;
(2) A shared service arrangement between a facility and a hospital; or
(3) The physical location of a facility on the premises of a hospital.
(e)
(f)
(2) The payment is made only on an assignment basis, that is, directly to the facility or supplier, which must accept, as payment in full, the amount that HCFA determines.
(3) HCFA determines the payment amount in accordance with the following rules:
(i) The amount is prospectively determined, as specified in section 1881(b)(11)(B)(ii) of the Act, reviewed and adjusted by HCFA, as necessary, and paid to hospital-based and independent dialysis facilities and to suppliers of home dialysis equipment and supplies, regardless of the location of the facility, supplier, or patient.
(ii) If HCFA determines that an adjustment to the payment amount is necessary, HCFA publishes a
(iii) Any increase in this amount for a year does not exceed the percentage increase (if any) in the implicit price deflator for gross national product (as published by the Department of Commerce) for the second quarter of the preceding year over the implicit price deflator for the second quarter of the second preceding year.
(iv) The Medicare payment amount is subject to the Part B deductible and coinsurance.
(g)
(1)
(2)
(a) If the beneficiary has incurred the full deductible applicable under Part B of Medicare before the dialysis treatment, the intermediary pays the facility 80 percent of its prospective payment rate.
(b) If the beneficiary has not incurred the full deductible applicable under Part B of Medicare before the dialysis treatment, the intermediary subtracts the amount applicable to the deductible from the facility's prospective rate and pays the facility 80 percent of the remainder, if any.
(a) HCFA will reimburse each facility its allowable Medicare bad debts, as defined in § 413.80(b), up to the facility's costs, as determined under Medicare principles, in a single lump sum payment at the end of the facility's cost reporting period.
(b) A facility must attempt to collect deductible and coinsurance amounts owed by beneficiaries before requesting reimbursement from HCFA for uncollectible amounts. Section 413.80 specifies the collection efforts facilities must make.
(c) A facility must request payment for uncollectible deductible and coinsurance amounts owed by beneficiaries by submitting an itemized list that specifically enumerates all uncollectable amounts related to covered services under the composite rate.
(a)
(b)
(c)
(d)
(1) The effective date of its new composite payment rate(s);
(2) The effective date that HCFA opens the exceptions process; or
(3) The date on which an extraordinary cost-increasing event occurs, as specified (or provided for) in §§ 413.182(c) and 413.188.
(e)
(1) The conditions under which the exception was granted have not changed;
(2) The facility files a request to retain the rate with its fiscal intermediary during the 30-day period before the opening of an exception cycle; and
(3) The request is approved by the fiscal intermediary.
(f)
(1) Separately identify elements of cost contributing to costs per treatment in excess of the facility's payment rate;
(2) Show that the facility's costs, including those costs that are not directly attributable to the exception criteria, are allowable and reasonable under the reasonable cost principles set forth in this part;
(3) Show that the elements of excessive cost are specifically attributable to one or more conditions specified in § 413.182;
(4) Specify the amount of additional payment per treatment the facility believes is required for it to recover its justifiable excess costs; and
(5) Specify that the facility has compared its most recently completed cost report with cost reports from (at least 2) prior years. The facility must explain any material statistical data or cost changes, or both, and include an explanation with the documentation supporting the exception request.
(g)
(h)
(i)
(j)
(1) Date the circumstances justifying the exception rate no longer exist; or
(2) End of the period during which the announced rate was to apply.
(k)
(l)
(m)
HCFA may approve exceptions to an ESRD facility's prospective payment rate if the facility demonstrates, by convincing objective evidence, that its total per treatment costs are reasonable and allowable under the relevant cost reimbursement principles of part 413 and that its per treatment costs in excess of its payment rate are directly attributable to any of the following criteria:
(a) Atypical service intensity (patient mix), as specified in § 413.184.
(b) Isolated essential facility, as specified in § 413.186.
(c) Extraordinary circumstances, as specified in § 413.188.
(d) Self-dialysis training costs, as specified in § 413.190.
(e) Frequency of dialysis, as specified in § 413.192.
(a) To qualify for an exception to the prospective payment rate based on atypical service intensity (patient mix)—
(1) A facility must demonstrate that a substantial proportion of the facility's outpatient maintenance dialysis treatments involve atypically intense dialysis services, special dialysis procedures, or supplies that are medically necessary to meet special medical needs of the facility's patients. Examples that may qualify under this criterion are more intense dialysis services that are medically necessary for patients such as—
(i) Patients who have been referred from other facilities on a temporary basis for more intense care during a period of medical instability and who return to the original facility after stabilization;
(ii) Pediatric patients who require a significantly higher staff-to-patient ratio than typical adult patients; or
(iii) Patients with medical conditions that are not commonly treated by ESRD facilities and that complicate the dialysis procedure.
(2) The facility must demonstrate clearly that these services, procedures, or supplies and its per treatment costs are prudent and reasonable when compared to those of facilities with a similar patient mix.
(3) A facility must demonstrate that—
(i) Its nursing personnel costs have been allocated properly between each mode of care; and
(ii) The additional nursing hours per treatment are not the result of an excess number of employees.
(b)
(i) Patients who received transplants, including the date of transplant;
(ii) Patients awaiting a transplant who are medically able, have given consent, and are on an active transplant list, and projected transplants;
(iii) Home patients;
(iv) In-facility patients, staff-assisted, or self-dialysis;
(v) Individual patient diagnosis;
(vi) Diabetic patients;
(vii) Patients isolated because of contagious disease;
(viii) Age of patients;
(ix) Mortality rate, by age and diagnosis;
(x) Number of patient transfers, reasons for transfers, and any related information; and
(xi) Total number of hospital admissions for the facility's patients, reason for, and length of stay of each session.
(2) The facility also must—
(i) Submit documentation on costs of nursing personnel (registered nurses, licensed practical nurses, technicians, and aides) incurred during the most recently completed fiscal year cost report showing—
(A) Amount each employee was paid;
(B) Number of personnel;
(C) Amount of time spent in the dialysis unit; and
(D) Staff-to-patient ratio based on total hours, with an analysis of productive and nonproductive hours.
(ii) Submit documentation on supply costs incurred during the most recently completed fiscal or calendar year cost report showing—
(A) By modality, a complete list of supplies used routinely in a dialysis treatment;
(B) The make and model number of each dialyzer and its component cost; and
(C) That supplies are prudently purchased (for example, that bulk discounts are used when available).
(iii) Submit documentation on overhead costs incurred during the most recently completed fiscal or calendar year cost reporting year showing—
(A) The basis of the higher overhead costs;
(B) The impact on the specific cost components; and
(C) The effect on per treatment costs.
(a)
(1) The facility must be the only supplier of dialysis in its geographical area;
(2) The facility's patients must be unable to obtain dialysis services elsewhere without substantial additional hardship; and
(3) The facility's excess costs must be justifiable.
(b)
(1) Local, permanent residential population density;
(2) Typical local commuting distances from medical services;
(3) Volume of treatments; and
(4) The extent that other dialysis facilities are used by area residents (other than the applying facility's patients).
(c)
(2)
(i) That a substantial number of its patients cannot obtain dialysis services elsewhere without additional hardship; and
(ii) The additional hardship the patients will incur in travel time and cost.
(3)
(i) Document that its cost per treatment is reasonable; and
(ii) Explain how the facility's cost per treatment in excess of its composite rate relates to the isolated essential facility criteria specified in paragraph (b) of this section.
(4)
(i) A list of current and requested payment rates for each modality.
(ii) An explanation of how the facility's costs in excess of its composite rate payment are attributable to its being an isolated essential facility.
(iii) An explanation of any unusual geographic conditions in the area surrounding the facility.
(iv) A copy of the latest filed cost report and a budget estimate for the next 12 months prepared on cost report forms.
(v) An explanation of unusual costs reported on the facility's actual or budgeted cost reports and any significant changes in budgeted costs and data compared to actual costs and data reported on the latest filed cost report.
(vi) The name, location of, and distance to the nearest renal dialysis facility.
(vii) A list of patients by modality showing commuting distance and time to the current and the next nearest renal dialysis facility.
(viii) The historical and projected patient-to-staff ratios and number of machines used for maintenance dialysis treatments.
(ix) A computation showing the facility's treatment capacity, arrived at by taking the total stations multiplied by the number of hours of operation for the year divided by the average length of a dialysis treatment.
(x) The geographic boundaries and population size of the facility's service area.
(a) To qualify for an exception to the prospective payment rate based on extraordinary circumstances, the facility must substantiate that it incurs excess costs beyond its control due to a fire, earthquake, flood, or other natural disaster.
(b) HCFA will not grant an exception based on increased costs if a facility has chosen not to—
(1) Maintain adequate insurance protection against such losses (through the purchase of insurance, the maintenance of a self-insurance program, or other equivalent alternative); or
(2) File a claim for losses covered by insurance or utilize its self-insurance program.
(a)
(b)
(1) Separately identify those elements contributing to its costs in excess of the composite training rate; and
(2) Demonstrate that its per treatment costs are reasonable and allowable.
(c)
(d)
(e)
(1) A copy of the facility's training program.
(2) Computation of the facility's cost per treatment for maintenance sessions and training sessions including an explanation of the cost difference between the two modalities.
(3) Class size and patients' training schedules.
(4) Number of training sessions required, by treatment modality, to train patients.
(5) Number of patients trained for the current year and the prior 2 years on a monthly basis.
(6) Projection for the next 12 months of future training candidates.
(7) The number and qualifications of staff at training sessions.
(f)
(2) If an ESRD facility elects to train all its patients using a particular treatment modality more often than during each dialysis treatment and, as a result, the number of billable training dialysis sessions is less than the number of actual training sessions, the facility may request a composite rate exception, limited to the lesser of the—
(i) Facility's projected training cost per treatment; or
(ii) Cost per treatment the facility would have received in training a patient if it had trained patients only during a dialysis treatment, that is, three times per week.
(3) An ESRD facility may bill a maximum of 25 training sessions per patient for hemodialysis training and 15 sessions for CCPD and CAPD training.
(4) In computing the payment amount under an accelerated training exception, HCFA uses a minimum number of training sessions per patient (15 for hemodialysis and 5 for CAPD and CCPD) when the facility actually provides fewer than the minimum number of training sessions.
(5) To justify an accelerated training exception request, an ESRD facility must document that a significant number of training sessions for a particular modality are provided during a shorter but more condensed period.
(6) The facility must submit with the exception request a list of patients, by modality, trained during the most recent cost report period. The list must include each beneficiary's—
(i) Name;
(ii) Age; and
(iii) Training status (completed, not completed, being retrained, or in the process of being trained).
(7) The total treatments from the patient list must be the same as the total treatments reported on the cost report filed with the request.
(a)
(b)
(c)
(d)
(1) A list of patients receiving outpatient dialysis treatments for the cost report that is filed with the request. The list must indicate—
(i) Whether the patients are permanent, transient, or temporary;
(ii) The medically prescribed frequency of dialysis; and
(iii) The number of dialysis treatments that each patient received on a weekly and yearly basis and an explanation of any discrepancy between that calculation and the number of treatments reported on the facility's cost report.
(2) A list of patients used to project treatments. The list must indicate—
(i) Whether the patients are permanent, transient, or temporary;
(ii) The medically prescribed frequency of dialysis;
(iii) The number of dialysis treatments that each patient is projected to receive on a weekly and yearly basis, an explanation of any discrepancy between that calculation and the number of treatments reported on the facility's projected cost report, and an explanation for any change among prior, actual, and projected data.
(3) A schedule showing the number of treatments to be furnished twice a week and the number of treatments that would have been furnished if each patient were dialyzed three times a week.
(4) A computation of the facility's projected costs per treatment using the—
(i) Projected number of treatments furnished twice a week; and
(ii) Number of treatments if patients dialyze three times a week.
(5) A schedule showing the computation of the percentage decrease in the number of treatments.
(a)
(2) A facility must request and obtain a final agency decision prior to seeking judicial review of a dispute regarding the amount of allowable Medicare bad debts.
(b)
(2) The PRRB has the authority to review the action taken by HCFA on the facility's requests. However, the PRRB's decision is subject to review by the Administrator under § 405.1875 of this chapter.
(3) A facility must request and obtain a final agency decision, in accordance with paragraph (b)(1) of this section, prior to seeking judicial review of the denial, in whole or in part, of the exception request.
(c)
(2) The facility may not submit to the reviewing entity, whether it is the intermediary or the PRRB, any additional information or cost data that had not been submitted to HCFA at the time HCFA evaluated the exception request.
(d)
(1) The amount in controversy per treatment is determined by subtracting the amount of program payment from the amount the facility requested under § 413.180; and
(2) The total amount in controversy is calculated by multiplying the amount in controversy per treatment by the projected number of treatments for the exception request period.
(a) HCFA or the facility's intermediary notifies each facility of changes in its payment rate. This notice includes changes in individual facility payment rates resulting from corrections or revisions of particular geographic labor cost adjustment factors.
(b) Changes in payment rates resulting from incorporation of updated cost data or general revisions of geographic labor cost adjustment factors are announced by notice published in the
(a)
(b)
(2) The cost reimbursement principles set forth in this part (beginning with § 413.134, Depreciation, and excluding the principles listed in paragraph (b)(4) of this section), apply in the determination and reporting of the allowable cost incurred in furnishing outpatient maintenance dialysis treatments to patients dialyzing in the facility, or incurred by the facility in furnishing home dialysis service, supplies, and equipment.
(3) Allowable cost is the reasonable cost related to dialysis treatments. Reasonable cost includes all necessary and proper expenses incurred by the facility in furnishing the dialysis treatments, such as administrative costs, maintenance costs, and premium payments for employee health and pension plans. It includes both direct and indirect costs and normal standby costs. Reasonable cost does not include costs that—
(i) Are not related to patient care for outpatient maintenance dialysis;
(ii) Are for services or items specifically not reimbursable under the program;
(iii) Flow from the provision of luxury items or servicess (items or services substantially in excess of or more expensive than those generally considered necessary for the provision of needed health services); or
(iv) Are found to be substantially out of line with other institutions in the same area that are similar in size, scope of services, utilization, and other relevant factors.
(4) The following principles of this part do not apply in determining adjustments to allowable costs as reported by ESRD facilities:
(i) Section 413.157, Return on equity capital of proprietary providers;
(ii) Section 413.200, Reimbursement of OPAs and histocompatibility laboratories;
(iii) Section 413.9, Cost related to patient care (except for the principles stated in paragraph (b)(3) of this section); and
(iv) Sections 413.64, Payments to providers, and §§ 413.13, 413.30, 413.35, 413.40, 413.74, and §§ 415.55 through 415.70, § 415.162, and § 415.164 of this chapter, Principles of reimbursement for services by hospital-based physicians.
(a)
(b)
(1) Subject to the control of the hospital with respect to the hiring, firing, training, and paying of employees; and
(2) Considered as a department of the hospital for insurance purposes (including malpractice insurance, general liability insurance, worker's compensation insurance, and employee retirement insurance).
(c)
(i) To file a cost report in accordance with § 413.24(f) within three months after the end of each fiscal year;
(ii) To permit HCFA to designate an intermediary to determine the interim reimbursement rate payable to the transplant hospitals for services provided by the OPO or laboratory and to make a determination of reasonable cost based upon the cost report filed by the OPO or laboratory;
(iii) To provide such budget or cost projection information as may be required to establish an initial interim reimbursement rate;
(iv) To pay to HCFA amounts that have been paid by HCFA to transplant hospitals and that are determined to be in excess of the reasonable cost of the services provided by the OPO or laboratory; and
(v) Not to charge any individual for items or services for which that individual is entitled to have payment made under section 1861 of the Act.
(2) The initial cost report due from an OPO or laboratory is for its first fiscal year during any portion of which it had an agreement with the Secretary under paragraphs (c) (1) and (2) of this section. The initial cost report covers only the period covered by the agreement.
(d)
(2) The interim rate will be based on the average cost per service incurred by an OPO or laboratory, during its previous fiscal year, associated with procuring a kidney for transplantation. This interim rate may be adjusted if necessary for anticipated cost changes. If there is not adequate cost data to determine the initial interim rate, it will be determined according to the OPO's or laboratory's estimate of its projected costs for the fiscal year.
(3) Payments made on the basis of the interim rate will be reconciled directly with the OPO or laboratory after the close of its fiscal year, in accordance with paragraph (e) of this section.
(4) Information on the interim rate for all freestanding OPOs and histocompatibility laboratories shall be disseminated to all transplant hospitals and intermediaries.
(e)
(2)
(f) For services furnished on or after April 1, 1988, no payment may be made for services furnished by an OPO that does not meet the requirements of part 485, subpart D of this chapter.
(g)
An OPO's total costs for all kidneys is reduced by the costs associated with procuring kidneys sent to foreign transplant centers or transplanted in patients other than Medicare beneficiaries. OPOs, as defined in § 435.302 of this chapter, must separate costs for procuring kidneys that are sent to foreign transplant centers and kidneys transplanted in patients other than Medicare beneficiaries from Medicare allowable costs prior to final settlement by the Medicare fiscal intermediaries. Medicare costs are based on the ratio of the number of usable kidneys transplanted into Medicare beneficiaries to the total number of usable kidneys applied to reasonable costs. Certain long-standing arrangements that existed before March 3, 1988 (for example, an OPO that procures kidneys at a military transplant hospital for transplant at that hospital), will be deemed to be Medicare kidneys for cost reporting statistical purposes. The OPO must submit a request to the fiscal intermediary for review and approval of these arrangements.
(a) A transplant center's total costs for all organs is reduced by the costs associated with procuring organs sent to foreign transplant centers or transplanted in patients other than Medicare beneficiaries. Organs are defined in § 486.302 (only covered organs will be paid for on a reasonable cost basis).
(b) Transplant center hospitals must separate costs for procuring organs that are sent to foreign transplant centers and organs transplanted in patients other than Medicare beneficiaries from Medicare allowable costs prior to final cost settlement by the Medicare fiscal intermediaries.
(c) Medicare costs are based on the ratio of the number of usable organs transplanted into Medicare beneficiaries to the total number of usable organs applied to reasonable costs.
(a)
(b)
For purposes of this subpart—
(a)
(b)
(c)
(a)
(b)
(c)
(d)
(a)
(b)
(a)
(i) The SNF cost data that were used to develop the applicable routine service cost limits;
(ii) A wage index to adjust for area wage differences; and
(iii) The most recent projections of increases in the costs from the SNF market basket index.
(2) In the annual schedule of rates published in the
(b)
(ii)
(iii)
(B) The labor-related portion is obtained by multiplying the SNF's adjusted per diem routine operating cost by a percentage that represents the labor-related portion of cost from the market basket. This percentage is published when the revised rates are published as described in § 413.320.
(C) The labor-related portion of each SNF's per diem cost is divided by the wage index applicable to the SNF's geographic location to arrive at the adjusted labor-related portion of routine cost.
(iv)
(2)
(i) The SNF routine capital-related cost for both direct and indirect capital costs allocated to routine services, as reported on the Medicare cost report, is obtained for each SNF in the data base.
(ii) For each SNF, the per diem capital-related cost is calculated by dividing the SNF's routine capital costs by its inpatient days.
(iii) SNFs are grouped by urban and rural location by census region, and mean per diem routine capital-related cost is determined for each group.
(iv) Each group mean per diem capital-related cost is multiplied by 105 percent.
(3)
(ii) For each proprietary SNF, per diem return on equity is calculated by dividing the routine cost related return on equity determined under paragraph (b)(3)(i) of this section by the SNF's total Medicare inpatient days.
(iii) Separate group means are computed for per diem return on equity of proprietary SNFs, based on regional and urban or rural classification.
(iv) Each group mean is multiplied by 105 percent.
(a)
(b)
(1) A routine operating component, which is divided into:
(i) A labor-related portion adjusted by the appropriate wage index; and
(ii) A nonlabor-related portion.
(2) A routine capital-related cost portion.
(3) For proprietary SNFs only, a portion that is based on the return on owner's equity related to routine cost, applicable only for services furnished before October 1, 1993.
(c)
(2) If a facility uses a cost reporting period that is not 12 months in duration, the intermediary must obtain a special adjustment factor from HCFA for the specific period.
(d)
Ancillary services are paid on the basis of reasonable cost in accordance with section 1861(v)(1) of the Act and § 413.53.
At least 90 days before the beginning of a Federal fiscal year to which revised prospectively determined payment rates are to be applied, HCFA publishes a notice in the
(a) Establishing the prospectively determined payment rates for routine services; and
(b) Explaining the basis on which the prospectively determined payment rates are calculated.
SNFs electing to be paid under the prospectively determined payment rate system may file a simplified cost report. The cost report contains a simplified method of cost finding to be used in lieu of cost methods described in § 413.24(d). This method is specified in the instructions for Form HCFA-2540S, contained in sections 3000-3027.3 of Part 2 of the Provider Reimbursement Manual. This form may not be used by hospital-based SNFs or SNFs that are part of a health care complex. Those SNFs must file a cost report that reflects the shared services and administrative costs of the hospital and any other related facilities in the health care complex.
(a)
(b)
As used in this subpart—
(a)
(b)
(a)
(i) Medicare data on allowable costs from freestanding and hospital-based SNFs for cost reporting periods beginning in fiscal year 1995. SNFs that received “new provider” exemptions under § 413.30(e)(2) are excluded from the data base used to compute the Federal payment rates. In addition, allowable costs related to exceptions payments under § 413.30(f) are excluded from the data base used to compute the Federal payment rates;
(ii) An appropriate wage index to adjust for area wage differences;
(iii) The most recent projections of increases in the costs from the SNF market basket index;
(iv) Resident assessment and other data that account for the relative resource utilization of different resident types; and
(v) Medicare Part B SNF claims data reflecting amounts payable under Part B for covered SNF services (other than those services described in § 411.15(p)(2) of this chapter) furnished during SNF cost reporting periods beginning in fiscal year 1995 to individuals who were residents of SNFs and receiving Part A covered services.
(b)
(2)
(3)
(4)
(5)
(i) By computing the average per diem standardized cost of freestanding SNFs weighted by Medicare days.
(ii) By computing the average per diem standardized cost of freestanding and hospital-based SNFs combined weighted by Medicare days.
(iii) By computing the average of the amounts determined under paragraphs (b)(5)(i) and (b)(5)(ii) of this section.
(c)
(d)
(1) For fiscal years 2000 through 2002, the unadjusted Federal rate is equal to the rate for the previous period or fiscal year increased by a factor equal to the SNF market basket index percentage minus 1 percentage point.
(2) For subsequent fiscal years, the unadjusted Federal rate is equal to the rate for the previous fiscal year increased by the applicable SNF market basket index amount.
(a)
(b)
(c)
(d)
(1) For a subsequent cost reporting period beginning in fiscal years 1998 and 1999, the facility-specific rate is equal to the facility-specific rate for the previous cost reporting period updated by the applicable market basket index percentage minus one percentage point.
(2) For a subsequent cost reporting period beginning in fiscal year 2000, the facility-specific rate is equal to the facility-specific rate for the previous cost reporting period updated by the applicable market basket index percentage.
(e)
(a)
(b)
(c)
HCFA publishes information pertaining to each update of the Federal payment rates in the
Judicial or administrative review under sections 1869 or 1878 of the Act or otherwise is prohibited with regard to the establishment of the Federal rates. This prohibition includes the methodology used in the computation of the Federal standardized payment rates, the case-mix methodology, and the development and application of the wage index. This prohibition on judicial and administrative review also extends to the methodology used to establish the facility-specific rates but not to determinations related to reasonable cost in the fiscal year 1995 cost reporting period used as the basis for these rates.
(a)
(b)
(2)
(3)
(ii)
(c)
(d)
(i) There is a delay by the intermediary in making payment to the SNF.
(ii) Due to an exceptional situation, there is a temporary delay in the SNF's preparation and submittal of bills to the intermediary beyond its normal billing cycle.
(2)
(3)
(4)
Secs. 1102, 1871, and 1881(b)(l) of the Social Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)).
Nomenclature changes affecting this part appear at 60 FR 50442, Sept. 29, 1995, and 60 FR 53877, Oct. 18, 1995.
This part implements the indicated provisions of the following sections of the Act:
1802—Rules for private contracts by Medicare beneficiaries.
1820—Rules for Medicare reimbursement for telehealth services.
1833—Rules for payment for most Part B services.
1834(a) and (h)—Amounts and frequency of payments for durable medical equipment and for prosthetic devices and orthotics and prosthetics.
l848—Fee schedule for physician services.
1881(b)—Rules for payment for services to ESRD beneficiaries.
1887—Payment of charges for physician services to patients in providers.
As used in this part, unless the context indicates otherwise—
(1) Professional services of doctors of medicine and osteopathy (including osteopathic practitioners), doctors of optometry, doctors of podiatry, doctors of dental surgery and dental medicine, and chiropractors.
(2) Supplies and services covered “incident to” physician services (excluding drugs as specified in § 414.36).
(3) Outpatient physical and occupational therapy services if furnished by a person or an entity that is not a Medicare provider of services as defined in § 400.202 of this chapter.
(4) Diagnostic x-ray tests and other diagnostic tests (excluding diagnostic laboratory tests paid under the fee schedule established under section 1833(h) of the Act).
(5) X-ray, radium, and radioactive isotope therapy, including materials and services of technicians.
(6) Antigens, as described in section 1861(s)(2)(G) of the Act.
(7) Bone mass measurement.
(a)
(b)
(a)
(1) The RVUs for the service.
(2) The GAF for the fee schedule area.
(3) The CF.
(b)
Medicare payment is based on the lesser of the actual charge or the applicable fee schedule amount.
HCFA establishes RVUs for physicians' work, practice expense, and malpractice insurance.
(a)
(2)
(ii)
(b)
(2) The average practice expense percentage for a service or class of services is computed as follows:
(i) Multiply the average practice expense percentage for each specialty by the proportion of a particular service or class of service performed by that specialty.
(ii) Add the products for all specialties.
(3) For services furnished beginning calendar year (CY) 1994, for which 1994 practice expense RVUs exceed 1994 work RVUs and that are performed in office settings less than 75 percent of the time, the 1994, 1995, and 1996 practice expense RVUs are reduced by 25 percent of the amount by which they exceed the number of 1994 work RVUs. Practice expense RVUs are not reduced to less than 128 percent of 1994 work RVUs.
(4) For services furnished beginning January 1, 1998, practice expense RVUs for certain services are reduced to 110 percent of the work RVUs for those services. The following two categories of services are excluded from this limitation:
(i) The service is provided more than 75 percent of the time in an office setting; or
(ii) The service is one described in section 1848(c)(2)(G)(v) of the Act, codified at 42 U.S.C. 1395w-4(c)(2)(G). Section 1848(c)(2)(G)(v) of the Act refers to the 1998 proposed resource-based practice expense RVUs (as specified in the June 18, 1997 physician fee schedule proposed rule (62 FR 33158)) for the specific site, either in-office or out-of-office, increased from its 1997 practice expense RVUs.)
(5) For services furnished beginning January 1, 1999, the practice expense RVUs are based on 75 percent of the practice expense RVUs applicable to services furnished in 1998 and 25 percent of the relative practice expense resources involved in furnishing the service. For services furnished in 2000, the practice expense RVUs are based on 50 percent of the practice expense RVUs applicable to services furnished in 1998 and 50 percent of the relative practice expense resources involved in furnishing the service. For services furnished in 2001, the practice expense RVUs are based on 25 percent of the practice expense RVUs applicable to services furnished in 1998 and 75 percent of the relative practice expense resources involved in furnishing the service. For services furnished in 2002 and subsequent years, the practice expense RVUs are based entirely on relative practice expense resources.
(i) Usually one of two levels of practice expense RVUs per code can be applied to each service. The lower practice expense RVUs apply to services furnished to hospital, skilled nursing
(ii) Only one practice expense RVU per code can be applied for each of the following services: services that have only technical component practice expense RVUs or only professional component practice expense RVUs; evaluation and management services, such as hospital or nursing facility visits, that are furnished exclusively in one setting; and major surgical services.
(c)
(2) The average historical malpractice insurance percentage for a service or class of services is computed as follows:
(i) Multiply the average malpractice insurance percentage for each specialty by the proportion of a particular service or class of services performed by that specialty.
(ii) Add all the products for all the specialties.
(a)
(2) HCFA publishes a notice in the
(3) After considering public comments, HCFA revises, if necessary, the interim RVUs and announces those revisions in a final notice published in the
(b)
(2) After considering public comments, HCFA publishes a final notice in the
(3) The RVU revisions are effective prospectively for services furnished beginning on the effective date specified in the final notice.
(c)
(2) Carriers must obtain prior approval from HCFA to establish local codes for services that meet the definition of “physician services” in § 414.2.
HCFA establishes a GAF for each service in each fee schedule area.
(a)
(1) An index that reflects one-fourth of the difference between the relative value of physicians' work effort in each of the different fee schedule areas as determined under § 414.22(a) and the national average of that work effort.
(2) An index that reflects the relative costs of the mix of goods and services comprising practice expenses (other than malpractice expenses) in each of the different fee schedule areas as determined under § 414.22(b) compared to the national average of those costs.
(3) An index that reflects the relative costs of malpractice expenses in each of the different fee schedule areas as
(b)
(c)
(1) The geographic physicians' work adjustment factor for a service is the product of the proportion of the total relative value for the service that reflects the RVUs for the work component and the geographic physicians' work index value established under paragraph (a)(1) of this section.
(2) The geographic practice expense adjustment factor for a service is the product of the proportion of the total relative value for the service that reflects the RVUs for the practice expense component, multiplied by the geographic practice cost index (GPCI) value established under paragraph (a)(2) of this section.
(3) The geographic malpractice adjustment factor for a service is the product of the proportion of the total relative value for the service that reflects the RVUs for the malpractice component, multiplied by the GPCI value established under paragraph (a)(3) of this section.
HCFA establishes CFs in accordance with section 1848(d) of the Act.
(a)
(b)
Unless Congress acts in accordance with section 1848(d)(3) of the Act—
(a)
(b)
(1) For CYs 1992 and 1993, 2 percentage points.
(2) For CY 1994, 2.5 percentage points.
(3) For CYs 1995 and thereafter, 5 percentage points.
(a)
(1) Hospital outpatient departments, including clinics and emergency rooms.
(2) Hospital inpatient departments.
(3) Comprehensive outpatient rehabilitation facilities.
(4) Comprehensive inpatient rehabilitation facilities.
(5) Inpatient psychiatric facilities.
(6) Skilled nursing facilities.
(b)
(c)
(d)
(1) Rural health clinic services.
(2) Surgical services not on the ambulatory surgical center covered list of procedures published under § 416.65(c) of this chapter when furnished in an ambulatory surgical center.
(3) Anesthesiology services and diagnostic and therapeutic radiology services.
(a)
(2) If physician services of the type routinely furnished in provider settings are furnished in a physician's office, separate payment may be made for certain supplies furnished incident to that physician service if the following requirements are met:
(i) It is a procedure that can safely be furnished in the office setting in appropriate circumstances.
(ii) It requires specialized supplies that are not routinely available in physicians' offices and that are generally disposable.
(iii) It is furnished before January 1, 1999.
(3) For the purpose of paragraph (a)(2) of this section, provider settings include only the following settings:
(i) Hospital inpatient and outpatient departments.
(ii) Ambulatory surgical centers.
(4) For the purpose of paragraph (a)(2) of this section, “routinely furnished in provider settings” means furnished in inpatient or outpatient hospital settings or ambulatory surgical centers more than 50 percent of the time.
(5) HCFA establishes a list of services for which a separate supply payment may be made under this section.
(6) The fee schedule amount for supplies billed separately is not subject to a GPCI adjustment.
(b)
Payment for drugs incident to a physician's service is made in accordance with § 405.517 of this chapter.
(a)
(b)
(1) A history of a previous adverse reaction to contrast material, with the
(2) A history of asthma or allergy.
(3) Significant cardiac dysfunction including recent or imminent cardiac decompensation, severe arrhythmias, unstable angina pectoris, recent myocardial infarction, and pulmonary hypertension.
(4) Generalized severe debilitation.
(5) Sickle cell disease.
(c)
(d)
(a)
(b)
(1) The care plan oversight services require recurrent physician supervision of therapy involving 30 or more minutes of the physician's time per month.
(2) Payment is made to only one physician per patient for services furnished during a calendar month period. The physician must have furnished a service requiring a face-to-face encounter with the patient at least once during the 6-month period before the month for which care plan oversight payment is first billed. The physician may not have a significant ownership interest in, or financial or contractual relationship with, the HHA in accordance with § 424.22(d) of this chapter. The physician may not be the medical director or employee of the hospice and may not furnish services under an arrangement with the hospice.
(3) If a physician furnishes care plan oversight services during a postoperative period, payment for care plan oversight services is made if the services are documented in the patient's medical record as unrelated to the surgery.
(a)
(b)
(1) Global surgery policy (for example, post- and pre-operative periods and services, and intra-operative services).
(2) Professional and technical components (for example, payment for services, such as an EEG, which typically comprise a technical component (the taking of the test) and a professional component (the interpretation)).
(3) Payment modifiers (for example, assistant-at-surgery, multiple surgery, bilateral surgery, split surgical global services, team surgery, and unusual services).
(a)
(b)
(c)
(2) The “second, third, and fourth years of practice“ are the first, second, and third CYs following the first year of practice, respectively.
(d)
(1) First year—80 percent
(2) Second year—85 percent
(3) Third year—90 percent
(4) Fourth year—95 percent
(a)
(2)
(3)
(4)
(b)
(1) If the AHPB determined under paragraph (a) of this section is from 85 percent to 115 percent of the fee schedule amount for the area for services furnished in 1992, payment is at the fee schedule amount.
(2) If the AHPB determined under paragraph (a) of this section is less than 85 percent of the fee schedule amount for the area for services furnished in 1992, an amount equal to the AHPB plus 15 percent of the fee schedule amount is substituted for the fee schedule amount.
(3) If the AHPB determined under paragraph (a) of this section is greater than 115 percent of the fee schedule amount for the area for services furnished in 1992, an amount equal to the AHPB minus 15 percent of the fee schedule amount is substituted for the fee schedule amount.
(c)
(1) If the AHPB determined under paragraph (a) of this section is from 85 percent to 109 percent of the fee schedule amount for the area for services furnished in 1992, payment is at the fee schedule amount.
(2) If the AHPB determined under paragraph (a) of this section is less than 85 percent of the fee schedule amount for the area for services furnished in 1992, an amount equal to the AHPB plus 15 percent of the fee schedule amount is substituted for the fee schedule amount.
(3) If the AHPB determined under paragraph (a) of this section is greater than 109 percent of the fee schedule amount for the area for services furnished in 1992, an amount equal to the
(d)
(e)
(f)
(a)
(1)
(2)
(b)
(1) The physician fee schedule amount for an anesthesia service is based on the product of the allowable base and time units and an anesthesia-specific CF.
(2) The allowable base units are determined by the uniform relative value guide based on the 1988 American Society of Anesthesiologists' Relative Value Guide except that the number of base units recognized for anesthesia services furnished during cataract or iridectomy surgery is four units. The uniform base units are identified in program operating instructions.
(3) Modifier units are not allowed. Modifier units include additional units charged by a physician or a CRNA for patient health status, risk, age, or unusual circumstances.
(c)
(1) HCFA considers an anesthesia service to be personally performed under any of the following circumstances:
(i) The physician performs the entire anesthesia service alone.
(ii) The physician establishes an attending physician relationship in one or two concurrent cases involving an intern or resident and the service was furnished before January 1, 1994.
(iii) The physician establishes an attending physician relationship in one case involving an intern or resident and the service was furnished on or after January 1, 1994 but prior to January 1, 1996. For services on or after January 1, 1996, the physician must be the teaching physician as defined in §§ 415.170 through 415.184 of this chapter.
(iv) The physician and the CRNA or AA are involved in a single case and the services of each are found to be medically necessary.
(v) The physician is continuously involved in a single case involving a student nurse anesthetist.
(vi) The physician is continuously involved in a single case involving a
(2) HCFA determines the fee schedule amount for an anesthesia service personally performed by a physician on the basis of an anesthesia-specific fee schedule CF and unreduced base units and anesthesia time units. One anesthesia time unit is equivalent to 15 minutes of anesthesia time, and fractions of a 15-minute period are recognized as fractions of an anesthesia time unit.
(d)
(i) The physician performs the activities described in § 415.110 of this chapter.
(ii) The physician directs qualified individuals involved in two, three, or four concurrent cases.
(iii) Medical direction can occur for a single case furnished on or after January 1, 1998 if the physician performs the activities described in § 415.110 of this chapter and medically directs a single CRNA or AA.
(2) The rules for medical direction differ for certain time periods depending on the nature of the qualified individual who is directed by the physician. If more than two procedures are directed on or after January 1, 1994, the qualified individuals could be AAs, CRNAs, interns, or residents. The medical direction rules apply to student nurse anesthetists only if the physician directs two concurrent cases, each of which involves a student nurse anesthetist or the physician directs one case involving a student nurse anesthetist and the other involving a CRNA, AA, intern, or resident.
(3) Payment for medical direction is based on a specific percentage of the payment allowance recognized for the anesthesia service personally performed by a physician alone. The following percentages apply for the years specified:
(i) CY 1994—60 percent of the payment allowance for personally performed procedures.
(ii) CY 1995—57.5 percent of the payment allowance for personally performed services.
(iii) CY 1996—55 percent of the payment allowance for personally performed services.
(iv) CY 1997—52.5 percent of the payment allowance for personally performed services.
(v) CY 1998 and thereafter—50 percent of the payment allowance for personally performed services.
(e)
(f)
(2) HCFA makes no separate payment for other medical or surgical services, such as the pre-anesthetic examination of the patient, pre- or post-operative visits, or usual monitoring functions, that are ordinarily included in the anesthesia service.
(g)
(a)
(b)
(a)
(1) The supplier's net charge to the physician.
(2) The physician's actual charge.
(3) The fee schedule amount for the test that would be allowed if the supplier billed directly.
(b)
(1) Physicians who accept Medicare assignment may bill beneficiaries for only the applicable deductibles and coinsurance.
(2) Physicians who do not accept Medicare assignment may not bill the beneficiary more than the payment amount described in paragraph (a) of this section.
Allowed amounts for the services of a physician assistant furnished beginning January 1, 1992 and ending December 31, 1997, may not exceed the limits specified in paragraphs (a) through (c) of this section. Allowed amounts for the services of a physician assistant furnished beginning January 1, 1998, may not exceed the limits specified in paragraph (d) of this section.
(a) For assistant-at-surgery services, 65 percent of the amount that would be allowed under the physician fee schedule if the assistant-at-surgery service was furnished by a physician.
(b) For services (other than assistant-at-surgery services) furnished in a hospital, 75 percent of the physician fee schedule amount for the service.
(c) For all other services, 85 percent of the physician fee schedule amount for the service.
(d) For services (other than assistant-at-surgery services) furnished beginning January 1, 1998, 85 percent of the physician fee schedule amount for the service. For assistant-at-surgery services, 85 percent of the physician fee schedule amount that would be allowed under the physician fee schedule if the assistant-at-surgery service were furnished by a physician.
For services furnished after December 31, 1991, allowed amounts under the fee schedule established under section 1833(a)(1)(K) of the Act for the payment of certified nurse-midwife services may not exceed 65 percent of the physician fee schedule amount for the service.
(a)
(1) For services furnished in a hospital (including assistant-at-surgery services), 75 percent of the physician fee schedule amount for the service.
(2) For all other services, 85 percent of the physician fee schedule amount for the service.
(b)
(c)
(a)
(b)
(a)
(1) The allowance for an anesthesia service furnished by a medically directed CRNA is based on a fixed percentage of the allowance recognized for the anesthesia service personally performed by the physician alone, as specified in § 414.46(d)(3); and
(2) The CF for an anesthesia service furnished by a CRNA not directed by a physician may not exceed the CF for a service personally performed by a physician.
(b)
(c)
The fee schedule for clinical psychologist services is set at 100 percent of the amount determined for corresponding services under the physician fee schedule.
(a)
(1) The payment may not exceed the current fee schedule amount applicable to the consulting practitioner for the health care service provided.
(2) The payment may not include reimbursement for any telephone line charges or any facility fees.
(3) The payment is subject to the coinsurance and deductible requirements of sections 1833(a)(1) and (b) of the Act.
(4) The payment differential of section 1848(a)(3) of the Act applies to
(b)
(c)
(d)
(e)
(f)
(1) Knowingly and willfully bills or collects for services in violation of the limitations f this section on a repeated basis; or
(2) Fails to timely correct excess charges by reducing the actual charge billed for the service to an amount that does not exceed the limiting charge for the service or fails to timely refund excess collections.
This subpart implements sections 1834 (a) and (h) of the Act by specifying how payments are made for the purchase or rental of new and used durable medical equipment and prosthetic and orthotic devices for Medicare beneficiaries.
For purposes of this subpart, the following definitions apply:
(1) Can withstand repeated use;
(2) Is primarily and customarily used to serve a medical purpose;
(3) Generally is not useful to an individual in the absence of an illness or injury; and
(4) Is appropriate for use in the home. (See § 410.38 of this chapter for a description of when an institution qualifies as a home.)
(1) Devices that replace all or part of an internal body organ, including ostomy bags and supplies directly related to ostomy care, and replacement of such devices and supplies;
(2) One pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens; and
(3) Leg, arm, back, and neck braces, and artificial legs, arms, and eyes, including replacements if required because of a change in the beneficiary's physical condition.
(1) Parenteral and enteral nutrients, supplies, and equipment;
(2) Intraocular lenses;
(3) Medical supplies such as catheters, catheter supplies, ostomy bags, and supplies related to ostomy care that are furnished by an HHA as part of home health services under § 409.40(e) of this chapter;
(4) Dental prostheses.
(a)
(1) The actual charge for the item;
(2) The fee schedule amount for the item, as determined in accordance with the provisions of §§ 414.220 through 414.232.
(b)
(i) Inexpensive or routinely purchased items, as specified in § 414.220.
(ii) Items requiring frequent and substantial servicing, as specified in § 414.222.
(iii) Certain customized items, as specified in § 414.224.
(iv) Oxygen and oxygen equipment, as specified in § 414.226.
(v) Prosthetic and orthotic devices, as specified in § 414.228.
(vi) Other durable medical equipment (capped rental items), as specified in § 414.229.
(vii) Transcutaneous electrical nerve stimulators (TENS), as specified in § 414.232.
(2) HCFA designates the items in each class of equipment or device through its program instructions.
(c)
(d)
(e)
(2)
(i) Items requiring frequent and substantial servicing, as defined in § 414.222(a);
(ii) Capped rental items, as defined in § 414.229(a), that are not purchased in accordance with § 414.229(d); and
(iii) Oxygen equipment, as defined in § 414.226.
(f)
(1) The reasonable useful lifetime of DME or prosthetic and orthotic devices is determined through program instructions. In the absence of program instructions, carriers may determine the reasonable useful lifetime of equipment but in no case can it be less than 5 years. Computation is based on when the equipment is delivered to the beneficiary, not the age of the equipment.
(2) If the beneficiary elects to obtain replacement equipment, payment is made on a purchase basis.
(a)
(2)
(3)
(b)
(2) Effective January 1, 1994, payment for ostomy supplies, tracheostomy supplies, urologicals, and surgical dressings not furnished as incident to a physician's professional service or furnished by an HHA is made using the methodology for the inexpensive and routinely purchased class.
(3) The total amount of payments made for an item may not exceed the fee schedule amount recognized for the purchase of that item.
(c)
(1) The carrier determines the average reasonable charge for inexpensive or routinely purchased items that were furnished during the period July 1, 1986 through June 30, 1987 based on the mean of the carrier's allowed charges for the item. A separate determination of an average reasonable charge is made for rental equipment, new purchased equipment, and used purchased equipment.
(2) The carrier adjusts the amount determined under paragraph (c)(1) of this section by the change in the level of the CPI-U for the 6-month period ending December 1987.
(d)
(e)
(f)
(1) The 1991 national limited payment amount is equal to:
(i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the weighted average of all local payment amounts;
(ii) The sum of 67 percent of the local payment amount plus 33 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average of all local payment amounts; or
(iii) The sum of 67 percent of the local payment amount plus 33 percent of 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average of all local payment amounts.
(2) The 1992 national limited payment amount is equal to:
(i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the weighted average of all local payment amounts;
(ii) The sum of 33 percent of the local payment amount plus 67 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average; or
(iii) The sum of 33 percent of the local payment amount plus 67 percent of 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average.
(3) For 1993, the national limited payment amount is equal to one of the following:
(i) 100 percent of the local payment amount if the local payment amount is neither greater than the weighted average nor less than 85 percent of the weighted average of all local payment amounts.
(ii) 100 percent of the weighted average of all local payment amounts if the local payment amount exceeds the weighted average of all local payment amounts.
(iii) 85 percent of the weighted average of all local payment amounts if the local payment amount is less than 85 percent of the weighted average of all local payment amounts.
(4) For 1994 and subsequent years, the national limited payment amount is equal to one of the following:
(i) If the local payment amount is not in excess of the median, nor less than 85 percent of the median, of all local payment amounts—100 percent of the local payment amount.
(ii) If the local payment amount exceeds the median—100 percent of the median of all local payment amounts.
(iii) If the local payment amount is less than 85 percent of the median—85 percent of the median of all local payment amounts.
(g)
(a)
(1) Ventilators (except those that are either continuous airway pressure devices or intermittent assist devices with continuous airway pressure devices).
(2) Continuous and intermittent positive pressure breathing machines.
(3) Continuous passive motion machines.
(4) Other items specified in HCFA program instructions.
(5) Other items identified by the carrier.
(b)
(c)
(1) The carrier determines the average reasonable charge for rental of items requiring frequent and substantial servicing that were furnished during the period July 1, 1986 through June 30, 1987 based on the mean of the carrier's allowed charges for the item.
(2) The carrier adjusts the amounts determined under paragraph (c)(1) of this section by the change in the level of the CPI-U for the 6-month period ending December 1987.
(d)
(e)
(a)
(b)
(a)
(2) Monthly fee schedule payments continue until medical necessity ends.
(b)
(i) Stationary oxygen equipment and oxygen contents (stationary and portable oxygen contents).
(ii) Portable oxygen equipment only.
(iii) Stationary and portable oxygen contents only.
(iv) Portable oxygen contents only.
(2) For 1989 and 1990, the monthly fee schedule amounts are the local payment amounts determined as follows:
(i) The carrier determines the base local average monthly payment rate equal to the total reasonable charges for the item for the 12-month period ending December 1986 divided by the total number of months for all beneficiaries receiving the item for the same period. In determining the local average monthly payment rate, the following limitations apply:
(A) Purchase charges for oxygen systems are not included as items classified under paragraph (b)(1)(i) of this section.
(B) Purchase charges for portable equipment are not included as items classified under paragraph (b)(1)(ii) of this section.
(ii) The carrier determines the local monthly payment amount equal to 0.95 times the base local average monthly payment amount adjusted by the change in the CPI-U for the six-month period ending December 1987.
(3) For years after 1990, the fee schedule amounts are determined using the methodology contained in § 414.220 (d), (e), and (f).
(c)
(2) Subject to the limitation set forth in paragraph (d)(2) of this section, the fee schedule amount for items described in paragraph (b)(1)(ii) of this section is paid when the beneficiary rents a portable oxygen system.
(3) The fee schedule amount for items described in paragraph (b)(1)(iii) of this section is paid when the beneficiary owns a stationary gaseous or liquid oxygen system.
(4) The fee schedule amount for items described in paragraph (b)(1)(iv) of this section is paid when the beneficiary owns or rents a portable gaseous or portable liquid oxygen system and uses either a stationary oxygen concentrator or no stationary oxygen system.
(d)
(i) If the attending physician prescribes an oxygen flow rate exceeding four liters per minute, the fee schedule amount is increased by 50 percent, subject to the limit in paragraph (d)(2) of this section.
(ii) If the attending physician prescribes an oxygen flow rate of less than one liter per minute, the fee schedule amount is decreased by 50 percent.
(2) If portable oxygen equipment is used and the prescribed oxygen flow rate exceeds four liters per minute, the total fee schedule amount recognized for payment is limited to the higher of—
(i) The sum of the monthly fee schedule amount for the items described in paragraphs (b)(1)(i) and (ii) of this section; or
(ii) The adjusted fee schedule amount described in paragraph (d)(1)(i) of this section.
(3) In establishing the volume adjustment for those beneficiaries whose physicians prescribe varying flow rates, the following rules apply:
(i) If the prescribed flow rate is different for stationary oxygen equipment than for portable oxygen equipment,
(ii) If the prescribed flow rate is different for the patient at rest than for the patient at exercise, the flow rate for the patient at rest is used.
(iii) If the prescribed flow rate is different for nighttime use and daytime use, the average of the two flow rates is used.
(a)
(b)
(1) The carrier determines a base local purchase price equal to the average reasonable charge for items purchased during the period July 1, 1986 through June 30, 1987 based on the mean of the carrier's allowed charges for the item.
(2) The carrier determines a local purchase price equal to the following:
(i) For 1989 and 1990, the base local purchase price is adjusted by the change in the level of the CPI-U for the 6-month period ending December 1987.
(ii) For 1991 through 1993, the local purchase price for the preceding year is adjusted by the applicable percentage increase for the year. The applicable percentage increase is equal to 0 percent for 1991. For 1992 and 1993, the applicable percentage increase is equal to the percentage increase in the CPI-U for the 12-month period ending with June of the previous year.
(iii) For 1994 and 1995, the applicable percentage increase is 0 percent.
(iv) For all subsequent years the applicable percentage increase is equal to the percentage increase in the CPI-U for the 12-month period ending with June of the previous year.
(3) HCFA determines the regional purchase price equal to the following:
(i) For 1992, the average (weighted by the relative volume of all claims among carriers) of the local purchase prices for the carriers in the region.
(ii) For 1993 and subsequent years, the regional purchase price for the preceding year adjusted by the applicable percentage increase for the year.
(4) HCFA determines a purchase price equal to the following:
(i) For 1989, 1990 and 1991, 100 percent of the local purchase price.
(ii) For 1992, 75 percent of the local purchase price plus 25 percent of the regional purchase price.
(iii) For 1993, 50 percent of the local purchase price plus 50 percent of the regional purchase price.
(iv) For 1994 and subsequent years, 100 percent of the regional purchase price.
(5) For 1992 and subsequent years, HCFA determines a national average purchase price equal to the unweighted average of the purchase prices determined under paragraph (b)(4) of this section for all carriers.
(6) HCFA determines the fee schedule amount equal to 100 percent of the purchase price determined under paragraph (b)(4) of this section, subject to the following limitations:
(i) For 1992, the amount cannot be greater than 125 percent nor less than 85 percent of the national average purchase price determined under paragraph (b)(5) of this section.
(ii) For 1993 and subsequent years, the amount cannot be greater than 120 percent of the national average nor less than 90 percent of the national average purchase price determined under paragraph (b)(5) of this section.
(a)
(b)
(2) For 1991 and subsequent years, the monthly fee schedule amount for rental of other covered durable medical equipment equals 10 percent of the purchase price recognized as determined under paragraph (c) of this section for each of the first 3 months and 7.5 percent of the purchase price for each of the remaining months.
(c)
(1) For
(ii) The purchase price is equal to the base local purchase price adjusted by the change in the level of the CPI-U for the 6-month period ending December 1987.
(2) For
(ii) The purchase price for 1991 is the national limited payment amount as determined using the methodology contained in § 414.220(f).
(3)
(d)
(1) Suppliers must offer beneficiaries the option of purchasing power-driven wheelchairs at the time the supplier first furnishes the item. Payment must be on a lump-sum fee schedule purchase basis if the beneficiary chooses the purchase option. The purchase fee is the amount established in § 414.229(c).
(2) Suppliers must offer beneficiaries the option of converting capped rental items (including power-driven wheelchairs not purchased when initially furnished) to purchased equipment during their 10th continuous rental month. Beneficiaries have one month from the date the supplier makes the offer to accept the purchase option.
(i) If the beneficiary does not accept the purchase option, payment continues on a rental basis not to exceed a period of continuous use of longer than 15 months. After 15 months of rental payments have been paid, the supplier must continue to provide the item without charge, other than a charge for maintenance and servicing fees, until medical necessity ends or Medicare coverage ceases. A period of continuous use is determined under the provisions in § 414.230.
(ii) If the beneficiary accepts the purchase option, payment continues on a rental basis not to exceed a period of continuous use of longer than 13 months. On the first day after 13 continuous rental months during which payment is made, the supplier must transfer title to the equipment to the beneficiary.
(e)
(2) Payment of the fee for maintenance and servicing of other durable medical equipment that is rented is made only for equipment that continues to be used after 15 months of rental payments have been made and is limited to the following:
(i) For the first 6-month period, no payments are to be made.
(ii) For each succeeding 6-month period, payment may be made during the first month of that period.
(3) Payment for maintenance and servicing DME purchased in accordance with paragraphs (d)(1) and (d)(2)(ii) of this section, is made on the basis of reasonable and necessary charges.
(f)
(g)
(1) The reasonable useful lifetime of DME or prosthetic and orthotic devices is determined through program instructions. In the absence of program instructions, carriers may determine the reasonable useful lifetime of equipment but in no case can it be less than 5 years. Computation is based on when the equipment is delivered to the beneficiary, not the age of the equipment.
(2) If the beneficiary elects to obtain replacement equipment, payment is made on a rental or purchase basis in accordance with paragraph (a) of this section or on a lump-sum purchase basis if a purchase agreement had been entered into in accordance with paragraph (d) of this section.
(a)
(b)
(c)
(2) An interruption of not longer than 60 consecutive days plus the days remaining in the rental month in which use ceases is temporary, regardless of the reason for the interruption.
(3) Unless there is a break in medical necessity that lasts lnnger than 60 consecutive days plus the days remaining in the rental month in which use ceases, medical necessity is presumed to continue.
(d)
(1) A new prescription.
(2) New medical necessity documentation.
(3) A statement describing the reason for the interruption and demonstrating that medical necessity in the prior episode ended.
(e)
(f)
(g)
(a)
(1) Effective April 1, 1990—the original payment amount is reduced by 15 percent.
(2) Effective January 1, 1991—the reduced payment amount in paragraph (a)(1) is reduced by 15 percent.
(3) Effective January 1, 1994—the reduced payment amount in paragraph (a)(1) is reduced by 45 percent.
(b)
This subpart sets forth criteria and procedures for payment of the following services furnished to ESRD patients:
(a) Physician services related to renal dialysis.
(b) Physician services related to renal transplantation.
(c) Home dialysis equipment, supplies, and support services.
(d) Epoetin (EPO) furnished by a supplier of home dialysis equipment and supplies to a home dialysis patient for use in the home.
(a)
(b)
(i) Outpatient maintenance dialysis patients who dialyze—
(A) In an independent or hospital-based ESRD facility, or
(B) At home.
(ii) Hospital inpatients for which the physician elects to continue payment under the monthly capitation payment (MCP) method described in § 414.314.
(2)
(c)
(1) They are personally furnished by a physician to an individual patient.
(2) They contribute directly to the diagnosis or treatment of an individual patient.
(3) They ordinarily must be performed by a physician.
(d)
(1) Visits to the patient during dialysis, and review of laboratory test results, nurses' notes and any other medical documentation, as a basis for—
(i) Adjustment of the patient's medication or diet, or the dialysis procedure;
(ii) Prescription of medical supplies; and
(iii) Evaluation of the patient's psychosocial status and the appropriateness of the treatment modality.
(2) Medical direction of staff in delivering services to a patient during a dialysis session.
(3) Pre-dialysis and post-dialysis examinations, or examinations that could have been furnished on a pre-dialysis or post-dialysis basis.
(4) Insertion of catheters for patients who are on peritoneal dialysis and do not have indwelling catheters.
(e)
(a)
(b)
(2) The carrier pays the physician or the beneficiary (as appropriate) under the reasonable charge criteria set forth in subpart E of part 405 of this chapter for the following services:
(i) Physician services that must be furnished at a time other than during the dialysis session (excluding pre-dialysis and post-dialysis examinations and examinations that could have been furnished on a pre-dialysis or post-dialysis basis), such as monthly and semi-annual examinations to review health status and treatment.
(ii) Physician surgical services other than insertion of catheters for patients who are on peritoneal dialysis and do not have indwelling catheters.
(iii) Physician services furnished to hospital inpatients who were not admitted solely to receive maintenance dialysis.
(iv) Administration of hepatitis B vaccine.
(c)
(2) The initial method of payment applies to dialysis services furnished beginning with the second calendar month after the month in which all physicians in the facility elect the initial method and continues until the effective date of a termination of the election described in paragraph (d) of this section.
(d)
(2) If the notice terminating the initial method is received by the carrier(s) and intermediary—
(i) On or before November 1, the effective date of the termination is January 1 of the year following the calendar year in which the termination notice is received by the carrier(s) and intermediary; or
(ii) After November 1, the effective date of the termination is January 1 of the second year after the calendar year in which the notice is received by the carrier(s) and intermediary.
(e)
(f)
(a)
(2) The carrier pays the MCP amount, subject to the deductible and coinsurance provisions, either to the physician if the physician accepts assignment or to the beneficiary if the physician does not accept assignment.
(3) The MCP method recognizes the need of maintenance dialysis patients for physician services furnished periodically over relatively long periods of time, and the capitation amounts are consistent with physicians' charging patterns in their localities.
(4) Payment of the capitation amount for any particular month is contingent upon the physician furnishing to the patient all physician services required by the patient during the month, except those listed in paragraph (b) of this section.
(5) Payment for physician administrative services (§ 414.310) is made to the dialysis facility as part of the facility's composite rate (part 413, subpart H of this subchapter) and not to the physician under the MCP.
(b)
(i) Administration of hepatitis B vaccine.
(ii) Covered physician services furnished by another physician when the patient is not available to receive, or the attending physician is not available to furnish, the outpatient services as usual (see paragraph (b)(3) of this section).
(iii) Covered physician services furnished to hospital inpatients, including services related to inpatient dialysis, by a physician who elects not to continue to receive the MCP during the period of inpatient stay.
(iv) Surgical services, including declotting of shunts, other than the insertion of catheters for patients on maintenance peritoneal dialysis who do not have indwelling catheters.
(v) Needed physician services that are—
(A) Furnished by the physician furnishing renal care or by another physician;
(B) Not related to the treatment of the patient's renal condition; and
(C) Not furnished during a dialysis session or an office visit required because of the patient's renal condition.
(2) For the services described in paragraph (b)(1)(v) of this section, the following rules apply:
(i) The physician must provide documentation to show that the services are not related to the treatment of the patient's renal condition and that additional visits are required.
(ii) The carrier's medical staff, acting on the basis of the documentation and appropriate medical consultation obtained by the carrier, determines whether additional payment for the additional services is warranted.
(3) The MCP is reduced in proportion to the number of days the patient is—
(i) Hospitalized and the physician elects to bill separately for services furnished during hospitalization; or
(ii) Not attended by the physician or his or her substitute for any reason, including when the physician is not available to furnish patient care or when the patient is not available to receive care.
(c)
(a) For each patient, the carrier pays a flat amount that covers all physician services required to create the capacity for self-dialysis and home dialysis.
(b) HCFA determines the amount on the basis of program experience and reviews it periodically.
(c) The payment is made at the end of the training course, is subject to the deductible and coinsurance provisions, and is in addition to any amounts payable under the initial or MCP methods set forth in §§ 414.313 and 414.314, respectively.
(d) If the training is not completed, the payment amount is proportionate to the time spent in training.
(a)
(2) Additional sums, in amounts established on the basis of program experience, may be included in the comprehensive payment for other surgery performed concurrently with the transplant operation.
(3) The amount of the comprehensive payment may not exceed the lower of the following:
(i) The actual charges made for the services.
(ii) Overall national payment levels established under the ESRD program and adjusted to give effect to variations in physician's charges throughout the nation. (These adjusted amounts are the maximum allowances in a carrier's service area for renal transplantation surgery and related services by surgeons.)
(4) Maximum allowances computed under these instructions are revised at the beginning of each calendar year to the extent permitted by the lesser of the following:
(i) Changes in the economic index as described in § 405.504(a)(3)(i) of this chapter.
(ii) Percentage changes in the weighted average of the carrier's prevailing charges (before adjustment by the economic index) for—
(A) A unilateral nephrectomy; or
(B) Another medical or surgical service designated by HCFA for this purpose.
(b)
(a)
(2)
(i) The patient elects to obtain home dialysis equipment and supplies from a supplier that is not a Medicare approved dialysis facility.
(ii) The patient certifies to HCFA that he or she has only one supplier for all home dialysis equipment and supplies. This certification is made on HCFA Form 382 (the “ESRD Beneficiary Selection” form).
(iii) In writing, the supplier—
(A) Agrees to receive Medicare payment for home dialysis supplies and equipment only on an assignment-related basis; and
(B) Certifies to HCFA that it has a written agreement with one Medicare approved dialysis facility or, if the beneficiary is also entitled to military or veteran's benefits, one military or Veterans Administration hospital, for each patient. (See subpart U of part 405 of this chapter for the requirements for a Medicare approved dialysis facility.) Under the agreement, the facility or military or VA hospital agrees to the following:
(
(
(
(
(
(
(
(iv) The facility with which the agreement is made must be located within a reasonable distance from the patient's home (that is, located so that the facility can actually furnish the needed services in a practical and timely manner, taking into account variables like the terrain, whether the patient's home is located in an urban or rural area, the availability of transportation, and the usual distances traveled by patients in the area to obtain health care services).
(b)
(2)
(i) For support services furnished by a hospital-based ESRD facility, Medicare pays on a reasonable cost basis in accordance with part 413 of this chapter.
(ii) For support services furnished by an independent ESRD facility, Medicare pays on the basis of reasonable charges that are related to costs and allowances that are reasonable when the services are furnished in an effective and economical manner.
(c)
(2)
(3)
(a) Payment for EPO used at home by a home dialysis patient is made only to either a Medicare approved ESRD facility or a supplier of home dialysis equipment and supplies.
(b) Payment is made in accordance with the rules set forth in § 413.170 of this chapter.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
(b)
This subpart sets forth rules for payment by fiscal intermediaries to providers for services furnished by physicians. Payment for covered services is made either under the prospective payment system (PPS) to PPS-participating providers in accordance with part 412 of this chapter or under the reasonable cost method to non-PPS participating providers in accordance with part 413 of this chapter.
