e amount payable by the carrivisit will be determined as fol

the deductible has been fully by the beneficiary prior to 80 percent of the all-inclusive be paid.

the deductible has not been curred by the beneficiary me visit, and the amount of the easonable customary charges services that is applied to the le is less than the all-inclusive e amount applied to the dewill be subtracted from the sive rate and 80 percent of the er, if any, will be paid to the

the deductible has not been curred by the beneficiary he visit, and the amount of the reasonable customary charges services that is applied to the ole is equal to or exceeds the sive rate, no payment will be the clinic.

order to receive payment, the nt procedures established in acce with § 405.250-2 shall be fol

13075, Feb. 28, 1980, as amended at 1063, Aug. 14, 1981]

26 All-inclusive rate.

etermination of rate. (1) An alle rate will be determined by Frier at the beginning of the reperiod.

The rate will be determined by g the estimated total allowable y estimated total visits for rural clinic services.

The rate determination will be to any tests of reasonableness may be established in accordance his subpart.

djustment of rate. (1) The carriduring each reporting period, ically review the rate to assure ayments approximate actual alle costs and visits for rural clinic services, and will adjust it

There is a significant change in ilization of clinic services; Actual allowable costs vary matefrom the clinic's estimated al

le costs; or

(iii) Other circumstances arise which warrant an adjustment.

(2) The clinic may request the carrier to review the rate to determine whether adjustment is required.

§ 405.2427 Annual reconciliation.

(a) General. Payments made to a rural health clinic during a reporting period will be subject to reconciliation to assure that those payments do not exceed or fall short of the allowable costs attributable to covered services furnished to Medicare beneficiaries during that period.

(b) Calculation of reconciliation.

(1) The total reimbursement amount due the clinic for covered services furnished to Medicare beneficiaries will be based on the report specified in § 405.2429(c)(2) and will be calculated by the carrier as follows:

(i) The average cost per visit will be calculated by dividing the total allowable cost incurred for the reporting period by total visits for rural health clinic services furnished during the period. The average cost per visit will be subject to tests of reasonableness which may be established in accordance with this subpart.

(ii) The total cost of rural health clinic services furnished to Medicare beneficiaries will be calculated by multiplying the average cost per visit by the number of visits for covered rural health clinic services by beneficiaries.

(iii) The total reimbursement due the clinic will be 80 percent of the amount calculated by subtracting the amount of deductible incurred by beneficiaries, that is attributable to rural health clinic services, from the cost of these services.

(2) The total reimbursement amount due shall be compared with total payments made to the clinic for the reporting period, and the difference shall constitute the amount of the reconciliation.

(c) Notice of program reimbursement. The carrier will send written notice to the clinic:

(1) Setting forth its determination of the total reimbursement amount due the clinic for the reporting period and the amount, if any, of the reconciliation; and

(2) Informing the clinic of its right to have the determination reviewed at a hearing under the procedures set forth in Subpart R of this part, if the amount in controversy is at least $1,000.

(d) Payment of reconciliation amount-(1) Underpayments. If the total reimbursement due the clinic exceeds the payments made for the reporting period, the carrier will make a lump-sum payment to the clinic to bring total payments into agreement with total reimbursement due the clinic.

(2) Overpayments. If the total payments made to a clinic for the reporting period exceed the total reimbursement due the clinic for the period, the carrier will arrange with the clinic for repayment

through a lump-sum refund, or, if that poses a hardship for the clinic, through offset against subsequent payments or a combination of offset and partial refund. The repayment shall be completed as quickly as possible, generally within 12 months from the date of the notice of program reimbursement. A longer repayment period may be agreed to by the carrier if the carrier is satisfied that unusual circumstances exist which warrant a longer period.

[43 FR 8261, Mar. 1, 1978, as amended at 46 FR 41063, Aug. 14, 1981]

(3) Costs of services and supplies incident to the services of a physician, physician assistant, nurse practitioner, nurse midwife or specialized nurse practitioner.

(4) Overhead costs, including clinic adminstration, costs applicable to use and maintenance of the clinic facility, and depreciation costs.

(5) Costs of services purchased by the clinic.

(c) Tests of reasonableness for rural health clinic cost and utilization. Tests of reasonableness authorized by sections 1833(a) and 1861(v)(1)(A) of the Act may be established by HCFA or the carrier with respect to direct or indirect overall costs, costs of specific items and services, or costs of groups of items and services. Those tests include, but are not limited to, screening guidelines and payment limitations.

(d) Screening guidelines. (1) Costs in excess of amounts established by the guidelines will not be included unless the clinic provides reasonable justification satisfactory to the carrier.

