the provider would receive $55,000 from the program ($57,000 actual cost minus the $2,000 in charges to the beneficiaries). (d) Definition of emergency services. For purposes of paragraph (a)(2) of this section, emergency services are those hospital services which are necessary to prevent the death or serious impairment of the health of the individual, and which, because of the threat to the life or health of the individual, necessitate the use of the most accessible hospital (see § 405.192) available and equipped to furnish such services. Where an individual has been admitted to such hospital as an inpatient because of an emergency, the emergency will be deemed to continue until it is safe from a medical standpoint to move the individual to another hospital or other institution or to discharge him. (e) Identification of charges to individual. For purposes of paragraph (a)(5) of this section, a provider shall give or send to the individual or his representative, a schedule of all items and services which the individual might need and for which the provider imposes charges under this section, and the charge for each. Such schedule shall specify that the charges are necessary to meet the costs in excess of the costs determined to be necessary in the efficient delivery of needed health services under title XVIII of the Act and shall include such other information as the Health Care Financing Administration considers necessary to protect the individual's rights under this section. The provider, in arranging for the individual's admission, first service, or start of care, shall give or send this schedule to the individual or his representative when arrangements are being made for such services or if this is not feasible, as soon thereafter as is practicable but no later than at the initiation of services. [39 FR 20166, June 6, 1974; 39 FR 22415, June 24, 1974. Redesignated at 42 FR 52826, Sept. 30, 1977] § 405.465 Determining reimbursement for certain physician and medical school faculty services rendered in teaching hospitals. (a) General. Payments for services of physicians in teaching hospitals rendered to patients will be made by the health insurance program on the basis of reasonable cost where the hospital exercises the election as provided for in § 405.521 of this Part. Where such election is made: (1) Direct medical and surgical services to health insurance program patients, including supervision of interns and residents, rendered in a teaching hospital by physicians on the hospital staff are reimbursable as provider services on a reasonable-cost basis, as provided for in paragraph (b) of this section. (2) Reimbursement for certain medical school costs may be made as provided for in paragraph (c) of this section. (3) Payments for services donated by volunteer physicians to health insurance program patients will be made to a fund designated by the organized medical staff of the teaching hospital or medical school as provided for in paragraph (d) of this section. (b) Reasonable cost of direct medical and surgical services (including supervision of interns and residents) rendered in a teaching hospital by physicians on the hospital staff. Direct medical and surgical services to patients, including supervision of interns and residents, rendered in a teaching hospital by physicians on the hospital staff are reimbursable as provider services on a reasonable-cost basis. For purposes of this paragraph, reasonable cost is defined as the direct salary paid to such physicians, plus applicable fringe benefits. Such costs must be allocated to such services as provided by paragraph (j) of this section and apportioned to program beneficiaries as provided by paragraph (g) of this section. Other allowable costs incurred by the provider related to the services described in this paragraph are reimbursable subject to the requirements applicable to all other provider services. (c) Reasonable costs incurred by a teaching hospital for the services ren dered by a medical school or related organization in a hospital. An amount not in excess of the reasonable cost (as defined in paragraphs (c) (1) and (2) of this section) incurred by a teaching, hospital for services rendered by a medical school or organization related thereto within the meaning of § 405.427 for certain costs to the medical school (or such related organization) in rendering services in the hospital are reimbursable to the hospital by the health insurance program provided that such costs would be reimbursable if incurred directly by the hospital rather than under such arrangement. (1) Reasonable costs of direct medical and surgical services (including supervision of interns and residents in the care of individual patients) rendered in a teaching hospital by physicians on the faculty of a medical school or organization related to the medical school. (i) In situations where the medical school (or organization related to the medical school) and the hospital are related by common ownership or control in accordance with § 405.427, the cost of such services are allowable costs to the hospital under the provisions of § 405.427 and the reimbursable costs to the hospital are determined under the provisions of this section in the same manner as the costs incurred for physicians on the hospital staff and without regard to payments made to the medical school by the hospital. (ii) Where the medical school and the hospital are not related organizations under the provisions of § 405.427 and the hospital makes payment to the medical school for the costs of such services rendered to all patients, reimbursement will be made by the health insurance program to the hospital for the reasonable cost incurred by the hospital for its payments to the medical school for services to health insurance beneficiaries. Costs incurred under such an arrangement must be allocated to the full range of services provided to the hospital by the medical school physicians on the same basis as provided for under paragraph (j) of this section and costs so allocated to direct medical and surgical services to hospital patients must be apportioned to health insurance beneficiaries as provided for under paragraph (g) of this section. Where the medical school and the hospital are not related organizations under the provisions of § 405.427 and the hospital makes payment to the medical school only for the costs of such services rendered to health insurance program patients, costs of the medical school not to exceed 105 percent of the sum of physicians' direct salaries, applicable fringe benefits, employer's portion of FICA taxes, federal and state unemployment taxes, and workmen's compensation paid by the medical school or an organization related thereto may be recognized as allowable cost of the medical school. Such allowable medical school