(a)
(1) The services do not meet the conditions in § 415.102(a) regarding fee schedule payment for services of physicians to a beneficiary in a provider.
(2) The services include a surgeon's supervision of services of a qualified anesthetist, but do not include physician availability services, except for reasonable availability services furnished for emergency rooms and the services of standby surgical team physicians.
(3) The provider has incurred a cost for salary or other compensation it furnished the physician for the services.
(4) The costs incurred by the provider for the services meet the requirements in § 413.9 of this chapter regarding costs related to patient care.
(5) The costs do not include supervision of interns and residents unless the provider elects reasonable cost payment as specified in § 415.160, or any other costs incurred in connection with an approved GME program that are payable under § 413.86 of this chapter.
(b)
(c)
(a)
(b)
(1) Physician services to the provider (as described in § 415.55);
(2) Physician services to patients (as described in § 415.102); and
(3) Activities of the physician, such as funded research, that are not paid under either Part A or Part B of Medicare.
(c)
(d)
(1) The provider certifies that the compensation is attributable solely to the physician services furnished to the provider; and
(2) The physician bills all patients for the physician services he or she furnishes to them and personally receives the payment from or on behalf of the patients. If returned directly or indirectly to the provider or an organization related to the provider within the meaning of § 413.17 of this chapter, these payments are not compensation for physician services furnished to the provider.
(e)
(f)
(i) The provider submits to the intermediary a written allocation agreement between the provider and the physician that specifies the respective amounts of time the physician spends in furnishing physician services to the provider, physician services to patients, and services that are not payable under either Part A or Part B of Medicare; and
(ii) The compensation is reasonable in terms of the time devoted to these services.
(2) In the absence of a written allocation agreement, the intermediary assumes, for purposes of determining reasonable costs of the provider, that 100 percent of the physician compensation cost is allocated to services to beneficiaries as specified in paragraph (b)(2) of this section.
(g)
(1) Maintain the time records or other information it used to allocate physician compensation in a form that permits the information to be validated by the intermediary or the carrier.
(2) Report the information on which the physician compensation allocation is based to the intermediary or the carrier on an annual basis and promptly notify the intermediary or carrier of any revisions to the compensation allocation.
(3) Retain each physician compensation allocation, and the information on which it is based, for at least 4 years after the end of each cost reporting period to which the allocation applies.
(a)
(2) Limits established under this section do not apply to costs of physician compensation attributable to furnishing inpatient hospital services that are paid for under the prospective payment system implemented under part 412 of this chapter or to costs of physician compensation attributable to approved GME programs that are payable under § 413.86 of this chapter.
(3) Compensation that a physician receives for activities that may not be paid for under either Part A or Part B of Medicare is not considered in applying these limits.
(b)
(c)
(d)
(1) For the costs of membership in professional societies and continuing medical education, the intermediary may adjust the limit by the lesser of—
(i) The actual cost incurred by the provider or the physician for these activities; or
(ii) Five percent of the appropriate limit.
(2) For the cost of malpractice expenses incurred by either the provider or the physician, the intermediary may adjust the reasonable compensation equivalency limit by the cost of the malpractice insurance expense related to the physician service furnished to patients in providers.
(e)
(f)
(2) If HCFA proposes to revise the methodology for establishing payment limits under this section, HCFA publishes a notice, with opportunity for public comment, in the
(3) If HCFA updates limits by applying the most recent economic index data without revising the limit methodology, HCFA publishes the revised limits in a notice in the
This subpart implements section 1887(a)(1)(A) of the Act by providing general conditions that must be met in order for services furnished by physicians to beneficiaries in providers to be paid for on the basis of the physician fee schedule under part 414 of this chapter. Section 415.102 sets forth the conditions for fee schedule payment for physician services to beneficiaries in providers. Section 415.105 sets forth general requirements for determining the amounts of payment for services that meet the conditions of this section. Sections 415.120 and 415.130 set forth additional conditions for payment for physician services in the specialties of radiology and pathology (laboratory services).
(a)
(1) The services are personally furnished for an individual beneficiary by a physician.
(2) The services contribute directly to the diagnosis or treatment of an individual beneficiary.
(3) The services ordinarily require performance by a physician.
(4) In the case of radiology or laboratory services, the additional requirements in § 415.120 or § 415.130, respectively, are met.
(b)
(c)
(1) If a physician furnishes services that may be paid under the reasonable cost rules in § 415.55 or § 415.60, and paid by the intermediary, or would be paid under those rules except for the PPS rules in part 412 of this chapter, and under the payment rules for GME established by § 413.86 of this chapter, neither the provider nor the physician may seek payment from the carrier, beneficiary, or another insurer.
(2) If a physician furnishes services to an individual beneficiary that do not meet the applicable conditions in §§ 415.120 (concerning conditions for payment for radiology services) and 415.130 (concerning conditions for payment for physician pathology services), the carrier does not pay on a fee schedule basis.
(3) If the physician, the provider, or another entity bills the carrier or the beneficiary or another insurer for physician services furnished to the provider, as described in § 415.55(a), HCFA considers the provider to which the services are furnished to have violated its provider participation agreement, and may terminate that agreement. See part 489 of this chapter for rules governing provider agreements.
(d)
(1) If the conditions set forth in paragraph (a) of this section are met, the carrier pays for the physician services under the physician fee schedule in part 414 of this chapter.
(2) To the extent the provider incurs a cost payable on a reasonable cost basis under part 413 of this chapter, the intermediary pays the provider on a reasonable cost basis for the costs associated with producing these services,
(3) The physician (or other entity) is treated as being related to the provider within the meaning of § 413.17 of this chapter (concerning cost to related organizations).
(4) The physician (or other entity) must make its books and records available to the provider and the intermediary as necessary to verify the nature and extent of the costs of the services furnished by the physician (or other entity).
(a)
(b)
(2)
(a)
(1) For each patient, the physician—
(i) Performs a pre-anesthetic examination and evaluation;
(ii) Prescribes the anesthesia plan;
(iii) Personally participates in the most demanding aspects of the anesthesia plan including, if applicable, induction and emergence;
(iv) Ensures that any procedures in the anesthesia plan that he or she does not perform are performed by a qualified individual as defined in operating instructions;
(v) Monitors the course of anesthesia administration at frequent intervals;
(vi) Remains physically present and available for immediate diagnosis and treatment of emergencies; and
(vii) Provides indicated post-anesthesia care.
(2) The physician directs no more than four anesthesia services concurrently and does not perform any other services while he or she is directing the single or concurrent services so that one or more of the conditions in paragraph (a)(1) of this section are not violated.
(3) If the physician personally performs the anesthesia service, the payment rules in § 414.46(c) of this chapter apply (Physician personally performs the anesthesia procedure).
(b)
(a)
(b)
(a)
(1) Surgical pathology services.
(2) Specific cytopathology, hematology, and blood banking services that have been identified to require performance by a physician and are listed in program operating instructions.
(3) Clinical consultation services that meet the requirements in paragraph (b) of this section.
(4) Clinical laboratory interpretative services that meet the requirements of paragraphs (b)(1), (b)(3), and (b)(4) of this section and that are specifically listed in program operating instructions.
(b)
(1) Be requested by the beneficiary's attending physician.
(2) Relate to a test result that lies outside the clinically significant normal or expected range in view of the condition of the beneficiary.
(3) Result in a written narrative report included in the beneficiary's medical record.
(4) Require the exercise of medical judgment by the consultant physician.
(c)
This subpart sets forth the rules governing payment for the services of physicians in teaching settings and the criteria for determining whether the payments are made as one of the following:
(a) Services to the hospital under the reasonable cost election in §§ 415.160 through 415.164.
(b) Provider services through the direct GME payment mechanism in § 413.86 of this chapter.
(c) Physician services to beneficiaries under the physician fee schedule as set forth in part 414 of this chapter.
As used in this subpart—
(1) A residency program approved by the Accreditation Council for Graduate Medical Education of the American Medical Association, by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association, by the Commission on Dental Accreditation of the American Dental Association, or by the Council on Podiatric Medicine Education of the American Podiatric Medical Association.
(2) A program otherwise recognized as an “approved medical residency program” under § 413.86(b) of this chapter.
(1) An individual who participates in an approved GME program, including programs in osteopathy, dentistry, and podiatry.
(2) A physician who is not in an approved GME program, but who is authorized to practice only in a hospital, for example, individuals with temporary or restricted licenses, or unlicensed graduates of foreign medical schools. For purposes of this subpart, the term
(a)
(b)
(1) The hospital notifies its intermediary in writing of the election and meets the conditions of either paragraph (b)(2) or paragraph (b)(3) of this section;
(2) All physicians who furnish services to Medicare beneficiaries in the hospital agree not to bill charges for these services; or
(3) All physicians who furnish services to Medicare beneficiaries in the hospital are employees of the hospital and, as a condition of employment, are precluded from billing for these services.
(c)
(1) Those services and the supervision of interns and residents furnishing care to individual beneficiaries are covered as hospital services, and
(2) The intermediary pays the hospital for those services on a reasonable cost basis under the rules in § 415.162. (Payment for other physician compensation costs related to approved GME programs is made as described in § 413.86 of this chapter.)
(d)
(1) For physician services furnished to beneficiaries on a fee schedule basis as described in part 414 subject to the rules in this subpart, and
(2) For the supervision of interns and residents as described in § 413.86.
(a)
(1) Physician services furnished to beneficiaries and supervision of interns
(2) Payment for certain medical school costs may be made as provided for in paragraph (c) of this section.
(3) Payments for services donated by volunteer physicians to beneficiaries are made to a fund designated by the organized medical staff of the teaching hospital or medical school as provided for in paragraph (d) of this section.
(b)
(1) Physician services furnished to beneficiaries and supervision of interns and residents furnishing care to beneficiaries in a teaching hospital are payable as provider services on a reasonable-cost basis.
(2) For purposes of this paragraph,
(3) The costs must be allocated to the services as provided by paragraph (j) of this section and apportioned to program beneficiaries as provided by paragraph (g) of this section.
(4) Other allowable costs incurred by the provider related to the services described in this paragraph are payable subject to the requirements applicable to all other provider services.
(c)
(1)
(i)
(A) The costs of these services are allowable costs to the hospital under the provisions of § 413.17 of this chapter; and
(B) The reimbursable costs to the hospital are determined under the provisions of this section in the same manner as the costs incurred for physicians on the hospital staff and without regard to payments made to the medical school by the hospital.
(ii)
(A) If the medical school and the hospital are not related organizations under the provisions of § 413.17 of this chapter and the hospital makes payment to the medical school for the costs of those services furnished to all patients, payment is made by Medicare to the hospital for the reasonable cost incurred by the hospital for its payments to the medical school for services furnished to beneficiaries.
(B) Costs incurred under an arrangement must be allocated to the full range of services furnished to the hospital by the medical school physicians on the same basis as provided for under paragraph (j) of this section, and costs allocated to direct medical and surgical services furnished to hospital patients must be apportioned to beneficiaries as provided for under paragraph (g) of this section.
(C) If the medical school and the hospital are not related organizations under the provisions of § 413.17 of this chapter and the hospital makes payment to the medical school only for the costs of those services furnished to beneficiaries, costs of the medical school not to exceed 105 percent of the sum of physician direct salaries, applicable fringe benefits, employer's portion of FICA taxes, Federal and State unemployment taxes, and workmen's compensation paid by the medical school or an organization related to the medical school may be recognized as allowable costs of the medical school.
(D) These allowable medical school costs must be allocated to the full
(E) Costs allocated to direct medical and surgical services furnished to hospital patients must be apportioned to beneficiaries as provided by paragraph (g) of this section.
(2)
(i) If the hospital makes payment to the medical school for other than direct medical and surgical services furnished to beneficiaries and supervision of interns and residents furnishing care to beneficiaries, these payments are subject to the required cost-finding and apportionment methods applicable to the cost of other hospital services (except for direct medical and surgical services furnished to beneficiaries); or
(ii) If the hospital makes payment to the medical school only for these services furnished to beneficiaries, the cost of these services is not subject to cost-finding and apportionment as otherwise provided by this subpart, and the reasonable cost paid by Medicare must be determined on the basis of the health insurance ratio(s) used in the apportionment of all other provider costs (excluding physician direct medical and surgical services furnished to beneficiaries) applied to the allowable medical school costs incurred by the medical school for the services furnished to all patients of the hospital.
(d)
(1) HCFA makes payments under the Medicare program to a fund as defined in § 415.164 for direct medical and surgical services furnished to beneficiaries on a regularly scheduled basis by physicians on the unpaid voluntary medical staff of the hospital (or medical school under arrangement with the hospital).
(i) These payments represent compensation for contributed medical staff time which, if not contributed, would have to be obtained through employed staff on a payable basis.
(ii) Payments for volunteer services are determined by applying to the regularly scheduled contributed time an hourly rate not to exceed the equivalent of the average direct salary (exclusive of fringe benefits) paid to all full-time, salaried physicians (other than interns and residents) on the hospital staff or, if the number of full-time salaried physicians is minimal in absolute terms or in relation to the number of physicians on the voluntary staff, to physicians at like institutions in the area.
(iii) This “salary equivalent” is a single hourly rate covering all physicians regardless of specialty and is applied to the actual regularly scheduled time contributed by the physicians in furnishing direct medical and surgical services to beneficiaries including supervision of interns and residents in that care.
(iv) A physician who receives any compensation from the hospital or a medical school related to the hospital by common ownership or control (within the meaning of § 413.17 of this chapter) for direct medical and surgical services furnished to any patient in the hospital is not considered an unpaid voluntary physician for purposes of this paragraph.
(v) If, however, a physician receives compensation from the hospital or related medical school or organization only for services that are other than direct medical and surgical services, a salary equivalent payment for the physician's regularly scheduled direct medical and surgical services to beneficiaries in the hospital may be imputed. However, the sum of the imputed value for volunteer services and the physician's actual compensation from the hospital and the related medical school (or organization) may not exceed the amount that would have been imputed if all of the physician's hospital and medical school services (compensated and volunteer) had been volunteer services, or paid at the rate of $30,000 per year, whichever is less.
(2) The following examples illustrate how the allowable imputed value for volunteer services is determined. In each example, it has been assumed that the average salary equivalent hourly rate is equal to the hourly rate for the
(3) The amount of the imputed value for volunteer services applicable to beneficiaries and payable to a fund is determined in accordance with the aggregate per diem method described in paragraph (g) of this section.
(4) Medicare payments to a fund must be used by the fund solely for improvement of care of hospital patients or for educational or charitable purposes (which may include but are not limited to medical and other scientific research).
(i) No personal financial gain, either direct or indirect, from benefits of the fund may inure to any of the hospital staff physicians, medical school faculty, or physicians for whom Medicare imputes costs for purposes of payment into the fund.
(ii) Expenses met from contributions made to the hospital from a fund are not included as a reimbursable cost when expended by the hospital, and depreciation expense is not allowed with respect to equipment or facilities donated to the hospital by a fund or purchased by the hospital from monies in a fund.
(e)
(2)
(i) There is a written agreement between the hospital and the medical school or organization, specifying the types and extent of services to be furnished by the medical school and specifying that the hospital must pay to the medical school an amount at least equal to the reasonable cost (as defined in paragraph (c) of this section) of furnishing the services to beneficiaries.
(ii) The costs are paid to the medical school by the hospital no later than the date on which the cost report covering the period in which the services were furnished is due to HCFA.
(iii) Payment for the services furnished under an arrangement would have been made to the hospital had the services been furnished directly by the hospital.
(3)
(f)
(g)
(i) Physicians on the hospital staff.
(ii) Physicians on the medical school faculty.
(2)
(h)
(i) Inpatient days (as defined in paragraph (h)(2) of this section); and
(ii) Outpatient visit days (as defined in paragraph (h)(3) of this section).
(2)
(3)
(i)
Computation of cost applicable to program for physicians on the hospital staff:
Average cost per diem for direct medical and surgical services to patients by physicians on the hospital staff: $1,500,000 ÷ 75,000 = $20 per diem.
Computation of cost applicable to program for physicians on the medical school faculty:
Average cost per diem for direct medical and surgical services to patients by physicians on the medical school faculty: $1,650,000 ÷ 75,000 = $22 per diem.
(2) The following illustrates how the imputed value of physician volunteer direct medical and surgical services furnished in a teaching hospital to beneficiaries is determined.
Computation of total imputed value of physician volunteer services applicable to all patients:
Computation of imputed value of physician volunteer direct medical and surgical services furnished to Medicare beneficiaries:
Average per diem for physician direct medical and surgical services to all patients: $96,150 ÷ 75,000 = $1.28 per diem
(j)
(1) In determining reasonable cost under this section, the compensation paid by a teaching hospital, or a medical school or related organization under arrangement with the hospital, to physicians in a teaching hospital must be allocated to the full range of services implicit in the physician compensation arrangements. (However, see paragraph (d) of this section for the computation of the “salary equivalent” payments for volunteer services furnished to patients.)
(2) This allocation must be made and must be capable of substantiation on the basis of the proportion of each physician's time spent in furnishing each type of service to the hospital or medical school.
(a)
(1) The hospital (or medical school furnishing the services under arrangement with the hospital) incurs no actual cost in furnishing the services.
(2) The hospital has an agreement with HCFA under part 489 of this chapter.
(3) The intermediary, or HCFA as appropriate, has received written assurances that—
(i) The payment is used solely for the improvement of care of hospital patients or for educational or charitable purposes; and
(ii) Neither the individuals who are furnished the services nor any other persons are charged for the services (and if charged, provision is made for the return of any monies incorrectly collected).
(b)
(1) The organization has and retains exemption, as a governmental entity or under section 501(c)(3) of the Internal Revenue Code (nonprofit educational, charitable, and similar organizations), from Federal taxation.
(2) The organization is an organization of physicians who, under the terms of their employment by an entity that meets the requirements of paragraph (b)(1) of this section, are required to turn over to that entity all income that the physician organization derives from the physician services.
(c)
Services meeting the conditions for payment in § 415.102(a) furnished in teaching settings are payable under the physician fee schedule if—
(a) The services are personally furnished by a physician who is not a resident; or
(b) The services are furnished by a resident in the presence of a teaching physician except as provided in § 415.172 (concerning physician fee schedule payment for services of teaching physicians), § 415.174 (concerning an exception for services furnished in hospital
(a)
(1) In the case of surgical, high-risk, or other complex procedures, the teaching physician must be present during all critical portions of the procedure and immediately available to furnish services during the entire service or procedure.
(i) In the case of surgery, the teaching physician's presence is not required during opening and closing of the surgical field.
(ii) In the case of procedures performed through an endoscope, the teaching physician must be present during the entire viewing.
(2) In the case of evaluation and management services, the teaching physician must be present during the portion of the service that determines the level of service billed. (However, in the case of evaluation and management services furnished in hospital outpatient departments and certain other ambulatory settings, the requirements of § 415.174 apply.)
(b)
(c)
(a) In the case of certain evaluation and management codes of lower and mid-level complexity (as specified by HCFA in program instructions), carriers may make physician fee schedule payment for a service furnished by a resident without the presence of a teaching physician. For the exception to apply, all of the following conditions must be met:
(1) The services must be furnished in a center that is located in an outpatient department of a hospital or another ambulatory care entity in which the time spent by residents in patient care activities is included in determining intermediary payments to a hospital under § 413.86.
(2) Any resident furnishing the service without the presence of a teaching physician must have completed more than 6 months of an approved residency program.
(3) The teaching physician must not direct the care of more than four residents at any given time and must direct the care from such proximity as to constitute immediate availability. The teaching physician must—
(i) Have no other responsibilities at the time;
(ii) Assume management responsibility for those beneficiaries seen by the residents;
(iii) Ensure that the services furnished are appropriate;
(iv) Review with each resident during or immediately after each visit, the beneficiary's medical history, physical examination, diagnosis, and record of tests and therapies; and
(v) Document the extent of the teaching physician's participation in the review and direction of the services furnished to each beneficiary.
(4) The range of services furnished by residents in the center includes all of the following:
(i) Acute care for undifferentiated problems or chronic care for ongoing conditions.
(ii) Coordination of care furnished by other physicians and providers.
(iii) Comprehensive care not limited by organ system, or diagnosis.
(5) The patients seen must be an identifiable group of individuals who consider the center to be the continuing source of their health care and in which services are furnished by residents under the medical direction of teaching physicians.
(b) Nothing in paragraph (a) of this section may be construed as providing a basis for the coverage of services not determined to be covered under Medicare, such as routine physical checkups.
In the case of renal dialysis services, physicians who are not paid under the physician monthly capitation payment method (as described in § 414.314 of this chapter) must meet the requirements of §§ 415.170 and 415.172 (concerning physician fee schedule payment for services of teaching physicians).
(a)
(b)
(a)
(b)
To qualify for physician fee schedule payment for psychiatric services furnished under an approved GME program, the physician must meet the requirements of §§ 415.170 and 415.172, including documentation, except that the requirement for the presence of the teaching physician during the service in which a resident is involved may be met by observation of the service by use of a one-way mirror, video equipment, or similar device.
(a)
(1) A training program relating to the medical specialty required for the surgical procedure; and
(2) A resident in a training program relating to the specialty required for the surgery available to serve as an assistant at surgery.
(b)
(c)
(1) Are required as a result of exceptional medical circumstances.
(2) Are complex medical procedures performed by a team of physicians, each performing a discrete, unique function integral to the performance of a complex medical procedure that requires the special skills of more than one physician.
(3) Constitute concurrent medical care relating to a medical condition that requires the presence of, and active care by, a physician of another specialty during surgery.
(4) Are medically required and are furnished by a physician who is primarily engaged in the field of surgery, and the primary surgeon does not use interns and residents in the surgical procedures that the surgeon performs (including preoperative and postoperative care).
(5) Are not related to a surgical procedure for which HCFA determines that assistants are used less than 5 percent of the time.
(a)
(b)
(c)
(a)
(b)
(a)
(1)
(2)
(b)
Patient care activities of residents in approved GME programs that are furnished in nonprovider settings are payable in one of the following two ways:
(a)
(b)
(i) The resident is fully licensed to practice medicine, osteopathy, dentistry, or podiatry in the State in which the service is performed.
(ii) The time spent in patient care activities in the nonprovider setting is not included in a teaching hospital's full-time equivalency resident count for the purpose of direct GME payments.
(2) Payment may be made regardless of whether a resident is functioning within the scope of his or her GME program in the nonprovider setting.
(3) If fee schedule payment is made for the resident's services in a nonprovider setting, payment must not be made for the services of a teaching physician.
(4) The carrier must apply the physician fee schedule payment rules set forth in subpart A of part 414 of this chapter to payments for services furnished by a resident in a nonprovider setting.
(a)
(b)
(2) Services of residents that are not related to their approved GME programs and are performed in an outpatient department or emergency department of a hospital in which they have their training program are covered as physician services and payable under the physician fee schedule if all of the following criteria are met:
(i) The services are identifiable physician services and meet the conditions for payment of physician services to beneficiaries in providers in § 415.102(a).
(ii) The resident is fully licensed to practice medicine, osteopathy, dentistry, or podiatry by the State in which the services are performed.
(iii) The services performed can be separately identified from those services that are required as part of the approved GME program.
(3) If the criteria specified in paragraph (b)(2) of this section are met, the services of the moonlighting resident are considered to have been furnished by the individual in his or her capacity as a physician, rather than in the capacity of a resident. The carrier must review the contracts and agreements for these services to ensure compliance with the criteria specified in paragraph (b)(2) of this section.
(4) No payment is made for services of a “teaching physician” associated with moonlighting services, and the time spent furnishing these services is not included in the teaching hospital's
(c)
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
(2) Section 1833(i)(1)(A) of the Act requires the Secretary to specify the surgical procedures that can be performed safely on an ambulatory basis in an ambulatory surgical center, or a hospital outpatient department.
(3) Section 1833(i) (2)(A) and (3) specify the amounts to be paid for facility services furnished in connection with the specified surgical procedures when they are performed, respectively, in an ASC, or in a hospital outpatient department.
(b)
(1) The conditions that an ASC must meet in order to participate in the Medicare program;
(2) The scope of covered services; and
(3) The conditions for Medicare payment for facility services.
As used in this part:
Participation as an ASC is limited to facilities that—
(a) Meet the definition in § 416.2; and
(b) Have in effect an agreement obtained in accordance with this subpart.
(a)
(1) The ASC is accredited by a national accrediting body, or licensed by a State agency, that HCFA determines provides reasonable assurance that the conditions are met;
(2) In the case of deemed status through accreditation by a national accrediting body, where State law requires licensure, the ASC complies with State licensure requirements; and
(3) The ASC authorizes the release to HCFA, of the findings of the accreditation survey.
(b)
(2) HCFA surveys deemed ASCs on a sample basis as part of HCFA's validation process.
(c)
(1) Written notice of the determination; and
(2) Two copies of the ASC agreement.
(d)
(1) Have both copies of the ASC agreement signed by its authorized representative; and
(2) File them with HCFA.
(e)
(f)
As part of the agreement under § 416.26 the ASC must agree to the following:
(a)
(b)
(1) Is entitled to have payment made on his or her behalf under this part; or
(2) Would have been so entitled if the ASC had filed a request for payment in accordance with § 410.165 of this chapter.
(c)
(2) As used in this section,
(i) The beneficiary is later determined to have been entitled to Medicare benefits; and
(ii) The beneficiary's entitlement period falls within the time the ASC's agreement with HCFA is in effect.
(d)
(e)
(f)
(1) The agreement is made effective on the first day of the next Medicare cost reporting period of the hospital that operates the ASC; and
(2) The ASC participates and is paid only as an ASC, without the option of converting to or being paid as a hospital outpatient department, unless HCFA determines there is good cause to do otherwise.
(3) Costs for the ASC are treated as a non-reimbursable cost center on the hopsital's cost report.
(g)
(a)
(2)
(i) If the notice does not specify a date, or the date is not acceptable to HCFA, HCFA may set a date that will not be more than 6 months from the date on the ASC's notice of intent.
(ii) HCFA may accept a termination date that is less than 6 months after the date on the ASC's notice if it determines that to do so would not unduly disrupt services to the community or otherwise interfere with the effective and efficient administration of the Medicare program.
(3)
(b)
(i) No longer meets the conditions for coverage as specified under § 416.26; or
(ii) Is not in substantial compliance with the provisions of the agreement, the requirements of this subpart, and other applicable regulations of subchapter B of this chapter, or any applicable provisions of title XVIII of the Act.
(2)
(3)
(c)
(d)
(1) The ASC, after HCFA has approved or set a termination date; or
(2) HCFA, when it has terminated the agreement.
(e)
(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.
The ASC must comply with State licensure requirements.
The ASC must have a governing body, that assumes full legal responsibility for determining, implementing, and monitoring policies governing the ASC's total operation and for ensuring that these policies are administered so as to provide quality health care in a safe environment. When services are provided through a contract with an outside resource, the ASC must assure that these services are provided in a safe and effective manner.
Surgical procedures must be performed in a safe manner by qualified physicians who have been granted clinical privileges by the governing body of the ASC in accordance with approved policies and procedures of the ASC.
(a)
(b)
(1) A qualified anesthesiologist; or
(2) A physician qualified to administer anesthesia, a certified registered nurse anesthetist or an anesthesiologist's assistant as defined in § 410.68(b) of this chapter, or a supervised trainee in an approved educational program. In those cases in which a non-physician administers the anesthesia, the anesthetist must be under the supervision of the operating physician, and in the case of an anesthesiologist's assistant, under the supervision of an anesthesiologist.
(c)
The ASC, with the active participation of the medical staff, must conduct an ongoing, comprehensive self-assessment of the quality of care provided,
The ASC must have a safe and sanitary environment, properly constructed, equipped, and maintained to protect the health and safety of patients.
(a)
(1) Each operating room must be designed and equipped so that the types of surgery conducted can be performed in a manner that protects the lives and assures the physical safety of all individuals in the area.
(2) The ASC must have a separate recovery room and waiting area.
(3) The ASC must establish a program for identifying and preventing infections, maintaining a sanitary environment, and reporting the results to appropriate authorities.
(b)
(2) In consideration of a recommendation by the State survey agency, HCFA may waive, for periods deemed appropriate, specific provisions of the Life Safety Code which, if rigidly applied, would result in unreasonable hardship upon an ASC, but only if the waiver will not adversely affect the health and safety of the patients.
(3) Any ASC that, on May 9, 1988, complies with the requirements of the 1981 edition of the Life Safety Code, with or without waivers, will be considered to be in compliance with this standard, so long as the ASC continues to remain in compliance with that edition of the Life Safety Code.
(c)
(1) Emergency call system.
(2) Oxygen.
(3) Mechanical ventilatory assistance equipment including airways, manual breathing bag, and ventilator.
(4) Cardiac defibrillator.
(5) Cardiac monitoring equipment.
(6) Tracheostomy set.
(7) Laryngoscopes and endotracheal tubes.
(8) Suction equipment.
(9) Emergency medical equipment and supplies specified by the medical staff.
(d)
The medical staff of the ASC must be accountable to the governing body.
(a)
(b)
(c)
The nursing services of the ASC must be directed and staffed to assure that
(a)
(b) [Reserved]
The ASC must maintain complete, comprehensive, and accurate medical records to ensure adequate patient care.
(a)
(b)
(1) Patient identification.
(2) Significant medical history and results of physical examination.
(3) Pre-operative diagnostic studies (entered before surgery), if performed.
(4) Findings and techniques of the operation, including a pathologist's report on all tissues removed during surgery, except those exempted by the governing body.
(5) Any allergies and abnormal drug reactions.
(6) Entries related to anesthesia administration.
(7) Documentation of properly executed informed patient consent.
(8) Discharge diagnosis.
The ASC must provide drugs and biologicals in a safe and effective manner, in accordance with accepted professional practice, and under the direction of an individual designated responsible for pharmaceutical services.
(a)
(1) Adverse reactions must be reported to the physician responsible for the patient and must be documented in the record.
(2) Blood and blood products must be administered by only physicians or registered nurses.
(3) Orders given orally for drugs and biologicals must be followed by a written order, signed by the prescribing physician.
(b) [Reserved]
If the ASC performs laboratory services, it must meet the requirements of part 493 of this chapter. If the ASC does not provide its own laboratory services, it must have procedures for obtaining routine and emergency laboratory services from a certified laboratory in accordance with part 493 of this chapter. The referral laboratory must be certified in the appropriate specialties and subspecialties of service to perform the referred tests in accordance with the requirements of part 493 of this chapter. The ASC must have procedures for obtaining radiologic services from a Medicare approved facility to meet the needs of patients.
(a) The services payable under this part are facility services furnished to Medicare beneficiaries, by a participating facility, in connection with covered surgical procedures specified in § 416.65.
(b) The surgical procedures, including all preoperative and post-operative services that are performed by a physician, are covered as physician services under part 410 of this chapter.
(a)
(1) Nursing, technician, and related services;
(2) Use of the facilities where the surgical procedures are performed;
(3) Drugs, biologicals, surgical dressings, supplies, splints, casts, and appliances and equipment directly related to the provision of surgical procedures;
(4) Diagnostic or therapeutic services or items directly related to the provision of a surgical procedure;
(5) Administrative, recordkeeping and housekeeping items and services; and
(6) Materials for anesthesia.
(7) Intra-ocular lenses (IOLs).
(8) Supervision of the services of an anesthetist by the operating surgeon.
(b)
Covered surgical procedures are those procedures that meet the standards described in paragraphs (a) and (b) of this section and are included in the list published in accordance with paragraph (c) of this section.
(a)
(1) Are commonly performed on an inpatient basis in hospitals, but may be safely performed in an ASC;
(2) Are not of a type that are commonly performed, or that may be safely performed, in physicians' offices;
(3) Are limited to those requiring a dedicated operating room (or suite), and generally requiring a post-operative recovery room or short-term (not overnight) convalescent room; and
(4) Are not otherwise excluded under § 405.310 of this chapter.
(b)
(i) A total of 90 minutes operating time; and
(ii) A total of 4 hours recovery or convalescent time.
(2) If the covered surgical procedures require anesthesia, the anesthesia must be—
(i) Local or regional anesthesia; or
(ii) General anesthesia of 90 minutes or less duration.
(3) Covered surgical procedures may not be of a type that—
(i) Generally result in extensive blood loss;
(ii) Require major or prolonged invasion of body cavities;
(iii) Directly involve major blood vessels; or
(iv) Are generally emergency or life-threatening in nature.
(c)
The inclusion of any procedure as a covered surgical procedure under § 416.65 does not preclude its coverage in an inpatient hospital setting under Medicare.
The basis for payment depends on where the services are furnished.
(a)
(b) [Reserved]
(c)
(2)
(ii) If more than one surgical procedure is furnished in a single operative session, payment is based on—
(A) The full rate for the procedure with the highest prospectively determined rate; and
(B) One half of the prospectively determined rate for each of the other procedures.
(3)
(a) The payment rate is based on a prospectively determined standard overhead amount per procedure derived from an estimate of the costs incurred by ambulatory surgical centers generally in providing services furnished in connection with the performance of that procedure.
(b) The payment must be substantially less than would have been paid under the program if the procedure had been performed on an inpatient basis in a hospital.
Whenever HCFA proposes to revise the payment rate for ASCs, HCFA publishes a notice in the
(a)
(2) HCFA notifies the selected ASCs by mail of their selection and of the form and content of the report the ASCs are required to submit within 60 days of the notice.
(3) If the facility does not submit an adequate report in response to HCFA's survey request, HCFA may terminate the agreement to participate in the Medicare program as an ASC.
(4) HCFA may grant a 30-day postponement of the due date for the survey report if it determines that the facility has demonstrated good cause for the delay.
(b)
(1) Maintain adequate financial records, in the form and containing the data required by HCFA, to allow determination of the payment rates for covered surgical procedures furnished to Medicare beneficiaries under this subpart.
(2) Within 60 days of a request from HCFA submit, in the form and detail as may be required by HCFA, a report of—
(i) Their operations, including the allowable costs actually incurred for the period and the actual number and kinds of surgical procedures furnished during the period; and
(ii) Their customary charges for each surgical procedure furnished for the period.
A beneficiary (or ASC as his or her assignee) may request a hearing by a carrier (subject to the limitations and conditions set forth in part 405, subpart H of this chapter) if the beneficiary or the ASC—
(a) Is dissatisfied with a carrier's denial of a request for payment made on his or her behalf by an ASC;
(b) Is dissatisfied with the amount of payment; or
(c) Believes the request for payment is not being acted upon with reasonable promptness.
As used in this subpart, the following definitions apply:
(a) HCFA publishes a
(b) HCFA receives a request to review the appropriateness of the payment amount for an IOL.
(c) HCFA compiles a list of the requests it receives and identifies the IOL manufacturer's name, the model number of the IOL to be reviewed, the interested party or parties that submit requests, and a summary of the interested party's grounds for requesting review of the appropriateness of theIOL payment amount.
(d) HCFA publishes the list of requests in a
(e) HCFA reviews the information submitted with the request to review, any timely public comments that are submitted regarding the list of IOLs published in the
(f) If HCFA determines that a lens is a new technology IOL, HCFA establishes a payment adjustment as follows:
(1) Before July 16, 2002—$50.
(2) After July 16, 2002—$50 or the amount announced through proposed and final rulemaking in connection with ambulatory surgical center services.
(g) HCFA designates a predominant characteristic of a new technology IOL that both sets it apart from other IOLs and links it with other similar IOLs with the same characteristic to establish a specific subset of new technology within the “class of new technology IOLs.”
(h) Within 90 days of the end of the comment period following the
(i) Payment adjustments are effective beginning 30 days after the publication of HCFA's determinations in the
Any party who is able to furnish the information required in§ 416.195 may request that HCFA review the appropriateness of the payment amount provided under section 1833(i)(2)(A)(iii) of the Act with respect to an IOL that meets the definition of a new technology IOL in§ 416.180.
(a)
(1) The name of the manufacturer, the model number, and the trade name of the IOL.
(2) A copy of the FDA's summary of the IOL's safety and effectiveness.
(3) A copy of the labeling claims of specific clinical advantages approved by the FDA for the IOL.
(4) A copy of the IOL's original FDA approval notification.
(5) Reports of modifications made after the original FDA approval.
(6) Other information that HCFA finds necessary for identification of theIOL.
(b)
(a) HCFA recognizes the IOL(s) that define a new technology subset for purposes of this subpart as belonging to the class of new technology IOLs for a period of 5 years effective from the date that HCFA recognizes the first new technology IOL for a payment adjustment.
(b) Any IOL that HCFA subsequently recognizes as belonging to a new technology subset receives the new technology payment adjustment for the remainder of the 5-year period established with HCFA's recognition of the first IOL in the subset.
(c) Beginning 5 years after the effective date of HCFA's initial recognition of a new technology subset, payment adjustments cease for all IOLs that HCFA designates as belonging to that subset and payment reverts to the standard payment rate set under section 1833(i)(2)(A)(iii) of the Act for IOL insertion procedures performed in ASCs.
(d) ASCs that furnish an IOL designated by HCFA as belonging to the class of new technology IOLs must submit claims using specific billing codes to receive the new technology IOL payment adjustment.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), secs. 1301, 1306, and 1310 of the Public Health Service Act (42 U.S.C. 300e, 300e-5, and 300e-9), and 31 U.S.C. 9701.
Nomenclature changes to part 417 appear at 58 FR 38083, July 15, 1993, and 59 FR 59941, Nov. 21, 1994.
As used in this part, unless the context indicates otherwise—
(1) Physician services (§ 417.101(a)(1));
(2) Outpatient services and inpatient hospital services (§ 417.101(a)(2));
(3) Medically necessary emergency health services (§ 417.101(a)(3)); and
(4) Diagnostic laboratory and diagnostic and therapeutic radiologic services (§ 417.101(a)(6)).
(1) That these health professionals will provide their professional services in accordance with a compensation arrangement established by the entity; and
(2) To the extent feasible, for the sharing by these health professionals of health (including medical) and other records, equipment, and professional, technical, and administrative staff.
(1) That is composed of health professionals licensed to practice medicine or osteopathy and of such other licensed health professionals (including dentists, optometrists, and podiatrists) as are necessary for the provision of health services for which the group is responsible;
(2) A majority of the members of which are licensed to practice medicine or osteopathy; and
(3) The members of which:
(i) After the end of the 48 month period beginning after the month in which the HMO for which the group provides health services becomes a qualified HMO, as their principal professional activity (over 50 percent individually) engage in the coordinated practice of their profession and as a group responsibility have substantial responsibility (over 35 percent in the aggregate of their professional activity) for the delivery of health services to enrollees of an HMO;
(ii) Pool their income from practice as members of the group and distribute it among themselves according to a prearranged salary or drawing account or other similar plan unrelated to the provision of specific health services;
(iii) Share health (including medical) records and substantial portions of major equipment and of professional, technical, and administrative staff;
(iv) Establish an arrangement whereby an enrollee's enrollment status is not known to the health professional who provides health services to the enrollee.
(2) Any entity in which a person described in paragraph (1):
(i) Is an officer or director;
(ii) Is a partner (if the entity is organized as a partnership);
(iii) Has directly or indirectly a beneficial interest of more than 5 percent of the equity; or
(iv) Has a mortgage, deed of trust, note, or other interest valuing more than 5 percent of the assets of such entity;
(3) Any spouse, child, or parent of an individual described in paragraph (1).
(1) Provide services to HMO enrollees at an HMO facility subject to the staff policies and operational procedures of the HMO;
(2) Engage in the coordinated practice of their profession and provide to enrollees of the HMO the health services that the HMO has contracted to provide;
(3) Share medical and other records, equipment, and professional, technical, and administrative staff of the HMO; and
(4) Provide their professional services in accordance with a compensation arrangement, other than fee-for-service, established by the HMO. This arrangement may include, but is not limited to, fee-for-time, retainer or salary.
(1) Those health services that are projected to involve fewer than 1 percent of the encounters per year for the entire HMO enrollment, or,
(2) Those health services the provision of which, given the enrollment projection of the HMO and generally accepted staffing patterns, is projected will require less than 0.25 full time equivalent health professionals.
(a) Subparts B through F of this part pertain to the Federal qualification of HMOs under title XIII of the Public Health Service (PHS) Act.
(b) Subparts G through R of this part set forth the rules for Medicare contracts with, and payment to, HMOs and competitive medical plans (CMPs) under section 1876 of the Act.
(c) Subpart U of this part pertains to Medicare payment to health care prepayment plans under section 1833(a)(1)(A) of the Act.
(d) Subpart V of this part applies to the administration of outstanding loans and loan guarantees previously granted under title XIII of the PHS Act.
(a) An HMO must provide or arrange for the provision of basic health services to its enrollees as needed and without limitations as to time and cost other than those prescribed in the PHS Act and these regulations, as follows:
(1) Physician services (including consultant and referral services by a physician), which must be provided by a licensed physician, or if a service of a physician may also be provided under applicable State law by other health professionals, an HMO may provide the service through these other health professionals;
(2)(i) Outpatient services, which must include diagnostic services, treatment services and x-ray services, for patients who are ambulatory and may be provided in a non-hospital based health care facility or at a hospital;
(ii) Inpatient hospital services, which must include but not be limited to, room and board, general nursing care, meals and special diets when medically necessary, use of operating room and related facilities, use of intensive care unit and services, x-ray services, laboratory, and other diagnostic tests, drugs, medications, biologicals, anesthesia and oxygen services, special duty nursing when medically necessary, radiation therapy, inhalation therapy, and administration of whole blood and blood plasma;
(iii) Outpatient services and inpatient hospital services must include short-term rehabilitation services and physical therapy, the provision of which the HMO determines can be expected to result in the significant improvement of a member's condition within a period of two months;
(3) Instructions to its enrollees on procedures to be followed to secure medically necessary emergency health services both in the service area and out of the service area;
(4) Twenty outpatient visits per enrollee per year, as may be necessary and appropriate for short-term evaluative or crisis intervention mental health services, or both;
(5) Diagnosis, medical treatment and referral services (including referral services to appropriate ancillary services) for the abuse of or addiction to alcohol and drugs:
(i) Diagnosis and medical treatment for the abuse of or addiction to alcohol and drugs must include detoxification for alcoholism or drug abuse on either an outpatient or inpatient basis, whichever is medically determined to be appropriate, in addition to the other required basic health services for the treatment of other medical conditions;
(ii) Referral services may be either for medical or for nonmedical ancillary services. Medical services must be a part of basic health services; nonmedical ancillary services (such as vocational rehabilitation and employment counseling) and prolonged rehabilitation services in a specialized inpatient or residential facility need not be a part of basic health services;
(6) Diagnostic laboratory and diagnostic and therapeutic radiologic services in support of basic health services;
(7) Home health services provided at an enrollee's home by health care personnel, as prescribed or directed by the responsible physician or other authority designated by the HMO; and
(8) Preventive health services, which must be made available to members and must include at least the following:
(i) A broad range of voluntary family planning services;
(ii) Services for infertility;
(iii) Well-child care from birth;
(iv) Periodic health evaluations for adults;
(v) Eye and ear examinations for children through age 17, to determine the need for vision and hearing correction; and
(vi) Pediatric and adult immunizations, in accord with accepted medical practice.
(b) In addition, an HMO may include a health service described in § 417.102 as a supplemental health service in the basic health services that it provides or arranges for its enrollees for a basic health services payment.
(c) To the extent that a natural disaster, war, riot, civil insurrection, epidemic or any other emergency or similar event not within the control of an HMO results in the facilities, personnel, or financial resources of an HMO being unavailable to provide or arrange for the provision of a basic or supplemental health service in accordance with the requirements of §§ 417.101 through 417.106 and §§ 417.168 and 417.169, the HMO is required only to make a good-faith effort to provide or arrange for the provision of the service, taking into account the impact of the event. For purposes of this paragraph, an event is not within the control of an HMO if the HMO cannot exercise influence or dominion over its occurrence.
(d) The following are not required to be provided as basic health services:
(1) Corrective appliances and artificial aids;
(2) Mental health services, except as required under section 1302(1)(D) of the PHS Act and paragraph (a)(4) of this section;
(3) Cosmetic surgery, unless medically necessary;
(4) Prescribed drugs and medicines incidental to outpatient care;
(5) Ambulance services, unless medically necessary;
(6) Care for military service connected disabilities for which the enrollee is legally entitled to services and for which facilities are reasonably available to this enrollee;
(7) Care for conditions that State or local law requires be treated in a public facility;
(8) Dental services;
(9) Vision and hearing care except as required by sections 1302(1)(A) and 1302(1)(H)(vi) of the PHS Act and paragraphs (a)(1) and (a)(8) of this section;
(10) Custodial or domiciliary care;
(11) Experimental medical, surgical, or other experimental health care procedures, unless approved as a basic health service by the policymaking body of the HMO;
(12) Personal or comfort items and private rooms, unless medically necessary during inpatient hospitalization;
(13) Whole blood and blood plasma;
(14) Long-term physical therapy and rehabilitation;
(15) Durable medical equipment for home use (such as wheel chairs, surgical beds, respirators, dialysis machines); and
(16) Health services that are unusual and infrequently provided and not necessary for the protection of individual health, as approved by HCFA upon application by the HMO.
(e) An HMO may not offer to provide or arrange for the provision of basic health services on a prepayment basis that do not include all the basic health services set forth in paragraph (a) of this section or that are limited as to time and cost except in a manner prescribed by this subpart.
(a) An HMO may provide to its enrollees any health service that is not included as a basic health service under § 417.101(a). These health services may be limited as to time and cost.
(b) An HMO must determine the level and scope of supplemental health services included with basic health services provided to its enrollees for a basic health services payment or those services offered to its enrollees as supplemental health services.
(a)(1) The HMO must provide that the services of health professionals that are provided as basic health services will, except as provided in paragraph (c) of this section, be provided or arranged for through (i) health professionals who are staff of the HMO, (ii) a medical group or groups, (iii) an IPA or
(2) A staff or medical group model HMO may have as providers of basic health services physicians who have also entered into written services arrangements with an IPA or IPAs, but only if either (i) these physicians number less than 50 percent of the physicians who have entered into arrangements with the IPA or IPAs, or (ii) if the sharing is 50 percent or greater, HCFA approves the sharing as being consistent with the purposes of section 1310(b) of the PHS Act.
(3) After the 4 year period beginning with the month following the month in that an HMO becomes a qualified HMO, an entity that meets the requirements of the definition of medical group in § 417.100, except for subdivision (3)(i) of that definition, may be considered a medical group if HCFA determines that the principal professional activity (over 50 percent individually) of the entity's members is the coordinated practice of their profession, and if the HMO has demonstrated to the satisfaction of HCFA that the entity is committed to the delivery of medical services on a prepaid group practice basis by either:
(i) Presenting a reasonable time-phased plan for the entity to achieve compliance with the “substantial responsibility” requirement of subdivision (3)(i) of the definition of “medical group” in § 417.100. The HMO must update the plan annually and must demonstrate to the satisfaction of HCFA that the entity is making continuous efforts and progress towards compliance with the requirements of the definition of “medical group,” or
(ii) Demonstrating that compliance by the entity with the “substantial responsibility” requirement is unreasonable or impractical because (A) the HMO serves a non-metropolitan or rural area as defined in § 417.100, or (B) the entity is a multi-speciality group that provides medical consultation upon referral on a regional or national basis, or (C) the majority of the residents of the HMO's service area are not eligible for employer-employee health benefits plans and the HMO has an insufficient number of enrollees to require utilization of at least 35 percent of the entity's services.
(b) HMOs must have effective procedures to monitor utilization and to control cost of basic and supplemental health services and to achieve utilization goals, which may include mechanisms such as risk sharing, financial incentives, or other provisions agreed to by providers.
(c) Paragraph (a) of this section does not apply to the provision of the services of a physician:
(1) Which the HMO determines are unusual or infrequently used services; or
(2) Which, because of an emergency, it was medically necessary to provide to the enrollee other than as required by paragraph (a) of this section; or
(3) Which are provided as part of the inpatient hospital services by employees or staff of a hospital or provided by staff of other entities such as community mental health centers, home health agencies, visiting nurses' associations, independent laboratories, or family planning agencies.
(d) Supplemental health services must be provided or arranged for by the HMO and need not be provided by providers of basic health services under contract with the HMO.
(e) Each HMO must:
(1) Pay the provider, or reimburse its enrollees for the payment of reasonable charges for basic health services (or supplemental health services that the HMO agreed to provide on a prepayment basis) for which its enrollees have contracted, which were medically necessary and immediately required to be obtained other than through the HMO because of an unforeseen illness, injury, or condition, as determined by the HMO;
(2) Adopt procedures to review promptly all claims from enrollees for reimbursement for the provision of health services described in paragraph (e)(1) of this section, including a procedure for the determination of the medical necessity for obtaining the services other than through the HMO; and
(3) Provide instructions to its enrollees on procedures to be followed to secure these health services.
(a)
(1) Is to be paid on a periodic basis without regard to the dates these services are provided;
(2) Is fixed without regard to the frequency, extent, or kind of basic health services actually furnished;
(3) Except as provided in paragraph (c) of this section, is fixed under a community rating system, as described in paragraph (b) of this section; and
(4) May be supplemented by nominal copayments which may be required for the provision of specific basic health services. Each HMO may establish one or more copayment options calculated on the basis of a community rating system.
(i) An HMO may not impose copayment charges that exceed 50 percent of the total cost of providing any single service to its enrollees, nor in the aggregate more than 20 percent of the total cost of providing all basic health services.
(ii) To insure that copayments are not a barrier to the utilization of health services or enrollment in the HMO, an HMO may not impose copayment charges on any subscriber (or enrollees covered by the subscriber's contract with the HMO) in any calendar year, when the copayments made by the subscriber (or enrollees) in that calendar year total 200 percent of the total annual premium cost which that subscriber (or enrollees) would be required to pay if he (or they) were enrolled under an option with no copayments. This limitation applies only if the subscriber (or enrollees) demonstrates that copayments in that amount have been paid in that year.
(b)
(1) A system of fixing rates of payment for health services may provide that the rates will be fixed on a per person or per family basis and may vary with the number of persons in a family. Except as otherwise authorized in this paragraph, these rates must be equivalent for all individuals and for all families of similar composition. Rates of payment may be based on either a schedule of rates charged to each subscriber group or on a per-enrollee-per-month (or per-subscriber-per-month) revenue requirement for the HMO. In the former event, rates may vary from group to group if the projected total revenue from each group is substantially equivalent to the revenue that would be derived if the schedule of rates were uniform for all groups. In the latter event, the payments from each group of subscribers must be calculated to yield revenues substantially equivalent to the product of the total number of enrollees (or subscribers) expected to be enrolled from the group and the per-enrollee-per-month (or per-subscriber-per-month) revenue requirement for the HMO. Under the system described in this paragraph, rates of payment may not vary because of actual or anticipated utilization of services by individuals associated with any specific group of subscribers. These provisions do not preclude changes in the rates of payment that are established for new enrollments or re-enrollments and that do not apply to existing contracts until the renewal of these contracts.
(2) A system of fixing rates of payment for health services may provide
(i) Classify all of the enrollees of the organization into classes based on factors that the HMO determines predict the differences in the use of health services by the individuals or families in each class and which have not been disapproved by HCFA,
(ii) Determine its revenue requirements for providing services to the enrollees of each class established under paragraph (b)(2)(i) of this section, and
(iii) Fix the rates of payment for the individuals and families of a group on the basis of a composite of the organization's revenue requirements determined under paragraph (b)(2)(ii) of this section for providing services to them as members of the classes established under paragraph (b)(2)(i) of this section. HCFA will review the factors used by each HMO to establish classes under paragraph (b)(2)(i) of this section. If HCFA determines that any such factor may not reasonably be used to predict the use of the health services by individuals and families, HCFA will disapprove the factor for that purpose.
(3)(i) Nominal differentials in rates may be established to reflect differences in marketing costs and the different administrative costs of collecting payments from the following categories of potential subscribers:
(A) Individual (non-group) subscribers (including their families).
(B) Small groups of subscribers (100 subscribers or fewer).
(C) Large groups of subscribers (over 100 subscribers).
(ii) Differentials in rates may be established for subscribers enrolled in an HMO: (A) Under a contract with a governmental authority under section 1079 (“Contracts for Medical Care for Spouses and Children: Plans”) or section 1086 (“Contracts for Health Benefits for Certain Members, Former Members and their Dependents”) of title 10 (“Armed Forces”), United States Code; or (B) under any other governmental program (other than the health benefits program authorized by chapter 89 (“Health Insurance”) of title 5 (“Government Organization and Employees”), United States Code; or (C) under any health benefits program for employees of States, political subdivisions of states, and other public entities.
(4) An HMO may establish a separate community rate for separate regional components of the organization upon satisfactory demonstration to HCFA of the following:
(i) Each regional component is geographically distinct and separate from any other regional component; and
(ii) Each regional component provides substantially the full range of basic health services to its enrollees, without extensive referral between components of the organization for these services, and without substantial utilization by any two components of the same health care facilities. The separate community rate for each regional component of the HMO must be based on the different costs of providing health services in the respective regions.
(c)
(2) The requirement of community rating does not apply to the basic health services payment for basic health services provided an enrollee who is a full-time student at an accredited institution of higher education.
(d)
(e)
(1) An HMO must make a written request to HCFA, listing the factors to be used in the community rating by class system under paragraph (b)(2) of this section.
(2) HCFA will notify each HMO within 30 days of receipt of the request and application of one of the following:
(i) The application is approved;
(ii) Additional information or data are required and HCFA will notify the HMO of its decision within 30 days from the date of receipt of this information or data; or
(iii) HCFA needs additional time to review the written request and the HMO will be notified of HCFA's decision within 90 days.
(a) An HMO may require supplemental health services payments, in addition to the basic health services payments, for the provision of each health service included in the supplemental health services set forth in § 417.102 for which subscribers have contracted, or it may include supplemental health services in the basic health services provided its enrollees for a basic health services payment.
(b) Supplemental health services payments may be made in any agreed upon manner, such as prepayment or fee-for-service. Supplemental health services payments that are fixed on a prepayment basis, however, must be fixed under a community rating system, unless the supplemental health services payment is for a supplemental health service provided an enrollee who is a full-time student at an accredited institution of higher education. In the case of an HMO that provided comprehensive health services on a prepaid basis before it became a qualifed HMO, the community rating requirement shall not apply to that HMO during the forty-eight month period beginning with the month following the month in which it became a qualifed HMO.
(a)
(1) Stresses health outcomes to the extent consistent with the state of the art.
(2) Provides review by physicians and other health professionals of the process followed in the provision of health services.
(3) Uses systematic data collection of performance and patient results, provides interpretation of these data to its practitioners, and institutes needed change.
(4) Includes written procedures for taking appropriate remedial action whenever, as determined under the quality assurance program, inappropriate or substandard services have been provided or services that ought to have been furnished have not been provided.
(b)
(1) Except as provided in paragraph (b)(2) of this section, the services must
(2)
(3) The services must be available and accessible with reasonable promptness to each of the HMO's enrollees as ensured through—
(i) Staffing patterns within generally accepted norms for meeting the projected enrollment needs; and
(ii) Geographic location, hours of operation, and arrangements for after-hours services. (Medically necessary emergency services must be available 24 hours a day, 7 days a week.)
(c) Continuity of care. The HMO must ensure continuity or care through arrangements that include but are not limited to the following:
(1) Use of a health professional who is primarily responsible for coordinating the enrollee's overall health care.
(2) A system of health and medical records that accumulates pertinent information about the enrollee's health care and makes it available to appropriate professionals.
(3) Arrangements made directly or through the HMO's providers to ensure that the HMO or the health professional who coordinates the enrollee's overall health care is kept informed about the services that the referral resources furnish to the enrollee.
(d)
(a)
(i) Total assets greater than total unsubordinated liabilities. In evaluating assets and liabilities, loan funds awarded or guaranteed under section 1306 of the PHS Act are not included as liabilities.
(ii) Sufficient cash flow and adequate liquidity to meet obligations as they become due.
(iii) A net operating surplus, or a financial plan that meets the requirements of paragraph (a)(2) of this section.
(iv) An insolvency protection plan that meets the requirements of § 417.122(b) for protection of enrollees.
(v) A fidelity bond or bonds, procured and maintained by the HMO, in an amount fixed by its policymaking body but not less than $100,000 per individual, covering each officer and employee entrusted with the handling of its funds. The bond may have reasonable deductibles, based upon the financial strength of the HMO.
(vi) Insurance policies or other arrangements, secured and maintained by the HMO and approved by HCFA to insure the HMO against losses arising from professional liability claims, fire, theft, fraud, embezzlement, and other casualty risks.
(2)
(ii) This plan must include—
(A) A detailed marketing plan;
(B) Statements of revenue and expense on an accrual basis;
(C) Sources and uses of funds statements; and
(D) Balance sheets.
(b)
(1) For the cost of providing to any enrollee basic health services with an aggregate value of more than $5,000 in any year.
(2) For the cost of basic health services obtained by its enrollees from sources other than the HMO because medical necessity required that they be furnished before they could be secured through the HMO.
(3) For not more than 90 percent of the amount by which its costs for any of its fiscal years exceed 115 percent of its income for that fiscal year.
(4) For physicians or other health professionals, health care institutions, or any other combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for their furnishing of basic health services to the HMO's enrollees.
(a)
(i) Contractual arrangements that prohibit health care providers used by the enrollees from holding any enrollee liable for payment of any fees that are the legal obligation of the HMO.
(ii) Insurance, acceptable to HCFA.
(iii) Financial reserves, acceptable to HCFA, that are held for the HMO and restricted for use only in the event of insolvency.
(iv) Any other arrangements acceptable to HCFA.
(2) The requirements of this paragraph do not apply to an HMO if HCFA determines that State law protects the HMO enrollees from liability for payment of any fees that are the legal obligation of the HMO.
(b)
(1) For all enrollees, for the duration of the contract period for which payment has been made.
(2) For enrollees who are in an inpatient facility on the date of insolvency, until they are discharged from the facility.
(a)
(1) A policymaking body that exercises oversight and control over the HMO's policies and personnel to ensure that management actions are in the best interest of the HMO and its enrollees.
(2) Personnel and systems sufficient for the HMO to organize, plan, control and evaluate the financial, marketing, health services, quality assurance program, administrative and management aspects of the HMO.
(3) At a minimum, management by an executive whose appointment and removal are under the control of the HMO's policymaking body.
(b)
(i) Benefits (including limitations and exclusions).
(ii) Coverage (including a statement of conditions on eligibility for benefits).
(iii) Procedures to be followed in obtaining benefits and a description of circumstances under which benefits may be denied.
(iv) Rates.
(v) Grievance procedures.
(vi) Service area.
(vii) Participating providers.
(viii) Financial condition including at least the following most recently audited information: Current assets, other assets, total assets; current liabilities, long term liabilities; and net worth.
(2)
(ii) The description of benefits and coverage may be in general terms if reference is made to a detailed statement of benefits and coverage that is available without cost to any person who enrolls in the HMO or to whom the opportunity for enrollment is offered.
(iii) The HMO must provide the description to any enrollee or person who is eligible to elect the HMO option and who requests the material from the HMO or the administrator of a health benefits plan. For purposes of this requirement, “administrator” (of a health benefits plan) has the meaning it is given in the Employment Retirement Income Security Act of 1974 (ERISA) at 29 U.S.C. 1002(16)(A).
(iv) If the HMO provides health services through individual practice associations (IPAs), the HMO must specify the number of member physicians by specialty, and a listing of the hospitals where HMO enrollees will receive basic and supplemental health services.
(v) If the HMO provides health services other than through IPAs, the HMO must specify, for each ambulatory care facility, the facility's address, days and hours of operation, and the number of physicians by specialty, and a listing of the hospitals where HMO enrollees will receive basic and supplemental health services.
(c)
(2) If an HMO has a medically underserved population located in its service area, not more than 75 percent of its enrollees may be from the medically underserved population unless the area in which that population resides is a rural area.
(d)
(i) Expel or refuse to reenroll any enrollee; or
(ii) Refuse to enroll individual members of a group.
(2) For purposes of this paragraph, a “group” is composed of individuals who enroll in the HMO under a contract or other arrangement that covers two or more subscribers. Examples of groups are employees who enroll under a contract between their employer and the HMO, or members of an organization that arranges coverage for its membership.
(3) Nothing in this subpart prohibits an HMO from requiring that, as a condition for continued eligibility for enrollment, enrolled dependent children, upon reaching a specified age, convert to individual enrollment, consistent with paragraph (e) of this section.
(e)
(i) Each enrollee (and his or her enrolled dependents) leaving a group.
(ii) Each enrollee who would otherwise cease to be eligible for HMO enrollment because of his or her age, or the death or divorce of an enrollee.
(2) The individual enrollment offered must meet the conditions of subpart B of this part and this subpart C.
(3) The HMO is not required to offer individual enrollment except to the enrollees specified in this paragraph.
(4) The HMO must offer the enrollment on the same terms and conditions that it makes available to other nongroup enrollees.
(f) [Reserved]
(g)
(1) Grievances and complaints are transmitted in a timely manner to appropriate HMO decisionmaking levels that have authority to take corrective action; and
(2) Appropriate action is taken promptly, including a full investigation if necessary and notification of concerned parties as to the results of the HMO's investigation.
(h)
(1) In the case of hospitals, are either accredited by the Joint Commission on Accreditation of Health Care Organizations, or certified by Medicare.
(2) In the case of laboratories, are either CLIA-exempt, or have in effect a valid certificate of one of the following types, issued by HCFA in accordance with section 353 of the PHS Act and part 493 of this chapter:
(i) Registration certificate.
(ii) Certificate.
(iii) Certificate of waiver.
(iv) Certificate of accreditation.
(3) In the case of other affiliated institutional providers, are certified for participation in Medicare and Medicaid in accordance with part 405, 416, 418, 488, or 491 of this chapter, as appropriate.
(a)
(1) The cost of its operations.
(2) The patterns of utilization of its services.
(3) The availability, accessibility, and acceptability of its services.
(4) To the extent practical, developments in the health status of its enrollees.
(5) Information demonstrating that the HMO has a fiscally sound operation.
(6) Other matters that HCFA may require.
(b)
(1) A description of significant business transactions (as defined in paragraph (c) of this section) between the HMO and a party in interest.