(2) Screening guidelines will be used to assess:

(i) Compensation for the professional and supervisory services of physicians and for the services of physician assistants, nurse practitioners, nurse midwives and specialized nurse practitioners;

(ii) Physician, physician assistant, nurse practitioner, specialized nurse practitioner, nurse midwife, and visiting nurse productivity;

(iii) The level of admininstrative and general expenses;

(iv) Staffing (e.g., the ratio of other clinic personnel to physicians, physícian assistants, and nurse practition ers); and

(v) The reasonableness of payments for services purchased by the clinic, subject to the limitation that the costs of physicians' services purchased by the clinic may not exceed the reason. able charges for these services as determined under Subpart E of this part.

(e) Payment limitations. Limits on payments may be set by HCFA, on the basis of costs estimated to be reasonable for the provision of such services.

§ 405.2429 Reports and maintenance of records.

(a) Maintenance and availability of records. The rural health clinic shall:

(1) Maintain adequate financial and statistical records, in the form and containing the data required by HCFA, to allow the carrier to determine payment for covered services furnished to Medicare beneficiaries in accordance with this subpart.

(2) Make the records available for verification and audit by HHS or the General Accounting Office;

(3) Maintain financial data on an accrual basis, unless it is part of a governmental institution that uses a cash basis of accounting. In the latter case, appropriate depreciation on capital assets will be allowable rather than the expenditure for the capital asset.

(b) Adequacy of records. (1) The carrier may suspend reimbursement if it determines that the clinic does not maintain records that provide an adequate basis to determine payments under Medicare.

(2) The suspension will continue until the clinic demonstrates to the carrier's satisfaction that it does, and will continue to, maintain adequate records.

(c) Reporting requirements—(1) Initial report. At the beginning of its initial reporting period, the clinic shall submit an estimate of budgeted costs and visits for rural health clinic services for the reporting period, in the form and detail required by HCFA, and such other information as HCFA may require to establish the payment rate.

(2) Annual reports. Within 90 days after the end of its reporting period, the clinic shall submit, in such form and detail as may be required by HCFA, a report of:

(i) Its operations, including the allowable costs actually incurred for the period and the actual number of visits for rural health clinic services furnished during the period; and

(ii) The estimated costs and visits for rural health clinic services for the succeeding reporting period, and such other information as HCFA may require to establish the payment rate.

(3) Late reports. If the clinic does not submit an adequate annual report

on time, the carrier may reduce or suspend payments to preclude excess payment to the clinic.

(4) Inadequate reports. If the clinic does not furnish a report or furnishes a report that is inadequate for the carrier to make a determination of program payment, HCFA may deem all payments for the reporting period to be overpayments.

(5) Postponement of due date. For good cause shown by the clinic, the carrier may, with HCFA's approval, grant a 30-day postponement of the due date for the annual report.

(6) Termination of agreement or change of ownership. The report from a clinic which voluntarily or involuntarily ceases to participate in the Medicare program or experiences a change in ownership is due no later than 45 days following the effective date of the termination of agreement or change of ownership.

13-147 0-84--35

Sec.

408.11 Individual age 65 or over who is not

entitled to social security or railroad retirement benefits.

408.12 Individual under age 65 who is entitled to social security or railroad retirement disability benefits.

408.13 Individual who has end-stage renal

disease.

PREMIUM HOSPITAL INSURANCE

408.20 Basic requirements. 408.21

Enrollment and entitlement. 408.22 Monthly premiums. 408.23 Determination of months to be counted for premium increase: Enrollment.

408.24 Determination of months to be counted for premium increase: Reenrollment.

408.25 Termination of entitlement. 408.26 Prejudice to enrollment rights because of Federal Government error.

SPECIAL CIRCUMSTANCES THAT AFFECT
ENTITLEMENT

408.30 Nonpayment of benefits on behalf of certain aliens.

408.31 Conviction of subversive activities.

AUTHORITY: Secs. 202 (t) and (u), 226, 226A, 1102, 1811 and 1818 of the Social Security Act (42 U.S.C. 402 (t) and (u), 426, 426-1, 1302, 1395c, 1395i-2; Section 103 of Pub. L. 89-97 (42 U.S.C. 426a)).

SOURCE: 48 FR 12536, Mar. 25, 1983, unless otherwise noted.

Subpart A-Hospital Insurance

GENERAL PROVISIONS

§ 408.1 Statutory basis.

Sections 226, 226A, and 1818 of the Social Security Act and section 103 of Pub. L. 89-97 establish the conditions for entitlement to hospital insurance benefits. Sections 202 (t) and (u) of the Act specify limitations that apply to certain aliens and to persons convicted of certain offenses.

§ 408.2 Scope.

This subpart specifies the conditions of eligibility for hospital insurance and sets forth certain specific conditions that affect entitlement to benefits. Hospital insurance is authorized under Part A of Title XVIII and is also referred to as Medicare Part A. It includes inpatient hospital care, posthospital skilled nursing facility care, and posthospital home health services.

