[Title 42 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 1997 Edition]
[From the U.S. Government Publishing Office]
[[Page 1]]
42
Public Health
PARTS 400 TO 429
Revised as of October 1, 1997
CONTAINING
A CODIFICATION OF DOCUMENTS
OF GENERAL APPLICABILITY
AND FUTURE EFFECT
AS OF OCTOBER 1, 1997
With Ancillaries
Published by
the Office of the Federal Register
National Archives and Records
Administration
as a Special Edition of
the Federal Register
[[Page ii]]
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1997
For sale by U.S. Government Printing Office
Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328
[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 42:
Chapter IV--Health Care Financing Administration,
Department of Health and Human Services............... 3
Finding Aids:
Material Approved for Incorporation by Reference.......... 669
Table of CFR Titles and Chapters.......................... 671
Alphabetical List of Agencies Appearing in the CFR........ 687
Redesignation Tables...................................... 697
List of CFR Sections Affected............................. 725
[[Page iv]]
-------------------------------------------------------------
Cite this Code: CFR
To cite the regulations in this volume use title, part
and section number. Thus, 42 CFR 400.200 refers to title
42, part 400, section 200.
-------------------------------------------------------------
[[Page v]]
EXPLANATION
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.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
volume.
LEGAL STATUS
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).
HOW TO USE THE CODE OF FEDERAL REGULATIONS
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, 1997), 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.
EFFECTIVE AND EXPIRATION DATES
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.
OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
amendments to existing regulations in the CFR. These OMB numbers are
placed as close as possible to the applicable recordkeeping or reporting
requirements.
OBSOLETE PROVISIONS
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.
INCORPORATION BY REFERENCE
What is incorporation by reference? Incorporation by reference was
established by statute and allows Federal agencies to meet the
requirement to publish regulations in the Federal Register by referring
to materials already published elsewhere. For an incorporation to be
valid, the Director of the Federal Register must approve it. The legal
effect of incorporation by reference is that the material is treated as
if it were published in full in the Federal Register (5 U.S.C. 552(a)).
This material, like any other properly issued regulation, has the force
of law.
What is a proper incorporation by reference? The Director of the
Federal Register will approve an incorporation by reference only when
the requirements of 1 CFR part 51 are met. Some of the elements on which
approval is based are:
(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.
What if the material incorporated by reference cannot be found? If
you have any problem locating or obtaining a copy of material listed in
the Finding Aids of this volume as an approved incorporation by
reference, please contact the agency that issued the regulation
containing that incorporation. If, after contacting the agency, you find
the material is not available, please notify the Director of the Federal
Register, National Archives and Records Administration, Washington DC
20408, or call (202) 523-4534.
CFR INDEXES AND TABULAR GUIDES
A subject index to the Code of Federal Regulations is contained in a
separate volume, revised annually as of January 1, entitled CFR Index
and Finding Aids. This volume contains the Parallel Table of Statutory
Authorities and Agency Rules (Table I), and Acts Requiring Publication
in the Federal Register (Table II). A list of CFR titles, chapters, and
parts and an alphabetical list of agencies publishing in the CFR are
also included in this volume.
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.
[[Page vii]]
A List of CFR Sections Affected (LSA) is published monthly, keyed to
the revision dates of the 50 CFR titles.
REPUBLICATION OF MATERIAL
There are no restrictions on the republication of material appearing
in the Code of Federal Regulations.
INQUIRIES
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.
For inquiries concerning CFR reference assistance, call 202-523-5227
or write to the Director, Office of the Federal Register, National
Archives and Records Administration, Washington, DC 20408.
SALES
The Government Printing Office (GPO) processes all sales and
distribution of the CFR. For payment by credit card, call 202-512-1800,
M-F, 8 a.m. to 4 p.m. e.s.t. or fax your order to 202-512-2233, 24 hours
a day. For payment by check, write to the Superintendent of Documents,
Attn: New Orders, P.O. Box 371954, Pittsburgh, PA 15250-7954. For GPO
Customer Service call 202-512-1803.
Raymond A. Mosley,
Director,
Office of the Federal Register.
October 1, 1997.
[[Page ix]]
THIS TITLE
Title 42--Public Health is composed of three volumes. The parts in
these volumes are arranged in the following order: Parts 1-399, parts
400-429 and part 430 to end. The first volume (parts 1-399) contains
current regulations issued under chapter I--Public Health Service (HHS).
The second volume (parts 400-429) includes regulations issued under
chapter IV--Health Care Financing Administration (HHS) and the third
volume (part 430 to end) contains the remaining regulations in chapter
IV and the regulations issued under chapter V by the Office of Inspector
General-Health Care (HHS). The contents of these volumes represent all
current regulations codified under this title of the CFR as of October
1, 1997.
The OMB control numbers for the Health Care Financing Administration
appear in Sec. 400.310 of chapter IV. For the convenience of the user
subpart C consisting of Secs. 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, Christopher R. Choate was Chief Editor. The Code of
Federal Regulations publication program is under the direction of
Frances D. McDonald, assisted by Alomha S. Morris.
[[Page x]]
[[Page 1]]
TITLE 42--PUBLIC HEALTH
(This volume contains parts 400 to 429)
--------------------------------------------------------------------
Part
Chapter iv-- Health Care Financing Administration,
Department of Health and Human Services................... 400
[[Page 3]]
CHAPTER IV--HEALTH CARE FINANCING ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES
--------------------------------------------------------------------
Editorial Note: 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.
SUBCHAPTER A--GENERAL PROVISIONS
Part Page
400 Introduction; definitions................... 5
401 General administrative requirements......... 9
402
[Reserved]
403 Special programs and projects............... 22
SUBCHAPTER B--MEDICARE PROGRAM
405 Federal health insurance for the aged and
disabled................................ 39
406 Hospital insurance eligibility and
entitlement............................. 138
407 Supplementary medical insurance (SMI)
enrollment and entitlement.............. 154
408 Premiums for supplementary medical insurance 164
409 Hospital insurance benefits................. 178
410 Supplementary medical insurance (SMI)
benefits................................ 203
411 Exclusions from Medicare and limitations on
Medicare payment........................ 229
412 Prospective payment systems for inpatient
hospital services....................... 277
413 Principles of reasonable cost reimbursement;
payment for end-stage renal disease
services; optional prospectively
determined payment rates for skilled
nursing facilities...................... 363
414 Payment for Part B medical and other health
services................................ 461
415 Services furnished by physicians in
providers, supervising physicians in
teaching settings, and residents in
certain settings........................ 484
416 Ambulatory surgical services................ 502
[[Page 4]]
417 Health maintenance organizations,
competitive medical plans, and health
care prepayment plans................... 510
418 Hospice care................................ 604
420 Program integrity: Medicare................. 621
421 Intermediaries and carriers................. 627
424 Conditions for Medicare payment............. 640
[[Page 5]]
SUBCHAPTER A--GENERAL PROVISIONS
PART 400--INTRODUCTION; DEFINITIONS--Table of Contents
Subpart A--[Reserved]
Subpart B--Definitions
Sec.
400.200 General definitions.
400.202 Definitions specific to Medicare.
400.203 Definitions specific to Medicaid.
Subpart C--OMB Control Numbers for Approved Collections of Information
400.300 Scope.
400.310 Display of currently valid OMB control numbers.
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35.
Subpart A--[Reserved]
Subpart B--Definitions
Sec. 400.200 General definitions.
In this chapter, unless the context indicates otherwise--
Act means the Social Security Act, and titles referred to are titles
of that Act.
Administrator means the Administrator, Health Care Financing
Administration.
Area means the geographical area within the boundaries of a State,
or a State or other jurisdiction, designated as constituting an area
with respect to which a Professional Standards Review Organization or a
Utilization and Quality Control Peer Review Organization has been or may
be designated.
CMP stands for competitive medical plan.
Conditions of participation includes requirements for participation
as the latter term is used in part 483 of this chapter.
Condition level deficiencies includes deficiencies with respect to
``level A requirements'' as the latter term is used in parts 442 and 483
of this chapter.
CORF stands for comprehensive outpatient rehabilitation facility.
CFR stands for Code of Federal Regulations.
CY stands for calendar year.
Department means the Department of Health and Human Services (HHS),
formerly the Department of Health, Education, and Welfare.
ESRD stands for end-stage renal disease.
FDA stands for the Food and Drug Administration.
FQHC means Federally qualified health center.
FR stands for Federal Register.
FY stands for fiscal year.
HCFA stands for Health Care Financing Administration.
HCPP stands for health care prepayment plan.
HHS stands for the Department of Health and Human Services.
HHA stands for home health agency.
HMO stands for health maintenance organization.
ICF stands for intermediate care facility.
ICF/MR stands for intermediate care facility for the mentally
retarded.
Medicaid means medical assistance provided under a State plan
approved under title XIX of the Act.
Medicare means the health insurance program for the aged and
disabled under title XVIII of the Act.
OASDI stands for the Old Age, Survivors, and Disability Insurance
program under title II of the Act.
OIG stands for the Department's Office of the Inspector General.
PRO stands for Utilization and Quality Control Peer Review
Organization.
QDWI stands for Qualified Disabled and Working Individual.
QMB stands for Qualified Medicare Beneficiary.
Qualified Disabled and Working Individual means an individual who--
(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
[[Page 6]]
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.
Qualified Medicare Beneficiary means an individual who--
(1) Is entitled to Medicare Part A, with or without payment of
premiums, but is not entitled solely because he or she is eligible to
enroll as a QDWI;
(2) Has resources, as determined in accordance with SSI
methodologies, that do not exceed twice the maximum amount established
for SSI eligibility; and
(3) Has income, as determined in accordance with SSI methodologies,
that does not exceed 100 percent of the Federal poverty guidelines.
Regional Administrator means a Regional Administrator of HCFA.
Regional Office means one of the regional offices of HCFA.
RHC stands for rural health clinic.
Secretary means the Secretary of Health and Human Services.
SNF stands for skilled nursing facility.
Social security benefits means monthly cash benefits payable under
section 202 or 223 of the Act.
SSA stands for Social Security Administration.
United States means the fifty States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands.
U.S.C. stands for United States Code.
Utilization and Quality Control Peer Review Organization (PRO) means
an organization that has a contract with HCFA to review, under Part B of
title XI of the Act, the health care services or items furnished or
proposed to be furnished to Medicare beneficiaries.
[48 FR 12534, Mar. 25, 1983, as amended at 49 FR 7206, Feb. 27, 1984; 50
FR 15326 and 15358, Apr. 17, 1985; 50 FR 41886, Oct. 16, 1985; 51 FR
43197, Dec. 1, 1986; 52 FR 27764, July 23, 1987; 56 FR 8852, Mar. 1,
1991; 56 FR 38077, Aug. 12, 1991; 57 FR 24975, June 12, 1992; 57 FR
55912, Nov. 25, 1992]
Sec. 400.202 Definitions specific to Medicare.
As used in connection with the Medicare program, unless the context
indicates otherwise--
Beneficiary means a person who is entitled to Medicare benefits.
Carrier means an entity that has a contract with HCFA to determine
and make Medicare payments for Part B benefits payable on a charge basis
and to perform other related functions.
Critical access hospital (CAH) means a facility designated by HFCA
as meeting the applicable requirements of section 1820 of the Act and of
subpart F of part 485 of this chapter.
Entitled means that an individual meets all the requirements for
Medicare benefits.
Essential access community hospital (EACH) means a hospital
designated by HCFA as meeting the applicable requirements of section
1820 of the Act and of subpart G of part 412 of this chapter, as in
effect on September 30, 1997.
GME stands for graduate medical education.
Hospital insurance benefits means payments on behalf of, and in rare
circumstances directly to, an entitled individual for services that are
covered under Part A of title XVIII of the Act.
Intermediary means an entity that has a contract with HCFA to
determine and make Medicare payments for Part A or Part B benefits
payable on a cost basis and to perform other related functions.
Medicare Part A means the hospital insurance program authorized
under Part A of title XVIII of the Act.
Medicare Part B means the supplementary medical insurance program
authorized under Part B of title XVIII of the Act.
Payment on an assignment-related basis means payment for Part B
services--
(1) To a physician or other supplier that accepts assignment from
the beneficiary, in accordance with Sec. 424.55 or Sec. 424.56 of this
chapter;
(2) To a physician or other supplier after the beneficiary's death,
in accordance with Sec. 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 Sec. 424.66 of this chapter.
Provider means a hospital, a CAH, a skilled nursing facility, a
comprehensive outpatient rehabilitation facility,
[[Page 7]]
a home health agency, or a hospice that has in effect an agreement to
participate in Medicare, or a clinic, a rehabilitation agency, or a
public health agency that has in effect a similar agreement but only to
furnish outpatient physical therapy or speech pathology services, or a
community mental health center that has in effect a similar agreement
but only to furnish partial hospitalization services.
Railroad retirement benefits means monthly benefits payable to
individuals under the Railroad Retirement Act of 1974 (45 U.S.C.
beginning at section 231).
Services means medical care or services and items, such as medical
diagnosis and treatment, drugs and biologicals, supplies, appliances,
and equipment, medical social services, and use of hospital, CAH, or SNF
facilities.
Supplementary medical insurance benefits means payment to or on
behalf of an entitled individual for services covered under Part B of
title XVIII of the Act.
Supplier means a physician or other practitioner, or an entity other
than a provider, that furnishes health care services under Medicare.
[48 FR 12534, Mar. 25, 1983, as amended at 48 FR 56024, Dec. 16, 1983;
49 FR 3658, Jan. 30, 1984; 51 FR 43197, Dec. 1, 1986; 52 FR 27764, July
23, 1987; 55 FR 24567, June 18, 1990; 56 FR 8852, Mar. 1, 1991; 58 FR
30666, May 26, 1993; 59 FR 6576, Feb. 11, 1994; 60 FR 63175, Dec. 8,
1995; 62 FR 46025, Aug. 29, 1997]
Sec. 400.203 Definitions specific to Medicaid.
As used in connection with the Medicaid program, unless the context
indicates otherwise--
Applicant means an individual whose written application for Medicaid
has been submitted to the agency determining Medicaid eligibility, but
has not received final action. This includes an individual (who need not
be alive at the time of application) whose application is submitted
through a representative or a person acting responsibly for the
individual.
Federal financial participation (FFP) means the Federal Government's
share of a State's expenditures under the Medicaid program.
FMAP stands for the Federal medical assistance percentage, which is
used to calculate the amount of Federal share of State expenditures for
services.
Medicaid agency or agency means the single State agency
administering or supervising the administration of a State Medicaid
plan.
Nursing facility (NF), effective October 1, 1990, means an SNF or an
ICF participating in the Medicaid program.
Provider means any individual or entity furnishing Medicaid services
under a provider agreement with the Medicaid agency.
Recipient means an individual who has been determined eligible for
Medicaid.
Services means the types of medical assistance specified in section
1905(a) of the Act and defined in subpart A of part 440 of this chapter.
State means the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa
and the Northern Mariana Islands.
State plan or the plan means a comprehensive written commitment by a
Medicaid agency, submitted under section 1902(a) of the Act, to
administer or supervise the administration of a Medicaid program in
accordance with Federal requirements.
[48 FR 12534, Mar. 25, 1983, as amended at 50 FR 33029, Aug. 16, 1985;
56 FR 8852, Mar. 1, 1991; 57 FR 29155, June 30, 1992]
Subpart C--OMB Control Numbers for Approved Collections of Information
Source: 49 FR 4477, Feb. 7, 1984, unless otherwise noted.
Sec. 400.300 Scope.
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
[[Page 8]]
engage in a ``collection of information'' without obtaining a control
number from OMB.
Sec. 400.310 Display of currently valid OMB control numbers.
------------------------------------------------------------------------
Current OMB
Sections in 42 CFR that contain collections of information control Nos.
------------------------------------------------------------------------
403.510................................................... 0938--0641
405.509................................................... 0938--0666
405.512................................................... 0938--0008
405.2112, 405.2123, 405.2134, 405.2136-405.2140, 405.2171. 0938--0386
409.43.................................................... 0938--0365
410.105................................................... 0938--0267
411.25, 411.32............................................ 0938--0564
411.54.................................................... 0938--0558
411.165................................................... 0938--0564
411.404, 411.406.......................................... 0938--0465
411.408................................................... 0938--0566
412.42.................................................... 0938--0666
412.92.................................................... 0938--0477
412.105................................................... 0938--0456
412.230, 412.232, 412.234, 412.236, 412.254, 412.260,
412.266, 412.278......................................... 0938--0573
415.60.................................................... 0938--0301
415.162................................................... 0938--0301
416.43.................................................... 0938--0506
416.47.................................................... 0938--0266
and
0938--0506
417.126................................................... 0938--0472
417.436, 417.801.......................................... 0938--0610
418.22, 418.24, 418.28, 418.56, 418.58, 418.70, 418.74.... 0938--0302
418.30, 418.82, 418.83, 418.96, 418.100................... 0938--0475
418.96, 418.100........................................... 0938--0302
421.117................................................... 0938--0542
424.3..................................................... 0938--0008
424.5, 424.7, 424.20...................................... 0938--0454
424.22.................................................... 0938--0489
424.32, 424.34............................................ 0938--0008
431.17.................................................... 0938--0467
431.50, 431.52, 431.55.................................... 0938--0247
431.107................................................... 0938--0610
431.306................................................... 0938--0467
431.625................................................... 0938--0247
431.630................................................... 0938--0445
431.800................................................... 0938--0247
431.806, 431.830, 431.432, 431.834, 431.836............... 0938--0438
432.50.................................................... 0938--0459
433.36, 433.37............................................ 0938--0247
433.68, 433.74............................................ 0938--0618
433.110, 433.112-433.114, 433.116, 433.117, 433.119-
433.121, 433.123, 433.127, 433.130, 433.131, 433.135..... 0938--0247
433.138................................................... 0938--0502
0938--0553
and
0938--0555
433.139................................................... 0938--0459
0938--0554
and
0938--0555
434.27.................................................... 0938--0572
434.28.................................................... 0938--0610
435.1, 435.910, 435.919, 435.920, 435.940, 435.945,
435.948, 435.952, 435.953, 435.955, 435.960, 435.965,
435.1003, 441.11, 441.15, 441.20......................... 0938--0247
441.56, 441.58, 441.60, 441.61............................ 0938--0354
441.302................................................... 0938--0449
441.303................................................... 0938--0272
and
0938--0449
441.351, 441.352, 441.353, 441.356, 441.365............... 0938--0613
442.505................................................... 0938--0366
447.31.................................................... 0938--0287
447.45, 447.50, 447.51, 447.52............................ 0938--0247
447.53.................................................... 0938--0429
447.55.................................................... 0938--0247
447.253................................................... 0938--0366
0938--0523
and
0938--0556
447.255................................................... 0938--0193
447.272, 447.299.......................................... 0938--0618
447.302, 447.331, 447.332, 447.333........................ 0938--0247
456.80.................................................... 0938--0247
456.654................................................... 0938--0445
456.700, 456.705, 456.709, 456.711, 456.712............... 0938--0659
462.102, 462.103.......................................... 0938--0526
466.70, 466.72, 466.74.................................... 0938--0445
466.78.................................................... 0938--0445
and
0938--0665
466.80, 466.94............................................ 0938--0445
473.18, 473.34, 473.36, 473.42............................ 0938--0443
476.104, 476.105, 476.116, 476.134........................ 0938--0426
481.61.................................................... 0938--0328
482.12, 482.21, 482.22, 482.27, 482.30, 482.41, 482.43,
482.53, 482.56, 482.57, 482.60, 482.62................... 0938--0328
483.10.................................................... 0938--0610
483.410, 483.420, 483.440, 483.460, 483.470............... 0938--0366
484.1, 484.2.............................................. 0938--0365
484.10.................................................... 0938--0365
and
0938--0610
484.12, 484.14, 484.16, 484.18, 484.30, 484.32, 484.34,
484.36, 484.48, 484.52................................... 0938--0365
485.56, 485.58, 485.60, 485.64, 485.66.................... 0938--0267
and
0938--0538
485.709, 485.711, 485.717, 485.719, 485.721, 487.723,
485.725, 485.727......................................... 0938--0336
486.104, 486.106, 486.110................................. 0938--0338
486.155, 486.161, 486.163................................. 0938--0336
488.10.................................................... 0938--0646
488.18.................................................... 0938--0667
488.26.................................................... 0938--0646
489.20.................................................... 0938--0564
and
0938--0667
489.24.................................................... 0938--0334
0938--0663
and
0938--0667
489.102................................................... 0938--0610
491.9, 491.10............................................. 0938--0334
493.35, 493.37, 493.39, 493.43, 493.45, 493.47, 493.49,
493.51, 493.53,..........................................
493.55, 493.60, 493.61, 493.62, 493.63.................... 0938--0612
493.614, 493.633, 494.634................................. 0938--0607
493.801-493.1285, 493.1425, 493.1701, 493.1703, 493.1705,
493.1707, 493.1709, 493.1711, 493.1713, 493.1715,
493.1717, 493.1719, 493.1721, 493.1775, 493.1776,
493.1777, 493.1780, 493.2001............................. 0938--0612
494.52, 494.54, 494.56, 494.58, 494.64.................... 0938--0608
498.22, 498.40, 498.58, 498.82............................ 0938--0508
1004.40, 1004.50, 1004.60, 1004.70........................ 0938--0444
------------------------------------------------------------------------
[60 FR 50445, Sept. 29, 1995, as amended at 60 FR 63188, Dec. 8, 1995]
[[Page 9]]
PART 401--GENERAL ADMINISTRATIVE REQUIREMENTS--Table of Contents
Subpart A--[Reserved]
Subpart B--Confidentiality and Disclosure
Sec.
401.101 Purpose and scope.
401.102 Definitions.
401.105 Rules for disclosure.
401.106 Publication.
401.108 HCFA rulings.
401.110 Publications for sale.
401.112 Availability of administrative staff manuals.
401.116 Availability of records upon request.
401.118 Deletion of identifying details.
401.120 Creation of records.
401.126 Information or records that are not available.
401.128 Where requests for records may be made.
401.130 Materials available at social security district offices and
branch offices.
401.132 Materials in field offices of the Office of Hearings and
Appeals, SSA.
401.133 Availability of official reports on providers and suppliers of
services, State agencies, intermediaries, and carriers under
Medicare.
401.134 Release of Medicare information to State and Federal agencies.
401.135 Release of Medicare information to the public.
401.136 Requests for information or records.
401.140 Fees and charges.
401.144 Denial of requests.
401.148 Administrative review.
401.152 Court review.
Subparts C-E--[Reserved]
Subpart F--Claims Collection and Compromise
401.601 Basis and scope.
401.603 Definitions.
401.605 Omissions not a defense.
401.607 Claims collection.
401.613 Compromise of claims.
401.615 Payment of compromise amount.
401.617 Suspension of collection action.
401.621 Termination of collection action.
401.623 Joint and several liability.
401.625 Effect of HCFA claims collection decisions on appeals.
Authority: 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).
Subpart A--[Reserved]
Subpart B--Confidentiality and Disclosure
Source: 46 FR 55696, Nov. 12, 1981, unless otherwise noted.
Sec. 401.101 Purpose and scope.
(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 under sections 1816 and 1842 of
the Social Security Act, and any other information subject to section
1106(a) of the Social Security Act;
(2) Relate to the availability to the public, under 5 U.S.C. 552, of
records of 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 (Secs. 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).
Sec. 401.102 Definitions.
For purposes of this subpart:
Act means the Social Security Act.
[[Page 10]]
Freedom of Information Act rules means the substantive mandatory
disclosure provisions of the Freedom of Information Act, 5 U.S.C. 552
(including the exemptions from mandatory disclosure, 5 U.S.C. 552(b), as
implemented by the Department's public information regulation, 45 CFR
part 5, subpart F and by Secs. 401.106 to 401.152 of this subpart.
Person means a person as defined in the Administrative Procedure
Act, 5 U.S.C. 551(2). This includes State or local agencies, but does
not include Federal agencies or State or Federal courts.
Record has the same meaning as that provided in 45 CFR 5.5.
Subject individual means an individual whose record is maintained by
the Department in a system of records, as the terms ``individual,''
``record'', and ``system of records'' are defined in the Privacy Act of
1974, 5 U.S.C. 552a(a).
Sec. 401.105 Rules for disclosure.
(a) General rule. The Freedom of Information Act rules shall be
applied to every proposed disclosure of information. If, considering the
circumstances of the disclosure, the information would be made available
in accordance with the Freedom of Information Act rules, then the
information may be disclosed regardless of whether the requester or
recipient of the information has a statutory right to request the
information under the Freedom of Information Act, 5 U.S.C. 552, or
whether a request has been made.
(b) Application of the general rule. Pursuant to the general rule in
paragraph (a) of this section,
(1) Information shall be disclosed--
(i) To a subject individual when required by the access provision of
the Privacy Act, 5 U.S.C. 552a(d), as implemented by the Department
Privacy Act regulation, 45 CFR part 5b; and
(ii) To a person upon request when required by the Freedom of
Information Act, 5 U.S.C. 552;
(2) Unless prohibited by any other statute (e.g., the Privacy Act of
1974, 5 U.S.C. 552a(b), the Tax Reform Act of 1976, 26 U.S.C. 6103, or
section 1106(d) and (e) of the Social Security Act), information may be
disclosed to any requester or recipient of the information, including
another Federal agency or a State or Federal court, when the information
would not be exempt from mandatory disclosure under Freedom of
Information Act rules or when the information nevertheless would be made
available under the Department's public information regulation's
criteria for disclosures which are in the public interest and consistent
with obligations of confidentiality and administrative necessity, 45 CFR
part 5, subpart F, as supplemented by Secs. 401.106 to 401.152 of this
subpart.
[42 FR 14704, Mar. 16, 1977. Redesignated at 45 FR 74913, 74914, Nov.
13, 1980, and correctly redesignated at 46 FR 24551, May 1, 1981, as
amended at 46 FR 55697, Nov. 12, 1981]
Sec. 401.106 Publication.
(a) Methods of publication. Materials required to be published under
the provisions of The Freedom of Information Act, 5 U.S.C. 552 (a)(1)
and (2) are published in one of the following ways:
(1) By publication in the Federal Register of HCFA regulations, and
by their subsequent inclusion in the Code of Federal Regulations;
(2) By publication in the Federal Register of appropriate general
notices;
(3) By other forms of publication, when incorporated by reference in
the Federal Register with the approval of the Director of the Federal
Register; and
(4) By publication of indexes of precedential orders and opinions
issued in the adjudication of claims, statements of policy and
interpretations which have been adopted but have not been published in
the Federal Register, and of administrative staff manuals and
instructions to staff that affect a member of the public.
(b) Availability for inspection. Those materials which are published
in the Federal Register pursuant to 5 U.S.C. 552(a)(1) shall, to the
extent practicable and to further assist the public, be made available
for inspection at the places specified in Sec. 401.128.