(2) With respect to those transactions—
(i) A showing that the costs of the transactions listed in paragraph (c) of this section do not exceed the costs that would be incurred if these transactions were with someone who is not a party in interest; or
(ii) If they do exceed, a justification that the higher costs are consistent with prudent management and fiscal soundness requirements.
(3) A combined financial statement for the HMO and a party in interest if either of the following conditions is met:
(i) Thirty-five percent or more of the costs of operation of the HMO go to a party in interest.
(ii) Thirty-five percent or more of the revenue of a party in interest is from the HMO.
(c)
(1) Business transaction means any of the following kinds of transactions:
(i) Sale, exchange or lease of property.
(ii) Loan of money or extension of credit.
(iii) Goods, services, or facilities furnished for a monetary consideration, including management services, but not including—
(A) Salaries paid to employees for services performed in the normal course of their employment; or
(B) Health services furnished to the HMO's enrollees by hospitals and other providers, and by HMO staff, medical groups, or IPAs, or by any combination of those entities.
(2)
(d)
(2) Inter-entity transactions must be eliminated in the consolidated column.
(3) These statements must have been examined by an independent auditor in accordance with generally accepted accounting principles, and must include appropriate opinions and notes.
(4) Upon written request from an HMO showing good cause, HCFA may waive the requirement that its combined financial statement include the financial information required in this paragraph (d) with respect to a particular entity.
(e)
(i) The HMO must furnish the information to the employer or the employer's designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
(ii) Loan of money or extension of credit.
(iii) Goods, services, or facilities furnished for a monetary consideration, including management services, but not including—
(A) Salaries paid to employees for services performed in the normal course of their employment; or
(B) Health services furnished to the HMO's enrollees by hospitals and other providers, and by HMO staff, medical groups, or IPAs, or by any combination of those entities.
(2)
(d)
(2) Inter-entity transactions must be eliminated in the consolidated column.
(3) These statements must have been examined by an independent auditor in accordance with generally accepted accounting principles, and must include appropriate opinions and notes.
(4) Upon written request from an HMO showing good cause, HCFA may waive the requirement that its combined financial statement include the financial information required in this paragraph (d) with respect to a particular entity.
(e)
(2) The HMO must furnish the information to the employer or the employer's designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
This subpart sets forth—
(a) The requirements for—
(1) Entities that seek qualification as HMOs under title XIII of the PHS Act; and
(2) HMOs that seek—
(i) Qualification for their regional components; or
(ii) Expansion of their service areas;
(b) The procedures that HCFA follows to make determinations; and
(c) Other related provisions, including application fees.
(a)
(2) HCFA determines whether the entity is an HMO on the basis of the entity's application and any additional information and investigation (including site visits) that HCFA may require.
(3) HCFA may determine that an entity is any of the following:
(i) An operational qualified HMO.
(ii) A preoperational qualified HMO.
(iii) A transitional qualified HMO.
(b)
(1) HCFA finds that the entity meets the requirements of subparts B and C of this part.
(2) The entity, within 30 days of HCFA's determination, provides written assurances, satisfactory to HCFA, that it—
(i) Provides and will provide basic health services (and any supplemental health services included in any contract) to its enrollees;
(ii) Provides and will provide these services in the manner prescribed in sections 1301(b) and 1301(c) of the PHS Act and subpart B of this part;
(iii) Is organized and operated and will continue to be organized and operated in the manner prescribed in section 1301(c) of the PHS Act and subpart C of this part;
(iv) Under arrangements that safeguard the confidentiality of patient information and records, will provide access to HCFA and the Comptroller General or any of their duly authorized representatives for the purpose of audit, examination or evaluation to any books, documents, papers, and records of the entity relating to its operation as an HMO, and to any facilities that it operates; and
(v) Will continue to comply with any other assurances that it has given to HCFA.
(c)
(2) Within 30 days after receiving notice that the entity has begun operation, HCFA determines whether it is an operational qualified HMO. In the absence of this determination, the entity is not an operational qualified HMO even though it becomes operational.
(d)
(i) Meets the requirements of paragraph (d)(2) through (d)(4) of this section; and
(ii) Provides the assurances specified in paragraphs (d)(5) through (d)(7) of this section within 30 days of HCFA's determination.
(2)
(i) Assume full financial risk for the provision of basic health services as required by § 417.120(b); or
(ii) Comply with the limitations that are imposed on insurance by § 417.120(b)(1).
(3)
(i) Physician services.
(ii) Outpatient services and inpatient hospital services. (The entity need not provide or pay for hospital inpatient or outpatient services that it can show are being provided directly, through insurance, or under arrangements, by other entities.)
(iii) Medically necessary emergency services.
(iv) Diagnostic laboratory services and diagnostic and therapeutic radiologic services.
(4)
(ii)
(5)
(i) Continue to provide services in accordance with paragraph (d)(3) of this section.
(ii) Continue to be organized and operated and to pay for basic health services in accordance with paragraphs (d)(2) and (d)(4) of this section, respectively.
(6)
(i) It will implement a time-phased plan acceptable to HCFA that—
(A) May not extend for more than 3 years from the date of HCFA's determination; and
(B) Specifies definite steps for meeting, at the time of renewal of each group or individual contract, all the requirements of subparts B and C of this part.
(ii) Upon completion of this time-phased plan, it will—
(A) Provide basic and supplemental services to all of its enrollees; and
(B) Be organized and operated, and provide services, in accordance with subparts B and C of this part.
(7)
(i) Be organized and operated in accordance with subpart C of this part; and
(ii) Provide basic health services and any supplemental health services included in the contract, in accordance with subpart B of this part.
(e)
(f)
(g)
(1) The requirements of titles XVIII and XIX of the Act, as appropriate, take precedence over conflicting requirements of sections 1301(b) and 1301(c) of the PHS Act.
(2) The HMO must, with respect to its enrollees entitled to Medicare or Medicaid, comply with the applicable requirement of title XVIII or XIX, including those that pertain to—
(i) Deductibles and coinsurance;
(ii) Enrollment mix and enrollment practices;
(iii) State plan rules on copayment options; and
(iv) Grievance procedures.
(3) An HMO that complies with paragraph (g)(2) of this section may obtain and retain Federal qualification if, for its other enrollees, the HMO meets the requirements of sections 1301(b) and 1301(c) of the PHS Act and implementing regulations in this subpart D and in subparts B and C of this part.
(h)
(a)
(b)
(2) The authorized individual must describe thoroughly how the entity meets, or will meet, the requirements for qualified HMOs described in the PHS Act and in subparts B and C of this part, this subpart D, and 417.168 and 417.169 of subpart F.
(c)
(1) The fee is reasonably related to the Federal government's cost of qualifying an entity and may vary based on the type of application.
(2) Each type of application has one set fee rather than a charge based on the specific cost of each determination. (For example, each Federally qualified HMO applicant seeking Federal qualification of one of its regional components as an HMO is charged the same amount, unless the amount of the fee has been changed under paragraph (f) of this section.)
(d)
(1) $18,400 for an entity seeking qualification as an HMO or qualification of a regional component of an HMO.
(2) $6,900 for an HMO seeking expansion of its service area.
(3) $3,100 for a CMP seeking qualification as an HMO.
(e)
(f)
(g)
(h)
(a)
(2) If the application is incomplete, HCFA notifies the entity and allows 60 days from the date of the notice for the entity to furnish the missing information.
(3) After evaluating all relevant information, HCFA determines whether the entity meets the applicable requirements of §§ 417.142 and 417.143.
(b)
(c)
(2) Within 60 days from the date of the notice, the entity may respond in writing to the issues or other matters that were the basis for HCFA's preliminary finding, and may revise its application to remedy any defects identified by HCFA.
(d)
(2) A request for reconsideration must—
(i) Be submitted in writing, within 60 days following the date of the notice of denial;
(ii) Be addressed to the HCFA officer or employee who denied the application; and
(iii) Set forth the grounds upon which the entity requests reconsideration, specifying the material issues of fact and of law upon which the entity relies.
(3) HCFA bases its reconsideration upon the record compiled during the qualification review proceedings, materials submitted in support of the request for reconsideration, and other relevant materials available to HCFA.
(4) HCFA gives the entity written notice of the reconsidered determination and the basis for the determination.
(e)
(2)
As used in this subpart, unless the context indicates otherwise—
(1) Includes non-appropriated fund instrumentalities of the United States Government; and
(2) Excludes the following:
(i) The governments of the United States, the District of Columbia and the territories and possessions of the United States, the 50 States and their political subdivisions, and any agencies or instrumentalities of any of the foregoing, including the United States Postal Service and Postal Rate Commission.
(ii) Any church, or convention or association of churches, and any organization operated, supervised, or controlled by a church, or convention or association of churches that meets the following conditions:
(A) Is an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1954.
(B) Does not discriminate, in the employment, compensation, promotion or termination of employment of any personnel, or in the granting of staff and other privileges to physicians or other health personnel, on the grounds that the individuals obtain health care through HMOs, or participate in furnishing health care through HMOs.
(a)
(b)
(c)
(d)
(e)
(a)
(b)
(c)
(i) Must first be presented to the bargaining representative; and
(ii) If the representative accepts the option, must then be offered to each represented employee.
(2) For employees not represented by a bargaining representative, the option must be offered directly to those employees.
(a)
(i)
(ii)
(2)
(ii) Access may not be more restrictive or less favorable than the access the employing entity provides to other offerors of options included in the health benefits plan, whether or not those offerors elect to avail themselves of that access.
(b)
(2) Revisions must be limited to correcting factual errors and misleading or ambiguous statements, unless—
(i) The HMO and the employing entity agree otherwise; or
(ii) Other revisions are required by law.
(3) The employing entity or designee must complete revision of the materials promptly so as not to delay or otherwise interfere with their use during the group enrollment period.
(c)
(2)
(3)
(d)
(2)
(i) Is not integrated or incorporated into a basic health benefits package or major medical plan, and
(ii) Is—
(A) Offered by a carrier other than the one offering the basic health benefits package or major medical plan; or
(B) Subject to a premium separate from the premium for the basic health benefits package or major medical plan.
(3)
(ii) The non-HMO option provides free-standing coverage for optical services (such as refraction and the provision of eyeglasses), and the HMO does not. The employing entity must provide that employees who select the HMO option continue to be eligible for optical coverage.
(iii) The non-HMO option includes dental coverage in its major medical package, with a common deductible applied to dental as well as non-dental benefits. The HMO provides no dental coverage as part of its pre-paid health services. Because the dental coverage is not free-standing, the employing entity is not required to provide that employees who select the HMO option continue to be eligible for dental coverage, but is free to do so.
(e)
(i) Are new employees.
(ii) Have been transferred or have changed their place of residence, resulting in—
(A) Eligibility for enrollment in a qualified HMO for which they were not previously eligible by place of residence; or
(B) Residence outside the service area of a qualified HMO in which they were previously enrolled.
(iii) Are covered by any coverage option that ceases operation.
(2)
(3)
(i) Enrollment in a particular qualified HMO is offered for the first time.
(ii) The eligible employee elects to change from one option to another.
(iii) The eligible employee is one of those specified in paragraph (e)(1) of this section.
(f)
(1) For employees represented by a collective bargaining representative, the selection of copayment levels and supplemental health services is subject to the collective bargaining process.
(2) For employees not represented by a bargaining representative, the selection of copayment levels and supplemental health services is subject to the same decisionmaking process used by the employing entity with respect to the non-HMO option in its health benefits plan.
(3) In all cases, the HMO has the right to include, with the basic benefits package it provides to its enrollees for a basic health services payment, on a non-negotiable basis, those supplemental health services that meet the following conditions:
(i) Are required to be offered under State law.
(ii) Are included uniformly by the HMO in its prepaid benefit package.
(iii) Are available to employees who select the non-HMO option but not available to those who select the HMO option.
(a)
(2) If the HMO's request for inclusion in a health benefits plan is received at a time when existing contracts or agreements do not provide for inclusion, the employing entity must include the HMO option in the health benefits plan at the time that new agreements or contracts are offered or negotiated.
(b)
(1)
(i) When a new agreement is negotiated;
(ii) At the time prescribed, in an agreement with a fixed term of more than 1 year, for discussion of change in health benefits; or
(iii) In accordance with a specific process for review of HMO offers.
(2)
(i) If a contract has no fixed term or has a term in excess of 1 year, the contract must be treated as renewable on its earliest anniversary date.
(ii) If the employing entity or designee is self-insured, the budget year must be treated as the term of the existing contract.
(3)
(i) At the time each contract or arrangement is renewed or reissued; or
(ii) The benefits provided under the contract or arrangement are offered to employees.
(a)
(2)
(3)
(i) The employer contribution to the HMO is the same, per employee, as the contribution to non-HMO alternatives.
(ii) The employer contribution reflects the composition of the HMO's enrollment in terms of enrollee attributes that can reasonably be used to predict utilization, experience, costs, or risk. For each enrollee in a given class established on the basis of those attributes, the employer contributes an equal amount, regardless of the health benefits plan chosen by the employee.
(iii) The employer contribution is a fixed percentage of the premium for each of the alternatives offered.
(iv) The employer contribution is determined under a mutually acceptable arrangement negotiated by the HMO and the employer. In negotiating the arrangement, the employer may not insist on terms that would cause the HMO to violate any of the requirements of this part.
(4)
(b)
(2) However, if the employing entity or designee has special requirements for other than standard solicitation brochures and enrollment literature, it must, in the case of the HMO alternative, determine and distribute any administrative costs attributable to those requirements in a manner consistent with its method of determining and distributing those costs for the non-HMO alternatives.
(c)
(1) For which eligible employees and their eligible dependents are covered notwithstanding selection of the HMO alternative; and
(2) That are not offered on a prepayment basis by the HMO to the employing entity's employees.
(d)
(e)
(f)
(1) The data used to compute the level of contribution for each of the plans offered to employees.
(2) Related data about the employees who are eligible to enroll in a plan.
(3) A description of the methodology for computation.
(g)
(2) The purpose of HCFA's review is to determine whether the methodology and the level of contribution comply with the requirements of this subpart.
(3) HMOs and employees that request HCFA to review must set forth reasonable grounds for making the request.
Each employing entity that provides payroll deductions as a means of paying employees' contributions for health benefits or provides a health benefits plan that does not require an employee contribution must, with the consent of an employee who selects the HMO option, arrange for the employee's contribution, if any, to be paid through payroll deductions.
The decision of an employing entity subject to this subpart to include the HMO alternative in any health benefits plan offered to its eligible employees must be carried out consistently with the obligations imposed on that employing entity under the National Labor Relations Act, the Railway Labor Act, and other laws of similar effect.
This subpart applies to any entity that has been determined to be a qualified HMO under subpart D of this part.
Any entity subject to this subpart must comply with the assurances that it provided to HCFA, unless compliance is waived under § 417.166.
Entities subject to this subpart must submit:
(a) The reports that may be required by HCFA under § 417.126, and
(b) Any additional reports HCFA may reasonably require.
(a)
(1) State the grounds and underlying facts of the complaint;
(2) Give the names of all persons involved; and
(3) Assure that all appropriate grievance and appeals procedures established by the HMO and available to the complainant have been exhausted.
(b)
(2) When HCFA initiates an investigation, it gives the HMO written notice that includes a full statement of
(3) HCFA obtains any information it considers necessary to resolve issues related to the assurances, and may use site visits, public hearings, or any other procedures that HCFA considers appropriate in seeking this information.
(c)
(ii) HCFA publishes in the
(2)
(ii) The notice specifies the manner in which the HMO has not complied with its assurances and directs the HMO to initiate the corrective action that HCFA considers necessary to bring the HMO into compliance.
(iii) The HMO must initiate this corrective action within 30 days of the date of the notice from HCFA, or within any longer period that HCFA determines to be reasonable and specifies in the notice. The HMO must carry out the corrective action within the time period specified by HCFA in the notice.
(iv) The notice may provide the HMO an opportunity to submit, for HCFA's approval, proposed methods for achieving compliance.
(d)
(2) In the notice, HCFA provides the HMO with an opportunity for reconsideration of the revocation, including, at the HMO's election, a fair hearing.
(3) The revocation of qualification is effective on the tenth calendar day after the day of the notice unless HCFA receives a request for reconsideration by that date.
(4) If after reconsideration HCFA again determines to revoke the HMO's qualification, this revocation is effective on the tenth calendar day after the date of the notice of reconsidered determination.
(5) HCFA publishes in the
(6) A revocation under this paragraph (d) has the effect described in § 417.164.
(e)
(1) The HMO's enrollees.
(2) Each employer or public entity that has offered enrollment in the HMO in accordance with subpart E of this part.
(3) Each lawfully recognized collective bargaining representative or other representative of the employees of the employer or public entity.
(f)
(i) Expenses for basic or supplemental health services that the enrollee obtained from other sources because the HMO failed to provide or arrange for them in accordance with its assurances.
(ii) Any amounts the HMO charged the enrollee that are inconsistent with its assurances. (Rules applicable to charges for all enrollees are set forth in §§ 417.104 and 417.105. The additional rules applicable to Medicare enrollees are in § 415.454.)
(2) This paragraph applies regardless of when the HMO failed to comply with the appropriate assurances.
(g)
(2)
When an HMO's qualification is revoked under § 417.163(d), the following rules apply:
(a) The HMO may not seek inclusion in employees health benefits plans under subpart E of this part.
(b) Inclusion of the HMO in an employer's health benefits plan—
(1) Is disregarded in determining whether the employer is subject to the requirements of subpart E of this part; and
(2) Does not constitute compliance with subpart E of this part by the employer.
An entity whose qualification as an HMO has been revoked by HCFA for purposes of section 1310 of the PHS Act may, after completing the corrective action required under § 417.163(c)(2), reapply for a determination of qualification in accordance with the procedures specified in subpart D of this part.
(a)
(1) The qualification requirements are changed by Federal law; or
(2) The HMO shows good cause, consistent with the purposes of title XIII of the PHS Act.
(b)
(i) The HMO has filed for reorganization under Federal bankruptcy provisions and the reorganization can only be approved with the waiver of the assurances.
(ii) State laws governing the entity have been changed after it signed the assurances so as to prohibit the HMO from being organized and operated in a manner consistent with the signed assurances.
(2) Changes in State laws do not constitute good cause to the extent that the changes are preempted by Federal law under section 1311 of the PHS Act.
(c)
(a)
(b)
(2) The rules for payment to HMOs and CMPs are set forth in subparts N, O, and P of this part.
(3) The rules for HCPP participation in Medicare under section 1833(a)(1)(A) of the Act are set forth in subpart U of this part.
As used in this subpart and subparts K through R of this part, unless the context indicates otherwise—
(1) The other entity agrees to furnish specified services to the HMO's or CMP's Medicare enrollees;
(2) The HMO or CMP retains responsibility for the services; and
(3) Medicare payment to the HMO or CMP discharges the beneficiary's obligation to pay for the services.
(1) Are needed immediately because of an injury or sudden illness.
(2) Are such that the time required to reach the HMO's or CMP's providers or suppliers (or alternatives authorized by the HMO or CMP) would mean risk of permanent damage to the enrollee's health.
(1) Enrolls with an HMO or CMP after the date on which the HMO or CMP first enters into a risk contract under subpart L of this part; and
(2) Was not enrolled with the HMO or CMP at the time he or she became entitled to benefits under Part A or eligible to enroll in Part B of Medicare.
(1) Are required in order to prevent serious deterioration of the enrollee's health as a result of unforeseen injury or illness; and
(2) Cannot be delayed until the enrollee returns to the HMO's or CMP's geographic area.
(a) The changes made to section 1876 of the Act by section 114 of the Tax Equity and Fiscal Responsibility Act of 1982 became effective on February 1, 1985, the effective date of the initial implementing regulations.
(b) The changes made to section 1876 of the Act by section 4002 of the Balanced Budget Act (BBA) of 1997 are incorporated in section 422 except for 1876 cost contracts. Upon enactment of the BBA (August 5, 1997) no new cost contracts or service area expansions are accepted by HCFA except for current Health Care Prepayment Plans that may convert to 1876 cost contracts. Also, 1876 cost contracts may not be extended or renewed beyond December 31, 2002.
(a) In order to contract with HCFA under the Medicare program, an entity must—
(1) Be determined by HCFA to be an HMO or CMP (in accordance with §§ 117.142 and 417.407, respectively); and
(2) Comply with the contract requirements set forth in subpart L of this part.
(b) HCFA enters into or renews a contract only if it determines that action would be consistent with the effective and efficient implementation of section 1876 of the Act.
(a)
(b)
(2) The requirements of § 417.143 also apply to CMPs except that there are no application fees.
(c)
(d)
(2) If an entity no longer meets those requirements, HCFA terminates the contract of that entity in accordance with § 417.494.
(a)
(b)
(i) Physicians' services performed by physicians.
(ii) Laboratory, x-ray, emergency, and preventive services.
(iii) Out-of-area coverage.
(iv) Inpatient hospital services.
(2) Exception for Medicaid prepayment risk contracts. An entity that had, before 1970, a Medicaid prepayment risk contract that did not include provision of inpatient hospital services is not required to provide those services.
(c)
(d)
(1) Physicians who are employees or partners of the entity; or
(2) Physicians or groups of physicians (organized on a group or individual practice basis) under contract with the entity to provide physicians' services.
(e)
(f)
(a)
(b)
(2) If the HMO or CMP is dissatisfied with a determination that it meets the requirements only for a reasonable cost contract, it may request reconsideration in accordance with the procedures specified in subpart R of this part.
(c)
(1) That it does not meet the contract requirements under section 1876 of the Act;
(2) The reasons why the HMO or CMP does not meet the contract requirements; and
(3) The HMO's or CMP's right to request reconsideration in accordance with the procedures specified in subpart R of this part.
(a)
(b)
(c)
(d)
(1) The HMO's or CMP's activities;
(2) The extent to which the HMO or CMP complies with each condition;
(3) The nature and extent of any deficiencies; and
(4) The need for improvement if HCFA should enter into a contract with the HMO or CMP.
(e)
(1) Meets all the applicable requirements in the statute and regulations;
(2) Has at least 5,000 enrollees or 1,500 enrollees if it serves a primarily rural area as defined in § 417.413(b)(3);
(3) Has at least 75 Medicare enrollees or has an acceptable plan to achieve this Medicare membership within 2 years;
(4) Satisfies HCFA that it can bear the potential losses of a risk contract; and
(5) Has not previously terminated or failed to renew a risk contract within the preceding 5 years, unless HCFA determines that circumstances warrant special consideration.
(f)
(1) The HMO or CMP qualifies for a risk contract, but chooses a reasonable cost contract.
(2) The HMO or CMP meets the conditions for entering into a risk contract specified in paragraph (e) of this section except that HCFA does not judge the HMO or CMP capable of bearing the potential losses of a risk contract.
(g) Regulations on reasonable cost and risk reimbursement are set forth in subparts O and P of this part.
The HMO or CMP must demonstrate that it—
(a) Has sufficient administrative capability to carry out the requirements of the contract; and
(b) Does not have any agents or management staff or persons with ownership or control interests who have been convicted of criminal offenses related to their involvement in Medicaid, Medicare, or social service programs under title XX of the Act.
(a)
(b)
(1) A nonrural HMO or CMP must currently have the following:
(i) At least 5,000 enrollees; and
(ii) At least 75 Medicare enrollees or a plan acceptable to HCFA for achieving a Medicare enrollment of 75 within 2 years from the beginning of its initial contract period.
(2) A rural HMO or CMP must currently have—
(i) At least 1,500 enrollees; and
(ii) At least 75 Medicare enrollees or a plan acceptable to HCFA for achieving a Medicare enrollment of 75 within 2 years from the beginning of its initial contract period.
(3) For purposes of this paragraph, an HMO or CMP is considered rural if at least 50 percent of its enrollees reside in nonmetropolitan areas. A nonmetropolitan area is an area—
(i) No part of which is within a metropolitan statistical area (MSA) as designated by the Executive Office of Management and Budget; and
(ii) That does not contain a city whose population exceeds 50,000 individuals.
(4) A subdivision or subsidiary of an HMO or CMP that meets the requirements of paragraph (b)(1) or (b)(2) of this section need not demonstrate that it meets those requirements as an independent unit if the HMO or CMP assumes responsibility for the financial risk, and adequate management and supervision of health care services furnished by its subdivision or subsidiary.
(c)
(1) At least 1,500 enrollees.
(2) At least 75 Medicare enrollees, or a plan acceptable to HCFA for achieving—
(i) A Medicare enrollment of 75 within 2 years from the beginning of its initial contract period; and
(ii) At least 250 Medicare enrollees by the beginning of its fourth contract period.
(d)
(2)
(i) The HMO or CMP serves a geographic area in which Medicare beneficiaries and Medicaid recipients constitute more than 50 percent of the population. (HCFA does not grant a waiver that would permit the percentage of Medicare and Medicaid enrollees to exceed the percentage of Medicare beneficiaries and Medicaid recipients in the population of the geographic area.)
(ii) The HMO or CMP is owned and operated by a government entity. The waiver may be for a period up to three years after the date the HMO or CMP first enters into a contract under this subpart, and may not be extended.
(iii) The HMO or CMP requests waiver of the composition rule because it is in the public interest. The organization provides documentation that supports one of the following:
(A) The organization serves a medically underserved rural or urban area.
(B) The organization demonstrates a long-term business and community service commitment to the area.
(C) The organization believes that a waiver is necessary to promote managed care choices in an area with limited or no managed care choices.
(3)
(i) If HCFA determines that the HMO or CMP has complied, or made significant progress toward compliance, with the approved schedule, and that an extension is in the best interest of the Medicare program, HCFA may extend the waiver of modification.
(ii) If HCFA determines that the HMO or CMP has not complied with the approved schedule, HCFA may apply the sanctions described in paragraphs (d)(6) and (d)(7) of this section.
(4)
(5)
(6)
(i) Require the HMO or CMP to stop accepting new enrollment applications after a date specified by HCFA.
(ii) Deny payment for individuals who are formally added or “accreted” to HCFA's records as Medicare enrollees after a date specified by HCFA.
(7)
(8)
(e)
(2) HCFA may waive the requirement of paragraph (e)(1) of this section if compliance would prevent compliance with the limitation on enrollment of Medicare beneficiaries and Medicaid recipients (paragraph (d) of this section) or result in an enrollment substantially nonrepresentative of the population of the HMO's or CMP's geographic area. The enrollment would be “substantially nonrepresentative” if the proportion of a subgroup to the total enrollment exceeded, by 10 percent or more, its proportion of the population in the HMO's or CMP's geographic area, as shown by census data or other data acceptable to HCFA. For purposes of this paragraph, a subgroup means a class of Medicare enrollees as defined in § 417.582.
(a)
(b)
(2)
(i) The sources are located within the HMO's or CMP's geographic area; or
(ii) It is common practice to refer patients to sources outside that geographic area.
(3)
(i) A hospice participating in Medicare is located within the HMO's or CMP's geographic area; or
(ii) It is common practice to refer patients to hospices outside the geographic area.
(c)
(2) An HMO or CMP must assume financial responsibility for services that the Medicare enrollee attempted to obtain from the HMO or CMP, but that the HMO or CMP failed to furnish or unreasonably denied, and that are found, upon appeal by the enrollee under subpart Q of this part, to be services that the enrollee was entitled to have furnished to him or her by the HMO or CMP.
(a)
(b)
(2) Suppliers must meet the conditions for coverage or conditions for certification of their services, as set forth elsewhere in this chapter.
(3) If more than one type of practitioner is qualified to furnish a particular service, the HMO or CMP may select the type of practitioner to be used.
(c)
(1) Services furnished by paramedical, ancillary, and other nonphysician personnel are furnished under the direct supervision of a physician;
(2) A physician is present to perform medical (as opposed to administrative) services whenever the clinics or offices are open; and
(3) Each patient is under the care of a physician.
(d)
(1) Services of physician assistants and nurse practitioners (as defined in § 491.2 of this chapter), and the services and supplies incident to their services. The conditions for payment, as set forth in §§ 405.2414 and 405.2415 of this chapter for services furnished by rural health clinics and Federally qualified health centers, respectively, also apply when those services are furnished by an HMO or CMP.
(2) When furnished by an HMO or CMP, services of clinical psychologists who meet the qualifications specified in § 410.71(d) of this chapter, and the services and supplies incident to their professional services.
(3) When an HMO or CMP contracts on—
(i) A risk basis, the services of a clinical social worker (as defined at § 410.73 of this chapter) and the services and supplies incident to their professional services; or
(ii) A cost basis, the services of a clinical social worker (as defined in § 410.73 of this chapter). Services incident to the professional services of a clinical social worker furnished by an HMO or CMP contracting on a cost basis are not covered by Medicare and payment will not be made for these services.
(e)
(2) The HMO or CMP must maintain a health (including medical) recordkeeping system through which pertinent information relating to the health care of its Medicare enrollees is accumulated and is readily available to appropriate professionals.
(a)
(b)
(a)
(b)
(c)
(2) As described in § 417.448, Medicare enrollees of risk HMOs or CMPs are liable for services that they obtain from sources other than the HMO or CMP, unless the services are—
(i) Emergency or urgently needed; or
(ii) Determined, on appeal under subpart Q of this part, to be services that should have been furnished by the HMO or CMP.
Except as specified in §§ 417.423 and 417.424, an HMO or CMP must enroll, either for an indefinite period or for a specified period of at least 12 months, any individual who—
(a) Is entitled to Medicare benefits under Parts A and B or under Part B only;
(b) Lives within the geographic area served by the HMO or CMP;
(c) Is not enrolled in any other HMO or CMP that has entered into a contract under subpart L of this part;
(d) During an enrollment period of the HMO or CMP, completes and signs the HMO's or CMP's application form and gives whatever information is required for enrollment;
(e) Agrees to abide by the HMO's or CMP's rules after they are disclosed to him or her in connection with the enrollment process;
(f) Is not denied enrollment by the HMO or CMP under a selection policy, if any, that has been approved by HCFA under § 417.424(b); and
(g) Is not denied enrollment by the HMO or CMP on the basis of any of the administrative criteria concerning denial of enrollment in § 417.424(a).
(a)
(2) However, if a beneficiary is already enrolled in an HMO or CMP when he or she is determined to have end-stage renal disease, the HMO or CMP—
(i) Must reenroll the beneficiary as required by § 417.434; and
(ii) May not disenroll the beneficiary except as provided in § 417.460.
(b)
(a)
(1) Cause the number of enrollees who are Medicare or Medicaid beneficiaries to exceed 50 percent of the HMO's or CMP's total enrollment;
(2) Prevent the HMO or CMP from complying with any of the other contract qualifying conditions set forth in subpart J of this part;
(3) Require the HMO or CMP to exceed its enrollment capacity; or
(4) Cause the enrollment to become substantially nonrepresentative of the
(b)
(a)
(2) During open enrollment, the HMO or CMP must enroll eligible Medicare beneficiaries in the order in which their applications are received and until its enrollment capacity is reached.
(3) The HMO or CMP may accept applications from Medicare beneficiaries after it has reached capacity if it places those individuals on a waiting list and enrolls them in chronological order as vacancies occur.
(4) An HMO or CMP with a risk contract must accept applications from eligible Medicare beneficiaries during the month of November 1998.
(b)
(2) HCFA evaluates the HMO's or CMP's submittal under paragraph (b)(1) of this section.
(3) The HMO or CMP must promptly notify HCFA if there is any change in its enrollment capacity.
(c)
(2) Any set aside vacancies that are not filled within a reasonable time after the beginning of the group contract enrollment period must be made available to Medicare beneficiaries and other nongroup applicants under the requirements of this subpart.
(a)
(1) Offer its plan to Medicare beneficiaries and provide to those interested in enrolling, adequate written descriptions of the HMO's or CMP's rules, procedures, benefits, fees and other charges, services, and other information necessary for beneficiaries to make an informed decision about enrollment.
(2) Notify the general public of its enrollment period (whether time limited or continuous) in an appropriate manner through appropriate media, throughout its enrollment area.
(3) Submit all marketing materials to HCFA at least 45 days before their planned distribution.
(4) Include in the HMO's or CMP's written materials provided to prospective enrollees prior to enrollment, notice that the HMO or CMP is authorized by law to terminate or refuse to renew its contract with HCFA, that HCFA may also choose to terminate or refuse to renew its contact with the HMO or CMP and that termination or nonrenewal may result in termination of the individual's enrollment in the HMO or CMP.
(b)
(1) Practices that are discriminatory. For example, the HMO or CMP may not engage in any activity intended to recruit Medicare beneficiaries from higher income areas (usually an indicator of better health) without making a comparable effort to enroll Medicare beneficiaries from lower income areas.
(2) Activities that could mislead or confuse Medicare beneficiaries, or misrepresent the HMO or CMP its marketing representatives, or HCFA. For example, the HMO or CMP may not claim that it is recommended or endorsed by HCFA or that HCFA recommends that the beneficiary enroll in the HMO or CMP. It may, however, explain that the entity is approved as an HMO or CMP for purposes of participation in Medicare.
(3) Offers of gifts or payment as an inducement to enroll in the HMO or CMP. This does not prohibit the explanation of any legitimate benefits the beneficiary might obtain as an enrollee of the HMO or CMP such as eligibility to enroll in a supplemental benefit plan that covers deductibles and coinsurance or preventive services.
(4) Door-to-door solicitation of Medicare beneficiaries.
(5) Distribution of marketing materials if, before the expiration of the 45-day period described in paragraph (a)(3) of this section, the HMO or CMP receives written notice from HCFA that HCFA has disapproved the material because it is inaccurate or misleading or it misrepresents the HMO or CMP, its marketing representatives or HCFA.
(c)
(a)
(2) The HMO or CMP must file and retain application forms for the period specified in HCFA instructions.
(b)
(1) Each application is dated as of the day it is received.
(2) Applications are processed in chronological order by date of receipt.
(3) The HMO or CMP gives the beneficiary prompt written notice of acceptance or rejection of the application.
(4) The notice of acceptance—
(i) Specifies the date on which the HMO or CMP will request HCFA to make the enrollment effective; or
(ii) If the HMO or CMP is currently enrolled to capacity, explains the procedures that will be followed when vacancies occur.
(5) The notice of denial explains the reason for denial.
(6) The HMO or CMP transmits the information necessary for HCFA to add the beneficiary to its records of the HMO's or CMP's Medicare enrollees—
(i) Within 30 days from the date of application or from the date a vacancy occurs for an applicant who was accepted (for future enrollment) while there were no vacancies; or
(ii) Within an additional period of time approved by HCFA on a showing by the HMO or CMP that it needs more time.
(7) The HMO or CMP promptly notifies the beneficiary of the effective month of his or her enrollment as a Medicare enrollee, when it receives that information from HCFA.
(8) If the HMO or CMP accepts applications while it is enrolled to capacity, its procedures ensure that vacancies are filled in chronological order by date of application of beneficiaries who are still eligible to enroll, unless that would result in failure to comply with any of the qualifying conditions set forth in § 417.413.
(a)
(b)
(c)
(d)
(e)
(1) At least 30, but no earlier than 90, days before the enrollee—
(i) Attains age 65; or
(ii) Reaches his or her 25th month of entitlement to social security disability benefits under title II of the Act or railroad retirement disability benefits under section 7(d) of the Railroad Retirement Act of 1974.
(2) Within 30 days after the enrollee initiates a course of renal dialysis, or on or before the day he or she enters a hospital in anticipation of a kidney transplant.
If an HMO or CMP requires periodic reenrollment, it must reenroll Medicare enrollees unless there is a basis for disenrollment as set forth in § 417.460.
(a)
(1) All benefits provided under the contract, as described in § 417.440.
(2) How and where to obtain services from or through the HMO or CMP.
(3) The restrictions on coverage for services furnished from sources outside a risk HMO or CMP, other than emergency services and urgently needed services (as defined in § 417.401).
(4) The obligation of the HMO or CMP to assume financial responsibility and provide reasonable reimbursement for emergency services and urgently needed services as required by § 417.414(c).
(5) Any services other than the emergency or urgently needed services that the HMO or CMP chooses to provide as permitted by this part, from sources outside the HMO or CMP. A cost HMO or CMP must disclose that the enrollee may receive services through any Medicare providers and suppliers.
(6) Premium information, including the amount (or if the amount cannot be included, the telephone number of the source from which this information may be obtained) and the procedures for paying premiums and other charges for which enrollees may be liable.
(7) Grievance and appeal procedures.
(8) Disenrollment rights.
(9) The obligation of an enrollee who is leaving the HMO's or CMP's geographic area for more than 90 days to notify the HMO or CMP of the move or extended absence and the HMO's or CMP's policies concerning retention of enrollees who leave the geographic area for more than 90 days, as described in § 417.460(a)(2).
(10) The expiration date of the Medicare contract with HCFA and notice that both HCFA and the HMO or CMP are authorized by law to terminate or refuse to renew the contract, and that termination or nonrenewal of the contract may result in termination of the individual's enrollment in the HMO or CMP.
(11) Advance directives as specified in paragraph (d) of this section.
(12) Any other matters that HCFA may prescribe.
(b)
(c)
(d)
(i) Provide written information to those individuals concerning—
(A) Their rights under the law of the State in which the organization furnishes services (whether statutory or recognized by the courts of the State) to make decisions concerning such medical care, including the right to accept or refuse medical or surgical treatment and the right to formulate, at the individual's option, advance directives. Providers are permitted to contract with other entities to furnish this information but are still legally responsible for ensuring that the requirements of this section are met. Such information must reflect changes in State law as soon as possible, but no later than 90 days after the effective date of the State law; and
(B) The HMO's or CMP's written policies respecting the implementation of those rights, including a clear and precise statement of limitation if the HMO or CMP cannot implement an advance directive as a matter of conscience. At a minimum, this statement should:
(
(
(
(ii) Provide the information specified in paragraphs (d)(1)(i) of this section to each enrollee at the time of initial enrollment. If an enrollee is incapacitated at the time of initial enrollment and is unable to receive information (due to the incapacitating condition or a mental disorder) or articulate whether or not he or she has executed an advance directive, the HMO or CMP may give advance directive information to the enrollee's family or surrogate in the same manner that it issues other materials about policies and procedures to the family of the incapacitated enrollee or to a surrogate or other concerned persons in accordance with State law. The HMO or CMP is not relieved of its obligation to provide this information to the enrollee once he or she is no longer incapacitated or unable to receive such information. Follow-up procedures must be in place to ensure that the information is given to the individual directly at the appropriate time.
(iii) Document in the individual's medical record whether or not the individual has executed an advance directive;
(iv) Not condition the provision of care or otherwise discriminate against an individual based on whether or not the individual has executed an advance directive;
(v) Ensure compliance with requirements of State law (whether statutory or recognized by the courts of the State) regarding advance directives;
(vi) Provide for education of staff concerning its policies and procedures on advance directives; and
(vii) Provide for community education regarding advance directives that may include material required in paragraph (d)(1)(i)(A) of this section, either directly or in concert with other providers or entities. Separate community education materials may be developed and used, at the discretion of the HMO or CMP. The same written materials are not required for all settings, but the material should define what constitutes an advance directive, emphasizing that an advance directive is designed to enhance an incapacitated individual's control over medical treatment, and describe applicable State law concerning advance directives. An HMO or CMP must be able to document its community education efforts.
(2) The HMO or CMP—(i) Is not required to provide care that conflicts with an advance directive.
(ii) Is not required to implement an advance directive if, as a matter of conscience, the HMO or CMP cannot implement an advance directive and State law allows any health care provider or any agent of such provider to conscientiously object.
(3) The HMO or CMP must inform individuals that complaints concerning non-compliance with the advance directive requirements may be filed with the State survey and certification agency.
(a)
(2) A Medicare enrollee is also entitled to receive timely and reasonable payment directly (or have payment made on his or her behalf) for services he or she obtained from a provider or supplier outside the HMO or CMP if those services are—
(i) Emergency services or urgently needed services as defined § 417.401;
(ii) Services denied by the HMO or CMP and found (upon appeal under subpart Q of this part) to be services the enrollee was entitled to have furnished by the HMO or CMP.
(b)
(i) Medicare Part A and Part B services if the enrollee is entitled to benefits under both programs.
(ii) Medicare Part B services if the enrollee is entitled only under that program.
(2)
(3)
(4)
(i) A reduction in the HMO's or CMP's premium rate or in other charges for services furnished to Medicare enrollees.
(ii) Provision of health benefits or services beyond the required Part A and Part B coverage.
(5)
(c)
(ii)
(A) Is an employee or contractor of the HMO or CMP; and
(B) Is not an employee of the designated hospice and does not receive compensation from the hospice for those services.
(2)
(i) The effective date of the enrollee's revocation of the election of hospice care as described in § 418.28 of this chapter.
(ii) The date the enrollee exhausts his or her hospice benefits.
(3)
(d)
(1) Is not responsible for the provision of any of the inpatient hospital services under Part A during the stay and is not required to pay for those services;
(2) Must assume responsibility for payment for or provision of inpatient hospital services under Part A on the day after the day of discharge from the inpatient stay; and
(3) Is responsible for the full scope of services under paragraph (b) of this section, other than inpatient hospital services under Part A, beginning on the effective date of enrollment.
(e)
(1) Is financially responsible for payment of the inpatient services under Part A through the date the beneficiary is discharged from the inpatient stay; and
(2) Is not responsible for the provision of services, furnished on or after the effective date of disenrollment, other than inpatient hospital services under Part A.
(f)
(2) Before giving notice of noncoverage, the HMO or CMP must obtain the concurrence of its affiliated physician responsible for the hospital care of the enrollee, or other physician as authorized by the HMO or CMP.
(3) The HMO or CMP must give the enrollee written notice that includes the following:
(i) The reason why inpatient hospital care is no longer needed.
(ii) The effective date of the enrollee's liability for continued inpatient care.
(iii) The enrollee's appeal rights.
(4) If the HMO or CMP delegates to the hospital the determination of noncoverage of inpatient care, the hospital obtains the concurrence of the HMO- or CMP-affiliated physician responsible for the hospital care of the enrollee, or other physician as authorized by the HMO or CMP, and sends notice, following the procedures set forth in § 412.42(c)(3) of this chapter.
(a)
(b)
(i) Elects to receive reduced payment so that there is no difference between the average of its per capita rates of payment and its ACR; or
(ii) Elects to receive partially reduced payment and furnish Medicare enrollees with additional benefits described in § 417.440 (b)(4) so that the combined value of benefits and reduced payment is equivalent to the difference between the average of its per capita rates of payment and its ACR.
(2)
(a)
(1) On February 1, 1985, was enrolled—
(i) In an HMO or CMP that had in effect a cost contract entered into under section 1876 of the Act in accordance with regulations in effect before February 1, 1985; or
(ii) In an HCPP that was being reimbursed on a reasonable cost basis under section 1833(a)(1)(A) of the Act.
(2) Has continued enrollment in the same entity without interruption or disenrolled after February 1, 1985, and later reenrolled in the same entity.
(b)
(2) A nonrisk enrollee of a risk HMO or CMP is not entitled to additional benefits under § 417.442.
(c)
(i) HCFA notifies each affected enrollee of the decision at least 90 days prior to the effective date.
(ii) The nonrisk Medicare enrollees complete and sign forms stating that they understand and accept the new
(iii) The HMO or CMP notifies each affected enrollee, in writing, at least 30 days in advance, of the date upon which his or her coverage under the risk portion of the contract takes effect.
(2)
(d)
(a)
(1) Directly by the HMO or CMP; or
(2) Through arrangements made by the HMO or CMP.
(b)
(1) New Medicare enrollees;
(2) Nonrisk Medicare enrollees who convert to risk reimbursement; and
(3) Nonrisk Medicare enrollees who elect special supplemental benefit plans.
(c)
(d)
(a)
(1) HCFA's liability for payments to an HMO or CMP on behalf of a Medicare beneficiary begins on the first day of the month in which he or she is—
(i) Entitled to Medicare benefits; and
(ii) Enrolled in an HMO or CMP; and
(2) The effective month of coverage may not be earlier than the first month after, nor later than the third month after the month in which HCFA receives the information necessary to include the beneficiary as a Medicare enrollee of the HMO or CMP in HCFA records.
(b)
(2) If an individual becomes an HMO or CMP enrollee before becoming entitled to Medicare Part B benefits, the effective month of coverage is the first month for which he or she becomes entitled to Medicare Part B benefits.
(c)
(a)
(2) The deductible and coinsurance amounts may be paid by or on behalf of the enrollee in the form of a premium, membership fee, charge per unit, or other similar charge.
(3) The sum of the amounts the HMO or CMP charges its Medicare enrollees for Medicare deductibles and coinsurance may not exceed, on the average, the actuarial value of the deductible and coinsurance the Medicare enrollees otherwise would have been liable for had they not enrolled in the HMO or CMP or in another HMO or CMP.
(b)
(1) All services that are not covered under Medicare Part A or Part B; or
(2) If entitled only to Medicare Part B benefits, all services that are not covered under Medicare Part B.
(c)
(d)
(2) If a supplemental benefit plan premium includes charges for both noncovered services and the deductible and coinsurance amounts applicable to covered services, the portion of the premium that is for deductibles and coinsurance must be computed separately and must be disclosed to the beneficiary during the enrollment process and before he or she elects coverage options.
(3) The sum of the amounts an HMO or CMP charges its Medicare enrollees for services that are not covered under Part A or Part B may not exceed the ACR for these services.
(e)
(a)
(1) Deductible and coinsurance amounts applicable to furnished covered services;
(2) Charges for noncovered services or services for which the enrollee is liable as described in § 417.452; and
(3) Services for which Medicare is not the primary payor as provided in § 417.528.
(b)
(c)
(a)
(1) Emergency services;
(2) Urgently needed services for which the HMO or CMP has assumed financial responsibility; or
(3) On appeal under subpart Q of this part, found to be services the enrollee was entitled to have furnished by the HMO or CMP.
(b)
(c)
(1) Incorrectly collected amounts that were not collected as premiums.
(2) Other amounts due.
(3) All amounts due, if the HMO or CMP is going out of business.
(d)
(e)
(f)
An HMO or CMP agrees not to recoup deductible and coinsurance amounts for which Medicare enrollees were liable in a previous contract period except in the following circumstances:
(a) The HMO or CMP failed to collect the deductible and coinsurance amounts during the contract period in which they were due because of—
(1) Underestimation of the actuarial value of the deductible and coinsurance amounts; or
(2) A billing error.
(b) The HMO or CMP has identified the amounts and obtained advance HCFA approval of the recoupment and the method and timing of recoupment.
(c) The HMO or CMP collects these amounts no later than the end of the contract period following the contract period during which they were found to be due.
(a)
(1) Disenroll a Medicare beneficiary; or
(2) Orally or in writing, or by any action or inaction, request or encourage a Medicare enrollee to disenroll.
(b)
(i) Fails to pay the required premiums or other charges;
(ii) Commits fraud or permits abuse of his or her enrollment card; or
(iii) Behaves in a manner that seriously impairs the HMO's or CMP's ability to furnish health care services to the particular enrollee or to other enrollees.
(2)
(i) Moves out of the HMO's or CMP's geographic area;
(ii) Fails to convert to the risk provisions of the HMO's or CMP's Medicare contract;
(iii) Loses entitlement to Medicare Part B benefits; or
(iv) Dies.
(3)
(c)
(i) Can demonstrate to HCFA that it made reasonable efforts to collect the unpaid amount;
(ii) Gives the enrollee written notice of disenrollment, including an explanation of the enrollee's right to a hearing under the HMO's or CMP's grievance procedures; and
(iii) Sends the notice of disenrollment to the enrollee before it notifies HCFA.
(2)
(d)
(i) Knowingly provides, on the application form, fraudulent information that materially affects the beneficiary's eligibility to enroll in the HMO or CMP; or
(ii) Intentionally permits others to use his or her enrollment card to obtain services from the HMO or CMP.
(2)
(i) The notice must be mailed to the enrollee before submission of the disenrollment notice to HCFA.
(ii) The notice must include an explanation of the enrollee's right to have the disenrollment heard under the grievance procedures established in accordance with § 417.436.
(3)
(e)
(2)
(3)
(4)
(5)
(ii) HCFA makes this decision within 20 working days after receipt of the documentation material, and notifies the HMO or CMP within 5 working days after making its decision.
(6)
(f)
(ii)
(iii)
(2)
(i) An absence for an extended period means an uninterrupted absence from the HMO's or CMP's geographic area for more than 90 days but less than 1 year.
(ii) The HMO or CMP and the enrollee may mutually agree upon restrictions for obtaining services while the enrollee is absent for an extended period from the HMO's or CMP's geographic area. However, restrictions may not be imposed on the scope of services described in § 417.440.
(iii) HMOs and CMPs that choose to exercise this exception must make the option available to all Medicare enrollees who are absent for an extended period from their geographic areas. However, HMOs and CMPs may limit this option to enrollees who go to a geographic area served by an affiliated HMO or CMP.
(iv) As used in this paragraph, “affiliated HMO or CMP” means an HMO or CMP that—
(A) Is under common ownership or control of the HMO or CMP that seeks to retain the absent enrollees; or
(B) Has in effect an agreement to furnish services to enrollees who are on an extended absence from the geographic area of the HMO or CMP that seeks to retain them.
(v) When the enrollee returns to the HMO's or CMP's geographic area (even temporarily), the restrictions of § 417.448(a) (which limit payment for services not provided or arranged for by the HMO or CMP) apply again immediately.
(vi) If the enrollee fails to return to the HMO's or CMP's geographic area within 1 year from the date he or she left that area, the HMO or CMP must disenroll the beneficiary on the first day of the month following the anniversary of the date the enrollee left that area in accordance with paragraph (f)(1) of this section.
(g)
(2)
(h)
(2)
(i)
(a)
(2) The enrollee may request a certain disenrollment date but it may be no earlier than the first day of the month following the month in which the HMO or CMP receives the request.
(b)
(1) Submit a disenrollment notice to HCFA promptly;
(2) Provide the enrollee with a copy of the request for disenrollment; and
(3) In the case of a risk HMO or CMP, also provide the enrollee with a statement explaining that he or she—
(i) Remains enrolled until the effective date of disenrollment; and
(ii) Until that date, is subject to the restrictions of § 417.448(a) under which neither the HMO or CMP nor HCFA pays for services not provided or arranged for by the HMO or CMP.
(c)
(a)
(2) Disenrollment is effective no earlier than the month immediately after, and no later than the third month after, the month in which HCFA receives the disenrollment notice in acceptable form.
(b)
(2)
(3)
(4)
(c)
(2)
(i) Determines the month in which its liability for payments ends; and
(ii) Notifies the HMO or CMP and all affected Medicare enrollees as soon as practicable.
(a)
(b)
(1) Specific contract requirements; and
(2) Procedures for renewal, nonrenewal, or termination of a contract.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(2) In applying the part 422 rules, references to “M+C organizations” or “M+C plans” must be read as references to “risk HMOs and CMPs”.
(a)
(b)
(1) For the initial term, at least 12 months, but no more than 23 months.
(2) For any subsequent term, 12 months.
If HCFA waives any of the qualifying conditions required under subpart J of this part, the contract must specify the following information for each waived condition:
(a) The specific terms of the waiver.
(b) The expiration date of the waiver.
(c) Any other information required by HCFA.
The contract must provide that the HMO or CMP agrees to comply with—
(a) The requirements for PRO review of services furnished to Medicare enrollees as set forth in subchapter D of this chapter;
(b) Sections 1318(a) and (c) of the PHS Act, which pertain to disclosure of certain financial information;
(c) Section 1301(c)(8) of the PHS Act, which relates to liability arrangements to protect enrollees of the HMO or CMP; and
(d) The reporting requirements in § 417.126(a), which pertain to the monitoring of an HMO's or CMP's continued compliance.
(a) The contract must specify that an HMO or CMP may operate a physician incentive plan only if—
(1) No specific payment is made directly or indirectly under the plan to a physician or physician group as an inducement to reduce or limit medically necessary services furnished to an individual enrollee; and
(2) The stop-loss protection, enrollee survey, and disclosure requirements of this section are met.
(b)
(c)
(d)
(e)
(f)
(1) Withholds greater than 25 percent of potential payments.
(2) Withholds less than 25 percent of potential payments if the physician or physician group is potentially liable for amounts exceeding 25 percent of potential payments.
(3) Bonuses that are greater than 33 percent of potential payments minus the bonus.
(4) Withholds plus bonuses if the withholds plus bonuses equal more than 25 percent of potential payments. The threshold bonus percentage for a particular withhold percentage may be calculated using the formula—
(5) Capitation, arrangements, if—
(i) The difference between the maximum potential payments and the minimum potential payments is more than 25 percent of the maximum potential payments; or
(ii) The maximum and minimum potential payments are not clearly explained in the physician's or physician group's contract.
(6) Any other incentive arrangements that have the potential to hold a physician or physician group liable for more than 25 percent of potential payments.
(g)
(1) Conduct enrollee surveys. These surveys must—
(i) Include either all current Medicare/Medicaid enrollees in the HMO or CMP and those who have disenrolled (other than because of loss of eligibility in Medicaid or relocation outside the HMO's or CMP's service area) in the past 12 months, or a sample of these same enrollees and disenrollees;
(ii) Be designed, implemented, and analyzed in accordance with commonly accepted principles of survey design and statistical analysis;
(iii) Address enrollees/disenrollees satisfaction with the quality of the services provided and their degree of access to the services; and
(iv) Be conducted no later than 1 year after the effective date of the Medicare contract and at least annually thereafter.
(2) Ensure that all physicians and physician groups at substantial financial risk have either aggregate or per-patient stop-loss protection in accordance with the following requirements:
(i) If aggregate stop-loss protection is provided, it must cover 90 percent of the costs of referral services (beyond allocated amounts) that exceed 25 percent of potential payments.
(ii) If the stop-loss protection provided is based on a per-patient limit, the stop-loss limit per patient must be determined based on the size of the patient panel and may be a single combined limit or consist of separate limits for professional services and institutional services. In determining patient panel size, the patients may be pooled in accordance with paragraph (h)(1)(v) of this section. Stop-loss protection must cover 90 percent of the costs of referral services that exceed the per patient limit. The per-patient stop-loss limit is as follows:
(h)
(i) Whether services not furnished by the physician or physician group are covered by the incentive plan. If only the services furnished by the physician or physician group are covered by the incentive plan, disclosure of other aspects of the plan need not be made.
(ii) The type of incentive arrangement; for example, withhold, bonus, capitation.
(iii) If the incentive plan involves a withhold or bonus, the percent of the withhold or bonus.
(iv) Proof that the physician or physician group has adequate stop-loss protection, including the amount and type of stop-loss protection.
(v) The panel size and, if patients are pooled, the method used. Pooling is permitted only if: it is otherwise consistent with the relevant contracts governing the compensation arrangements for the physician or physician group; the physician or physician group is at risk for referral services with respect to each of the categories of patients being pooled; the terms of the compensation arrangements permit the physician or physician group to spread the risk across the categories of patients being pooled; the distribution of payments to physicians from the risk pool is not calculated separately by patient category; and the terms of the risk borne by the physician or physician group are comparable for all categories of patients being pooled. If these conditions are met, the physician or physician group may use either or both of the following methods to pool patients:
(A) Pooling any combination of commercial, Medicare, or Medicaid patients enrolled in a specific HMO or CMP in the calculation of the panel size.
(B) Pooling together, by a physician group that contracts with more than one HMO, CMP, health insuring organization (as defined in § 434.2 of this chapter), or prepaid health plan (as defined in § 434.2 of this chapter) the patients of each of those entities.
(vi) In the case of capitated physicians or physician groups, capitation payments paid to primary care physicians for the most recent year broken down by percent for primary care services, referral services to specialists,
(vii) In the case of those prepaid plans that are required to conduct beneficiary surveys, the survey results.
(2)
(ii) An HMO or CMP must provide the capitation data required under paragraph (h)(1)(vi) for the previous calendar year to HCFA by April 1 of each year.
(3)
(i) Whether the prepaid plan uses a physician incentive plan that affects the use of referral services.
(ii) The type of incentive arrangement.
(iii) Whether stop-loss protection is provided.
(iv) If the prepaid plan was required to conduct a survey, a summary of the survey results.
(i)
(i) Disclose to HCFA any incentive plan between the physician group and its individual physicians that bases compensation to the physician on the use or cost of services furnished to Medicare beneficiaries or Medicaid recipients. The disclosure must include the information specified in paragraphs (h)(1)(i) through (h)(1)(vii) of this section and be made at the times specified in paragraph (h)(2) of this section.
(ii) Provide adequate stop-loss protection to the individual physicians.
(iii) Conduct enrollee surveys as specified in paragraph (g)(1) of this section.
(2)
(i) Disclose to HCFA any incentive plan between the entity and a physician or physician group that bases compensation to the physician or physician group on the use or cost of services furnished to Medicare beneficiaries or Medicaid recipients. The disclosure must include the information required to be disclosed under paragraphs (h)(1)(i) through (h)(1)(vii) of this section and be made at the times specified in paragraph (h)(2) of this section.
(ii) If the physician incentive plan puts a physician or physician group at substantial financial risk for the cost of services the physician or physician group does not furnish—
(A) Meet the stop-loss protection requirements of this subpart; and
(B) Conduct enrollee surveys as specified in paragraph (g)(1) of this section.
(3) For purposes of paragraph (i)(2) of this section, an entity includes, but is not limited to, an individual practice association that contracts with one or more physician groups and a physician hospital organization.
(j)
A reasonable cost contract must provide that the HMO or CMP agrees to maintain books, records, documents, and other evidence of accounting procedures and practices that—
(a) Are sufficient to—
(1) Ensure an audit trail; and
(2) Properly reflect all direct and indirect costs claimed to have been incurred under the contract; and
(b) Include at least records of the following:
(1) Ownership, HMO or CMP, and operation of the HMO's or CMP's financial, medical, and other recordkeeping systems.
(2) Financial statements for the current contract period and three prior periods.
(3) Federal income tax or information returns for the current contract period and three prior periods.
(4) Asset acquisition, lease, sale, or other action.
(5) Agreements, contracts, and subcontracts.
(6) Franchise, marketing, and management agreements.
(7) Schedules of charges for the HMO's or CMP's fee-for-service patients.
(8) Matters pertaining to costs of operations.
(9) Amounts of income received by source and payment.
(10) Cash flow statements.
(11) Any financial reports filed with other Federal programs or State authorities.
A risk contract must provide that the HMO or CMP agrees to maintain and make available to HCFA upon request, books, records, documents, and other evidence of acounting procedures and practices that—
(a) Are sufficient to—
(1) Establish component rates of the ACR for determining additional and supplementary benefits; and
(2) Determine the rates utilized in setting premiums for State insurance agency purposes; and
(b) Include at least any records or financial reports filed with other Federal agencies or State authorities.
The contract must provide that the HMO or CMP agrees to the following:
(a) HHS may evaluate, through inspection or other means, the quality, appropriateness, and timeliness of services furnished under the contract to its Medicare enrollees.
(b) HHS may evaluate, through inspection or other means, the facilities of the HMO or CMP when there is reasonable evidence of some need for that inspection.
(c) HHS, the Comptroller General, or their designees may audit or inspect any books and records of the HMO or CMP or its transferee that pertain to any aspect of services performed, reconciliation of benefit liabilities, and determination of amounts payable under the contract.
(d) HHS may evaluate, through inspection or other means, the enrollment and disenrollment records for the current contract period and three prior periods, when there is reasonable evidence of some need for that inspection.
(e) In the case of a reasonable cost HMO or CMP to make available for the purposes specified in paragraphs (a), (b), (c), and (d) of this section, its premises, physical facilities, and equipment, its records relating to its Medicare enrollees, the records specified in § 417.480 and any additional relevant information that HCFA may require.
(f) That the right to inspect, evaluate, and audit, will extend through three years from the date of the final settlement for any contract period unless—
(1) HCFA determines there is a special need to retain a particular record or group of records for a longer period and notifies the HMO or CMP at least 30 days before the normal disposition date;
(2) There has been a termination, dispute, fraud, or similar fault by the HMO or CMP, in which case the retention may be extended to three years from the date of any resulting final settlement; or
(3) HCFA determines that there is a reasonable possibility of fraud, in which case it may reopen a final settlement at any time.
(a)
(1) Performs some of the HMO's or CMP's management functions under contract or delegation;
(2) Furnishes services to Medicare enrollees under an oral or written agreement; or
(3) Leases real property or sells materials to the HMO or CMP at a cost of more than $2,500 during a contract period.
(b)
(1) HHS, the Comptroller General, or their designees have the right to inspect, evaluate, and audit any pertinent books, documents, papers, and records of the subcontractor involving transactions related to the subcontract; and
(2) The right under paragraph (b)(1) of this section to information for any particular contract period will exist for a period equivalent to that specified in § 417.482(f).
The contract must provide that the HMO or CMP agrees to the following:
(a) To submit to HCFA—
(1) All financial information required under subpart O of this part and for final settlement; and
(2) Any other information necessary for the administration or evaluation of the Medicare program.
(b) To comply with the requirements set forth in part 420, subpart C, of this chapter pertaining to the disclosure of ownership and control information.
(c) To comply with the requirements of the Privacy Act, as implemented by 45 CFR part 5b and subpart B of part 401 of this chapter, with respect to any system of records developed in performing carrier or intermediary functions under §§ 417.532 and 417.533.
(d) To meet the confidentiality requirements of § 482.24(b)(3) of this chapter for medical records and for all other enrollee information that is—
(1) Contained in its records or obtained from HCFA or other sources; and
(2) Not covered under paragraph (c) of this section.
A risk contract must provide that the HMO or CMP agrees to give notice as follows if the contract is terminated:
(a) At least 60 days before the effective date of termination, to give its Medicare enrollees a written notice that—
(1) Specifies the termination date; and
(2) Describes the alternatives available for obtaining Medicare services after termination.
(b) To pay the cost of the written notices.
A contract with an HMO or CMP is renewed automatically for the next 12-month period unless HCFA or the HMO or CMP decides not to renew, in accordance with § 417.492.
(a)
(i) Give written notice to HCFA at least 90 days before the end of the current contract period;
(ii) Notify each Medicare enrollee by mail at least 60 days before the end of the contract period; and
(iii) Notify the general public at least 30 days before the end of the contract period, by publishing a notice in one or more newspapers of general circulation in each community or county located in the HMO's or CMP's geographic area.