costs must be allocated to the full range of services rendered by the physicians of the medical school or organization related thereto as provided by paragraph (j) of this section. Costs so allocated to direct medical and surgical services to hospital patients must be apportioned to health insurance program beneficiaries as provided by paragraph (g) of this section. (2) Reasonable costs of other than direct medical and surgical services rendered in a teaching hospital by medical school faculty (or organization related to the medical school). Such costs are determined in accordance with paragraph (c)(1) of this section except that: (i) Where the hospital makes payment to the medical school for other than direct medical and surgical services rendered to all patients, such payments are subject to the required cost-finding and apportionment methods applicable to the cost of other hospital services (excepting direct medical and surgical services rendered to patients), or (ii) where the hospital makes payment to the medical school only for such services rendered to health insurance program patients, then the cost of services which are so reimbursed are not subject to cost-finding and apportionment otherwise provided by this subpart and the reasonable cost reimbursed by the health insurance program must be determined on the basis of the health insurance ratio(s) used in the apportionment of all other provider costs as (excepting physicians' direct medical and surgical services rendered to patients) applied to the allowable medical school costs incurred by the medical school for the services rendered to all patients of the hospital. (d) "Salary Equivalent" payments for physicians' direct medical and surgical services rendered to health insur ance program patients in a teaching hospital by physicians on the voluntary staff of the hospital (or medical school or organization related thereto under arrangement with the hospital). (1) Payments will be made to a fund as defined in § 405.466 for direct medical and surgical services rendered on a regularly scheduled basis by physicians on the unpaid voluntary medical staff of the hospital (or medical school under arrangement with the hospital) to health insurance program patients. Such payments represent compensation for contributed medical staff time which, if not contributed, would have to be obtained through employed staff on a reimbursable basis. Payments for volunteer services are determined by applying to the regularly scheduled contributed time an hourly rate not to exceed the equivalent of the average direct salary (exclusive of fringe benefits) paid to all full-time, salaried physicians (other than interns and residents) on the hospital staff or, where the number of full-time salaried physicians is minimal in absolute terms or in relation to the number of physicians on the voluntary staff, to physicians at like institutions in the area. This "salary equivalent" is a single hourly rate covering all physicians regardless of specialty, and is applied to the actual regularly scheduled time contributed by the physicians in rendering direct medical and surgical services to health insurance program patients including supervision of interns and residents in such care. A physician who receives any compensation from the hospital or a medical school related to the hospital by common ownership or control (within the meaning of § 405.427), for direct medical and surgical services rendered to any patient in the hospital will not be considered an unpaid voluntary physician for purposes of this paragraph. Where, however, a physician receives compensation from the hospital or related medical school or organization related thereto for only services which are other than direct medical and surgical services, a salary equivalent payment for his regularly scheduled direct medical and surgical services to health insurance program patients of the hospital may be imputed. However, the sum of the imputed value for volunteer services and his actual compensation from the hospital and the related medical school (or organization related thereto) may not exceed the amount that would have been imputed if all of his hospital and medical school services (compensated and volunteer) had been (i) volunteer services, or (ii) at the rate of $30,000 per year, whichever is less. (2) The following examples illustrate how the allowable imputed value for volunteer services is determined. In each example, it has been assumed that the average salary equivalent hourly rate is equal to the hourly rate for the individual physician's compensated services. Example No. 1. Dr. Jones received $3,000 a year from Hospital X for services other than direct medical services to all patients, e.g., utilization review, administrative services, etc. Dr. Jones also voluntarily rendered direct medical services to health insurance program patients. The imputed value of the volunteer services amounted to $10,000 for the cost-reporting period. The full imputed value of Dr. Jones' volunteer direct medical services would be allowed since the total amount of the imputed value ($10,000) and the compensated services ($3,000) does not exceed $30,000. Example No. 2. Dr. Smith received $25,000 from Hospital X for services as a department head in a teaching hospital. Dr. Smith also voluntarily rendered direct medical services to health insurance program patients. The imputed value of the volunteer services amounted to $10,000. Only $5,000 of the imputed value of volunteer services would be allowed since the total amount of the imputed value ($10,000) and the compensated services ($25,000) exceeds the $30,000 maximum amount allowable for all his services. $5,000 Allowable amount of imputed value for the volunteer services rendered by Dr. Smith...... Example No. 3. Dr. Brown is not compensated by Hospital X for any services rendered in the hospital. Dr. Brown voluntarily rendered direct surgical services to health insurance program patients for a period of 6 months and the imputed value of these services amounted to $20,000. The allowable amount of the imputed value for volunteer services rendered by Dr. Brown would be limited to $15,000 ($30,000 × 12). (3) The amount of the imputed value for volunteer services applicable to health insurance program beneficiaries and payable to a fund will be determined in accordance with the Aggregate Per Diem Method described in paragraph (g) of this section. (4) Health insurance payments to a fund will be used by the fund solely for improvement of care of hospital patients or for educational or charitable purposes (which may include but are not limited to medical and other scientific research). No personal financial gain, either direct or indirect, from benefits of the fund may inure to any of the hospital staff physicians, medical