[46 FR 55696, Nov. 12, 1981, as amended at 48 FR 22924, May 23, 1983]
Sec. 401.108 HCFA rulings.
(a) After September 1981, a precedent final opinion or order or a
statement of
[[Page 11]]
policy or interpretation that has not been published in the Federal
Register as a part of a regulation or of a notice implementing
regulations, but which has been adopted by HCFA as having precedent, may
be published in the Federal Register as a HCFA Ruling and will be made
available in the publication entitled HCFA Rulings.
(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 Federal Register are available in HCFA
Rulings.
(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.
[48 FR 22924, May 23, 1983]
Sec. 401.110 Publications for sale.
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) Federal Register issues.
(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.
Sec. 401.112 Availability of administrative staff manuals.
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 Secs. 401.130 and 401.132 for a
listing of this material.
Sec. 401.116 Availability of records upon request.
(a) General. In addition to the records made available pursuant to
Secs. 401.106, 401.108, 401.110 and 401.112, HCFA will, upon request
made in accordance with this subpart, make identified records available
to any person, unless they are exempt from disclosure under the
provisions of section 552(b) of title 5, United States Code (see
Sec. 401.126), or any other provision of law.
(b) Misappropriation, alteration, or destruction of records. No
person may remove any record made available to him for inspection or
copying under this part, from the place where it is made available. In
addition, no person may steal, alter, mutilate, obliterate, or destroy
in whole or in part, such a record. See sections 641 and 2071 of title
18 of the United States Code.
Sec. 401.118 Deletion of identifying details.
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.
Sec. 401.120 Creation of records.
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.
Sec. 401.126 Information or records that are not available.
(a) Specific exemptions from disclosure. Pursuant to paragraph (b)
of 5 U.S.C. 552, certain classes of records are exempt from disclosure.
For some examples of the kinds of materials which are
[[Page 12]]
exempt, see subpart F of the public information regulation of the
Department of Health and Human Services (45 CFR part 5) and the appendix
to that regulation.
(b) Materials exempt from disclosure by statute. Pursuant to
paragraph (b)(3) of 5 U.S.C. 552, as amended, which exempts from the
requirement for disclosure matters that are exempted from disclosure by
statute, provided that such statute requires that the matters be
withheld from the public in such a manner as to leave no discretion on
the issue, or establishes particular criteria for withholding or refers
to particular types of matter to be withheld:
(1) Reports described in sections 1106 (d) and (e) of the Social
Security Act shall not be disclosed, except in accordance with the
provisions of sections 1106 (d) and (e). Sections 1106 (d) and (e)
provide for public inspection of certain official reports dealing with
the operation of the health programs established by titles XVIII and XIX
of the Social Security Act (Medicare and Medicaid), but require that
program validation survey reports and other formal evaluations of
providers of services shall not identify individual patients, individual
health care practitioners, or other individuals. Section 1106(e) further
requires that none of the reports shall be made public until the
contractor or provider whose performance is being evaluated has had a
reasonable opportunity to review that report and to offer comments. See
Sec. 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
Sec. 488.6 or Sec. 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) Exceptions.
(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) Effect of exemption. Neither 5 U.S.C. 552 nor this regulation
directs the withholding of any record or information, except to the
extent of the prohibitions in paragraph (b) of this section. Except for
material required to be withheld under the statutory provisions
incorporated in paragraph (b) of this section or under another statute
which meets the standards in 5 U.S.C. 552(b)(3), materials exempt from
mandatory disclosure will nevertheless be made available when this can
be done consistently with obligations of confidentiality and
administrative necessity. The disclosure of materials or records under
these circumstances in response to a specific request, however, is of no
precedent force with respect to any other request.
[46 FR 55696, Nov. 12, 1981, as amended at 58 FR 61837, Nov. 23, 1993]
Sec. 401.128 Where requests for records may be made.
(a) General. Any request for any record may be made to--
(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.
The locations and service areas of these offices are as follows:
Region I--John F. Kennedy Federal Building, Boston, MA 02203.
Connecticut, Maine,
[[Page 13]]
Massachusetts, New Hampshire, Rhode Island, Vermont.
Region II--26 Federal Plaza, New York, NY 10007. New York, New Jersey,
Puerto Rico, Virgin Islands.
Region III--Gateway Building, 3535 Market Street, Philadelphia, PA
19101. Delaware, Maryland, Pennsylvania, Virginia, West Virginia,
District of Columbia.
Region IV--101 Marietta Street, Altanta, GA 30323. Alabama, Florida,
Georgia, Kentucky, Mississippi, North Carolina, South Carolina,
Tennessee.
Region V--300 South Wacker Drive, Chicago, IL 60606. Illinois, Indiana,
Michigan, Minnesota, Ohio, Wisconsin.
Region VI--1200 Main Tower Building, Dallas, TX 75202. Arkansas,
Louisiana, New Mexico, Oklahoma, Texas.
Region VII--601 East 12th Street, Kansas City, MO 64106. Iowa, Kansas,
Missouri, Nebraska.
Region VIII--Federal Office Building, 19th and Stout Streets, Denver, CO
80294. Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming.
Region IX--Federal Office Building, 50 United Nations Plaza, San
Francisco, CA 94102. Arizona, California, Hawaii, Nevada, Guam, Trust
Territory of Pacific Islands, American Samoa.
Region X--Arcade Plaza Building, 1321 Second Avenue, Seattle, WA 98101.
Alaska, Idaho, Oregon, Washington.
(b) Records pertaining to individuals. HCFA maintains some records
pertaining to individuals. Disclosure of such records is generally
prohibited by section 1106 of the Social Security Act (42 U.S.C. 1306),
except as prescribed in Sec. 401.105 (See also Sec. 401.126(b)).
Requests for records pertaining to individuals may be addressed to:
Director, Office of Research, Demonstrations and Statistics, HCFA,
Baltimore, Maryland 21235, when information is sought from the record of
a person who has participated in a research survey conducted by or for
HCFA, Office of Research, Demonstrations and Statistics; or whose
records have been included by statistical sampling techniques in
research and statistical studies authorized by the Social Security Act
in the field of health care financing.
(c) Requests for materials listed in Sec. 401.130 or Sec. 401.132 or
indexed in the HCFA Rulings. A request to inspect and copy materials
listed in Sec. 401.130 or Sec. 401.132 or indexed in HCFA Rulings may be
made to any district or branch office of the Social Security
Administration. If the specific material requested is not available in
the office receiving the request, the material will be obtained and made
available promptly.
Sec. 401.130 Materials available at social security district offices and branch offices.
(a) Materials available for inspection. The following are available
or will be made available for inspection at the social security district
offices and branch offices:
(1) Compilation of the Social Security Laws.
(2) The Public Information Regulation of the Department of Health
and Human Services (45 CFR part 5).
(3) Medicare Program regulations issued by the Health Care Financing
Administration. 42 CFR chapter IV .
(4) HCFA Rulings.
(5) Social Security Handbook.
(b) Materials available for inspection and copying. The following
materials are available or will be made available for inspection and
copying at the social security district offices and branch offices:
(1) Claims Manual of the Social Security Administration.
(2) Department Staff Manual on Organization, Department of Health
and Human Services, Part F, HCFA.
(3) Parts 2 and 3 of the Part A
Intermediary Manual (Provider Services under Medicare HCFA Pub. 13-2 and
13-3).
(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).
[[Page 14]]
(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 Sec. 401.133(a). Except as otherwise
provided for at Secs. 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.
[46 FR 55696, Nov. 12, 1981, as amended at 59 FR 56232, Nov. 10, 1994]
Sec. 401.132 Materials in field offices of the Office of Hearings and Appeals, SSA.
(a) Materials available for inspection. The following materials are
available for inspection in the field offices of the Office of Hearings
and Appeals, SSA.
(1) Title 45 of the Code of Federal Regulations (including the
public information regulation of the Department of Health and Human
Services).
(2) Regulations of the Social Security Administration and HCFA.
(3) Title 5, United States Code.
(4) Compilation of the Social Security Laws.
(5) HCFA Rulings.
(6) Social Security Handbook.
(b) Handbook available for inspection and copying. The Office of
Hearings and Appeals Handbook is available for inspection and copying in
the field offices of the Office of Hearings and Appeals.
Sec. 401.133 Availability of official reports on providers and suppliers of services, State agencies, intermediaries, and carriers under Medicare.
Except as otherwise provided for in Sec. 488.325 of this chapter for
SNFs, the following must be made available to the public under the
conditions specified:
(a) Statements of deficiencies and survey reports on providers of
services prepared by State agencies. (1) Statements of deficiencies
based upon official survey reports prepared after January 31, 1973, by a
State agency pursuant to its agreement entered into under section 1864
of the Social Security Act and furnished to HCFA, which relate to a
State agency's findings on the compliance of a health care institution
or facility with the applicable provisions in section 1861 of the Act
and with the regulations, promulgated pursuant to those provisions,
dealing with health and safety of patients in those institutions and
facilities; and (2) State agency survey reports. The statement of
deficiencies or report and any pertinent written statements furnished by
the institution or facility on the statement of deficiencies shall be
disclosed within 90 days following the completion of the survey by the
State agency, but not to exceed 30 days following the receipt of the
report by HCFA. (See Sec. 401.130(b)(17)) for places where statements of
deficiencies, reports, and pertinent written statements will be
available.)
(b) HCFA reports on providers of services. Upon request in writing,
official reports and other formal evaluations (including followup
reviews), excluding references to internal tolerance rules and practices
contained therein, internal working papers or other informal memoranda,
prepared and completed after January 31, 1973, which relate to the
performance of providers of services under Medicare: Provided, That no
[[Page 15]]
information identifying individual patients, physicians, or other
practitioners, or other individuals shall be disclosed under this
paragraph. Those reports and other evaluations shall be disclosed within
30 days following the final preparation thereof by HCFA during which
time the providers of services shall be afforded a reasonable
opportunity to offer comments, and there shall be disclosed with those
reports and evaluations any pertinent written statements furnished HCFA
by those providers on those reports and evaluations.
(c) Contractor performance review reports. Upon request in writing,
official contractor performance review reports and other formal
evaluations (including followup reviews), excluding references to
internal tolerance rules and practices contained therein, internal
working papers or other informal memoranda, prepared and completed after
January 31, 1973, which relate to the evaluation of the performance of
(1) intermediaries and carriers under their agreements entered into
pursuant to sections 1816 and 1842 of the Social Security Act and (2)
State agencies under their agreements entered into pursuant to section
1864 of the Act (including comparative evaluations of the performance of
those intermediaries, carriers, and State agencies). The latest Contract
Performance Review Report pertaining to a particular intermediary or
carrier, prepared prior to February 1, 1973, may also be disclosed to
any person upon request in writing. Those reports and evaluations shall
be disclosed within 30 days following their final preparation by HCFA
(or 30 days following the request therefor, in the case of the contract
performance review report prepared prior to February 1, 1973), during
which time those intermediaries, carriers, and State agencies, as the
case may be, shall be afforded a reasonable opportunity to offer
comments, and there shall be disclosed with those reports and
evaluations any pertinent written statements furnished HCFA by those
intermediaries, carriers, on State agencies or those reports and
evaluations.
(d) Accreditation surveys. Upon written request, HCFA will release
the accreditation survey and related information from an accreditation
organization meeting the requirements of Sec. 488.5, Sec. 488.6 or
Sec. 493.506 of this chapter to the extent the survey and information
relate to an enforcement action taken (for example, denial of payment
for new admission, civil money penalties, temporary management and
termination) by HCFA;
(e) Upon written request, HCFA will release the accreditation survey
of any home health agency.
[46 FR 55696, Nov. 12, 1981; 46 FR 59249, Dec. 4, 1981, as amended at 58
FR 61838, Nov. 23, 1993; 59 FR 56232, Nov. 10, 1994]
Sec. 401.134 Release of Medicare information to State and Federal agencies.
(a) Except as provided in paragraph (b) of this section, the
following information may be released to an officer or employee of an
agency of the Federal or a State government lawfully charged with the
administration of a program receiving grants-in-aid under title V and
XIX of the Social Security Act for the purpose of administration of
those titles, or to any officer or employee of the Department of Army,
Department of Defense, solely for the administration of its Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS):
(1) Information, including the identification number, concerning
charges made by physicians, other practitioners, or suppliers, and
amounts paid under Medicare for services furnished to beneficiaries by
such physicians, other practioners, or suppliers, to enable the agency
to determine the proper amount of benefits payable for medical services
performed in accordance with those programs; or
(2) Information as to physicians or other practioners that has been
disclosed under Sec. 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.
[[Page 16]]
(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.
Sec. 401.135 Release of Medicare information to the public.
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: Provided, That no information identifying any
particular beneficiaries shall be disclosed under this paragraph.
(b) The name of any provider of services or other person furnishing
services to Medicare beneficiaries who--
(1) Has been found by a Federal court to have been guilty of
submitting false claims in connection with Medicare; or
(2) Has been found by a carrier or intermediary, after consultation
with a professional medical association functioning external to program
administration or, if appropriate, the State medical authority, to have
been engaged in a pattern of furnishing services to beneficiaries which
are substantially in excess of their medical needs; except that the name
of any provider or other person shall not be disclosed pursuant to a
finding under this paragraph (b)(2) of this section, unless that
provider or other person has first been afforded a reasonable
opportunity to offer evidence on his behalf.
(c) Upon request in writing, cost reports submitted by providers of
services pursuant to section 1815 of the Act to enable the Secretary to
determine amounts due the providers.
Sec. 401.136 Requests for information or records.
(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
[[Page 17]]
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 Sec. 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
Sec. 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.
Sec. 401.140 Fees and charges.
(a) Statement of policy. It is HCFA's policy to comply with certain
requests for information services without charge. Except as otherwise
determined pursuant to paragraph (c) of this section, fees will be
charged for the following services with respect to all other requests
for information from records which are reasonably identified by the
requesters:
(1) Reproduction, duplication, or copying of records;
(2) Searches for records; and
(3) Certification or authentication of records.
(b) Fee schedules. The fee schedule is as follows:
(1) Search for records. Three dollars per hour: Provided, however,
That no charge will be made for the first half hour.
(2) Reproduction, duplication, or copying of records. Ten cents per
page where such reproduction can be made by commonly available
photocopying machines. The cost of reproducing records which cannot be
so photocopied will be determined on an individual basis at actual cost.
(3) Certification or authentication of records. Three dollars per
certification or authentication.
(4) Forwarding materials to destination. Any special arrangements
for forwarding which are requested shall be charged at actual cost;
however, no charge will be made for postage.
(5) No charge will be made when the total amount does not exceed
five dollars.
(c) Waiver or reduction of fees. Waiver or reduction of the fees in
paragraph (b) of this section may be made upon a determination that such
waiver or reduction is in the public interest because furnishing the
information can be considered as primarily benefiting the general
public. Such determination may be made by the appropriate officer or
employee identified in Sec. 401.144.
(d) Sale of documents. On occasion, a previously printed document
may be available for sale to the public; the cost of supplying the
document is one cent per page unless the document is available for sale
from the Superintendent of Documents, in which case the price shall be
that determined by the Superintendent.
[[Page 18]]
Sec. 401.144 Denial of requests.
(a) General authority. Only the Director, Office of Public Affairs,
HCFA, and the Regional Directors of Public Affairs, HHS, are authorized
to deny written requests to obtain, inspect or copy any HCFA information
or record.
(b) Forms of denials. (1) Oral requests may be dealt with orally,
but the requester should be advised that the oral response is not an
official determination and that an official determination may be
obtained only by submitting the request in writing. Appropriate
available assistance will be offered.
(2) Written Requests--Denials of written requests will be in writing
and will contain the reasons for the denial including, as appropriate, a
statement that a document requested is nonexistent or not reasonably
described or is subject to one or more clearly described exemption(s).
Denials will also provide the requester with appropriate information on
how to exercise the right of appeal.
Sec. 401.148 Administrative review.
(a) Review by the Administrator. A person whose request has been
denied may initiate a review by filing a request for review with the
Administrator of HCFA, 700 East High Rise Building, 6401 Security
Boulevard, Baltimore, Maryland 21235, within 30 days of receipt of the
determination to deny or within 30 days of receipt of records which are
in partial response to his request if a portion of a request is granted
and a portion denied, whichever is later. Upon receipt of a timely
request for review, the Administrator will review the decision in
question and the findings upon which it was based. Upon the basis of the
data considered in connection with the decision and whatever other
evidence and written argument is submitted by the person requesting the
review or which is otherwise obtained, the Administrator or his designee
will affirm or revise in whole or in part the findings and decision in
question. A decision to affirm the denial will be made only upon
concurrence of the Assistant Secretary for Public Affairs, or his
designee, after consultation with the General Counsel or his or her
designee, and the appropriate program policy official. Written notice of
the decision of the Administrator will be mailed to the person who
requested the review. A written decision will be made within 20 working
days from receipt of the request for review. Extension of the time limit
may be granted under the circumstances listed in Sec. 401.136(b) to the
extent that the maximum 10 days limit on extensions has not been
exhausted on the initial determination. The decision will include the
basis for it and will advise the requester of his right to judicial
review.
(b) Failure of the Administrator to comply with the time limits.
Failure of the Administrator to comply with the time limits set forth in
Sec. 401.136 and this section constitutes an exhaustion of the
requester's administrative remedies.
Sec. 401.152 Court review.
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).
Subparts C-E--[Reserved]
Subpart F--Claims Collection and Compromise
Source: 48 FR 39064, Aug. 29, 1983, unless otherwise noted.
Sec. 401.601 Basis and scope.
(a) Basis. This subpart implements for HCFA the Federal Claims
Collection Act (FCCA) of 1966 (31 U.S.C. 3711), and conforms to the
regulations (4 CFR parts 101-105) issued jointly by the General
Accounting Office and the Department of Justice that generally prescribe
claims collection standards and procedures under the FCCA for the
Federal government.
(b) Scope. Except as provided in paragraphs (c) through (f) of this
section, the regulations in this subpart describe HCFA's procedures and
standards for the collection of claims in any amount, and the compromise
of, or the suspension or termination of collection action on, all claims
for money or property that do not exceed $100,000 or such higher amount
as the Attorney General
[[Page 19]]
may from time to time prescribe, exclusive of interest, arising under
any functions delegated to HCFA by the Secretary.
(c) Amount of claim. HCFA refers all claims that exceed $100,000 or
such higher amount as the Attorney General may from time to time
prescribe, exclusive of interest, to the Department of Justice or the
General Accounting Office for the compromise of claims, or the
suspension or termination of collection action.
(d) Related regulations--(1) Department regulations. DHHS
regulations applicable to HCFA that generally implement the FCCA for the
Department are located at 45 CFR part 30. These regulations apply only
to the extent HCFA regulations do not address a situation.
(2) HCFA regulations. The following regulations govern specific debt
management situations encountered by HCFA and supplement this subpart:
(i) Claims against Medicare beneficiaries for the recovery of
overpayments are covered in 20 CFR 404.515.
(ii) Adjustments in Railroad Retirement or Social Security benefits
to recover Medicare overpayments to individuals are covered in
Secs. 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 Secs. 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
Sec. 408.110 of this chapter.
(v) State repayment of Medicaid funds by installments is covered in
Sec. 430.48 of this chapter.
(e) Collection and compromise under other statutes and at common
law. The regulations in this subpart do not--
(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) Fraud. The regulations in this subpart do not apply to claims in
which there is an indication of fraud, the presentation of a false
claim, or misrepresentation on the part of a debtor or any other party
having an interest in the claim. HCFA forwards these claims to the
Department of Justice for disposition under 4 CFR 105.1.
(g) Enforced collection. HCFA refers claims to the Department of
Justice for enforced collection through litigation in those cases which
cannot be compromised or on which collection action cannot be suspended
or terminated in accordance with this subpart or the regulations issued
jointly by the Attorney General and the Comptroller General.
[48 FR 39064, Aug. 29, 1983, as amended at 52 FR 48123, Dec. 18, 1987;
57 FR 56998, Dec. 2, 1992; 61 FR 49271, Sept. 19, 1996; 61 FR 63748,
Dec. 2, 1996]
Sec. 401.603 Definitions.
For purposes of this subpart--
Claim means any debt owed to HCFA.
Debtor means any individual, partnership, corporation, estate, trust
or other legal entity against which HCFA has a claim.
Sec. 401.605 Omissions not a defense.
The failure of HCFA to comply with the regulations in this subpart,
or with the related regulations listed in Sec. 401.601(d), is not
available as a defense to a debtor against whom HCFA has a claim for
money or property.
Sec. 401.607 Claims collection.
(a) General policy. HCFA recovers amounts of claims due from
debtors, including interest where appropriate, by--
(1) Direct collections in lump sums or in installments; or
(2) Offsets against monies owed to the debtor by the Federal
government where possible.
(b) Collection in lump sums. Whenever possible, HCFA attempts to
collect claims in full in one lump sum. However, if HCFA determines that
a debtor is unable to pay the claim in one lump sum, HCFA may instead
enter into an agreement to accept regular installment payments.
(c) Collection in installments. Generally, HCFA requires that all
claims
[[Page 20]]
to be satisfied by installment payments must be liquidated in three
years or less. If unusual circumstances exist, such as the possibility
of debtor insolvency, an installment agreement that extends beyond three
years may be approved.
(1) Debtor request. If a debtor desires to repay a claim in
installments, the debtor must submit--
(i) A request to HCFA; and
(ii) Any information required by HCFA to make a decision regarding
the request.
(2) HCFA decision. HCFA will determine the number, amount and
frequency of installment payments based on the information submitted by
the debtor and on other factors such as--
(i) Total amount of the claim;
(ii) Debtor's ability to pay; and
(iii) Cost to HCFA of administering an installment agreement.
(d) Collection by offset. (1) HCFA may offset, where possible, the
amount of a claim against the amount of pay, compensation, benefits or
other monies that a debtor is receiving or is due from the Federal
government.
(2) Under regulations at Sec. 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.
[48 FR 39064, Aug. 29, 1983, as amended at 61 FR 49271, Sept. 19, 1996;
61 FR 63748, Dec. 2, 1996]
Sec. 401.613 Compromise of claims.
(a) Amount of compromise. HFCA requires that the amount to be
recovered through a compromise of a claim must--
(1) Bear a reasonable relation to the amount of the claim; and
(2) Be recoverable through enforced collection procedures.
(b) General factors. After considering the bases for a decision to
compromise a claim under paragraph (c) of this section, HCFA may further
consider factors such as--
(1) The age and health of the debtor if the debtor is an individual;
(2) Present and potential income of the debtor; and
(3) Whether assets have been concealed or improperly transferred by
the debtor.
(c) Basis for compromise. Bases on which HCFA may compromise a claim
include the following--
(1) Inability to pay. HCFA may compromise a claim if it determines
that the debtor, or the estate of a deceased debtor, does not have the
present or prospective ability to pay the full amount of the claim
within a reasonable time.
(2) Litigative probabilities. HCFA may compromise a claim if it
determines that it would be difficult to prevail in a case before a
court of law as a result of the legal issues involved or inability of
the parties to agree to the facts of the case. The amount that HCFA
accepts in compromise under this provision will reflect--
(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 other evidentiary support for HCFA's claim; and
(iii) The amount of court costs that would be assessed to HCFA.
(3) Cost of collecting the claim. HCFA may compromise a claim if it
determines that the cost of collecting the claim does not justify the
enforced collection of the full amount. In this case, HCFA may adjust
the amount it accepts as a compromise to allow an appropriate discount
for the costs of collection it would have incurred but for the
compromise.
(d) Enforcement policy. HCFA may compromise statutory penalties,
forfeitures, or debts established as an aid to enforcement or to compel
compliance, if it determines that its enforcement policy, in terms of
deterrence and securing compliance both present and future, is
adequately served by acceptance of the compromise amount.
Sec. 401.615 Payment of compromise amount.
(a) Time and manner of compromise. Payment by the debtor of the
amount
[[Page 21]]
that HCFA has agreed to accept as a compromise in full settlement of a
claim must be made within the time and in the manner prescribed by HCFA.
Accordingly, HCFA will not settle a claim until the full payment of the
compromise amount has been made.
(b) Effect of failure to pay compromise amount. Failure of the
debtor to make payment, as provided by the compromise agreement,
reinstates the full amount of the claim, less any amounts paid prior to
the default.
(c) Prohibition against grace periods. HCFA will not agree to
inclusion of a provision in an installment agreement that would permit
grace periods for payments that are late under the terms of the
agreement.
Sec. 401.617 Suspension of collection action.
(a) General conditions. HCFA may temporarily suspend collection
action on a claim if the following general conditions are met--
(1) Amount of future recovery. HCFA determines that future
collection action may result in a recovery of an amount sufficient to
justify periodic review and action on the claim by HCFA during the
period of suspension.
(2) Statute of limitations. HCFA determines that--
(i) The applicable statute of limitations has been tolled, waived or
has started running anew; or
(ii) Future collections may be made by HCFA through offset despite
an applicable statute of limitations.
(b) Basis for suspension. Bases on which HCFA may suspend collection
action on a particular claim include the following--
(1) A debtor cannot be located; or
(2) A debtor--
(i) Owns no substantial equity in property;
(ii) Is unable to make payment on HCFA's claim or is unable to
effect a compromise; and
(iii) Has future prospects that justify retention of the claim.
(c) Locating debtors. HCFA will make every reasonable effort to
locate missing debtors sufficiently in advance of the bar of an
applicable statute of limitations to permit timely filing of a lawsuit
to recover the amount of the claim.
(d) Effect of suspension on liquidation of security. HCFA will
liquidate security, obtained in partial recovery of a claim, despite a
decision under this section to suspend collection action against the
debtor for the remainder of the claim.
Sec. 401.621 Termination of collection action.
(a) General factors. After considering the bases for a decision to
terminate collection action under paragraph (b) of this section, HCFA
may further consider factors such as--
(1) The age and health of the debtor if the debtor is an individual;
(2) Present and potential income of the debtor; and
(3) Whether assets have been concealed or improperly transferred by
the debtor.
(b) Basis for termination of collection action. Bases on which HCFA
may terminate collection action on a claim include the following--
(1) Inability to collect a substantial amount of the claim. HCFA may
terminate collection action if it determines that it is unable to
collect, or to enforce collection, of a significant amount of the claim.
In making this determination, HCFA will consider factors such as--
(i) Judicial remedies available;
(ii) The debtor's future financial prospects; and
(iii) Exemptions available to the debtor under State or Federal law.
(2) Inability to locate debtor. In cases involving missing debtors,
HCFA may terminate collection action if--
(i) There is no security remaining to be liquidated;
(ii) The applicable statute of limitations has run; or
(iii) The prospects of collecting by offset, whether or not an
applicable statute of limitations has run, are considered by HCFA to be
too remote to justify retention of the claim.