(2) HCFA may accept a nonrenewal notice submitted less than 90 days before the end of a contract period if—
(i) The HMO or CMP notifies its Medicare enrollees and the public in accordance with paragraph (a)(1) of this section; and
(ii) Acceptance would not otherwise jeopardize the effective and efficient administration of the Medicare program.
(b)
(i) To the HMO or CMP at least 90 days before the end of the contract period.
(ii) To the HMO's or CMP's Medicare enrollees at least 60 days before the end of the contract period.
(iii) To the general public at least 30 days before the end of the contract period.
(2)
(a)
(2) If the contract is modified, the HMO or CMP must notify its Medicare enrollees of any changes that HCFA determines are appropriate for notification.
(3) If the contract is terminated, the HMO or CMP must notify its Medicare enrollees, and HCFA notifies the general public, at least 30 days before the termination date.
(b)
(i) The HMO or CMP has failed substantially to carry out the terms of the contract.
(ii) The HMO or CMP is carrying out the contract in a manner that is inconsistent with the effective and efficient implementation of section 1876 of the Act.
(iii) The HMO or CMP has failed substantially to comply with the composition of enrollment requirements specified in § 417.413(d).
(iv) HCFA determines that the HMO or CMP no longer meets the requirements of section 1876 of the Act and this subpart for being an HMO or CMP.
(2) If HCFA decides to terminate a contract, it sends a written notice informing the HMO or CMP of its right to appeal the termination in accordance with subpart R of this part.
(3) An HMO or CMP with a risk contract must notify its Medicare enrollees of the termination as described in § 417.488.
(4) HCFA notifies the HMO's or CMP's Medicare enrollees and the general public of the termination at least 30 days before the effective date of termination.
(c)
(1) The HMO or CMP must notify HCFA at least 90 days before the effective date of the termination and must include in its notice the reasons for the termination.
(2) The HMO or CMP must notify its Medicare enrollees of the termination at least 60 days before the termination date. Risk HMOs or CMPs must also provide a written description of alternatives available for obtaining Medicare services after termination of the contract. The HMO or CMP is responsible for the cost of these notices.
(3) The HMO or CMP must notify the general public of the termination at least 30 days before the termination date.
(4) The contract is terminated effective 60 days after the HMO or CMP mails the notice to Medicare enrollees as required in paragraph (c)(2) of this section.
(5) HCFA's liability for payment ends as of the first day of the month after
(a)
(1) Fails substantially to provide the medically necessary services required to be provided to a Medicare enrollee and the failure adversely affects (or has a substantial likelihood of adversely affecting) the enrollee.
(2) Requires Medicare enrollees to pay amounts in excess of premiums permitted.
(3) Acts, in violation of the provisions of subpart K of this part, to expel or to refuse to reenroll an individual.
(4) Engages in any practice that could reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by subpart K of this part) by eligible individuals whose medical conditions or histories indicate a need for substantial future medical services.
(5) Misrepresents or falsifies information that it furnishes under this part to HCFA, an individual, or to any other entity.
(6) Fails to comply with the requirements of section 1876(g)(6)(A) of the Act relating to the prompt payment of claims.
(7) Fails to meet the requirement in section 1876(f)(1) of the Act that not more than 50 percent of the organization's enrollment be Medicare beneficiaries and Medicaid recipients.
(8) Has a Medicare risk contract and—
(i) Employs or contracts with individuals or entities excluded from participation in Medicare under section 1128 or section 1128A of the Act for the provision of health care, utilization review, medical social work, or administrative services; or
(ii) Employs or contracts with any entity for the provision of those services (directly or indirectly) through an excluded individual or entity.
(9) Fails to comply with the requirements of §§ 417.479(d) through (i) relating to physician incentive plans.
(b)
(i) Sends a written notice to the HMO or CMP stating the nature and basis of the proposed sanction; and
(ii) Sends the OIG a copy of the notice (other than a notice regarding the restriction on Medicare and Medicaid enrollees as described in paragraph (a)(7) of this section), once the sanction has been confirmed following the notice period or the reconsideration.
(2)
(c)
(1) Consists of a review of the evidence by a HCFA official who did not participate in the initial decision to impose a sanction; and
(2) Gives the HMO or CMP a concise written decision setting forth the factual and legal basis for the decision that affirms or rescinds the original determination.
(d)
(1) Require the HMO or CMP to suspend acceptance of applications for enrollment made by Medicare beneficiaries during the sanction period;
(2) Suspend payments to the HMO or CMP for Medicare beneficiaries enrolled during the sanction period; and
(3) Require the HMO or CMP to suspend all marketing activities to Medicare enrollees.
(e)
(2)
(3)
(f)
(g)
(a) The provisions set forth in subpart L of part 422 of this chapter also apply to Medicare contracts with HMOs and CMPs under section 1876 of the Act.
(b) In applying these provisions, references to “M+C organizations” must be read as references to “HMOs and CMPs”.
(c) In § 422.550, reference to “subpart K of this part” must be read as reference to “subpart L of part 417 of this chapter”.
(d) In § 422.553, reference to “subpart K of this part” must be read as reference to “subpart J of part 417 of this chapter”.
(a)
(b)
(2) In certain cases a risk HMO or CMP also receives payments on a reasonable cost basis for certain Medicare enrollees who retain nonrisk status, as
Subpart O of this part set forth the principles that HCFA follows in determining Medicare payment to an HMO or CMP that has a reasonable cost contract. Subpart P of this part describes the per capita method of Medicare payment to HMOs or CMPs that contract on a risk basis.
(a)
(2) The circumstances under which an HMO or CMP may charge, or authorize a provider to charge, for covered Medicare services for which Medicare is not the primary payer are stated in paragraphs (b) and (c) of this section.
(b)
(1) The insurance carrier, employer, or other entity that is liable to pay for these services; or
(2) The Medicare enrollee, to the extent that he or she has been paid by the carrier, employer, or other entity.
(c)
(1) The Medicare enrollee is covered under the plan; and
(2) Under section 1862(b) of the Act, HCFA is precluded from paying for the covered services .
(d)
(1) Identify payers that are primary to Medicare under section 1862(b) of the Act;
(2) Determine the amounts payable by these payers; and
(3) Coordinate the benefits of its Medicare enrollees with these payers.
This subpart sets forth the principles that HCFA follows to determine the amount it pays for services furnished by a cost HMO or CMP to its Medicare enrollees. These principles are based on sections 1861(v) and 1876 of the Act and are, for the most part, the same as those set forth—
(a) In part 412 of this chapter, for paying the costs of inpatient hospital services which, for cost HMOs and CMPs, are considered “reasonable” only if they do not exceed the amounts allowed under the prospective payment system; and
(b) In part 413 of this chapter, for the costs of all other covered services.
(a) If a Medicare enrollee of an HMO or CMP with a reasonable cost contract makes an election under § 418.24 of this chapter to receive hospice care services, payment for these services is made to the hospice that furnishes the services in accordance with part 418 of this chapter.
(b) While the enrollee's hospice election is in effect, HCFA pays the HMO or CMP on a reasonable cost basis for only the following covered Medicare services furnished to the Medicare enrollee:
(1) Services of the enrollee's attending physician if the physician is an employee or contractor of the HMO or CMP and is not employed by or under contract to the enrollee's hospice.
(2) Services not related to the treatment of the terminal condition for which hospice care was elected or a condition related to the terminal condition.
(a)
(i) Proper and necessary;
(ii) Reasonable in amount; and
(iii) Except as provided in § 417.550, appropriately apportioned among the HMO's or CMP's Medicare enrollees, other enrollees, and nonenrolled patients.
(2) In determining fair and equitable payment for the HMOs or CMPs, HCFA generally applies the cost payment principles set forth in § 413.5 of this chapter.
(3) In judging whether costs are reasonable, HCFA applies the weighted average of the AAPCCs of each class of the HMO's or CMP's Medicare enrollees (as defined in § 417.582) for the HMO's or CMP's geographic area as an absolute limitation on the total amount payable.
(b)
(2) HCFA adjusts the interim per capita rate as necessary during the contract period and makes final adjustments at the end of the contract period.
(3) In determining the amount due the HMO or CMP, HCFA deducts from the reasonable cost actually incurred by the HMO or CMP for covered services furnished to its Medicare enrollees, an amount equal to the actuarial value of the applicable Medicare Part A and Part B deductible and coinsurance amounts that would have applied to the covered services for which payment is being made if these enrollees had not enrolled in the HMO or CMP or another HMO or CMP.
(c)
(1) Direct payment by HCFA.
(2) Direct payment by the HMO or CMP.
(d)
(e)
(1) Determine the eligibility of its Medicare enrollees to receive covered services through the HMO or CMP;
(2) Make proper coverage decisions and appropriate payments, in accordance with §§ 421.100 and 421.200 of this chapter, for the services furnished to its Medicare enrollees;
(3) Ensure that providers maintain and furnish appropriate documentation of physician certification and recertification, to the extent required under subpart B of part 424 of this chapter; and
(4) Carry out any other procedures required by HCFA.
(f)
(g)
(2) In computing the Medicare payment to the HMO or CMP, HCFA deducts these payments and any other payments made by the Medicare intermediary or carrier on behalf of the HMO or CMP (such as payment for
(h)
In paying for Part B services furnished to its enrollees by suppliers, the HMO or CMP must—
(a) Determine the eligibility of individuals to receive those services through the HMO or CMP;
(b) Make proper coverage decisions and appropriate payment as authorized under § 421.200 of this chapter for the services for which its Medicare enrollees are eligible; and
(c) Carry out any other procedures that HCFA may require.
(a)
(b)
(2) The allowability of other costs is determined in accordance with principles set forth in §§ 417.538 through 417.550.
(3) Costs for covered services for which Medicare is not the primary payor, as described in § 417.528, are not allowable.
(a)
(b)
(c)
(d)
(e)
(f)
(i) They are attributable to Medicare deductible and coinsurance amounts for which the Medicare enrollee is liable; and
(ii) The HMO or CMP has made a reasonable, but unsuccessful, effort to collect those amounts.
(2) If all or part of the deductible and coinsurance amounts is payable through a monthly premium or other periodic payment, the amount allowed as a bad debt may not exceed three
(3) Any bad debt related to a service furnished to a Medicare enrollee of the HMO or CMP, and claimed on a cost report submitted for payment by a provider or other facility reimbursed on a cost basis, may not be claimed as a bad debt by the HMO or CMP.
(g)
(h)
(i)
(j)
(k)
(2) An entity is not considered related to the HMO or CMP merely because—
(i) It has a risk or incentive agreement under which the HMO or CMP reimburses or compensates the entity for services it furnishes to the HMOs' or CMPs' enrollees; or
(ii) Substantially all the services the entity furnishes are furnished to the HMO's or CMP's enrollees.
(3) However, an entity described in paragraph (k)(2) of this section and an HMO or CMP are considered related if either of them is in a position to exercise significant management or ownership influence or control over the other.
(l)
(m)
(1) For ESRD treatment, the limitations authorized under § 413.170 of this chapter.
(2) For services of physical, occupational, and speech therapists and other therapists and nonphysician health specialists, the limitations set forth in § 413.106 of this chapter.
(3) For drugs, the allowable cost as determined under §§ 405.517 and 410.29 of this chapter.
(4) The overall cost limits established in accordance with § 413.30 of this chapter.
(5) The limitation to the lesser of reasonable cost or customary charges, as set forth in § 413.13 of this chapter.
(a)
(b)
(c)
(d)
(a)
(b)
Reinsurance costs are not allowable.
(a)
(2) Physician compensation may take various forms, but the aggregate compensation allowable must be reasonable in relation to the services personally furnished.
(3) If aggregate physician compensation costs exceed what is normally incurred, the excess is not a reasonable cost.
(b)
(2) To be allowable, compensation must be reasonable in relation to the personal services furnished.
(a) Do not exceed those that a prudent and cost-conscious buyer would incur to purchase those services; and
(b) Are comparable to costs incurred for similar services furnished by similar physicians or other suppliers in the same or a similar geographic area.
(a)
(b)
(c)
(1) The provider furnishes services to the HMO's or CMP's enrollees infrequently;
(2) The charges represent an insignificant portion of total Medicare reimbursement to the HMO or CMP; and
(3) The charges do not exceed the customary charges by the provider to its other patients for similar services.
(a)
(b)
(1) Reporting increases and decreases in the number of Medicare enrollees.
(2) Obtaining independent certification of the HMO's or CMP's cost report to the extent that it is for Medicare purposes.
(3) Reporting special data that HCFA requires solely for program planning and evaluation.
(c)
(d)
(a)
(1) In accordance with this subpart; and
(2) Using methods approved by HCFA.
(b)
(1) The cost of services furnished to Medicare enrollees is not borne by other enrollees and nonenrolled patients; and
(2) The cost of the services furnished to other enrollees and nonenrolled patients is not borne by Medicare.
The Medicare share of the cost of covered services furnished to Medicare enrollees by providers that are owned or operated by the HMO or CMP or are related to the HMO or CMP by common ownership or control must be determined in accordance with the apportionment methods set forth in part 412, §§ 413.24, 413.55, and 415.55 of this chapter.
The Medicare share of the cost of covered services furnished to Medicare enrollees through arrangements with providers other than those specified in § 417.554 must be determined as follows:
(a) The Medicare share must be based on the cost the HMO or CMP pays the provider under their arrangement, to the extent that cost is reasonable and
(b) Except as specified in paragraph (c) of this section, apportionment must be on the same approved basis that is used by the provider for Medicare beneficiaries who are not Medicare enrollees of the HMO or CMP, subject to the conditions and limitations set forth in § 417.548.
(c) If, because of the special nature or terms of the HMO's or CMP's arrangement with the provider, apportionment on the basis specified in paragraph (b) of this section would result in Medicare's bearing the costs of furnishing services to individuals other than the HMO's or CMP's Medicare enrollees, apportionment must be on another basis that is approved by HCFA and that will ensure that Medicare does not pay any of the cost of furnishing services to individuals who are not Medicare enrollees of the HMO or CMP.
(d) If the HMO or CMP elects to have providers reimbursed by the HMO's or CMP's Medicare intermediary, the Medicare share is the amount the intermediary paid the provider.
(a)
(b)
(c)
(a)
(1) Results in an accurate and equitable allocation of allowable costs; and
(2) Is justifiable from an administrative and cost efficiency standpoint.
(b)
(c)
(d)
(a)
(b)
(i) Facility costs.
(ii) Interest expense.
(iii) Medical record costs.
(iv) Centralized purchasing costs.
(v) Accounting and data processing costs.
(vi) Other administrative and general costs that are not included in paragraph (a) of this section.
(2) The allocation or distribution process must be as follows:
(i) If a separate entity or department of an HMO or CMP performs administrative functions the benefit of which can be quantitatively measured (such as centralized purchasing and data processing), the total allowable costs of this entity or department must be allocated or distributed to the components of the HMO or CMP in reasonable proportion to the benefits received by these components.
(ii) If a separate entity or department of an HMO or CMP performs administrative functions the benefit of which cannot be quantitatively measured (such as facility costs), the total allowable costs of this entity or department must be allocated or distributed to the components of the HMO or CMP on the basis of a ratio of total incurred and distributed costs per component to the total incurred and distributed costs for all components.
(a)
(b)
(2) If HCFA approves use of a different method, the HMO or CMP may not revert to another method without first obtaining HCFA's approval.
(a)
(2) Unless otherwise provided for in this subpart, the HMO or CMP must follow standardized definitions and accounting, statistics, and reporting practices that are widely accepted in the health care industry.
(b)
(2) The cost data must be based on an approved method of cost finding and, except as provided in paragraph (b)(3) of this section, on the accrual method of accounting.
(3) For governmental institutions that use a cash basis of accounting, cost data developed on this basis is acceptable. However, only depreciation on capital assets, rather than the expenditure for the capital asset, is allowable.
(c)
(d)
(e)
(a)
(2) Additional lump-sum payments may be made at other times during the contract period, at HCFA's discretion, to adjust the total amounts paid during the contract period to the level of incurred costs.
(b)
(c)
(1) A change in the number of Medicare enrollees that affects the per capita rate;
(2) A material variation from the costs estimated when the annual operating budget was prepared; or
(3) A significant change in the use of covered services by the HMO's or CMP's Medicare enrollees.
(d)
(a)
(b)
(1) Establish an interim per capita rate of payment on the basis of the best available data and adjust payments on the basis of that rate until the required reports are submitted and a new interim per capita rate can be established; or
(2) If there is not enough data on which to base an interim per capita rate, inform the HMO or CMP that interim payments will not be made until the required reports are submitted.
(c)
(2) HCFA may reduce the frequency of the reports required under paragraph (c)(1) of this section if HCFA determines that, on the basis of the HMO's or CMP's reporting experience, there is good cause to do so.
(a)
(b)
(a)
(b)
(2)
(i) The per capita costs incurred in furnishing covered services to its Medicare enrollees, determined in accordance with subpart O of this part and including—
(A) The costs incurred by entities related to the HMO or CMP by common ownership or control; and
(B) For reports for cost-reporting periods that begin on or after January 1, 1996, the costs of hospital and SNF services paid by Medicare's intermediaries under the option provided by § 417.532(d).
(ii) The HMO's or CMP's methods of apportioning cost among Medicare enrollees, and nonenrolled patients, in accordance with the payment procedures specified in this subpart (as, applicable, in parts 412 and 413 of this chapter); and
(iii) Any other information required by HCFA.
(3)
(i) Consider the failure to report as evidence of likely overpayment; and
(ii) Initiate recovery of amounts previously paid, or reduce interim payments, or both.
(c)
(2) A final settlement may be made with the HMO or CMP even though a provider that is not owned or operated by the HMO or CMP or related to the HMO or CMP by common ownership or control and that provides services to the HMO's or CMP's Medicare enrollees has not had a final settlement with HCFA under parts 412 and 413 of this chapter for services furnished by the provider to Medicare beneficiaries who are not enrolled in the HMO or CMP. In this situation—
(i) HCFA must be satisfied that the costs of covered services furnished to the HMO's or CMP's Medicare enrollees, as shown in the reports specified in paragraph (b) of this section, are reasonable and that the interest of the Medicare program would best be served by not delaying final settlement with the HMO or CMP until there is a final settlement with the provider for services furnished to Medicare beneficiaries not enrolled in the HMO or CMP; and
(ii) Prompt settlement with the HMO or CMP would be in the best interest of the Medicare program if, for instance, the provider's costs represent an insignificant portion of total payment due to the HMO or CMP; or if HCFA is satisfied that the provider's costs, as shown in the reports specified in paragraph (b) of this section, will not be modified, to any significant extent, by the final settlement with the provider under parts 412 and 413 of this chapter.
(d)
(1) Explains HCFA's determination regarding total Medicare payment due the HMO or CMP for the contract period covered by the financial information specified in paragraph (b) of this section;
(2) Relates this determination to the HMO's or CMP's claimed total payable cost for that period;
(3) Explains the amounts and reasons, by appropriate reference to law, regulations, and Medicare program policy and procedures, if the determined amounts differ from the HMO's or CMP's claim; and
(4) Informs the HMO or CMP of its right to a hearing in accordance with subpart R of part 405 of this chapter.
(e)
(1) HCFA's determination (as contained in the notice of amount of Medicare payment) constitutes the basis for making retroactive adjustments to any Medicare payment made to the HMO or CMP during the period to which the determination applies.
(2) Further payments to the HMO or CMP may be withheld or offset in order to recover, or to aid in the recovery of, any overpayment identified in the determination as having been made to the HMO or CMP, even if the HMO or CMP requests a hearing under subpart R of part 405 of this chapter.
(3) Any withholding continues until the earliest of the following occurs:
(i) The overpayment is liquidated.
(ii) The HMO or CMP enters into an agreement with HCFA to refund the overpaid amount.
(iii) HCFA, on the basis of subsequently acquired information, determines that there was no overpayment.
(iv) The decision of a hearing specified in paragraph (d)(4) of this section is that there was no overpayment.
(a)
(b)
(1) Method of payment;
(2) Procedures for determining the HMO's or CMP's payment rate; and
(3) Procedures for determining the additional benefits (and their value) the HMO or CMP must provide to its Medicare enrollees.
As used in this subpart—
Except in the circumstances specified in § 417.440(d) for inpatient hospital care, and as provided in § 417.585 for hospice care, HCFA makes payment for covered services only to the HMO or CMP.
(a)
(b)
(2) HCFA furnishes each HMO or CMP with its per capita rate of payment for each class of Medicare enrollees not later than 90 days before the beginning of the HMO's or CMP's contract period.
(c)
(d)
(e)
(a) No payment is made to an HMO or CMP on behalf of a Medicare enrollee who has elected hospice care under § 418.24 of this chapter except for the portion of the payment applicable to the additional benefits described in § 417.592. This no-payment rule is effective from the first day of the month
(b) During the time the election is in effect, the HMO or CMP may bill HCFA on a fee-for-service basis (subject to the usual Medicare rules of payment) but only for the following covered Medicare services:
(1) Services of the enrollee's attending physician if the physician is an employee or contractor of the HMO or CMP and is not employed by or under contract to the enrollee's hospice.
(2) Services not related to the treatment of the terminal condition for which the enrollee elected hospice care or a condition related to the terminal condition.
(3) Services furnished after the revocation or expiration of the enrollee's hospice election until the full monthly capitation payments begin again.
(c) Payment for hospice care services furnished to Medicare enrollees of an HMO or CMP is made to the Medicare-participating hospice elected by the enrollee.
(a)
(b)
(c)
(2)
(3)
(4)
(a)
(b)
(a)
(2) The dollar value of the elected option must, over the course of a contract period, be at least equal to the difference between the APCRP and the proposed ACR.
(b)
(2)
(3)
(4)
(c)
(2) The HMO or CMP may elect to provide additional benefits in any of the following forms—
(i) A reduction in the HMO's or CMP's premium or in other charges it imposes in the form of deductibles or coinsurance.
(ii) Health benefits in addition to the required Part A and Part B covered services.
(iii) A combination of reduced charges and additional benefits.
(d)
(2) An HMO or CMP that elects the option of providing additional benefits must include in its submittal—
(i) A description of the additional benefits it will provide to its Medicare enrollees; and
(ii) Supporting evidence to show that the selected benefits meet the requirements of paragraph (a)(2) of this section with respect to dollar value equivalence.
(a)
(1) Compute an initial rate in accordance with paragraph (b) of this section.
(2) Adjust and reduce the initial rate in accordance with paragraphs (c) and (d) of this section.
(b)
(i) A community rating system as defined in § 417.104(b); or
(ii) A system, approved by HCFA, under which the HMO or CMP develops an aggregate premium for all its enrollees and weights the aggregate by the size of the various enrolled groups that compose its enrollment.
(2) Regardless of which method the HMO or CMP uses—
(i) The initial rate must be equal to the premium it would charge its non-Medicare enrollees for the Medicare-covered services;
(ii) The HMO or CMP must compute the rates separately for enrollees entitled to Medicare Part A and Part B and for those entitled only to Part B; and
(iii) The HMO or CMP must identify and take into account anticipated revenue from health insurance payers for those services for which Medicare is not the primary payer as provided in § 417.528.
(3) Except as provided in paragraph (b)(4) of this section, the HMO or CMP must identify in its initial rate calculation, the following components whose rates must be consistent with rates used by the HMO or CMP in calculating premiums for non-Medicare enrollees:
(i) Hospital services (services covered under Medicare Part A and Part B shown separately).
(ii) Physicians' services.
(iii) Other medical services (for example, X-ray and laboratory services).
(iv) Home health services.
(v) Out-of-plan claims for emergency services.
(vi) Skilled nursing care services.
(vii) Ambulance services.
(viii) Other Medicare covered services.
(ix) General and administrative.
(x) Noncovered Medicare services (for example, eyeglasses).
(xi) Services for which Medicare is the secondary payer.
(xii) Enrollee liabilities (for example, deductibles, coinsurance, or copayments) for covered services.
(4) An HMO or CMP that does not usually separate its premium components as described in paragraph (b)(3) of this section may calculate its initial rate with the methods it uses for its other enrolled groups if the HMO or CMP provides HCFA with the documentation necessary to support any adjustments the HMO or CMP makes to the initial rate in accordance with paragraph (e) of this section.
(5) The initial rate calculation must not carry forward any losses experienced by the HMO or CMP during prior contract periods. The HMO or CMP must submit supporting documentation to assure HCFA that rates do not include past losses but only premiums for the price of additional benefits and services of the upcoming contract period.
(c)
(2)
(i)
(ii)
(3)
(4)
(i) Medicare and non-Medicare enrollees in other HMOs or CMPs; or
(ii) Medicare beneficiaries (in the HMO's or CMP's area, or State, or the United States) who are eligible to enroll in an HMO or CMP and other individuals in that same area, or State, or the United States.
(d)
(e)
(2)
(ii) The request must state why the HMO or CMP believes the determination is incorrect, and include any supporting evidence the HMO or CMP considers pertinent.
(iii) A hearing officer designated by HCFA conducts the hearing in accordance with the hearing procedures set
(a)
(b)
(c)
(2)
(3)
(d)
(2) The amounts withheld in a benefit stabilization fund are accounted for by HCFA in accounts in which interest does not accrue to the HMO or CMP.
(a)
(1) Indicate how it intends to use the withdrawn amounts;
(2) Justify the need for the withdrawal in terms of stabilizing the additional benefits it provides to Medicare enrollees;
(3) Document the HMO's or CMP's experience with fluctuations of revenue requirements relative to the additional benefits it provides to Medicare enrollees; and
(4) Document its experience during the contract period previous to the one for which it requests withdrawal to ensure that the HMO or CMP will not be using the withdrawn amounts to refinance losses suffered during that previous contract period.
(b)
(1) The HMO's or CMP's average of its per capita rates of payment for the next contract period is less than that of the previous contract period;
(2) The HMO's or CMP's ACR for the next contract period is significantly higher than that of the previous contract period; or
(3) The HMO's or CMP's revenue requirements for the next contract period for providing the additional benefits it provided during the previous contract period is significantly higher
(c)
(1) Offer without charge the supplemental services it provides to its Medicare enrollees under the provisions of § 417.440 (b)(2) or (b)(3); or
(2) Refinance prior contract period losses or to avoid losses in the upcoming contract period.
(d)
HCFA's payment to an HMO or CMP may be subject to an enrollment reconciliation at least annually. HCFA conducts this reconciliation as necessary to ensure that the payments made do not exceed or fall short of the appropriate per capita rate of payment for each Medicare enrollee of the HMO or CMP during the contract period. The HMO or CMP must submit any information or reports required by HCFA to conduct the reconciliation.
(a)
(2) Section 1876 of the Act provides for Medicare payments to HMOs and CMPs that contract with HCFA to enroll Medicare beneficiaries and furnish Medicare-covered health care services to them. Section 1876(c)(5) provides that—
(i) An HMO or CMP must establish grievance and appeals procedures; and
(ii) Medicare enrollees dissatisfied because they do not receive health care services to which they believe they are entitled, at no greater cost than they believe they are required to pay, have the following appeal rights:
(A) The right to an ALJ hearing if the amount in controversy is $100 or more.
(B) The right to judicial review of the hearing decision if the amount in controversy is $1000 or more.
(iii) The Medicare enrollee and the HMO or CMP are parties to the hearing and to the judicial review.
(b)
(1) The appeals procedures, as required by section 1876(c)(5)(B) of the Act for Medicare enrollees who are dissatisfied with an “organization determination” as defined in § 417.606;
(2) The applicability of grievance procedures established by the HMO or CMP under section 1876(c)(5)(A) of the Act and § 417.604(a) for complaints that do not involve an organization determination;
(3) The responsibility of the HMO or CMP—
(i) To develop and maintain procedures; and
(ii) To ensure all Medicare enrollees have a complete written explanation of their grievance and appeal rights, the availability of expedited reviews, the steps to follow, and the time limits for each procedure; and
(4) The special rules that apply when a beneficiary requests immediate PRO review of a determination that he or she no longer needs inpatient hospital care.
As used in this subpart, unless the context indicates otherwise—
ALJ stands for administrative law judge.
RRB stands for Railroad Retirement Board.
(a)
(i) Appeals procedures that meet the requirements of this subpart for issues that involve organization determinations; and
(ii) Grievance procedures for dealing with issues that do not involve organization determinations.
(2) The HMO or CMP must ensure that all enrollees receive written information about the grievance and appeals procedures that are available to them.
(b)
(i) The enrollee is not entitled to subsequent review of that issue under this subpart; and
(ii) The PRO review decision is subject to the appeals procedures set forth in part 473 of this chapter.
(2) Any determination regarding services that were furnished by the HMO or CMP, either directly or under arrangement, for which the enrollee has no further liability for payment are not subject to appeal.
(3) Services included in an optional supplemental plan under (§ 417.440(b)(2)) are subject only to a grievance procedure.
(4) Physicians and other individuals who furnish services under arrangement with an HMO or CMP have no right of appeal under this subpart, except as provided in §§ 417.609(c)(4) and 417.617(c)(4), which allow physicians and other health professionals to act on behalf of an enrollee in time-sensitive situations when an organization determination or reconsideration is being requested.
(c)
(a)
(b)
(1) The enrollee or authorized representative must submit the request for immediate review—
(i) To the PRO that has an agreement with the hospital under § 466.78 of this chapter;
(ii) In writing or by telephone; and
(iii) By noon of the first working day after receipt of the written notice of the determination that the hospital stay is no longer necessary.
(2) On the date it receives the enrollee's request, the PRO must notify the HMO or CMP that a request for immediate review has been filed.
(3) The HMO or CMP must supply any information that the PRO requires to conduct its review and must make it available, by phone or in writing, by the close of business of the first full working day immediately following the day the enrollee submits the request for review.
(4) In response to a request from the HMO or CMP, the hospital must submit medical records and other pertinent information to the PRO by close of business of the first full working day immediately following the day the HMO or CMP makes its request.
(5) The PRO must solicit the views of the enrollee who requested the immediate PRO review (or the enrollee's representative).
(6) The PRO must make a determination and notify the enrollee, the hospital, and the HMO or CMP by close of business of the first working day after
(c)
(2)
(i) It was the hospital (acting on behalf of the enrollee) that filed the request for immediate PRO review; and
(ii) The PRO upholds the noncoverage determination made by the HMO or CMP.
(a)
(1) Payment for emergency or urgently needed services.
(2) Any other health services furnished by a provider or supplier other than the HMO or CMP that the enrollee believes—
(i) Are covered under Medicare; and
(ii) Should have been furnished, arranged for, or reimbursed by the HMO or CMP.
(3) The HMO's or CMP's refusal to provide services that the enrollee believes should be furnished or arranged for by the HMO or CMP and the enrollee has not received the services outside the HMO or CMP.
(4) Discontinuation of a service (such as a skilled nursing facility discharge), if the enrollee disagrees with the determination that the service is no longer medically necessary.
(b)
(1) A determination regarding services that were furnished by the HMO or CMP, either directly or under arrangement, for which the enrollee has no further obligation for payment.
(2) A determination regarding services included in an optional supplemental plan (see § 417.440(b)(2)).
(c)
(a) If an HMO or CMP makes an organization determination that is partially or fully adverse to the enrollee, it must notify the enrollee of the determination—
(1) Within 60 days of receiving the enrollee's request for payment for services; or
(2) As specified in § 417.609(c)(3) for expedited organization determinations.
(b) The notice must—
(1) State the specific reasons for the determination; and
(2) Inform the enrollee of his or her right to a reconsideration, including the right to and conditions for obtaining an expedited reconsidered determination.
(c) The failure to provide the enrollee with timely notification of an adverse organization determination as specified in paragraph (a) of this section or in § 417.609(b) (concerning time frames for expediting certain organization determinations) constitutes an adverse organization determination and may be appealed.
(a) An enrollee, or an authorized representative of the enrollee, may request that an organization determination as defined in §§ 417.606(a)(3) and (a)(4) be expedited. The request may be made orally to the HMO or CMP.
(b) The HMO or CMP must maintain procedures for expediting organization determinations when, upon request from an enrollee or authorized representative of the enrollee, the organization decides that making the determination according to the procedures
(c) The procedures must include the following:
(1) Receipt of oral requests, followed by written documentation of the oral requests.
(2) Prompt decision-making regarding whether the request will be expedited, or handled within the standard time frame set forth at § 417.608(a)(1), including notification of the enrollee if the request is not expedited.
(3) Notification of the enrollee, and the physician as appropriate, as expeditiously as the enrollee's health condition requires, but within 72 hours of the request. An extension of up to 10 working days is permitted if requested by the enrollee or if the HMO or CMP finds that additional information is necessary and the delay is in the interest of the enrollee.
(i) Notification must comply with § 417.608(b), concerning the content of a notice of adverse organization determination.
(ii) If the initial notification is not in writing, written confirmation must be mailed to the enrollee within 2 working days.
(iii) In cases for which the HMO or CMP must receive medical information from a physician or provider not affiliated with the HMO or CMP, the time standard begins with receipt of the information.
(4) Granting the request of a physician, regardless of whether the physician is affiliated with the organization or not, to expedite the enrollee's request.
The parties to the organization determination are—
(a) The enrollee;
(b) An assignee of the enrollee (that is, a physician or other supplier who has provided a service to the enrollee and formally agrees to waive any right to payment from the enrolee for that service);
(c) The legal representative of a deceased enrollee's estate; or
(d) Any other entity determined to have an appealable interest in the proceeding.
The organization determination is binding on all parties unless it is reconsidered in accordance with §§ 417.614 through 417.626, or revised in accordance with § 417.638.
Any party who is dissatisfied with an organization determination or with one that has been reopened and revised may request reconsideration of the determination in accordance with the procedures of § 417.616, concerning a request for reconsideration, or § 417.617, concerning certain expedited reconsiderations.
(a)
(2) An SSA office; or
(3) In the case of a qualified railroad retirement beneficiary, an RRB office.
(4) In the case of a request for an expedited reconsideration, as provided for in § 417.617 (concerning certain expedited reconsiderations), the HMO or CMP.
(b)
(c)
(2)
(i) Be in writing; and
(ii) State why the request for reconsideration was not filed timely.
(d)
(e)
(a) An enrollee, or an authorized representative of the enrollee, may request that a reconsideration be expedited. The request may be made orally to the HMO or CMP.
(b) The HMO or CMP must maintain procedures for expediting reconsiderations when, upon request from an enrollee or an authorized representative of the enrollee, the organization decides that the longer time frames permitted in § 417.620(c) could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(c) The procedures must comply with the requirements for reconsidered determinations set forth in §§ 417.614 through 417.626 and include the following items:
(1) Receipt of oral requests, followed by written documentation of the oral requests.
(2) Prompt decision-making regarding whether the request will be expedited or handled within the standard time frame of § 417.620(c), including notification of the enrollee if the request is not expedited.
(3) Notification of the enrollee, and the physician as appropriate, as expeditiously as the enrollee's health condition requires, but within 72 hours of the request. An extension of up to 10 working days is permitted if requested by the enrollee or if the HMO or CMP finds that additional information is necessary and the delay is in the interest of the enrollee.
(i) Notification must comply with § 417.624(b), concerning the content of a notice of a reconsidered determination.
(ii) If the initial notification is not in writing, written confirmation must be mailed to the enrollee within 2 working days.
(iii) In cases for which the HMO or CMP must receive medical information from a physician or provider not affiliated with the HMO or CMP, the time standard begins with receipt of the information.
(4) Granting the request of a physician, regardless of whether the physician is affiliated with the organization or not, to expedite the request.
The HMO or CMP must provide the parties to the reconsideration reasonable opportunity to present evidence and allegations of fact or law, related to the issue in dispute, in person as well as in writing. In the case of an expedited reconsideration, the opportunity to present evidence is limited by the short time frames for making decisions, and the organization must inform the enrollee, or the authorized representative of the enrollee, of the conditions for submitting the evidence.
(a) If the HMO or CMP can make a reconsidered determination that is completely favorable to the enrollee, the HMO or CMP issues the reconsidered determination.
(b) If the HMO or CMO recommends partial or complete affirmation of its
(c) The HMO or CMP must issue the reconsidered determination to the enrollee, or submit the explanation and file to HCFA within 60 calendar days from the date of receipt of the request for reconsideration. In the case of an expedited reconsideration, the HMO or CMP must issue the reconsidered determination as specified in § 417.617(c)(3) or submit the explanation and file to HCFA within 24 hours of its determination, the expiration of the 72-hour review period, or the expiration of the extension.
(d) For good cause shown, HCFA may allow extensions to the time limit set forth in paragraph (c) of this section.
(e) Failure by the HMO or CMP to provide the enrollee with a reconsidered determination within the time limits described in paragraph (c) of this section or to obtain a good cause extension described in paragraph (d) of this section constitutes an adverse determination, and the HMO or CMP must submit the file to HCFA.
(f) If the HMO or CMP refers the matter to HCFA, it must concurrently notify the beneficiary of that action.
A reconsidered determination is a new determination that—
(a) Is based on a review of the organization determination, the evidence and findings upon which it was based, and any other evidence submitted by the parties or obtained by HCFA or the HMO or CMP; and
(b) Is made by a person or persons who were not involved in making the organization determination.
(a)
(b)
(1) State the specific reasons for the reconsidered determination;
(2) Inform the party of his or her right to a hearing if the amount in controversy is $100 or more; and
(3) Describe the procedures that the party must follow to obtain a hearing.
A reconsidered determination is binding on all parties unless a request for a hearing is filed in accordance with the provisions of § 417.632, or unless it is revised in accordance with § 417.638.
If the amount remaining in controversy is $100 or more, any party to the reconsideration who is dissatisfied with the reconsidered determination has a right to a hearing. (The amount remaining in controversy, which can include any combination of Part A and Part B services, is computed in accordance with § 405.740 of this chapter for Part A services and § 405.820(b) of this chapter for Part B services. If the basis for the appeal is the refusal of services, the projected value of those services is used in computing the amount remaining in controversy.)
(a)
(b)
(c)
(2) The HMO or CMP must be made a party to the hearing but does not have a right to request a hearing.
(d)
(2) If, after a hearing is initiated, the ALJ finds that the amount in controversy is less than $100, he or she discontinues the hearing and does not rule on the substantive issues raised in the appeal.
Any party to the hearing, including the HMO or CMP, who is dissatisfied with the hearing decision, may request the DAB to review the ALJ's decision or dismissal. Regulations beginning at 20 CFR 404.967 regarding SSA Appeals Council Review are applicable to DAB review for matters addressed by this subpart.
(a)
(1) The Departmental Appeals Board denied the party's or the HMO's or CMP's request for review; and
(2) The amount in controversy is $1,000 or more.
(b)
(1) It is the final decision of HCFA; and
(2) The amount in controversy is $1,000 or more.
(c)
An organization, reconsidered, or revised determination made by an HMO, CMP, or HCFA, or a decision or revised decision of an ALJ or the Departmental Appeals Board, may be reopened in accordance with the provisions of § 405.750 of this chapter.
This subpart establishes the procedures for making and reviewing the following initial determinations:
(a) A determination that an HMO or CMP is not qualified to enter into a contract with HCFA under section 1876 of the Act.
(b) A determination that an HMO or CMP is qualified only for a reasonable cost contract.
(c) A determination to terminate, or to refuse to renew, a contract with an HMO or CMP because—
(1) The HMO or CMP has failed substantially to carry out the terms of the contract;
(2) The HMO or CMP is carrying out the contract in a manner that is inconsistent with the efficient and effective administration of section 1876 of the Act;
(3) The HMO or CMP no longer meets the applicable conditions necessary to qualify as an HMO or CMP under section 1876 of the Act and this subpart; or
(4) The HMO or CMP has failed to comply with the composition of enrollment requirements specified in § 417.413(d).
Administrative actions that are not initial determinations under this subpart include, but are not limited to, HCFA's refusal to renew a contract with an HMO or CMP when the refusal is not based on the causes specifed in § 417.640(c).
(a) When HCFA makes an initial determination, it gives the HMO or CMP written notice.
(b) The notice specifies—
(1) The reasons for the determination; and
(2) The HMO's or CMP's right to request reconsideration.
(c) HCFA mails the notice to the HMO or CMP at least 90 days before the end of the contract period, or in the case of termination, at least 90 days before the effective date of the termination.
The initial determination is final and binding on all parties unless—
(a) It is reconsidered in accordance with §§ 417.648 through 417.658;
(b) In the case of an initial determination described in § 417.640(c), a request for a hearing is filed; or
(c) It is revised as a result of a reopening under § 417.692.
(a) Reconsideration is the first step for appealing an organization determination specified in § 417.640(a) or (b).
(b) HCFA reconsiders either of the specified determinations if the HMO or CMP files a written request in accordance with § 417.650.
(a)
(b)
(c)
(d)
(e)
HCFA provides the parties to the reconsideration reasonable opportunity to present as evidence any documents or written statements that are relevant and material to the matters at issue.
A reconsidered determination is a new determination that—
(a) Is based on a review of the initial determination, the evidence and findings upon which that was based, and any other written evidence submitted before notice of the reconsidered determination is mailed, including facts relating to the status of the entity subsequent to the initial determination; and
(b) Affirms, reverses, or modifies the initial determination.
(a) HCFA gives the parties written notice of the reconsidered determination.
(b) The notice—
(1) Contains findings with respect to the HMO's or CMP's qualifications to enter into a contract with HCFA under section 1876 of the Act;
(2) States the specific reasons for the reconsidered determination; and
(3) Informs the party of its right to a hearing if it is dissatisfied with the determination.
A reconsidered determination is final and binding on all parties unless a request for a hearing is filed in accordance with § 417.662 or it is revised in accordance with § 417.692.
The following parties are entitled to a hearing:
(a) An entity that has been determined in a reconsidered determination to be unqualified to enter into a contract with HCFA under section 1876 of the Act.
(b) An HMO or CMP that has been determined in a reconsidered determination to be qualified only for a reasonable cost contract.
(c) An HMO or CMP whose contract with HCFA has been terminated or has not been renewed as a result of an initial determination as provided in § 417.640(c).
(a)
(b)
(c)
(d)
(1) The parties described in § 417.660;
(2) At the discretion of the hearing officer, any interested parties who make a showing that their rights may be prejudiced by the decision to be rendered at the hearing; and
(3) HCFA.
When a request for a hearing with respect to an initial determination is filed timely—
(a) The effective date of the initial determination to terminate a contract with an HMO or CMP will be postponed until a hearing decision is reached; and
(b) The current contract will be extended at the end of the contract period (in the case of a determination not to renew) only—
(1) If HCFA finds that an extension of the contract will be consistent with the purpose of section 1876 of the Act; and
(2) For such period as HCFA and the HMO or CMP agree.
HCFA designates a hearing officer to conduct the hearing. The hearing officer need not be an ALJ.
(a) A hearing officer may not conduct a hearing in a case in which he or she is prejudiced or partial to any party or
(b) A party to the hearing who objects to the designated hearing officer must notify that officer in writing at the earliest opportunity.
(c) The hearing officer must consider the objections, and may, at his or her discretion, either proceed with the hearing or withdraw.
(1) If the hearing officer withdraws, HCFA designates another hearing officer to conduct the hearing.
(2) If the hearing officer does not withdraw, the objecting party may, after the hearing, present objections and request that the officer's decision be revised or a new hearing be held before another hearing officer. The objections must be submitted to HCFA.
(a) The hearing officer fixes a time and place for the hearing and sends written notice to the parties. The notice also informs the parties of the general and specific issues to be resolved and information about the hearing procedure.
(b) The hearing officer may, on his or her own motion, or at the request of a party, change the time and place for the hearing. The hearing officer may adjourn or postpone the hearing.
(c) The hearing officer will give the parties reasonable notice of any change in the time or place of hearing, or of adjournment or postponement.
A party may appoint as its representative at the hearing anyone not disqualified or suspended from acting as a representative before HCFA or otherwise prohibited by law.
(a) A representative appointed and qualified in accordance with § 417.672 may, on behalf of the represented party—
(1) Give or accept any notice or request pertinent to the proceedings set forth in this subpart;
(2) Present evidence and allegations as to facts and law in any proceedings affecting that party; and
(3) Obtain information to the same extent as the party.
(b) A notice or request sent to the representative has the same force and effect as if it had been sent to the party.
(a) The hearing is open to the parties and to the public.
(b) The hearing officer inquires fully into all the matters at issue and receives in evidence the testimony of witnesses and any documents that are relevant and material.
(c) The hearing officer provides the parties an opportunity to enter any objection to the inclusion of any document.
(d) The hearing officer decides the order in which the evidence and the arguments of the parties are presented and the conduct of the hearing.
The hearing officer rules on the admissibility of evidence and may admit evidence that would be inadmissible under rules applicable to court procedures.
(a) The hearing officer may examine the witnesses.
(b) The parties or their representatives are permitted to examine their witnesses and cross-examine witnesses of other parties.
(a) Prehearing discovery is permitted upon timely request of a party.
(b) A request is timely if it is made before the beginning of the hearing.
(c) A reasonable time for inspection and reproduction of documents is provided by order of the hearing officer.
(d) The hearing officer's order on all discovery matters is final.
The hearing officer may schedule a prehearing conference if he or she believes that a conference would more clearly define the issues.
(a) A complete record of the proceedings at the hearing is made and transcribed and made available to all parties upon request.
(b) The record may not be closed until a hearing decision has been issued.
In exercising his or her authority, the hearing officer must comply with the provisions of title XVIII and related provisions of the Act, the regulations issued by HCFA, and general instructions issued by HCFA in implementing that Act.
(a) As soon as practical after the close of the hearing, the hearing officer issues a written decision that—
(1) Is based upon the evidence of record; and
(2) Contains separately numbered findings of fact and conclusions of law.
(b) The hearing officer provides a copy of the hearing decision to each party.
(c) The hearing decision is final and binding unless it is reopened and revised in accordance with § 417.692.
(a)
(b)
(c)
(2) The notice of revision specifies the reasons for revisions.
The revision of an initial or reconsidered determination is binding unless a party files a written request for hearing of the revised determination in accordance with § 417.662.
(a)
(1) Effective January 1, 1999, (or on the effective date of the HCPP agreement in the case of a 1998 applicant) either—
(A) Is union or employer sponsored; or
(B) Does not provide, or arrange for the provision of, any inpatient hospital services.
(2) Is responsible for the organization, financing, and delivery of covered Part B services to a defined population on a prepayment basis.
(3) Meets the conditions specified in paragraph (b) of this section.
(4) Elects to be reimbursed on a reasonable cost basis.
(b)
(i) Enter into a written agreement with HCFA as specified in § 417.801;
(ii) Furnish physicians' services through its employees or under a formal arrangement with a medical group, independent practice association or individual physicians; and
(iii) Furnish covered Part B services to its Medicare enrollees through institutions, entities, and persons that have qualified under the applicable requirements of title XVIII of the Social Security Act and section 353 of the PHS Act.
(2) An organization that, as of January 31, 1983, was being reimbursed on a reasonable cost basis under section 1833(a)(1)(A) of the Act, and that would not otherwise meet the conditions specified in paragraph (b)(1) of this section, may receive reimbursement on a reasonable cost basis as an HCPP, provided it files an agreement with HCFA as required by § 417.801.
(c)
(2)
(ii)
(A) The actuarial value of the Part B deductible.
(B) An amount equal to 20 percent of the cost incurred for any service that is subject to the Medicare coinsurance.
(d)
(2) Covered Part B services furnished by a provider of services to an HCPP's Medicare enrollees are not payable to the HCPP. HCFA makes payment for these services to the provider on behalf of the Medicare enrollee through the provider's Medicare fiscal intermediary. This requirement does not affect Medicare payment to the HCPP for physicians' services furnished to its Medicare enrollees for which the physicians are compensated by the HCPP.
(e)
(a)
(2) An existing group practice prepayment plan (GPPP) that continues as an HCPP under this subpart U must have entered into a written agreement with HCFA within 60 days of January 31, 1983.
(b)
(1) Maintain compliance with the requirements for participation and reimbursement on a reasonable cost basis of HCPPs as specified in § 417.800;
(2) Not charge the Medicare enrollee or any other person for items or services for which that enrollee is entitled to have payment made under the provisions of this part, except for any deductible or coinsurance amounts for which the enrollee is liable;
(3) Refund, as promptly as possible, any money incorrectly collected as charges or premiums, or in any other way from Medicare enrollees in the HCPP in accordance with the requirements specified in § 417.456;
(4) Not impose any limitations on the acceptance of Medicare enrollees or beneficiaries for care and treatment that it does not impose on all other individuals;
(5) Meet the advance directives requirements specified in § 417.436(d) of this part;
(6) Establish administrative review procedures in accordance with §§ 417.830 through 417.840 for Medicare enrollees who are dissatisfied with denied services or claims; and
(7) Consider any additional requirements that HCFA finds necessary or desirable for efficient and effective program administration.
(c)
(d)
(i) The HCPP no longer meets the requirements for participation and reimbursement as an HCPP as specified in § 417.800;
(ii) The HCPP is not in substantial compliance with the provisions of the agreement, applicable HCFA regulations, or applicable provisions of the Medicare law; or
(iii) The HCPP undergoes a change in ownership as specified in subpart M of this part.
(2) HCFA will give notice of termination or nonrenewal to the HCPP at least 90 days before the effective date stated in the notice.
(e)
(2) HCFA may approve the termination date proposed by the HCPP, or set a different date no later than 6 months after that date. HCFA makes this decision based on a finding that termination on a specific date would not—
(i) Unduly disrupt the furnishing of services to the community serviced by the HCPP; or
(ii) Otherwise interfere with the efficient administration of the Medicare program.
(a)
(b)
(2)
(i) Except as specified in paragraph (b)(2)(ii) of this section, the costs incurred by the HCPP may be considered reasonable if they—
(A) Do not exceed those that a prudent and cost-conscious buyer would incur to purchase those services; and
(B) Are comparable to costs incurred for similar services furnished by similar physicians and other suppliers in the same or a similar locality.
(ii)(A) If a physician group to whom the HCPP makes payment compensates its physicians on a fee-for-service basis, the HCPP's payment to the group may not exceed the reasonable charges for those services, as defined in subpart E of part 405 of this chapter.
(B) Payment in excess of the limits specified in paragraph (b)(2)(ii)(A) of this section is allowable if the group has procedures under which members of the group accept effective incentives, such as risk-sharing, designed to avoid unnecessary or unduly costly utilization of health services. In such cases, the amount paid by the HCPP is considered reasonable if it meets the conditions specified in paragraph (b)(2)(i) of this section.
(3)
(i) Except as specified in paragraph (b)(3)(ii) of this section, the costs incurred by the HCPP are considered reasonable if they do not exceed—
(A) The reasonable charges for those services, as defined in subpart E of part 405 of this chapter; and
(B) The amount that HCFA would pay for those services if they were furnished to beneficiaries who are not enrolled in the HCPP and who receive the services from sources other than providers of services or other entities that are reimbursed on a reasonable cost basis.
(ii) Payment to a physician group organized on an individual-practice basis is not subject to the paragraph (b)(3)(i) of this section if the group pays its physicians on a fee-for-service basis and has procedures under which the members of the group accept effective incentives, such as risk-sharing, designed to avoid unnecessary or unduly costly utilization of health services. In these cases, the amount paid by an HCPP is considered reasonable if it meets the conditions specified in paragraph (b)(2)(i) of this section.
(a) The HCPP follows the cost apportionment principles specified in §§ 417.552 through 417.566, except for provisions on provider costs and provisions on departmental apportionment.
(b) The HCPP may use a method for reporting costs that is approved by HCFA. HCFA bases its approval on a finding that the method—
(1) Results in an accurate and equitable allocation of allowable costs; and
(2) Is justifiable from an administrative and cost efficiency standpoint.
(a) The principles specified in § 417.568 apply to HCPPs, except those in paragraph (c) of that section.
(b) The HCPP may use a method for reporting costs that is approved by HCFA. HCFA bases its approval on a finding that the method—
(1) Results in an accurate and equitable allocation of allowable costs; and
(2) Is justifiable from an administrative and cost efficiency standpoint.
(c) An HCPP must permit the Department and the Comptroller General to audit or inspect any books and records of the HCPP and of any related organization that pertain to the determination of amounts payable for covered Part B services furnished its Medicare enrollees. For purposes of this requirement, the principles specified in § 417.486 apply to HCPPs.
The HCPP follows the principles specified in §§ 417.570 and 417.572 on interim per capita payments, except for the following:
(a) When applying these principles to HCPPs, the term “reporting period” should be used instead of the term “contract period” contained in that section.
(b) An HCPP must submit to HCFA an annual operating budget and enrollment forecast, in the form and detail specified by HCFA, at least 60 days before the beginning of each reporting period. A reporting period must be 12 consecutive months, except that the HCPP's initial reporting period for participating in Medicare may be as short as 6 months or as long as 18 months.
(c) An HCPP must submit to HCFA an interim cost report and enrollment data applicable to the first 6-month period of the HCPP's reporting period in the form and detail specified by HCFA. The interim cost report must be submitted not later than 45 days after the close of the first 6-month period of the HCPP's reporting period.
(d) In lieu of an interim payment based on the actual monthly enrollment in an HCPP, HCFA and the HCPP may agree to a uniform monthly interim reimbursement rate for a reporting period. This interim rate is based on the HCPP's budget and enrollment forecast, if HCFA is satisfied that the rate is consistent with efficiency and economy, and will not result in excessive adjustment at the end of the reporting period.
(a)
(b)
(2)
(i) The HCPP's per capita incurred costs of providing covered Part B services to its Medicare enrollees during the reporting period, including any costs incurred by another organization related to the HCPP by common ownership or control;
(ii) The HCPP's methods of apportioning costs among its Medicare enrollees, enrollees who are not Medicare beneficiaries, and other nonenrollees, including Medicare beneficiaries receiving health care services on a fee-for-service or other basis; and
(iii) Information on enrollment and other data as specified by HCFA.
(3)
(4)
(i) Regard the failure to report this information as evidence of likely overpayment and reduce or suspend interim payments to the HCPP; and
(ii) Determine that amounts previously paid are overpayments, and make appropriate recovery.
(c)
(1) Explains HCFA's determination of total reimbursement due the HCPP for the reporting period; and
(2) Informs the HCPP of its right to have the determination reviewed at a hearing as provided in part 405, subpart R of this chapter.
(d)
(2) If the HCPP does not pay HCFA within 30 days of HCFA's determination of any amounts the HCPP owes HCFA, HCFA may offset further payments to the HCPP to recover, or to aid in the recovery of, any overpayment identified in its determination.
(3) Any offset of payments HCFA makes under paragraph (d)(2) of this section will remain in effect even if the HCPP has requested a hearing on the determination under the provisions of part 405, subpart R of this chapter.
(e)
(2) HCFA or the HCPP will make payment within 30 days of HCFA's determination under the tentative settlement of any estimated amounts due.
(3) The tentative settlement is subject to adjustment at the time of a final settlement.
Sections 417.832 through 417.840 establish procedures for the presentation and resolution of organization determinations, reconsiderations, hearings, Departmental Appeals Board review, court reviews, and finality of decisions that are applicable to Medicare enrollees of an HCPP.
(a) The administrative review rights and procedures specified in §§ 417.834 through 417.840 pertain to disputes involving an organization determination, as defined in § 417.838, with which the enrollee is dissatisfied.
(b) Physicians and other individuals who furnish items or services under arrangements with an HCPP have no right of administrative review under §§ 417.834 through 417.840.
(c) The provisions of subpart R of 20 CFR part 404 dealing with representation of parties under title II of the Act are, unless otherwise provided, also applicable.
The HCPP is responsible for establishing and maintaining the administrative review procedures that are specified in §§ 417.830 through 417.840.
Each HCPP is responsible for ensuring that all Medicare enrollees are informed in writing of the administrative review procedures that are available to them.
(a)
(b)
(1) A determination regarding services that were furnished by the HCPP, either directly or under arrangement, for which the enrollee has no further obligation for payment.
(2) A determination regarding services that are not covered under the HCPP's agreement with HCFA.
The HCPP must apply §§ 417.608 through 417.638 to organization determinations that affect its Medicare enrollees, and to reconsideration, hearings, Departmental Appeals Board review, and judicial review of those organization determinations.
The regulations in this subpart apply, as appropriate, to public and private entities that have loans or loan guarantees that—
(a) Were awarded to them before October 1986 under section 1304 or section 1305 of the PHS Act; and
(b) Are still outstanding.
As used in this subpart—
(2) The improvement or upgrading of existing facilities or equipment, or an increase in the number of categories of health professionals, of the HMO so that the HMO could provide directly services that it previously provided through contract or referral or which it could not previously provide with its existing facilities or equipment.
(1) Under generally accepted accounting principles or under accounting practices prescribed or permitted by State regulatory authority, was not a capital cost.
(2) Was required by State regulatory authority to meet reserves or tangible net equity requirements.
(3) Was for a payment made to reduce balance sheet liabilities existing at the beginning of the 60-month period, but only if—(i) The payment had been approved in writing by the Secretary; and
(ii) The total of these payments did not exceed 20 percent of the amount of the loan.
(4) Was for a small capital expenditure, but only if—(i) The cost had been approved in writing by the Secretary; and
(ii) The total of these costs did not exceed $200,000 in any 12-month period, and $400,000 during the first 60 months of operation or expansion.
(2) A planned expansion of the service area beyond the current service area, that would be made possible by the addition of health service delivery facilities and health professionals to serve enrollees at a new site or sites in areas previously without service sites.
(2) Alterations and renovations required to change the interior arrangements or other physical characteristics of an existing facility or installed equipment, so that it may be more effectively used for its currently designated purpose, or adapted to a changed use.
(a) Under section 1304 of the PHS Act, grants and loan guarantees were awarded for projects for planning and initial development of HMOs.
(b) Planning projects included projects for any of the following:
(1) Establishment of an HMO.
(2) Significant expansion of the HMO's enrollment or geographic area.
(c) Initial development projects included projects for any of the following:
(1) Establishment of an HMO.
(2) Significant expansion of the HMO's enrollment or geographic area.
(3) Expansion of the range or amount of services furnished by the HMO.
Under section 1305 of the PHS, loans and loan guarantees were awarded for initial costs of operation of HMOs.
(a)
(1) When the HMO's revenues and costs of operation reached the break-even point.
(2) At the end of the 60-month period following the Secretary's endorsement of the loan or loan guarantee.
(b)
(a)
(b)
(c)
The provisions of § 417.163(g) apply to entities that have outstanding loans or loan guarantees administered under this subpart.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
This part implements section 1861(dd) of the Social Security Act. Section 1861(dd) specifies services covered as hospice care and the conditions that a hospice program must meet in order to participate in the Medicare program. The following sections of the Act are also pertinent:
(a) Sections 1812(a) (4) and (d) of the Act specify eligibility requirements for the individual and the benefit periods.
(b) Section 1813(a)(4) of the Act specifies coinsurance amounts.
(c) Sections 1814(a)(7) and 1814(i) of the Act contain conditions and limitations on coverage of, and payment for, hospice care.
(d) Sections 1862(a) (1), (6) and (9) of the Act establish limits on hospice coverage.
Subpart A of this part sets forth the statutory basis and scope and defines terms used in this part. Subpart B specifies the eligibility requirements and the benefit periods. Subpart C specifies conditions of participation for hospices. Subpart D describes the covered services and specifies the limits on services covered as hospice care. Subpart E specifies the reimbursement methods and procedures. Subpart F specifies coinsurance amounts applicable to hospice care.
For purposes of this part—
(a) Is a doctor of medicine or osteopathy; and
(b) Is identified by the individual, at the time he or she elects to receive hospice care, as having the most significant role in the determination and delivery of the individual's medical care.
In order to be eligible to elect hospice care under Medicare, an individual must be—
(a) Entitled to Part A of Medicare; and
(b) Certified as being terminally ill in accordance with § 418.22.
(a) Subject to the conditions set forth in this part, an individual may elect to receive hospice care during one
(1) An initial 90-day period.
(2) A subsequent 90-day period.
(3) A subsequent 30-day period.
(4) A subsequent extension period of unlimited duration during the individual's lifetime.
(b) The periods of care are available in the order listed and may be elected separately at different times.
(a)
(2)
(3)
(b)
(c)
(i) The medical director of the hospice or the physician member of the hospice interdisciplinary group; and
(ii) The individual's attending physician if the individual has an attending physician.
(2) For subsequent periods, the only requirement is certification by one of the physicians listed in paragraph (c)(1)(i) of this section.
(d)
(1) Make an appropriate entry in the patient's medical record as soon as they receive an oral certification; and
(2) File written certifications in the medical record.
(a)
(b)
(1) Identification of the particular hospice that will provide care to the individual.
(2) The individual's or representative's acknowledgement that he or she has been given a full understanding of the palliative rather than curative nature of hospice care, as it relates to the individual's terminal illness.
(3) Acknowledgement that certain Medicare services, as set forth in paragraph (d) of this section, are waived by the election.
(4) The effective date of the election, which may be the first day of hospice care or a later date, but may be no earlier than the date of the election statement.
(5) The signature of the individual or representative.
(c)
(1) Remains in the care of a hospice; and
(2) Does not revoke the election under the provisions of § 418.28.
(d)
(1) Hospice care provided by a hospice other than the hospice designated by the individual (unless provided under
(2) Any Medicare services that are related to the treatment of the terminal condition for which hospice care was elected or a related condition or that are equivalent to hospice care except for services—
(i) Provided by the designated hospice:
(ii) Provided by another hospice under arrangements made by the designated hospice; and
(iii) Provided by the individual's attending physician if that physician is not an employee of the designated hospice or receiving compensation from the hospice for those services.
(e)
(a) An individual or representative may revoke the individual's election of hospice care at any time during an election period.
(b) To revoke the election of hospice care, the individual or representative must file a statement with the hospice that includes the following information:
(1) A signed statement that the individual or representative revokes the individual's election for Medicare coverage of hospice care for the remainder of that election period.
(2) The date that the revocation is to be effective. (An individual or representative may not designate an effective date earlier than the date that the revocation is made).
(c) An individual, upon revocation of the election of Medicare coverage of hospice care for a particular election period—
(1) Is no longer covered under Medicare for hospice care;
(2) Resumes Medicare coverage of the benefits waived under § 418.24(e)(2); and
(3) May at any time elect to receive hospice coverage for any other hospice election periods that he or she is eligible to receive.