school faculty, or physicians for whom the health insurance program imputes costs for purposes of payment into the fund. Expenses met from contributions made to the hospital from such a fund will not be included as a reimbursable cost when expended by the hospital, and depreciation expense will not be allowed with respect to equipment or facilities donated to the hospital by such a fund or purchased by the hospital from monies in such a fund. (e) Requirements for reimbursement for physicians' direct medical and surgical services (including supervision of interns and residents) in the care of individual patients rendered in a teaching hospital (1) Physicians on the hospital staff. The requirements under which the costs of physicians' direct medical and surgical services (including supervision of interns and residents) in the care of individual patients rendered to health insurance program patients will be allowed are the same as those applicable to the cost of all other covered provider services except that the costs of these services are separately determined as provided by this section and are not subject to cost-finding as described in § 405.453. (2) Physicians on the medical school faculty. Reimbursement will be made to a hospital by the health insurance program for the costs of services of physicians on the medical school faculty, provided that in situations where the medical school is not related to the hospital (within the meaning of § 405.427), the hospital does not make payment to the medical school for services rendered to all patients and the following requirements are met: (In situations where the hospital makes payment to the medical school for services rendered to all patients, these requirements do not apply (see § 405.465(c)(1)(ii)). (i) There is a written agreement between the hospital and the medical school or organization related thereto, specifying the types and extent of services to be furnished by the medical school and specifying that the hospital must pay to the medical school an amount at least equal to the reasonable cost (as defined in paragraph (c) of this section) of providing such services to health insurance program patients, (ii) Such costs are paid to the medical school by the hospital no later than the date on which the cost report covering the period in which the services were rendered is due, and (iii) Payment for such services furnished under such an arrangement would be made by the health insurance program to the hospital had such services been furnished directly by the hospital. (3) Physicians on the voluntary staff of the hospital (or medical school under arrangement with the hospital). Payments will be made by the health insurance program on a "salary equivalent" basis (as defined in paragraph (d) of this section) to a fund where the conditions outlined in § 405.466 are met. (f) Requirements for reimbursement for medical school faculty services other than physicians' direct medical and surgical services rendered in a 40-117 0-79--11 teaching hospital. Reimbursement will be made to a hospital by the health insurance program for the costs of medical school faculty services other than physicians' direct medical and surgical services rendered in a teaching hospital where the requirements described in paragraph (e) of this section are met. (g) Aggregate per diem methods of apportionment for physicians' direct medical and surgical services (including supervision of interns and residents) in the care of individual patients, rendered in a teaching hospital (1) Aggregate per diem method of apportionment for the costs of physicians' direct medical and surgical services (including supervision of interns and residents) in the care of individual patients. The cost of physicians' direct medical and surgical services rendered in a teaching hospital to health insurance program beneficiaries is determined on the basis of an average cost per diem as defined in paragraph (h)(1) of this section for physicians' direct medical and surgical services to all patients (see § 405.521) for each of the following categories of physicians: (i) Physicians on the hospital staff. (ii) Physicians on the medical school faculty. (2) Aggregate per diem method of apportionment for the imputed value of physicians' volunteer direct medical and surgical services. The imputed value of physicians' direct medical and surgical services rendered to health insurance program beneficiaries in a teaching hospital is determined on the basis of an average per diem, as defined in paragraph (h)(1) of this section, for physicians' direct medical and surgical services to all patients except that the average per diem will be derived from the imputed value of the physician volunteer direct medical and surgical services rendered to all patients. (h) Definitions—(1) Average cost per diem for physicians' direct medical and surgical services (including supervision of interns and residents) rendered in a teaching hospital. Average cost per diem for physicians' direct medical and surgical services rendered in a teaching hospital to patients in each category of physicians' services as described in paragraphs (g)(1) (i) and (ii) of this section means the amount computed by dividing total reasonable costs of such services in each category by the sum of: (i) Inpatient days (as defined in paragraph (h)(2) of this section) and, (ii) Outpatient visit days (as defined in paragraph (h)(3) of this section). (2) Inpatient days. Inpatient days will be determined by counting the day of admission as 3.5 days and each day subsequent to a patient's day of admission except the day of discharge, as 1 day. (3) Outpatient visit days. Outpatient visit days will be determined by counting only one visit day for each calendar day that a patient visits the outpatient department. (i) Application. (1) The following illustrates how apportionment based on the Aggregate Per Diem Method for cost of physicians' direct medical and surgical services rendered in a teaching hospital to patients will be determined. TEACHING HOSPITAL Y Statistical and financial data: Total inpatient days as defined in paragraph (h)(2) of this section and outpatient visit days as defined in paragraph (h)(3) of this section. Total inpatient part A days applicable to Total outpatient part B visit days applicable Total cost of direct medical and surgical services rendered to all patients by physicians on the hospital staff as determined in accordance with paragraph (1) of this section Total cost of direct medical and surgical services rendered to all patients by physicians on the medical school faculty as determined in accordance with paragraph (j) of this section.. Computation of cost applicable to program for physicians on the hospital staff: 75,000 20,000 1,000 -5,000 $1,500,000 $1,650,000 $400,000 $20,000 |