(3) Cost of collection exceeds recovery. HCFA may terminate
collection action if it determines that the cost of further collection
action will exceed the amount recoverable.
[[Page 22]]
(4) Legal insufficiency. HCFA may terminate collection action if it
determines that the claim is legally without merit.
(5) Evidence unavailable. HCFA may terminate collection action if--
(i) Efforts to obtain voluntary payment are unsuccessful; and
(ii) Evidence or witnesses necessary to prove the claim are
unavailable.
Sec. 401.623 Joint and several liability.
(a) Collection action. HCFA will liquidate claims as quickly as
possible. In cases of joint and several liability among two or more
debtors, HCFA will not allocate the burden of claims payment among the
debtors. HCFA will proceed with collection action against one debtor
even if other liable debtors have not paid their proportionate shares.
(b) Compromise. Compromise with one debtor does not release a claim
against remaining debtors. Furthermore, HCFA will not consider the
amount of a compromise with one debtor to be a binding precedent
concerning the amounts due from other debtors who are jointly and
severally liable on the claim.
Sec. 401.625 Effect of HCFA claims collection decisions on appeals.
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.
PART 402--[RESERVED]
I07
PART 403--SPECIAL PROGRAMS AND PROJECTS--Table of Contents
Subpart A--[Reserved]
Subpart B--Medicare Supplemental Policies
Sec.
403.200 Basis and scope.
General Provisions
403.201 State regulation of insurance policies.
403.205 Medicare supplement policy.
403.206 General standards for Medicare supplemental policies.
403.210 NAIC model standards.
403.215 Loss ratio standards.
State Regulatory Programs
403.220 Supplemental Health Insurance Panel.
403.222 State with an approved regulatory program.
Voluntary Certification Program: General Provisions
403.231 Emblem.
403.232 Requirements and procedures for obtaining certification.
403.235 Review and certification of policies.
403.239 Submittal of material to retain certification.
403.245 Loss of certification.
403.248 Administrative review of HCFA determinations.
Voluntary Certification Program: Loss Ratio Provisions
403.250 Loss ratio calculations: General provisions.
403.251 Loss ratio date and time frame provisions.
403.253 Calculation of benefits.
403.254 Calculation of premiums.
403.256 Loss ratio supporting data.
403.258 Statement of actuarial opinion.
Subpart C--Recognition of State Reimbursement Control Systems
403.300 Basis and purpose.
403.302 Definitions.
403.304 Minimum requirements for State systems--discretionary approval.
403.306 Additional requirements for State systems--mandatory approval.
403.308 State systems under demonstration projects--mandatory approval.
403.310 Reduction in payments.
403.312 Submittal of application.
403.314 Evaluation of State systems.
403.316 Reconsideration of certain denied applications.
403.318 Approval of State systems.
403.320 HCFA review and monitoring of State systems.
403.321 State systems for hospital outpatient services.
403.322 Termination of agreements for Medicare recognition of State
systems.
Subpart D--[Reserved]
Subpart E--Beneficiary Counseling and Assistance Grants
403.500 Basis, scope, and definition.
403.501 Eligibility for grants.
403.502 Availability of grants.
403.504 Number and size of grants.
403.508 Limitations.
[[Page 23]]
403.510 Reporting requirements.
403.512 Administration.
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart A--[Reserved]
Subpart B--Medicare Supplemental Policies
Source: 47 FR 32400, July 26, 1982, unless otherwise noted.
Sec. 403.200 Basis and scope.
(a) Provisions of the legislation. This subpart implements, in part,
section 1882 of the Social Security Act. The intent of that section is
to enable Medicare beneficiaries to identify Medicare supplemental
policies that do not duplicate Medicare, and that provide adequate,
fairly priced protection against expenses not covered by Medicare. The
legislation establishes certain standards for Medicare supplemental
policies and provides two methods for informing Medicare beneficiaries
which policies meet those standards:
(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) Scope of subpart. This subpart sets forth the standards and
procedures HCFA will use to implement the voluntary certification
program.
General Provisions
Sec. 403.201 State regulation of insurance policies.
(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 Sec. 403.235(b), does not authorize the insuring
organization to market a policy that does not conform to applicable
State laws and regulations.
Sec. 403.205 Medicare supplemental policy.
(a) Except as specified in paragraph (d) of this section, Medicare
supplemental policy (policy) means a health insurance policy or other
health benefit plan--
(1) That a private entity offers to a Medicare beneficiary; and
(2) That is primarily designed, or is advertised, marketed, or
otherwise purported to provide payment for expenses incurred for
services and items that are not reimbursed under the Medicare program
because of deductibles, coinsurance, or other limitations under
Medicare.
(b) Unless otherwise specified in this subpart, the term policy
includes both policy form and policy.
(1) Policy form means the form of health insurance contract that is
approved by and on file with the State agency for the regulation of
insurance.
(2) Policy means the contract--
(i) Issued under the policy form; and
(ii) Held by the policyholder.
(c) Medicare supplemental policy includes the following--
(1) An individual policy.
(2) A group policy.
(d) Medicare supplemental policy does not include 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;
[[Page 24]]
(ii) Has been maintained in good faith for a purpose other than
obtaining insurance; and
(iii) Has been in existence for at least two years before the date
of its initial offering of a Medicare supplemental health insurance
policy to its members.
(5) For purposes of the voluntary certification program, a policy
issued to an employee or to a member of a labor organization as an
addition to a franchise plan (a plan that enables members of the same
entity to purchase an individual policy marketed to them under group
underwriting procedures), if the plan is in existence on July 1, 1982.
Sec. 403.206 General standards for Medicare supplemental policies.
(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 Sec. 405.210; and
(2) The loss ratio standards specified in Sec. 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.
Sec. 403.210 NAIC model standards.
(a) NAIC model standards means the National Association of Insurance
Commissioners (NAIC) ``Model Regulation to Implement the Individual
Accident and Insurance Minimum Standards Act'' (as amended and adopted
by the NAIC on June 6, 1979, as it applies to Medicare supplemental
policies). Copies of the NAIC model standards can be purchased from the
National Association of Insurance Commissioners at 350 Bishops Way,
Brookfield, Wisconsin 53004, and from the NIARS Corporation, 318
Franklin Avenue, Minneapolis, Minnesota 55404.
(b) The policy must comply with the provisions of the NAIC model
standards, except as follows--
(1) Policy, for purposes of this paragraph, means individual and
group policy, as specified in Sec. 403.205. The NAIC model standards
limit ``policy'' to individual policy.
(2) The policy must meet the loss ratio standards specified in
Sec. 403.215.
[47 FR 32400, July 26, 1982; 49 FR 44472, Nov. 7, 1984]
Sec. 403.215 Loss ratio standards.
(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.
State Regulatory Programs
Sec. 403.220 Supplemental Health Insurance Panel.
(a) Membership. The Supplemental Health Insurance Panel (Panel)
consists of--
(1) The Secretary or a designee, who serves as chairperson, and
(2) Four State Commissioners or Superintendents of Insurance
appointed by the President. (The terms Commissioner or Superintendent of
Insurance include persons of similar rank.)
(b) Functions. (1) The Panel determines whether or not a State
regulatory program for Medicare supplemental health insurance policies
meets and continues to meet minimum requirements specified in section
1882 of the Social Security Act.
(2) The chairperson of the Panel informs the State Commissioners and
Superintendents of Insurance of all determinations made under paragraph
(b)(1) of this section.
[[Page 25]]
Sec. 403.222 State with an approved regulatory program.
(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) Policy issued in that State means--
(1) A group policy, if the holder of the master policy resides in
that State; and
(2) An individual policy, if the policy is--
(i) Issued in that State; or
(ii) Issued for delivery in that State.
(c) A policy issued in a State with an approved regulatory program
is considered to meet the NAIC model standards in Sec. 403.210 and loss
ratio standards in Sec. 403.215.
Voluntary Certification Program: General Provisions
Sec. 403.231 Emblem.
(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 Sec. 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 Sec. 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 Sec. 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 Sec. 403.239).
Sec. 403.232 Requirements and procedures for obtaining certification.
(a) To be certified by HCFA, a policy must meet--
(1) The NAIC model standards specified in Sec. 403.210;
(2) The loss ratio standards specified in Sec. 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
Sec. 403.250.
(10) Loss ratio supporting data, as specified in Sec. 403.256.
(11) A statement of actuarial opinion, as specified in Sec. 403.258.
[[Page 26]]
(12) A statement that the insuring organization will notify the
policyholders in writing, within the period of time specified in
Sec. 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.
Sec. 403.235 Review and certification of policies.
(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 Sec. 403.222.
(b) If the requirements specified in Sec. 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 Sec. 403.231.
(c) If HCFA certifies a policy, it will inform all State
Commissioners and Superintendents of Insurance of that fact.
Sec. 403.239 Submittal of material to retain certification.
(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 Sec. 403.232(b), that
was submitted for previous certification.
(2) The loss ratio supporting data specified in Sec. 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
Sec. 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
Sec. 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.
Sec. 403.245 Loss of certification.
(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
Sec. 403.232(a); or
(ii) The insuring organization has failed to meet the requirements
for submittal of material specified in Sec. 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.
Sec. 403.248 Administrative review of HCFA determinations.
(a) This section provides for administrative review if HCFA
determines--
(1) Not to certify a policy; or
[[Page 27]]
(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 Sec. 403.232(b) or Sec. 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.
Voluntary Certification Program: Loss Ratio Provisions
Sec. 403.250 Loss ratio calculations: General provisions.
(a) Basic formula. The expected loss ratio is calculated by
determining the ratio of benefits to premiums.
(b) Calculations. The insuring organization must calculate loss
ratios according to the provisions of Secs. 403.251, 403.253, and
403.254.
Sec. 403.251 Loss ratio date and time frame provisions.
(a) Initial calculation date means the first date of the period that
the insuring organization uses to calculate the policy's expected loss
ratio.
(1) The initial calculation date may be before, the same as, or
after the date the insuring organization sends the policy to 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) Loss ratio calculation period means the period beginning with
the initial calculation date and ending with the last day of the period
for which the insuring organization calculates the policy's scale of
premiums.
(c) To calculate ``present values'', the insuring organization may
ignore discounting (an actuarial procedure that provides for the impact
of a variety of factors, such as lapse of policies) for loss ratio
calculation periods not exceeding 12 months.
Sec. 403.253 Calculation of benefits.
(a) General provisions. (1) Except as provided for in paragraph
(a)(2) of this section, calculate the amount of ``benefits'' by--
(i) Adding the present values on the initial calculation date of--
(A) Expected incurred benefits in the loss ratio calculation period,
to--
(B) The total policy reserve at the last day of the loss ratio
calculation period: and
(ii) Subtracting the total policy reserve on the initial calculation
date from the sum of these values.
[[Page 28]]
(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) Calculation of total policy reserve--(1) Option for calculation.
The insuring organization must calculate ``total policy reserve''
according to the provisions of paragraph (b) (2) or (3) of this section.
(2) Total policy reserve: Federal provisions. (i) ``Total policy
reserve'' means the sum of--
(A) Additional reserve; and
(B) The reserve for future contingent benefits.
(ii) Additional reserve means the amount calculated on a net level
reserve basis, using appropriate values to account for lapse, mortality,
morbidity, and interest, that on the valuation date represents--
(A) The present value of expected incurred benefits over the loss
ratio calculation period; less--
(B) The present value of expected net premiums over the loss ratio
calculation period.
(iii) Net premium means the level portion of the gross premium used
in calculating the additional reserve. On the day the policy is issued,
the present value of the series of those portions equals the present
value of the expected incurred claims over the period that the gross
premiums are computed to provide coverage.
(iv) Reserve for future contingent benefits means the amounts, not
elsewhere included, that provide for the extension of benefits after
insurance coverage terminates. These benefits--
(A) Are predicated on a health condition existing on the date
coverage ends;
(B) Accrue after the date coverage ends; and
(C) Are payable after the valuation date.
(3) Total policy reserve: State provisions. ``Total policy reserve''
means the total policy reserve calculated according to appropriate State
law or regulation.
Sec. 403.254 Calculation of premiums.
(a) General provisions. To calculate the amount of ``premiums'',
calculate the present value on the initial calculation date of expected
earned premiums for the loss ratio calculation period.
(b) Specific provisions. (1) Earned premium for a given period
means--
(i) Written premiums for the period; plus--
(ii) The total premium reserve at the beginning of the period;
less--
(iii) The total premium reserve at the end of the period.
(2) Written premiums in a period means--
(i) Premiums collected in that period; plus--
(ii) Premiums due and uncollected at the end of that period; less--
(iii) Premiums due and uncollected at the beginning of that period.
(3) Total premium reserve means the sum of--
(i) The unearned premium reserve;
(ii) The advance premium reserve; and
(iii) The reserve for rate credits.
(4) Unearned premium reserve means the portion of gross premiums due
that provide for days of insurance coverage after the valuation date.
(5) Advance premium reserve means premiums received by the insuring
organization that are due after the valuation date.
(6) Reserve for rate credits means rate credits on a group policy
that--
(i) Accrue by the valuation date of the policy; and
(ii) Are paid or credited after the valuation date.
Sec. 403.256 Loss ratio supporting data.
(a) For purposes of requesting HCFA certification under
Sec. 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
[[Page 29]]
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
Sec. 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.
Sec. 403.258 Statement of actuarial opinion.
(a) For purposes of certification requests submitted under
Sec. 403.232(b) and subsequent review as specified in Sec. 403.239(a),
statement of actuarial opinion means a signed declaration in which a
qualified actuary states that the assumptions used in calculating the
expected loss ratio are appropriate and reasonable, taking into account
actual policy experience, if any, and reasonable expectations.
(b) Qualified actuary means--
(1) A member in good standing of the American Academy of Actuaries;
or
(2) A person who has otherwise demonstrated his or her actuarial
competence to the satisfaction of the Commissioner or Superintendent of
Insurance of the domiciliary State of the insuring organization.
Subpart C--Recognition of State Reimbursement Control Systems
Source: 51 FR 15492, Apr. 24, 1986, unless otherwise noted.
Sec. 403.300 Basis and purpose.
(a) Basis. This subpart implements section 1886(c) of the Act, which
authorizes payment for Medicare inpatient hospital services in
accordance with a State's reimbursement control system rather than under
the Medicare reimbursement principles as described in HCFA's regulations
and instructions.
(b) Purpose. Contained in this subpart are--
(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.
Sec. 403.302 Definitions.
For purposes of this subpart--
Chief executive officer of a State means the Governor of the State
or the Governor's designee.
Existing demonstration project refers to demonstration projects
approved by HCFA under the authority of section
[[Page 30]]
402(a) of the Social Security Amendments of 1967 (42 U.S.C. 1395b-1) or
section 222(a) of the Social Security Amendments of 1972 (42 U.S.C.
1395b-1 (note)) and in effect on April 20, 1983 (the date of the
enactment of Pub. L. 98-21 (Social Security Amendments of 1983)).
Federal hospital means a hospital that is administered by, or that
is under exclusive contract with, the Department of Defense, the
Veterans Administration, or the Indian Health Service.
State system or system refers to a State reimbursement control
system that is approved by HCFA under the authority of section 1886(c)
of the Act and that satisfies the requirements described in this
subpart.
Sec. 403.304 Minimum requirements for State systems--discretionary approval.
(a) Discretionary approval by HCFA. HCFA may approve Medicare
payments under a State system, if HCFA determines that the system meets
the requirements in paragraphs (b) and (c) of this section and, if
applicable paragraph (d) of this section.
(b) Requirements for State system. (1) An application for approval
of the system must be submitted to HCFA by the Chief Executive Officer
of the State.
(2) The State system must apply to substantially all non-Federal
acute care hospitals in the State.
(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
Sec. 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 Sec. 489.23 of this
chapter, the system must prohibit payment, as required under section
1862(a)(14) of the Act and Sec. 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) Satisfactory assurances. The State must provide to HCFA
satisfactory assurance as to the following:
(1) The system provides for equitable treatment of hospital patients
and hospital employees.
(2) The system provides for equitable treatment of all entities that
pay hospitals for inpatient hospital services, including Federal and
State programs. Under the requirement, the following conditions must be
met:
(i) Both the Medicare and Medicaid programs must participate under
the system.
(ii) The State must assure equitable and uniform treatment under the
system of third-party payors of inpatient
[[Page 31]]
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
Sec. 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) Additional cost-effectiveness assurance. If the assurances and
supporting data required under paragraph (c)(3) of this section are
insufficient to provide assurance satisfactory to HCFA regarding the
cost-effectiveness of a State system, the State may additionally submit
one of the following assurances in order to meet the cost-effectiveness
test:
(1) State responsibility for excess payments. The State must agree
that each month Medicare intermediaries will disburse to the State's
hospital Federal funds that in the aggregate equal no more than would
have been disbursed in the absence of the State system. Any additional
funds necessary to pay hospitals for Medicare services required by the
State system will be paid to the intermediaries by the State. These
additional amounts will be refunded to the State by the intermediaries
to the extent that, in subsequent months, the State system requires a
smaller aggregate payment for Medicare services than would have been
paid in the absence of the State system.
(2) Limitations on payments. (i) The State must agree that if its
projections exceed what Medicare would pay in any particular period, the
State and HCFA will establish and agreed upon payment schedule that will
limit payments under the State system based on a predetermined
percentage relationship between projected State payments and what
payments would have been under Medicare.
(ii) If deviation from the predetermined relationship described in
paragraph (d)(2)(i) of this section occurs, the State must further agree
that--
(A) Medicare payments would be capped automatically at payment
levels based on the rates used for the Medicare prospective payment
system and the State would be required to pay the difference to
individual hospitals in its system; or
(B) The State may provide by legislation or legally binding
regulations that any reduced payments to hospitals under the system that
result from this cost-effectiveness assurance will constitute full and
final payment for hospital services furnished to Medicare beneficiaries
for the period covered by these reduced payments.
Sec. 403.306 Additional requirements for State systems--mandatory approval.
(a) General policy--(1) Mandatory approval. HFCA will approve an
application for Medicare reimbursement under a State system if the
system meets all of the requirements of Sec. 403.304 and of paragraph
(b) of this section.
(2) Exception. HCFA may approve an application if the State system
meets all of the requirements of Sec. 403.304 but
[[Page 32]]
only some of the requirements of paragraph (b) of this section.
(b) Additional requirements--(1) Operation of system. The system
must--
(i) Be operated directly by the State or by entity designated under
State law;
(ii) Provide for payments to hospitals using a methodology under
which--
(A) Prospectively determined payment rates are established; and
(B) Exceptions, adjustments, and methods for changes in methodology
are set forth;
(iii) Provide that a change by the State in the system that has the
effect of materially changing payments to hospitals can take effect only
upon 60 days notice to HCFA and to the hospitals likely to be materially
affected by the change and upon HCFA's approval of the change.
(2) Satisfactory assurances--(i) Admissions practice. The State must
assure that the operation of the system will not result in any change in
hospital admission practices that result in--
(A) A significant reduction in the proportion of patients receiving
hospital services covered under the system who have no third-party
coverage and who are unable to pay for hospital services;
(B) A significant reduction in the proportion of individuals
admitted to hospitals for inpatient hospital services for which payment
is less, or is likely to be less, than the anticipated charges for or
cost of the services;
(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) Consultation with local government officials. The State must
provide documentation that it has consulted with local government
officials concerning the impact of the system on publicly owned or
operated hospitals.
Sec. 403.308 State systems under demonstration projects--mandatory approval.
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 Sec. 403.304 (b)(1)-(10) and Sec. 403.304(c), and,
if appropriate Sec. 403.304(d).
Sec. 403.310 Reduction in payments.
(a) General rule. If HCFA determines that the satisfactory
assurances required of a State under Sec. 403.304(c) and, if applicable,
Sec. 403.304(d) have not been met, or will not be met, with respect to
any 36-month period, HCFA will reduce Medicare payments to individual
hospitals being reimbursed under the State's system or, if applicable,
under the Medicare payment system, in an amount equal to the amount by
which the Medicare payments under the system exceed the amount of
Medicare payments to such hospitals that otherwise would have been made
not using the State system. The amount of the recoupment will include,
when appropriate, interest charges computed in accordance with
Sec. 405.378 of this chapter.
(b) Recoupment procedures. The amount of the overpayment will be
recouped on a proportionate basis from each of those hospitals that
received payments under the State system that exceeded the payments they
would have received under the Medicare payment system. Each hospital's
share of the aggregate excess payment will be determined on the basis of
a comparison of the hospital's proportionate share of the aggregate
payment received under the State system that is in excess of what the
aggregate payment would have been under the Medicare payment system.
Recoupments may be accomplished by a hospital's direct payment to the
Medicare program or by offsets to future payments made to the hospital.
(c) Alternative recoupment procedures. As an alternative to the
recoupment procedures described in paragraph (b) of this section and
subject to HCFA's
[[Page 33]]
acceptance, the State may provide, by legislation or legally binding
regulations, procedures for the recoupment of the amount of payments
that exceed the amount of payments that otherwise would have been paid
by Medicare if the State system had not been in effect.
(d) Rule for existing Medicare demonstration projects. In cases of
existing Medicare demonstration projects where the expenditure test is
to be applied by a rate of increase factor, the amount of the excess
payment will be determined, for the three hospital cost reporting
periods beginning before October 1, 1986, by a comparison of the State
system's rate of increase to the national rate of increase. Recoupment
of excessive payments will be assessed and recouped as described in this
section.
[51 FR 15492, Apr. 24, 1986, as amended at 61 FR 63748, Dec. 2, 1996]
Sec. 403.312 Submittal of application.
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 Secs. 403.304 through 403.308.
Sec. 403.314 Evaluation of State systems.
HCFA will evaluate all State applications for approval of State
systems and notify the State of its determination within 60 days.
Sec. 403.316 Reconsideration of certain denied applications.
(a) Request for reconsideration. If HCFA denies an application for a
State system, the State may request that HCFA reconsider the denial if
the State believes that its system meets all of the requirements for
mandatory approval under Secs. 403.304 and 403.306 or, in the case of a
State with a system operating under an existing demonstration project,
the applicable requirements of Secs. 403.304 and 403.308.
(b) Time limit. (1) The State must submit its request for
reconsideration within 60 days after the date of HCFA's notice that the
application was denied.
(2) HCFA will notify the State of the results of its reconsideration
within 60 days after it receives the request for reconsideration.
Sec. 403.318 Approval of State systems.
(a) Approval agreement. If HCFA approves a State system, a written
agreement will be executed between HCFA and the Chief Executive Officer
of the State. The agreement must incorporate any terms of the State's
application for approval of the system as agreed to by the parties and,
as a minimum, must contain provisions that require the following:
(1) The system is operated directly by the State or an entity
designated by State law.
(2) For purposes of the Medicare program, the State's system applies
only to Medicare payments for inpatient, and if applicable, outpatient
hospital services.
(3) The system conforms to applicable Medicare law and regulations
other than those relating to the amount of reimbursement for inpatient
hospital services, or for inpatient and outpatient services, whichever
the State system covers. Applicable regulations include, for example,
those describing Medicare benefits and entitlement requirements for
program beneficiaries, as explained in parts 406 and 409 of this
chapter; the requirements at part 405, subpart J of this chapter
specifying conditions of participation for hospitals; the requirements
at part 405, subparts A, G, and S of this chapter on Medicare program
administration; and all applicable fraud and abuse regulations contained
in titles 42 and 45 of the CFR.
(4) The State must obtain 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) Effective date. An approved State system may not be effective
earlier than the date of the approval agreement, which may not be
retroactive.
Sec. 403.320 HCFA review and monitoring of State systems.
(a) General rule. The State must submit an assurance and detailed
and quantitative studies of provider cost
[[Page 34]]
and financial data and projections to support the effectiveness of its
system, as required by paragraphs (b) and (c) of this section.
(b) Required information. (1) Under Sec. 403.304(c)(3) an assurance
is required that the system will not result in greater payments over a
36-month period than would have otherwise been made under Medicare not
using such system. If a State that has an existing demonstration project
in effect on April 20, 1983 elects under Sec. 403.304(c)(3) to have the
effectiveness of its system judged on the basis of a rate of increase
factor, the State must submit an assurance that its rate of increase or
inflation in inpatient hospital payments does not exceed, for that
portion of the 36-month period that is subject to this test, the
national rate of increase or inflation in Medicare inpatient hospital
payments. The election of the rate of increase test applies only to the
three cost reporting periods beginning on or after October 1, 1983. At
the end of these cost reporting periods, the State must assure,
beginning with the first month after the expiration of the third cost
reporting period beginning after October 1, 1983, that payments under
its system will not exceed over the remainder of the 36-month period
what Medicare payments would have been.
(2) Estimates and data are required to support the State's
assurance, required under Sec. 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
[[Page 35]]
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 Sec. 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, the assurance and data as required by paragraphs (a) and (b)
of this section, if appropriate, may be based on aggregate payments or
payments per inpatient admission or discharge. HCFA will judge the
effectiveness of these systems on the basis of the rate of increase or
inflation in Medicare inpatient hospital payments compared to the
national rate of increase or inflation for such payments during the
State's hospitals' three cost reporting periods beginning on or after
October 1, 1983. The data submitted by the State for the period subject
to the rate of increase test must include the rate of increase
projection for that particular period of time. For the subsequent period
of time, the State must assure that payments under its system will not
exceed what Medicare payments would have been, as described in
Sec. 403.304(c)(3).
(7) If the amount of Medicare payments under the State system
exceeds what would have been paid under the Medicare reimbursement
principles in any given year, the State must also submit quantitative
evidence that the system will result in expenditures that do not exceed
what Medicare expenditures would have been over the 36 month period
beginning with the first month that the State system is operating. For a
State that has an existing demonstration project in effect on April 20,
1983, and that elects under Sec. 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) Review of assurances regarding expenditures. HCFA will review
the State's assurances and data submitted under this section, as a
prerequisite to the approval of the State's system. HCFA will compare
the State's projections of payment amounts to HCFA data in order to
determine if the State's assurance is reasonable and fully supportable.
If the HCFA data indicate that the State's system would result in
payment amounts that would be more then that which would have been paid
under the Medicare principles, the State's assurances would not be
acceptable. For States applying in accordance with Sec. 403.308, if HCFA
data indicate that the State's system would result in a rate of increase
or inflation that would be more than the national rate of increase or
inflation, the State's assurances would not be acceptable.
(d) Medicaid upper limit. In accordance with Sec. 447.253 of this
chapter, the State system may not result in aggregate payments for
Medicaid inpatient hospital services that would exceed the amount that
would have otherwise have been paid under the Medicare principles as
applied through the State system.