(a) An individual or representative may change, once in each election period, the designation of the particular hospice from which hospice care will be received.
(b) The change of the designated hospice is not a revocation of the election for the period in which it is made.
(c) To change the designation of hospice programs, the individual or representative must file, with the hospice from which care has been received and with the newly designated hospice, a statement that includes the following information:
(1) The name of the hospice from which the individual has received care and the name of the hospice from which he or she plans to receive care.
(2) The date the change is to be effective.
(a)
(b)
(1) Make nursing services, physician services, and drugs and biologicals routinely available on a 24-hour basis;
(2) Make all other covered services available on a 24-hour basis to the extent necessary to meet the needs of individuals for care that is reasonable and necessary for the palliation and management of terminal illness and related conditions; and
(3) Provide these services in a manner consistent with accepted standards of practice.
(c)
A hospice must have a governing body that assumes full legal responsibility for determining, implementing and monitoring policies governing the hospice's total operation. The governing body must designate an individual who is responsible for the day to day management of the hospice program. The governing body must also ensure that all services provided are consistent with accepted standards of practice.
The medical director must be a hospice employee who is a doctor of medicine or osteopathy who assumes overall responsibility for the medical component of the hospice's patient care program.
Subject to the conditions of participation pertaining to services in §§ 418.80 and 418.90, a hospice may arrange for another individual or entity to furnish services to the hospice's patients. If services are provided under arrangement, the hospice must meet the following standards:
(a)
(b)
(1) Identification of the services to be provided.
(2) A stipulation that services may be provided only with the express authorization of the hospice.
(3) The manner in which the contracted services are coordinated, supervised, and evaluated by the hospice.
(4) The delineation of the role(s) of the hospice and the contractor in the admission process, patient/family assessment, and the interdisciplinary group care conferences.
(5) Requirements for documenting that services are furnished in accordance with the agreement.
(6) The qualifications of the personnel providing the services.
(c)
(d)
(e)
(1) That the hospice furnishes to the inpatient provider a copy of the patient's plan of care and specifies the inpatient services to be furnished;
(2) That the inpatient provider has established policies consistent with those of the hospice and agrees to abide by the patient care protocols established by the hospice for its patients;
(3) That the medical record includes a record of all inpatient services and events and that a copy of the discharge summary and, if requested, a copy of the medical record are provided to the hospice;
(4) The party responsible for the implementation of the provisions of the agreement; and
(5) That the hospice retains responsibility for appropriate hospice care training of the personnel who provide the care under the agreement.
A written plan of care must be established and maintained for each individual admitted to a hospice program,
(a)
(b)
(c)
A hospice may not discontinue or diminish care provided to a Medicare beneficiary because of the beneficiary's inability to pay for that care.
A hospice must demonstrate respect for an individual's rights by ensuring that an informed consent form that specifies the type of care and services that may be provided as hospice care during the course of the illness has been obtained for every individual, either from the individual or representative as defined in § 418.3.
A hospice must provide an ongoing program for the training of its employees.
A hospice must conduct an ongoing, comprehensive, integrated, self-assessment of the quality and appropriateness of care provided, including inpatient care, home care and care provided under arrangements. The findings are used by the hospice to correct identified problems and to revise hospice policies if necessary. Those responsible for the quality assurance program must—
(a) Implement and report on activities and mechanisms for monitoring the quality of patient care;
(b) Identify and resolve problems; and
(c) Make suggestions for improving patient care.
The hospice must designate an interdisciplinary group or groups composed of individuals who provide or supervise the care and services offered by the hospice.
(a)
(1) A doctor of medicine or osteopathy.
(2) A registered nurse.
(3) A social worker.
(4) A pastoral or other counselor.
(b)
(1) Participation in the establishment of the plan of care;
(2) Provision or supervision of hospice care and services;
(3) Periodic review and updating of the plan of care for each individual receiving hospice care; and
(4) Establishment of policies governing the day-to-day provision of hospice care and services.
(c) If a hospice has more than one interdisciplinary group, it must designate in advance the group it chooses to execute the functions described in paragraph (b)(4) of this section.
(d)
The hospice in accordance with the numerical standards, specified in paragraph (e) of this section, uses volunteers, in defined roles, under the supervision of a designated hospice employee.
(a)
(b)
(c)
(d)
(1) The identification of necessary positions which are occupied by volunteers;
(2) The work time spent by volunteers occupying those positions; and
(3) Estimates of the dollar costs which the hospice would have incurred if paid employees occupied the positions identified in paragraph (d)(1) for the amount of time specified in paragraph (d)(2).
(e)
(f)
The hospice and all hospice employees must be licensed in accordance with applicable Federal, State and local laws and regulations.
(a)
(b)
In accordance with accepted principles of practice, the hospice must establish and maintain a clinical record for every individual receiving care and services. The record must be complete, promptly and accurately documented, readily accessible and systematically organized to facilitate retrieval.
(a)
(1) The initial and subsequent assessments;
(2) The plan of care;
(3) Identification data;
(4) Consent and authorization and election forms;
(5) Pertinent medical history; and
(6) Complete documentation of all services and events (including evaluations, treatments, progress notes, etc.).
(b)
Except as permitted in § 418.83, a hospice must ensure that substantially all the core services described in this subpart are routinely provided directly by hospice employees. A hospice may use contracted staff if necessary to supplement hospice employees in order to meet the needs of patients during periods of peak patient loads or under extraordinary circumstances. If contracting is used, the hospice must maintain professional, financial, and administrative responsibility for the services and must assure that the
The hospice must provide nursing care and services by or under the supervision of a registered nurse.
(a) Nursing services must be directed and staffed to assure that the nursing needs of patients are met.
(b) Patient care responsibilities of nursing personnel must be specified.
(c) Services must be provided in accordance with recognized standards of practice.
(a) HCFA may approve a waiver of the requirement in § 418.80 for nursing services provided by a hospice which is located in a non-urbanized area. The location of a hospice that operates in several areas is considered to be the location of its central office. The hospice must provide evidence that it was operational on or before January 1, 1983, and that it made a good faith effort to hire a sufficient number of nurses to provide services directly. HCFA bases its decision as to whether to approve a waiver application on the following:
(1) The current Bureau of the Census designations for determining non-urbanized areas.
(2) Evidence that a hospice was operational on or before January 1, 1983 including:
(i) Proof that the organization was established to provide hospice services on or before January 1, 1983;
(ii) Evidence that hospice-type services were furnished to patients on or before January 1, 1983; and
(iii) Evidence that the hospice care was a discrete activity rather than an aspect of another type of provider's patient care program on or before January 1, 1983.
(3) Evidence that a hospice made a good faith effort to hire nurses, including:
(i) Copies of advertisements in local newspapers that demonstrate recruitment efforts;
(ii) Job descriptions for nurse employees;
(iii) Evidence that salary and benefits are competitive for the area; and
(iv) Evidence of any other recruiting activities (e.g., recruiting efforts at health fairs and contacts with nurses at other providers in the area);
(b) Any waiver request is deemed to be granted unless it is denied within 60 days after it is received.
(c) Waivers will remain effective for one year at a time.
(d) HCFA may approve a maximum of two one-year extensions for each initial waiver. If a hospice wishes to receive a one-year extension, the hospice must submit a certification to HCFA, prior to the expiration of the waiver period, that the employment market for nurses has not changed significantly since the time the initial waiver was granted.
Medical social services must be provided by a qualified social worker, under the direction of a physician.
In addition to palliation and management of terminal illness and related conditions, physician employees of the hospice, including the physician member(s) of the interdisciplinary group, must also meet the general medical needs of the patients to the extent that these needs are not met by the attending physician.
Counseling services must be available to both the individual and the family. Counseling includes bereavement counseling, provided after the patient's death as well as dietary, spiritual and any other counseling services for the individual and family provided while the individual is enrolled in the hospice.
(a)
(b)
(c)
(d)
A hospice must ensure that the services described in this subpart are provided directly by hospice employees or under arrangements made by the hospice as specified in § 418.56.
(a) Physical therapy services, occupational therapy services, and speech-language patholgy services must be available, and when provided, offered in a manner consistent with accepted standards of practice.
(b)(1) If the hospice engages in laboratory testing outside of the context of assisting an individual in self-administering a test with an appliance that has been cleared for that purpose by the FDA, such testing must be in compliance with all applicable requirements of part 493 of this chapter.
(2) If the hospice chooses to refer specimens for laboratory testing to another laboratory, the referral laboratory must be certified in the appropriate specialties and subspecialties of services in accordance with the applicable requirements of part 493 of this chapter.
Home health aide and homemaker services must be available and adequate in frequency to meet the needs of the patients. A home health aide is a person who meets the training, attitude and skill requirements specified in § 484.36 of this chapter.
(a)
(b)
Medical supplies and appliances including drugs and biologicals, must be provided as needed for the palliation and management of the terminal illness and related conditions.
(a)
(b)
(c)
(1) A licensed nurse or physician.
(2) An employee who has completed a State-approved training program in medication administration.
(3) The patient if his or her attending physician has approved.
(4) Any other individual in accordance with applicable State and local
Inpatient care must be available for pain control, symptom management and respite purposes, and must be provided in a participating Medicare or Medicaid facility.
(a)
(1) A hospice that meets the condition of participation for providing inpatient care directly as specified in § 418.100.
(2) A hospital or an SNF that also meets the standards specified in § 418.100 (a) and (e) regarding 24-hour nursing service and patient areas.
(b)
(1) A provider specified in paragraph (a) of this section.
(2) An ICF that also meets the standards specified in § 418.100 (a) and (e) regarding 24-hour nursing service and patient areas.
(c)
(d)
A hospice that provides inpatient care directly must comply with all of the following standards.
(a)
(2) Each shift must include a registered nurse who provides direct patient care.
(b)
(c)
(1) Construction, maintenance, and equipment for the hospice;
(2) Sanitation;
(3) Communicable and reportable diseases; and
(4) Post mortem procedures.
(d)
(2) In consideration of a recommendation by the State survey agency, HCFA may waive, for periods deemed appropriate, specific provisions of the Life Safety Code which, if rigidly applied would result in unreasonable hardship for the hospice, but only if the waiver would not adversely affect the health and safety of the patients.
(3) Any hospice that, on May 9, 1988, complies with the requirements of the 1981 edition of the Life Safety Code, with or without waivers, will be considered to be in compliance with this standard, as long as the hospice continues to remain in compliance with that edition of the Life Safety Code.
(4) Any facility of two or more stories that is not of fire resistive construction and is participating on the basis of a waiver of construction type or height, may not house blind, nonambulatory, or physically handicapped patients above the street-level floor unless the facility—
(i) Is one of the following construction types (as defined in the Life Safety Code):
(A) Type II (1, 1, 1)—protected non-combustible.
(B) Fully sprinklered Type II (0, 0, 0)—non-combustible.
(C) Fully sprinklered Type III (2, 1, 1)—protected ordinary.
(D) Fully sprinklered Type V (1, 1, 1)—protected wood frame; or
(ii) Achieves a passing score on the Fire Safety Evaluation System (FSES).
(e)
(2) The hospice must have—
(i) Physical space for private patient/family visiting;
(ii) Accommodations for family members to remain with the patient throughout the night;
(iii) Accommodations for family privacy after a patient's death; and
(iv) Decor which is homelike in design and function.
(3) Patients must be permitted to receive visitors at any hour, including small children.
(f)
(1) Each patient's room must—
(i) Be equipped with or conveniently located near toilet and bathing facilities;
(ii) Be at or above grade level;
(iii) Contain a suitable bed for each patient and other appropriate furniture;
(iv) Have closet space that provides security and privacy for clothing and personal belongings;
(v) Contain no more than four beds;
(vi) Measure at least 100 square feet for a single patient room or 80 square feet for each patient for a multipatient room; and
(vii) Be equipped with a device for calling the staff member on duty.
(2) For an existing building, HCFA may waive the space and occupancy requirements of paragraphs (f)(1) (v) and (vi) of this section for as long as it is considered appropriate if it finds that—
(i) The requirements would result in unreasonable hardship on the hospice if strictly enforced; and
(ii) The waiver serves the particular needs of the patients and does not adversely affect their health and safety.
(g)
(1) Provide an adequate supply of hot water at all times for patient use; and
(2) Have plumbing fixtures with control valves that automatically regulate the temperature of the hot water used by patients.
(h)
(i)
(j)
(1) Serve at least three meals or their equivalent each day at regular times, with not more than 14 hours between a substantial evening meal and breakfast;
(2) Procure, store, prepare, distribute, and serve all food under sanitary conditions;
(3) Have a staff member trained or experienced in food management or nutrition who is responsible for—
(i) Planning menus that meet the nutritional needs of each patient, following the orders of the patient's physician and, to the extent medically possible, the recommended dietary allowances of the Food and Nutrition Board of the National Research Council, National Academy of Sciences (Recommended Dietary Allowances (9th ed., 1981) is available from the Printing and Publications Office, National Academy of Sciences, Washington, DC 20418); and
(ii) Supervising the meal preparation and service to ensure that the menu plan is followed; and
(4) If the hospice has patients who require medically prescribed special diets, have the menus for those patients planned by a professionally qualified dietitian and supervise the preparation and serving of meals to ensure that the patient accepts the special diet.
(k)
(1)
(i) Employ a licensed pharmacist; or
(ii) Have a formal agreement with a licensed pharmacist to advise the hospice on ordering, storage, administration, disposal, and recordkeeping of drugs and biologicals.
(2)
(ii) If the medication order is verbal—
(A) The physician must give it only to a licensed nurse, pharmacist, or another physician; and
(B) The individual receiving the order must record and sign it immediately and have the prescribing physician sign it in a manner consistent with good medical practice.
(3)
(i) A licensed nurse or physician.
(ii) An employee who has completed a State-approved training program in medication administration.
(iii) The patient if his or her attending physician has approved.
(4)
(5)
(6)
(7)
To be covered, hospice services must meet the following requirements. They must be reasonable and necessary for the palliation or management of the terminal illness as well as related conditions. The individual must elect hospice care in accordance with § 418.24 and a plan of care must be established as set forth in § 418.58 before services
All services must be performed by appropriately qualified personnel, but it is the nature of the service, rather than the qualification of the person who provides it, that determines the coverage category of the service. The following services are covered hospice services:
(a) Nursing care provided by or under the supervision of a registered nurse.
(b) Medical social services provided by a social worker under the direction of a physician.
(c) Physicians' services performed by a physician as defined in § 410.20 of this chapter except that the services of the hospice medical director or the physician member of the interdisciplinary group must be performed by a doctor of medicine or osteopathy.
(d) Counseling services provided to the terminally ill individual and the family members or other persons caring for the individual at home. Counseling, including dietary counseling, may be provided both for the purpose of training the individual's family or other caregiver to provide care, and for the purpose of helping the individual and those caring for him or her to adjust to the individual's approaching death.
(e) Short-term inpatient care provided in a participating hospice inpatient unit, or a participating hospital or SNF, that additionally meets the standards in § 418.202 (a) and (e) regarding staffing and patient areas. Services provided in an inpatient setting must conform to the written plan of care. Inpatient care may be required for procedures necessary for pain control or acute or chronic symptom management.
(f) Medical appliances and supplies, including drugs and biologicals. Only drugs as defined in section 1861(t) of the Act and which are used primarily for the relief of pain and symptom control related to the individual's terminal illness are covered. Appliances may include covered durable medical equipment as described in § 410.38 of this chapter as well as other self-help and personal comfort items related to the palliation or management of the patient's terminal illness. Equipment is provided by the hospice for use in the patient's home while he or she is under hospice care. Medical supplies include those that are part of the written plan of care.
(g)
(h) Physical therapy, occupational therapy and speech-language pathology services in addition to the services described in § 409.33 (b) and (c) of this chapter provided for purposes of symptom control or to enable the patient to maintain activities of daily living and basic functional skills.
(a)
(b)
(2) Respite care may be provided only on an occasional basis and may not be reimbursed for more than five consecutive days at a time.
(c)
(a) Medicare payment for covered hospice care is made in accordance with the method set forth in § 418.302.
(b) Medicare reimbursement to a hospice in a cap period is limited to a cap amount specified in § 418.309.
(a) HCFA establishes payment amounts for specific categories of covered hospice care.
(b) Payment amounts are determined within each of the following categories:
(1)
(2)
(3)
(4)
(c) The payment amounts for the categories of hospice care are fixed payment rates that are established by HCFA in accordance with the procedures described in § 418.306. Payment rates are determined for the following categories:
(1) Routine home care.
(2) Continuous home care.
(3) Inpatient respite care.
(4) General inpatient care.
(d) The intermediary reimburses the hospice at the appropriate payment amount for each day for which an eligible Medicare beneficiary is under the hospice's care.
(e) The intermediary makes payment according to the following procedures:
(1) Payment is made to the hospice for each day during which the beneficiary is eligible and under the care of the hospice, regardless of the amount of services furnished on any given day.
(2) Payment is made for only one of the categories of hospice care described in § 418.302(b) for any particular day.
(3) On any day on which the beneficiary is not an inpatient, the hospice is paid the routine home care rate, unless the patient receives continuous care as defined in paragraph (b)(2) of this section for a period of at least 8 hours. In that case, a portion of the continuous care day rate is paid in accordance with paragraph (e)(4) of this section.
(4) The hospice payment on a continuous care day varies depending on the number of hours of continuous services provided. The continuous home care rate is divided by 24 to yield an hourly rate. The number of hours of continuous care provided during a continuous
(5) Subject to the limitations described in paragraph (f) of this section, on any day on which the beneficiary is an inpatient in an approved facility for inpatient care, the appropriate inpatient rate (general or respite) is paid depending on the category of care furnished. The inpatient rate (general or respite) is paid for the date of admission and all subsequent inpatient days, except the day on which the patient is discharged. For the day of discharge, the appropriate home care rate is paid unless the patient dies as an inpatient. In the case where the beneficiary is discharged deceased, the inpatient rate (general or respite) is paid for the discharge day. Payment for inpatient respite care is subject to the requirement that it may not be provided consecutively for more than 5 days at a time. Payment for the sixth and any subsequent day of respite care is made at the routine home care rate.
(f) Payment for inpatient care is limited as follows: (1) The total payment to the hospice for inpatient care (general or respite) is subject to a limitation that total inpatient care days for Medicare patients not exceed 20 percent of the total days for which these patients had elected hospice care.
(2) At the end of a cap period, the intermediary calculates a limitation on payment for inpatient care to ensure that Medicare payment is not made for days of inpatient care in excess of 20 percent of the total number of days of hospice care furnished to Medicare patients.
(3) If the number of days of inpatient care furnished to Medicare patients is equal to or less than 20 percent of the total days of hospice care to Medicare patients, no adjustment is necessary. Overall payments to a hospice are subject to the cap amount specified in § 418.309.
(4) If the number of days of inpatient care furnished to Medicare patients exceeds 20 percent of the total days of hospice care to Medicare patients, the total payment for inpatient care is determined in accordance with the procedures specified in paragraph (f)(5) of this section. That amount is compared to actual payments for inpatient care, and any excess reimbursement must be refunded by the hospice. Overall payments to the hospice are subject to the cap amount specified in § 418.309.
(5) If a hospice exceeds the number of inpatient care days described in paragraph (f)(4), the total payment for inpatient care is determined as follows:
(i) Calculate the ratio of the maximum number of allowable inpatient days to the actual number of inpatient care days furnished by the hospice to Medicare patients.
(ii) Multiply this ratio by the total reimbursement for inpatient care made by the intermediary.
(iii) Multiply the number of actual inpatient days in excess of the limitation by the routine home care rate.
(iv) Add the amounts calculated in paragraphs (f)(5)(ii) and (iii) of this section.
(a) The following services performed by hospice physicians are included in the rates described in § 418.302:
(1) General supervisory services of the medical director.
(2) Participation in the establishment of plans of care, supervision of care and services, periodic review and updating of plans of care, and establishment of governing policies by the physician member of the interdisciplinary group.
(b) For services not described in paragraph (a) of this section, a specified Medicare contractor pays the hospice an amount equivalent to 100 percent of the physician's reasonable charge for those physician services furnished by hospice employees or under arrangements with the hospice. Reimbursement for these physician services is included in the amount subject to the hospice payment limit described in § 418.309. Services furnished voluntarily by physicians are not reimbursable.
(c) Services of the patient's attending physician, if he or she is not an employee of the hospice or providing services under arrangements with the hospice, are not considered hospice services and are not included in the amount subject to the hospice payment limit described in § 418.309. These services are paid by the carrier under the procedures in subparts D or E, part 405 of this chapter.
(a)
(b)
(1) The following rates, which are 120 percent of the rates in effect on September 30, 1989, are effective January 1, 1990 through September 30, 1990 and October 21, 1990 through December 31, 1990:
(2) Except for the period beginning October 21, 1990, through December 31, 1990, the payment rates for routine home care and other services included in hospice care for Federal fiscal years 1991, 1992, and 1993 and those that begin on or after October 1, 1997, are the payment rates in effect under this paragraph during the previous fiscal year increased by the market basket percentage increase as defined in section 1886(b)(3)(B)(iii) of the Act, otherwise applicable to discharges occurring in the fiscal year. The payment rates for the period beginning October 21, 1990, through December 31, 1990, are the same as those shown in paragraph (b)(1) of this section.
(3) For Federal fiscal years 1994 through 1997, the payment rate is the payment rate in effect during the previous fiscal year increased by a factor equal to the market basket percentage increase minus—
(i) 2 percentage points in FY 1994;
(ii) 1.5 percentage points in FYs 1995 and 1996; and
(iii) 0.5 percentage points in FY 1997.
(c)
(d)
Subject to the provisions of § 413.64(h) of this chapter, a hospice may elect to receive periodic interim payments (PIP) effective with claims received on or after July 1, 1987. Payment is made biweekly under the PIP method unless the hospice requests a longer fixed interval (not to exceed one month) between payments. The biweekly interim payment amount is based on the total estimated Medicare payments for the reporting period (as described in §§ 418.302-418.306). Each payment is made 2 weeks after the end of a biweekly period of service as described in § 413.64(h)(5) of this chapter. Under certain circumstances that are described in § 413.64(g) of this chapter, a hospice that is not receiving PIP may request an accelerated payment.
(a) Except as specified in paragraph (b) of this section, the total Medicare payment to a hospice for care furnished during a cap period is limited by the hospice cap amount specified in § 418.309.
(b) Until October 1, 1986, payment to a hospice that began operation before January 1, 1975 is not limited by the amount of the hospice cap specified in § 418.309.
(c) The intermediary notifies the hospice of the determination of program reimbursement at the end of the cap year in accordance with procedures similar to those described in § 405.1803 of this chapter.
(d) Payments made to a hospice during a cap period that exceed the cap amount are overpayments and must be refunded.
The hospice cap amount is calculated using the following procedures:
(a) The cap amount is $6,500 per year and is adjusted for inflation or deflation for cap years that end after October 1, 1984, by using the percentage change in the medical care expenditure category of the Consumer Price Index (CPI) for urban consumers that is published by the Bureau of Labor Statistics. This adjustment is made using the change in the CPI from March 1984 to the fifth month of the cap year. The cap year runs from November 1 of each year until October 31 of the following year.
(b) Each hospice's cap amount is calculated by the intermediary by multiplying the adjusted cap amount determined in paragraph (a) of this section by the number of Medicare beneficiaries who elected to receive hospice care from that hospice during the cap period. For purposes of this calculation, the number of Medicare beneficiaries includes—
(1) Those Medicare beneficiaries who have not previously been included in the calculation of any hospice cap and who have filed an election to receive hospice care, in accordance with § 418.24, from the hospice during the period beginning on September 28 (35 days before the beginning of the cap period) and ending on September 27 (35 days before the end of the cap period).
(2) In the case in which a beneficiary has elected to receive care from more than one hospice, each hospice includes in its number of Medicare beneficiaries only that fraction which represents the portion of a patient's total stay in all hospices that was spent in that hospice. (The hospice can obtain this information by contacting the intermediary.)
Hospices must provide reports and keep records as the Secretary determines necessary to administer the program.
A hospice that believes its payments have not been properly determined in accordance with these regulations may request a review from the intermediary or the Provider Reimbursement Review Board (PRRB) if the amount in controversy is at least $1,000 or $10,000, respectively. In such a case, the procedure in 42 CFR part 405, subpart R, will be followed to the extent that it is applicable. The PRRB, subject to review by the Secretary under § 405.1874 of this chapter, shall have the authority to determine the issues raised. The methods and standards for the calculation of the payment rates by HCFA are not subject to appeal.
An individual who has filed an election for hospice care in accordance with § 418.24 is liable for the following coinsurance payments. Hospices may charge individuals the applicable coinsurance amounts.
(a)
(b)
(2) The amount of the individual's coinsurance liability for respite care during a hospice coinsurance period may not exceed the inpatient hospital deductible applicable for the year in which the hospice coinsurance period began.
(3) The individual hospice coinsurance period—
(i) Begins on the first day an election filed in accordance with § 418.24 is in effect for the beneficiary; and
(ii) Ends with the close of the first period of 14 consecutive days on each of which an election is not in effect for the beneficiary.
Medicare payment to the hospice discharges an individual's liability for payment for all services, other than the hospice coinsurance amounts described in § 418.400, that are considered covered hospice care (as described in § 418.202). The individual is liable for the Medicare deductibles and coinsurance payments and for the difference between the reasonable and actual charge on unassigned claims on other covered services that are not considered hospice care. Examples of services not considered hospice care include: Services furnished before or after a hospice election period; services of the individual's attending physician, if the attending physician is not an employee of or working under an arrangement with the hospice; or Medicare services received for the treatment of an illness or injury not related to the individual's terminal condition.
The Medicare payment rates established by HCFA in accordance with § 418.306 are not reduced when the individual is liable for coinsurance payments. Instead, when establishing the payment rates, HCFA offsets the estimated cost of services by an estimate of average coinsurance amounts hospices collect.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
This part sets forth requirements for Medicare providers, intermediaries, and carriers to disclose ownership and
(a)
(b)
This subpart implements sections 1124, 1124A, 1126, and 1861(v)(1)(i) of the Social Security Act. It sets forth requirements for providers, Part B suppliers, intermediaries, and carriers to disclose ownership and control information and the identities of managing employees. It also sets forth requirements for disclosure of information about a provider's or Part B supplier's owners, those with a controlling interest, or managing employees convicted of criminal offenses against Medicare, Medicaid, or the title V (Maternal and Child Health Services) and title XX (Social Services) programs.
As used in this subpart unless the context indicates otherwise:
(1) A provider of services, an independent clinical laboratory, a renal disease facility, a rural health clinic, a Federally qualified health center, or a health maintenance organization (as defined in section 1301(a) of the Public Health Service Act);
(2) A carrier or other agency or organization that is acting for one or more providers of services for purposes of part A and part B of Medicare; and
(3) A part B supplier, as defined in § 400.202 of this chapter.
(1) An entity (other than an individual practitioner or group of practitioners) that furnishes, or arranges for the furnishing of, items or services for which payment may be claimed by the entity under any plan or program established under title V of the Social Security Act or under an approved State Medicaid plan;
(2) An entity (other than an individual practitioner or group of practitioners) that furnishes, or arranges for the furnishing of, health-related services for which payment may be claimed by the entity under an approved State plan and services program under title XX of the Act; or
(3) A Medicaid fiscal agent.
(1) Has an ownership interest totaling 5 percent or more in a disclosing entity;
(2) Has an indirect ownership interest equal to 5 percent or more in a disclosing entity;
(3) Has a combination of direct and indirect ownership interests equal to 5 percent or more in a disclosing entity;
(4) Owns an interest of 5 percent or more in any mortgage, deed of trust, note, or other obligation secured by the disclosing entity if that interest equals at least 5 percent of the value of the property or assets of the disclosing entity;
(5) Is an officer or director of a disclosing entity that is organized as a corporation; or
(6) Is a partner in a disclosing entity that is organized as a partnership.
(1) An individual, agency, or organization to which a disclosing entity has contracted or delegated some of its management functions or responsibilities of providing medical care to its patients; or
(2) An individual, agency, or organization with which an intermediary or carrier has entered into a contract, agreement, purchase order or lease (or leases of real property) to obtain space, supplies, equipment, or services provided under the Medicare agreement.
(a)
(b)
A provider must notify the Secretary promptly if it, or its home office (in the case of a chain organization), employs or obtains the services of an individual who, at any time during the year preceding such employment, was employed in a managerial, accounting, auditing, or similar capacity by an agency or organization which currently serves, or at any time during the preceding year, served as a Medicare fiscal intermediary or carrier for the provider.
(a)
(1) Has an ownership or control interest in the provider or part B supplier;
(2) Is an agent or managing employee of the provider or part B supplier; or
(3) Is a person identified in paragraph (a)(1) or (a)(2) of this section and has been convicted of, or was an owner of, had a controlling interest in, or was a managing employee of a corporation that has been convicted of a criminal offense, subjected to any civil monetary penalty, or excluded from the programs for any activities related to involvement in the Medicare, Medicaid, title V or title XX social services program, since the inception of those programs.
(b)
(c)
A provider or part B supplier must submit to HCFA, within 35 days after the date of a written request, full and complete information on—
(a) The ownership of a subcontractor with which the provider or part B supplier has had, during the previous 12 months, business transactions in an aggregate amount in excess of $25,000;
(b) Any significant business transactions between the provider or part B supplier and any wholly owned supplier or between the provider or part B supplier and any subcontractor, during the 5 year period ending on the date of the request;
(c) The names of managing employees of the subcontractors;
(d) The identity of any other entities to which payment may be made by Medicare, which a person with an ownership or control interest or a managing employee in the subcontractor has or has had an ownership or control interest in the 3-year period preceding disclosure; and
(e) Any penalties, assessments, or exclusions under sections 1128, 1128A and 1128B of the Act incurred by the subcontractor, its owners, managing employees or those with a controlling interest in the subcontract.
(a)
(1) The name and address of each person with an ownership or control interest in the entity or in any subcontractor in which the entity has direct or indirect ownership interest totaling
(2) Whether any of the persons named, in compliance with paragraph (a)(1) of this section, is related to another as spouse, parent, child, or sibling.
(3) The name of any other disclosing entity in which any person with an ownership or control interest, or who is a managing employee in the reporting disclosing entity, has, or has had in the previous three-year period, an ownership or control interest or position as managing employee, and the nature of the relationship with the other disclosing entity. If any of these other disclosing entities has been convicted of a criminal offense or received a civil monetary or other administrative sanction related to participation in Medicare, Medicaid, title V (Maternal and Child Health) or title XX (Social Services) programs, such as penalties assessments and exclusions under sections 1128, 1128A or 1128B of the Act, the disclosing entity must also provide that information.
(b)
(2) Any disclosing entity that is not subject to periodic survey and certification must supply the information specified in paragraph (a) of this section to HCFA before entering into a contract or agreement with Medicare or before being issued or reissued a billing number as a part B supplier.
(3) A disclosing entity must furnish updated information to HCFA at intervals between recertification, or re-enrollment, or contract renewals, within 35 days of a written request. In the case of a part B supplier, the supplier must report also within 35 days, on its own initiative, any changes in the information it previously supplied.
(c)
(2) HCFA terminates any existing agreement or contract with, or withdraws a determination of eligibility for or (in the case of a part B supplier) revokes the billing number of, any disclosing entity that fails to comply with paragraph (b) of this section.
(d)
This subpart implements section 1861(v)(1)(I) of the Act, which requires, for Medicare payment under certain provider contracts, access by the Secretary, upon written request, and the Comptroller General, and their duly authorized representatives, to certain contracts for services and to books, documents, and records necessary to verify the costs of the services. The contracts affected are those between providers and their subcontractors, and between the subcontractors and organizations related to the subcontractor by control or common ownership. It also specifies the criteria by which HHS will determine whether to request access to books, documents, and records.
For purposes of this subpart—
(a)
(1) Between a provider and a subcontractor and, where subject to section 1861(v)(l)(I)(ii) of the Act, between a subcontractor and an organization related to the subcontractor;
(2) Entered into or renewed after December 5, 1980; and
(3) For services the cost or value of which is $10,000 or more over a 12-month period, including contracts for both goods and services in which the service component is worth $10,000 or more over a 12-month period.
(b)
(c)
HHS will generally request books, documents, and records from a subcontractor only if one of the following situations exists and the question cannot satisfactorily and efficiently be resolved without access to the books, documents, and records:
(a) HHS has reason to believe that the costs claimed for services of the subcontractor are excessive or inappropriate.
(b) There is insufficient information to judge the appropriateness of the costs.
(c) There is a written accusation with suitable evidence against the provider or subcontractor of kickbacks, bribes, rebates, or other illegal activities.
(d) There is evidence of a possible nondisclosure of the existence of a related organization.
(a)
(1) Reasonable identification of the books, documents, and records to which access is being requested.
(2) Identification of the contract or subcontract in which costs are being questioned as excessive or inappropriate.
(3) The reason that the appropriateness of the costs or value of the services of the subcontractor in question cannot be adequately or efficiently determined without access to the subcontractor's books and records.
(4) The authority in the statute and regulations for the access requested.
(5) To the extent possible, the identification of those individuals who will be visiting the subcontractor to obtain access to the books, documents, and records.
(6) The time and date of the scheduled visit.
(7) The name of the duly authorized representative of HHS to contact if there are any questions.
(b)
(2) If the subcontractor believes the request is inadequate because it does not fully meet one or more of the required elements in paragraph (a) of this section, the subcontractor must advise the requesting organization of the additional information needed.
(i) The subcontractor must notify the requesting organization within 20 days of the date of the request that it was improperly completed.
(ii) The subcontractor must make the books, documents, and records available within 20 days after the date of the requesting organization's response.
(3) If the subcontractor believes, for good cause, that the requested books, documents, and records cannot be made available as requested with the 30-day period under paragraph (b)(1) of this section, the subcontractor may request an extension of time within which to comply with the request from the requesting organization. The requesting organization may, at its discretion, grant the request for an extension, in whole or in part, for good cause shown.
(4) The subcontractor must make the books, documents, and records available during its regular business hours for inspection, audit, and reproduction.
(5) If HHS asks the subcontractor to reproduce books, documents, and records, HHS will pay the reasonable cost of reproduction. However, if the subcontractor reproduces books, documents, and records as a means of making them available, the subcontractor must bear the cost of the reproduction and no Medicare reimbursement will be made for that purpose.
(6) HHS reserves the right to examine the originals of any requested contracts, books, documents, and records, if they exist.
(c)
This subpart implements section 203 (b) of Public Law 104-191, which requires the establishment of a program
(a)
(b)
(2) HCFA does not give a reward for information relating to an individual or entity that, at the time the information is provided, is already the subject of a review or investigation by HCFA or its contractors, or the OIG, the Department of Justice, the Federal Bureau of Investigation, or any other Federal, State, or local law enforcement agency.
(c)
(2)
(ii) Any other Federal or State employee or contractor or an HHS grantee is not eligible for a reward under this section if the information submitted came to his or her knowledge in the course of his or her official duties.
(iii) An individual who illegally obtained the information he or she submitted is excluded from receiving a reward under this section.
(iv) An individual who participated in the sanctionable offense with respect to which payment would be made is excluded from receiving a reward under this section.
(d)
(2)
(ii) If the individual has become incapacitated or has died, an executor, administrator, or other legal representative may claim the reward on behalf of the individual or the individual's estate. The claimant must submit certified copies of the letters testamentary, letters of administration, or other similar evidence to show his or her authority to claim the reward. The claim must be filed within 1 year from the date on which HCFA first gave or attempted to give notice of the reward.
(e)
(2) The amount of a reward represents what HCFA considers to be adequate compensation in the particular case, not to exceed 10 percent of the overpayments recovered in the case or $1,000, whichever is less.
(3) If more than one person is eligible to receive a reward in a particular case, HCFA allocates the total reward amount (not to exceed 10 percent of the overpayments recovered in that case or $1,000, whichever is less) among the participants.
(4) HCFA bases rewards only on recovered Medicare payments and not on amounts collected as penalties or fines.
(5) HCFA makes payments as promptly as the circumstances of the case permit, but not until it has collected all Medicare overpayments, fines, and penalties.
(6) No person may make any offer or promise or otherwise bind HCFA or HHS with respect to the payment of any reward under this section or the amount of the reward.
(f)
(2) A participant interested in receiving a reward must provide his or her name, address, telephone number, and any other requested identifying information so that he or she may be contacted, if necessary, for additional information and, when applicable, for the payment of a reward upon resolution of the case.
(g)
(h)
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a) This part is based on the indicated provisions of the following sections of the Act:
1124—Requirements for disclosure of certain information.
1816 and 1842—Use of organizations and agencies in making Medicare payments to providers and suppliers of services.
(b) Section 421.118 is also based on 42 U.S.C.1395b-1(a)(1)(F), which authorizes demonstration projects involving intermediary agreements and carrier contracts.
(c) The provisions of this part apply to agreements with Part A (Hospital Insurance) intermediaries and contracts with Part B (Supplementary Medical Insurance) carriers. They also state that HCFA may perform certain functions directly or by contract. They specify criteria and standards to be used in selecting intermediaries and evaluating their performance, in assigning or reassigning a provider or providers to particular intermediaries, and in designating regional or national intermediaries for certain classes of providers. The provisions set forth the instances where there is the opportunity for a hearing for intermediaries and carriers affected by certain adverse actions. In some circumstances, the adversely affected intermediaries may request a judicial review of hearings decisions on—
(1) Assignment or reassignment of a provider or providers; or
(2) Designation of an intermediary or intermediaries to serve a class of providers.
(a)
(b)
(c)
(d)
(e)
(f)
An agreement between HCFA and an intermediary specifies the functions to be performed by the intermediary, which must include, but are not necessarily limited to, the following:
(a)
(i) Furnished to Medicare beneficiaries;
(ii) Covered under Medicare; and
(iii) In accordance with PRO determinations when they are services for which the PRO has assumed review responsibility under its contract with HCFA.
(2) The intermediary takes appropriate action to reject or adjust the claim if—
(i) The intermediary or the PRO determines that the services furnished or proposed to be furnished were not reasonable, not medically necessary, or not furnished in the most appropriate setting; or
(ii) The intermediary determines that the claim does not properly reflect the kind and amount of services furnished.
(b)
(c)
(d)
(1) Develop procedures relating to utilization practices;
(2) Make studies of the effectiveness of those procedures and recommend methods to improve them;
(3) Evaluate the results of utilization review activity; and
(4) Assist in the application of safeguards against unnecessary utilization of services.
(e)
(f)
(g)
(h)
(i)
(a) Except for hospices (which are covered under § 421.117), a provider may elect to receive payment for covered services furnished to Medicare beneficiaries—
(1) Directly from HCFA (subject to the provisions of paragraph (b) of this section); or
(2) Through an intermediary, when both HCFA and the intermediary consent.
(b) Whenever HCFA determines it appropriate, it may contract with any organization (including an intermediary with which HCFA has previously entered into an agreement under § 421.105 and § 421.110 or designated as a regional or alternative regional intermediary under § 421.117) for the purposes of making payments to any provider that does not elect to receive payment from an intermediary.
(a)
(2) The nomination is not binding on any member of the association if it notifies HCFA of its nonconcurrence with the nomination.
(3) The nomination must be made in writing, to HCFA, and must—
(i) Identify the proposed intermediary by giving the complete name and address;
(ii) Include, or furnish as an attachment, the name, address, and bed capacity (or patient care capacity in the case of home health agencies) of each member of the association;
(iii) List the members that have concurred in the nomination of the proposed intermediary; and
(iv) Be signed by an authorized representative of the association.
(b)
(1) Form a group of 2 or more providers for the specific purpose of nominating an intermediary, in accordance with provisions of paragraph (a) of this section;
(2) Elect to receive payments from a fiscal intermediary with which HCFA already has an agreement, if HCFA and the intermediary agree to it (see § 421.106); or
(3) Elect to receive payment from HCFA as provided in § 421.103.
(c) HCFA is not required to enter into an agreement with a proposed intermediary solely because it has been nominated.
(a) HCFA will send, to each member of a nominating association or group, written notice of a decision to enter into or not enter into an agreement with the nominated organization or agency.
(b) Any member of a group or association having more than one nominated intermediary approved by HCFA to act on its behalf must withdraw its nomination from all but one or exercise the option provided in § 421.103(a), subject to § 421.103(b), to receive payment directly from HCFA.
(a) Any provider may request a change of intermediary, or except for a hospice, that it be paid directly by HCFA, by—
(1) Giving HCFA written notice of its desire at least 120 days before the end of its current fiscal year; and
(2) Concurrently giving written notice to its intermediary.
(b) If HCFA finds the change is consistent with effective and efficient administration of the program and approves the request under paragraph (a) of this section, it will notify the provider, the outgoing intermediary, and the newly-elected intermediary (if any) that the change will be effective on the first day following the close of the fiscal year in which the request was filed.
Before entering into or renewing an intermediary agreement, HCFA will—
(a) Determine that to do so is consistent with the effective and efficient administration of the Medicare program;
(b) Review the performance of the intermediary as measured by the criteria (§ 421.120) and standards (§ 421.122); and
(c) Determine that the intermediary or prospective intermediary—
(1) Is willing and able to assist providers in the application of safeguards against unnecessary utilization of services;
(2) Meets all solvency and financial responsibility requirements imposed by the statutes and regulatory authorities of the State or States in which it, or any subcontractor performing some or all of its functions, would serve;
(3) Has the overall resources and experience to administer its responsibilities under the Medicare program and has an existing operational, statistical, and recordkeeping capacity to carry out the additional program responsibilities it proposes to assume. HCFA will presume that an intermediary or prospective intermediary meets this requirement if it has at least 5 years experience in paying for or reimbursing the cost of health services;
(4) Will serve a sufficient number of providers to permit a finding of effective and efficient administration. Under this criterion no intermediary or prospective intermediary shall be found to be not efficient or effective solely on the grounds that it serves only providers located in a single State;
(5) Has acted in good faith to achieve effective cooperation with the providers it will service and with the physicians and medical societies in the area;
(6) Has established a record of integrity and satisfactory service to the public; and
(7) Has an affirmative equal employment opportunity program that complies with the fair employment provisions of the Civil Rights Act of 1964 and Executive Order 11246, as amended.
(a) In order to accomplish the most effective and efficient administration of the Medicare program, determinations may be made by the Secretary with respect to the termination of an intermediary agreement, or by HCFA with respect to the—
(1) Renewal of an intermediary agreement (§ 421.110);
(2) Assignment or reassignment of providers to an intermediary (§ 421.114); or
(3) Designation of a regional or national intermediary to serve a class of providers (§ 421.116).
(b) When taking the actions listed in paragraph (a), the Secretary or HCFA will consider the performance of the individual intermediary in its Medicare operations using the factors contained in the performance criteria (§ 421.120) and performance standards (§ 421.122).
(c) In addition, when taking the actions listed in paragraph (a) of this section, the Secretary or HCFA may consider factors relating to—
(1) Consistency in the administration of program policy;
(2) Development of intermediary expertise in difficult areas of program administration;
(3) Individual capacity of available intermediaries to serve providers as it is affected by such considerations as—
(i) Program emphasis on the number or type of providers to be served; or
(ii) Changes in data processing technology;
(4) Overdependence of the program on the capacity of an intermediary to an extent that services could be interrupted;
(5) Economy in the delivery of intermediary services;
(6) Timeliness in the delivery of intermediary services;
(7) Duplication in the availability of intermediaries;
(8) Conflict of interest between an intermediary and provider; and
(9) Any additional pertinent factors.
HCFA may assign or reassign any provider to any intermediary if it determines that the assignment or reassignment will result in a more effective and efficient administration of the Medicare program. Before making this determination HCFA will consider—
(a) The preferences of the provider;
(b) The availability of an intermediary as specified in § 421.5(e); and
(c) Intermediary performance measured against the criteria and standards specified in §§ 421.120 and 421.122.
(a) After considering intermediary performance measured against the criteria and standards specified in §§ 421.120 and 421.122, HCFA may designate a particular intermediary to serve a class of providers nationwide or in any geographic area it defines. HCFA may make this designation if it determines that the designation will result in a greater degree of effectiveness and efficiency in the administration of the Medicare program than could be achieved by an assignment of providers to an intermediary preferred by the providers.
(b) No designation may be made until the affected providers and intermediaries are given an explanation and the intermediaries are advised of their right to a hearing and judicial review as specified in § 421.128. This provision does not apply to experimental contracts awarded under § 421.118.
(c) To designate an intermediary, HCFA may establish classes of providers on the basis of—
(1) The type of provider, for example, hospital, skilled nursing facility, home health agency; or
(2) Common characteristics.
(a) This section is based on section 1816(e)(4) of the Social Security Act, which requires the Secretary to designate regional intermediaries for home health agencies (HHAs) other than hospital-based HHAs but permits him or her to designate regional intermediaries for hospital-based HHAs only if the designation meets promulgated criteria concerning administrative efficiency and effectiveness; on section 1816(e)(5) of the Social Security Act, which requires the Secretary to designate intermediaries for hospices; and on section 1874 of the Act, which permits HCFA to contract with any organization for the purpose of making payments to any provider that elects to receive payment directly from HCFA.
(b) HCFA applies the following criteria to determine whether the assignment of hospital-based HHAs to designated regional intermediaries will result in the more effective and efficient administration of the Medicare program:
(1) Uniform interpretation of Medicare rules;
(2) Expertise in bill processing;
(3) Control of administrative costs;
(4) Ease of communication of program policy and issues to affected providers;
(5) Ease of data collection;
(6) Ease of HCFA's monitoring of intermediary performance; and
(7) Other criteria as the Secretary believes to be pertinent.
(c) Except as provided in paragraphs (e), (f), and (g) of this section, an HHA must receive payment through a regional intermediary designated by HCFA.
(d) Except as provided in paragraphs (f) through (h) of this section, a hospice must receive payment for covered services furnished to Medicare beneficiaries
(e) An HHA chain not desiring to receive payment from designated regional intermediaries may request service by one lead intermediary with the assistance of a local designated regional intermediary. Alternatively, the chain may request to be serviced by a single intermediary. A lead, local, or a single intermediary must be an organization that is a designated regional intermediary. Any request made under this paragraph is evaluated by HCFA in accordance with the criteria contained at § 421.106 of this subpart.
(f) An HHA or hospice not wishing to receive payment from a regional intermediary designated under paragraph (c) or (d) of this section may submit a request to the HCFA Regional Office to receive payment through an alternative regional intermediary designated by HCFA.
(g) Except as provided in paragraph (h) of this section, any request that an HHA or hospice may make to change from a designated regional intermediary to an alternative designated regional intermediary, in accordance with paragraph (f) of this section, is evaluated by HCFA in accordance with the criteria set forth at § 421.106(b) of this subpart and must be filed within the timeframe established at § 421.106(a) of this subpart.
(h)
Notwithstanding the provisions of §§ 421.103 and 421.104, HCFA may award a fixed price or performance incentive contract under the experimental authority contained in 42 U.S.C. 1395b-1 for performance of any of the functions specified in § 421.100. Action taken by HCFA under this paragraph is not subject to—
(a) The administrative and judicial review which would otherwise be available under § 421.128; or
(b) Performance criteria and performance standards review as provided for in §§ 421.120 and 421.122.
(a)
(1) Correct coverage and payment determinations;
(2) Responsiveness to beneficiary concerns; and
(3) Proper management of administrative funds.
(b)
(1) Nationwide intermediary experience;
(2) Changes in intermediary operations due to fiscal constraints; and
(3) HFCA's objectives in achieving better performance.
(c)
(a)
(b)
(1) Study the performance of intermediaries during the base period, and
(2) Consider the noncontrollable factors in developing performance standards.
(c)
(a) Failure by an intermediary to meet, or to demonstrate the capacity to meet, the criteria or standards specified in §§ 421.120 and 421.122 may be grounds for adverse action by the Secretary or by HCFA, such as reassignment of providers, offer of a short-term agreement, termination of a contract, or non-renewal of a contract. If an intermediary meets all criteria and standards in its overall performance, but does not meet them with respect to a specific provider or class of providers, HCFA may reassign that provider or class of providers to another intermediary in accordance with § 421.114.
(b) In addition, notwithstanding whether an intermediary meets the criteria and standards, if the cost incurred by the intermediary to meet its contractual requirements exceeds the amount which HCFA finds to be reasonable and adequate to meet the cost which must be incurred by an efficiently and economically operated intermediary, those high costs may also be grounds for adverse action.
(a)
(1) Giving written notice of its intention to HCFA and to the providers it services at least 180 days before its intended termination date; and
(2) Giving public notice of its intention by publishing a statement of the effective date of termination at least 60 days before that date. Publication must be in a newspaper of general circulation in each community served by the intermediary.
(b)
(i) The intermediary fails to comply with the requirements of this subpart;
(ii) The intermediary fails to meet the criteria or standards specified in §§ 421.120 and 421.122; or
(iii) HCFA has reassigned, under § 421.114 or § 421.116, all of the providers assigned to the intermediary.
(2) If the Secretary decides to terminate an agreement, he or she will offer the intermediary an opportunity for a hearing, in accordance with § 421.128.
(3) If the intermediary does not request a hearing, or if the hearing decision affirms the Secretary's decision, the Secretary will provide reasonable notice of the effective date of termination to—
(i) The intermediary;
(ii) The providers served by the intermediary; and
(iii) The general public.
(4) The providers served by the intermediary will be given the opportunity to nominate another intermediary, in accordance with § 421.104.
(a)
(1) Assignment or reassignment of providers to another intermediary.
(2) Designation of a national or regional intermediary to serve a class of providers.
(3) Termination of the agreement.
(b)
(c)
(d)
(e) As specified in § 421.118, contracts awarded under the experimental authority of HCFA are not subject to the provisions of this section.
(f)
A contract between HCFA and a carrier, other than a regional DMEPOS carrier, specifies the functions to be performed by the carrier which must include, but are not necessarily limited to, the following:
(a)
(i) Furnished to Medicare beneficiaries;
(ii) Covered under Medicare; and
(iii) In accordance with PRO determinations when they are services for which the PRO has assumed review responsibility under its contract with HCFA.
(2) The carrier takes appropriate action to reject or adjust the claim if—
(i) The carrier or the PRO determines that the services furnished or proposed to be furnished were not reasonable, not medically necessary, or not furnished in the most appropriate setting;
(ii) The carrier determines that the claim does not properly reflect the kind and amount of services furnished.
(b)
(c)
(1) Charges are reasonable and not higher than the charge for a comparable service furnished under comparable circumstances to the carrier's policy holders and subscribers; and
(2) The payment is based on one of the following—
(i) An itemized bill.
(ii) An assignment under the terms of which the reasonable charge is the full charge for the service, as specified in § 424.55 of this chapter.
(iii) If the beneficiary has died, the procedures set forth in §§ 424.62 and 424.64 of this chapter.
(d)
(e)
(f)
(2) The carrier must assist providers and other persons who furnish Medicare Part B services to—
(i) Develop procedures relating to utilization practices;
(ii) Make studies of the effectiveness of those procedures and devise methods to improve them;
(iii) Apply safeguards against unnecessary utilization of services; and
(iv) Develop procedures for utilization review, and establish groups to perform such reviews of providers to whom it makes Medicare Part B payments.
(g)
(h)
(i)
(2) The hearing procedures must be in accordance with part 405, subpart H, of this chapter (Review and Hearing Under the Supplementary Medical Insurance Program).
(j)
(a)
(1) The criteria measure and evaluate carrier performance of functional responsibilities such as—
(i) Accurate and timely payment determinations;
(ii) Responsiveness to beneficiary, physician, and supplier concerns; and
(iii) Proper management of administrative funds.
(2) The standards evaluate the specific requirements of each functional responsibility or criterion.
(b)
(1) Nationwide carrier experience;
(2) Changes in carrier operations due to fiscal constraints; and
(3) HCFA's objectives in achieving better performance.
(c)
Before entering into or renewing a carrier contract, HCFA determines that the carrier—
(a) Has the capacity to perform its contractual responsibilities effectively and efficiently;
(b) Has the financial responsibility and legal authority necessary to carry out its responsibilities; and
(c) Will be able to meet any other requirements HCFA considers pertinent, and, if designated a regional DMEPOS carrier, any special requirements for
(a) Failure by a carrier to meet, or demonstrate the capacity to meet, the criteria and standards specified in § 421.201 may be grounds for adverse action by the Secretary, such as contract termination or non-renewal.
(b) Notwithstanding whether or not a carrier meets the criteria and standards specified in § 421.201, if the cost incurred by the carrier to meet its contractual requirements exceeds the amount that HCFA finds to be reasonable and adequate to meet the cost which must be incurred by an efficiently and economically operated carrier, those high costs may also be grounds for adverse action.
(a)
(b)
(c)
(a)
(b)
(1) Durable medical equipment (and related supplies) as defined in section 1861(n) of the Act;
(2) Prosthetic devices (and related supplies) as described in section 1861(s)(8) of the Act, (including intraocular lenses and parenteral and enteral nutrients, supplies, and equipment, when furnished under the prosthetic device benefit);
(3) Orthotics and prosthetics (and related supplies) as described in section 1861(s)(9);
(4) Home dialysis supplies and equipment as described in section 1861(s)(2)(F);
(5) Surgical dressings and other devices as described in section 1861(s)(5);
(6) Immunosuppressive drugs as described in section 1861(s)(2)(J); and
(7) Other items or services which are designated by HCFA.
(c)
(d)
(1) Timeliness of claim processing;
(2) Cost per claim;
(3) Claim processing quality;
(4) Experience in claim processing, and in establishing local medical review policy; and
(5) Other criteria that HCFA believes to be pertinent.
(e)
(2) The regional carriers designated to process DMEPOS claims (as defined in paragraph (b) of this section) for all Medicare beneficiaries residing in their respective regions (as designated in paragraph (c) of this section), including those entitled under the Railroad Retirement Act, are the following:
(i) The Travelers Insurance Company (Region A), which will be processing claims in Pennsylvania.
(ii) Associated Insurance Companies, Inc.—AdminaStar (Region B), which will be processing claims in Indiana.
(iii) Blue Cross and Blue Shield of South Carolina (doing business as Palmetto Governments Benefits Administrators) (Region C), which will be processing claims in South Carolina.
(iv) Connecticut General Life Insurance Co. (a CIGNA Company) (Region D), which will be processing claims in Tennessee.
(3) Blue Cross and Blue Shield of South Carolina (Palmetto Government Benefits Administrators) has been selected to serve as the National Supplier Clearinghouse and the Statistical Analysis DME regional carrier.
(4) The contracts for the four DME regional carriers will be periodically recompeted. The National Supplier Clearinghouse and Statistical Analysis DME regional carrier do not constitute separate contracts, but are contract amendments to one of the DME regional carrier contracts. The National Supplier Clearinghouse and Statistical Analysis DME regional carrier contract amendments will also be periodically recompeted.
(f)
In accordance with this subpart C, the Railroad Retirement Board contracts with DMEPOS regional carriers designated by HCFA, as set forth in § 421.210(e)(2), for processing claims for Medicare-eligible Railroad Retirement beneficiaries, for the same contract period as the contracts entered into between HCFA and the DMEPOS regional carriers.
(a)
(1) Sets forth requirements and procedures for the issuance and recovery of advance payments to suppliers of Part B services and the rights and responsibilities of suppliers under the payment and recovery process.
(2) Does not limit HCFA's right to recover unadjusted advance payment balances.
(3) Does not affect suppliers' appeal rights under part 405, subpart H of this
(4) Does not apply to claims for Part B services furnished by suppliers that have in effect provider agreements under section 1866 of the Act and part 489 of this chapter, and are paid by intermediaries.
(b)
(c)
(1) The carrier is unable to process the claim timely.
(2) HCFA determines that the prompt payment interest provision specified in section 1842(c) of the Act is insufficient to make a claimant whole.
(3) HCFA approves, in writing to the carrier, the making of an advance payment by the carrier.
(d)
(1) Is delinquent in repaying a Medicare overpayment.
(2) Has been advised of being under active medical review or program integrity investigation.
(3) Has not submitted any claims.
(4) Has not accepted claims' assignments within the most recent 180-day period preceding the system malfunction.
(e)
(2) A supplier must accept an advance payment as a conditional payment subject to adjustment, recoupment, or both, based on an eventual determination of the actual amount due on the claim and subject to the provisions of this section.
(f)
(i) A carrier must calculate an advance payment for a particular claim at no more than 80 percent of the anticipated payment for that claim based upon the historical assigned claims payment data for claims paid the supplier.
(ii) “Historical data” are defined as a representative 90-day assigned claims payment trend within the most recent 180-day experience before the system malfunction.
(iii) Based on this amount and the number of claims pending for the supplier, the carrier must determine and issue advance payments.
(iv) If historical data are not available or if backlogged claims cannot be identified, the carrier must determine and issue advance payments based on some other methodology approved by HCFA.
(v) Advance payments can be made no more frequently than once every 2 weeks to a supplier.
(2) Generally, a supplier will not receive advance payments for more assigned claims than were paid, on a daily average, for the 90-day period before the system malfunction.
(3) A carrier must recover an advance payment by applying it against the amount due on the claim on which the advance was made. If the advance payment exceeds the Medicare payment amount, the carrier must apply the unadjusted balance of the advance payment against future Medicare payments due the supplier.
(4) In accordance with HCFA instructions, a carrier must maintain a financial system of data in accordance with the Statement of Federal Financial Accounting Standards for tracking each advance payment and its recoupment.
(g)
(2) If adjusting Medicare payments fails to recover an advance payment, HCFA may authorize the use of any other recoupment method available (for example, lump sum repayment or
(h)
(i)
(2) The carrier must notify the supplier receiving an advance payment about the amounts advanced and recouped and how any Medicare payment amounts have been adjusted.
(3) The supplier may request an administrative review from the carrier if it believes the carrier's reconciliation of the amounts advanced and recouped is incorrectly computed. If a review is requested, the carrier must provide a written explanation of the adjustments.
(4) The review and explanation described in paragraph (i)(3) of this section is separate from a supplier's right to appeal the amount and computation of benefits paid on the claim, as provided at part 405, subpart H of this chapter. The carrier's reconciliation of amounts advanced and recouped is not an initial determination as defined at § 405.803 of this chapter, and any written explanation of a reconciliation is not subject to further administrative review.
Secs. 1851 and 1855 of the Social Security Act.
(a)
(b)
As used in this part—
(1) The provider or provider network agrees to furnish for a specific M+C plan(s) specified services to the organization's M+C enrollees;
(2) The organization retains responsibilities for the services; and
(3) Medicare payment to the organization discharges the enrollee's obligation to pay for the services.
(1) Serious jeopardy to the health of the individual or, in the case of a pregnant woman, the health of the woman or her unborn child;
(2) Serious impairment to bodily functions; or
(3) Serious dysfunction of any bodily organ or part.
(1) Furnished by a provider qualified to furnish emergency services; and
(2) Needed to evaluate or stabilize an emergency medical condition.
(1) Is approved by the Internal Revenue Service to be a trustee or custodian of an individual retirement account (IRA); and
(2) Meets the requirements of § 422.262(b).
(1) Any individual who is engaged in the delivery of health care services in a State and is licensed or certified by the State to engage in that activity in the State; and
(2) Any entity that is engaged in the delivery of health care services in a State and is licensed or certified to deliver those services if such licensing or certification is required by State law or regulation.
(1) Is described in section 501(c)(8) of the Internal Revenue Code of 1986 and is exempt from taxation under section 501(a) of that Act; and
(2) Is affiliated with, carries out the tenets of, and shares a religious bond with, a church or convention or association of churches or an affiliated group of churches.
(1) As a result of an unforeseen illness, injury, or condition; and
(2) It was not reasonable given the circumstances to obtain the services through the organization offering the M+C plan.
(a)
(1)
(i) The network is approved by HCFA to ensure that all applicable requirements are met, including access and availability, service area, and quality.
(ii) Coordinated care plans may include mechanisms to control utilization, such as referrals from a gatekeeper for an enrollee to receive services within the plan, and financial arrangements that offer incentives to providers to furnish high quality and cost-effective care.
(iii) Coordinated care plans include health maintenance organizations (HMOs), provider-sponsored organizations (PSOs) and preferred provider organizations (PPOs), RFBs, and other network plans (except network MSA plans).
(2)
(A) Pays at least for the services described in § 422.101, after the enrollee has incurred countable expenses (as specified in the plan) equal in amount to the annual deductible specified in § 422.103(d); and
(B) Meets all other applicable requirements of this part.
(ii) An M+C MSA plan may be either a network plan or a non-network plan.
(A)
(B)
(iii)
(A) That is established in conjunction with an MSA plan for the purpose of paying the qualified expenses of the account holder; and
(B) Into which no deposits are made other than contributions by HCFA under the M+C program, or a trustee-to-trustee transfer or rollover from another M+C MSA of the same account holder, in accordance with the requirements of sections 138 and 220 of the Internal Revenue Code.
(3)
(i) Pays providers of services at a rate determined by the plan on a fee-for-service basis without placing the provider at financial risk;
(ii) Does not vary the rates for a provider based on the utilization of that provider's services; and
(iii) Does not restrict enrollees' choices among providers that are lawfully authorized to provide services and agree to accept the plan's terms and conditions of payment.
(b)
(a)
(b)
(i) Documentation of appropriate State licensure or State certification that the entity is able to offer health insurance or health benefits coverage that meets State-specified standards applicable to M+C plans, and is authorized by the State to accept prepaid capitation for providing, arranging, or paying for the comprehensive health
(ii) Federal waiver as described in subpart H of this part.
(2) The authorized individual must describe thoroughly how the entity and M+C plan meet, or will meet, the requirements described in this part.
(c)
(d)
(e)
(a)
(2) If the application is incomplete, HCFA notifies the entity and allows 60 days from the date of the notice for the entity to furnish the missing information.
(3) After evaluating all relevant information, HCFA determines whether the entity's application meets the applicable requirements of § 422.6.
(b)
(c)
(d)
(e)
(2) Within 60 days from the date of the notice, the entity may respond in writing to the issues or other matters that were the basis for HCFA's preliminary finding and may revise its application to remedy any defects HCFA identified.
(f)
(1) That the M+C organization does not meet the contract requirements under part C of title XVIII of the Act;
(2) The reasons why the M+C organization does not meet the contract requirements; and
(3) The M+C organization's right to request reconsideration in accordance with the procedures specified in subpart N of this part.