§ 408.3 Definitions.

"First month of eligibility" means the first month in which an individual meets all the requirements for entitlement to hospital insurance except application or enrollment if that is required.

"First month of entitlement" means the first month for which the individual meets all the requirements for entitlement to Part A benefits.

"Insured individual” means an individual who has the number of quar ters of coverage required for monthly social security benefits.

"Quarter of coverage” means a calendar quarter that is counted toward the number of covered quarters re quired to make the individual eligible for monthly social security benefits. A quarter is counted if during that quar ter (or that calendar year) the individual earned a required minimum amount of money. (For details, see 20 CFR Part 404, Subpart B.)

§ 408.5 Basis of eligibility and entitlement.

(a) Hospital insurance without premiums. Hospital insurance is available to most individuals without payment of a premium if they:

(1) Are age 65 or over, or

(2) Have received social security or railroad retirement disability benefits for 25 months; or

(3) Have end-stage renal disease. Sections 408.10 through 408.13 explain the requirements such individuals must meet to obtain hospital insur ance without premiums.

(b) Premium hospital insurance. Many individuals who are age 65 or over, but do not meet the requirements set forth in §§ 408.10 through 408.13, may obtain the benefits by paying a premium. Section 408.20 of this part explains the requirements individuals must meet to obtain premi. um hospital insurance.

§ 408.6 Application or enrollment for hospital insurance.

(a) Basic provision. In most cases, eligibility for Medicare Part A is a result of entitlement to monthly social security or railroad retirement cash benefits or eligibility for monthly social security cash benefits. This sec

tion specifies the individuals who need not file an application to become entitled to hospital insurance, those who must file an application, and those who must enroll.

(b) Individuals who need not file an application for hospital insurance. An individual who is already entitled to monthly social security or railroad retirement benefits when he or she attains age 65 or who establishes entitlement to those benefits after age 65 need not file a separate application to become entitled to hospital insurance. (See 20 CFR Part 404, Subpart D for eligibility requirements for social security cash benefits, and Subpart G for requirements for filing applications for cash benefits.)

(c) Individuals who must file an application for hospital insurance. An individual must file an application for hospital insurance if he or she seeks entitlement to hospital insurance on the basis of

(1) The transitional provisions set forth in § 408.11;

(2) Deemed entitlement to disabled widow's or widower's benefit under certain circumstances as provided in § 408.12;

(3) A diagnosis of end-stage renal disease, as specified in § 408.13; or

(4) Effective January 1, 1981, eligibility for social security cash benefits, as specified in § 408.10(a)(3), if the individual has attained age 65 without applying for those benefits.

(d) When application is deemed to be filed. (1) An application based on the transitional provisions or on ESRD is deemed to be filed in the first month of eligibility if it is filed not more than 3 months before the first month, and is retroactive to that month if filed within 12 months after the first month. An application filed more than 12 months after the first month of eligibility is retroactive to the 12th month before the month it is filed.

(2) An application for deemed entitlement to disabled widow's or widower's benefits, that is filed before the first month in which the individual meets all conditions of entitlement for this benefit, will be deemed a valid application if those conditions are met before an initial determination, reconsideration, or hearing decision is made

on the application. If the conditions are met after the date of any hearing decision, a new application will have to be filed. An application validly filed within 12 months after the first month of eligibility is retroactive to that first month. If filed more than 12 months after that first month, it is retroactive to the 12th month before the month of filing.

(3) Effective June 8, 1980, an application based on eligibility for social security benefits at or after age 65, that is filed before the first month in which the individual meets all eligibility conditions for this benefit, will be deemed a valid application if those conditions are met before an initial determination, reconsideration, or hearing decision is made on the application. If the conditions are met after the date of any hearing decision, a new application will have to be filed.

(4) Effective March 1, 1981, an application validly filed within 6 months after the first month of eligibility is retroactive to that first month. If filed more than 6 months after that first month, it is retroactive to the 6th month before the month of filing.

(e) Individuals who must enroll for hospital insurance. An individual who must pay a monthly premium for hospital insurance must enroll in accordance with the procedures set forth in § 408.21.

HOSPITAL INSURANCE WITHOUT PREMIUMS

§ 408.10 Individual age 65 or over who is entitled to social security or railroad retirement benefits, or who is eligible for social security benefits.

(a) Requirements. An individual is entitled to hospital insurance benefits under Section 226 of the Act if he or she has attained aged 65 and is:

(1) Entitled to monthly social security benefits under section 202 of the Social Security Act;

(2) A qualified railroad retirement beneficiary who has been certified as such to the Social Security Administration by the Railroad Retirement Board in accordance with section 7(d) of the Railroad Retirement Act of 1974; or