(e) Monitoring of Medicare expenditures. HCFA will monitor on a
quarterly basis expenditures under the State's system as compared to
what Medicare expenditures would have been if the system had not been in
effect. If HCFA determines at any time that the payments made under the
State's system exceed the States' projections, as
[[Page 36]]
established by the satisfactory assurances required under
Sec. 403.304(c) and, if appropriate, the predetermined percentage
relationship of the payments as required under Sec. 403.304(d). HCFA
will--
(1) Conclude that payments under the State system over a 36-month
period will exceed what Medicare would have paid:
(2) Terminate the waiver; and
(3) Recoup overpayments to the affected hospitals in accordance with
the procedures described in Sec. 403.310.
Sec. 403.321 State systems for hospital outpatient services.
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 Sec. 403.304 (b) and
(c), and Sec. 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 Sec. 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
Sec. 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 Sec. 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.
Sec. 403.322 Termination of agreements for Medicare recognition of State systems.
(a) Termination of agreements. (1) HCFA may terminate any approved
agreement if it finds, after the procedures described in this paragraph
are followed that the State system does not satisfactorily meet the
requirements of section 1886(c) of the Act or the regulations in this
subpart. A termination must be effective on the last day of a calendar
quarter.
(2) 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) Termination by State. A State may voluntarily terminate a State
system by giving HCFA notice of its intent to terminate. A termination
must be effective on the last day of a calendar quarter. The State must
notify HCFA of its intent to terminate at least 90 days before the
effective date of the termination.
Subpart D--[Reserved]
Subpart E--Beneficiary Counseling and Assistance Grants
Source: 59 FR 51128, Oct. 7, 1994, unless otherwise noted.
Sec. 403.500 Basis, scope, and definition.
(a) Basis. This subpart implements, in part, the provisions of
section 4360 of
[[Page 37]]
Public Law 101-508 by establishing a minimum level of funding for grants
made to States for the purpose of providing information, counseling, and
assistance relating to obtaining adequate and appropriate health
insurance coverage to individuals eligible to receive benefits under the
Medicare program.
(b) Scope of subpart. This subpart sets forth the following:
(1) Conditions of eligibility for the grant.
(2) Minimum levels of funding for those States qualifying for the
grants.
(3) Reporting requirements.
(c) Definition. For purposes of this subpart, the term ``State''
includes (except where otherwise indicated by the context) the 50
States, the District of Columbia, the Commonwealth of Puerto Rico, the
Virgin Islands, Guam, and American Samoa.
Sec. 403.501 Eligibility for grants.
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.
Sec. 403.502 Availability of grants.
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.
Sec. 403.504 Number and size of grants.
(a) General. HCFA awards the following types of grants:
(1) New program grants.
(2) Existing program enhancement grants.
(b) Grant Award. Each eligible State that submits an acceptable
application receives a grant including a fixed amount (minimum funding
level) and a variable amount.
(1) A fixed portion is awarded to States in the following amounts:
(i) Each of the 50 States, $75,000.
(ii) The District of Columbia, $75,000.
(iii) Puerto Rico, $75,000.
(iv) American Samoa, $25,000.
(v) Guam, $25,000.
(vi) The Virgin Islands, $25,000.
(2) A variable portion, which is based on the number and location of
Medicare beneficiaries residing in the State is awarded to each State.
The variable amount a particular State receives is determined as set
forth in paragraph (c) of this section.
(c) Calculation of variable portion of the grant. (1) HCFA bases the
variable portion of the grant on--
(i) The amount of available funds, and
(ii) A comparison of each State with the average of all of the
States (except the State being compared) with respect to three factors
that relate to the size of the State's Medicare population and where
that population resides.
(2) The factors 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
[[Page 38]]
funds and the three comparative factors), HCFA determines a variable
rate for each participating State for each grant period.
(d) Submission of revised budget. A State that receives an amount of
grant funds under this subpart that differs from the amount requested in
the budget submitted with its application must submit a revised budget
to HCFA, along with its acceptance of the grant award, that reflects the
amount awarded.
Sec. 403.508 Limitations.
(a) Use of grants. Except as specified in paragraph (b) of this
section, a State that receives a grant under this subpart may use the
grant for any reasonable expenses incurred in planning, developing,
implementing, and/or operating the program for which the grant is made.
(b) Maintenance of effort. A State that receives a grant to
supplement an existing program (that is, an existing program enhancement
grant)--
(1) Must not use the grant to supplant funds for activities that
were conducted immediately preceding the date of the initial award of a
grant made under this subpart and funded through other sources
(including in-kind contributions).
(2) Must maintain the activities of the program at least at the
level that those activities were conducted immediately preceding the
initial award of a grant made under this subpart.
Sec. 403.510 Reporting requirements.
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.
Sec. 403.512 Administration.
(a) General. Administration of grants will be in accordance with the
provisions of this subpart, 45 CFR part 92 (``Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local
Governments''), 45 CFR 74.4, the terms of the solicitation, and the
terms of the notice of grant award. Except for the minimum funding
levels established by Sec. 403.504(b)(1), in the event of conflict
between a provision of the notice of grant award, any provision of the
solicitation, or of any regulation enumerated in 45 CFR 74.4 or in part
92, the terms of the notice of grant award control.
(b) Notice. HCFA provides notice to each applicant regarding HCFA's
decision on an application for grant funding under Sec. 403.504.
(c) Appeal. Any applicant for a grant under this subpart has the
right to appeal HCFA's determination regarding its application. Appeal
procedures are governed by the regulations at 45 CFR part 16 (Procedures
of the Departmental Grant Appeals Board).
[[Page 39]]
SUBCHAPTER B--MEDICARE PROGRAM
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED--Table of Contents
Subpart A--[Reserved]
Subpart B--Medical Services Coverage Decisions That Relate to Health
Care Technology
Sec.
405.201 Scope of subpart and definitions.
405.203 FDA categorization of investigational devices.
405.205 Coverage of a non-experimental/investigational (Category B)
device.
405.207 Services related to a noncovered device.
405.209 Payment for a non-experimental/investigational (Category B)
device.
405.211 Procedures for Medicare contractors in making coverage
decisions for a non-experimental/investigational (Category B)
device.
405.213 Re-evaluation of a device categorization.
405.215 Confidential commercial and trade secret information.
Subpart C--Suspension of Payment, Recovery of Overpayments, and
Repayment of Scholarships and Loans
General Provisions
405.301 Scope of subpart.
Liability for Payments to Providers and Suppliers, and Handling of
Incorrect Payments
405.350 Individual's liability for payments made to providers and other
persons for items and services furnished the individual.
405.351 Incorrect payments for which the individual is not liable.
405.352 Adjustment of title XVIII incorrect payments.
405.353 Certification of amount that will be adjusted against
individual title II or railroad retirement benefits.
405.354 Procedures for adjustment or recovery--title II beneficiary.
405.355 Waiver of adjustment or recovery.
405.356 Principles applied in waiver of adjustment or recovery.
405.357 Notice of right to waiver consideration.
405.358 When waiver of adjustment or recovery may be applied.
405.359 Liability of certifying or disbursing officer.
Suspension and Recoupment of Payment to Providers and Suppliers and
Collection and Compromise of Overpayments
405.370 Definitions.
405.371 Suspension, offset, and recoupment of Medicare payments to
providers and suppliers of services.
405.372 Proceeding for suspension of payment.
405.373 Proceeding for offset or recoupment.
405.374 Opportunity for rebuttal.
405.375 Time limits for, and notification of, administrative
determination after receipt of rebuttal statement.
405.376 Suspension and termination of collection action and compromise
of claims for overpayment.
405.377 Withholding Medicare payments to recover Medicaid overpayments.
405.378 Interest charges on overpayment and underpayments to providers,
suppliers, and other entities.
Repayment of Scholarships and Loans
405.380 Collection of past-due amounts on scholarship and loan
programs.
Subpart D--[Reserved]
Subpart E--Criteria for Determining Reasonable Charges
405.500 Basis.
405.501 Determination of reasonable charges.
405.502 Criteria for determining reasonable charges.
405.503 Determining customary charges.
405.504 Determining prevailing charges.
405.505 Determination of locality
405.506 Charges higher than customary or prevailing charges or lowest
charge levels.
405.507 Illustrations of the application of the criteria for
determining reasonable charges.
405.508 Determination of comparable circumstances; limitation.
405.509 Determining the inflation-indexed charge.
405.511 Reasonable charges for medical services, supplies, and
equipment.
405.512 Carriers' procedural terminology and coding systems.
405.515 Reimbursement for clinical laboratory services billed by
physicians.
405.517 Payment for drugs that are not paid on a cost or prospective
payment basis.
405.534 Limitation on payment for screening mammography services.
[[Page 40]]
405.535 Special rules for nonparticipating physicians and suppliers
furnishing screening mammography services.
Subpart F--[Reserved]
Subpart G--Reconsiderations and Appeals Under Medicare Part A
405.701 Basis, purpose and definitions.
405.702 Notice of initial determination.
405.704 Actions which are initial determinations.
405.705 Actions which are not initial determinations.
405.706 Decisions of utilization review committees.
405.708 Effect of initial determination.
405.710 Right to reconsideration.
405.711 Time and place of filing request for reconsideration.
405.712 Extension of time to request reconsideration.
405.714 Withdrawal of request for reconsideration.
405.715 Reconsidered determination.
405.716 Notice of reconsidered determination.
405.717 Effect of a reconsidered determination.
405.718 Expedited appeals process.
405.720 Hearing; right to hearing.
405.722 Time and place of filing request for a hearing.
405.724 Departmental Appeals Board (DAB) review.
405.730 Court review.
405.732 Review of national coverage decisions (NCDs).
405.740 Principles for determining the amount in controversy.
405.745 Amount in controversy ascertained after reconsideration.
405.747 Dismissal of request for hearing; amount in controversy less
than $100.
405.750 Time period for reopening initial, revised, or reconsidered
determinations and decisions or revised decisions of an ALJ or
the Departmental Appeals Board (DAB); binding effect of
determination and decisions.
405.753 Appeal of a categorization of a device.
Subpart H--Appeals Under the Medicare Part B Program
405.801 Part B appeals--general description.
405.802 Definitions.
405.803 Initial determination.
405.804 Notice of initial determination.
405.805 Parties to the initial determination.
405.806 Effect of initial determination.
405.807 Review of initial determination.
405.808 Parties to the review.
405.809 Opportunity to submit evidence.
405.810 Review determination.
405.811 Notice of review determination.
405.812 Effect of review determination.
405.815 Amount in controversy for carrier hearing, ALJ hearing and
judicial review.
405.817 Principles for determining amount in controversy.
405.821 Request for carrier hearing.
405.822 Parties to a carrier hearing.
405.823 Carrier hearing officer.
405.824 Disqualification of carrier hearing officer.
405.825 Location of carrier hearing.
405.826 Notice of carrier hearing.
405.830 Conduct of the carrier hearing.
405.831 Waiver of right to appear at carrier hearing and present
evidence.
405.832 Dismissal of request for carrier hearing.
405.833 Record of carrier hearing.
405.834 Carrier hearing officer's decision.
405.835 Effect of carrier hearing officer's decision.
405.836 Authority of the carrier hearing officer.
405.841 Reopening initial or review determination of the carrier, and
decision of a carrier hearing officer.
405.842 Notice of reopening and revision.
405.850 Change of ruling or legal precedent.
405.853 Expedited appeals process.
405.855 ALJ hearing.
405.856 Departmental Appeals Board (DAB) review.
405.857 Court review.
405.860 Review of national coverage decisions (NCDs).
405.870 Appointment of representative.
405.871 Qualifications of representatives.
405.872 Authority of representatives.
405.874 Appeals of carrier decisions that supplier standards are not
met.
405.877 Appeal of a categorization of a device.
Subparts I-Q--[Reserved]
Subpart R--Provider Reimbursement Determinations and Appeals
405.1801 Introduction.
405.1803 Intermediary determination and notice of amount of program
reimbursement.
405.1804 Matters not subject to administrative or judicial review under
prospective payment.
405.1805 Parties to intermediary determination.
405.1807 Effect of intermediary determination.
405.1809 Intermediary hearing procedures.
405.1811 Right to intermediary hearing; time, place, form, and content
of request for intermediary hearing.
405.1813 Failure to timely request an intermediary hearing.
[[Page 41]]
405.1815 Parties to the intermediary hearing.
405.1817 Hearing officer or panel of hearing officers authorized to
conduct intermediary hearing; disqualification of officers.
405.1819 Conduct of intermediary hearing.
405.1821 Prehearing discovery and other proceedings prior to the
intermediary hearing.
405.1823 Evidence at intermediary hearing.
405.1825 Witnesses at intermediary hearing.
405.1827 Record of intermediary hearing.
405.1829 Authority of hearing officer(s) at intermediary hearing.
405.1831 Intermediary hearing decision and notice.
405.1833 Effect of intermediary hearing decision.
405.1835 Right to Board hearing.
405.1837 Group appeal.
405.1839 Amount in controversy.
405.1841 Time, place, form, and content of request for Board hearing.
405.1842 Expediting Board proceedings.
405.1843 Parties to Board hearing.
405.1845 Composition of Board.
405.1847 Disqualification of Board members.
405.1849 Establishment of time and place of hearing by the Board.
405.1851 Conduct of Board hearing.
405.1853 Prehearing discovery and other proceedings prior to the Board
hearing.
405.1855 Evidence at Board hearing.
405.1857 Subpoenas.
405.1859 Witnesses.
405.1861 Oral argument and written allegations.
405.1863 Administrative policy at issue.
405.1865 Record of Board hearing.
405.1867 Sources of Board's authority.
405.1869 Scope of Board's decision-making authority.
405.1871 Board hearing decision and notice.
405.1873 Board's jurisdiction.
405.1875 Administrator's review.
405.1877 Judicial review.
405.1881 Appointment of representative.
405.1883 Authority of representative.
405.1885 Reopening a determination or decision.
405.1887 Notice of reopening.
405.1889 Effect of a revision.
Subparts S-T--[Reserved]
Subpart U--Conditions for Coverage of Suppliers of End-Stage Renal
Disease (ESRD) Services
405.2100 Scope of subpart.
405.2101 Objectives of end-stage renal disease (ESRD) program.
405.2102 Definitions.
405.2110 Designation of ESRD networks.
405.2111 [Reserved]
405.2112 ESRD network organizations.
405.2113 Medical review board.
405.2114 [Reserved]
405.2120 Minimum utilization rates: general.
405.2121 Basis for determining minimum utilization rates.
405.2122 Types and duration of classification according to utilization
rates.
405.2123 Reporting of utilization rates for classification.
405.2124 Calculation of utilization rates for comparison with minimal
utilization rates(s) and notification of status.
405.2130 Condition: Minimum utilization rates.
405.2131 Condition: Provider status: Renal transplantation center or
renal dialysis center.
405.2132 [Reserved]
405.2133 Condition: Furnishing data and information for ESRD program
administration.
405.2134 Condition: Participation in network activities.
405.2135 Condition: Compliance with Federal, State, and local laws and
regulations.
405.2136 Condition: Governing body and management.
405.2137 Condition: Patient long-term program and patient care plan.
405.2138 Condition: Patients' rights and responsibilities.
405.2139 Condition: Medical records.
405.2140 Condition: Physical environment.
405.2150 Condition: Reuse of hemodialyzers and other dialysis supplies.
405.2160 Condition: Affiliation agreement or arrangement.
405.2161 Condition: Director of a renal dialysis facility or renal
dialysis center.
405.2162 Condition: Staff of a renal dialysis facility or renal
dialysis center.
405.2163 Condition: Minimal service requirements for a renal dialysis
facility or renal dialysis center.
405.2164 Conditions for coverage of special purpose renal dialysis
facilities.
405.2170 Condition: Director of a renal transplantation center.
405.2171 Condition: Minimal service requirements for a renal
transplantation center.
405.2180 Termination of Medicare coverage.
405.2181 Alternative sanctions.
405.2182 Notice of sanction and appeal rights: Termination of coverage.
405.2184 Notice of appeal rights: Alternative sanctions.
Subparts V-W--[Reserved]
Subpart X--Rural Health Clinic and Federally Qualified Health Center
Services
405.2400 Basis.
405.2401 Scope and definitions.
405.2402 Basic requirements.
[[Page 42]]
405.2403 Content and terms of the agreement with the Secretary.
405.2404 Terminations of agreements.
405.2410 Application of Part B deductible and coinsurance.
405.2411 Scope of benefits.
405.2412 Physicians' services.
405.2413 Services and supplies incident to a physician's services.
405.2414 Nurse practitioner and physician assistant services.
405.2415 Services and supplies incident to nurse practitioner and
physician assistant services.
405.2416 Visiting nurse services.
405.2417 Visiting nurse services: Determination of shortage of
agencies.
Federally Qualified Health Center Services
405.2430 Basic requirements.
405.2434 Content and terms of the agreement.
405.2436 Termination of agreement.
405.2440 Conditions for reinstatement after termination by HCFA.
405.2442 Notice to the public.
405.2444 Change of ownership.
405.2446 Scope of services.
405.2448 Preventive primary services.
405.2450 Clinical psychologist and clinical social worker services.
405.2452 Services and supplies incident to clinical psychologist and
clinical social worker services.
Payment for Rural Health Clinic and Federally Qualified Health Center
Services
405.2460 Applicability of general payment exclusions.
405.2462 Payment for rural health clinic and Federally qualified health
center services.
405.2463 What constitutes a visit.
405.2464 All-inclusive rate.
405.2466 Annual reconciliation.
405.2468 Allowable costs.
405.2470 Reports and maintenance of records.
405.2472 Beneficiary appeals.
Subpart A--[Reserved]
Subpart B--Medical Services Coverage Decisions That Relate to Health
Care Technology
Authority: Secs. 1102, 1861, 1862(a), 1871, 1874, and 1881 of the
Social Security Act (42 U.S.C. 1302, 1395x, 1395y(a), 1395hh, 1395kk,
and 1395rr), and sec. 353 of the Public Health Service Act (42 U.S.C.
263a), unless otherwise noted.
Source: 60 FR 48423, Sept. 19, 1995, unless otherwise noted.
Sec. 405.201 Scope of subpart and definitions.
(a) Scope. This subpart establishes that--
(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) Definitions. As used in this subpart--
Class I refers to devices for which the general controls of the
Food, Drug, and Cosmetic Act, such as adherence to good manufacturing
practice regulations, are sufficient to provide a reasonable assurance
of safety and effectiveness.
Class II refers to devices that, in addition to general controls,
require special controls, such as performance standards or postmarket
surveillance, to provide a reasonable assurance of safety and
effectiveness.
Class III refers to devices that cannot be classified into Class I
or Class II because insufficient information exists to determine that
either special or general controls would provide reasonable assurance of
safety and effectiveness. Class III devices require premarket approval.
Contractors refers to carriers, fiscal intermediaries, and other
entities that contract with HCFA to review and adjudicate claims for
Medicare services.
Experimental/investigational (Category A) device refers to an
innovative device believed to be in Class III for which ``absolute
risk'' of the device type has not been established (that is, initial
questions of safety and effectiveness have not been resolved and the FDA
is unsure whether the device type can be safe and effective).
IDE stands for investigational device exemption. An FDA-approved IDE
application permits a device, which would otherwise be subject to
marketing clearance, to be shipped lawfully for the purpose of
conducting a clinical
[[Page 43]]
trial in accordance with 21 U.S.C. 360j(g) and 21 CFR parts 812 and 813.
Non-experimental/investigational (Category B) device refers to a
device believed to be in Class I or Class II, or a device believed to be
in Class III for which the incremental risk is the primary risk in
question (that is, underlying questions of safety and effectiveness of
that device type have been resolved), or it is known that the device
type can be safe and effective because, for example, other manufacturers
have obtained FDA approval for that device type.
PMA stands for ``premarket approval'' and refers to a marketing
application for a Class III device, which includes all information
submitted with or incorporated by reference in the application in
accordance with 21 U.S.C. 360e and 360j and 21 CFR 814.3(e).
Sponsor refers to a person or entity that initiates, but does not
conduct, an investigation under an IDE.
Sec. 405.203 FDA categorization of investigational devices.
(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.
Sec. 405.205 Coverage of a non-experimental/investigational (Category B) device.
(a) For any device that meets the requirements of the exception at
Sec. 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 Sec. 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.
Sec. 405.207 Services related to a noncovered device.
(a) When payment is not made. Medicare payment is not made for
medical and hospital services that are related to the use of a device
that is not covered because HCFA determines the device is not
``reasonable'' and ``necessary'' under section 1862(a)(1)(A) of the Act
or because it is excluded from coverage for other reasons. These
services include all services furnished in preparation for the use of a
noncovered device, services furnished contemporaneously with and
necessary to the use of a noncovered device, and services furnished as
necessary after-care that are incident to recovery from the use of the
device or from receiving related noncovered services.
(b) When payment is made. Medicare payment may be made for services,
ordinarily covered by Medicare, to treat a condition or complication
that arises because of the use of a noncovered device or from the
furnishing of related noncovered services.
Sec. 405.209 Payment for a non-experimental/investigational (Category B) device.
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.
Sec. 405.211 Procedures for Medicare contractors in making coverage decisions for a non-experimental/investigational (Category B) device.
(a) General rule. In their review of claims for payment, Medicare
contractors are bound by the statute, regulations, and all HCFA
administrative issuances, including all national coverage decisions.
[[Page 44]]
(b) Potentially covered non-experimental/investigational (Category
B) devices. Medicare contractors may approve coverage for any device
with an FDA-approved IDE categorized as a non-experimental/
investigational (Category B) device if all other coverage requirements
are met.
(c) Other considerations. Medicare contractors must consider whether
any restrictions concerning site of service, indications for use, or any
other list of conditions for coverage have been placed on the device's
use.
Sec. 405.213 Re-evaluation of a device categorization.
(a) General rules. (1) Any sponsor that does not agree with an FDA
decision that categorizes its device as experimental/investigational
(Category A) may request re-evaluation of the categorization decision.
(2) A sponsor may request review by 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) Request to FDA. A sponsor that does not agree with the FDA's
categorization of its device may submit a written request to the FDA at
any time requesting re-evaluation of its original categorization
decision, together with any information and rationale that it believes
support recategorization. The FDA notifies both HCFA and the sponsor of
its decision.
(c) Request to HCFA. If the FDA does not agree to recategorize the
device, the sponsor may seek review from HCFA. A device sponsor must
submit its request in writing to HCFA. HCFA obtains copies of relevant
portions of the application, the original categorization decision, and
supplementary materials. HCFA reviews all material submitted by the
sponsor and the FDA's recommendation. HCFA reviews only information in
the FDA record to determine whether to change the categorization of the
device. HCFA issues a written decision and notifies the sponsor of the
IDE and the FDA.
Sec. 405.215 Confidential commercial and trade secret information.
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.
Subpart C--Suspension of Payment, Recovery of Overpayments, and
Repayment of Scholarships and Loans
Authority: 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.
Source: 31 FR 13534, Oct. 20, 1966, unless otherwise noted.
Redesignated at 42 FR 52826, Sept. 30, 1977.
General Provisions
Sec. 405.301 Scope of subpart.
This subpart sets forth the policies and procedures for handling of
incorrect payments and recovery of overpayments.
[54 FR 41733, Oct. 11, 1989]
Liability for Payments To Providers or Suppliers and Handling of
Incorrect Payments
Sec. 405.350 Individual's liability for payments made to providers and other persons for items and services furnished the individual.
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 Secs. 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:
[[Page 45]]
(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.
[41 FR 1492, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 61 FR 49271, Sept. 19, 1996]
Sec. 405.351 Incorrect payments for which the individual is not liable.
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.
Sec. 405.352 Adjustment of title XVIII incorrect payments.
Where an individual is liable for an incorrect payment (i.e., a
payment made under Sec. 405.350(a) or Sec. 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).
[31 FR 13534, Oct. 20, 1966, as amended by 41 FR 1492, Jan. 8, 1976.
Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.353 Certification of amount that will be adjusted against individual title II or railroad retirement benefits.
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 Sec. 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.
Sec. 405.354 Procedures for adjustment or recovery--title II beneficiary.
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.
[31 FR 13534, Oct. 20, 1966, as amended at 32 FR 18027, Dec. 16, 1967.
Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.355 Waiver of adjustment or recovery.
(a) The provisions of Sec. 405.352 may not be applied and there may
be no adjustment or recovery of an incorrect payment (i.e., a payment
made under Sec. 405.350(a) or Sec. 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
[[Page 46]]
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 Secs. 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
Sec. 405.310 (g) and (k).)
[41 FR 1493, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.356 Principles applied in waiver of adjustment or recovery.
The principles applied in determining waiver of adjustment or
recovery (Sec. 405.355) are the applicable principles of Sec. 405.358
and 20 CFR 404.507-404.509, 404.510a, and 404.512.
[61 FR 49271, Sept. 19, 1996]
Sec. 405.357 Notice of right to waiver consideration.
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
Sec. 405.358).
[61 FR 49271, Sept. 19, 1996]
Sec. 405.358 When waiver of adjustment or recovery may be applied.
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.
[61 FR 49271, Sept. 19, 1996]
Sec. 405.359 Liability of certifying or disbursing officer.
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
Sec. 405.355), or
(b) Where adjustment (see Sec. 405.352) or recovery is not completed
prior to the death of all persons against whose benefits such adjustment
is authorized.
Suspension and Recoupment of Payment to Providers and Suppliers and
Collection and Compromise of Overpayments
Sec. 405.370 Definitions.
For purposes of this subpart, the following definitions apply:
Offset. The recovery by Medicare of a non-Medicare debt by reducing
present or future Medicare payments and applying the amount withheld to
the indebtedness. (Examples are Public Health Service debts or Medicaid
debts recovered by HCFA).
Recoupment. The recovery by Medicare of any outstanding Medicare
debt by reducing present or future Medicare payments and applying the
amount withheld to the indebtedness.
Suspension of payment. The withholding of payment by an intermediary
or carrier from a provider or supplier of an approved Medicare payment
amount before a determination of the amount of the overpayment exists.
[61 FR 63745, Dec. 2, 1996]
Sec. 405.371 Suspension, offset, and recoupment of Medicare payments to providers and suppliers of services.
(a) General. Medicare payments to providers and suppliers, as
authorized under this subchapter (excluding payments to beneficiaries),
may be--
(1) Suspended, in whole or in part, by 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
[[Page 47]]
(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) Steps necessary for suspension of payment, offset, and
recoupment. Except as provided in paragraph (c) of this section, HCFA,
the intermediary, or carrier suspends payments only after it has
complied with the procedural requirements set forth at Sec. 405.372. The
intermediary or carrier offsets or recoups payments only after it has
complied with the procedural requirements set forth at Sec. 405.373.
(c) Suspension of payment in the case of unfiled cost reports. If a
provider has failed to timely file an acceptable cost report, payment to
the provider is immediately suspended until a cost report is filed and
determined by the intermediary to be acceptable. In the case of an
unfiled cost report, the provisions of Sec. 405.372 do not apply. (See
Sec. 405.372(a)(2) concerning failure to furnish other information.)