(g)
(2) If an entity no longer meets those requirements, HCFA terminates the contract in accordance with § 422.510.
(a)
(b)
(c)
(d)
(2)
(i) The estimated costs to be incurred by HCFA in that fiscal year to carry out the activities described in paragraph (b) of this section.
(ii) The amount authorized in the DHHS appropriation for the fiscal year.
(e)
A times B divided by C where—
A is the total of the estimated January payments to all organizations subject to assessment;
B is the nine-month (January through September) assessment period; and
C is the total assessment amount authorized for the particular fiscal year in accordance with paragraph (d)(2) of this section.
(2) HCFA determines each organization's pro rata share of the annual fee on the basis of that organization's calculated monthly payment amount during the nine consecutive months beginning with January. HCFA calculates each organization's monthly pro rata share by multiplying the established percentage rate by the total monthly calculated Medicare payment amount to the organization as recorded in HCFA's payment system on the first day of the month.
(3) HCFA deducts the organization's fee from the amount of Federal funds otherwise payable to the organization for that month under the M+C program.
(4) If assessments reach the amount authorized for the year before the end of September, HCFA discontinues assessment.
(5) If there are delays in determining the amount of the annual aggregate fees specified in paragraph (d)(2) of this section or the fee percentage rate specified in paragraph (e), HCFA may adjust the assessment time period and the fee percentage amount.
(a) An individual is eligible to elect an M+C plan if he or she—
(1) Is entitled to Medicare under Part A and enrolled in Part B (except that an individual entitled only to Part B and who is (or was) enrolled in an HMO or CMP with a risk contract under part 417 of this chapter on December 31, 1998 may continue to be enrolled in the M+C organization as an M+C plan enrollee);
(2) Has not been medically determined to have end-stage renal disease, except that an individual who develops end-stage renal disease while enrolled in an M+C plan or in a health plan offered by the M+C organization offering an M+C plan in the service area or continuation area in which the individual resides may continue to be enrolled in the M+C organization as an M+C plan enrollee;
(3) Resides in the service area of the plan, except that an individual who resides in a continuation area of an M+C plan while enrolled in a health plan offered by the M+C organization may continue to be enrolled in the M+C organization as an M+C plan enrollee;
(4) Completes and signs an election form and gives information required for enrollment; and
(5) Agrees to abide by the rules of the M+C organization after they are disclosed to him or her in connection with the election process.
(b) An M+C eligible individual may not be enrolled in more than one M+C plan at any given time.
(a)
(b)
(c)
(i) Obtain HCFA's approval of the continuation area, the marketing materials that describe the option, and the M+C organization's assurances of access to services.
(ii) Describe the option(s) in the member materials it offers and make the option available to all enrollees residing in the continuation area.
(2) An enrollee who moves out of the service area and into the geographic area designated as the continuation area has the choice of continuing enrollment or disenrolling from the plan.
(d)
(2)
(i) Through contracts with providers, or through direct payment of claims that satisfy the requirements in § 422.100(b)(2), to other providers who meet the requirement in subpart E of this part; and
(ii) By ensuring that the access requirements of § 422.112 are met.
(3)
(i) The cost-sharing amounts required in the M+C plan's service area (in which the enrollee no longer resides) if provided by contract providers;
(ii) The cost-sharing amounts required by the continuation area plan if provided through agreements with another M+C plan; or
(iii) The amount for which a beneficiary would be liable under original Medicare if noncontracting providers furnish the services.
(4)
(i) The ultimate responsibility for all appeals and grievance requirements remain with the organization that is receiving payment from HCFA; and
(ii) Organizations that require enrollees to give advance notice of intent to use the continuation of enrollment option, must stipulate the notification process in the marketing materials.
(e)
(a)
(1) If the number of individuals enrolled in M+C MSA plans has reached 390,000;
(2) Unless the individual provides assurances that are satisfactory to HCFA that he or she will reside in the United States for at least 183 days during the year for which the election is effective; or
(3) On or after January 1, 2003, unless the enrollment is the continuation of an enrollment in effect as of that date.
(b)
(c)
(d)
An RFB society that offers an M+C RFB plan may offer that plan only to members of the church, or convention or group of churches with which the society is affiliated.
(a)
(2) M+C organizations must accept elections during the open enrollment periods specified in § 422.62(a)(3), (a)(4), and (a)(5) if their M+C plans are open to new enrollees.
(b)
(2) If HCFA determines that an M+C plan offered by an M+C organization has a capacity limit, and the number of M+C eligible individuals who elect to enroll in that plan exceeds the limit, the M+C organization offering the plan may limit enrollment in the plan under this part, but only if it provides priority in acceptance as follows:
(i) First, for individuals who elected the plan prior to the HCFA determination that capacity has been exceeded, elections will be processed in chronological order by date of receipt of their election forms.
(ii) Then for other individuals in a manner that does not discriminate on the basis of any factor related to health as described in § 422.110.
(c)
(2) The M+C organization must file and retain election forms for the period specified in HCFA instructions.
(d)
(e)
(1) Each election form is dated as of the day it is received.
(2) Election forms are processed in chronological order, by date of receipt.
(3) The M+C organization gives the beneficiary prompt written notice of acceptance or denial in a format specified by HCFA.
(4) In a format specified by HCFA, a notice of acceptance—
(i) Informs the beneficiary of the date on which enrollment will be effective under § 422.68; and
(ii) If the M+C plan is enrolled to capacity, explains the procedures that will be followed when vacancies occur.
(5) A notice of denial explains the reasons for denial in a format specified by HCFA.
(6) Within 30 days from receipt of the election form (or from the date a vacancy occurs for an individual who was accepted for future enrollment), the M+C organization transmits the information necessary for HCFA to add the beneficiary to its records as an enrollee of the M+C organization.
(f)
(2) In order to obtain the effective date described in paragraph (f)(1) of this section, the beneficiary must certify that, at the time of enrollment in the M+C organization, he or she received the disclosure statement specified in § 422.111.
(3) The M+C organization must submit the enrollment within 30 days from receipt of the election form from the employer.
(a)
(2)
(ii) During the annual election period, an individual eligible to enroll in an M+C plan may change his or her election from an M+C plan to original Medicare or to a different M+C plan, or from original Medicare to an M+C plan.
(3)
(4)
(ii)
(iii) The limitation to one election or change in paragraphs (a)(4)(i) and (a)(4)(ii) of this section does not apply to elections or changes made during the annual election period specified in (a)(2) of this section or during a special enrollment period specified in paragraph (b) of this section.
(5)
(ii)
(iii) The limitation to one election or change in paragraphs (a)(5)(i) and (a)(5)(ii) of this section does not apply to elections or changes made during the annual election period specified in paragraph (a)(2) of this section or during a special election period specified in paragraph (b) of this section.
(b)
(1) HCFA has terminated the organization's contract for that plan or the organization has terminated or discontinued offering the plan in the service area or continuation area in which the individual resides.
(2) The individual is not eligible to remain enrolled in the plan because of a change in his or her place of residence to a location out of the service area or continuation area or other change in circumstances as determined by HCFA but not including terminations resulting from a failure to make timely payment of an M+C monthly or supplemental beneficiary premium, or from disruptive behavior.
(3) The individual demonstrates to HCFA, in accordance with guidelines issued by HCFA, that—
(i) The organization offering the plan substantially violated a material provision of its contract under this part in relation to the individual, including, but not limited to the following:
(A) Failure to provide the beneficiary on a timely basis medically necessary services for which benefits are available under the plan.
(B) Failure to provide medical services in accordance with applicable quality standards; or
(ii) The organization (or its agent, representative, or plan provider) materially misrepresented the plan's provisions in marketing the plan to the individual.
(4) The individual meets such other exceptional conditions as HCFA may provide.
(c)
(d)
(2)
(A) November 1998;
(B) An annual election period; or
(C) The special election period described in paragraph (b) of this section.
(ii)
(a)
(b)
(1) At least 15 days before each annual election period, to each individual eligible to elect an M+C plan; and
(2) To the extent practicable, not later than 30 days before his or her initial coverage election period to each individual who will become eligible to elect an M+C plan.
(c)
(ii) Beneficiary cost sharing, such as deductibles, coinsurance, and copayment amounts.
(iii) Any beneficiary liability for balance billing.
(2)
(3)
(4)
(5)
(6)
(7)
(ii) Any beneficiary cost sharing.
(iii) Any maximum limitations on out-of-pocket expenses.
(iv) In the case of an M+C MSA plan, the amount of the annual MSA deposit and the differences in cost-sharing, enrollee premiums, and balance billing, as compared to M+C plans.
(v) In the case of a M+C private fee-for-service plan, differences in cost-sharing, enrollee premiums, and balance billing, as compared to M+C plans.
(vi) The extent to which an enrollee may obtain benefits through out-of-network health care providers.
(vii) The types of providers that participate in the plan's network and the extent to which an enrollee may select among those providers.
(viii) The coverage of emergency and urgently needed services.
(8)
(ii) The M+C monthly supplemental beneficiary premium.
(9)
(10)
(i) Disenrollment rates for Medicare enrollees for the 2 previous years, excluding disenrollment due to death or moving outside the plan's service area, calculated according to HCFA guidelines.
(ii) Medicare enrollee satisfaction.
(iii) Health outcomes.
(iv) Plan-level appeal data.
(v) The recent record of plan compliance with the requirements of this part, as determined by the Secretary.
(vi) Other performance indicators.
(11)
(d)
(e)
(a)
(b)
(i) Elect a different M+C plan by filing the appropriate election form with the M+C organization or through other mechanisms as determined by HCFA.
(ii) Submit a signed and dated request for disenrollment to the M+C organization in the form and manner prescribed by HCFA or file the appropriate disenrollment form through other mechanisms as determined by HCFA.
(2)
(3)
(i) Submit a disenrollment notice to HCFA within 15 days of receipt;
(ii) Provide the enrollee with a copy of the request for disenrollment; and
(iii) In the case of a plan where lock-in applies, also provide the enrollee with a statement explaining that he or she—
(A) Remains enrolled until the effective date of disenrollment; and
(B) Until that date, neither the M+C organization nor HCFA pays for services not provided or arranged for by the M+C plan in which the enrollee is enrolled; and
(iv) File and retain disenrollment requests for the period specified in HCFA instructions.
(4)
(5)
(i) There never was a legally valid enrollment.
(ii) A valid request for disenrollment was properly made but not processed or acted upon.
(c)
(d)
(2)
(3)
(4)
(5)
(6)
(e)
(1) The individual changes the election under this section.
(2) The elected M+C plan is discontinued or no longer serves the service area in which the individual resides, and the organization does not offer or the individual does not elect the option of continuing enrollment, as provided in § 422.54.
(f)
(2) The M+C organization must submit a disenrollment notice to NCFA within 15 days of receipt of the notice from the employer.
(a)
(b)
(c)
(d)
(e)
(a)
(1) Disenroll an individual from any M+C plan it offers; or
(2) Orally or in writing, or by any action or inaction, request or encourage an individual to disenroll.
(b)
(i) Any monthly basic and supplementary beneficiary premiums are not paid on a timely basis, subject to the grace period for late payment established under paragraph (d)(1) of this section.
(ii) The individual has engaged in disruptive behaviors specified at paragraph (d)(2) of this section.
(iii) The individual provides fraudulent information on his or her election form or permits abuse of his or her enrollment card as specified in paragraph (d)(3) of this section.
(2)
(i) The individual no longer resides in the M+C plan's service area as specified in paragraph (d)(4) of this section, and optional continued enrollment has not been offered or elected pursuant to § 422.54.
(ii) The individual loses entitlement to Part A or Part B benefits as described in paragraph (d)(5) of this section.
(iii) Death of the individual as described in paragraph (d)(6) of this section.
(3)
(c)
(1) The notice must be mailed to the individual before submission of the disenrollment notice to HCFA.
(2) The notice must include an explanation of the individual's right to a hearing under the M+C organization's grievance procedures.
(d)
(i) Makes a reasonable effort to collect unpaid premium amounts by sending a written notice of nonpayment to the enrollee within 20 days after the date that the delinquent charges were due—
(A) Alerting the individual that the premiums are delinquent;
(B) Providing the individual with an explanation of the disenrollment procedures and any lock-in requirements of the M+C plan; and
(C) Advising that failure to pay the premiums within the 90-day grace period will result in termination of M+C coverage;
(ii) Only disenrolls a Medicare enrollee when the organization has not received payment within 90 days after the date it has sent the notice of nonpayment to the enrollee; and
(iii) Gives the individual a written notice of disenrollment that meets the requirements set forth in paragraph (c) of this section.
(2)
(ii)
(iii)
(iv)
(v)
(B) HCFA makes the decision within 20 working days after receipt of the documentation and notifies the M+C organization within 5 working days after making its decision.
(vi)
(3)
(A) Knowingly provides, on the election form, fraudulent information that materially affects the individual's eligibility to enroll in the M+C plan; or
(B) Intentionally permits others to use his or her enrollment card to obtain services under the M+C plan.
(ii)
(iii)
(4)
(ii)
(5)
(6)
(7)
(ii) The notice must be sent before the effective date of the plan termination or area reduction.
(e)
(2)
(ii) An individual who fails to make an election during the special election period is deemed to have elected original Medicare.
(a)
(1) At least 45 days before the date of distribution the M+C organization has submitted the material or form to HCFA for review under the guidelines in paragraph (c); and
(2) HCFA has not disapproved the distribution of the material or form.
(b)
(1) Promote the M+C organization, or any M+C plan offered by the M+C organization;
(2) Inform Medicare beneficiaries that they may enroll, or remain enrolled in, an M+C plan offered by the M+C organization;
(3) Explain the benefits of enrollment in an M+C plan, or rules that apply to enrollees;
(4) Explain how Medicare services are covered under an M+C plan, including conditions that apply to such coverage;
(5) Examples of marketing materials include, but are not limited to:
(i) General audience materials such as general circulation brochures, newspapers, magazines, television, radio, billboards, yellow pages, or the internet.
(ii) Marketing representative materials such as scripts or outlines for telemarketing or other presentations.
(iii) Presentation materials such as slides and charts.
(iv) Promotional materials such as brochures or leaflets, including materials for circulation by third parties (
(v) Membership communication materials such as membership rules, subscriber agreements (evidence of coverage), member handbooks, and newsletters.
(vi) Letters to members about contractual changes; changes in providers, premiums, benefits, plan procedures
(vii) Membership or claims processing activities (
(c)
(1) Provide, in a format (and, where appropriate, print size), and using
(i) Adequate written description of rules (including any limitations on the providers from whom services can be obtained), procedures, basic benefits and services, and fees and other charges.
(ii) Adequate written description of any supplemental benefits and services.
(iii) Adequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each.
(iv) Any other information necessary to enable beneficiaries to make an informed decision about enrollment.
(2) Notify the general public of its enrollment period (whether time-limited or continuous) in an appropriate manner, through appropriate media, throughout its service and continuation area.
(3) Include in the written materials notice that the M+C organization is authorized by law to refuse to renew its contract with HCFA, that HCFA also may refuse to renew the contract, and that termination or non-renewal may result in termination of the beneficiary's enrollment in the plan.
(4) Contain no statements that are inaccurate or misleading or otherwise make misrepresentations.
(5) For markets with a significant non-English speaking population, provide materials in the language of these individuals.
(d)
(e)
(i) Provide for cash or other monetary rebates as an inducement for enrollment or otherwise. This does not prohibit explanation of any legitimate benefits the beneficiary might obtain as an enrollee of the M+C plan, such as eligibility to enroll in a supplemental benefit plan that covers deductibles and coinsurance, or preventive services.
(ii) Engage in any discriminatory activity such as, for example, attempts to recruit Medicare beneficiaries from higher income areas without making comparable efforts to enroll Medicare beneficiaries from lower income areas.
(iii) Solicit door-to-door for Medicare beneficiaries.
(iv) Engage in activities that could mislead or confuse Medicare beneficiaries, or misrepresent the M+C organization. The M+C organization may not claim that it is recommended or endorsed by HCFA or Medicare or that HCFA or Medicare recommends that the beneficiary enroll in the M+C plan. It may, however, explain that the organization is approved for participation in Medicare.
(v) Distribute marketing materials for which, before expiration of the 45-day period, the M+C organization receives from HCFA written notice of disapproval because it is inaccurate or misleading, or misrepresents the M+C organization, its marketing representatives, or HCFA.
(2) In its marketing, the M+C organization must:
(i) Demonstrate to HCFA's satisfaction that marketing resources are allocated to marketing to the disabled Medicare population as well as beneficiaries age 65 and over.
(ii) Establish and maintain a system for confirming that enrolled beneficiaries have in fact, enrolled in the M+C plan, and understand the rules applicable under the plan.
(f)
(a)
(b)
(i) Emergency services as defined in § 422.2.
(ii) Urgently needed services as defined § 422.2.
(iii) Renal dialysis services provided while the enrollee was temporarily outside the plan's service area.
(iv) Post-stabilization care services that were—
(A) Pre-approved by the organization; or
(B) Were not pre-approved by the organization because the organization did not respond to the provider of post-stabilization care services' request for pre-approval within 1 hour after being requested to approve such care, or could not be contacted for pre-approval.
(v) Services for which coverage has been denied by the M+C organization and found (upon appeal under subpart M of this part) to be services the enrollee was entitled to have furnished, or paid for, by the M+C organization.
(2) An M+C plan (other than an M+C MSA plan) offered by an M+C organization satisfies paragraph (a) of this section with respect to benefits for services furnished by a noncontracting provider if that M+C plan provides payment in an amount the provider would have received under original Medicare (including balance billing permitted under Medicare Part A and Part B).
(c)
(1) Basic benefits as defined in § 422.2.
(2) Supplemental benefits, which consist of—
(i) Mandatory supplemental benefits as defined in § 422.2; and
(ii) Optional supplemental benefits as defined in § 422.2.
(d)
(1) To all Medicare beneficiaries residing in the service area of the M+C plan;
(2) At a uniform premium; and
(3) With a uniform level of cost-sharing, as defined in § 422.2.
(e)
(f)
(g)
(1) Promote discrimination;
(2) Discourage enrollment;
(3) Steer specific subsets of Medicare beneficiaries to particular M+C plans; or
(4) Inhibit access to services.
(h)
(2) M+C organizations may not impose cost-sharing for influenza vaccine and pneumococcal vaccine.
(i)
(j)
Except as specified in § 422.264 (for entitlement that begins or ends during a hospital stay) and § 422.266 (with respect to hospice care), each M+C organization must—
(a) Provide coverage of, through the provision of or payment for, all services that are covered by Part A and Part B of Medicare (if the enrollee is entitled to benefits under both parts) or by Medicare Part B (if entitled only under Part B) and that are available to beneficiaries residing in the geographic area in which services are covered under the M+C plan (or to Part A and Part B services obtained outside the geographic area if it is common practice to refer patients to sources outside that geographic area); and
(b) Comply with—
(1) HCFA's national coverage decisions; and
(2) Written coverage decisions of local carriers and intermediaries with jurisdiction for claims in the geographic area in which services are covered under the M+C plan.
(a)
(2) If the M+C organization imposes mandatory supplemental benefits, it must impose them on all Medicare beneficiaries enrolled in the M+C plan.
(3) HCFA approves mandatory supplemental benefits if it determines that imposition of the mandatory benefits will not substantially discourage Medicare beneficiaries from enrolling in the M+C plan.
(b)
(c)
(a)
(b)
(c)
(1) 100 percent of the expense of the services.
(2) 100 percent of the amounts that would have been paid for the services under original Medicare, including amounts that would be paid by the enrollee as deductibles and coinsurance.
(d)
(1) For contract year 1999, may not exceed $6,000; and
(2) For subsequent contract years may not exceed the deductible for the preceding contract year, increased by the national per capita growth percentage determined under § 422.252(b).
(a) An M+C organization offering an M+C MSA plan may not provide supplemental benefits that cover expenses that count towards the deductible specified in § 422.103(d).
(b) In applying the limitation of paragraph (a) of this section, the following kinds of policies are not considered as covering the deductible:
(1) A policy that provides coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision care, or long-term care.
(2) A policy of insurance in which substantially all of the coverage relates to liabilities incurred under workers' compensation laws, tort liabilities, liabilities relating to use or ownership of property, and any other similar liabilities that HCFA may specify by regulation.
(3) A policy of insurance that provides coverage for a specified disease or illness or pays a fixed amount per day (or other period) of hospitalization.
(a) A POS benefit is an option that an M+C organization may offer in an M+C coordinated care plan or network M+C MSA plan to provide enrollees with additional choice in obtaining specified health care services from individuals or entities that do not have a contract with the M+C organization to provide service through the M+C coordinated care plan or network M+C MSA plan offering the POS option. The plan may offer a POS option—
(1) Under a coordinated care plan only as an additional benefit as described in § 422.312;
(2) Under a coordinated care plan only as a mandatory supplemental benefit as described in § 422.102(a); or
(3) Under a coordinated care plan or network MSA plan as an optional supplemental benefit as described in § 422.102(b).
(b)
(c)
(d)
(1)
(2)
(i) Any premiums and cost-sharing for which the enrollee is responsible;
(ii) Annual limits on benefits and on out-of-pocket expenditures;
(iii) Potential financial responsibility for services for which the plan denies payment because they were not covered under the POS benefit, or exceeded the dollar limit for the benefit; and
(iv) The annual maximum out-of-pocket expense an enrollee could incur.
(e)
(f)
An M+C organization may negotiate with an employer group to provide benefits to members of the employer group who are enrolled in an M+C plan offered by the organization. While these negotiated employer group benefits may be designed to complement the benefits available to Medicare beneficiaries enrolled in the M+C plan, they are offered by the employer group independently as the product of private negotiation. Examples of such employer-benefits include the following:
(a) Reductions in the portion of the premium that the M+C organization charges to the beneficiary.
(b) Reductions in portion of other cost sharing amounts the M+C organization charges to the beneficiary.
(c) The addition of benefits that may require additional premium and cost sharing. The addition of benefits and the charges for those benefits are not subject to HCFA review or approval.
(a)
(b)
(1) Identify payers that are primary to Medicare under section 1862(b) of the Act and part 411 of this chapter;
(2) Determine the amounts payable by those payers; and
(3) Coordinate its benefits to Medicare enrollees with the benefits of the primary payers.
(c)
(d)
(1) The insurance carrier, the employer, or any other entity that is liable for payment for the services under section 1862(b) of the Act and part 411 of this chapter.
(2) The Medicare enrollee, to the extent that he or she has been paid by the carrier, employer, or entity for covered medical expenses.
(e)
(a) If HCFA determines and announces that an NCD meets the criteria for “significant cost” described in paragraph (c) of this section, an M+C organization is not required to assume risk for the costs of that service until the contract year for which the annual M+C capitation rate is determined on a basis that includes the cost of the NCD service.
(b) The M+C organization must furnish, arrange or pay for an NCD “significant cost” service prior to the adjustment of the annual M+C capitation rate. The following rules apply to such services:
(1) Medicare payment for the service is:
(i) In addition to the capitation payment to the M+C organization; and
(ii) Made directly by the fiscal intermediary and carrier to the M+C organization in accordance with original Medicare payment rules, methods, and requirements.
(2) NCD costs for which HCFA intermediaries and carriers will not make payment and are the responsibility of the M+C organization are—
(i) Services necessary to diagnose a condition covered by the NCD;
(ii) Most services furnished as follow-up care to the NCD service;
(iii) Any service that is already a Medicare-covered service and included in the annual M+C capitation rate; and
(iv) Any service, including the costs of the NCD service itself, to the extent the M+C organization is already obligated to cover it as an additional benefit under § 422.312 or supplemental benefit under § 422.102.
(3) NCD costs for which HCFA intermediaries and carriers make payment are—
(i) Costs relating directly to the provision of services related to the NCD that were noncovered services prior to the issuance of the NCD; and
(ii) A service that is not included in the M+C per capita payment rate.
(4) If the M+C organization does not provide or arrange for the service consistent with HCFA's NCD, enrollees may obtain the services through qualified providers not under contract to the M+C organization, and the organization will pay for the services consistent with § 422.109(c).
(5) Beneficiaries are liable for Part A deductible and any applicable coinsurance amounts.
(c) The term “significant cost” as it relates to a particular NCD means either of the following:
(1) The average cost of furnishing a single service exceeds a cost threshold that—
(i) For calendar years 1998 and 1999, is $100,000;
(ii) For calendar year 2000 and subsequent calendar years, is the preceding year's dollar threshold adjusted to reflect the national per capita growth percentage described in § 422.254(b).
(2) The estimated cost of all of Medicare services furnished nationwide as a result of a particular NCD represents at least 0.1 percent of the national standardized annual capitation rate (see § 422.254(f)), multiplied by the total number of Medicare beneficiaries nationwide for the applicable calendar year.
(a)
(1) Medical condition, including mental as well as physical illness.
(2) Claims experience.
(3) Receipt of health care.
(4) Medical history.
(5) Genetic information.
(6) Evidence of insurability, including conditions arising out of acts of domestic violence.
(7) Disability.
(b)
(c) Plans are required to observe the provisions of the Civil Rights Act, Age Discrimination Act, Rehabilitation Act of 1973, and Americans with Disabilities Act (see § 422.502(h)).
(a)
(1) To each enrollee electing an M+C plan it offers;
(2) In clear, accurate, and standardized form; and
(3) At the time of enrollment and at least annually thereafter.
(b)
(1)
(2)
(i) The benefits offered under original Medicare, including the content specified in § 422.64(c);
(ii) For an M+C MSA plan, the benefits under other types of M+C plans; and
(iii) The availability of the Medicare hospice option and any approved hospices in the service area, including those the M+C organization owns, controls, or has a financial interest in.
(3)
(4)
(5)
(i) Explanation of what constitutes an emergency, referencing the definitions of emergency services and emergency medical condition at § 422.2;
(ii) The appropriate use of emergency services, stating that prior authorization cannot be required;
(iii) The process and procedures for obtaining emergency services, including use of the 911 telephone system or its local equivalent; and
(iv) The locations where emergency care can be obtained and other locations at which contracting physicians and hospitals provide emergency services and post-stabilization care included in the M+C plan.
(6)
(7)
(8)
(9)
(10)
(c)
(1) The information required under § 422.64(c).
(2) The procedures the organization uses to control utilization of services and expenditures.
(3) The number of disputes, and the disposition in the aggregate, in a manner and form described by the Secretary. Such disputes shall be categorized as
(i) Grievances according to § 422.564; and
(ii) Appeals according to § 422.578 et. seq.
(4) A summary description of the method of compensation for physicians.
(5) Financial condition of the M+C organization, including the most recently audited information regarding, at least, a description of the financial condition of the M+C organization offering the plan.
(d)
(1) Submit the changes for HCFA review under the procedures of § 422.80.
(2) For changes that take effect on January 1, notify all enrollees by the previous October 15.
(3) For all other changes, notify all enrollees at least 30 days before the intended effective date of the changes.
(e)
(a)
(1)
(2)
(3)
(4)
(i) Identify individuals with complex or serious medical conditions;
(ii) Assess those conditions, and use medical procedures to diagnose and monitor them on an ongoing basis; and
(iii) Establish and implement a treatment plan that—
(A) Is appropriate to those conditions;
(B) Includes an adequate number of direct access visits to specialists consistent with the treatment plan;
(C) Is time-specific and updated periodically; and
(D) Ensures adequate coordination of care among providers.
(5)
(6)
(7)
(i) Timeliness of access to care and member services that meet or exceed standards established by HCFA. Timely access to care and member services within a plan's provider network must be continuously monitored to ensure compliance with these standards, and the M+C organization must take corrective action as necessary.
(ii) Policies and procedures (coverage rules, practice guidelines, payment policies, and utilization management) that allow for individual medical necessity determinations.
(iii) Provider consideration of beneficiary input into the provider's proposed treatment plan.
(8)
(i) The hours of operation of its M+C plan providers are convenient to the population served under the plan and do not discriminate against Medicare enrollees; and
(ii) Plan services are available 24 hours a day, 7 days a week, when medically necessary.
(9)
(ii) Provide coverage for emergency and urgent care services in accordance with paragraph (c) of this section.
(b)
(1) Policies that specify under what circumstances services are coordinated and the methods for coordination;
(2) Offering to provide each enrollee with an ongoing source of primary care and providing a primary care source to each enrollee who accepts the offer;
(3) Programs for coordination of plan services with community and social services generally available through contracting or noncontracting providers in the area served by the M+C plan, including nursing home and community-based services; and
(4) Procedures to ensure that the M+C organization and its provider network have the information required for effective and continuous patient care and quality review, including procedures to ensure that—
(i) The M+C organization makes a “best-effort” attempt to conduct an initial assessment of each enrollee's health care needs, including following up on unsuccessful attempts to contact an enrollee, within 90 days of the effective date of enrollment;
(ii) Each provider, supplier, and practitioner furnishing services to enrollees maintains an enrollee health record in accordance with standards established by the M+C organization, taking into account professional standards; and
(iii) There is appropriate and confidential exchange of information among provider network components.
(5) Procedures to ensure that enrollees are informed of specific health care needs that require follow-up and receive, as appropriate, training in self-care and other measures they may take to promote their own health; and
(6) Systems to address barriers to enrollee compliance with prescribed treatments or regimens.
(c)
(i) Regardless of whether the services are obtained within or outside the M+C organization; and
(ii) Without required prior authorization.
(2)
(i) That is an emergency medical condition as defined in § 422.2; or
(ii) For which a plan provider or other M+C organization representative instructs an enrollee to seek emergency services within or outside the plan.
(3)
(4)
(a)
(2) HCFA finds that an M+C organization meets the requirement in paragraph (a)(1) of this section if, with respect to a particular category of health care providers, the M+C organization has—
(i) Payment rates that are not less than the rates that apply under original Medicare for the provider in question;
(ii) Contracts or agreements with a sufficient number and range of providers to furnish the services covered under the M+C private fee-for-service plan; or
(iii) A combination of paragraphs (a)(2)(i) and (a)(2)(ii) of this section.
(b)
For any medical records or other health and enrollment information it maintains with respect to enrollees, an M+C organization must establish procedures to do the following:
(a) Safeguard the privacy of any information that identifies a particular enrollee. Information from, or copies
(b) Maintain the records and information in an accurate and timely manner.
(c) Ensure timely access by enrollees to the records and information that pertain to them.
(d) Abide by all Federal and State laws regarding confidentiality and disclosure for mental health records, medical records, other health information, and enrollee information.
(a) Each M+C organization must maintain written policies and procedures that meet the requirements for advance directives, as set forth in subpart I of part 489 of this chapter. For purposes of this part,
(b) An M+C organization must maintain written policies and procedures concerning advance directives with respect to all adult individuals receiving medical care by or through the M+C organization.
(1) An M+C organization must provide written information to those individuals with respect to the following:
(i) Their rights under the law of the State in which the organization furnishes services (whether statutory or recognized by the courts of the State) to make decisions concerning their medical care, including the right to accept or refuse medical or surgical treatment and the right to formulate advance directives. Providers may contract with other entities to furnish this information but remain legally responsible for ensuring that the requirements of this section are met. The information must reflect changes in State law as soon as possible, but no later than 90 days after the effective date of the State law.
(ii) The M+C organization's written policies respecting the implementation of those rights, including a clear and precise statement of limitation if the M+C organization cannot implement an advance directive as a matter of conscience. At a minimum, this statement must do the following:
(A) Clarify any differences between institution-wide conscientious objections and those that may be raised by individual physicians.
(B) Identify the state legal authority permitting such objection.
(C) Describe the range of medical conditions or procedures affected by the conscience objection.
(D) Provide the information specified in paragraph (a)(1) of this section to each enrollee at the time of initial enrollment. If an enrollee is incapacitated at the time of initial enrollment and is unable to receive information (due to the incapacitating condition or a mental disorder) or articulate whether or not he or she has executed an advance directive, the M+C organization may give advance directive information to the enrollee's family or surrogate in the same manner that it issues other materials about policies and procedures to the family of the incapacitated enrollee or to a surrogate or other concerned persons in accordance with State law. The M+C organization is not relieved of its obligation to provide this information to the enrollee once he or she is no longer incapacitated or unable to receive such information. Follow-up procedures must be in place to ensure that the information is given to the individual directly at the appropriate time.
(E) Document in a prominent part of the individual's current medical record whether or not the individual has executed an advance directive.
(F) Not condition the provision of care or otherwise discriminate against an individual based on whether or not the individual has executed an advance directive.
(G) Ensure compliance with requirements of State law (whether statutory or recognized by the courts of the State) regarding advance directives.
(H) Provide for education of staff concerning its policies and procedures on advance directives.
(I) Provide for community education regarding advance directives that may include material required in paragraph (a)(1)(i) of this section, either directly
(2) The M+C organization—
(i) Is not required to provide care that conflicts with an advance directive; and
(ii) Is not required to implement an advance directive if, as a matter of conscience, the M+C organization cannot implement an advance directive and State law allows any health care provider or any agent of the provider to conscientiously object.
(3) The M+C organization must inform individuals that complaints concerning noncompliance with the advance directive requirements may be filed with the State survey and certification agency.
Enrollees of M+C organizations are entitled to the protections specified in § 422.502(g).
(a)
(b)
(1) Meet the requirements in paragraph (c)(1) of this section concerning performance measurement and reporting. With respect to an M+C coordinated care plan, an organization must also meet the requirements of paragraph (c)(2) of this section concerning the achievement of minimum performance levels. The requirements of paragraph (c)(2) of this section do not apply with respect to an M+C MSA plan.
(2) Conduct performance improvement projects as described in paragraph (d) of this section. These projects must achieve, through ongoing measurement and intervention, demonstrable and sustained improvement in significant aspects of clinical care and nonclinical care areas that can be expected to have a favorable effect on health outcomes and enrollee satisfaction.
(3) In processing requests for initial or continued authorization of services, follow written policies and procedures that reflect current standards of medical practice.
(4) Have in effect mechanisms to detect both underutilization and overutilization of services.
(5) Make available to HCFA information on quality and outcomes measures that will enable beneficiaries to compare health coverage options and select among them, as provided in § 422.64(c)(10).
(c)
(1) Measure performance under the plan, using standard measures required by HCFA, and report its performance to HCFA. The standard measures may be specified in uniform data collection and reporting instruments required by HCFA, and will relate to—
(i) Clinical areas including effectiveness of care, enrollee perception of care, and use of services; and
(ii) Nonclinical areas including access to and availability of services, appeals and grievances, and organizational characteristics.
(2) Achieve any minimum performance levels that HCFA establishes locally, regionally, or nationally with respect to the standard measures.
(i) In establishing minimum performance levels, HCFA considers historical plan and original Medicare performance data and trends.
(ii) HCFA establishes the minimum performance levels prospectively upon contract initiation and renewal.
(iii) The organization must meet the minimum performance levels by the end of the contract year.
(iv) In accordance with § 422.506, HCFA may decline to renew the organization's contract in the year that HCFA determines that it did not meet the minimum performance levels.
(d)
(i) Measurement of performance.
(ii) System interventions, including the establishment or alteration of practice guidelines.
(iii) Improving performance.
(iv) Systematic follow-up on the effect of the interventions.
(2) Each project must address the entire population to which the measurement specified in paragraph (d)(1)(i) of this section is relevant.
(3) HCFA establishes M+C organization and M+C plan-specific obligations for the number and distribution of projects among the required clinical and nonclinical areas, in accordance with paragraphs (d)(4) and (d)(5) of this section, to ensure that the projects are representative of the entire spectrum of clinical and nonclinical care areas associated with a plan.
(4) The required clinical areas include:
(i) Prevention and care of acute and chronic conditions.
(ii) High-volume services.
(iii) High-risk services.
(iv) Continuity and coordination of care.
(5) The required nonclinical areas include:
(i) Appeals, grievances, and other complaints.
(ii) Access to, and availability of, services.
(6) In addition to requiring that the organization initiate its own performance improvement projects, HCFA may require that the organization—
(i) Conduct particular performance improvement projects that are specific to the organization; and
(ii) Participate in national or statewide performance improvement projects.
(7) For each project, the organization must assess performance under the plan using quality indicators that are—
(i) Objective, clearly and unambiguously defined, and based on current clinical knowledge or health services research; and
(ii) Capable of measuring outcomes such as changes in health status, functional status and enrollee satisfaction, or valid proxies of those outcomes.
(8) Performance assessment on the selected indicators must be based on systematic ongoing collection and analysis of valid and reliable data.
(9) Interventions must achieve improvement that is significant and sustained over time.
(10) The organization must report the status and results of each project to HCFA as requested.
(e)
(1) Measure performance under the plan using standard measures required by HCFA and report its performance to HCFA. The standard measures may be specified in uniform data collection and reporting instruments required by HCFA and will relate to—
(i) Prevention and care of acute and chronic conditions;
(ii) High-volume services;
(iii) High-risk services; and
(iv) Enrollee satisfaction.
(2) Evaluate the continuity and coordination of care furnished to enrollees.
(3) If the organization uses written protocols for utilization review, the organization must—
(i) Base those protocols on current standards of medical practice; and
(ii) Have mechanisms to evaluate utilization of services and to inform enrollees and providers of services of the results of the evaluation.
(f)
(i) Maintain a health information system that collects, analyzes, and integrates the data necessary to implement its quality assessment and performance improvement program;
(ii) Ensure that the information it receives from providers of services is reliable and complete; and
(iii) Make all collected information available to HCFA.
(2)
(a)
(b)
(1) Require that the organization—
(i) Allocate adequate space for use of the review organization whenever it is conducting review activities; and
(ii) Provide all pertinent data, including patient care data, at the time the review organization needs the data to carry out the reviews and make its determinations.
(2) Except in the case of complaints about quality, exclude review activities that HCFA determines would duplicate review activities conducted as part of an accreditation process or as part of HCFA monitoring.
(c)
(a)
(1) The M+C organization is fully accredited (and periodically reaccredited) by a private, national accreditation organization approved by HCFA; and
(2) The accreditation organization used the standards approved by HCFA for the purposes of assessing the M+C organization's compliance with Medicare requirements.
(b)
(1) The quality assessment and performance improvement requirements of § 422.152.
(2) The confidentiality and accuracy of enrollee records requirements of § 422.118.
(c)
(1) The date on which the accreditation organization is approved by HCFA.
(2) The date the M+C organization is accredited by the accreditation organization.
(d)
(1) Submit to surveys by HCFA to validate its accreditation organization's accreditation process; and
(2) Authorize its accreditation organization to release to HCFA a copy of its most recent accreditation survey, together with any survey-related information that HCFA may require (including corrective action plans and summaries of unmet HCFA requirements).
(e)
(1) HCFA determines, on the basis of its own survey or the results of the accreditation survey, that the M+C organization does not meet the Medicare requirements for which deemed status was granted.
(2) HCFA withdraws its approval of the accreditation organization that accredited the M+C organization.
(3) The M+C organization fails to meet the requirements of paragraph (d) of this section.
(f)
(a)
(1) In accrediting M+C organizations, it applies and enforces standards that are at least as stringent as Medicare requirements with respect to the standard or standards in question.
(2) It complies with the application and reapplication procedures set forth in § 422.158.
(3) It is not controlled, as defined in § 413.17 of this chapter, by the entities it accredits.
(b)
(i) Specifies the basis for granting approval;
(ii) Describes how the accreditation organization's accreditation program meets or exceeds all of the Medicare requirements for which HCFA would deem compliance on the basis of the organization's accreditation; and
(iii) Provides opportunity for public comment.
(2)
(ii) If HCFA grants the request, the final notice specifies the effective date and the term of the approval, which may not exceed 6 years.
(c)
(1) Provide to HCFA in written form and on a monthly basis all of the following:
(i) Copies of all accreditation surveys, together with any survey-related information that HCFA may require (including corrective action plans and summaries of unmet HCFA requirements).
(ii) Notice of all accreditation decisions.
(iii) Notice of all complaints related to deemed M+C organizations.
(iv) Information about any M+C organization against which the accrediting organization has taken remedial or adverse action, including revocation, withdrawal or revision of the M+C organization's accreditation. (The accreditation organization must provide this information within 30 days of taking the remedial or adverse action.)
(v) Notice of any proposed changes in its accreditation standards or requirements or survey process. If the organization implements the changes before or without HCFA approval, HCFA may withdraw its approval of the accreditation organization.
(2) Within 30 days of a change in HCFA requirements, submit to HCFA—
(i) An acknowledgment of HCFA's notification of the change;
(ii) A revised cross-walk reflecting the new requirements; and
(iii) An explanation of how the accreditation organization plans to alter its standards to conform to HCFA's new requirements, within the time-frames specified in the notification of change it receives from HCFA.
(3) Permit its surveyors to serve as witnesses if HCFA takes an adverse action based on accreditation findings.
(4) Within 3 days of identifying, in an accredited M+C organization, a deficiency that poses immediate jeopardy to the organization's enrollees or to the general public, give HCFA written notice of the deficiency.
(5) Within 10 days of HCFA's notice of withdrawal of approval, give written notice of the withdrawal to all accredited M+C organizations.
(d)
(1)
(i) HCFA imposes new requirements or changes its survey process;
(ii) An accreditation organization proposes to adopt new standards or changes in its survey process; or
(iii) The term of an accreditation organization's approval expires.
(2)
(i) Indicate a 20 percent rate of disparity between certification by the accreditation organization and certification by HCFA or its agent on standards that do not constitute immediate jeopardy to patient health and safety if unmet;
(ii) Indicate any disparity between certification by the accreditation organization and certification by HCFA or its agent on standards that constitute immediate jeopardy to patient health and safety if unmet; or
(iii) Indicate that, irrespective of the rate of disparity, there are widespread or systematic problems in an organization's accreditation process such that accreditation no longer provides assurance that the Medicare requirements are met or exceeded.
(3)
(4)
(5)
(i) Deeming based on accreditation no longer guarantees that the M+C organization meets the M+C requirements, and failure to meet those requirements could jeopardize the health or safety of Medicare enrollees and constitute a significant hazard to the public health; or
(ii) The accreditation organization has failed to meet its obligations under this section or under § 422.156 or § 422.158.
(6)
(a)
(1) The types of M+C plans that it would review as part of its accreditation process.
(2) A detailed comparison of the organization's accreditation requirements and standards with the Medicare requirements (for example, a crosswalk).
(3) Detailed information about the organization's survey process, including—
(i) Frequency of surveys and whether surveys are announced or unannounced.
(ii) Copies of survey forms, and guidelines and instructions to surveyors.
(iii) Descriptions of—
(A) The survey review process and the accreditation status decision making process;
(B) The procedures used to notify accredited M+C organizations of deficiencies and to monitor the correction of those deficiencies; and
(C) The procedures used to enforce compliance with accreditation requirements.
(4) Detailed information about the individuals who perform surveys for the accreditation organization, including—
(i) The size and composition of accreditation survey teams for each type of plan reviewed as part of the accreditation process;
(ii) The education and experience requirements surveyors must meet;
(iii) The content and frequency of the in-service training provided to survey personnel;
(iv) The evaluation systems used to monitor the performance of individual surveyors and survey teams; and
(v) The organization's policies and practice with respect to the participation, in surveys or in the accreditation decision process by an individual who is professionally or financially affiliated with the entity being surveyed.
(5) A description of the organization's data management and analysis system with respect to its surveys and accreditation decisions, including the kinds of reports, tables, and other displays generated by that system.
(6) A description of the organization's procedures for responding to and investigating complaints against accredited organizations, including policies and procedures regarding coordination of these activities with appropriate licensing bodies and ombudsmen programs.
(7) A description of the organization's policies and procedures with respect to the withholding or removal of accreditation for failure to meet the accreditation organization's standards or requirements, and other actions the organization takes in response to noncompliance with its standards and requirements.
(8) A description of all types (for example, full, partial) and categories (for example, provisional, conditional, temporary) of accreditation offered by the organization, the duration of each type and category of accreditation and a statement identifying the types and categories that would serve as a basis for accreditation if HCFA approves the accreditation organization.
(9) A list of all currently accredited M+C organizations and the type, category, and expiration date of the accreditation held by each of them.
(10) A list of all full and partial accreditation surveys scheduled to be performed by the accreditation organization as requested by HCFA.
(11) The name and address of each person with an ownership or control interest in the accreditation organization.
(b)
(1) A written presentation that demonstrates its ability to furnish HCFA with electronic data in HCFA compatible format.
(2) A resource analysis that demonstrates that its staffing, funding, and other resources are adequate to perform the required surveys and related activities.
(3) A statement acknowledging that, as a condition for approval, it agrees to comply with the ongoing responsibility requirements of § 422.157(c).
(c)
(d)
(e)
(1) States whether the request for approval has been granted or denied;
(2) Gives the rationale for any denial; and
(3) Describes the reconsideration and reapplication procedures.
(f)
(g)
(h)
(i) Has revised its accreditation program to correct the deficiencies on which the denial was based;
(ii) Can demonstrate that the M+C organizations that it has accredited meet or exceed applicable Medicare requirements; and
(iii) Resubmits the application in its entirety.
(2) An accreditation organization that has requested reconsideration of HCFA's denial of its request for approval may not submit a new request until the reconsideration is administratively final.
This subpart is based on sections 1852(a)(1), (a)(2), (b)(2), (c)(2)(D), (j), and (k) of the Act; section 1859(b)(2)(A) of the Act; and the general authority under 1856(b) of the Act requiring the establishment of standards. It sets forth the requirements and standards for the M+C organization's relationships with providers including physicians, other health care professionals, institutional providers and suppliers, under contracts or arrangements or deemed contracts under M+C private fee-for-service plans. This subpart also contains some requirements that apply to noncontracting providers.
(a)
(1) Written notice of rules of participation including terms of payment, credentialing, and other rules directly related to participation decisions.
(2) Written notice of material changes in participation rules before the changes are put into effect.
(3) Written notice of participation decisions that are adverse to physicians.
(4) A process for appealing adverse participation decisions, including the right of physicians to present information and their views on the decision. In the case of a termination or suspension of a provider contract by the M+C organization, this process must conform to the rules in § 422.204(c).
(b)
(1) Practice guidelines and utilization management guidelines—
(i) Are based on reasonable medical evidence or a consensus of health care professionals in the particular field;
(ii) Consider the needs of the enrolled population;
(iii) Are developed in consultation with contracting physicians; and
(iv) Are reviewed and updated periodically.
(2) The guidelines are communicated to providers and, as appropriate, to enrollees.
(3) Decisions with respect to utilization management, enrollee education, coverage of services, and other areas in
(c) An M+C organization that operates an M+C plan through subcontracted physician groups must provide that the participation procedures in this section apply equally to physicians within those subcontracted groups.
(a)
(1) For providers (other than physicians and other health care professionals) requires determination, and redetermination at specified intervals, that each provider—
(i) Licensed to operate in the State, and in compliance with any other applicable State or Federal requirements; and
(ii) Reviewed and approved by an accrediting body, or meets the standards established by the organization itself;
(2) For physicians and other health care professionals, including members of physician groups, covers—
(i) Initial credentialing that includes written application, verification of licensure and other information from primary sources, disciplinary status, eligibility for payment under Medicare, and site visits as appropriate. The application must be signed and dated and include an attestation by the applicant of the correctness and completeness of the application and other information submitted in support of the application;
(ii) Recredentialing at least every 2 years that updates information obtained during initial credentialing and considers performance indicators such as those collected through quality assurance programs, utilization management systems, handling of grievances and appeals, enrollee satisfaction surveys, and other plan activities, and that includes an attestation of the correctness and completeness of the new information; and
(iii) A process for receiving advice from contracting health care professionals with respect to criteria for credentialing and recredentialing; and
(iv) Requiring that, to the extent applicable, the requirements in paragraphs (a)(2)(i) and (a)(2)(iii) of this section are satisfied; and
(3)(i) Specify that basic benefits must be provided through, or payments must be made to, providers that meet applicable requirements of title XVIII and part A of title XI of the Act. In the case of providers meeting the definition of “provider of services” in section 1861(u), basic benefits may only be provided through such providers if they have a provider agreement with HCFA permitting them to provide services under original Medicare.
(ii) Ensures compliance with the requirements at § 422.752(a)(8) that prohibit employment or contracts with individuals (or with an entity that employs or contracts with such an individual) excluded from participation under Medicare and with the requirements at § 422.220 regarding physicians and practitioners who opt out of Medicare.
(b)
(2)
(i) Refusal to grant participation to health care professionals in excess of the number necessary to meet the needs of the plan's enrollees (except for M+C private-fee-for-service plans, which may not refuse to contract on this basis).
(ii) Use of different reimbursement amounts for different specialties.
(iii) Implementation of measures designed to maintain quality and control costs consistent with its responsibilities.
(c)
(1)
(i) The reasons for the action, including, if relevant, the standards and profiling data used to evaluate the physician and the numbers and mix of physicians needed by the M+C organization.
(ii) The affected physician's right to appeal the action and the process and timing for requesting a hearing.
(2)
(3)
(4)
(a)
(i) The patient's health status, medical care, or treatment options (including any alternative treatments that may be self-administered), including the provision of sufficient information to the individual to provide an opportunity to decide among all relevant treatment options;
(ii) The risks, benefits, and consequences of treatment or non-treatment; or
(iii) The opportunity for the individual to refuse treatment and to express preferences about future treatment decisions.
(2) Health care professionals must provide information regarding treatment options in a culturally-competent manner, including the option of no treatment. Health care professionals must ensure that individuals with disabilities have effective communications with participants throughout the health system in making decisions regarding treatment options.
(b)
(1) Objects to the provision of that service on moral or religious grounds; and
(2) Through appropriate written means, makes available information on these policies as follows:
(i) To HCFA, with its application for a Medicare contract, or within 10 days of submitting its ACR proposal, as appropriate.
(ii) To prospective enrollees, before or during enrollment.
(iii) With respect to current enrollees, the organization is eligible for the exception provided in paragraph (a)(1) of this section if it provides notice within 90 days after adopting the policy at issue; however, under § 422.111(d), notice of such a change must be given in advance.
(c)
(d)
(a)
(b)
(c)
(1) The M+C organization makes no specific payment, directly or indirectly, to a physician or physician group as an inducement to reduce or limit medically necessary services furnished to any particular enrollee. Indirect payments may include offerings of monetary value (such as stock options or waivers of debt) measured in the present or future.
(2) If the physician incentive plan places a physician or physician group at substantial financial risk (as determined under paragraph (d) of this section) for services that the physician or physician group does not furnish itself, the M+C organization provides aggregate or per-patient stop-loss protection in accordance with paragraph (f) of this section, and conducts periodic surveys in accordance with paragraph (g) of this section.
(3) For all physician incentive plans, the M+C organization provides to HCFA the information specified in § 422.210.
(d)
(2)
(3)
(i) Withholds greater than 25 percent of potential payments.
(ii) Withholds less than 25 percent of potential payments if the physician or physician group is potentially liable for amounts exceeding 25 percent of potential payments.
(iii) Bonuses that are greater than 33 percent of potential payments minus the bonus.
(iv) Withholds plus bonuses if the withholds plus bonuses equal more than 25 percent of potential payments. The threshold bonus percentage for a particular withhold percentage may be calculated using the formula—Withhold % = −0.75 (Bonus %) +25%.
(v) Capitation arrangements, if—
(A) The difference between the maximum potential payments and the minimum potential payments is more than 25 percent of the maximum potential payments;
(B) The maximum and minimum potential payments are not clearly explained in the contract with the physician or physician group.
(vi) Any other incentive arrangements that have the potential to hold a physician or physician group liable for more than 25 percent of potential payments.
(e) An M+C fee-for-service plan may not operate a physician incentive plan.
(f)
(2)
(ii) For per-patient stop-loss protection if the stop-loss protection provided is on a per-patient basis, the stop-loss limit (deductible) per patient must be determined based on the size of the patient panel and may be a combined policy or consist of separate policies for professional services and institutional services. In determining patient panel size, the patients may be pooled in accordance with paragraph (g) of this section.
(iii) Stop-loss protection must cover 90 percent of the costs of referral services that exceed the per patient deductible limit. The per-patient stop-loss deductible limits are as follows:
(g)
(1) It is otherwise consistent with the relevant contracts governing the compensation arrangements for the physician or physician group.
(2) The physician or physician group is at risk for referral services with respect to each of the categories of patients being pooled.
(3) The terms of the compensation arrangements permit the physician or physician group to spread the risk
(4) The distribution of payments to physicians from the risk pool is not calculated separately by patient category.
(5) The terms of the risk borne by the physician or physician group are comparable for all categories of patients being pooled.
(h)
(1) Include either a sample of, or all, current Medicare/Medicaid enrollees in the M+C organization and individuals disenrolled in the past 12 months for reasons other than—
(i) The loss of Medicare or Medicaid eligibility;
(ii) Relocation outside the M+C organization's service area;
(iii) For failure to pay premiums or other charges;
(iv) For abusive behavior; and
(v) Retroactive disenrollment.
(2) Be designed, implemented, and analyzed in accordance with commonly accepted principles of survey design and statistical analysis;
(3) Measure the degree of enrollees/disenrollees' satisfaction with the quality of the services provided and the degree to which the enrollees/disenrollees have or had access to the services provided under the M+C organization; and
(4) Be conducted no later than 1 year after the effective date of the M+C organization's contract and at least annually thereafter.
(i)
(a)
(2)
(i) Whether services not furnished by the physician or physician group are covered by the incentive plan.
(ii) The type or types of incentive arrangements, such as, withholds, bonus, capitation.
(iii) The percent of any withhold or bonus the plan uses.
(iv) Assurance that the physicians or physician group has adequate stop-loss protection, and the amount and type of stop-loss protection.
(v) The patient panel size and, if the plan uses pooling, the pooling method.
(vi) If the M+C organization is required to conduct enrollee surveys, a summary of the survey results.
(3)
(b)
(1) Whether the M+C organization uses a physician incentive plan that affects the use of referral services.
(2) The type of incentive arrangement.
(3) Whether stop-loss protection is provided.
(4) If the M+C organization was required to conduct a survey, a summary of the survey results.
An M+C organization may not contract or otherwise provide, directly or indirectly, for any of the following individuals, organizations, or entities to indemnify the organization against any civil liability for damage caused to an enrollee as a result of the M+C organization's denial of medically necessary care:
(a) A physician or health care professional.
(b) Provider of services.
(c) Other entity providing health care services.
(d) Group of such professionals, providers, or entities.
(a)
(2) Any statutory provisions (including penalty provisions) that apply to payment for services furnished to a beneficiary not enrolled in an M+C plan also apply to the payment described in paragraph (a)(1) of this section.
(b)
(a)
(ii) Contracting providers must be reimbursed on a fee-for-service basis.
(iii) The M+C organization must make information on its payment rates available to providers that furnish services that may be covered under the M+C private fee-for-service plan.
(2)
(3)
(4)
(b)
(ii) The organization may permit balance billing no greater than 15 percent of the payment rate established under paragraph (a)(1) of this section.
(iii) The M+C organization must specify the amount of cost-sharing and balance billing in its contracts with providers and these amounts must be the same for “deemed” contract providers as for those that have signed contracts in effect.
(iv) The M+C organization is subject to intermediate sanctions under § 422.752(a)(7), under the rules in subpart O of this part, if it fails to enforce the limit specified in paragraph (b)(1)(i) of this section.
(2)
(c)
(2)
(d)
(2)
(i) Notice that balance billing is permitted for those services;
(ii) A good faith estimate of the likely amount of balance billing, based on the enrollees presenting condition; and
(iii) The amount of any deductible, coinsurance, and copayment that may be due in addition to the balance billing amount.
(e)
(f)
(1) The services are covered under the plan and are furnished—
(i) To an enrollee of an M+C fee-for-service plan; and
(ii) Provided by a provider including a provider of services (as defined in section 1861(u) of the Act) that does not have in effect a signed contract with the M+C organization.
(2) Before furnishing the services, the provider—
(i) Was informed of the individual's enrollment in the plan; and
(ii) Was informed (or given a reasonable opportunity to obtain information) about the terms and conditions of payment under the plan, including the information described in § 422.202(a)(1).
(3) The information was provided in a manner that was reasonably designed to effect informed agreement and met the requirements of paragraphs (g) and (h) of this section.
(g)
(1) Presentation of an enrollment card or other document attesting to enrollment.
(2) Notice of enrollment from HCFA, a Medicare intermediary or carrier, or the M+C organization itself.
(h)
(1) The M+C organization used postal service, electronic mail, FAX, or telephone to communicate the information to one of the following:
(i) The provider.
(ii) The employer or billing agent of the provider.
(iii) A partnership of which the provider is a member.
(iv) Any party to which the provider makes assignment or reassigns benefits.
(2) The M+C organization has in effect a procedure under which—
(i) Any provider furnishing services to an enrollee in an M+C private fee-for-service plan, and who has not previously entered into a contract or agreement to furnish services under the plan, can receive instructions on
(ii) The organization responds to the request before the entity furnishes the service; and
(iii) The information the organization provides includes the following:
(A) Billing procedures.
(B) The amount the organization will pay towards the service.
(C) The amount the provider is permitted to collect from the enrollee.
(D) The information described in § 422.202(a)(1).
(3) Announcements in newspapers, journals, or magazines or on radio or television are not considered communication of the terms and conditions of payment.
(i)
An M+C organization may not pay, directly or indirectly, on any basis, for services (other than emergency or urgently needed services as defined in § 422.2) furnished to a Medicare enrollee by a physician (as defined in section 1861(r)(1) of the Act) or other practitioner (as defined in section 1842(b)(18)(C) of the Act) who has filed with the Medicare carrier an affidavit promising to furnish Medicare-covered services to Medicare beneficiaries only through private contracts under section 1802(b) of the Act with the beneficiaries. An M+C organization must pay for emergency or urgently needed services furnished by a physician or practitioner who has not signed a private contract with the beneficiary.
In this subpart—
(a) The terms “per capita rate” and “capitation rate” (see § 422.252) are used interchangeably; and
(b) In the term “area-specific,” “area” refers to any of the payment areas described in § 422.250(c).
(a)
(2)
(B) HCFA reduces the payment rate by the equivalent of 50 cents per renal dialysis treatment. These funds will be used to help pay for the ESRD network program in the same manner as similar reductions are used in original Medicare.
(ii)
(iii)
(b)
(2)
(ii) HCFA does not make an adjustment unless the beneficiary certifies that, at the time of enrollment under the M+C plan, he or she received from the organization the disclosure statement specified in § 422.111.
(c)
(2)
(d)
(e)
(1)
(i) A single Statewide M+C payment area.
(ii) A metropolitan-based system in which all nonmetropolitan areas within the State constitute a single payment area and any of the following constitutes a separate M+C payment area:
(A) All portions of each single metropolitan statistical area within the State.
(B) All portions of each primary metropolitan statistical area within each consolidated metropolitan statistical area within the State.
(iii) A consolidation of noncontiguous counties.
(2)
(3)
(f)
(2) For purposes of paragraphs (b) and (c) of § 422.252, except as provided in § 422.254(e)(4), the “capitation payment rate for 1997” is the rate determined under section 1876(a)(1)(c) of the Act.
Subject to the adjustments specified in this subpart, the annual capitation rate for a particular payment area is equal to the largest of the following:
(a)
(1) The area-specific percentage (specified in § 422.254(a)) for the year multiplied by the annual area-specific capitation rate for the payment area as determined under § 422.254(e) for the year, and
(2) The national percentage (specified in § 422.254(a)) for the year multiplied by the national input-price-adjusted capitation rate for the payment area as determined under § 422.254(g) for the year.
(3) Multiplied by the budget neutrality adjustment factor determined under § 422.254(d).
(b)
(i) For the 50 States and the District of Columbia, the minimum amount rate is 12 times $367.
(ii) For all other jurisdictions the minimum amount rate is the lesser of the rate described in (b)(1)(i) or 150 percent of the capitation payment rate for 1997.
(2) For each succeeding year, the minimum amount rate is the minimum amount rate for the preceding year, increased by the national per capita growth percentage (specified in § 422.254(b)) for the year.
(c)
(2) For each succeeding year, the minimum percentage increase rate is 102 percent of the annual capitation rate for the preceding year.
The following are the factors used in calculating the per capita payment rates:
(a)
(b)
(1) The national per capita growth percentage for a year is HCFA's estimate of the rate of growth in per capita expenditures, reduced by the percentage points specified in paragraph (b)(2) of this section for the year. HCFA may make separate estimates for aged enrollees, disabled enrollees, and enrollees who have ESRD.
(2) The percentage points that HCFA uses to reduce its estimates are as follows:
(i) For 1998, 0.8 percentage points.
(ii) For years 1999-2002, 0.5 percentage points.
(iii) For years after 2002, 0 percentage points.
(c)
(1) the indirect costs of medical education under section 1886(d)(5)(B) of the Act; and
(2) The direct costs of graduate medical education under section 1886(h) of the Act.
(d)
(e)
(i) For 1998, subject to paragraph (e)(4) of this section, the per capita rate determined for that area for 1997 under section 1876(a)(1)(c) of the Act, increased by the national per capita growth percentage for 1998; and
(ii) For a subsequent year, the area-specific capitation rate determined for the previous year, increased by the national per capita growth percentage for the year.
(2)
(3)
(4)
(f)
(1) The sum, for all payment areas, of the products of—
(i) The annual area-specific capitation rate and
(ii) The average number of Medicare beneficiaries residing in the area multiplied by the average of the risk-factor weights used to adjust payments under § 422.256(c);
(2) Divided by the sum, for all payment areas, of the products specified in paragraph (f)(1)(ii) of this section for all payment areas.
(g)
(i) The national standardized annual M+C capitation rate (determined under paragraph (f) of this section) for the year;
(ii) The proportion of such rates for the year which is attributable to such type of services; and
(iii) An index that reflects (for that year and that type of services) the relative input price of such services in the area compared to the national average input price for such services.
(2) HCFA may, subject to the special rules for 1988, use indices that are used in applying or updating national payment rates for particular areas and localities.