[61 FR 63746, Dec. 2, 1996]
Sec. 405.372 Proceeding for suspension of payment.
(a) Notice of intention to suspend--(1) General rule. Except as
provided in paragraphs (a)(2) through (a)(4) of this section, if the
intermediary, carrier, or HCFA has determined that a suspension of
payments under Sec. 405.371(a)(1) should be put into effect, the
intermediary or carrier must notify the provider or supplier of the
intention to suspend payments, in whole or in part, and the reasons for
making the suspension.
(2) Failure to furnish information. The notice requirement of
paragraph (a)(1) of this section does not apply if the intermediary or
carrier suspends payments to a provider or supplier in accordance with
section 1815(a) or section 1833(e) of the Act, respectively, because the
provider or supplier has failed to submit information requested by the
intermediary or carrier that is needed to determine the amounts due the
provider or supplier. (See Sec. 405.371(c) concerning failure to file
timely acceptable cost reports.)
(3) Harm to Trust Funds. A suspension of payment may be imposed
without prior notice if HCFA, the intermediary, or carrier determines
that the Medicare Trust Funds would be harmed by giving prior notice.
HCFA may base its determination on an intermediary's or carrier's belief
that giving prior notice would hinder the possibility of recovering the
money.
(4) Fraud or misrepresentation. If the intended suspension of
payment involves suspected fraud or misrepresentation, HCFA determines
whether to impose the suspension and if prior notice is appropriate.
HCFA directs the intermediary or carrier as to the timing and content of
the notification to the provider or supplier. HCFA is the real party in
interest and is responsible for the decision. HCFA may base its decision
on information from the intermediary, carrier, law enforcement agencies,
or other sources. HCFA determines whether the information is reliable.
(b) Rebuttal--(1) If prior notice is required. If prior notice is
required under paragraph (a) of this section, the intermediary or
carrier must give the provider or supplier an opportunity for rebuttal
in accordance with Sec. 405.374. If a rebuttal statement is received
within the specified time period, the suspension of payment goes into
effect on the date stated in the notice, and the procedures and
provisions set forth in Sec. 405.375 apply. If by the end of the period
specified in the notice no statement has been received, the suspension
goes into effect automatically, and the procedures set forth in
paragraph (c) of this section are followed.
(2) If prior notice is not required. If, under the provisions of
paragraphs (a)(2) through (a)(4) of this section, a suspension of
payment is put into effect without prior notice to the provider or
supplier, the intermediary or carrier must, once the suspension is in
effect, give the provider or supplier an opportunity to submit a
rebuttal statement as to why the suspension should be removed.
(c) Subsequent action. If a suspension of payment is put into
effect, the intermediary, carrier, or HCFA takes timely action after the
suspension to obtain the additional evidence it may
[[Page 48]]
need to make a determination as to whether an overpayment exists or the
payments may be made. The intermediary, carrier, or HCFA makes all
reasonable efforts to expedite the determination. As soon as the
determination is made, the intermediary or carrier informs the provider
or supplier and, if appropriate, the suspension is rescinded or any
existing recoupment or offset is adjusted to take into account the
determination.
(d) Duration of suspension of payment--(1) General rule. Except as
provided in paragraphs (d)(2) and (d)(3) of this section, a suspension
of payment is limited to 180 days, starting with the date the suspension
begins.
(2) 180-day extension. (i) An intermediary, a carrier, or, in cases
of fraud and misrepresentation, OIG or a law enforcement agency, may
request a one-time only extension of the suspension period for up to 180
additional days if it is unable to complete its examination of the
information or investigation, as appropriate, within the 180-day time
limit. The request must be submitted in writing to HCFA.
(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) Exceptions to the time limits. (i) The time limits specified in
paragraphs (d)(1) and (d)(2) of this section do not apply if the case
has been referred to, and is being considered by, the OIG for
administrative action (for example, civil money penalties).
(ii) 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) Disposition of suspended payments. Payments suspended under the
authority of Sec. 405.371(b) are first applied to reduce or eliminate
any overpayments determined by the intermediary, carrier, or HCFA,
including any interest assessed under the provisions of Sec. 405.378,
and then applied to reduce any other obligation to HCFA or to HHS. In
the absence of a legal requirement that the excess be paid to another
entity, the excess is released to the provider or supplier.
[61 FR 63746, Dec. 2, 1996]
Sec. 405.373 Proceeding for offset or recoupment.
(a) General rule. Except as specified in paragraph (b) of this
section, if the intermediary, carrier, or HCFA has determined that an
offset or recoupment of payments under Sec. 405.371(a)(2) should be put
into effect, the intermediary or carrier must--
(1) Notify the provider or supplier of its intention to offset or
recoup payment, in whole or in part, and the reasons for making the
offset or recoupment; and
(2) Give the provider or supplier an opportunity for rebuttal in
accordance with Sec. 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 Sec. 405.1803, recoups
payment under paragraph (c) of Sec. 405.1803. (For provider rights in
this circumstance, see Secs. 405.1809, 405.1811, 405.1815, 405.1835, and
405.1843.)
(c) Actions following receipt of rebuttal statement. If a provider
or supplier submits, in accordance with Sec. 405.374, a statement as to
why an offset or recoupment should not be put into effect on the date
specified in the notice, the intermediary or carrier must comply with
the time limits and notification requirements of Sec. 405.375.
(d) No rebuttal statement received. If, by the end of the time
period specified in the notice, no statement has been
[[Page 49]]
received, the recoupment or offset goes into effect automatically.
(e) Duration of recoupment or offset. If a recoupment or offset is
put into effect, it remains in effect until the earliest of the
following:
(1) The overpayment and any assessed interest are liquidated.
(2) The intermediary or carrier obtains a satisfactory agreement
from the provider or supplier for liquidation of the overpayment.
(3) The intermediary or carrier, on the basis of subsequently
acquired evidence or otherwise, determines that there is no overpayment.
[61 FR 63747, Dec. 2, 1996]
Sec. 405.374 Opportunity for rebuttal.
(a) General rule. If prior notice of the suspension of payment,
offset, or recoupment is given under Sec. 405.372 or Sec. 405.373, the
intermediary or carrier must give the provider or supplier an
opportunity, before the suspension, offset, or recoupment takes effect,
to submit any statement (to include any pertinent information) as to why
it should not be put into effect on the date specified in the notice.
Except as provided in paragraph (b) of this section, the provider or
supplier has at least 15 days following the date of notification to
submit the statement.
(b) Exception. The intermediary or carrier may for cause--
(1) Impose a shorter period for rebuttal; or
(2) Extend the time within which the statement must be submitted.
[61 FR 63747, Dec. 2, 1996]
Sec. 405.375 Time limits for, and notification of, administrative determination after receipt of rebuttal statement.
(a) Submission and disposition of evidence. If the provider or
supplier submits a statement, under Sec. 405.374, as to why a suspension
of payment, offset, or recoupment should not be put into effect, or,
under Sec. 405.372(b)(2), why a suspension should be terminated, HCFA,
the intermediary, or carrier must within 15 days, from the date the
statement is received, consider the statement (including any pertinent
evidence submitted), together with any other material bearing upon the
case, and determine whether the facts justify the suspension, offset, or
recoupment or, if already initiated, justify the termination of the
suspension, offset, or recoupment. Suspension, offset, or recoupment is
not delayed beyond the date stated in the notice in order to review the
statement.
(b) Notification of determination. The intermediary or carrier must
send written notice of the determination made under paragraph (a) of
this section to the provider or supplier. The notice must--
(1) In the case of offset or recoupment, contain rationale for the
determination; and
(2) In the case of suspension of payment, contain specific findings
on the conditions upon which the suspension is initiated, continued, or
removed and an explanatory statement of the determination.
(c) Determination is not appealable. A determination made under
paragraph (a) of this section is not an initial determination and is not
appealable.
[61 FR 63747, Dec. 2, 1996]
Sec. 405.376 Suspension and termination of collection action and compromise of claims for overpayment.
(a) Basis and purpose. This section contains requirements and
procedures for the compromise of, or suspension or termination of
collection action on, claims for overpayments against a provider or a
supplier under the Medicare program. It is adopted under the authority
of the Federal Claims Collection Act (31 U.S.C. 3711). Collection and
compromise of claims against Medicare beneficiaries are explained at 20
CFR 404.515.
(b) Definitions. As used in this section, debtor means a provider of
services or a physician or other supplier of services that has been
overpaid under title XVIII of the Social Security Act. It includes an
individual, partnership, corporation, estate, trust, or other legal
entity.
(c) Basic conditions. A claim for recovery of Medicare overpayments
against a debtor may be compromised, or collection action on it may be
suspended or terminated, by the Health Care Financing Administration
(HCFA) if;
[[Page 50]]
(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) Basis for compromise. A claim may be compromised for one or more
of the following reasons:
(1) The debtor, or the estate of a deceased debtor, does not have
the present or prospective ability to pay the full amount within a
reasonable time;
(2) The debtor refuses to pay the claim in full and the United
States is unable to collect the full amount within a reasonable time by
legal proceedings;
(3) There is real doubt the United States can prove its case in
court; or
(4) The cost of collecting the claim does not justify enforced
collection of the full amount.
(e) Basis for termination of collection action. Collection action
may be terminated for one or more of the following reasons:
(1) The United States cannot enforce collection of any significant
sum;
(2) The debtor cannot be located, there is no security to be
liquidated, the statute of limitations has run, and the prospects of
collecting by offset are too remote to justify retention of the claim;
(3) The cost of further collection action is likely to exceed any
recovery;
(4) It is determined the claim is without merit; or
(5) Evidence to substantiate the claim is no longer available.
(f) Basis for suspension of collection action. Collection action may
be suspended for either of the following reasons if future collection
action is justified based on potential productivity, including
foreseeable ability to pay, and size of claim:
(1) The debtor cannot be located; or
(2) The debtor is unable to make payments on the claim or to fulfill
an acceptable compromise.
(g) Factors considered. In determining whether a claim will be
compromised, or collection action terminated or suspended, HCFA will
consider the following factors:
(1) Age and health of the debtor, present and potential income,
inheritance prospects, possible concealment or fraudulent transfer of
assets, and the availability of assets which may be reached by enforced
collection proceedings, for compromise under paragraph (d)(1) of this
section, termination under paragraph (e)(1) of this section, and
suspension under paragraph (f)(2) of this section;
(2) Applicable exemptions available to a debtor and uncertainty
concerning the price of the property in a forced sale, for compromise
under paragraph (d)(2) of this section and termination under paragraph
(e)(1) of this section; and
(3) The probability of proving the claim in court, the probability
of full or partial recovery, the availability of necessary evidence, and
related pragmatic considerations, for compromise under paragraph (d)(3)
of this section.
(h) Amount of compromise. The amount accepted in compromise will be
reasonable in relation to the amount that can be recovered by enforced
collection proceedings.
Consideration shall be given to the following:
(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) Payment of compromise--(1) Time and manner. Payment of the
amount that HCFA has agreed to accept as a compromise in full settlement
of a Medicare overpayment claim must be made within the time and in the
manner prescribed by HCFA. An overpayment claim is not compromised or
settled until the full payment of the compromised amount has been made
within the time and in the manner prescribed by HCFA.
(2) Failure to pay compromised amount. Failure of the debtor or the
estate to
[[Page 51]]
make payment as provided by the comprise reinstates the full amount of
the overpayment claim, less any amounts paid prior to the default.
(j) Effect of compromise, or suspension, or termination of
collection action. Any action taken by HCFA under this section regarding
the compromise of an overpayment claim, or termination or suspension of
collection action on an overpayment claim, is not an initial
determination for purposes of the appeal procedures under subparts G, H,
and R of this part.
[43 FR 59381, Dec. 20, 1978, as amended at 57 56998, Dec. 2, 1992.
Redesignated and amended at 61 FR 63745, 63747, Dec. 2, 1996]
Sec. 405.377 Withholding Medicare payments to recover Medicaid overpayments.
(a) Basis and purpose. This section implements section 1885 of the
Act, which provides for withholding Medicare payments to certain
Medicaid providers that have not arranged to repay Medicaid overpayments
as determined by the Medicaid State agency or have failed to provide
information necessary to determine the amount (if any) of overpayments.
(b) When withholding may be used. HCFA may withhold Medicare payment
to offset Medicaid overpayments that a Medicaid agency has been unable
to collect if--
(1) The Medicaid agency has followed the procedure specified in
Sec. 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) Institutions or persons affected. Withholding under paragraph
(b) of this section may be made with respect to any of the following
entities that has or had in effect an agreement with a Medicaid agency
to furnish services under an approved Medicaid State plan:
(1) An institutional provider that has in effect an agreement under
section 1866 of the Act. (Part 489 (Provider and Supplier Agreements)
implements section 1866 of the Act.)
(2) A physician or supplier that has accepted payment on the basis
of an assignment under section 1842(b)(3)(B)(ii) of the Act. (Section
424.55 sets forth the conditions a supplier agrees to in accepting
assignment.)
(d) Amount to be withheld. (1) HCFA contacts the appropriate
intermediary or carrier to determine the amount of Medicare payment to
which the institution or person is entitled.
(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) Notice of withholding. If HCFA intends to withhold payments
under this section, it notifies by certified mail, return receipt
requested, the institution or person and the appropriate intermediary or
carrier of the intention to withhold Medicare payments and follows the
procedure in Sec. 405.374. The notice includes--
(1) Identification of the institution or person; and
(2) The amount of Medicaid overpayment to be withheld from payments
to which the institution or person would otherwise be entitled under
Medicare.
(f) Termination of withholding. HCFA terminates the withholding if--
(1) The Medicaid overpayment is completely recovered;
(2) The institution or person enters into an agreement satisfactory
to the Medicaid agency to repay the overpayment; or
(3) The Medicaid agency determines that there is no overpayment
based on newly acquired evidence or a subsequent audit.
(g) Disposition of funds withheld. HCFA releases amounts withheld
under this section to the Medicaid agency to be applied against the
Medicaid overpayment made by the State agency.
[61 FR 63747, Dec. 2, 1996]
[[Page 52]]
Sec. 405.378 Interest charges on overpayment and underpayments to providers, suppliers, and other entities.
(a) Basis and purpose. This section, which implements sections
1815(d) and 1833(j) of the common law and Act, and authority granted
under the Federal Claims Collection Act, provides for the charging and
payment of interest on overpayments and underpayments to Medicare
providers, suppliers, HMOs, competitive medical plans (CMPs), and health
care prepayment plans (HCPPs).
(b) Basic rules. (1) HCFA will charge interest on overpayments, and
pay interest on underpayments, to providers and suppliers of services
(including physicians and other practitioners), except as specified in
paragraphs (f) and (h) of this section.
(2) Interest will accrue from the date of the final determination as
defined in paragraph (c) of this section, and will either be charged on
the overpayment balance or paid on the underpayment balance for each 30-
day period that payment is delayed. (Periods of less than 30 days will
be treated as a full 30-day period, and the 30-day interest charge will
be applied to any balance.)
(c) Definition of final determination. (1) For purposes of this
section, any of the following constitutes a final determination:
(i) A Notice of Amount of Program Reimbursement (NPR) is issued, as
discussed in Secs. 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
Secs. 417.574 and 417.810(e) of this chapter, and initial retroactive
adjustment determinations under Sec. 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 specified in paragraphs (c)(1)
(i), (ii), (iii), or (iv) of this section.)
(2) Except as required by any subsequent administrative or judicial
reversal, interest accrues from the date of final determination as
specified in this subsection.
(d) Rate of interest. (1) The interest rate on overpayments and
underpayments is the higher of--
(i) The rate as fixed by the Secretary of the Treasury after taking
into consideration private consumer rates of interest prevailing on the
date of final determination as defined in paragraph
[[Page 53]]
(c) of this section (this rate is published quarterly in the Federal
Register by the Department under 45 CFR 30.13(a)); or
(ii) The current value of funds rate (this rate is published
annually in the Federal Register by the Secretary of the Treasury,
subject to quarterly revisions).
(2) [Reserved]
(e) Accrual of interest. (1) If a cost report is filed that does not
indicate an amount is due HCFA but the intermediary makes a final
determination that an overpayment exists, or if a carrier makes a final
determination that an overpayment to a physician or supplier exists,
interest will accrue beginning with the date of such final
determination. Interest will continue to accrue during periods of
administrative and judicial appeal and until final disposition of the
claim.
(2)(i) If a cost report is filed and indicates that an amount is due
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 Sec. 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) Waiver of interest charges. (1) When an intermediary or a
carrier makes a final determination that an overpayment or underpayment
exists, as specified in paragraphs (e)(1), (e)(2)(ii), and (e)(4)--
(i) Interest charges will be waived if the overpayment or
underpayment is completely liquidated within 30 days from the date of
the final determination.
(ii) 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) Rules applicable to partial payments. If an overpayment is
repaid in installments or recouped by withholding from several payments
due the provider or supplier of services--
(1) Each payment or recoupment will be applied first to accrued
interest and then to the principal; and
(2) After each payment or recoupment, interest will accrue on the
remaining unpaid balance.
(h) Exceptions to applicability. (1) The provisions of this section
do not apply to the time period for which interest is payable under
Sec. 413.64(j) of this chapter because the provider seeks judicial
review of a decision of the Provider Reimbursement Review Board, or a
subsequent reversal, affirmance, or modification of that decision by the
Administrator. Prior to that time, until the provider seeks judicial
review, interest accrues at the rate specified in this section on
outstanding unpaid balances resulting from final determinations as
defined in paragraph (c) of this section.
(2) If an overpayment or an underpayment determination is reversed
administratively or judicially, and the reversal is no longer subject to
appeal, appropriate adjustments will be made with respect to the
overpayment or underpayment and the amount of interest charged.
[[Page 54]]
(i) Nonallowable cost. As specified in Secs. 412.113 and 413.153 of
this chapter, interest accrued on overpayments and interest on funds
borrowed specifically to repay overpayments are not considered allowable
costs, up to the amount of the overpayment, unless the provider had made
a prior commitment to borrow funds for other purposes (for example,
capital improvements).
(See Sec. 413.153(a)(2) of this chapter for exceptions based on
administrative or judicial reversal.)
[47 FR 54814, Dec. 6, 1982, as amended at 49 FR 36102, Sept. 14, 1984;
49 FR 44472, Nov. 7, 1984; 51 FR 34792, Sept. 30, 1986; 56 FR 31336,
July 10, 1991. Redesignated at 61 FR 63745, Dec. 2, 1996]
Repayment of Scholarships and Loans
Sec. 405.380 Collection of past-due amounts on scholarship and loan programs.
(a) Basis and purpose. This section implements section 1892 of the
Act, which authorizes the Secretary to deduct from Medicare payments for
services amounts considered as past-due obligations under the National
Health Service Corps Scholarship program, the Physician Shortage Area
Scholarship program, and the Health Education Assistance Loan program.
(b) Offsetting against Medicare payment. (1) Medicare carriers and
intermediaries offset against Medicare payments in accordance with the
signed repayment agreement between the Public Health Service and
individuals who have breached their scholarship or loan obligations and
who--
(i) Accept Medicare assignment for services;
(ii) Are employed by or affiliated with a provider, HMO, or
Competitive Medical Plan (CMP) that receives Medicare payment for
services; or
(iii) Are members of a group practice that receives Medicare payment
for services.
(2) For purposes of this section, ``provider'' includes all entities
eligible to receive Medicare payment in accordance with an agreement
under section 1866 of the Act.
(c) Beginning of offset. (1) The Medicare carrier offsets Medicare
payments beginning six months after it notifies the individual or the
group practice of the amount to be deducted and the particular
individual to whom the deductions are attributable.
(2) The Medicare intermediary offsets payments beginning six months
after it notifies the provider, HMO, CMP or group practice of the amount
to be deducted and the particular individuals to whom the deductions are
attributable. Offset of payments is made in accordance with the terms of
the repayment agreement. If the individual ceases to be employed by the
provider, HMO, or CMP, or leaves the group practice, no deduction is
made.
(d) Refusal to offset against Medicare payment. If the individual
refuses to enter into a repayment agreement, or breaches any provision
of the agreement, or if Medicare payment is insufficient to maintain the
offset collection according to the agreed upon formula, then--
(1) The Department, within 30 days if feasible, informs the Attorney
General; and
(2) The Department excludes the individual from Medicare until the
entire past due obligation has been repaid, unless the individual is a
sole community practitioner or the sole source of essential specialized
services in a community and the State requests that the individual not
be excluded.
[57 FR 19092, May 4, 1992]
Subpart D--[Reserved]
Subpart E--Criteria for Determining Reasonable Charges
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Source: 32 FR 12599, Aug. 31, 1967, unless otherwise noted.
Redesignated at 42 FR 52826, Sept. 30, 1977.
Sec. 405.500 Basis.
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
[[Page 55]]
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.
[60 FR 63175, Dec. 8, 1995]
Sec. 405.501 Determination of reasonable charges.
(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 Secs. 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 Sec. 405.502, and the customary and prevailing
charge screens in effect when the service was furnished. (Also see
Secs. 415.55 through 415.70 and Secs. 415.100 through 415.130 of this
chapter, which pertain to the determination of reimbursement for
services performed by hospital-based physicians.) However, when services
are furnished more than 12 months before the beginning of the fee screen
year (January 1 through December 30) in which a request for payment is
made, payment is based on the customary and prevailing charge screens in
effect for the fee screen year that ends immediately preceding the fee
screen year in which the claim or request for payment is made.
(d) Payment under Medicare Part B for durable medical equipment and
prosthetic and orthotic devices is determined in accordance with the
provisions of subpart D of part 414 of this chapter.
[47 FR 63274, Dec. 31, 1981, as amended at 51 FR 34978, Oct. 1, 1986; 51
FR 37911, Oct. 27, 1986; 54 FR 9003, Mar. 2, 1989; 57 FR 24975, June 12,
1992; 57 FR 33896, July 31, 1992; 57 FR 57688, Dec. 7, 1992; 60 FR
63176, Dec. 8, 1995]
[[Page 56]]
Sec. 405.502 Criteria for determining reasonable charges.
(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 Sec. 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
Sec. 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 Sec. 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 Sec. 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 Sec. 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) Comparable services limitation. The law also specifies that the
reasonable charge cannot be higher than the charge applicable for a
comparable service under comparable circumstances to the carriers' own
policyholders and subscribers.
(c) Application of criteria. In applying these criteria, the
carriers are to exercise judgment based on factual data on the charges
made by physicians to patients generally and by other persons to the
public in general and on special factors that may exist in individual
cases so that determinations of reasonable charge are realistic and
equitable.
(d) Responsibility of Administration and carriers. Determinations by
carriers of reasonable charge are not reviewed on a case-by-case basis
by the Health Care Financing Administration, although the general
procedures and performance of functions by carriers are evaluated. In
making determinations, carriers apply the provisions of the law under
broad principles issued by the Health Care Financing Administration.
These principles are intended to assure overall consistency among
carriers in their determinations of reasonable charge. The principles in
Secs. 405.503 through 405.507 establish the criteria for making such
determinations in accordance with the statutory provisions.
(e) Determination of reasonable charges under the End-Stage Renal
Disease
[[Page 57]]
(ESRD) Program--(1) General. Reasonable charges for renal-related items
and services (furnished in connection with transplantation or dialysis)
must be related to costs and allowances that are reasonable when the
treatments are furnished in an effective and economical manner.
(2) Nonprovider (independent) dialysis facilities. Reasonable
charges for renal-related items and services furnished before August 1,
1983 must be determined related to costs and charges prior to July,
1973, in accordance with the regulations at Sec. 405.541. Items and
services related to outpatient maintenance dialysis that are furnished
after that date are paid for in accordance with Secs. 405.544 and
413.170 of this chapter.
(3) Provider services and (hospital-based) dialysis facilities.
Renal-related items and services furnished by providers, or by ESRD
facilities based in hospitals, before August 1, 1983 are paid for under
the provider reimbursement provisions found generally in part 413 of
this chapter. Items and services related to outpatient maintenance
dialysis that are furnished after that date are paid for in accordance
with Secs. 405.544 and 413.170 of this chapter.
(4) Physicians' services. Reasonable charges for renal-related
physicians' services must be determined considering charges made for
other services involving comparable physicians' time and skill
requirements, in accordance with regulations at Secs. 405.542 and
405.543.
(5) Health maintenance organizations (HMOs). For special rules
concerning the reimbursement of ESRD services furnished by risk-basis
HMOs, or by facilities owned or operated by or related to such HMOs by
common ownership or control, see Secs. 405.2042(b)(14) and 405.2050(c).
(f) Determining payments for certain physician services furnished in
outpatient hospital settings--(1) General rule. If physician services of
the type routinely furnished in physicians' offices are furnished in
outpatient hospital settings before January 1, 1992, carriers determine
the reasonable charge for those services by applying the limits
described in paragraph (f)(5) of this section.
(2) Definition. As used in this paragraph (f), outpatient settings
means--
(i) Hospital outpatient departments, including clinics and emergency
rooms; and
(ii) Comprehensive outpatient rehabilitation facilities.
(3) Services covered by limits. The carrier establishes a list of
services routinely furnished in physicians' offices in the area. The
carrier has the discretion to determine which professional services are
routinely furnished in physicians' offices, based on current medical
practice in the area. Listed below are some examples of routine services
furnished by office-based physicians.
Examples
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) Services excluded from limits. The limits established under this
paragraph do not apply to the following:
(i) Rural health clinic services.
(ii) Surgical services included on the ambulatory surgical center
list of procedures published under Sec. 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) Methodology for developing limits--(i) Development of a charge
base. The carrier establishes a charge base for each service identified
as a routine office-based physician service. The
[[Page 58]]
charge base consists of the prevailing charge in the locality for each
such service adjusted by the economic index. The carrier uses the
prevailing charges that apply to services by nonspecialists in office
practices in the locality in which the outpatient setting is located.
(ii) Calculation of the outpatient limits. The carrier calculates
the charge limit for each service by multiplying the charge base amount
for each service by .60.
(6) Application of limits. The reasonable charge for physician
services of the type described in paragraph (f)(3) of this section that
are furnished in an outpatient setting is the lowest of the actual
charges, the customary charges in accordance with Sec. 405.503, the
prevailing charges applicable to these services in accordance with
Sec. 405.504, or the charge limits calculated in paragraph (f)(5)(ii) of
this section.
(g) Determination of reasonable charges in special circumstances:
General. HCFA or a carrier may establish special reasonable charge
limits for a category of service if it determines that the standard
rules for calculating reasonable charges set forth in this subpart
result in grossly deficient or excessive charges. The limit on the
reasonable charge is an upper limit to correct a grossly excessive
charge or a lower limit to correct a grossly deficient charge. The limit
is either a specific dollar amount, or is based on a special method to
be used in determining the reasonable charge.
(1) Determination of excessive or deficient charges. HCFA or a
carrier may make a determination that the standard rules for calculating
reasonable charges set forth in this subpart result in grossly deficient
or excessive charges. HCFA's determination may apply to the services of
any supplier; however, a carrier's determination may apply only to
nonphysician services. Examples of the circumstances which may result in
grossly deficient or excessive charges include, but are not limited to
the following:
(i) The marketplace is not competitive. This includes circumstances
in which the marketplace for a service is not truly competitive because
a limited number of physicians perform the service.
(ii) Medicare and Medicaid are the sole or primary sources of
payment for a service.
(iii) The charges involve the use of new technology for which an
extensive charge history does not exist.
(iv) The charges do not reflect changing technology, increased
facility with that technology, or changes in acquisition, production or
supplier costs.
(v) The prevailing charges for a service in a particular locality
are significantly in excess of or below prevailing charges in other
comparable localities, taking into account the relative costs of
furnishing the services in the different localities.
(vi) Charges are grossly lower than or in excess of acquisition or
production costs.
(vii) There have been increases in charges for a service that cannot
be explained by inflation or technology.
(viii) The prevailing charges for a service are substantially higher
or lower than the payments made for the service by other purchasers in
the same locality.
(2) Establishing a limit. In establishing a limit, HCFA or a carrier
considers the available information that is relevant to the category of
service and establishes a reasonable charge that is realistic and
equitable. The factors to be considered in establishing a specific
dollar amount or special method may include the following:
(i) Price markup. This is the relationship between the retail and
wholesale prices or manufacturer's costs of a category of service. If
information on a particular category of service is not available, HCFA
or a carrier may consider the markup on similar services and information
on general industry pricing trends.
(ii) Differences in charges. HCFA or a carrier may consider the
differences in charges to non-Medicare and Medicare patients or to
institutions and other large volume purchasers.
(iii) Costs. HCFA or a carrier may consider resources (overhead,
time, acquisition costs, production costs, complexity, etc.) required to
produce a service or a product.
[[Page 59]]
(iv) Utilization. HCFA or a carrier may impute a reasonable rate of
use for a category of service and consider unit costs based on efficient
utilization.
(v) Charges in other localities.
(vi) Other relevant factors.
(3) Notification of limits--(i) National limits. When HCFA makes a
determination regarding nonphysicians' services under this section, it
publishes in the Federal Register proposed and final notices of a
special reasonable charge limit before the limit is adopted. The notice
sets forth in the Federal Register the criteria and circumstances, if
any, under which a carrier may grant an exception to the limit.
(ii) Carrier level limits. After September 9, 1988, a carrier
proposing to establish a generally applicable special reasonable charge
limit must inform the affected suppliers and State Medicaid agencies of
the factors considered in establishing the limit as described in
paragraphs (g) (1) and (2) of this section and solicit comments. After
evaluating the comments received, the carrier must inform the affected
suppliers and State Medicaid agencies of any final limit established.
The limit is effective for services furnished no fewer than 30 days
after the date of the carrier's notification.
(h) Determination of reasonable charges in special circumstances:
Physician services. In establishing special reasonable charge limits for
a category of physician services, HCFA applies the general rules under
paragraphs (g) (1) and (2) of this section and the following special
rules:
(1) Potential impact of special limit. In determining whether to set
a special reasonable charge limit for a category of physician service,
HCFA considers the potential impact on quality, access, beneficiary
liability, assignment rates, reasonable charge reductions on unassigned
claims, and participation rates of physicians.
(2) Physician consultation. Before making a determination that a
charge is not inherently reasonable by reason of its grossly excessive
or deficient amount, HCFA consults with representatives of the
physicians likely to be affected by any change in the reasonable charge.
(3) Special limits based on comparison of charges in different
localities. HCFA takes into account differences in practice costs before
basing a special limit on the comparison of prevailing charges in
different localities.
(4) Factors considered in establishing a special limit. (i) In
establishing the specific dollar amount or special method under
paragraph (g)(2) of this section, HCFA takes into account regional
differences in fees unless there is substantial economic justification,
as described in the proposed and final notices required under paragraphs
(h)(5) (i) and (ii) of this section, for a uniform fee or a uniform
payment limit.
(ii) In determining that a charge is not inherently reasonable by
reason of its grossly excessive or deficient amount, and in establishing
the specific dollar amount or special method under paragraphs (g) (1)
and (2) of this section, HCFA may compare the charge to the--
(A) Resource costs (that is, factors such as the time required to
provide a procedure, including pre-procedure evaluation and post-
procedure follow-up; the complexity of the procedure; the training
required to perform the procedure; and the risk involved in the
procedure) for related services;
(B) Resource costs for the service over a period of time;
(C) Charges for the service in different geographic areas after
accounting for differences in practice costs;
(D) Payments for a service allowed under Medicare Part B and by
other payors; and
(E) Other relevant factors.
(5) Publication of national limits. When HCFA makes a determination
under this section, it publishes in the Federal Register proposed and
final notices of a special reasonable charge limit before the limit is
adopted. The notice sets forth in the Federal Register the criteria and
circumstances, if any, under which a carrier may grant an exception to
the limit.
(i) Proposed notice. The proposed notice--
(A) Specifies the proposed charge or methodology to be established
with respect to a service;
[[Page 60]]
(B) Explains the factors and data that HCFA took into account in
determining the charge or methodology, including the economic
justification for a uniform fee or payment limit if it is proposed;
(C) Explains the potential impacts of a limit on physicians'
services as described in paragraph (h)(1) of this section; and
(D) Allows no less than 60 days for public comment on the proposal.
(ii) Final notice. The final notice--
(A) Explains the factors and data that HCFA took into consideration,
including the economic justification for any uniform fee or payment
limit established; and
(B) Responds to the public comments and any comments made by the
Physician Payment Review Commission.
(Secs. 1102, 1814(b), 1833(a), 1842(b), and (h), and 1871, 1903(i)(1) of
the Social Security Act; 49 Stat. 647, as amended, 79 Stat. 296, 302,
310, 331; 86 Stat. 1395, 1454; 42 U.S.C. 1302, 1395u(b), 1395hh,
1396b(i)(1).
[32 FR 12599, Aug. 31, 1967]
Editorial Note: For Federal Register citations affecting
Sec. 405.502, see the List of CFR Sections Affected in the Finding Aids
section of this volume.
Sec. 405.503 Determining customary charges.
(a) Customary charge defined. The term ``customary charges'' will
refer to the uniform amount which the individual physician or other
person charges in the majority of cases for a specific medical procedure
or service. In determining such uniform amount, token charges for
charity patients and substandard charges for welfare and other low
income patients are to be excluded. The reasonable charge cannot, except
as provided in Sec. 405.506, be higher than the individual physician's
or other person's customary charge. The customary charge for different
physicians or other persons may, of course, vary. Payment for covered
services would be based on the actual charge for the service when, in a
given instance, that charge is less than the amount which the carrier
would otherwise have found to be within the limits of acceptable charges
for the particular service. Moreover, the income of the individual
beneficiary is not to be taken into account by the carrier in
determining the amount which is considered to be a reasonable charge for
a service rendered to him. There is no provision in the law for a
carrier to evaluate the reasonableness of charges in light of an
individual beneficiary's economic status.
(b) Variation of charges. If the individual physician or other
person varies his charges for a specific medical procedure or service,
so that no one amount is charged in the majority of cases, it will be
necessary for the carrier to exercise judgment in the establishment of a
``customary charge'' for such physician or other person. In making this
judgment, an important guide, to be utilized when a sufficient volume of
data on the physician's or other person's charges is available, would be
the median or midpoint of his charges, excluding token and substandard
charges as well as exceptional charges on the high side. A significant
clustering of charges in the vicinity of the median amount might
indicate that a point of such clustering should be taken as the
physician's or other person's ``customary'' charge. Use of relative
value scales will help in arriving at a decision in such instances.
(c) Use of relative value scales. If, for a particular medical
procedure or service, the carrier is unable to determine the customary
charge on the basis of reliable statistical data (for example, because
the carrier does not yet have sufficient data or because the performance
of the particular medical procedure or service by the physician or other
person is infrequent), the carrier may use appropriate relative value
scales to determine the customary charge for such procedure or service
in relation to customary charges of the same physician or person for
other medical procedures and services.
(d) Revision of customary charge. A physician's or other person's
customary charge is not necessarily a static amount. Where a physician
or other person alters his charges, a revised pattern of charges for his
services may develop. Where on the basis of adequate evidence, the
carrier finds that the physician or other person furnishing services has
changed his charge for a service to the public in general, the customary
charge resulting from
[[Page 61]]
the revised charge for the service should be recognized as the customary
charge in making determinations of reasonable charges for such service
when rendered thereafter to supplementary insurance beneficiaries. If
the new customary charge is not above the top of the range of prevailing
charges (see Sec. 405.504(a)), it should be deemed to be reasonable by
the carrier, subject to the provisions of Sec. 405.508.
Sec. 405.504 Determining prevailing charges.
(a) Ranges of charges. (1) In the case of physicians' services
furnished beginning January 1, 1987, the prevailing charges for a
nonparticipating physician as defined in this paragraph will be no
higher than the same level that was set for services furnished during
the previous calendar year for a physician who was a participating
physician during that year. A nonparticipating physician is a physician
who has not entered into an agreement with the Medicare program to
accept payment on an assignment-related basis (in accordance with
Sec. 424.55 of this chapter) for all items and services furnished to
individuals enrolled under Part B of Medicare during a given calendar
year.
(2) No charge for Part B medical or other health services may be
considered to be reasonable if it exceeds the higher of:
(i) The prevailing charge for similar services in the same locality
in effect on December 31, 1970, provided such prevailing charge had been
found acceptable by 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.
Example. The available data indicate the office-expense and earnings
components of the index should be given relative weights of 40 percent
and 60 percent, respectively, and it is calculated that the aggregate
increase in expenses of practice for a particular July through June
period was 112 percent over the expenses of practice for calendar year
1971 and the increase in earnings (less increases in workers'
productivity was 110 percent over the earnings for calendar year 1971.
The allowable increase in any prevailing charge that could be recognized
during the next fee screen year would be 110.8 percent
((.40 x 112)+(.60) x 110)=110.8) above the prevailing charge recognized
for fiscal year 1973.
(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
[[Page 62]]
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) Variation in range of prevailing charges. The range of
prevailing charges in a locality may be different for physicians or
other persons who engage in a specialty practice or service than for
others. Existing differentials in the level of charges between different
kinds of practice or service could, in some localities, lead to the
development of more than one range of prevailing charges for application
by the carrier in its determinations of reasonable charges. Carrier
decisions in this respect should be responsive to the existing patterns
of charges by physicians and other persons who render covered services,
and should establish differentials in the levels of charges between
different kinds of practice or service only where in accord with such
patterns.
(c) Re-evaluation and adjustment of prevailing charges.
Determinations of prevailing charges by the carrier are to be re-
evaluated and adjusted from time to time on the basis of factual
information about the charges made by physicians and other persons to
the public in general. This information should be obtained from all
possible sources including a carrier's experience with its own programs
as well as with the supplementary medical insurance program.
(d) Computation and issuance of the MEI after CY 1992--(1) For
update years after CY 1992, the MEI is a physician input price index, in
which the annual percent changes for the direct-labor price components
are adjusted by an annual percent change in a 10-year
[[Page 63]]
moving average index of labor productivity in the nonfarm business
sector.
(2) The MEI is constructed, using as a base year, CY 1989 weights
and annual percent changes in the economic price proxies as shown on the
following chart:
Medicare Economic Index Expenditure Categories, Weights, and Price
Proxies
------------------------------------------------------------------------
1989 weights
Expense category \1\,\2\ Price proxy \3\
(percent)
------------------------------------------------------------------------
Total...................... 100.0
1. Physician's Own Time (net 54.2
income, general earnings).
a. Wages and Salaries...... 45.3 Average hourly
earnings, total
private non-farm.\4\
b. Fringe Benefits......... 8.8 Employment Cost Index,
fringe benefits,
private non-farm.\4\
2. Physician Practice Expense.. 45.8
a. Non-physician Employee 16.3
Compensation.
(1) Wages and Salaries. 13.8 Employment Cost Index,
wages and salaries
weighted for
occupational mix of
non-physician
employees.\4\
(2) Fringe Benefits.... 2.5 Employment Cost Index,
fringe benefits,
white collar.\4\
b. Office Expense.......... 10.3 CPI-U, housing.
c. Medical Materials and 5.2 PPI, ethical drugs;
Supplies. PPI, surgical
appliances and
supplies; and CPI-U
medical equipment and
supplies (equally
weighted).
d. Professional Liability 4.8 HCFA survey of change
Insurance. in average liability
premiums for $100,000/
$300,000 liability
coverage among 9
major insurers.
e. Medical Equipment....... 2.3 PPI, medical
instruments and
equipment.
f. Other Professional 6.9
Expense.
(1) Professional Car... 1.4 CPI-U, private
transportation.
(2) Other.............. 5.5 CPI-U, all items less
food and energy.
------------------------------------------------------------------------
\1\ Sources: Martin L. Gonzalez, ed.: Physician Marketplace Statistics,
Fall, 1990. Center for Health Policy Research, Chicago, American
Medical Association, 1990; Mark Holoweiko, ``Practice Expenses Take
the Leap of the Decade,'' Medical Economics, November 12, 1990; and
HCFA, OACT special study.
\2\ Due to rounding, weights may not sum to 100.0%
\3\ All price proxies are for annual percent changes for the 12 months
ending June 30th.
\4\ Annual percent change values for Physicians' Own Time and Non-
physician Employee Compensation are net of the change in the 10-year
moving average of output per man-hour to exclude changes in non-farm
business sector labor productivity.
(3) If there is no methodological change, HCFA publishes a notice in
the Federal Register to announce the annual increase in the MEI before
the beginning of the update year to which it applies. If there are
changes in the base year weights or price proxies, or if there are any
other MEI methodological changes, they are published in the Federal
Register with an opportunity for public comment.
[32 FR 12600, Aug. 31, 1967, as amended at 40 FR 25447, June 16, 1975;
42 FR 18275, Apr. 6, 1977. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 43 FR 4430, Feb. 2, 1978; 47 FR 63274, Dec. 31, 1982; 51
FR 34978, Oct. 1, 1986; 53 FR 6648, Mar. 2, 1988; 57 FR 55912, Nov. 25,
1992]
Sec. 405.505 Determination of locality.
``Locality'' is the geographical area for which the carrier is to
derive the reasonable charges or fee schedule amounts for services or
items. Usually, a locality may be a State (including the District of
Columbia, a territory, or a Commonwealth), a political or economic
subdivision of a State, or a group of States. It should include a cross
section of the population with respect to economic and other
characteristics. Where people tend to gravitate toward certain
population centers to obtain medical care or service, localities may be
recognized on a basis constituting medical services areas (interstate or
otherwise), comparable in concept to ``trade areas.'' Localities may
differ in population density, economic level, and other major factors
affecting charges for services. Carriers therefore shall delineate
localities on the basis of their knowledge of local conditions. However,
distinctions between localities are not to be so finely made that a
locality includes only a very limited geographic area whose population
has
[[Page 64]]
distinctly similar income characteristics (e.g., a very rich or very
poor neighborhood within a city).
[57 FR 27305, June 18, 1992]
Sec. 405.506 Charges higher than customary or prevailing charges or lowest charge levels.
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.
(Secs. 1102, 1842(b) and 1871, 1903(i)(1) of the Social Security Act; 49
Stat. 647, 79 Stat. 302, 310, 331; 86 Stat. 1395, 1454; (42 U.S.C. 1302,
1395u(b), 1395hh, 1396b(i)(1)))
[43 FR 32300, July 26, 1978]
Sec. 405.507 Illustrations of the application of the criteria for determining reasonable charges.
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.
Sec. 405.508 Determination of comparable circumstances; limitation.
(a) Application of limitation. The carrier may not in any case make
a determination of reasonable charge which would be higher than the
charge upon which it would base payment to its own policyholders for a
comparable service in comparable circumstances. The charge upon which it
would base payment, however, does not necessarily mean the amount the
carrier would be obligated to pay. Under certain circumstances, some
carriers pay amounts on behalf of individuals who are their
policyholders, which are below the customary charges of physicians or
other persons to other individuals. Payment under the supplementary
medical insurance program would not be limited to these lower amounts.
(b) When comparability exists. ``Comparable circumstances,'' as used
in the Act and this subpart, refers to the circumstances under which
services are rendered to individuals and the nature of the carrier's
health insurance programs and the method it uses to determine the
amounts of payments under these programs. Generally, comparability would
exist where:
(1) The carrier bases payment under its program on the customary
charges, as presently constituted, of physicians or other persons and on
current prevailing charges in a locality, and
[[Page 65]]
(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) Responsibility for determining comparability. Responsibility for
determining whether or not a carrier's program has comparability will in
the first instance fall upon the carrier in reporting pertinent
information about its programs to the Health Care Financing
Administration. When the pertinent information has been reported, the
Health Care Financing Administration will advise the carrier whether any
of its programs have comparability.
Sec. 405.509 Determining the inflation-indexed charge.
(a) Definition. For purposes of this section, inflation-indexed
charge means the lowest of the fee screens used to determine reasonable
charges (as determined in Sec. 405.503 for the customary charge,
Sec. 405.504 for the prevailing charge, this section for the inflation-
indexed charge, and Sec. 405.511 for the lowest charge level) for
services, supplies, and equipment reimbursed on a reasonable charge
basis (excluding physicians' services), that is in effect on December 31
of the previous fee screen year, updated by the inflation adjustment
factor, as described in paragraph (b) of this section.
(b) Application of inflation adjustment factor to determine
inflation-indexed charge. (1) For fee screen years beginning on or after
January 1, 1987, the inflation-indexed charge is determined by updating
the fee screen used to determine the reasonable charges in effect on
December 31 of the previous fee screen year by application of an
inflation adjustment factor, that is, the annual change in the level of
the consumer price index for all urban consumers, as compiled by the
Bureau of Labor Statistics, for the 12-month period ending on June 30 of
each year.
(2) For services, supplies, and equipment furnished from October 1,
1985 through December 31, 1986 the inflation adjustment factor is zero.
(c) The inflation-indexed charge does not apply to any services,
supplies, or equipment furnished after December 31, 1991, that are
covered under or limited by the fee schedule for physicians' services
established under section 1848 of the Act and part 415 of this chapter.
These services are subject to the Medicare Economic Index described in
Sec. 415.30 of this chapter.
[51 FR 34979, Oct. 1, 1986; 51 FR 37911, Oct. 27, 1986, as amended at 56
FR 59621, Nov. 25, 1991]
Sec. 405.511 Reasonable charges for medical services, supplies, and equipment.
(a) General rule. (1) A charge for any medical service, supply, or
equipment (including equipment servicing) that in the judgment of HCFA
generally does not vary significantly in quality from one supplier to
another (and that is identified by a notice published in the Federal
Register) may not be considered reasonable if it exceeds:
(i) The customary charge of the supplier (see Sec. 405.503);
(ii) The prevailing charge in the locality (see Sec. 405.504);
(iii) The charge applicable for a comparable service and under
comparable circumstances to the policyholders or subscribers of the
carrier (see Sec. 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 Sec. 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 Sec. 405.1310(a)) and to
services furnished by a hospital laboratory for individuals who are
neither inpatients nor outpatients of a hospital. Allowance of
additional charges exceeding the lowest charge level can be approved by
the carrier on the basis of unusual circumstances or medical
complications in accordance with Sec. 405.506.
(b) Public notice of items and services subject to the lowest charge
level rule. Before the Secretary determines that lowest charge levels
should be established for an item or service, notice of the proposed
determination will be
[[Page 66]]
published with an opportunity for public comment. The descriptions or
specifications of items or services in the notice will be in sufficient
detail to permit a determination that items or services conforming to
the descriptions will not vary significantly in quality.
(c) Calculating the lowest charge level. The lowest charge level at
which an item or service is widely and consistently available in a
locality is calculated by the carrier in accordance with instructions
from HCFA as follows:
(1) For items or services furnished on or before December 31, 1986.
(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) For items or services furnished on or after January 1, 1987.
(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) Lowest charge levels for laboratory services. In setting lowest
charge levels for laboratory services, the carrier will consider only
charges made for laboratory services performed by physicians in their
offices, by independent laboratories which meet coverage requirements,
and for services furnished by a hospital laboratory for individuals who
are neither inpatients nor outpatients of a hospital.
(d) Locality. Subject to the approval of the Secretary, the carrier
may designate its entire service area as the locality for purposes of
this section, or may otherwise modify the localities used for
calculating prevailing charges. (The modified locality for an item or
service will also be used for calculating the prevailing charge for that
item or service.)
(Secs. 1102, 1842(b) and 1871, 1903(i)(1) of the Social Security Act; 49
Stat. 647, 79 Stat. 302, 310, 331, 86 Stat. 1395, 1454 (42 U.S.C. 1302,
1395u(b), 1395hh, 1396b(i)(1)))
[43 FR 32300, July 26, 1978, as amended at 50 FR 40174, Oct. 1, 1985; 51
FR 34979, Oct. 1, 1986]
Sec. 405.512 Carriers' procedural terminology and coding systems.
(a) General. Procedural terminology and coding systems are designed
to provide physicians and third party payers with a common language that
accurately describes the kinds and levels of services provided and that
can serve as a basis for coverage and payment determinations.
(b) Modification of terminology and/or coding systems. A carrier
that wishes to modify its system of procedural terminology and coding
shall submit its request to the Health Care Financing Administration
with all pertinent data and information for approval before the revision
is implemented. The Health Care Financing Administration will evaluate
the proposal in the light of the guidelines specified in paragraph (c)
of this section and such other considerations as may be pertinent, and
consult with the Assistant Secretary for Health. The Health Care
Financing Administration will approve such a revision if it determines
that the potential advantages of the proposed new system, outweigh the
disadvantages.
(c) Guidelines. The following considerations and guidelines are
taken into account in evaluating a carrier's proposal to change its
system of procedural terminology and coding:
(1) The rationale for converting to the new terminology and coding;
(2) The estimated short-run and long-run impact on the cost of the
health insurance program, other medical care
[[Page 67]]
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.
[40 FR 7639, Feb. 21, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 59 FR 10298, Mar. 4, 1994]
Sec. 405.515 Reimbursement for clinical laboratory services billed by physicians.
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 Secs. 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 Sec. 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 Sec. 405.502), or
(2) The amount that the laboratory charged the physician for the
service.
(c) If the bill or request for payment does not indicate that the
conditions specified in paragraph (a) of this section were met, and does
not identify both the laboratory and the amount the laboratory charged,
payment will be based on the lowest charge at which the carrier
estimates the test could have been secured from a laboratory serving the
physician's locality. The carrier will estimate this lowest amount twice
a year by (i) obtaining lists of charges laboratories make to physicians
from as many commercial laboratories serving the carrier's area as
possible (including laboratories in other States from which tests may be
obtained by physicians in the carrier's service area) and (ii)
establishing a schedule of lowest prices based on this information. The
carrier will take into consideration specific circumstances, such as a
need for emergency services
[[Page 68]]
that may be costlier than routine services, in making the estimate in a
particular case. However, in no case may this estimate be higher than
the lowest customary charge for commercial laboratories, or when
applicable to the laboratory service, the lowest charge level determined
in accordance with Sec. 405.511, in the carrier's service area.
(d) When a physician bills, in accordance with paragraph (b) or (c)
of this section, for a laboratory test and indicates that it was
performed by an independent laboratory, a nominal payment will also be
made to the physician for collecting, handling, and shipping the
specimen to the laboratory, if the physician bills for such a service.
[46 FR 42672, Aug. 24, 1981, as amended at 51 FR 41351, Nov. 14, 1986]
Sec. 405.517 Payment for drugs that are not paid on a cost or prospective payment basis.
(a) Applicability. Payment for a drug that is not paid on a cost or
prospective payment basis is determined by the standard methodology
described in paragraph (b) of this section. Examples of when this
procedure applies includes a drug furnished incident to a physician's
service and a drug furnished by an independent dialysis facility that is
not included in the ESRD composite rate set forth in Sec. 413.170(c) of
this chapter.
(b) Methodology. Payment for a drug described in paragraph (a) of
this section is based on the lower of the estimated acquisition cost or
the national average wholesale price of the drug. The estimated
acquisition cost is determined based on surveys of the actual invoice
prices paid for the drug. In calculating the estimated acquisition cost
of a drug, the carrier may consider factors such as inventory, waste,
and spoilage.
(c) Multiple-Source drugs. For multiple-source drugs, payment is
based on the lower of the estimated acquisition cost described in
paragraph (b) of this section or the wholesale price that, for this
purpose, is defined as the median price for all sources of the generic
form of the drug.
[56 FR 59621, Nov. 25, 1991]
Sec. 405.534 Limitation on payment for screening mammography services.
(a) Basis and scope. This section implements section 1834(c) of the
Act by establishing a limit on payment for screening mammography
examinations. There are three categories of billing for screening
mammography services. Those categories and the payment limitations on
each are set forth in paragraphs (b) through (d) of this section.
(b) Global or complete service billing representing both the
professional and technical components of the procedure. If a fee is
billed for a global service, the amount of payment subject to the
deductible is equal to 80 percent of the least of the following:
(1) The actual charge for the service.
(2) The amount established for the global procedure for a diagnostic
bilateral mammogram under the fee schedule for physicians' services set
forth at part 414, subpart A.
(3) The payment limit for the procedure. For screening mammography
services furnished in CY 1994, the payment limit is $59.63. On January 1
of each subsequent year, the payment limit is updated by the percentage
increase in the Medicare Economic Index (MEI) and reflects the
relationship between the relative value units for the professional and
technical components of a diagnostic bilateral mammogram under the fee
schedule for physicians' services.
(c) Professional component billing representing only the physician's
interpretation for the procedure. If the professional component of
screening mammography services is billed separately, the amount of
payment for that professional component, subject to the deductible, is
equal to 80 percent of the least of the following:
(1) The actual charge for the professional component of the service.
(2) The amount established for the professional component of a
diagnostic bilateral mammogram under the fee schedule for physicians'
services.
(3) The professional component of the payment limit for screening
mammography services described in paragraph (b)(3) of this section.
[[Page 69]]
(d) Technical component billing representing other resources
involved in furnishing the procedure. If the technical component of
screening mammography services is billed separately, the amount of
payment, subject to the deductible, is equal to 80 percent of the least
of the following:
(1) The actual charge for the technical component of the service.
(2) The amount established for the technical component of a
diagnostic bilateral mammogram under the fee schedule for physicians'
services.
(3) The technical component of the payment limit for screening
mammography services described in paragraph (b)(3) of this section.
[55 FR 53521, Dec. 31, 1990, as amended at 59 FR 49833, Sept. 30, 1994]
Sec. 405.535 Special rules for nonparticipating physicians and suppliers furnishing screening mammography services.