(3)
(i) Medicare services are classified as Part A and Part B services;
(ii) The proportion attributable to Part A services is the ratio (expressed as a percentage) of the national average per capita rate of payment for Part A services for 1997 to the national average per capita rate of payment for Part A and Part B services for that year;
(iii) The proportion attributed to part B services is 100 percent minus the ratio described in paragraph (g)(3)(ii) of this section;
(iv) For Part A services, 70 percent of the payments attributable to those services are adjusted by the index used under section 1886(d)(3)(E) of the Act to adjust payment rates for relative hospital wage levels for hospitals located in the particular payment area; and
(v) For part B services—
(A) 66 percent of payments attributable to those services are adjusted by the index of the geographic area factors under section 1848(e) of the Act used to adjust payment rates for physician services in the particular payment area; and
(B) Of the remaining 34 percent, 40 percent is adjusted by the index specified in paragraph (g)(3)(iv) of this section.
(a)
(2) Beginning with rates for 2000, HCFA also adjusts the minimum amount rate (calculated under § 422.252(b)) in the same manner.
(b)
(c)
(d)
(2)
(3)
(a)
(b)
(1) Beginning on a date determined by HCFA, inpatient hospital care data for all discharges that occur on or after July 1, 1997.
(2) HCFA will provide advance notice to M+C organizations to collect and submit data for services that occur on or after July 1, 1998, as follow:
(i) Physician, outpatient hospital, SNF, and HHA data beginning no earlier than October 1, 1999; and
(ii) All other data HCFA deems necessary beginning no earlier than October 1, 2000.
(c)
(2) The data must account separately for each provider, supplier, physician, or other practitioner that would be permitted to bill separately under the Medicare fee-for-service program, even if they participate jointly in the same encounter.
(d)
(1) Conform to the requirements for equivalent data for Medicare fee-for-service when appropriate, and to all relevant national standards; and
(2) Be submitted electronically to the appropriate HCFA contractor.
(e)
(f)
(a)
(2) HCFA includes in the announcement a description of the risk and other factors and explains the methodology in sufficient detail to enable M+C organizations to compute monthly adjusted capitation rates for individuals in each of its payment areas.
(b)
(2) The M+C organizations have 15 days to comment on the proposed changes.
(a)
(1) Must establish an M+C MSA with a trustee that meets the requirements of paragraph (b) of this section; and
(2) If he or she has more than one M+C MSA, designate the particular account to which payments under the M+C MSA plan are to be made.
(b)
(1) Register with HCFA;
(2) Certify that it is a licensed bank, insurance company, or other entity qualified, under sections 408(a)(2) or 408(h) of the IRS Code, to act as a trustee of individual retirement accounts;
(3) Agree to comply with the M+C MSA provisions of section 138 of the IRS Code of 1986; and
(4) Provide any other information that HCFA may require.
(c)
(i) The monthly M+C MSA premium is compared with \1/12\ of the annual capitation rate for the area determined under § 422.252.
(ii) If the monthly M+C MSA premium is less than \1/12\ of the annual capitation rate, the difference is the amount to be deposited in the M+C MSA for each month for which the beneficiary is enrolled in the MSA plan.
(2) HCFA deposits the full amount to which a beneficiary is entitled under paragraph (c)(1)(ii) of this section for the calendar year, beginning with the month in which M+C MSA coverage begins.
(3) If the beneficiary's coverage under the M+C MSA plan ends before the end of the calendar year, HCFA recovers the amount that corresponds to the remaining months of that year.
(a)
(b)
(1) Payment for inpatient services until the date of the beneficiary's discharge is made by the previous M+C organization or original Medicare, as appropriate.
(2) The M+C organization offering the newly-elected M+C plan is not responsible for the inpatient services until the date after the beneficiary's discharge; and
(3) The M+C organization offering the newly-elected M+C plan is paid the full amount otherwise payable under this subpart.
(c)
(1) The M+C organization is responsible for the inpatient services until the date of the beneficiary's discharge;
(2) Payment for those services during the remainder of the stay is not made by original Medicare or by any succeeding M+C organization offering a newly-elected M+C plan; and
(3) The M+C organization that no longer provides coverage receives no payment for the beneficiary for the period after coverage ends.
(a)
(1) A Medicare hospice program is located within the plan's service area; or
(2) It is common practice to refer patients to hospice programs outside that area.
(b)
(c)
(1) The hospice program for hospice care furnished to the Medicare enrollee; and
(2) The M+C organization, provider or supplier for other Medicare-covered services furnished to the enrollee.
(a)
(b)
(c)
(a)
(b)
(1) M+C organizations may, with HCFA's agreement, modify an M+C plan offered prior to January 1, 2002 by—
(i) Adding benefits at no additional cost to the M+C plan enrollee; and
(ii) Lowering the premiums approved through the ACR process;
(iii) Lowering other cost-sharing amounts approved through the ACR process.
(2) For contracts beginning on a date other than January 1 (according to § 422.504(d)), M+C organizations may submit ACRs on a date other than May 1 approved by HCFA.
As used in this subpart, unless specified otherwise—
(a)
(1) For an individual enrolled in an M+C plan (other than an M+C MSA plan) offered by an M+C organization, the sum of the M+C monthly basic beneficiary premium plus the M+C monthly supplemental beneficiary premium (if any); or
(2) For an individual enrolled in an M+C MSA plan offered by an M+C organization, the M+C monthly supplemental beneficiary premium (if any).
(b)
(c)
(d)
(a)
(i) The information specified in paragraph (b), (c), or paragraph (d) of this section for the type of M+C plan involved; and
(ii) The service area and enrollment capacity (if any).
(2) If the submission is not complete, timely, or accurate, HCFA has the authority to impose sanctions under subpart O of this part or may choose not to renew the contract.
(b)
(i) The ACR as specified in § 422.310.
(ii) The M+C monthly basic beneficiary premium.
(iii) A description of cost-sharing to be imposed under the plan, and its actuarial value.
(iv) A description of any additional benefits to be provided pursuant to § 422.312 and the actuarial value determined for those benefits.
(v) Amounts collected in the previous contract period for basic benefits.
(2)
(i) The ACR.
(ii) The M+C monthly supplemental beneficiary premium.
(iii) A description of supplemental benefits being offered, the cost sharing
(iv) Amounts collected in the previous contract period for supplemental benefits.
(c)
(2) The M+C monthly supplementary beneficiary premium for supplemental benefits.
(3) A description of all benefits offered under the M+C MSA plan.
(4) The amount of the deductible imposed under the plan.
(5) Amounts collected in the previous contract period for supplemental benefits.
(d)
(2) The amount of the M+C monthly supplemental beneficiary premium.
(3) A description of all benefits offered under the plan.
(4) Amounts collected in the previous contract period for basic and supplemental benefits.
(e)
(2)
(i) Any amounts submitted with respect to M+C MSA plans.
(ii) The M+C monthly basic and supplementary beneficiary premiums for M+C private fee-for-service plans.
(a)
(2) For supplemental benefits, the M+C monthly supplemental beneficiary premium (multiplied by 12) charged, plus the actuarial value of its cost-sharing, may not exceed the amounts approved in the ACR for those benefits, as determined under § 422.310 on an annual basis.
(3)
(i) The APR that is payable for these services for those beneficiaries entitled to Part A plus the actuarial value of Medicare deductibles and Coinsurance for the services;
(ii) or the ACR for such services.
(b)
(2) For supplemental benefits, the actuarial value of its cost-sharing may not exceed the amounts approved in the ACR for those benefits, as determined under § 422.310 on an annual basis.
(c)
(a)
(1)
(i) Means amounts that:
(A) Exceed the limits imposed by § 422.308;
(B) In the case of a M+C private fee-for-service plan, exceed the M+C monthly basic beneficiary premium or the M+C monthly supplemental premium submitted under § 422.306; and
(C) In the case of a M+C MSA plan, exceed the M+C monthly supplemental premium submitted under § 422.306 and the deductible for basic benefits; and
(ii) Includes amounts collected from an enrollee who was believed not entitled to Medicare benefits but was later found to be entitled.
(2)
(i) Emergency, urgently needed services, or other services obtained outside the M+C plan; or
(ii) Initially denied but, upon appeal, found to be services the enrollee was entitled to have furnished by the M+C organization.
(b)
(c)
(i) Amounts incorrectly collected that were not collected as premiums.
(ii) Other amounts due.
(iii) All amounts due if the M+C organization is going out of business or terminating its M+C contract for an M+C plan(s).
(2)
(3)
(d)
(a)
(2) To calculate the adjusted excess described in section 422.312, the M+C organization or HCFA further reduces the rate for Medicare-covered services by the actuarial value of applicable Medicare coinsurance and deductibles.
(3) Separate ACRs must be calculated for Part A and Part B enrollees and Part B-only enrollees for each M+C plan offered, and for each optional supplemental benefit option.
(4) In calculating its initial rate, the M+C organization must identify and take into account anticipated revenue collectible from other payers for those services for which Medicare is not the primary payer as described in § 422.108.
(5) Except as provided in paragraph (a)(6) of this section, the M+C organization must have an adequate accounting system that is accrual based and uses generally-accepted accounting principles to develop its ACR.
(6) For M+C organizations that are part of a government entity that uses a cash basis of accounting, ACR cost data developed on this basis is acceptable. However, only depreciation on capital assets, rather than the expenditure for the asset, is acceptable.
(b)
(i) A community rating system (as defined in section 1308(8) of the PHS Act, other than subparagraph (C)); or
(ii) A system, approved by HCFA, under which the M+C organization develops an aggregate premium for each M+C plan for all enrollees of that M+C plan that is weighted by the size of the various enrolled groups and individuals that compose the M+C organization's enrollment in that M+C plan. For purposes of this section, enrolled groups are defined as employee groups or other bodies of subscribers (including individual subscribers) that enroll in the M+C plan on a premium basis.
(2) Regardless of which method the M+C organization uses to calculate its initial rate, the initial rate must be equal to the premium the M+C organization would charge its non-Medicare enrollees on a yearly basis for services included in the M+C plan.
(3) Except as provided in paragraph (b)(4) of this section, the M+C organization must identify in its initial rate calculation for an M+C plan, the following components whose rates must be consistent with rates used by the M+C organization in calculating premiums for non-Medicare enrollees:
(i) Direct medical care.
(ii) Administration.
(iii) Additional Revenues.
(iv) Enrollee cost sharing (for example, deductibles, coinsurance, or copayments) for Medicare-covered services and for additional and supplemental benefits.
(4) An M+C organization that does not usually separate its premium components as described in paragraph (b)(3) of this section may calculate its initial rate with the methods it uses for its other enrolled groups if the M+C organization provides HCFA with the documentation necessary to support any adjustments the M+C organization makes to the initial rate in accordance with paragraph (c)(5) of this section.
(5) The initial rate calculation must not carry forward any losses experienced by the M+C organization during prior contract periods. The M+C organization must submit supporting documentation to assure HCFA that ACR values do not include past losses but only premiums for covered services, additional services, and supplemental benefits for the upcoming 12-month period.
(c)
(1)
(2)
(3)
(4)
(5)
(6)
(i) Medicare and non-Medicare enrollees in other M+C plans; or
(ii) Medicare beneficiaries in the M+C organization's area, State, or the United States who are eligible to elect an M+C plan and other individuals in that same area, State, or the United States.
(d)
(1) The M+C organization may use an estimate of the ACR value for the direct medical and administrative components of a service or services offered using generally-accepted accounting principles.
(2) The M+C organization may use an estimate of the ACR value for the additional revenue component of a service or services offered based on the lesser of (if the information is available)—
(i) The average of additional revenues received through risk payments for health services contracted to be furnished to an enrolled population of other organizations;
(ii) The average of additional revenues received for health services furnished; or
(iii) A reasonable estimate of additional revenues of other M+C organizations in the general marketplace.
(e)
(1) Determine the APR based on the enrollment experience of other M+C organizations;
(2) Determine ACR using data in the general commercial marketplace; or
(3) Determine either or both rates using the best available information, which may include enrollment experience of other M+C organizations and section 1876 risk contractors.
(f)
(2) If the M+C organization is dissatisfied with an HCFA determination that the M+C organization's computation is not acceptable, the M+C organization may within 2 weeks after the date of receipt of notification of this determination, file a request for a hearing with HCFA. The request must state why the M+C organization believes the determination is incorrect and must be accompanied by any supporting evidence the M+C organization wishes to submit. The hearing is conducted by a hearing officer designated by HCFA under the hearing procedures described in subpart N.
(a)
(1)
(2)
(b)
(1) Provide additional benefits with an actuarial value (less the actuarial value of any copayment or coinsurance associated with the benefit) which HCFA determines is at least equal to the adjusted excess amount; and
(2) Provide those benefits uniformly for all Medicare enrollees electing the plan.
(c)
(2) The reserved funds are to be used to stabilize and prevent undue fluctuations in the additional benefits that are required under this section and are provided during subsequent contract periods.
(3) Any amounts not provided as additional benefits during the period specified by the M+C organization for which the stabilization fund is established, reverts for the use of the trust funds.
(4)
(i)
(ii)
(iii)
(iv)
(5)
(i)
(A) Indicate how it intends to use the withdrawn amounts;
(B) Justify the need for the withdrawal in terms of stabilizing the additional benefits it provides to Medicare enrollees;
(C) Document the M+C plan's experience with fluctuations of revenue requirements relative to the additional benefits it provides to Medicare enrollees; and
(D) Document its experience during the contract period previous to the one for which it requests withdrawal to ensure that the M+C organization will not be using the withdrawn amounts to refinance losses suffered during that previous contract period.
(ii)
(A) The average of the APR for the M+C plan's next contract period of the M+C plan is less than that of the previous contract period;
(B) The M+C plan's ACR for the next contract period is significantly higher than that of the previous contract period;
(C) The M+C plan's revenue requirements for the next contract period for providing the additional benefits it provided during the previous contract period is significantly higher than the requirements for that previous period; or
(D) The ACR for the next contract period results in additional benefits that are significantly less in total value than that of the previous contract period.
(iii)
(iv)
(d)
Nomenclature changes to subpart H appear at 63 FR 35098, 35099, June 26, 1998.
(a)
(1) Authorize provider sponsored organizations, (PSOs), to contract as a M+C plan;
(2) Require that a PSO meet certain qualifying requirements; and
(3) Provide for waiver of State licensure for PSOs under specified conditions.
(b)
(1) For an individual, that the individual directly furnishes health care services, or
(2) For an entity, that the entity is organized and operated primarily for the purpose of furnishing health care services directly or through its provider members or entities.
(1) Has been approved by HCFA as meeting the requirements to be a guarantor; and
(2) Obligates its resources to a PSO to enable the PSO to meet the solvency requirements required to contract with HCFA as an M+C organization.
(1) Is established or organized, and operated, by a provider or group of affiliated providers;
(2) Provides a substantial proportion (as defined in § 422.352) of the health care services under the M+C contract directly through the provider or affiliated group of providers; and
(3) When it is a group, is composed of affiliated providers who—
(i) Share, directly or indirectly, substantial financial risk, as determined under § 422.356, for the provision of services that are the obligation of the PSO under the M+C contract; and
(ii) Have at least a majority financial interest in the PSO.
(a)
(1) Is licensed by the State or has obtained a waiver of State licensure as provided for under § 422.370;
(2) Meets the definition of a PSO set forth in § 422.350 and other applicable requirements of this subpart; and
(3) Is effectively controlled by the provider or, in the case of a group, by one or more of the affiliated providers that established and operate the PSO.
(b)
(1) For a non-rural PSO, not less than 70% of Medicare services covered under the contract.
(2) For a rural PSO, not less than 60% of Medicare services covered under the contract.
(c)
(1) Demonstrate to HCFA that—
(i) It has available in the rural area, as defined in § 412.62(f) of this chapter, routine services including but not limited to primary care, routine specialty care, and emergency services; and
(ii) The level of use of providers outside the rural area is consistent with general referral patterns for the area; and
(2) Enroll Medicare beneficiaries, the majority of which reside in the rural area the PSO serves.
A PSO that consists of two or more providers must demonstrate to HCFA'S satisfaction that it meets the following requirements:
(a) The providers are affiliated. For purposes of this subpart, providers are affiliated if, through contract, ownership, or otherwise—
(1) One provider, directly or indirectly, controls, is controlled by, or is under common control with another;
(2) Each provider is part of a lawful combination under which each shares substantial financial risk in connection with the PSO's operations;
(3) Both, or all, providers are part of a controlled group of corporations under section 1563 of the Internal Revenue Code of 1986; or
(4) Both, or all, providers are part of an affiliated service group under section 414 of that Code.
(b) Each affiliated provider of the PSO shares, directly or indirectly, substantial financial risk for the furnishing of services the PSO is obligated to provide under the contract.
(c) Affiliated providers, as a whole or in part, have at least a majority financial interest in the PSO.
(d) For purposes of paragraph(a)(1) of this section, control is presumed to exist if one party, directly or indirectly, owns, controls, or holds the power to vote, or proxies for, not less than 51 percent of the voting rights or governance right of another.
(a)
(1) Agreement by a provider to accept capitation payment for each Medicare enrollee.
(2) Agreement by a provider to accept as payment a predetermined percentage of the PSO premium or the PSO's revenue.
(3) The PSO's use of significant financial incentives for its affiliated providers, with the aim of achieving utilization management and cost containment goals. Permissible methods include the following:
(i) Affiliated providers agree to a withholding of a significant amount of the compensation due them, to be used for any of the following:
(A) To cover losses of the PSO.
(B) To cover losses of other affiliated providers.
(C) To be returned to the affiliated provider if the PSO meets its utilization management or cost containment goals for the specified time period.
(D) To be distributed among affiliated providers if the PSO meets its utilization management or cost-containment goals for the specified time period.
(ii) Affiliated providers agree to preestablished cost or utilization targets for the PSO and to subsequent significant financial rewards and penalties (which may include a reduction in payments to the provider) based on the PSO's performance in meeting the targets.
(4) Other mechanisms that demonstrate significant shared financial risk.
(b)
For an organization that seeks to contract to offer an M+C plan under this subpart, HCFA may waive the State licensure requirement of section 1855(a)(1) of the Act if—
(a) The organization requests a waiver no later than November 1, 2002; and
(b) HCFA determines there is a basis for a waiver under § 422.372.
(a)
(b)
(1)
(2)
(i) Denied the license application on the basis of material requirements, procedures, or standards (other than solvency requirements) not generally applied by the State to other entities engaged in a substantially similar business; or
(ii) Required, as a condition of licensure that the organization offer any product or plan other than an M+C plan.
(3)
(ii) HCFA determines that the State has imposed, as a condition of licensure, any documentation or information requirements relating to solvency or other material requirements, procedures, or standards relating to solvency that are different from the requirements, procedures, or standards
(4)
(a)
(b) HCFA gives the organization written notice of granting or denial of waiver within 60 days of receipt of a substantially complete waiver request.
(c)
(d)
(e)
A waiver granted under this section is subject to the following conditions:
(a)
(b)
(c)
(1) Termination of the M+C contract;
(2) The organization's compliance with the State licensure requirement of section 1855(a)(1) of the Act; or
(3) The organization's failure to comply with § 422.378.
(a)
(b)
(i) Would apply to the organization if it were licensed under State law;
(ii) Generally apply to other M+C organizations and plans in the State; and
(iii) Are consistent with the standards established under this part.
(2) The standards specified in paragraph (b)(1) of this section do not include any standard preempted under section 1856(b)(3)(B) of the Act.
(c)
(d)
(a) At the time an organization applies to contract with HCFA as a PSO under this part, the organization must have a minimum net worth amount, as determined under paragraph (c) of this section, of:
(1) At least $1,500,000, except as provided in paragraph (a)(2) of this section.
(2) No less than $1,000,000 based on evidence from the organization's financial plan (under § 422.384) demonstrating to HCFA's satisfaction that the organization has available to it an administrative infrastructure that HCFA considers appropriate to reduce, control or eliminate start-up administrative costs.
(b) After the effective date of a PSO's M+C contract, a PSO must maintain a minimum net worth amount equal to the greater of—
(1) One million dollars;
(2) Two percent of annual premium revenues as reported on the most recent annual financial statement filed with HCFA for up to and including the first $150,000,000 of annual premiums and 1 percent of annual premium revenues on premiums in excess of $150,000,000;
(3) An amount equal to the sum of three months of uncovered health care expenditures as reported on the most recent financial statement filed with HCFA; or
(4) Using the most recent annual financial statement filed with HCFA, an amount equal to the sum of—
(i) Eight percent of annual health care expenditures paid on a non-capitated basis to non-affiliated providers; and
(ii) Four percent of annual health care expenditures paid on a capitated basis to non-affiliated providers plus annual health care expenditures paid on a non-capitated basis to affiliated providers.
(iii) Annual health care expenditures that are paid on a capitated basis to affiliated providers are not included in the calculation of the net worth requirement under paragraphs (a) and (b)(4) of this section.
(c)
(ii) After the effective date of a PSO's M+C contract, a PSO must maintain the greater of $750,000 or 40 percent of the minimum net worth amount in cash or cash equivalents.
(2)
(i)
(B) Up to 10 percent of the minimum net worth amount, if less than $1,000,000 of the minimum net worth amount is met through cash or cash equivalents, or if HCFA has used its discretion under paragraph (a)(2) of this section.
(ii)
(B) Up to ten percent of the minimum net worth amount if the greater of $1,000,000 or 67 percent of the minimum net worth amount is not met by cash or cash equivalents.
(3)
(4)
(5)
(6)
(a)
(b)
(1) A detailed marketing plan;
(2) Statements of revenue and expense on an accrual basis;
(3) Cash-flow statements;
(4) Balance sheets;
(5) Detailed justifications and assumptions in support of the financial plan including, where appropriate, certification of reserves and actuarial liabilities by a qualified health maintenance organization actuary; and
(6) If applicable, statements of the availability of financial resources to meet projected losses.
(c)
(1) Cover the first 12 months after the estimated effective date of a PSO's M+C contract; or
(2) If the PSO is projecting losses, cover 12 months beyond the end of the period for which losses are projected.
(d)
(e)
(1) Meets HCFA's requirements for guarantors and guarantee documents as specified in § 422.390; and
(2) Obtains from the guarantor cash or cash equivalents to fund the projected losses timely, as follows—
(i) Prior to the effective date of a PSO's M+C contract, the amount of the projected losses for the first two quarters;
(ii) During the first quarter and prior to the beginning of the second quarter of a PSO's M+C contract, the amount of projected losses through the end of the third quarter; and
(iii) During the second quarter and prior to the beginning of the third quarter of a PSO's M+C contract, the amount of projected losses through the end of the fourth quarter.
(3) If the guarantor complies with the requirements in paragraph (e)(2) of this section, the PSO, in the third quarter, may notify HCFA of its intent to reduce the period of advance funding of projected losses. HCFA will notify the PSO within 60 days of receiving the PSO's request if the requested reduction in the period of advance funding will not be accepted.
(4) If the guarantee requirements in paragraph (e)(2) of this section are not met, HCFA may take appropriate action, such as requiring funding of projected losses through means other than a guarantee. HCFA retains discretion to require other methods or timing of funding, considering factors such as the financial condition of the guarantor and the accuracy of the financial plan.
(f)
(g)
(1) Lines of credit from regulated financial institutions;
(2) Legally binding agreements for capital contributions; or
(3) Legally binding agreements of a similar quality and reliability as permitted in paragraphs (g)(1) and (2) of this section.
(h)
(a) A PSO must have sufficient cash flow to meet its financial obligations as they become due and payable.
(b) To determine whether the PSO meets the requirement in paragraph (a) of this section, HCFA will examine the following—
(1) The PSO's timeliness in meeting current obligations;
(2) The extent to which the PSO's current ratio of assets to liabilities is maintained at 1:1 including whether there is a declining trend in the current ratio over time; and
(3) The availability of outside financial resources to the PSO.
(c) If HCFA determines that a PSO fails to meet the requirement in paragraph (b)(1) of this section, HCFA will require the PSO to initiate corrective action and pay all overdue obligations.
(d) If HCFA determines that a PSO fails to meet the requirement of paragraph (b)(2) of this section, HCFA will require the PSO to initiate corrective action to—
(1) Change the distribution of its assets;
(2) Reduce its liabilities; or
(3) Make alternative arrangements to secure additional funding to restore the PSO's current ratio to 1:1.
(e) If HCFA determines that a PSO fails to meet the requirement of paragraph (b)(3) of this section, HCFA will require the PSO to obtain funding from alternative financial resources.
(a)
(2) The deposit must be restricted to use in the event of insolvency to help assure continuation of services or pay costs associated with receivership or liquidation.
(3) At the time of the PSO's application for an M+C contract and, thereafter, upon HCFA's request, a PSO must provide HCFA with proof of the insolvency deposit, such proof to be in a form that HCFA considers appropriate.
(b)
(2) The deposit must at all times have a fair market value of an amount that is 120 percent of the PSO's outstanding liability for uncovered expenditures for enrollees, including incurred, but not reported claims.
(3) The deposit must be calculated as of the first day of each month required and maintained for the remainder of each month required.
(4) If a PSO is not otherwise required to file a quarterly report, it must file a report within 45 days of the end of the calendar quarter with information sufficient to demonstrate compliance with this section.
(5) The deposit required under this section is restricted and in trust for HCFA's use to protect the interests of the PSO's Medicare enrollees and to pay the costs associated with administering the insolvency. It may be used only as provided under this section.
(c) A PSO may use the deposits required under paragraphs (a) and (b) of this section to satisfy the PSO's minimum net worth amount required under § 422.382(a) and (b).
(d) All income from the deposits or trust accounts required under paragraphs (a) and (b) of this section, are considered assets of the PSO. Upon HCFA's approval, the income from the deposits may be withdrawn.
(e) On prior written approval from HCFA, a PSO that has made a deposit under paragraphs (a) or (b) of this section, may withdraw that deposit or any part thereof if—
(1) A substitute deposit of cash or securities of equal amount and value is made;
(2) The fair market value exceeds the amount of the required deposit; or
(3) The required deposit under paragraphs (a) or (b) of this section is reduced or eliminated.
(a)
(b)
(1) Documentation that the guarantor meets the requirements for a guarantor under paragraph (c) of this section; and
(2) The guarantor's independently audited financial statements for the current year-to-date and for the two most recent fiscal years. The financial statements must include the guarantor's balance sheets, profit and loss statements, and cash flow statements.
(c)
(1) Be a legal entity authorized to conduct business within a State of the United States.
(2) Not be under Federal or State bankruptcy or rehabilitation proceedings.
(3) Have a net worth (not including other guarantees, intangibles and restricted reserves) equal to three times the amount of the PSO guarantee.
(4) If the guarantor is regulated by a State insurance commissioner, or other State official with authority for risk-bearing entities, it must meet the net worth requirement in § 422.390(c)(3) with all guarantees and all investments in and loans to organizations covered by guarantees excluded from its assets.
(5) If the guarantor is not regulated by a State insurance commissioner, or other similar State official it must meet the net worth requirement in § 422.390(c)(3) with all guarantees and all investments in and loans to organizations covered by a guarantee and to related parties (subsidiaries and affiliates) excluded from its assets.
(d)
(1) State the financial obligation covered by the guarantee;
(2) Agree to—
(i) Unconditionally fulfill the financial obligation covered by the guarantee; and
(ii) Not subordinate the guarantee to any other claim on the resources of the guarantor;
(3) Declare that the guarantor must act on a timely basis, in any case not more than 5 business days, to satisfy the financial obligation covered by the guarantee; and
(4) Meet other conditions as HCFA may establish from time to time.
(e)
(f)
(1) Requests HCFA's approval at least 90 days before the proposed effective date of the modification, substitution, or termination;
(2) Demonstrates to HCFA's satisfaction that the modification, substitution, or termination will not result in insolvency of the PSO; and
(3) Demonstrates how the PSO will meet the requirements of this section.
(g)
(1) Meet the applicable requirements of this section within 15 business days; and
(2) If required by HCFA, meet a portion of the applicable requirements in
Except in the case of a PSO granted a waiver under subpart H of this part, each M+C organization must—
(a) Be licensed under State law, or otherwise authorized to operate under State law, as a risk-bearing entity (as defined in § 422.2) eligible to offer health insurance or health benefits coverage in each State in which it offers one or more M+C plans;
(b) If not commercially licensed, obtain certification from the State that the organization meets a level of financial solvency and such other standards as the State may require for it to operate as an M+C organization; and
(c) Demonstrate to HCFA that—
(1) The scope of its license or authority allows the organization to offer the type of M+C plan or plans that it intends to offer in the State; and
(2) If applicable, it has obtained the State certification required under paragraph (b) of this section.
(a)
(b)
(1) Benefit requirements, such as mandating the inclusion in an M+C plan of a particular service, or specifying the scope or duration of a service (for example, length of hospital stay, number of home health visits). State cost-sharing standards with respect to any benefits are preempted only if they are inconsistent with this part, as provided for in paragraph (a) of this section.
(2) Requirements relating to inclusion or treatment of providers and suppliers.
(3) Coverage determinations (including related appeal and grievance processes for all benefits included under an M+C contract). Determinations on issues other than whether a service is covered under an M+C contract, and the extent of enrollee liability under the M+C plan for such a service, are not considered coverage determinations for purposes of this paragraph.
(c) Except as provided in paragraphs (a) and (b) of this section, nothing in this section may be construed to affect or modify the provisions of any other law or regulation that imposes or preempts a specific State authority.
(a)
(b)
For purposes of this subpart, the following definitions apply:
(1) Sale, exchange, or lease of property.
(2) Loan of money or extension of credit.
(3) Goods, services, or facilities furnished for a monetary consideration, including management services, but not including—
(i) Salaries paid to employees for services performed in the normal course of their employment; or
(ii) Health services furnished to the M+C organization's enrollees by hospitals and other providers, and by M+C organization staff, medical groups, or independent practice associations, or by any combination of those entities.
(1) Any director, officer, partner, or employee responsible for management or administration of an M+C organization.
(2) Any person who is directly or indirectly the beneficial owner of more than 5 percent of the organization's equity; or the beneficial owner of a mortgage, deed of trust, note, or other interest secured by and valuing more than 5 percent of the organization.
(3) In the case of an M+C organization organized as a nonprofit corporation, an incorporator or member of such corporation under applicable State corporation law.
(4) Any entity in which a person described in paragraph (1), (2), or (3) of this definition:
(i) Is an officer, director, or partner; or
(ii) Has the kind of interest described in paragraphs (1), (2), or (3) of this definition.
(5) Any person that directly or indirectly controls, is controlled by, or is under common control with, the M+C organization.
(6) Any spouse, child, or parent of an individual described in paragraph (1), (2), or (3) of this definition.
(1) Performs some of the M+C organization's management functions under contract or delegation;
(2) Furnishes services to Medicare enrollees under an oral or written agreement; or
(3) Leases real property or sells materials to the M+C organization at a cost of more than $2,500 during a contract period.
(a)
(b)
(1) Be licensed by the State as a risk bearing entity in each State in which it seeks to offer an M+C plan as defined in § 422.2.
(2) Meet the minimum enrollment requirements of § 422.514, unless waived under § 422.514(b).
(3) Have administrative and management arrangements satisfactory to HCFA, as demonstrated by at least the following:
(i) A policy making body that exercises oversight and control over the
(ii) Personnel and systems sufficient for the M+C organization to organize, plan, control, and evaluate financial and marketing activities, the furnishing of services, the quality assurance program, and the administrative and management aspects of the organization.
(iii) At a minimum, an executive manager whose appointment and removal are under the control of the policy making body.
(iv) A fidelity bond or bonds, procured and maintained by the M+C organization, in an amount fixed by its policymaking body but not less than $100,000 per individual, covering each officer and employee entrusted with the handling of its funds. The bond may have reasonable deductibles, based upon the financial strength of the M+C organization.
(v) Insurance policies or other arrangements, secured and maintained by the M+C organization and approved by HCFA to insure the M+C organization against losses arising from professional liability claims, fire, theft, fraud, embezzlement, and other casualty risks.
(vi) A compliance plan that consists of the following:
(A) Written policies, procedures, and standards of conduct that articulate the organization's commitment to comply with all applicable Federal and State standards.
(B) The designation of a compliance officer and compliance committee that are accountable to senior management.
(C) Effective training and education between the compliance officer and organization employees.
(D) Effective lines of communication between the compliance officer and the organization's employees.
(E) Enforcement of standards through well-publicized disciplinary guidelines.
(F) Provision for internal monitoring and auditing.
(G) Ensures prompt response to detected offenses and development of corrective action initiatives.
(H) An adhered-to process for reporting to HCFA and/or the OIG credible information of violations of law by the M+C organization, plan, subcontractors or enrollees for a determination as to whether criminal, civil, or administrative action may be appropriate. With respect to enrollees, this reporting requirement shall be restricted to credible information on violations of law with respect to enrollment in the plan, or the provision of, or payment for, health services.
(4) Not accept new enrollees under a section 1876 reasonable cost contract in any area in which it seeks to offer an M+C plan.
(5) The M+C organization's contract must not have been terminated by HCFA under § 422.510 within the past 5 years.
(c)
(d)
(2) Each contract under this section must provide that HCFA, or any person or organization designated by HCFA has the right to:
(i) Inspect or otherwise evaluate the quality, appropriateness, and timeliness of services performed under the M+C contract;
(ii) Inspect or otherwise evaluate the facilities of the organization when there is reasonable evidence of some need for such inspection; and
(iii) Audit and inspect any books, contracts, and records of the M+C organization that pertain to—
(A) The ability of the organization to bear the risk of potential financial losses, or
(B) Services performed or determinations of amounts payable under the contract.
(e)
(1) The contract will be amended to exclude any M+C plan or State-licensed entity specified by HCFA; and
(2) A separate contract for any such excluded plan or entity will be deemed to be in place when such a request is made.
The contract between the M+C organization and HCFA must contain the following provisions:
(a)
(1) To accept new enrollments, make enrollments effective, process voluntary disenrollments, and limit involuntary disenrollments, as provided in subpart B of this part.
(2) That it will comply with the prohibition in § 422.110 on discrimination in beneficiary enrollment.
(3) To provide—
(i) The basic benefits as required under § 422.101 and, to the extent applicable, supplemental benefits under § 422.102; and
(ii) Access to benefits as required under subpart C of this part;
(iii) In a manner consistent with professionally recognized standards of health care, all benefits covered by Medicare.
(4) To disclose information to beneficiaries in the manner and the form prescribed by HCFA as required under § 422.111;
(5) To operate a quality assurance and performance improvement program and have an agreement for external quality review as required under subpart D of this part;
(6) To comply with all applicable provider requirements in subpart E of this part, including provider certification requirements, anti-discrimination requirements, provider participation and consultation requirements, the prohibition on interference with provider advice, limits on provider indemnification, rules governing payments to providers, and limits on physician incentive plans;
(7) To comply with all requirements in subpart M of this part governing coverage determinations, grievances, and appeals;
(8) To comply with the reporting requirements in § 422.516 and the requirements in § 422.257 for submitting encounter data to HCFA;
(9) That it will be paid under the contract in accordance with the payment rules in subpart F of this part;
(10) To develop its annual ACR, and submit all required information on premiums, benefits, and cost-sharing by May 1, as provided in subpart G of this part;
(11) That its contract may not be renewed or may be terminated in accordance with this subpart and subpart N of this part.
(12) To comply will all requirements that are specific to a particular type of M+C plan, such as the special rules for private fee-for-service plans in §§ 422.114 and 422.216 and the MSA requirements in §§ 422.56, 422.103, and 422.262; and
(13) To comply with the confidentiality and enrollee record accuracy requirements in § 422.118.
(14) An M+C organization's compliance with paragraphs (a)(1) through (a)(13) and (c) of this section is material to performance of the contract.
(b)
(c)
(d)
(1) Are sufficient to do the following:
(i) Accommodate periodic auditing of the financial records (including data related to Medicare utilization, costs, and computation of the ACR) of M+C organizations.
(ii) Enable HCFA to inspect or otherwise evaluate the quality, appropriateness and timeliness of services performed under the contract, and the facilities of the organization.
(iii) Enable HCFA to audit and inspect any books and records of the M+C organization that pertain to the ability of the organization to bear the risk of potential financial losses, or to services performed or determinations of amounts payable under the contract.
(iv) Properly reflect all direct and indirect costs claimed to have been incurred and used in the preparation of the ACR proposal.
(v) Establish component rates of the ACR for determining additional and supplementary benefits.
(vi) Determine the rates utilized in setting premiums for State insurance agency purposes and for other government and private purchasers; and
(2) Include at least records of the following:
(i) Ownership and operation of the M+C organization's financial, medical, and other record keeping systems.
(ii) Financial statements for the current contract period and six prior periods.
(iii) Federal income tax or informational returns for the current contract period and six prior periods.
(iv) Asset acquisition, lease, sale, or other action.
(v) Agreements, contracts, and subcontracts.
(vi) Franchise, marketing, and management agreements.
(vii) Schedules of charges for the M+C organization's fee-for-service patients.
(viii) Matters pertaining to costs of operations.
(ix) Amounts of income received by source and payment.
(x) Cash flow statements.
(xi) Any financial reports filed with other Federal programs or State authorities.
(e)
(1) HHS, the Comptroller General, or their designee may evaluate, through inspection or other means—
(i) The quality, appropriateness, and timeliness of services furnished to Medicare enrollees under the contract;
(ii) The facilities of the M+C organization; and
(iii) The enrollment and disenrollment records for the current contract period and six prior periods.
(2) HHS, the Comptroller General, or their designees may audit, evaluate, or inspect any books, contracts, medical records, patient care documentation, and other records of the M+C organization, related entity, contractor, subcontractor, or its transferee that pertain to any aspect of services performed, reconciliation of benefit liabilities, and determination of amounts payable under the contract, or as the Secretary may deem necessary to enforce the contract.
(3) The M+C organization agrees to make available, for the purposes specified in paragraph (d) of this section, its premises, physical facilities and equipment, records relating to its Medicare enrollees, and any additional relevant information that HCFA may require.
(4) HHS, the Comptroller General, or their designee's right to inspect, evaluate, and audit extends through 6 years from the final date of the contract period or completion of audit, whichever is later unless—
(i) HCFA determines there is a special need to retain a particular record or group of records for a longer period and notifies the M+C organization at least 30 days before the normal disposition date;
(ii) There has been a termination, dispute, or fraud or similar fault by the M+C organization, in which case the retention may be extended to 6 years from the date of any resulting final resolution of the termination, dispute, or fraud or similar fault; or
(iii) HCFA determines that there is a reasonable possibility of fraud, in which case it may inspect, evaluate, and audit the M+C organization at any time.
(f)
(1) To HCFA, certified financial information that must include the following:
(i) Such information as HCFA may require demonstrating that the organization has a fiscally sound operation.
(ii) Such information as HCFA may require pertaining to the disclosure of ownership and control of the M+C organization.
(2) To HCFA, all information that is necessary for HCFA to administer and evaluate the program and to simultaneously establish and facilitate a process for current and prospective beneficiaries to exercise choice in obtaining Medicare services. This information includes, but is not limited to:
(i) The benefits covered under an M+C plan;
(ii) The M+C monthly basic beneficiary premium and M+C monthly supplemental beneficiary premium, if any, for the plan or in the case of an MSA plan, the M+C monthly MSA premium.
(iii) The service area and continuation area, if any, of each plan and the enrollment capacity of each plan;
(iv) Plan quality and performance indicators for the benefits under the plan including —
(A) Disenrollment rates for Medicare enrollees electing to receive benefits through the plan for the previous 2 years;
(B) Information on Medicare enrollee satisfaction;
(C) Information on health outcomes;
(D) The recent record regarding compliance of the plan with requirements of this part, as determined by HCFA; and
(E) Other information determined by HCFA to be necessary to assist beneficiaries in making an informed choice among M+C plans and traditional Medicare;
(v) Information about beneficiary appeals and their disposition;
(vi) Information regarding all formal actions, reviews, findings, or other similar actions by States, other regulatory bodies, or any other certifying or accrediting organization;
(vii) For M+C organizations offering an MSA plan, information specified by HCFA for HCFA's use in preparing its report to the Congress on the MSA demonstration, including data specified by HCFA in the areas of selection, use of preventative care, and access to services.
(viii) To HCFA, any other information deemed necessary by HCFA for the administration or evaluation of the Medicare program.
(3) To its enrollees all informational requirements under § 422.64 and, upon an enrollee's, request the financial disclosure information required under § 422.516.
(g)
(1) Each M+C organization must adopt and maintain arrangements satisfactory to HCFA to protect its enrollees from incurring liability for payment of any fee that are the legal obligation of the M+C organization. To meet this requirement the M+C organization must—
(i) Ensure that all contractual or other written arrangements with providers prohibit the organization's providers from holding any beneficiary enrollee liable for payment of any such fees; and
(ii) Indemnify the beneficiary enrollee for payment of any fees that are the legal obligation of the M+C organization for services furnished by providers that do not contract, or that have not otherwise entered into an agreement with the M+C organization, to provide services to the organization's beneficiary enrollees.
(2) The M+C organization must provide for continuation of enrollee health care benefits—
(i) For all enrollees, for the duration of the contract period for which HCFA payments have been made; and
(ii) For enrollees who are hospitalized on the date its contract with HCFA terminates, or, in the event of an insolvency, through discharge.
(3) In meeting the requirements of this paragraph (g), other than the provider contract requirements specified in paragraph (g)(1) of this section, the M+C organization may use—
(i) Contractual arrangements;
(ii) Insurance acceptable to HCFA;
(iii) Financial reserves acceptable to HCFA; or
(iv) Any other arrangement acceptable to HCFA.
(h)
(i) Title VI of the Civil Rights Act of 1964 as implemented by regulations at 45 CFR part 84;
(ii) The Age Discrimination Act of 1975 as implemented by regulations at 45 CFR part 91;
(iii) The Rehabilitation Act of 1973;
(iv) The Americans With Disabilities Act;
(v) Other laws applicable to recipients of Federal funds; and
(vi) All other applicable laws and rules.
(2) M+C organizations receiving Federal payments under M+C contracts, and related entities, contractors, and subcontractors paid by an M+C organization to fulfill its obligations under its M+C contract are subject to certain laws that are applicable to individuals and entities receiving Federal funds. M+C organizations must inform all related entities, contractors and subcontractors that payments that they receive are, in whole or in part, from Federal funds.
(i)
(2) The M+C organization agrees to require all related entities, contractors, or subcontractors to agree that—
(i) HHS, the Comptroller General, or their designees have the right to inspect, evaluate, and audit any pertinent contracts, books, documents, papers, and records of the related entity(s), contractor(s), or subcontractor(s) involving transactions related to the M+C contract; and
(ii) HHS', the Comptroller General's, or their designee's right to inspect, evaluate, and audit any pertinent information for any particular contract period will exist through 6 years from the final date of the contract period or from the date of completion of any audit, whichever is later.
(3) All contracts or written arrangements between M+C organizations and providers, related entities, contractors, or subcontractors must contain the following:
(i) Enrollee protection provisions that provide—
(A) Consistent with paragraph (g)(1) of this section, arrangements that prohibit providers from holding an enrollee liable for payment of any fees that are the obligation of the M+C Organization; and
(B) Consistent with paragraph (g)(2) of this section, provision for the continuation of benefits.
(ii) Accountability provisions that indicate that—
(A) The M+C organization oversees and is accountable to HCFA for any functions or responsibilities that are described in these standards; and
(B) The M+C organization may only delegate activities or functions to a provider, related entity, contractor, or subcontractor in a manner consistent with requirements set forth at paragraph (i)(4) of this section.
(iii) A provision requiring that any services or other activity performed by a related entity, contractor or subcontractor in accordance with a contract or written agreement will be consistent and comply with the M+C organization's contractual obligations.
(4) If any of the M+C organizations' activities or responsibilities under its contract with HCFA are delegated to other parties, the following requirements apply to any related entity, contractor, subcontractor, or provider:
(i) Written arrangements must specify delegated activities and reporting responsibilities.
(ii) Written arrangements must either provide for revocation of the delegation activities and reporting requirements or specify other remedies in instances where HCFA or the M+C organization determine that such parties have not performed satisfactorily.
(iii) Written arrangements must specify that the performance of the parties is monitored by the M+C organization on an ongoing basis.
(iv) Written arrangements must specify that either—
(A) The credentials of medical professionals affiliated with the party or parties will be either reviewed by the M+C organization; or
(B) The credentialing process will be reviewed and approved by the M+C organization and the M+C organization must audit the credentialing process on an ongoing basis.
(v) All contracts or written arrangements must specify that the related entity, contractor, or subcontractor must comply with all applicable Medicare laws, regulations, and HCFA instructions.
(5) If the M+C organization delegates selection of the providers, contractors, or subcontractor to another organization, the M+C organization's written arrangements with that organization must state that the HCFA-contracting M+C organization retains the right to approve, suspend, or terminate any such arrangement.
(j)
(k)
(1) The contract will be amended to exclude any M+C plan or State-licensed entity specified by HCFA; and
(2) A separate contract for any such excluded plan or entity will be deemed to be in place when such a request is made.
(l)
(1) The CEO or CFO must certify that each enrollee for whom the organization is requesting payment is validly enrolled in an M+C plan offered by the organization and the information relied upon by HCFA in determining payment is accurate.
(2) The CEO or CFO must certify that the encounter data it submits under § 422.257 are accurate, complete, and truthful.
(3) If such encounter data are generated by a related entity, contractor, or subcontractor of an M+C organization, such entity, contractor, or subcontractor must similarly certify the accuracy, completeness, and truthfulness of the data.
(4) The CEO or CFO must certify that the information in its ACR submission is accurate and fully conforms to the requirements in § 422.310.
(a)
(b)
(c)
(1) HCFA informs the M+C organization that it authorizes a renewal; and
(2) The M+C organization has not provided HCFA with a notice of intention not to renew.
(d)
(a)
(2) If an M+C organization does not intend to renew its contract, it must notify—
(i) HCFA in writing, by May 1 of the year in which the contract would end;
(ii) Each Medicare enrollee, at least 90 days before the date on which the nonrenewal is effective. This notice must include a written description of alternatives available for obtaining Medicare services within the service area, including alternative M+C plans, Medigap options, and original Medicare and must receive HCFA approval.
(iii) The general public, at least 90 days before the end of the current calendar year, by publishing a notice in one or more newspapers of general circulation in each community located in the M+C organization's service area.
(3) HCFA may accept a nonrenewal notice submitted after May 1 if—
(i) The M+C organization notifies its Medicare enrollees and the public in accordance with paragraph (a)(2)(ii) and (a)(2)(iii) of this section; and
(ii) Acceptance is not inconsistent with the effective and efficient administration of the Medicare program.
(4) If an M+C organization does not renew a contract under this paragraph (a), HCFA will not enter into a contract with the organization for 5 years unless there are special circumstances that warrant special consideration, as determined by HCFA.
(b)
(i) The M+C organization has not fully implemented or shown discernable progress in implementing quality improvement projects as defined in § 422.152(d).
(ii) The M+C organization's level of enrollment or growth in enrollment is determined by HCFA to threaten the viability of the organization under the M+C program and or be an indicator of beneficiary dissatisfaction with the M+C plan(s) offered by the organization.
(iii) For any of the reasons listed in § 422.510(a), which would also permit HCFA to terminate the contract.
(iv) The M+C organization has committed any of the acts in § 422.752(a) that would support the imposition of intermediate sanctions or civil money penalties under subpart O of this part.
(2)
(i) To the M+C organization by May 1 of the contract year.
(ii) If HCFA decides not to authorize a renewal of the contract, to the M+C organization's Medicare enrollees by mail at least 90 days before the end of the current calendar year.
(iii) If HCFA decides not to authorize a renewal of the contract, to the general public at least 90 days before the end of the current calendar year, by publishing a notice in one or more newspapers of general circulation in each community or county located in the M+C organization's service area.
(3)
(a) A contract may be modified or terminated at any time by written mutual consent.
(1) If the contract is terminated by mutual consent, except as provided in paragraph (b) of this section, the M+C organization must provide notice to its Medicare enrollees and the general public as provided in § 422.512(b)(2) and (b)(3).
(2) If the contract is modified by mutual consent, the M+C organization must notify its Medicare enrollees of any changes that HCFA determines are appropriate for notification within timeframes specified by HCFA.
(b) If the contract terminated by mutual consent is replaced the day following such termination by a new M+C contract, the M+C organization is not required to provide the notice specified in paragraph (a)(1) of this section.
(a)
(1) The M+C organization has failed substantially to carry out the terms of its contract with HCFA.
(2) The M+C organization is carrying out its contract with HCFA in a manner that is inconsistent with the effective and efficient implementation of this part.
(3) HCFA determines that the M+C organization no longer meets the requirements of this part for being a contracting organization.
(4) The M+C organization commits or participates in fraudulent or abusive activities affecting the Medicare program, including submission of fraudulent data.
(5) The M+C organization experiences financial difficulties so severe that its ability to make necessary health services available is impaired to the point of posing an imminent and serious risk to the health of its enrollees, or otherwise fails to make services available to the extent that such a risk to health exists.
(6) The M+C organization substantially fails to comply with the requirements in subpart M of this part relating to grievances and appeals.
(7) The M+C organization fails to provide HCFA with valid encounter data as required under § 422.257.
(8) The M+C organization fails to implement an acceptable quality assessment and performance improvement program as required under subpart D of this part.
(9) The M+C organization substantially fails to comply with the prompt payment requirements in § 422.520.
(10) The M+C organization substantially fails to comply with the service access requirements in § 422.112 or § 422.114.
(11) The M+C organization fails to comply with the requirements of § 422.208 regarding physician incentive plans.
(b)
(1)
(ii) The M+C organization notifies its Medicare enrollees of the termination by mail at least 30 days before the effective date of the termination.
(iii) The M+C organization notifies the general public of the termination at least 30 days before the effective date of the termination by publishing a notice in one or more newspapers of general circulation in each community or county located in the M+C organization's service area.
(2)
(ii) HCFA notifies the M+C organization's Medicare enrollees in writing of HCFA's decision to terminate the M+C organization's contract. This notice occurs no later than 30 days after HCFA notifies the plan of its decision to terminate the M+C contract. HCFA simultaneously informs the Medicare enrollees of alternative options for obtaining Medicare services, including alternative M+C organizations in a similar geographic area and original Medicare.
(iii) HCFA notifies the general public of the termination no later than 30 days after notifying the plan of HCFA's decision to terminate the M+C contract. This notice is published in one or more newspapers of general circulation in each community or county located in the M+C organization's service area.
(c)
(2)
(d)
(a)
(b)
(1) To HCFA, at least 90 days before the intended date of termination. This notice must specify the reasons why the M+C organization is requesting contract termination.
(2) To its Medicare enrollees, at least 60 days before the termination effective date. This notice must include a written description of alternatives available for obtaining Medicare services within the services area, including alternative M+C plans, Medigap options, original Medicare and must receive HCFA approval.
(3) To the general public at least 60 days before the termination effective date by publishing an HCFA-approved notice in one or more newspapers of general circulation in each community or county located in the M+C organization's geographic area.
(c)
(d)
(e)
(a)
(1) At least 5,000 individuals (or 1,500 individuals if the organization is a PSO) are enrolled for the purpose of receiving health benefits from the organization; or
(2) At least 1,500 individuals (or 500 individuals if the organization is a PSO) are enrolled for purposes of receiving health benefits from the organization and the organization primarily serves individuals residing outside of urbanized areas as defined in § 412.62(f) (or, in the case of a PSO, the PSO meets the requirements in § 422.352(c)).
(3) Except as provided for in paragraph (b) of this section, an M+C organization must maintain a minimum enrollment as defined in paragraphs (a)(1) and (a)(2) of this section for the duration of its contract.
(b)
(i) The organization management and providers have previous experience in managing and providing health care services under a risk-based payment arrangement to at least as many individuals as the applicable minimum enrollment for the entity as described in paragraph (a) of this section, or
(ii) The organization has the financial ability to bear financial risk under an M+C contract. In determining whether an organization is capable of bearing risk, HCFA considers factors such as the organization's management experience as described in paragraph
(iii) The organization is able to establish a marketing and enrollment process that will allow it to meet the applicable enrollment requirement specified in paragraph (a) of this section prior to completion of the third contract year.
(2) If an M+C organization fails to meet the enrollment requirement in the first year, HCFA may waive the minimum requirements for another year provided that the organization—
(i) Requests an additional minimum enrollment waiver no later than 120 days before the end of the first year;
(ii) Continues to demonstrate it is capable of administering and managing an M+C contract and is able to manage the level of risk; and,
(iii) Demonstrates an acceptable marketing and enrollment process. Enrollment projections for the second year of the waiver will become the organization's transitional enrollment standard.
(3) If an M+C organization fails to meet the enrollment requirement in the second year, HCFA may waive the minimum requirements for the third year only if the organization has attained the transitional enrollment standard as described in paragraph (b)(2)(iii) of this section.
(c) Failure to meet enrollment requirements. HCFA may elect not to renew its contract with an M+C organization that fails to meet the applicable enrollment requirement in paragraph (a) of this section
(a)
(1) The cost of its operations.
(2) The patterns of utilization of its services.
(3) The availability, accessibility, and acceptability of its services.
(4) To the extent practical, developments in the health status of its enrollees.
(5) Information demonstrating that the M+C organization has a fiscally sound operation.
(6) Other matters that HCFA may require.
(b)
(1) A description of significant business transactions (as defined in § 422.500) between the M+C organization and a party in interest.
(2) With respect to those transactions—
(i) A showing that the costs of the transactions listed in paragraph (c) of this section do not exceed the costs that would be incurred if these transactions were with someone who is not a party in interest; or
(ii) If they do exceed, a justification that the higher costs are consistent with prudent management and fiscal soundness requirements.
(3) A combined financial statement for the M+C organization and a party in interest if either of the following conditions is met:
(i) Thirty-five percent or more of the costs of operation of the M+C organization go to a party in interest.
(ii) Thirty-five percent or more of the revenue of a party in interest is from the M+C organization.
(c)
(2) Inter-entity transactions must be eliminated in the consolidated column.
(3) The statements must have been examined by an independent auditor in accordance with generally accepted accounting principles and must include appropriate opinions and notes.
(4) Upon written request from an M+C organization showing good cause, HCFA may waive the requirement that the organization's combined financial
(d)
(2) The M+C organization must furnish the information to the employer or the employer's designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
(e)
(f)
(a)
(1) The contract between HCFA and the M+C organization must provide that the M+C organization will pay 95 percent of the “clean claims” within 30 days of receipt if they are submitted by, or on behalf of, an enrollee of an M+C private fee-for-service plan or are claims for services that are not furnished under a written agreement between the organization and the provider.
(2) The M+C organization must pay interest on clean claims that are not paid within 30 days in accordance with sections 1816(c)(2)(B) and 1842(c)(2)(B).
(3) All other claims must be approved or denied within 60 calendar days from the date of the request.
(b)
(c)
(1) For direct payment of the sums owed to providers, or M+C private fee-for-service plan enrollees; and
(2) For appropriate reduction in the amounts that would otherwise be paid to the organization, to reflect the amounts of the direct payments and the cost of making those payments.
In order to participate as an M+C organization, an RFB society—
(a) May not impose any limitation on membership based on any factor related to health status; and
(b) Must offer, in addition to the M+C RFB plan, health coverage to individuals who are members of the church or convention or group of churches with which the society is affiliated, but who are not entitled to receive benefits from the Medicare program.
Nomenclature changes to subpart L appear at 63 FR 35106, June 26, 1998.
(a)
(2)
(3)
(ii) Transfer of corporate stock or the merger of another corporation into the M+C organization's corporation, with the M+C organization surviving, does not ordinarily constitute change of ownership.
(b)
(2) If the M+C organization fails to give HCFA the required notice timely, it continues to be liable for capitation payments that HCFA makes to it on behalf of Medicare enrollees after the date of change of ownership.
(c)
(1) That is embodied in a document executed and signed by all three parties;
(2) That meets the requirements of § 422.552; and
(3) Under which HCFA recognizes the new owner as the successor in interest to the current owner's Medicare contract.
(d)
(1) The existing contract becomes invalid; and
(2) If the new owner wishes to participate in the Medicare program, it must apply for, and enter into, a contract in accordance with subpart K of this part.
(e)
(a)
(1)
(2)
(3)
(i) The proposed new owner is in fact a successor in interest to the contract;
(ii) Recognition of the new owner as a successor in interest to the contract is in the best interest of the Medicare program; and
(iii) The successor organization meets the requirements to qualify as an M+C organization under subpart J of this part.
(b)
(2)
(3)
(ii) The new owner must post a performance bond that is satisfactory to HCFA.
(4)
(a)
(b)
(2) If the other entity wishes to participate in Medicare as an M+C organization, it must apply for and enter into a contract in accordance with subpart L of this part.
(c)
(a)
(2) Section 1852(g) of the Act establishes requirements that an M+C organization must meet concerning organization determinations and appeals.
(b)
(1) Requirements for M+C organizations with respect to grievance procedures, organization determinations, and appeal procedures.
(2) The rights of M+C enrollees with respect to organization determinations, and grievance and appeal procedures.
(3) The rules concerning notice of noncoverage of inpatient hospital care.
(4) The rules that apply when an M+C enrollee requests immediate PRO review of a determination that he or she no longer needs inpatient hospital care.
As used in this subpart, unless the context indicates otherwise—
(a)
(i) A grievance procedure as described in § 422.564 for addressing issues
(ii) A procedure for making timely organization determinations; and
(iii) Appeal procedures that meet the requirements of this subpart for issues that involve organization determinations; and
(2) An M+C organization must ensure that all enrollees receive written information about the—
(i) Grievance and appeal procedures that are available to them through the M+C organization; and
(ii) Complaint process available to the enrollee under the PRO process as set forth under section 1154(a)(14) of the Act.
(3) In accordance with subpart K of this part, if the M+C organization delegates any of its responsibilities under this subpart to another entity or individual through which the organization provides health care services, the M+C organization is ultimately responsible for ensuring that the entity or individual satisfies the relevant requirements of this subpart.
(b)
(1) The right to have grievances between the enrollee and the M+C organization heard and resolved, as described in § 422.564.
(2) The right to a timely organization determination, as provided under § 422.566.
(3) The right to request an expedited organization determination, as provided under § 422.570.
(4) If dissatisfied with any part of an organization determination, the following appeal rights:
(i) The right to a reconsideration of the adverse organization determination by the M+C organization, as provided under § 422.578.
(ii) The right to request an expedited reconsideration, as provided under § 422.584.
(iii) If, as a result of a reconsideration, an M+C organization affirms, in whole or in part, its adverse organization determination, the right to an automatic reconsidered determination made by an independent, outside entity contracted by HCFA, as provided in § 422.592.
(iv) The right to an ALJ hearing if the amount in controversy is $100 or more, as provided in § 422.600.
(v) The right to request DAB review of the ALJ hearing decision, as provided in § 422.608.
(vi) The right to judicial review of the hearing decision if the amount in controversy is $1000 or more, as provided in § 422.612.
(c)
(i) The enrollee is not entitled to review of that issue by the M+C organization; and
(ii) The PRO review decision is subject only to the appeal procedures set forth in part 473 of this chapter.
(2) If an enrollee has no further liability to pay for services that were furnished by an M+C organization, a determination regarding these services is not subject to appeal.
(d)
(a)
(2) Grievance procedures must meet any guidelines established by HCFA.
(b)
(c)
(a)
(b)
(1) Payment for emergency services, post-stabilization care, or urgently needed services.
(2) Payment for any other health services furnished by a provider other than the M+C organization that the enrollee believes—
(i) Are covered under Medicare; or
(ii) If not covered under Medicare, should have been furnished, arranged for, or reimbursed by the M+C organization.
(3) The M+C organization's refusal to provide services that the enrollee believes should be furnished or arranged for by the M+C organization when the enrollee has not received the services outside the M+C organization.
(4) Discontinuation of a service, if the enrollee disagrees with the determination that the service is no longer medically necessary.
(c)
(a)
(b)
(c)
(d)
(1) State the specific reasons for the denial in understandable language;
(2) Inform the enrollee of his or her right to a reconsideration;
(3) Describe both the standard and expedited reconsideration processes, including the enrollee's right to and conditions for obtaining an expedited reconsideration for service requests, and the rest of the appeal process; and
(4) Comply with any other requirements specified by HCFA.
(e)
(a)
(b)
(2) A physician may provide oral or written support for a request for an expedited determination.
(c)
(1) Establish an efficient and convenient means for individuals to submit oral or written requests. The M+C organization must document all oral requests in writing and maintain the documentation in the case file.
(2) Promptly decide whether to expedite a determination, based on the following requirements:
(i) For a request made by an enrollee the M+C organization must provide an expedited determination if it determines that applying the standard timeframe for making a determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(ii) For a request made or supported by a physician, the M+C organization must provide an expedited determination if the physician indicates that applying the standard timeframe for making a determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(d)
(1) Automatically transfer a request to the standard timeframe and make the determination within the 14-day timeframe established in § 422.568 for a standard determination. The 14-day period begins with the day the M+C organization receives the request for expedited determination.
(2) Give the enrollee prompt oral notice of the denial and follow up, within 2 working days, with a written letter that—
(i) Explains that the M+C organization will process the request using the 14-day timeframe for standard determinations;
(ii) Informs the enrollee of the right to file a grievance if he or she disagrees with the M+C organization's decision not to expedite; and
(iii) Provides instructions about the grievance process and its timeframes.
(e)
(f)
(a)
(b)
(c)
(d)
(e)
(2) If the determination is not completely favorable to the enrollee, the notice must—
(i) Inform the enrollee of his or her right to a reconsideration;
(ii) Describe both the standard and expedited reconsideration processes, including the enrollee's right to request, and conditions for obtaining, an expedited reconsideration, and the rest of the appeal process; and
(iii) Comply with any other requirements specified by HCFA.
(f)
The parties to the organization determination are—
(a) The enrollee (including his or her authorized representative);
(b) An assignee of the enrollee (that is, a physician or other provider who has furnished a service to the enrollee and formally agrees to waive any right to payment from the enrollee for that service);
(c) The legal representative of a deceased enrollee's estate; or
(d) Any other provider or entity (other than the M+C organization) determined to have an appealable interest in the proceeding.
The organization determination is binding on all parties unless it is reconsidered under §§ 422.578 through 422.596 or is reopened and revised under § 422.616.
Any party to an organization determination (including one that has been reopened and revised as described in § 422.616) may request that the determination be reconsidered under the procedures described in § 422.582, which address requests for a standard reconsideration. An enrollee or physician (acting on behalf of an enrollee) may request an expedited reconsideration as described in § 422.584.