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
Sec. 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
Sec. 414.48(b)(3) of this chapter.
[59 FR 49833, Sept. 30, 1994]
Subpart F--[Reserved]
Subpart G--Reconsiderations and Appeals Under Medicare Part A
Authority: 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).
Source: 37 FR 5814, Mar. 22, 1972, unless otherwise noted.
Redesignated at 42 FR 52826, Sept. 30, 1977.
Sec. 405.701 Basis, purpose and definitions.
(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) Definitions. As used in subpart G of this part, the term--
Appellant designates the beneficiary, provider or other person or
entity that has filed an appeal concerning a particular determination of
benefits under Medicare part A. Designation as an appellant does not in
itself convey standing to appeal the determination in question.
Common issues of law and fact, with respect to the aggregation of
claims by two or more appellants to meet the minimum amount in
controversy needed for a hearing, occurs when the claims sought to be
aggregated are denied or reduced for similar reasons and arise from a
similar fact pattern material to the reason the claims are denied.
Delivery of similar or related services, with respect to the
aggregation of claims by two or more provider appellants to meet the
minimum amount in controversy needed for a hearing, means like or
coordinated services or
[[Page 70]]
items provided to the same beneficiary by the appellants.
[55 FR 11020, Mar. 26, 1990, as amended at 59 FR 12181, Mar. 16, 1994]
Sec. 405.702 Notice of initial determination.
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 Sec. 411.15(g) or Sec. 411.15(k) and payment
may not be made for such items or services under Sec. 411.400 only
because the requirements of Sec. 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.
[55 FR 11020, Mar. 26, 1990]
Sec. 405.704 Actions which are initial determinations.
(a) Applications and entitlement of individuals. An initial
determination with respect to an individual includes the following--
(1) A determination with respect to entitlement to hospital
insurance or supplementary medical insurance;
(2) A disallowance of an individual's application for entitlement to
hospital or supplementary medical insurance, if the individual fails to
submit evidence requested by SSA to support the application. (SSA will
specify in the initial determination the conditions of entitlement that
the applicant failed to establish by not submitting the requested
evidence);
(3) A denial of a request for withdrawal of an application for
hospital or supplementary medical insurance;
(4) A denial of a request for cancellation of a ``request for
withdrawal''; and
(5) A determination as to whether an individual, previously
determined to be entitled to hospital or supplementary medical
insurance, is no longer entitled to such benefits, including a
determination based on nonpayment of premiums.
(b) Requests for payment by or on behalf of individuals. An initial
determination with respect to an individual includes any determination
made on the basis of a request for payment by or on behalf of the
individual under part A of Medicare, including a determination with
respect to:
(1) The coverage of items and services furnished;
(2) The amount of an applicable deductible;
(3) The application of the coinsurance feature;
(4) The number of days of inpatient hospital benefits utilized
during a spell of illness or for purposes of the inpatient psychiatric
hospital 190-day lifetime maximum;
(5) The number of days of the 60-day lifetime reserve utilized for
inpatient hospital coverage;
(6) The number of days of posthospital extended care benefits
utilized;
(7) The number of home health visits utilized;
(8) The physician certification requirement;
(9) The request for payment requirement;
(10) The beginning and ending of a spell of illness, including a
determination made under the presumptions established under
Sec. 409.60(c)(2) of this chapter, as specified in Sec. 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);
[[Page 71]]
(12) When services are excluded from coverage as custodial care
(Sec. 411.15(g)) or as not reasonable and necessary (Sec. 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 Sec. 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) Initial determination with respect to a provider of services. An
initial determination with respect to a provider of services shall be a
determination made on the basis of a request for payment filed by the
provider under part A of Medicare on behalf of an individual who was
furnished items or services by the provider, but only if the
determination involves the following:
(1) A finding by the intermediary that such items or services are
not covered by reason of Sec. 411.15(g) or Sec. 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.
[55 FR 11020, Mar. 26, 1990]
Sec. 405.705 Actions which are not initial determinations.
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 Sec. 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,
Sec. 405.376 for overpayment claims against a provider, physician or
other supplier, and Sec. 408.110 for claims concerning unpaid Medicare
premiums;
(e) The transfer or discharge of residents of skilled nursing
facilities in accordance with Sec. 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.
[45 FR 73932, Nov. 7, 1980; 46 FR 24565, May 1, 1981, as amended at 52
FR 22454, June 12, 1987; 52 FR 48123, Dec. 18, 1987; 57 FR 56504, Nov.
30, 1992; 61 FR 63749, Dec. 2, 1996]
Sec. 405.706 Decisions of utilization review committees.
(a) General rule. A decision of a utilization review committee is a
medical determination by a staff committee of the provider or a group
similarly composed and does not constitute a determination by the
Secretary within the meaning of section 1869 of the Act. The decision of
a utilization review committee may be considered by HCFA along with
other pertinent medical evidence in determining whether or not an
individual has the right to have payment made under Part A of title
XVIII.
(b) Applicability under the prospective payment system. HCFA may
consider utilization review committee decisions related to inpatient
hospital services paid for under the prospective payment system (see
part 412 of this chapter) only as those decisions concern:
(1) The appropriateness of admissions resulting in payments under
subparts D, E and G of part 412 of this chapter.
(2) The covered days of care involved in determinations of outlier
payments under Sec. 412.80(a)(1)(i) of this chapter; and
[[Page 72]]
(3) The necessity of professional services furnished in high cost
outliers under Sec. 412.80(a)(1)(ii) of this chapter.
[48 FR 39831, Sept. 1, 1983]
Sec. 405.708 Effect of initial determination.
(a) The initial determination under Sec. 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 Secs. 405.710 through 405.717 or revised in accordance
with Sec. 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 Sec. 405.704(c) shall be binding
upon the provider of services unless it is reconsidered in accordance
with Secs. 405.710 through 405.717 or revised in accordance with
Sec. 405.750. Such provider of services shall be the party to such
initial determination.
[55 FR 11021, Mar. 26, 1990, as amended at 62 FR 25855, May 12, 1997]
Sec. 405.710 Right to reconsideration.
(a) An individual who is a party to an initial determination, as
specified in Sec. 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 Sec. 405.711
regardless of the amount in controversy.
(b) A provider of services who is a party to an initial
determination (as specified in Sec. 405.704(c)) and who is dissatisfied
with such initial determination may request a reconsideration of such
determination in accordance with Sec. 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
Sec. 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 Sec. 411.15(g) or Sec. 411.15(k).
[55 FR 11021, Mar. 26, 1990]
Sec. 405.711 Time and place of filing request for reconsideration.
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 beneficiary (see 20 CFR 404.368) filed at an office
of the Railroad Retirement Board, within 60 days after the date of
receipt of notice of initial determination, unless such time is extended
as provided in Sec. 405.712. A request for reconsideration which is
filed with the intermediary which received the request for payment
submitted on behalf of the individual is considered to have been filed
with the HCFA as of the date it is filed with the intermediary. For
purposes of this section, the date of receipt of notice of the initial
determination shall be presumed to be 5 days after the date of such
notice, unless there is a reasonable showing to the contrary.
[41 FR 47917, Nov. 1, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 62 FR 25855, May 12, 1997]
Sec. 405.712 Extension of time to request reconsideration.
If a party to an initial determination desires to file a request for
reconsideration after the time for filing such request in accordance
with Sec. 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.
[37 FR 5814, Mar. 22, 1972. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 62 FR 25855, May 12, 1997]
[[Page 73]]
Sec. 405.714 Withdrawal of 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.
[40 FR 1025, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 62 FR 25855, May 12, 1997]
Sec. 405.715 Reconsidered determination.
(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
Sec. 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 Sec. 405.710(b) a request for
reconsideration is filed by a provider of services with respect to an
individual determination under Sec. 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.
[55 FR 11021, Mar. 26, 1990, as amended at 62 FR 25855, May 12, 1997]
Sec. 405.716 Notice of reconsidered determination.
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 Sec. 405.718).
[40 FR 53387, Nov. 18, 1975. Redesignated at 42 FR 52826, Sept. 30,
1977, as amended at 62 FR 25855, May 12, 1997]
Sec. 405.717 Effect of a reconsidered determination.
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
Sec. 405.750; or
(c) The expedited appeals process is used in accordance with
Sec. 405.718.
[62 FR 25852, May 12, 1997]
Sec. 405.718 Expedited appeals process.
(a) Conditions for use of expedited appeals process (EAP). A party
may use the EAP to request court review in place of an administrative
law judge (ALJ) hearing or Departmental Appeals Board (DAB) review if
the following conditions are met:
(1) 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 Sec. 405.718(d).
(3) The party has filed a request for an ALJ hearing in accordance
with Sec. 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.
[[Page 74]]
(b) Content of the request for EAP. The request for the EAP:
(1) Alleges that there are no material issues of fact in dispute;
and
(2) Asserts that the only factor precluding a decision favorable to
the party is a statutory provision that is unconstitutional or a
regulation, national coverage decision under section 1862(a)(1) of the
Act, or HCFA Ruling that is invalid.
(c) Place and time for requesting an EAP.--(1) Place for filing
request. The person must file a written request--
(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) Time of filing request. The party may file a request for the
EAP--
(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) Parties to the EAP. The parties to the EAP are the persons who
were parties to the reconsideration determination and, if appropriate,
to the hearing.
(e) Determination on request for EAP. (1) For EAP requests initiated
at the ALJ level, an ALJ determines whether all conditions of paragraphs
(a) and (b) of this section are met.
(2) If a hearing decision has been issued, the DAB determines
whether all conditions of paragraphs (a) and (b) of this section are
met.
(f) ALJ or DAB certification for the EAP. If the party meets the
requirements for the EAP, the ALJ or the DAB, as appropriate, certifies
the case in writing stating that:
(1) The facts involved in the claim are not in dispute;
(2) Except as indicated in paragraph (f)(3) of this section, 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) Effect of ALJ or DAB certification. (1) Following the issuance
of the certification described in paragraph (f) of this section, the
party waives completion of the remaining steps of the administrative
appeals process.
(2) The 60-day period for filing a civil suit in a Federal district
court begins on the date of receipt of the ALJ or DAB certification.
(h) Effect of a request for EAP that does not result in
certification. If a request for the EAP does not meet all the conditions
for use of the process, the ALJ or DAB so advises the party and treats
the request as a request for hearing or DAB review, as appropriate.
[62 FR 25852, May 12, 1997]
Sec. 405.720 Hearing; right to hearing.
A person has a right to a hearing regarding any initial
determination made under Sec. 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
Sec. 405.722; and
(d) The amount in controversy is $100 or more.
[40 FR 1025, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 62 FR 25855, May 12, 1997]
Sec. 405.722 Time and place of filing request for a hearing.
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
[[Page 75]]
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.
[45 FR 73933, Nov. 7, 1980, as amended at 62 FR 25855, May 12, 1997]
Sec. 405.724 Departmental Appeals Board (DAB) review.
Regulations beginning at 20 CFR 404.967 regarding SSA Appeals
Council Review are also applicable to DAB review of matters addressed by
this subpart.
[62 FR 25852, May 12, 1997]
Sec. 405.730 Court review.
(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 Sec. 405.718.
[62 FR 25852, May 12, 1997]
Sec. 405.732 Review of national coverage decisions (NCDs).
(a) General. (1) HCFA makes NCDs either granting, limiting, or
excluding Medicare coverage for a specific medical service, procedure or
device. NCDs are made under section 1862(a)(1) of the Act or other
applicable provisions of the Act. An NCD is binding on all Medicare
carriers, fiscal intermediaries, PROs, HMOs, CMPs, and HCPPs when
published in HCFA program manuals or the Federal Register.
(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) Review by ALJ. (1) An ALJ may not disregard, set aside, or
otherwise review an NCD.
(2) An ALJ may review the facts of a particular case to determine
whether an NCD applies to a specific claim for benefits and, if so,
whether the NCD has been applied correctly to the claim.
(c) Review by Court. (1) A court's review of an NCD is limited to
whether the record is incomplete or otherwise lacks adequate information
to support the validity of the decision, unless the case has been
remanded to the Secretary to supplement the record regarding the NCD.
The court may not invalidate an NCD except upon review of the
supplemented record.
(2) A Federal court may not hold unlawful or set aside an NCD
because it was not issued in accordance with the notice and comment
procedures of the Administrative Procedure Act (5 U.S.C. 553) or section
1871(b) of the Act.
(d) Remands--(1) Secretary's action. When a court remands an NCD
matter to the Secretary because the record in support of the NCD is
incomplete or otherwise lacks adequate information, the Secretary
remands the case to HCFA in order to supplement the record.
(2) Remand to HCFA. HCFA supplements the record with new or updated
evidence, including additional information from other sources, and may
issue a revised NCD.
(3) Final Actions. (i) The proceedings to supplement the record are
expedited.
(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.
[62 FR 25852, May 12, 1997]
[[Page 76]]
Sec. 405.740 Principles for determining the amount in controversy.
(a) Individual appellants. For the purpose of determining whether an
individual appellant meets the minimum amount in controversy needed for
a hearing ($100), the following rules apply:
(1) The amount in controversy is computed as the actual amount
charged the individual for the items and services in question, less any
amount for which payment has been made by the intermediary and less any
deductible and coinsurance amounts applicable in the particular case.
(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) Two or more appellants. As specified below, under section
1869(b)(2) of the Act, two or more appellants may aggregate their claims
together to meet the minimum amount in controversy needed for a hearing
($100). The right to aggregate under this statutory provision applies to
claims for items and services furnished on or after January 1, 1987.
(1) The aggregate amount in controversy is computed as the actual
amount charged the individual(s) for the items and services in question,
less any amount for which payment has been made by the intermediary and
less any deductible and coinsurance amounts applicable in the particular
case.
(2) In determining the amount in controversy, two or more appellants
may aggregate their claims together under the following circumstances:
(i) Two or more beneficiaries may combine claims representing
services from the same or different provider(s) if the claims involve
common issues of law and fact;
(ii) Two or more providers may combine their claims if the claims
involve the delivery of similar or related services to the same
beneficiary; or
(iii) Two or more providers may combine their claims if the claims
involve common issues of law and fact with respect to services furnished
to two or more beneficiaries.
(iv) In any of the circumstances specified in paragraphs (b)(2)(i)
through (b)(2)(iii) of this section, the claims may be aggregated only
if the claims have previously been reconsidered and a request for
hearing has been made within 60 days after receipt of the
reconsideration determination(s). Moreover, in the request for hearing,
the appellants must specify the claims that they seek to aggregate.
(c) The determination as to whether the amount in controversy is
$100 or more is made by the administrative law judge (ALJ).
(d) In determining the amount in controversy under paragraph (b) of
this section, the ALJ also makes the determination as to what
constitutes ``similar or related services'' or ``common issues of law
and fact.''
(e) When a civil action is filed by either an individual appellant
or two or more appellants, the Secretary may assert that the aggregation
principles contained in this subpart may be applied to determine the
amount in controversy for judicial review ($1000).
(f) Notwithstanding the provisions of paragraphs (a)(1) and (b)(1)
of this section, when payment is made for certain excluded services
under Sec. 411.400 of this chapter or the liability of the beneficiary
for those services is limited under Sec. 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 Sec. 411.400 of this chapter
or had such liability not been limited pursuant to Sec. 411.402 of this
chapter.
[[Page 77]]
(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.
[59 FR 12181, Mar. 16, 1994]
Sec. 405.745 Amount in controversy ascertained after reconsideration.
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.
[40 FR 1026, Jan. 6, 1975. Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.747 Dismissal of request for hearing; amount in controversy less than $100.
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.
[37 FR 5814, Mar. 23, 1972. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 62 FR 25855, May 12, 1997]
Sec. 405.750 Time period for reopening initial, revised, or reconsidered determinations and decisions or revised decisions of an ALJ or the Departmental
Appeals Board (DAB); binding effect of determination and
decisions.
(a) Reopenings concerning applications and entitlement. A
determination, or decision, or revised determination or decision made by
the SSA concerning any matter under Sec. 405.704(a), may be reopened and
revised under 20 CFR 404.988 (Conditions for reopening).
(b) Reopenings concerning a request for payment. An initial,
revised, or reconsidered determination of HCFA, or a decision or revised
decision of an ALJ or of the DAB, with respect to an individual's right
concerning a request for payment under Medicare Part A, which is
otherwise binding under 20 CFR 404.955 or 404.981 and Secs. 405.708 or
405.717 of this subpart may be reopened:
(1) Within 12 months from the date of the notice of the initial or
reconsidered determination to the party to such determination;
(2) After such 12-month period, but within 4 years after the date of
the notice of the initial determination to the individual, upon
establishment of good cause for reopening such determination or decision
(see 20 CFR 404.988(b) and 404.989); or
(3) At any time, when:
(i) Such initial, revised, or reconsidered determination or such
decision or revised decision is unfavorable, in whole or in part, to the
party thereto, but only for the purpose of correcting clerical error or
error on the face of the evidence on which such determination or
decision was based; or
(ii) Such initial, revised, or reconsidered determination or such
decision or revised decision was procured by fraud or similar fault of
the beneficiary or some other person.
[45 FR 73933, Nov. 7, 1980, as amended at 61 FR 32348, June 24, 1996; 62
FR 25853, 25855, May 12, 1997]
Sec. 405.753 Appeal of a categorization of a device.
(a) HCFA's acceptance of the FDA categorization of a device as an
experimental/investigational (Category A) device under Sec. 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 Sec. 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 Sec. 405.203 may not be
reviewed by an administrative law judge.
[60 FR 48424, Sept. 19, 1995]
[[Page 78]]
Subpart H--Appeals Under the Medicare Part B Program
Authority: Secs. 1102, 1842(b)(3)(C), and 1869(b) of the Social
Security Act (42 U.S.C. 1302, 1395u(b)(3)(C), 1395ff(b)).
Source: 32 FR 18028, Dec. 16, 1967, unless otherwise noted.
Redesignated at 42 FR 52826, Sept. 30, 1977.
Sec. 405.801 Part B appeals--general description.
(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
Sec. 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.
[62 FR 25853, May 12, 1997]
Sec. 405.802 Definitions.
As used in subpart H of this part, the term--
After receipt of the notice means 5 days after the date on the
notice, unless it is shown that the notice was received earlier or
later.
Appellant designates the beneficiary, assignee or other person or
entity that has filed an appeal concerning a particular determination of
benefits under Medicare part B. Designation as an appellant does not in
itself convey standing to appeal the determination in question.
Assignee means a physician or supplier who furnishes services to a
beneficiary under Medicare part B and who has accepted a valid
assignment executed by the beneficiary.
Assignment means the transfer by the assignor of his or her claim
for payment to the assignee in return for the latter's promise not to
charge more for his or her services than the carrier finds to be the
reasonable charge or other approved amount.
Assignor means a beneficiary under Medicare part B whose physician
or supplier has taken assignment of a claim.
Carrier means an organization which has entered into a contract with
the Secretary pursuant to section 1842 of the Act and which is
authorized to make determinations with respect to part B of title XVIII
of the Act. For purposes of this subpart, the term carrier also refers
to an intermediary that has entered into a contract with the Secretary
under section 1816 of the Act and is authorized to make determinations
with respect to part B provider services, as specified in Sec. 421.5(c)
of this chapter.
Common issues of law and fact, with respect to the aggregation of
claims by two or more appellants to meet the minimum amount in
controversy needed for an ALJ hearing, occurs when the
[[Page 79]]
claims sought to be aggregated are denied or reduced for similar reasons
and arise from a similar fact pattern material to the reason the claims
are denied.
Delivery of similar or related services, with respect to the
aggregation of claims by two or more physician/supplier appellants to
meet the minimum amount in controversy needed for an ALJ hearing, means
like or coordinated services or items provided to the same beneficiary
by the appellants.
Representative means an individual meeting the conditions described
in Secs. 405.870 through 405.871.
With reasonable promptness means within a period of 60 consecutive
days after the receipt by the carrier of a request for payment.
[59 FR 12182, Mar. 16, 1994, as amended at 62 FR 25853, May 12, 1997]
Sec. 405.803 Initial determination.
(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 Sec. 424.55 of this chapter are
not covered because they are determined to be not reasonable and
necessary under Sec. 411.15(k) of this chapter, whether the beneficiary,
physician or supplier, or a physician who meets the requirements of
Sec. 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.
[62 FR 25853, May 12, 1997]
Sec. 405.804 Notice of initial determination.
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.
Sec. 405.805 Parties to the initial determination.
The parties to the initial determination (see Sec. 405.803) may be
any party described in Sec. 405.802(b).
[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.806 Effect of Initial Determination.
The initial determination is binding upon all parties to the claim
for benefits unless the determination is--
(a) Reviewed in accordance with Secs. 405.810 through 405.812; or
(b) Revised as a result of a reopening in accordance with
Sec. 405.841.
[62 FR 25853, May 12, 1997]
Sec. 405.807 Review of initial determination.
(a) General. A party to an initial determination by a carrier, who
is dissatisfied with such initial determination, may request that the
carrier review such determination. If a review is requested, such action
shall not constitute a waiver of the right to hearing (see Sec. 405.820)
subsequent to such review.
(b) Place of filing request. A request for a carrier to review the
initial determination is to be made in writing and filed at an office of
the carrier or at an office of the SSA or the HCFA.
(c) Time of filing request. The carrier shall provide a period of 6
months after
[[Page 80]]
the date of the notice of its initial determination within which a party
to the initial determination may request review. The carrier may, upon
request by the party affected, extend the period for requesting the
review.
(d) Request for review. Any clear expression in writing by a party
to an initial determination which indicates, in effect, that he is
dissatisfied with such determination by the carrier and wants to appeal
the matter further constitutes a request for review.
[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 62 FR 25855, May 12, 1997]
Sec. 405.808 Parties to the review.
The parties to the review (as provided for in Sec. 405.807(a)) shall
be the persons who were parties to the carrier's initial determination
as described in Sec. 405.805, and any other party whose rights with
respect to the particular claim being reviewed may be affected by such
review.
[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.809 Opportunity to submit evidence.
The parties to the review (as provided for in Sec. 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.
[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.810 Review determination.
Subject to the provisions of Secs. 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.
[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.811 Notice of review determination.
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 Sec. 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 Sec. 405.821).
[59 FR 12182, Mar. 16, 1994]
Sec. 405.812 Effect of review determination.
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 Sec. 405.821 or is revised as a result
of reopening in accordance with Sec. 405.841.
[59 FR 12182, Mar. 16, 1994, as amended at 62 FR 25855, May 12, 1997]
Sec. 405.815 Amount in controversy for carrier hearing, ALJ hearing and judicial review.
Any party designated in Sec. 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 Sec. 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.
[59 FR 12182, Mar. 16, 1994, as amended at 61 FR 32348, June 24, 1996]
Sec. 405.817 Principles for determining amount in controversy.
(a) Individual appellants. For the purpose of determining whether an
individual appellant meets the minimum amount in controversy needed for
a carrier hearing ($100) or ALJ hearing ($500), the following rules
apply:
(1) The amount in controversy is computed as the actual amount
charged the individual for the items and services in question, less any
amount for which payment has been made by the carrier and less any
deductible and coinsurance amounts applicable in the particular case.
[[Page 81]]
(2) A single beneficiary may aggregate claims from two or more
physicians/suppliers to meet the $100 or $500 thresholds. A single
physician/supplier may aggregate claims from two or more beneficiaries
to meet the $100 or $500 threshold levels of appeal.
(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) Two or more appellants. As specified in this paragraph, under
section 1869(b)(2) of the Act, two or more appellants may aggregate
their claims together to meet the minimum amount in controversy needed
for an ALJ hearing ($500). The right to aggregate under this statutory
provision applies to claims for items and services furnished on or after
January 1, 1987.
(1) The aggregate amount in controversy is computed as the actual
amount charged the individual(s) for the items and services in question,
less any amount for which payment has been made by the carrier and less
any deductible and coinsurance amounts applicable in the particular
case.
(2) In determining the amount in controversy, two or more appellants
may aggregate their claims together under the following circumstances:
(i) Two or more beneficiaries may combine claims representing
services from the same or different physician(s) or supplier(s) if the
claims involve common issues of law and fact;
(ii) Two or more physicians/suppliers may combine their claims if
the claims involve the delivery of similar or related services to the
same beneficiary;
(iii) Two or more physicians/suppliers may combine their claims if
the claims involve common issues of law and fact with respect to
services furnished to two or more beneficiaries.
(iv) In any of the circumstances specified in paragraphs (b)(2)(i)
through (b)(2)(iii) of this section, the claims may be aggregated only
if the claims have previously been decided by a carrier hearing
officer(s) and a request for ALJ hearing has been made within 60 days
after receipt of the carrier hearing officer decision(s). Moreover, in a
request for ALJ hearing, the appellants must specify the claims that
they seek to aggregate.
(c) The determination as to whether the amount in controversy is
$100 or more is made by the carrier hearing officer. The determination
as to whether the amount in controversy is $500 or more is made by the
ALJ.
(d) In determining the amount in controversy under paragraph (b) of
this section, the ALJ will also make the determination as to what
constitutes ``similar or related services'' or ``common issues of law
and fact.''
(e) When a civil action is filed by either an individual appellant
or two or more appellants, the Secretary may assert that the aggregation
principles contained in this subpart may be applied to determine the
amount in controversy for judicial review ($1000).
(f) Notwithstanding the provisions of paragraphs (a)(1) and (b)(1)
of this section, when payment is made for certain excluded services
under Sec. 411.400 of this chapter or the liability of the beneficiary
for those services is limited under Sec. 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 Sec. 411.400 of this chapter or
had such liability not been limited under Sec. 411.402 of this chapter.
(g) Under this subpart, an appellant may not combine part A and part
B
[[Page 82]]
claims together to meet the requisite amount in controversy for a
carrier hearing or ALJ hearing. HMO, CMP and HCPP appellants under part
417 of this chapter may combine part A and part B claims together to
meet the requisite amount in controversy for a hearing.
[59 FR 12182, Mar. 16, 1994]
Sec. 405.821 Request for carrier hearing.
(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.
[59 FR 12183, Mar. 16, 1994, as amended at 62 FR 25855, May 12, 1997]
Sec. 405.822 Parties to a carrier hearing.
The parties to a hearing shall be the persons who were parties to
the carrier's review determination (Sec. 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.
[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 59 FR 12183, Mar. 16, 1994]
Sec. 405.823 Carrier hearing officer.
Any hearing provided for in this subpart shall be conducted by a
hearing officer designated by the appropriate official of the carrier.
[39 FR 12097, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977,
and amended at 59 FR 12183, Mar. 16, 1994]
Sec. 405.824 Disqualification of carrier hearing officer.
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.
[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30,
1977, as amended at 59 FR 12183, Mar. 16, 1994]
Sec. 405.825 Location of carrier hearing.
(a) Time and place. The hearing officer shall fix a time and place
for the hearing reasonably convenient to the requesting party and not
inconsistent with the public interest.