A reconsideration consists of a review of an adverse organization determination, the evidence and findings upon which it was based, and any other evidence the parties submit or the M+C organization or HCFA obtains.
(a)
(1) The M+C organization that made the organization determination;
(2) An SSA office; or
(3) In the case of a qualified railroad retirement beneficiary, an RRB office.
(b)
(c)
(2)
(i) Be in writing; and
(ii) State why the request for reconsideration was not filed on time.
(d)
(e)
(a)
(b)
(2) A physician may provide oral or written support for a request for an expedited reconsideration.
(c)
(1)
(2)
(i) For a request made by an enrollee, the M+C organization must provide an expedited reconsideration if it determines that applying the standard timeframe for reconsidering a determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(ii) For a request made or supported by a physician, the M+C organization must provide an expedited reconsideration if the physician indicates that applying the standard timeframe for conducting a reconsideration could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(d)
(1) Automatically transfer a request to the standard timeframe and make the determination within the 30-day timeframe established in § 422.590(a). The 30-day period begins the day the M+C organization receives the request for expedited reconsideration.
(2) Give the enrollee prompt oral notice, and follow up, within 2 working days, with a written letter that—
(i) Explains that the M+C organization will process the enrollee's request using the 30-day timeframe for standard reconsiderations;
(ii) Informs the enrollee of the right to file a grievance if he or she disagrees with the organization's decision not to expedite; and
(iii) Provides instructions about the grievance process and its timeframes.
(e)
(f)
The M+C organization must provide the parties to the reconsideration with a reasonable opportunity to present evidence and allegations of fact or law, related to the issue in dispute, in person as well as in writing. In the case of an expedited reconsideration, the opportunity to present evidence is limited by the short timeframe for making a decision. Therefore, the M+C organization must inform the parties of the conditions for submitting the evidence.
(a)
(2) If the M+C organization makes a reconsidered determination that affirms, in whole or in part, its adverse organization determination, it must prepare a written explanation and send the case file to the independent entity contracted by HCFA as expeditiously as the enrollee's health condition requires, but no later than 30 calendar days from the date it receives the request for a standard reconsideration (or no later than the expiration of an extension described in paragraph (a)(1) of this section). The organization must make reasonable and diligent efforts to assist in gathering and forwarding information to the independent entity.
(b)
(2) If the M+C organization affirms, in whole or in part, its adverse organization determination, it must prepare a written explanation and send the case file to the independent entity contracted by HCFA no later than 60 calendar days from the date it receives the request for a standard reconsideration. The organization must make reasonable and diligent efforts to assist in gathering and forwarding information to the independent entity.
(c)
(d)
(2)
(3)
(4)
(5)
(e)
(f)
(g)
(2) When the issue is the M+C organization's denial of coverage based on a lack of medical necessity, the reconsidered determination must be made by a physician with expertise in the field of medicine that is appropriate for the services at issue.
(a) When the M+C organization affirms, in whole or in part, its adverse organization determination, the issues that remain in dispute must be reviewed and resolved by an independent, outside entity that contracts with HCFA.
(b) The independent outside entity must conduct the review as expeditiously as the enrollee's health condition requires but must not exceed the deadlines specified in the contract.
(c) When the independent entity conducts a reconsideration, the parties to the reconsideration are the same parties listed in § 422.582(d) who qualified during the M+C organization's reconsideration, with the addition of the M+C organization.
(a)
(b)
(1) State the specific reasons for the entity's decisions;
(2) If the reconsidered determination is adverse (that is, does not completely reverse the M+C organization's adverse organization determination), inform the parties of their right to an ALJ hearing if the amount in controversy is $100 or more;
(3) Describe the procedures that a party must follow to obtain an ALJ hearing; and
(4) Comply with any other requirements specified by HCFA.
A reconsidered determination is final and binding on all parties unless a party files a request for a hearing under the provisions of § 422.602, or unless the reconsidered determination is revised under § 422.616.
(a) If the amount remaining in controversy is $100 or more, any party to the reconsideration (except the M+C organization) who is dissatisfied with the reconsidered determination has a right to a hearing before an ALJ. The M+C organization does not have the right to request a hearing before an ALJ.
(b) The amount remaining in controversy, which can include any combination of Part A and Part B services, is computed in accordance with § 405.740 of this chapter for Part A services and § 405.817 of this chapter for Part B services.
(c) If the basis for the appeal is the M+C organization's refusal to provide services, HCFA uses the projected value of those services to compute the amount remaining in controversy.
(a)
(b)
(c)
(d)
(2) If, after a hearing is initiated, the ALJ finds that the amount in controversy is less than $100, he or she discontinues the hearing and does not rule on the substantive issues raised in the appeal.
Any party to the hearing, including the M+C organization, who is dissatisfied with the ALJ hearing decision, may request that the Board review the ALJ's decision or dismissal. Regulations located at 20 CFR 404.967 through 404.984 regarding SSA Appeals Council Review apply to Board review for matters addressed by this subpart.
(a)
(1) The Board denied the party's request for review; and
(2) The amount in controversy is $1,000 or more.
(b)
(1) It is the final decision of HCFA; and
(2) The amount in controversy is $1,000 or more.
(c)
(a) An organization or reconsidered determination made by an M+C organization, a reconsidered determination made by the independent entity described in § 422.592, or the decision of an ALJ or the Board that is otherwise final and binding may be reopened and revised by the entity that made the determination or decision, under the rules in § 405.750 of this chapter.
(b) Reopening may be at the instigation of any party.
(c) The filing of a request for reopening does not relieve the M+C organization of its obligation to make payment or provide services as specified in § 422.618.
(d) Once an entity issues a revised determination or decision, any party may file an appeal.
(a)
(2)
(b)
(a)
(b)
(c)
(1) The reason why inpatient hospital care is no longer needed.
(2) The effective date of the enrollee's liability for continued inpatient care.
(3) The enrollee's appeal rights.
(4) Comply with any other requirements specified by HCFA.
(d)
(a)
(2) An enrollee who fails to request immediate PRO review in accordance with the procedures in paragraph (b) of this section may request expedited reconsideration by the M+C organization as described in § 422.584, but the financial liability rules of paragraph (c) of this section do not apply.
(b)
(1) The enrollee must submit the request for immediate review—
(i) To the PRO that has an agreement with the hospital under § 466.78 of this chapter;
(ii) In writing or by telephone; and
(iii) By noon of the first working day after he or she receives written notice that the M+C organization or hospital has determined that the hospital stay is no longer necessary.
(2) On the date it receives the enrollee's request, the PRO must notify the M+C organization that the enrollee has filed a request for immediate review.
(3) The M+C organization must supply any information that the PRO requires to conduct its review and must make it available, by phone or in writing, by the close of business of the first full working day immediately following the day the enrollee submits the request for review.
(4) In response to a request from the M+C organization, the hospital must submit medical records and other pertinent information to the PRO by close of business of the first full working day immediately following the day the organization makes its request.
(5) The PRO must solicit the views of the enrollee who requested the immediate PRO review.
(6) The PRO must make a determination and notify the enrollee, the hospital, and the M+C organization by close of business of the first working day after it receives all necessary information from the hospital, or the organization, or both.
(c)
(ii) The hospital may not charge the M+C organization (or the enrollee) if—
(A) It was the hospital (acting on behalf of the enrollee) that filed the request for immediate PRO review; and
(B) The PRO upholds the noncoverage determination made by the M+C organization.
(2)
This subpart establishes the procedures for making and reviewing the following contract determinations:
(a) A determination that an entity is not qualified to enter into a contract with HCFA under Part C of title XVIII of the Act.
(b) A determination to terminate a contract with an M+C organization in accordance with § 422.510(a).
(c) A determination not to authorize a renewal of a contract with an M+C organization in accordance with § 422.506(b).
(a) When HCFA makes a contract determination, it gives the M+C organization written notice.
(b) The notice specifies—
(1) The reasons for the determination; and
(2) The M+C organization's right to request reconsideration.
(c) For HCFA-initiated terminations, HCFA mails notice 90 days before the anticipated effective date of the termination. For terminations based on initial determinations described at § 422.510(a)(5), HCFA immediately notifies the M+C organization of its decision to terminate the organization's M+C contract.
(d) When HCFA determines that it will not authorize a contract renewal, HCFA mails the notice to the M+C organization by May 1 of the current contract year.
The contract determination is final and binding unless—
(a) The determination is reconsidered in accordance with §§ 422.648 through 422.658;
(b) A timely request for a hearing is filed under § 422.662; or
(c) The reconsideration decision is revised as a result of a reopening under § 422.696.
(a) Reconsideration is the first step for appealing a contract determination specified in § 422.641.
(b) HCFA reconsiders the specified determinations if the M+C organization files a written request in accordance with § 422.650.
(a)
(b)
(c)
(d)
HCFA provides the M+C organization or M+C contract applicant and the HCFA official or officials who made the contract determination reasonable opportunity to present as evidence any documents or written statements that are relevant and material to the matters at issue.
A reconsidered determination is a new determination that—
(a) Is based on a review of the contract determination, the evidence and findings upon which that was based, and any other written evidence submitted before notice of the reconsidered determination is mailed, including facts relating to the status of the M+C organization subsequent to the contract determination; and
(b) Affirms, reverses, or modifies the initial determination.
(a) HCFA gives the M+C organization or M+C contract applicant written notice of the reconsidered determination.
(b) The notice—
(1) Contains findings with respect to the M+C organization's qualifications to enter into or remain under a contract with HCFA pursuant to Part C of title XVIII of the Act;
(2) States the specific reasons for the reconsidered determination; and
(3) Informs the M+C organization or M+C contract applicant of its right to a hearing if it is dissatisfied with the determination.
A reconsidered determination is final and binding unless a request for a hearing is filed in accordance with § 422.662 or it is revised in accordance with § 422.696.
The following parties are entitled to a hearing:
(a) An applicant entity that has been determined in a reconsidered determination to be unqualified to enter into a contract with HCFA under Part C of the Act.
(b) An M+C organization whose contract with HCFA has been terminated or has not been renewed as a result of a contract determination as provided in § 422.641.
(a)
(b)
(c)
(1) The parties described in § 422.660;
(2) At the discretion of the hearing officer, any interested parties who make a showing that their rights may be prejudiced by the decision to be rendered at the hearing; and
(3) HCFA.
(a) HCFA postpones the proposed effective date of the contract determination to terminate a contract with an M+C organization until a hearing decision is reached and affirmed by the Administrator following review under § 422.692 in instances where an M+C organization requests review by the Administrator; and
(b) HCFA extends the current contract at the end of the contract period (in the case of a determination not to renew) only—
(1) If HCFA finds that an extension of the contract will be consistent with the purpose of this part; and
(2) For such period as HCFA and the M+C organization agree.
(c) Exception: A contract terminated in accordance with § 422.510(a)(5) will be immediately terminated and will not be postponed if a hearing is requested.
HCFA designates a hearing officer to conduct the hearing. The hearing officer need not be an ALJ.
(a) A hearing officer may not conduct a hearing in a case in which he or she is prejudiced or partial to any party or has any interest in the matter pending for decision.
(b) A party to the hearing who objects to the designated hearing officer must notify that officer in writing at the earliest opportunity.
(c) The hearing officer must consider the objections, and may, at his or her discretion, either proceed with the hearing or withdraw.
(1) If the hearing officer withdraws, HCFA designates another hearing officer to conduct the hearing.
(2) If the hearing officer does not withdraw, the objecting party may, after the hearing, present objections and request that the officer's decision be revised or a new hearing be held before another hearing officer. The objections must be submitted in writing to HCFA.
(a) The hearing officer fixes a time and place for the hearing, which is not to exceed 30 days from the receipt of the request for the hearing, and sends written notice to the parties. The notice also informs the parties of the general and specific issues to be resolved and information about the hearing procedure.
(b) The hearing officer may, on his or her own motion, or at the request of a party, change the time and place for the hearing. The hearing officer may adjourn or postpone the hearing.
(c) The hearing officer will give the parties reasonable notice of any change in time or place of hearing, or of adjournment or postponement.
A party may appoint as its representative at the hearing anyone not disqualified or suspended from acting as a representative before the Secretary or otherwise prohibited by law.
(a) A representative appointed and qualified in accordance with § 422.672 may, on behalf of the represented party—
(1) Gives or accepts any notice or request pertinent to the proceedings set forth in this subpart;
(2) Presents evidence and allegations as to facts and law in any proceedings affecting that party; and
(3) Obtains information to the same extent as the party.
(b) A notice or request sent to the representative has the same force and effect as if it had been sent to the party.
(a) The hearing is open to the parties and to the public.
(b) The hearing officer inquires fully into all the matters at issue and receives in evidence the testimony of witnesses and any documents that are relevant and material.
(c) The hearing officer provides the parties an opportunity to enter any objection to the inclusion of any document.
(d) The hearing officer decides the order in which the evidence and the arguments of the parties are presented and the conduct of the hearing.
The hearing officer rules on the admissibility of evidence and may admit evidence that would be inadmissible under rules applicable to court procedures.
(a) The hearing officer may examine the witnesses.
(b) The parties or their representatives are permitted to examine their witnesses and cross-examine witnesses of other parties.
(a) Prehearing discovery is permitted upon timely request of a party.
(b) A request is timely if it is made before the beginning of the hearing.
(c) A reasonable time for inspection and reproduction of documents is provided by order of the hearing officer.
(d) The hearing officer's order on all discovery matters is final.
The hearing officer may schedule a prehearing conference if he or she believes that a conference would more clearly define the issues.
(a) A complete record of the proceedings at the hearing is made and
(b) The record may not be closed until a hearing decision has been issued.
In exercising his or her authority, the hearing officer must comply with the provisions of title XVIII and related provisions of the Act, the regulations issued by the Secretary, and general instructions issued by HCFA in implementing the Act.
(a) As soon as practical after the close of the hearing, the hearing officer issues a written decision that—
(1) Is based upon the evidence of record; and
(2) Contains separately numbered findings of fact and conclusions of law.
(b) The hearing officer provides a copy of the hearing decision to each party.
(c) The hearing decision is final and binding unless it is reversed or modified by the Administrator following review under § 422.692, or reopened and revised in accordance with § 422.696.
(a)
(b)
(c)
A decision by the Administrator under section 422.692 is final and binding unless it is reopened and revised in accordance with § 422.696.
(a)
(b)
(c)
(d)
(2) The notice of revision specifies the reasons for revisions.
The revision of a contract or reconsidered determination is binding unless a party files a written request for hearing of the revised determination in accordance with § 422.662.
(a) The following intermediate sanctions and civil money penalties may be imposed:
(1) Civil money penalties ranging from $10,000 to $100,000 depending upon the violation.
(2) Suspension of enrollment of Medicare beneficiaries.
(3) Suspension of payment to the M+C organization for Medicare beneficiaries who enroll.
(4) Require the M+C organization to suspend all marketing activities to Medicare beneficiaries for the M+C plan subject to the intermediate sanctions.
(b) The enrollment, payment, and marketing sanctions continue in effect until HCFA is satisfied that the deficiency on which the determination was based has been corrected and is not likely to recur.
(a)
(1) Fails substantially to provide, to an M+C enrollee, medically necessary services that the organization is required to provide (under law or under the contract) to an M+C enrollee, and that failure adversely affects (or is substantially likely to adversely affect) the enrollee.
(2) Imposes on M+C enrollees premiums in excess of the monthly basic and supplemental beneficiary premiums permitted under section 1854 of the Act and subpart G of this part.
(3) Expels or refuses to reenroll a beneficiary in violation of the provisions of this part.
(4) Engages in any practice that could reasonably be expected to have the effect of denying or discouraging enrollment of individuals whose medical condition or history indicates a need for substantial future medical services.
(5) Misrepresents or falsifies information that it furnishes—
(i) To HCFA; or
(ii) To an individual or to any other entity.
(6) Fails to comply with the requirements of § 422.206, which prohibits interference with practitioners' advice to enrollees.
(7) Fails to comply with § 422.216, which requires the organization to enforce the limit on balance billing under a private fee-for service plan.
(8) Employs or contracts with an individual who is excluded from participation in Medicare under section 1128 or 1128A of the Act (or with an entity that employs or contracts with such an individual) for the provision of any of the following:
(i) Health care.
(ii) Utilization review.
(iii) Medical social work.
(iv) Administrative services.
(b)
(a)
(i) Sends a written notice to the M+C organization stating the nature and basis of the proposed sanction; and
(ii) Sends the OIG a copy of the notice.
(2)
(b)
(1) Consists of a review of the evidence by an HCFA official who did not participate in the initial decision to impose a sanction; and
(2) Gives the M+C organization a concise written decision setting forth the factual and legal basis for the decision that affirms or rescinds the original determination.
(c)
(1) Require the M+C organization to suspend acceptance of applications made by Medicare beneficiaries for enrollment in the sanctioned M+C plan during the sanction period;
(2) In the case of a violation under § 422.752(a), suspend payments to the M+C organization for Medicare beneficiaries enrolled in the sanctioned M+C plan during the sanction period; and
(3) Require the M+C organization to suspend all marketing activities for the sanctioned M+C plan to Medicare enrollees.
(d) Effective date and duration of sanctions—(1)
(2)
(3)
(e)
(f)
(2) In the case of a violation described in paragraph (a) of § 422.752, or a determination under paragraph (b) of § 422.752 based upon a violation under § 422.510(a)(4) (involving fraudulent or abusive activities), in accordance with the provisions of 42 CFR parts 1003 and 1005, the OIG may impose civil money penalties on the M+C organization in accordance with parts 1003 and 1005 of this title in addition to, or in place of, the sanctions that HCFA may impose under paragraph (c) of this section.
(3) In the case of a determination under paragraph (b) of § 422.752 other than a determination based upon a violation under § 422.510(a)(4), in accordance with the provisions of 42 CFR parts 1003 and 1005, HCFA may impose civil money penalties on the M+C organization in the amounts specified in § 422.758 in addition to, or in place of, the sanctions that HCFA may impose under paragraph (c) of this section.
If HCFA makes a determination under § 422.752(b), based on any determination under § 422.510(a) except a determination under § 422.510(a)(4), HCFA may impose civil money penalties in the following amounts:
(a) If the deficiency on which the determination is based has directly adversely affected (or has the substantial likelihood of adversely affecting) one or more M+C enrollees—$25,000 for each determination.
(b) For each week that a deficiency remains uncorrected after the week in which the M+C organization receives HCFA's notice of the determination—$10,000.
The provisions of section 1128A of the Act (except subsections (a) and (b))
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a)
1814—Basic conditions for, and limitations on, Medicare payments for Part A services.
1815—Payment to providers for Part A services.
1820—Conditions for designating certain hospitals as critical assess hospitals.
1835—Procedures for payment to providers for Part B services.
1842(b)(3)(B)(ii)—Assignment of Part B Medicare claims.
1842(b)(6)—Payment to entities other than the supplier.
1848—Payment for physician services.
1870(e) and (f)—Settlement of claims after death of the beneficiary.
(2) Section 424.444(c) is also based on section 216(j) of the Act.
(b)
(1) The requirement that the need for services be certified and that a physician establish a plan of treatment (subpart B);
(2) The procedures and time limits for filing claims (subpart C);
(3) The individuals or entities to whom payment may be made (subparts D and E);
(4) The limitations on assignment and reassignment of claims (subpart F);
(5) Special requirements that apply to services furnished by nonparticipating U.S. hospitals and foreign hospitals (subparts G and H); and
(6) The replacement and reclamation of Medicare payment checks (subpart M).
(c)
As used in this part, unless the context indicates otherwise—
ICD-9-CM means International Classification of Diseases, Ninth Revision, Clinical Modification.
(a) As a basis for Medicare payment, the following conditions must be met:
(1)
(i) Covered services, as specified in part 409 or part 410 of this chapter; or
(ii) Services excluded from coverage as custodial care or services not reasonable and necessary, but reimbursable in accordance with §§ 405.332 through 405.334 of this chapter, pertaining to limitation of liability.
(2)
(3)
(4)
(5)
(6)
(b) Additional conditions applicable in certain circumstances or to certain services are set forth in other sections of this part.
(a)
(1)
(2)
(ii)
(b)
(a)
(b)
(a)
(1) Obtain the required certification and recertification statements;
(2) Keep them on file for verification by the intermediary, if necessary; and
(3) Certify, on the appropriate billing form, that the statements have been obtained and are on file.
(b)
(c)
(d)
(2) A hospital or SNF may provide for obtaining a certification or recertification earlier than required by these regulations, or vary the time frame (within the prescribed outer limits) for different diagnostic or clinical categories.
(3) Delayed certification and recertification statements are acceptable when there is a legitimate reason for delay. (For instance, the patient was unaware of his or her entitlement when he or she was treated.) Delayed certification and recertification statements must include an explanation of the reason for the delay.
(4) A delayed certification may be included with one or more recertifications on a single signed statement.
(e)
(1) A physician who is a doctor of medicine or osteopathy.
(2) A dentist in the circumstances specified in § 424.13(c).
(3) A doctor of podiatric medicine if his or her certification is consistent with the functions he or she is authorized to perform under State law.
(4) A nurse practitioner or clinical nurse specialist, as defined in paragraph (e)(5) or (e)(6) of this section, in the circumstances specified in § 424.20(e).
(5) For purposes of this section, to qualify as a nurse practitioner, an individual must—
(i) Be a registered professional nurse who is currently licensed to practice nursing in the State where he or she practices; be authorized to perform the services of a nurse practitioner in accordance with State law; and have a master's degree in nursing;
(ii) Be certified as a nurse practitioner by a professional association recognized by HCFA that has, at a minimum, eligibility requirements that meet the standards in paragraph (e)(5)(i) of this section; or
(iii) Meet the requirements for a nurse practitioner set forth in paragraph (e)(5)(i) of this section, except for the master's degree requirement, and have received before August 25, 1998 a certificate of completion from a formal advanced practice program that prepares registered nurses to perform an expanded role in the delivery of primary care.
(6) For purposes of this section, to qualify as a clinical nurse specialist, an individual must—
(i) Be a registered professional nurse who is currently licensed to practice nursing in the State where he or she practices; be authorized to perform the
(ii) Be certified as a clinical nurse specialist by a professional association recognized by HCFA that has at a minimum, eligibility requirements that meet the standards in paragraph (e)(6)(i) of this section; or
(iii) Meet the requirements for a clinical nurse specialist set forth in paragraph (e)(6)(i) of this section, except for the master's degree requirement, and have received before August 25, 1998 a certificate of completion from a formal advanced practice program that prepares registered nurses to perform an expanded role in the delivery of primary care.
(a)
(1) The reasons for either—
(i) Continued hospitalization of the patient for medical treatment or medically required inpatient diagnostic study; or
(ii) Special or unusual services for cost outlier cases (under the prospective payment system set forth in subpart F of part 412 of this chapter).
(2) The estimated time the patient will need to remain in the hospital.
(3) The plans for posthospital care, if appropriate.
(b)
(2) If this is the basis for the physician's certification or recertification, the required statement must so indicate; and the physician is expected to continue efforts to place the patient in a participating SNF as soon as a bed becomes available.
(c)
(2)
(d)
(2) The first recertification is required no later than as of the 18th day of hospitalization.
(3) Subsequent recertifications are required at intervals established by the UR committee (on a case-by-case basis if it so chooses), but no less frequently than every 30 days.
(e)
(1) For day-outlier cases, certification is required no later than one day after the hospital reasonably assumes that the case meets the outlier criteria, established in accordance with § 412.80(a)(1)(i) of this chapter, or no later than 20 days into the hospital stay, whichever is earlier. The first and subsequent recertifications are required at intervals established by the UR committee (on a case-by-case basis if it so chooses) but not less frequently than every 30 days.
(2) For cost-outlier cases, certification is required no later than the date on which the hospital requests
(f)
(2) A utilization review that is used to fulfill the recertification requirement is considered timely if performed no later than the seventh day after the day the physician recertification would have been required. The next physician recertification would need to be made no later than the 30th day following such review; if review by the UR committee took the place of this physician recertification, the review could be performed as late as the seventh day following the 30th day.
(g)
(a)
(b)
(1) For treatment that could reasonably be expected to improve the patient's condition; or
(2) For diagnostic study.
(c)
(i) For treatment that could reasonably be expected to improve the patient's condition; or
(ii) For diagnostic study; and
(2) The hospital records show that the services furnished were—
(i) Intensive treatment services;
(ii) Admission and related services necessary for diagnostic study; or
(iii) Equivalent services.
(d)
(2) The first recertification is required as of the 18th day of hospitalization. Subsequent recertifications are required at intervals established by the UR committee (on a case-by-case basis if it so chooses), but no less frequently than every 30 days.
(e)
(a)
(b)
(a)
(b)
(1) The certification is required no later than September 12;
(2) The first recertification is required no later than September 18; and
(3) Subsequent recertifications are required at least every 30 days after September 18.
Medicare Part A pays for posthospital SNF care furnished by an SNF, or a hospital or CAH with a swing-bed approval, only if the certification and recertification for services are consistent with the content of paragraph (a) or (c) of this section, as appropriate.
(a)
(i) The individual needs or needed on a daily basis skilled nursing care (furnished directly by or requiring the supervision of skilled nursing personnel) or other skilled rehabilitation services that, as a practical matter, can only be provided in an SNF or a swing-bed hospital on an inpatient basis, and the SNF care is or was needed for a condition for which the individual received inpatient care in a participating hospital or a qualified hospital, as defined in § 409.3 of this chapter; or
(ii) The individual has been correctly assigned to one of the Resource Utilization Groups designated as representing the required level of care, as provided in § 409.30 of this chapter.
(2)
(b)
(2)
(c)
(2) The estimated time the individual will need to remain in the SNF;
(3) Plans for home care, if any; and
(4) If appropriate, the fact that continued services are needed for a condition that arose after admission to the SNF and while the individual was still under treatment for the condition for which he or she had received inpatient hospital services.
(d)
(2) Subsequent recertifications are required at least every 30 days after the first recertification.
(e)
(1) The physician responsible for the case or, with his or her authorization, by a physician on the SNF staff or a physician who is available in case of an emergency and has knowledge of the case; or
(2) A nurse practitioner or clinical nurse specialist, neither of whom has a direct or indirect employment relationship with the facility but who is working in collaboration with a physician. For purposes of this section,
(f)
(g)
Medicare Part A or Part B pays for home health services only if a physician certifies and recertifies the content specified in paragraphs (a)(1) and (b)(2) of this section, as appropriate.
(a)
(i) The individual needs or needed intermittent skilled nursing care, or physical or speech therapy, or (for the period from July through November 30, 1981) occupational therapy.
(ii) Home health services were required because the individual was confined to the home except when receiving outpatient services.
(iii) A plan for furnishing the services has been established and is periodically reviewed by a physician who is a doctor of medicine, osteopathy, or podiatric medicine, and who is not precluded from performing this function under paragraph (d) of this section. (A doctor of podiatric medicine may perform only plan of treatment functions that are consistent with the functions he or she is authorized to perform under State law.)
(iv) The services were furnished while the individual was under the care of a physician who is a doctor of medicine, osteopathy, or podiatric medicine.
(2)
(b)
(2)
(c)[Reserved]
(d)
(2)
(i) Has a direct or indirect ownership interest of 5 percent or more in the
(ii) Has an ownership interest of 5 percent or more in any mortgage, deed of trust, note, or other obligation that is secured by the agency, if that interest equals 5 percent or more of the agency's assets.
(3)
(i) Receives any compensation as an officer or director of the HHA; or
(ii) Has direct or indirect business transactions with the HHA that, in any fiscal year, amount to more than $25,000 or 5 percent of the agency's total operating expenses, whichever is less. Business transactions means contracts, agreements, purchase orders, or leases to obtain services, supplies, equipment, and space and, after August 29, 1986, salaried employment.
(4)
(e)
(2)
(f)
(2) The intermediary reviews the request and sends the request, with its recommendations, to HCFA.
(3) HCFA reviews the request and the intermediary's recommendation and forwards its approval or disapproval to the intermediary
(4) An approved classification as sole community HHA remains in effect without need for reapproval unless there is a change in the circumstances under which the classification was approved.
(g)
(a)
(2) Outpatient hospital diagnostic services, including necessary drugs and biologicals, ordinarily furnished or arranged for by a hospital for the purpose of diagnostic study.
(b)
(c)
(ii) The services were furnished while the individual was under the care of a physician, nurse practitioner, clinical nurse specialist, or physician assistant.
(iii) The services were furnished under a plan of treatment that meets the requirements of § 410.61 of this chapter.
(2)
(3)
(ii) If the plan of treatment is established by a physical therapist or speech-language pathologist, the certification must be signed by a physician or by a nurse practitioner, clinical nurse specialist, or physician assistant who has knowledge of the case.
(4)
(ii)
(iii)
(d)[Reserved]
(e)
(ii) The services are or were furnished while the individual was under the care of a physician.
(iii) The services were furnished under a written plan of treatment that meets the requirements of paragraph (e)(2) of this section.
(2)
(A) The physician's diagnosis;
(B) The type, amount, duration, and frequency of the services; and
(C) The treatment goals under the plan.
(ii) The physician determines the frequency and duration of the services taking into account accepted norms of medical practice and a reasonable expectation of improvement in the patient's condition.
(f)
(2)
(3)
(4)
Medicare Part B pays for CORF services only if a physician certifies, and the facility physician recertifies, the content specified in paragraphs (a) and (b)(2) of this section, as appropriate.
(a)
(2) The services were furnished while the individual was under the care of a physician; and
(3) A written plan of treatment has been established and is reviewed periodically by a physician.
(b)
(2)
(ii) The patient is making progress in attaining the rehabilitation goals; and,
(iii) The treatment is not having any harmful effect on the patient.
This subpart sets forth the requirements, procedures, and time limits for claiming Medicare payments. Claims must be filed in all cases except when services are furnished on a prepaid capitation basis by a health maintenance organization (HMO), a competitive medical plan (CMP), or a health care prepayment plan (HCPP). Special procedures for claiming payment after the beneficiary has died and for certain bills paid by organizations are set forth in subpart E of this part.
(a) A claim must meet the following requirements:
(1) A claim must be filed with the appropriate intermediary or carrier on a form prescribed by HCFA in accordance with HCFA instructions.
(2) A claim for physician services, clinical psychologist services, or clinical social worker services must include appropriate diagnostic coding for those services using ICD-9-CM, and a claim for physician services furnished to an SNF resident under § 411.15(p)(2) of this chapter must also include the SNF's Medicare provider number.
(3) A claim must be signed by the beneficiary or the beneficiary's representative (in accordance with § 424.36(b)).
(4) A claim must be filed within the time limits specified in § 424.44.
(5) A Part B claim filed by an SNF must include appropriate HCPCS coding.
(b) The prescribed forms for claims are the following:
HCFA-1450—Uniform Institutional Provider Bill. (This form is for institutional provider billing for Medicare inpatient, outpatient and home health services.)
HCFA-1490S—Request for Medicare payment. (For use by a patient to request payment for medical expenses.)
HCFA-1490U—Request for Medicare Payment by Organization. (For use by an organization requesting payment for medical services.)
HCFA-1491—Request for Medicare Payment-Ambulance. (For use by an organization requesting payment for ambulance services.)
HCFA-1500—Health Insurance Claim Form. (For use by physicians and other suppliers to request payment for medical services.)
HCFA-1660—Request for Information-Medicare Payment for Services to a Patient now Deceased. (For use in requesting amounts payable under title XVIII to a deceased beneficiary.)
(c)
All claims for services of providers and all claims by suppliers and nonparticipating hospitals must be—
(a) Filed by the provider, supplier, or hospital; and
(b) Signed by the provider, supplier, or hospital unless HCFA instructions waive this requirement.
(a)
(b)
(1) The name and address of—
(i) The beneficiary;
(ii) The supplier or nonparticipating hospital that furnished the services; and
(iii) The physician who prescribed the services if they were furnished by a supplier other than the physician.
(2) The place where each service was furnished, e.g., home, office, independent laboratory, hospital.
(3) The date each service was furnished.
(4) A listing of the services in sufficient detail to permit determination of payment under the fee schedule for physicians' services; for itemized bills from physicians, appropriate diagnostic coding using ICD-9-CM must be used.
(5) The charges for each service.
(c)
(a)
(b)
(1) The beneficiary's legal guardian.
(2) A relative or other person who receives social security or other governmental benefits on the beneficiary's behalf.
(3) A relative or other person who arranges for the beneficiary's treatment or exercises other responsibility for his or her affairs.
(4) A representative of an agency or institution that did not furnish the services for which payment is claimed but furnished other care, services, or assistance to the beneficiary.
(5) A representative of the provider or of the nonparticipating hospital claiming payment for services it has furnished if the provider or nonparticipating hospital is unable to have the claim signed in accordance with paragraph (b) (1), (2), (3), or (4) of this section.
(c)
(d)
(e)
(a)
(1) Describes his or her relationship to the beneficiary; and
(2) Explains the circumstances that make it impractical for the beneficiary to sign the claim or statement.
(b)
(a)
(b)
(2)
(c)
(i) By the hospital or SNF;
(ii) By physicians, if their services are billed by the hospital or SNF in its name; or
(iii) By physicians who bill separately, if the services were furnished in the hospital or SNF.
(2)
(i) By the provider or facility;
(ii) By physicians whose services are billed by the provider or facility in its name; or
(iii) By physicians who bill separately, if the services were furnished in the provider or facility.
(3)
(d)
(1) This policy does not apply to unassigned claims for rental of durable medical equipment (DME).
(2) With respect to assigned claims for rental or purchase of DME, a new statement is required if another item of equipment is rented or purchased.
(a)
(1) On or before December 31 of the following year for services that were furnished during the first 9 months of a calendar year; and
(2) On or before December 31 of the second following year for services that were furnished during the last 3 months of the calendar year.
(b)
(2) The time will be extended through the last day of the 6th calendar month following the month in which the error or misrepresentation is corrected.
(c)
A written statement of intent to claim Medicare benefits constitutes a claim if—
(a) The statement is filed with HCFA or any carrier or intermediary within the time limits specified in § 424.44;
(b) The statement indicates the intent to claim Medicare payment for specified services furnished to an identified beneficiary; and
(c) A claim that meets the requirements of § 424.32(a) is filed within 6 months after the month in which the intermediary or carrier, as appropriate, advises the claimant to file that claim.
(a) This subpart specifies to whom Medicare payment is ordinarily made for different kinds of services.
(b) Subpart E of this part sets forth provisions applicable in special situations.
(c) Subpart F of this part specifies the exceptional circumstances under which payment may be made to an assignee or reassignee.
(a)
(b)
Medicare pays a nonparticipating hospital for the following services, if covered, in the specified circumstances:
(a) Emergency inpatient and outpatient services furnished by a U.S. hospital, if the hospital has in effect an election to claim payment in accordance with subpart G of this part.
(b) Certain medical and other health services covered under Medicare Part B and furnished by a U.S. hospital, if the hospital meets the requirements of § 424.55 for payment as a supplier.
(c) Emergency or nonemergency inpatient services furnished by a foreign hospital if the hospital has in effect an election to claim payment in accordance with subpart G of this part.
Medicare pays the beneficiary for the following services, if covered, in the specified circumstances:
(a) Emergency inpatient and outpatient services furnished by a nonparticipating U.S. hospital that has not elected to claim payment in accordance with subpart G of this part.
(b) Certain medical and other health services covered under Medicare Part B and furnished by a nonparticipating U.S. hospital, if the hospital does not receive assigned payment as a supplier under § 424.55.
(c) Emergency or nonemergency services furnished by a foreign hospital if the hospital does not have in effect an election to claim payment in accordance with subpart H of this part.
(d) Physician and ambulance services furnished outside the United States.
(e) Services furnished by a supplier if the claim has not been assigned to the supplier.
Medicare may pay amounts due a beneficiary to the beneficiary's legal guardian or representative payee.
(a) Medicare pays the supplier for covered services if the beneficiary (or
(b) In accepting assignment, the supplier agrees to the following:
(1) To accept, as full charge for the service, the amount approved by the carrier as the basis for determining the Medicare Part B payment (the reasonable charge or the lesser of the fee schedule amount and the actual charge).
(2) To limit charges to the beneficiary or any other source as follows:
(i) To collect nothing for those services for which Medicare pays 100 percent of the Medicare approved amount.
(ii) To collect only the difference between the Medicare approved amount and the Medicare Part B payment (for example, the amount of any reduction in incurred expenses under § 410.155(c), any applicable deductible amount, and any applicable coinsurance amount) for services for which Medicare pays less than 100 percent of the approved amount.
(3) Not to charge the beneficiary when Medicare paid for services determined to be “not reasonable or necessary” if—
(i) The beneficiary was without fault in the overpayment; and
(ii) The determination that the payment was incorrect was made by the carrier after the third year following the year in which the carrier sent notice to the beneficiary that it approved the payment.
(a)
(b)
(1) The reasonable charge minus the amount the beneficiary had already paid to the supplier; or
(2) The full Part B benefit due for the services furnished.
(c)
(d)
(a)
(b) Medicare pays for items furnished by a supplier with a billing number to the—
(1) Supplier if the beneficiary (or the person authorized to request payment on the beneficiary's behalf) assigns the claim to the supplier and the supplier accepts assignment;
(2) Beneficiary, if the supplier does not accept assignment; or
(3) Partly to the beneficiary and partly to the supplier, if the supplier accepts assignment of the bill, as described in § 424.56.
(c) Medicare does not issue a billing number to a supplier that submits claims for items listed in § 421.210(b) of this subchapter until that supplier
(1) In response to orders which it receives, fills those orders from its own inventory or inventory in other companies with which it has contracted to fill such orders or fabricates or fits items for sale from supplies it buys under a contract;
(2) Is responsible for delivery of Medicare covered items to Medicare beneficiaries;
(3) Honors all warranties express and implied under applicable State law;
(4) Answers any questions or complaints a beneficiary has about the item or use of the item that was sold or rented to him or her, and refers beneficiaries with Medicare questions to the appropriate carrier;
(5) Maintains and repairs directly or through a service contract with another company, items it has rented to beneficiaries;
(6) Accepts returns of substandard (less than full quality for the particular item) or unsuitable items (inappropriate for the beneficiary at the time it was fitted and/or sold) from beneficiaries;
(7) Discloses consumer information to each beneficiary with whom it does business which consists of the supplier standards to which it must conform;
(8) Complies with the disclosure provisions in § 420.206;
(9) Complies with all applicable State and Federal licensure and regulatory requirements;
(10) Maintains a physical facility on an appropriate site; and
(11) Has proof of appropriate liability insurance.
(d) If a supplier is found not to meet the standards in paragraph (c) of this section, its billing number is revoked, effective 15 days after the entity is sent notice of the revocation. A billing number may be issued, with the concurrence of HCFA, when a supplier has successfully completed a corrective action plan rectifying past violations of the supplier standards and provided sufficient assurance that it will comply with the supplier standards in the future. Corrective action includes repayment of monies due to beneficiaries and Medicare, and honoring applicable warranties.
(e) Suppliers must renew their applications for a billing number 3 years after the billing numbers are first reissued, except for the first reissuance process, as follows: suppliers must renew applications for supplier numbers 2 years after initial issuance of billing numbers for one third of all suppliers. Another one third of suppliers must reapply 3 years after initial issuance. The last third of suppliers must reapply 4 years after initial issuance. Thereafter, each supplier must reapply 3 years after its last number is issued, unless no claim for an item furnished by a supplier has been submitted for four consecutive quarters, in which case the supplier must submit a new request for another billing number.
(f) Suppliers are required to have complaint resolution protocols to address beneficiary complaints which relate to the supplier standards in paragraph (c) of this section and to keep written complaints and related correspondence, and any notes of actions taken in response to written or oral complaints. Failure to maintain such information may be considered evidence that supplier standards have not been met. If a carrier determines that a supplier is not satisfactorily responding to one or more beneficiary complaints, the carrier may require that a supplier maintain the following information on all written and oral beneficiary complaints, including telephone complaints, it receives: The name, address, telephone number and health insurance claim number of the complaint, a summary of the complaint and the date it was made; the name of the person taking the complaint, a summary of any actions taken to resolve the complaint; and, if an investigation was not conducted, the name of the person making the decision and the reason for the decision.
(a) This subpart sets forth provisions applicable to payment after the beneficiary's death and payment to entities that provide coverage complementary to Medicare Part B.
(b) The provisions applicable to payment for services excluded as custodial care or services not reasonable and necessary are set forth in §§ 405.332 through 405.336 of this chapter.
(a)
(b)
(2) The beneficiary died without receiving Medicare payment.
(3) The bill has been paid.
(c)
(1) The person or persons who, without a legal obligation to do so, paid for the services with their own funds, before or after the beneficiary's death.
(2) The legal representative of the beneficiary's estate if the services were paid for by the beneficiary before he or she died, or with funds from the estate.
(3) If the deceased beneficiary or his or her estate paid for the services and no legal representative of the estate has been appointed, the survivors, in the following order of priority:
(i) The person found by SSA to be the surviving spouse, if he or she was either living in the same household with the deceased at the time of death, or was, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased beneficiary;
(ii) The child or children, who were, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one child, in equal parts to each child);
(iii) The parent or parents, who were, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one parent, in equal parts to each parent);
(iv) The person found by SSA to be the surviving spouse who was not living in the same household with the deceased at the time of death and was not, for the month of death, entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased beneficiary;
(v) The child or children who were not entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one child, in equal parts to each child);
(vi) The parent or parents who were not entitled to monthly social security or railroad retirement benefits on the basis of the same earnings record as the deceased (and, if there is more than one parent, in equal parts to each parent).
(4) If none of the listed relatives survive, no payment is made.
(5) If the services were paid for by a person other than the deceased beneficiary, and that person died before payment was completed, Medicare does not pay that person's estate. Medicare pays a surviving relative of the deceased beneficiary in accordance with the priorities in paragraph (c)(3) of this section. If none of those relatives survive. Medicare pays the legal representative of the deceased beneficiary's estate. If there is no legal representative of the estate, no payment is made.
(d)
(e)
(1) The person who claims payment must meet the following requirements:
(i) Submit a claim on a HCFA-prescribed form and an itemized bill in accordance with the requirements of this subpart. (See paragraph (g) of this section for an exception.)
(ii) Provide evidence that the services were furnished if the intermediary or carrier requests it.
(iii) Provide evidence of payment of the bill and of the identity of the person who paid it.
(2) If a person claims payment as the legal representative of the deceased beneficiary's estate, he or she must also submit a copy of the papers showing appointment as legal representative.
(3) If a person claims payment as a survivor of the beneficiary, he or she must also submit evidence, if the intermediary or carrier requests it, that he or she is highest on the priority list of paragraph (c)(3) of this section.
(f)
(1) A receipted bill, or a properly completed “Report of Services” section of a claim form, showing who paid the bill;
(2) A cancelled check;
(3) A written statement from the provider or supplier or an authorized staff member; or
(4) Other probative evidence.
(g)
(a)
(b)
(2) The beneficiary died without making an assignment to the physician or other supplier or receiving Medicare payment.
(3) The bill has not been paid.
(c)
(1)
(i) Files a claim on a HCFA-prescribed form in accordance with the applicable requirements of this subpart;
(ii) Upon request from the carrier, provides evidence that the services for which it claims payment were, in fact, furnished; and
(iii) Agrees in writing to accept the reasonable charge as the full charge for the services.
(2)
(i) A statement indicating that he or she has assumed legal obligation to pay for the services.
(ii) A claim on a HCFA-prescribed form in accordance with the requirements of this subpart. (If a claim had been submitted by or on behalf of the beneficiary before he or she died, submission of another claim form is not required; a written request by the person seeking payment meets the requirement for a claim.)
(iii) An itemized bill that identifies the claimant as the person to whom the physician or other supplier holds responsible for payment. (If such an itemized bill had been submitted by or on behalf of the beneficiary before he or she died, submission of another itemized bill is not required.)
(iv) If the intermediary or carrier requests it, evidence that the services were actually furnished.
(a)
(1) Provides coverage of the service under a complementary health benefit
(2) Has paid the person who provided the service an amount (including the amount payable under the Medicare program) that the person accepts as full payment.
(3) Has the written authorization of the beneficiary (or of a person authorized to sign claims on his behalf under § 424.36) to receive the Part B payment for the services for which the entity pays.
(4) Relieves the beneficiary of liability for payment for the service and will not seek any reimbursement from the beneficiary, his or her survivors or estate.
(5) Submits any information HCFA or the carrier may request, including an itemized physician or supplier bill, in order to apply the requirements under the Medicare program.
(6) Identifies and excludes from its requests for payment all services for which Medicare is the secondary payer.
(b)
(a)
(b)
(1) Prohibits the assignment, reassignment, or other transfer of the right to Medicare payments except under specified conditions;
(2) Sets forth the sanctions that HCFA may impose on a provider or supplier that violates this prohibition, or on a supplier that violates the conditions to which it agreed in accepting assignment from the individual; and
(3) Specifies the conditions for payment under court-ordered assignments or reassignments.
As used in this subpart, unless the context indicates otherwise—
(1) Receive, in the agent's name, any payments due the principal;
(2) Negotiate checks payable to the principal; or
(3) Receive, in any other manner, direct payment of amounts due the principal.
(a)
(b)
(2)
(3)
(i) The agent receives the payment under an agency agreement with the provider;
(ii) The agent's compensation is not related in any way to the dollar amounts billed or collected;
(iii) The agent's compensation is not dependent upon the actual collection of payment;
(iv) The agent acts under payment disposition instructions that the provider may modify or revoke at any time; and
(v) The agent, in receiving the payment, acts only on behalf of the provider.
HCFA may terminate a provider agreement, in accordance with § 489.53(a)(1) of this chapter, if the provider—
(a) Executes or continues a power of attorney, or enters into or continues any other arrangement, that authorizes or permits payment contrary to the provisions of this subpart; or
(b) Fails to furnish, upon request by HCFA or the intermediary, evidence necessary to establish compliance with the requirements of this subpart.
(a)
(b)
(2)
(3)
(4)
(5)
(6)
(c)
(a)
(b)
(c)
(1) Violates the terms of assignment in § 424.55(b).
(2) Continues collection efforts or fails to refund moneys incorrectly collected, in violation of the terms of assignment in § 424.55(b).
(3) Executes or continues in effect a reassignment or power of attorney or any other arrangement that seeks to obtain payment contrary to the provisions of § 424.80; or
(4) Fails to furnish evidence necessary to establish its compliance with the requirements of § 424.80.
(d)
(1) States the reasons for the proposed revocation; and
(2) Provides an opportunity for the supplier or other party to submit written argument and evidence against the proposed revocation. HCFA usually allows 15 days from the date on the notice, but may extend or reduce the time as circumstances require.
(e)
(2)
(i) The reasons for the revocation;
(ii) That the revocation is effective as of the date on the notice;
(iii) That the supplier or other party may, within 60 days from the date on the notice (or a longer period if the notice so specifies), request an administrative hearing and may be represented by counsel or other qualified representative.
(iv) That the carrier will withhold payment on any claims submitted by the supplier or other party until the period for requesting a hearing expires or, if a hearing is requested, until the hearing officer issues a decision;
(v) That if the hearing decision reverses the revocation, the carrier will pay the supplier's or other party's claims; and
(vi) That if a hearing is not requested or the hearing decision upholds the revocation, payment will be made to the beneficiary or to another person or agency authorized to receive payment on his or her behalf.
If the supplier or other party requests a hearing under § 424.82(e)(2)—
(a) The hearing is conducted—
(1) By a HCFA hearing official who was not involved in the decision to revoke; and
(2) In accordance with the procedures set forth in §§ 405.824 through 405.833 (but excepting § 405.832(d)) and 405.860 through 405.872 of this chapter. In applying those procedures, “HCFA” is substituted for “carrier”; and “hearing official”, for “hearing officer”.
(b) As soon as practicable after the close of the hearing, the official who conducted it issues a hearing decision that—
(1) Is based on all the evidence presented at the hearing and included in the hearing record; and
(2) Contains findings of fact and a statement of reasons.
(a)
(2)
(b)
(c)
(2) A final determination to revoke remains in effect until HCFA finds that the reason for the revocation has been removed and that there is reasonable assurance that it will not recur.
(d)
(a)
(b)
(2)
(a)
(1) Someone files a certified copy of the court order and of the executed assignment or reassignment (if it was necessary to execute one) with the intermediary or carrier responsible for processing the claim; and
(2) The assignment or reassignment—
(i) Applies to all Medicare benefits payable to a particular person or entity during a specified or indefinite time period; or
(ii) Specifies a particular amount of money, payable to a particular person or entity by a particular intermediary or carrier.
(b)
(c)
This subpart sets forth procedures and criteria that are followed in determining whether Medicare will pay for emergency services furnished by a hospital that is located in the United States and does not have in effect a provider agreement, that is, an agreement to participate in Medicare.
As used in this subpart, unless the context indicates otherwise—
(1) Is primarily engaged in providing, by or under the supervision of doctors of medicine or osteopathy, inpatient services for the diagnosis, treatment,
(2) Is not primarily engaged in providing skilled nursing care and related services for patients who require medical or nursing care, as described in section 1861(j)(1)(A) of the Act;
(3) Provides 24-hour nursing service in accordance with section 1861(e)(5) of the Act; and
(4) Is licensed, or is approved as meeting the standards for licensing, by the State or local licensing agency.
Without additional evidence of a threat to life or health, the following situations do not in themselves indicate a need for emergency services:
(a) Lack of care at home.
(b) Lack of transportation to a participating hospital.
(c) Death of the patient in the hospital.
Medicare pays for emergency services furnished to a beneficiary by a nonparticipating hospital or under arrangements made by such a hospital if the conditions of this section are met.
(a)
(2) The hospital has in effect an election to claim payment for all emergency services furnished in a calendar year in accordance with § 424.104.
(3) The need for emergency services arose while the beneficiary was not an inpatient in a hospital.
(4) In the case of inpatient hospital services, the services are furnished during a period in which the beneficiary could not be safely discharged or transferred to a participating hospital or other institution.
(5) The determination that the hospital was the most accessible hospital available and equipped to furnish the services is made in accordance with § 424.106.
(b)
(1) Describes the nature of the emergency and specifies why it required that the beneficiary be treated in the most accessible hospital;
(2) Establishes that all the conditions in paragraph (a) of this section are met; and
(3) Indicates when the emergency ended, which, for inpatient hospital services, is the earliest date on which the beneficiary could be safely discharged or transferred to a participating hospital or other institution.
(a)
(1) To comply with the provisions of subpart C of part 489 of this chapter relating to charges for items and services the hospital may make to the beneficiary, or any other person on his or her behalf.
(2) To comply with the provisions of subpart D of part 489 of this chapter relating to proper disposition of monies incorrectly collected from, or on behalf of a beneficiary.
(3) To request payment under the Medicare program based on amounts specified in § 413.74 of this chapter.
(b)
(c)
(d)
(e)
(1) The reason for its failure to qualify has been removed; and
(2) There is reasonable assurance that it will not recur.
(a)
(2) HCFA determines accessibility based on the factors specified in paragraphs (b) and (c) of this section and the conditions set forth in paragraph (d) of this section.
(b)
(1) The relative distances of participating and nonparticipating hospitals in the area.
(2) The transportation facilities available to these hospitals.
(3) The quality of the roads to each hospital.
(4) The availability of beds at each hospital.
(5) Any other factors that bear on whether or not the services could be provided sooner in the nonparticipating hospitals than in a participating hospital in the general area.
(c)
(1) The personal preference of the beneficiary, the physician, or members of the family.
(2) The fact that the attending physician did not have staff privileges in a participating hospital which was available and the most accessible to the beneficiary.
(3) The location of previous medical records.
(d)
(1) It was the nearest hospital to the point where the emergency occurred, it was medically equipped to handle the type of emergency, and it was the most accessible, on the basis of the factors specified in paragraph (b) of this section; or
(2) There was a closer participating hospital equipped to handle the emergency, but the participating hospital did not have a bed available or would not accept the individual.
(a)
(1) Has in effect a statement of election to claim payment for all covered emergency services furnished during a calendar year, in accordance with § 424.104;
(2) Claims payment in accordance with § 424.32; and
(3) Submits evidence requested by HCFA to establish that the services meet the requirements of this subpart.
(b)
(1) Contain sufficient information to clearly establish that, when the additional services were furnished, the emergency still existed; and
(2) Indicate when the emergency ended, which, for inpatient hospital services, is the earliest date on which the beneficiary could be safely discharged or transferred to a participating hospital or other institution.
Medicare pays the beneficiary for emergency services if the following conditions are met:
(a) The hospital does not have in effect an election to claim payment.
(b) The beneficiary, or someone on his or her behalf, submits—
(1) A claim that meets the requirements of § 424.32;
(2) An itemized hospital bill; and
(3) Evidence requested by HCFA to establish that the services meet the requirements of this subpart.
This subpart sets forth the conditions for payment for services furnished in a foreign country.
Subject to the conditions set forth in this subpart—
(a) Medicare Part A pays, in the amounts specified in § 413.74 of this chapter, for emergency and nonemergency inpatient hospital services furnished by a foreign hospital.
(b) Medicare Part B pays for certain physicians' services and ambulance services furnished in connection with covered inpatient care in a foreign hospital, as specified in § 424.124.
(c) All other services furnished outside the United States are excluded from Medicare coverage, as specified in § 405.313 of this chapter.
Medicare Part A pays for emergency inpatient hospital services furnished by a foreign hospital if the following conditions are met:
(a) At the time of the emergency that required the inpatient hospital services, the beneficiary was—
(1) In the United States; or
(2) In Canada traveling between Alaska and another State without unreasonable delay and by the most direct route.
(b) The foreign hospital was closer to, or more accessible from, the site of the emergency than the nearest United States hospital equipped to deal with, and available to treat, the individual's illness or injury.
(c) The conditions for payment for emergency services set forth in § 424.103 are met.
(d) The hospital is a hospital as defined in § 424.101, and is licensed, or approved as meeting the conditions for licensing, by the appropriate agency of the country in which it is located.
(e) The determination of whether the hospital was more accessible is made in accordance with § 424.106.
Medicare Part A pays for inpatient hospital services furnished by a foreign hospital if the following conditions are met:
(a) The beneficiary is a resident of the United States.
(b) The foreign hospital is closer or more accessible to the beneficiary's residence than the nearest United States hospital equipped to deal with, and available to treat, the individual's illness or injury.
(c) The foreign hospital is—
(1) A hospital as defined in § 424.101 and, it is licensed, or approved as meeting the conditions for licensing, by the appropriate agency of the country in which it is located; and
(2) Accredited by the Joint Commission on Accreditation of Hospitals (JCAH) or accredited or approved by a program of the country where it is located under standards that HCFA finds to be essentially equivalent to those of the JCAH.
(d) The services are covered services that Medicare would pay for if they were furnished by a participating hospital.
(a)
(1) They are furnished—
(i) To an individual who is entitled to Part B benefits; and
(ii) In connection with covered inpatient hospital services; and
(2) They meet the conditions set forth in paragraphs (b) and (c) of this section.
(b)
(i) In the hospital, during a period of covered inpatient services; or
(ii) Outside the hospital, on the day of admission and for the same condition that required inpatient admission; and
(2) The physician is legally authorized to practice in the country where he or she furnishes the services.
(c)
(1) Necessary because the use of other means of transportation is contraindicated by the beneficiary's condition; and
(2) Furnished by an ambulance that meets the definition in § 410.41 of this chapter.
(a)
(1) Has in effect an election that—
(i) Meets the requirements set forth in § 424.104; and
(ii) Reflects the hospital's intent to claim for all covered services furnished during a calendar year.
(2) Claims payment in accordance with §§ 424.32 and 413.74 of this chapter; and
(3) Submits evidence requested by HCFA to establish that the services meet the requirements of this subpart.
(b)
(a)
(1) The hospital does not have in effect an election to claim payment; and
(2) The beneficiary, or someone on his or her behalf, submits—
(i) A claim in accordance with § 424.32;
(ii) An itemized hospital bill; and
(iii) Evidence requested by HCFA to establish that the services meet the requirements of this subpart.
(b)
(c)
(d) The amount payable to the beneficiary is determined in accordance with § 410.152 of this chapter.
(a)
(2)
(3)
(b)
(a) When an intermediary or carrier is notified by a payee that a check has been lost, stolen, defaced, mutilated, destroyed, or paid on forged endorsement, the intermediary or carrier contacts the commercial bank on whose paper the check was drawn and determines whether the check has been negotiated.
(b) If the check has been negotiated—
(1) The intermediary or carrier provides the payee with a copy of the check and other pertinent information (such as a claim form, affidavit or questionnaire to be completed by the payee) required to pursue his or her claim in accordance with State law and commercial banking regulations.
(2) To pursue the claim, the payee must examine the check and certify (by completing the claim form, questionnaire or affidavit) that the endorsement is not the payee's.
(3) The claim form and other pertinent information is sent to the intermediary or carrier for review and processing of the claim.
(4) The intermediary or carrier reviews the payee's claim. If the intermediary or carrier determines that the claim appears to be valid, it forwards the claim and a copy of the check to the issuing bank. The intermediary or carrier takes further action to recover the proceeds of the check in accordance with the State law and regulations.
(5) Once the intermediary or carrier recovers the proceeds of the initial check, the intermediary or carrier issues a replacement check to the payee.
(6) If the bank of first deposit refuses to settle on the check for good cause, the payee must pursue the claim on his or her own and the intermediary or carrier will not reissue the check to the payee.
(c) If the check has not been negotiated—
(1) The intermediary or carrier arranges with the bank to stop payment on the check; and
(2) Except as provided in paragraph (d), the intermediary or carrier reissues the check to the payee.
(d) No check may be reissued under (c)(2) unless the claim for a replacement check is received by the intermediary or carrier no later than 1 year from the date of issuance of the original check, unless State law (including any applicable Federal banking laws or regulations that may affect the relevant State proceeding) provides a longer period which will control.
A list of CFR titles, subtitles, chapters, subchapters and parts and an alphabetical list of agencies publishing in the CFR are included in the CFR Index and Finding Aids volume to the Code of Federal Regulations which is published separately and revised annually.
Material Approved for Incorporation by Reference
Table of CFR Titles and Chapters
Alphabetical List of Agencies Appearing in the CFR
Redesignation Tables
List of CFR Sections Affected
The Director of the Federal Register has approved under 5 U.S.C. 552(a) and 1 CFR part 51 the incorporation by reference of the following publications. This list contains only those incorporations by reference effective as of the revision date of this volume. Incorporations by reference found within a regulation are effective upon the effective date of that regulation. For more information on incorporation by reference, see the preliminary pages of this volume.
At 51 FR 22040, June 17, 1986, §§ 405.1011—405.1042 (subpart J), formerly appearing in title 42, part 405, were redesignated as part 482 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 51 FR 34790, Sept. 30, 1986, certain sections of regulations formerly appearing in title 42, part 405, subpart D, were redesignated as part 413 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 51 FR 34764, Sept. 30, 1986, a document was published by the Department of Health and Human Services which established in title 42 a new chapter V, Office of Inspector General—Health Care, consisting of parts 1001 through 1004. This document also removed part 101 from title 45. A second document at 51 FR 34786, Sept. 30, 1986 amended title 42, parts 412, 420, 455, 466, 474, and 489. The following derivation table identifies the sections of 42 CFR chapter IV and 45 CFR subtitle A from which the new 42 CFR chapter V derives its content.
At 51 FR 41335, Nov. 14, 1986, certain sections of regulations formerly appearing in title 42, part 405, subpart B were redesignated as part 410 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 52 FR 22446, June 12, 1987, certain sections of regulations appearing in title 42, part 405, subparts F and O were redesignated as part 498 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 52 FR 36746, Sept. 30, 1987, regulations appearing in title 42, part 110 were redesignated as part 417, subpart A of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 53 FR 6632, Mar. 2, 1988, §§ 405.100—405.192 (subpart A) and 405.1625—405.1697 (subpart P), formerly appearing in title 42, part 405, were redesignated as part 424 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 53 FR 23100, June 17, 1988, §§ 405.1901—405.1913 (subpart S), formerly appearing in title 42, part 405, were redesignated as part 488 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 53 FR 47201, November 22, 1988, §§ 405.201—405.226 (subpart B), formerly appearing in title 42, part 405, were redesignated as part 407 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 52 FR 48114, Dec. 18, 1988, regulations appearing in title 42, part 405 were redesignated as part 408 of title 42. The redesignation table was correctly published at 53 FR 4158, Feb. 12, 1988.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 54 FR 33355, August 14, 1989, §§ 405.1201—405.1230 (subpart L), formerly appearing in title 42, part 405, were redesignated as part 484 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 54 FR 41733 and 41734, October 11, 1989, subpart C of part 405 was amended by removing §§ 405.308 through 405.344 and a new part 411 was added, to redesignate, revise, and amplify the content removed from subpart C of part 405.
For the convenience of the user, the following table (appearing at 54 FR 41733, Oct. 11, 1989 and corrected at 55 FR 1820, Jan. 19, 1990) shows the relationship of the old §§ 405.308 through 405.344 and the new part 411.
At 56 FR 51895, October 17, 1991, §§ 417.110—417.137 (subpart A), formerly appearing in part 405 of title 42, were redesignated as subpart V, part 417 of title 42.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
At 60 FR 2326, January 9, 1995, §§ 405.1411—405.1416 (subpart N), formerly appearing in title 42, part 405, were redesignated as subpart C, part 486, title 42. Additionally, §§405.1701, 405.1702, and 405.1715—405.1726, formerly appearing in part 405, were redesignated as subpart H, part 485, title 42. Sections 405.1730—405.1737 (subpart Q), formerly appearing in part 405, were redesignated as subpart D, part 486, title 42. And §§411.60 through 411.65 (subpart E) and §§411.70 through 411.75 (subpart F), appearing in part 411 of title 42, were redesignated as subparts F and G of the same part.
For the convenience of the user, the following table shows the relationship of the redesignated sections.
All changes in this volume of the Code of Federal Regulations which were made by documents published in the Federal Register since January 1, 1986, are enumerated in the following list. Entries indicate the nature of the changes effected. Page numbers refer to Federal Register pages. The user should consult the entries for chapters and parts as well as sections for revisions.
For the period before January 1, 1986, see the “List of CFR Sections Affected, 1949-1963, 1964-1972, and 1973-1985” published in seven separate volumes.