(b) Adjournment or postponement. The hearing officer may, for a good
and sufficient reason, fix a new time and/or place for the hearing; he
may change the time and place for the hearing or adjourn the hearing on
his own motion upon reasonable notification to the parties.
[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30,
1977, as amended at 59 FR 12183, Mar. 16, 1994]
Sec. 405.826 Notice of carrier hearing.
The notice of hearing is to include notice of the time and place of
the hearing; information as to the specific
[[Page 83]]
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 the party's right to
representation) for effective preparation for the hearing.
[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30,
1977, as amended at 59 FR 12183, Mar. 16, 1994]
Sec. 405.830 Conduct of the carrier hearing.
(a) General. Hearings shall be open to the parties and to such other
persons as the hearing officer deems necessary and proper for the
orderly and efficient conduct of the hearing. The hearing officer shall
inquire fully into the matters at issue and shall receive in evidence
the testimony of witnesses and any documents which are relevant and
material to such matters. The parties shall be provided an opportunity
to enter any objection to the inclusion of any document. The order in
which evidence and allegations shall be presented and the procedure at
the hearing, except as this subpart otherwise expressly provides, shall
be at the discretion of the hearing officer and of such nature as to
afford the parties a proper hearing.
(b) Evidence. Evidence may be received at the hearing even though
inadmissible under rules of evidence applicable to court procedures.
(c) Witnesses. The hearing officer may examine the witnesses and
shall allow the parties or their representatives to do so. If the
hearing officer conducts the examination of a witness, he may allow the
parties to suggest matters upon which they desire the witness to be
questioned, and the hearing officer shall question the witness with
respect to such matters if they are relevant and material to any issue
pending for decision before him.
(d) Oral argument and written allegations. The parties, upon their
request shall be allowed a reasonable time for the presentation of oral
argument or for the filing of briefs or other written statements or
allegations of facts or law.
(e) Consolidated issues. When one or more new issues are raised at
any time after a request for hearing has been made, but before the
mailing of notice of the decision, the hearing officer may, at his
discretion, consider the issues along with the other issues pending
before him on the same request for hearing.
[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30,
1977, as amended at 59 FR 12183, Mar. 16, 1994]
Sec. 405.831 Waiver of right to appear at carrier hearing and present evidence.
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 Secs. 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
Secs. 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.
[32 FR 18028, Dec. 16, 1967. Redesignated at 42 FR 52826, Sept. 30,
1977, as amended at 62 FR 25855, May 12, 1997]
Sec. 405.832 Dismissal of request for carrier hearing.
(a) By application of party. With the approval of the hearing
officer, a request for a hearing may be withdrawn or dismissed at any
time prior to the mailing of notice of the decision upon the application
of the party or parties filing the request for such hearing. A party may
request a dismissal by filing a written notice of such request with
[[Page 84]]
the carrier, the hearing officer or orally stating such request at the
hearing. The dismissal of a request for hearing shall be binding unless
vacated (see paragraph (d) of this section).
(b) Dismissal by abandonment of party. A hearing officer may dismiss
a request for hearing upon abandonment by the party or parties who filed
the request. A party shall be deemed to have abandoned a request for
hearing, other than where personal appearance is waived in accordance
with Sec. 405.831, if neither the party nor his representative appears
at the time and place fixed for the hearing and within 10 days after the
mailing of a notice to him by the hearing officer to show cause, such
party does not show good and sufficient cause for such failure to appear
and failure to notify the hearing officer prior to the time fixed for
hearing that he cannot appear.
(c) Dismissal for cause. The hearing officer may, on his own motion,
dismiss a hearing request, either entirely or as to any stated issue,
under either of the following circumstances:
(1) Where the party requesting a hearing is not a proper party under
Sec. 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) Dismissal without prejudice. The hearing officer may on his own
motion dismiss without prejudice a hearing request where the amount in
controversy is less than $100.
(e) Vacation of dismissal. A hearing officer may, on request of a
party and for good and sufficient cause shown, vacate any dismissal of a
request for hearing at any time within 6 months from the date of mailing
notice of the dismissal to the party requesting the hearing at his last
known address.
[32 FR 18028, Dec. 16, 1967, as amended at 39 FR 12098, Apr. 3, 1974.
Redesignated at 42 FR 52826, Sept. 30, 1977, as amended at 59 FR 12183,
Mar. 16, 1994; 62 FR 25855, May 12, 1997]
Sec. 405.833 Record of carrier hearing.
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.
[62 FR 25853, May 12, 1997]
Sec. 405.834 Carrier hearing officer's decision.
(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.
[62 FR 25854, May 12, 1997]
Sec. 405.835 Effect of carrier hearing officer's decision.
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
Sec. 405.855, or
(b) The decision is revised in accordance with Sec. 405.841.
[62 FR 25854, May 12, 1997]
Sec. 405.836 Authority of the carrier hearing officer.
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.
[62 FR 25854, May 12, 1997]
[[Page 85]]
Sec. 405.841 Reopening initial or review determination of the carrier, and decision of a carrier hearing officer.
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.
[39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 59 FR 12183, Mar. 16, 1994; 62 FR 25855, May 12, 1997]
Sec. 405.842 Notice of reopening and revision.
(a) Notice. When any determination or decision is reopened as
provided in Sec. 405.841, notice of such reopening shall be mailed to
the parties to such determination or decision at their last known
addresses. A notice of revision following a reopening of a decision,
shall be mailed to the parties and shall state the basis for the revised
determination or decision.
(b) Effect of revised determination. The revision of a determination
(see Sec. 405.841) shall be binding upon all parties thereto unless a
party files a written request for a hearing with respect to a revised
determination when the amount in controversy is $100 or more.
[32 FR 18028, Dec. 16, 1967, as amended at 39 FR 12098, Apr. 3, 1974.
Redesignated at 42 FR 52826, Sept. 30, 1977; 62 FR 25855, May 12, 1997]
Sec. 405.850 Change of ruling or legal precedent.
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.
Sec. 405.853 Expedited appeals process.
(a) Conditions for use of expedited appeals process (EAP). A party
may use the EAP set forth in Sec. 405.718 of this chapter to request
court review in place of the ALJ hearing or Departmental Appeals Board
(DAB) review if the following conditions are met:
(1) The carrier hearing officer has made a decision; an ALJ has made
a hearing decision; or DAB review has been requested, but a final
decision has not been issued.
(2) The filing entity is a party referred to in Sec. 405.718(d) of
this chapter.
(3) The party has filed a request for an ALJ hearing in accordance
with Sec. 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) Content of the request for EAP. The request for an EAP:
(1) Alleges that there are no material issues of fact in dispute;
and
(2) Asserts that the only factor precluding a decision favorable to
the party is a statutory provision that is unconstitutional or a
regulation, national coverage decision under section 1862(a)(1) of the
Act, or HCFA Ruling that is invalid.
[62 FR 25854, May 12, 1997]
Sec. 405.855 ALJ hearing.
(a) Right to hearing. A party to the carrier hearing has a right to
a hearing before an ALJ if--
(1) The party files a written request for an ALJ hearing within 60
days after receipt of the notice of the carrier hearing decision; and
(2) The amount remaining in controversy is $500 or more.
[[Page 86]]
(b) Place of filing hearing request. The request for an ALJ hearing
must be made in writing and filed with the carrier that issued the
decision, a Social Security office, or, in the case of a qualified
railroad retirement beneficiary, an office of the Railroad Retirement
Board.
(c) Effect of ALJ hearing decision. (1) An ALJ's decision is binding
on all parties to the hearing unless--
(i) The DAB reviews the ALJ decision;
(ii) The DAB does not review the ALJ decision, and the party
requests judicial review;
(iii) The decision is revised by the DAB or an ALJ in accordance
with the provisions of Sec. 405.750 of this chapter; or
(iv) The expedited appeals process is used.
[62 FR 25854, May 12, 1997]
Sec. 405.856 Departmental Appeals Board (DAB) review.
Regulations beginning at 20 CFR 404.967 regarding SSA Appeals
Council Review are applicable to DAB review of matters addressed by this
subpart.
[62 FR 25854, May 12, 1997]
Sec. 405.857 Court review.
(a) General rule. To the extent authorized by sections 1869,
1876(c)(5)(B), and 1879(d) of the Act, a party to a DAB decision, or an
ALJ decision if the DAB does not review the ALJ's decision, may obtain a
court review if the amount remaining in controversy is $1,000 or more. A
party may obtain court review by filing a civil action in a district
court of the United States in accordance with the provisions of section
205(g) of the Act. The filing procedure is set forth in 20 CFR 422.210.
(b) Prohibition against court review of certain Part B regulations
or instructions. Under section 1869(b)(4) of the Act, a court may not
review a regulation or instruction that relates to a method of payment
under Part B if the regulation was promulgated, or the instruction
issued, before January 1, 1981.
[62 FR 25854, May 12, 1997]
Sec. 405.860 Review of national coverage decisions (NCDs).
(a) General. (1) HCFA makes NCDs either granting, limiting, or
excluding Medicare coverage for a specific medical service, procedure or
device. NCDs are made under section 1862(a)(1) of the Act or other
applicable provisions of the Act. An NCD is binding on all Medicare
carriers, fiscal intermediaries, PROs, HMOs, CMPs, and HCPPs when
published in HCFA program manuals or the Federal Register.
(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) Review by ALJ. (1) An ALJ may not disregard, set aside, or
otherwise review an NCD.
(2) An ALJ may review the facts of a particular case to determine
whether an NCD applies to a specific claim for benefits and, if so,
whether the NCD has been applied correctly to the claim.
(c) Review by Court. (1) A court's review of an NCD is limited to
whether the record is incomplete or otherwise lacks adequate information
to support the validity of the decision, unless the case has been
remanded to the Secretary to supplement the record regarding the NCD.
The court may not invalidate an NCD except upon review of the
supplemented record.
(2) A Federal court may not hold unlawful or set aside an NCD
because it was not issued in accordance with the notice and comment
procedures of the Administrative Procedure Act (5 U.S.C. 553) or section
1871(b) of the Act.
(d) Remands--(1) Secretary's action. When a court remands an NCD
matter to the Secretary because the record in support of the NCD is
incomplete or otherwise lacks adequate information, the Secretary
remands the case to HCFA in order to supplement the record.
(2) Remand to HCFA. HCFA supplements the record with new or updated
evidence, including additional information from other sources, and may
issue a revised NCD.
(3) Final Actions. (i) The proceedings to supplement the record, are
expedited.
[[Page 87]]
(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.
[62 FR 25854, May 12, 1997]
Sec. 405.870 Appointment of representative.
A party to an initial determination, informal review or hearing as
provided in Secs. 405.803 through 405.934, may appoint as his
representative in any such proceeding any person qualified under
Sec. 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.
Sec. 405.871 Qualifications of representatives.
Any individual may be appointed to act as representative in
accordance with Sec. 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.
[39 FR 12098, Apr. 3, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 62 FR 25855, May 12, 1997]
Sec. 405.872 Authority of representatives.
A representative, appointed and qualified as provided in
Secs. 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.
Sec. 405.874 Appeals of carrier decisions that supplier standards are not met.
(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
[[Page 88]]
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.
[57 FR 27305, June 18, 1992]
Sec. 405.877 Appeal of a categorization of a device.
(a) HCFA's acceptance of the FDA categorization of a device as an
experimental/investigational (Category A) device under Sec. 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 Sec. 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 Sec. 405.203 may not be
reviewed by an administrative law judge.
[60 FR 48424, Sept. 19, 1995]
Subparts I-Q--[Reserved]
Subpart R--Provider Reimbursement Determinations and Appeals
Authority: 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).
Source: 39 FR 34515, Sept. 26, 1974, unless otherwise noted.
Redesignated at 42 FR 52826, Sept. 30, 1977.
Sec. 405.1801 Introduction.
(a) Definitions. As used in this subpart:
Administrator means the Administrator or Deputy Administrator of
HCFA.
Administrator's review means that review provided for in section
1878(f) of the Act (42 U.S.C. 1395oo(f)) and Sec. 405.1875.
Board means the Provider Reimbursement Review Board established in
accordance with section 1878 of the Act (42 U.S.C. 1395oo) and
Sec. 405.1845.
Board hearing means that hearing provided for in section 1878(a) of
the Act (42 U.S.C. 1395oo(a)), and Sec. 405.1835.
Date of filing and date of submission of materials mean the day of
the mailing (as evidenced by the postmark) or hand-delivery of
materials, unless otherwise defined in this subpart.
[[Page 89]]
Date of receipt means the date on the return receipt of ``return
receipt requested'' mail, unless otherwise defined in this subpart.
Intermediary determination means the following:
(1) With respect to a provider of services that has filed a cost
report under Secs. 413.20 and 413.24(f) of this chapter, the term means
a determination of the amount of total reimbursement due the provider,
pursuant to Sec. 405.1803 following the close of the provider's cost
reporting period, for items and services furnished to beneficiaries for
which reimbursement may be made on a reasonable cost basis under
Medicare for the period covered by the cost report.
(2) With respect to a hospital that receives payments for inpatient
hospital services under the prospective payment system (part 412 of this
chapter), the term means a determination of the total amount of payment
due the hospital, pursuant to Sec. 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 Sec. 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.
Intermediary hearing means that hearing provided for in
Sec. 405.1809.
(b) General rule--(1) Providers. The principles of reimbursement for
determining reasonable cost and prospective payment are contained in
parts 413 and 412, respectively, of this chapter. In order to be
reimbursed for covered services furnished to Medicare beneficiaries,
providers of services are obliged to file cost reports with their
intermediaries as specified in Sec. 413.24(f) of this chapter. Where the
term ``provider'' appears in this subpart, it includes hospitals paid
under the prospective payment system for purposes of applying the appeal
procedures described in this subpart to those hospitals.
(2) Other entities participating in Medicare Part A. In addition to
providers of services whose status as such is indicated in the Act,
there are entities (such as health maintenance organizations) that do
not meet the statutory test for providers of services, which may also
participate in Medicare. These entities are required to file periodic
cost reports and are reimbursed on the basis of information furnished in
the reports. Although the entities do not qualify for Board review, the
rules as set forth in this subpart with respect to intermediary hearings
are applicable to the entities to the maximum extent possible, for cost-
reporting periods ending on or after December 31, 1971, where the amount
of program reimbursement in controversy is at least $1,000.
(c) Effective dates. (1) Except as provided in paragraphs (c)(2) and
(c)(3) of this section or in Sec. 405.1885(e), this subpart applies to
all cost reporting periods ending on or after December 31, 1971, for
which reimbursement may be made on a reasonable cost basis.
(2) Sections 405.1835 to 405.1877 apply only to cost reporting
periods ending on or after June 30, 1973, for which reimbursement may be
made on a reasonable cost basis.
(3) With respect to hospitals under the prospective payment system
(see part 412 of this chapter), the appeals procedures in Secs. 405.1811
to 405.1877 that apply become applicable with the hospital's first cost
reporting period beginning on or after October 1, 1983.
[39 FR 34515, Sept. 26, 1974. Redesignated at 42 FR 52826, Sept. 30,
1977, as amended at 48 FR 39834, Sept. 1, 1983; 48 FR 45773, Oct. 7,
1983; 49 FR 322, Jan. 3, 1984; 49 FR 23013, June 1, 1984; 51 FR 34793,
Sept. 30, 1986; 61 FR 63749, Dec. 2, 1996]
Sec. 405.1803 Intermediary determination and notice of amount of program reimbursement.
(a) General requirement. Upon receipt of a provider's cost report,
or amended cost report where permitted or required, the intermediary
must within a reasonable period of time (see
[[Page 90]]
Sec. 405.1835(b)), furnish the provider and other parties as appropriate
(see Sec. 405.1805) a written notice reflecting the intermediary's
determination of the total amount of reimbursement due the provider. The
intermediary must include the following information in the notice, as
appropriate:
(1) Reasonable cost. The notice must--
(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) Prospective payment. With respect to a hospital that receives
payments for inpatient hospital services under the prospective payment
system (see part 412 of this chapter), the intermediary must include in
the notice its determination of the total amount of the payments due the
hospital under that system for the cost reporting period covered by the
notice. The notice must explain (with appropriate use of the applicable
money amounts) any difference in the amount determined to be due, and
the amounts received by the hospital during the cost reporting period
covered by the notice.
(b) Requirements for intermediary notices. The intermediary must
include in each notice appropriate references to law, regulations, HCFA
Rulings, or program instructions to explain why the intermediary's
determination of the amount of program reimbursement for the period
differs from the amount the provider claimed. The notice must also
inform the provider of its right to an intermediary or Board hearing
(see Secs. 405.1809, 405.1811, 405.1815, 405.1835, and 405.1843) and
that the provider must request the hearing within 180 days after the
date of the notice.
(c) Use of notice as basis for recoupment of overpayments. The
intermediary's determination contained in its notice is the basis for
making the retroactive adjustment (required by Sec. 413.64(f) of this
chapter) to any program payments made to the provider during the period
to which the determination applies, including recoupment under
Sec. 405.373 from ongoing payments to the provider of any overpayments
to the provider identified in the determination. Recoupment is made
notwithstanding any request for hearing on the determination the
provider may make under Sec. 405.1811 or Sec. 405.1835.
[48 FR 39834, Sept. 1, 1983, as amended at 49 FR 322, Jan 3, 1984; 51 FR
34793, Sept. 30, 1986; 61 FR 63748, Dec. 2, 1996]
Sec. 405.1804 Matters not subject to administrative and judicial review under prospective payment.
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.
[49 FR 322, Jan. 1, 1984]
Sec. 405.1805 Parties to intermediary determination.
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 Sec. 413.17 of this chapter.
[48 FR 39835, Sept. 1, 1983, as amended at 51 FR 34793, Sept. 30, 1986]
Sec. 405.1807 Effect of intermediary determination.
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
Sec. 405.1811 and an intermediary hearing decision rendered in
accordance with Sec. 405.1831; or
(b) The intermediary determination is revised in accordance with
Sec. 405.1885; or
[[Page 91]]
(c) A Board hearing is requested in accordance with Sec. 405.1835
and a hearing decision rendered pursuant thereto.
Sec. 405.1809 Intermediary hearing procedures.
(a) Hearings. Each intermediary must establish and maintain written
procedures for intermediary hearings, in accordance with the regulations
in this subpart, for resolving issues that may arise between the
intermediary and a provider concerning the amount of reasonable cost
reimbursement, or prospective payment due the provider (except as
provided in Sec. 405.1804) under the Medicare program. The procedures
must provide for a hearing on the intermediary determination contained
in the notice of program reimbursement (Sec. 405.1803), if the provider
files a timely request for a hearing.
(b) Amount in controversy. In order for an intermediary to grant a
hearing, the following dates and amounts in controversy apply:
(1) For cost reporting periods ending prior to June 30, 1973, the
amount of program reimbursement in controversy must be at least $1000.
(2) For cost reporting periods ending on or after June 30, 1973, the
amount of program reimbursement in controversy must be at least $1000
but less than $10,000.
[48 FR 39835, Sept. 1, 1983, as amended at 49 FR 323, Jan. 1, 1984]
Sec. 405.1811 Right to intermediary hearing; time, place, form, and content of request for intermediary hearing.
(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 Sec. 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 Sec. 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.
[39 FR 34515, Sept. 26, 1974. Redesignated at 42 FR 52826, Sept. 30,
1977, as amended at 48 FR 39835, Sept. 1, 1983]
Sec. 405.1813 Failure to timely request an intermediary hearing.
If a provider requests an intermediary hearing on an intermediary's
determination after the time limit prescribed in Sec. 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 Sec. 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.
[48 FR 39835, Sept. 1, 1983]
Sec. 405.1815 Parties to the intermediary hearing.
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 Sec. 405.1819).
[[Page 92]]
Sec. 405.1817 Hearing officer or panel of hearing officers authorized to conduct intermediary hearing; disqualification of officers.
The intermediary hearing provided for in Sec. 405.1809 shall be
conducted by a hearing officer or panel of hearing officers designated
by the intermediary. Such hearing officer or officers shall be persons
knowledgeable in the field of health care reimbursement. The hearing
officer or officers shall not have had any direct responsibility for the
program reimbursement determination with respect to which a request for
hearing is filed; no hearing officer (or officers) shall conduct a
hearing in a case in which he is prejudiced or partial with respect to
any party, or where he has any interest in the matter pending for
determination before him. Notice of any objection which a party may have
with respect to a hearing officer shall be presented in writing to such
officer by the objecting party at the party's earliest opportunity. The
hearing officer shall consider the objection and shall, at his
discretion, either proceed in the conduct of the hearing or withdraw. If
the hearing officer does not withdraw, the objecting party may, after
the hearing, present his objections to an executive official of the
intermediary, who shall rule promptly on the objection.
Sec. 405.1819 Conduct of intermediary hearing.
The hearing shall be open to all parties thereto (see Sec. 405.1815)
and to representatives of the intermediary and of the Health Care
Financing Administration (see Sec. 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).
Sec. 405.1821 Prehearing discovery and other proceedings prior to the intermediary hearing.
(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.
Sec. 405.1823 Evidence at intermediary hearing.
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.
Sec. 405.1825 Witnesses at intermediary hearing.
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.
Sec. 405.1827 Record of intermediary hearing.
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 Sec. 405.1831) has been issued.
[[Page 93]]
Sec. 405.1829 Authority of hearing officer(s) at intermediary hearing.
(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), and with the general instructions issued by the Health
Care Financing Administration in accordance with the Secretary's
agreement with the intermediary.
(b) The determination of a fiscal intermediary that no payment may
be made under title XVIII of the Act for any expense incurred for items
and services furnished to an individual because such items and services
are excluded from coverage pursuant to section 1862 of the Act, 42
U.S.C. 1395y (see subpart C of this part), shall not be reviewed by the
hearing officer(s). Such determination shall be reviewed only in
accordance with the applicable provisions of subparts G and H of this
part.
Sec. 405.1831 Intermediary hearing decision and notice.
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.
Sec. 405.1833 Effect of intermediary hearing decision.
The intermediary hearing decision provided for in Sec. 405.1831
shall be final and binding upon all parties to the hearing unless such
intermediary determination is revised in accordance with Sec. 405.1885.
Sec. 405.1835 Right to Board hearing.
(a) Criteria. The provider (but no other individual, entity, or
party) has a right to a hearing before the Board about any matter
designated in Sec. 405.1801(a)(1), if:
(1) An intermediary determination has been made with respect to the
provider; and
(2) The provider has filed a written request for a hearing before
the Board under the provisions described in Sec. 405.1841(a)(1); and
(3) The amount in controversy (as determined in Sec. 405.1839(a)) is
$10,000 or more.
(b) Prospective payment exceptions. Except with respect to matters
for which administrative or judicial review is not permitted as
specified in Sec. 405.1804, hospitals that are paid under the
prospective payment system are entitled to hearings before the Board
under this section if they otherwise meet the criteria described in
paragraph (a) of this section.
(c) Right to hearing based on late intermediary determination about
reasonable cost. Notwithstanding the provisions of paragraph (a)(1) of
this section, the provider also has a right to a hearing before the
Board if an intermediary's determination concerning the amount of
reasonable cost reimbursement due a provider is not rendered within 12
months after receipt by the intermediary of a provider's perfected cost
report or amended cost report (as permitted or as required to furnish
sufficient data for purposes of making such determination--see
Sec. 405.1803(a)) provided such delay was not occasioned by the fault of
the provider.
[48 FR 39835, Sept. 1, 1983]
Sec. 405.1837 Group appeal.
(a) Criteria for group appeals. Subject to paragraph (b) of this
section, a group of providers may bring an appeal before the Board but
only if--
(1) Each provider in the group is identified as one which would,
upon the filing of a request for a hearing before the Board, but without
regard to the $10,000 amount in controversy requirement, be entitled to
a hearing under Sec. 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.
[[Page 94]]
(b) Providers under common ownership or control. Effective April 20,
1983, any appeal filed by providers that are under common ownership or
control must be brought by the providers as a group appeal in accordance
with the provisions of paragraph (a) of this section with respect to any
matters involving an issue common to the providers and for which the
amount in controversy is, in the aggregate, $50,000 or more (see
Sec. 405.1841(a)(2)). A single provider involved in a group appeal that
also wishes to appeal issues that are not common to the other providers
in the group must file a separate hearing request (see
Sec. 405.1841(a)(1)) and must separately meet the requirements in
Sec. 405.1811 or Sec. 405.1835, as applicable.
[48 FR 39836, Sept. 1, 1983]
Sec. 405.1839 Amount in controversy.
(a) Single appeals. The $1,000 amount in controversy required under
Sec. 405.1809 for an intermediary hearing and the $10,000 amount in
controversy required under Sec. 405.1835 for a Board hearing is, as
applicable to the matters for which the provider has requested a
hearing, the combined total of the amounts computed as follows:
(1) Providers under prospective payment. For providers that are paid
under the prospective payment system, by deducting--
(i) The total of the payment due the provider on other than a
reasonable cost basis under the prospective payment system from the
total amount that would be payable after a recomputation that takes into
account any exclusion, exception, adjustment, or additional payment
denied the provider under part 412 of this chapter, as applicable;
(ii) The total of the payment due the provider on a reasonable cost
basis under the prospective payment system from the total reimbursable
costs claimed by the provider; and
(iii) The adjusted total reimbursable costs due the provider on a
reasonable cost basis under other than the prospective payment system
from the total reimbursable costs claimed by the provider.
(2) Providers not under prospective payment. For providers that are
not paid under the prospective payment system, by deducting the adjusted
total reimbursable program costs due the provider on a reasonable cost
basis from the total reimbursable costs claimed by the provider.
(b) Group appeals. The $50,000 amount in controversy required under
Sec. 405.1837 for group appeals to the Board is, as applicable to the
common matters for which the group of providers have requested a
hearing, the combined total of the amounts computed as follows:
(1) Providers under prospective payment. For providers that are paid
under the prospective payment system, by deducting--
(i) The total of the payment due the providers (in the aggregate) on
other than a reasonable cost basis under the prospective payment system
from the total amount that would be payable to the providers (in the
aggregate) after a recomputation that takes into account any applicable
exception, exclusion, adjustment, or additional payment denied the
providers under part 412 of this chapter.
(ii) The total of the payment due the providers (in the aggregate)
on a reasonable cost basis under the prospective payment system from the
total reimbursable costs claimed in the aggregate by the providers; and
(iii) The adjusted total reimbursable costs due the providers (in
the aggregate) on a reasonable cost basis under other than the
prospective payment system from the total reimbursable costs claimed in
the aggregate by the providers.
(2) Providers not under prospective payment. For providers that are
not paid under the prospective payment system, by deducting the adjusted
total reimbursable program costs due the providers (in the aggregate) on
a reasonable cost basis from the total reimbursable costs claimed in the
aggregate by the providers.
[49 FR 323, Jan. 3, 1984]