§ 405.2413 Services and supplies incident to a physician's services.

(a) Services and supplies incident to a physician's professional service are reimbursable under this subpart if the service or supply is:

(1) of a type commonly furnished in physicians' offices;

(2) Of a type commonly rendered either without charge or included in the rural health clinic's bill;

(3) Furnished as an incidental, although integral, part of a physician's professional services;

(4) Furnished under the direct, personal supervision of a physician; and

(5) In the case of a service, furnished by a member of the clinic's health care staff who is an employee of the clinic.

(b) Only drugs and biologicals which cannot be self-administered are included within the scope of this benefit.

§ 405.2414 Nurse practitioner and physician assistant services.

(a) Professional services are reimbursable under this subpart if:

(1) Furnished by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner who is employed by, or receives compensation from, the rural health clinic;

(2) Furnished under the medical supervision of a physician;

(3) Furnished in accordance with any medical orders for the care and treatment of a patient prepared by a physician;

(4) They are of a type which the nurse practitioner, physician assistant, nurse midwife or specialized nurse practitioner who furnished the service is legally permitted to perform by the State in which the service is rendered; and

(5) They would be covered if furnished by a physician.

(b) The physician supervision requirement is met if the conditions specified in § 491.8(b) of this chapter and any pertinent requirements of State law are satisfied.

(c) The services of nurse practitioners, physician assistants, nurse midwives or specialized nurse practitioners are not covered if State law or regulations require that the services be performed under a physician's order and no such order was prepared.

§ 405.2415 Services and supplies incident to nurse practitioner and physician assistant services.

(a) Services and supplies incident to a nurse practitioner's or physician assistant's services are reimbursable under this subpart if the service or supply is:

(1) Of a type commonly furnished in physicians' offices;

(2) Of a type commonly rendered either without charge or included in the rural health clinic's bill:

(3) Furnished as an incidental, although integral part of professional services furnished by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner;

(4) Furnished under the direct, personal supervision of a nurse practitioner, physician assistant, nurse midwife, specialized nurse practitioner or a physician; and

(5) In the case of a service, furnished by a member of the clinic's health care staff who is an employee of the clinic.

(b) The direct personal supervision requirement is met in the case of a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner only if such a person is permitted to supervise such services under the written policies governing the rural health clinic.

(c) Only drugs and biologicals which cannot be self-administered are included within the scope of this benefit.

§ 405.2416 Visiting nurse services.

(a) Visiting nurse services are covered if:

(1) The rural health clinic is located in an area in which the Secretary has determined that there is a shortage of home health agencies;

(2) The services are rendered to a homebound individual;

(3) The services are furnished by a registered nurse, licensed practical nurse, or licensed vocational nurse who is employed by, or receives compensation for the services from the clinic; and

(4) The services are furnished under a written plan of treatment that is:

(i) Established and reviewed at least every 60 days by a supervising physician of the rural health clinic or estab

lished by a nurse practitioner, physician assistant, nurse midwife, or specialized nurse practitioner and reviewed at least every 60 days by a supervising physician; and

(ii) Signed by the nurse practitioner, physician assistant, nurse midwife, specialized nurse practitioner, or the supervising physician of the clinic.

(b) The nursing care covered by this section includes:

(1) Services that must be performed by a registered nurse, licensed practical nurse, or licensed vocational nurse if the safety of the patient is to be assured and the medically desired results achieved; and

(2) Personal care services, to the extent covered under Medicare as home health services. These services include helping the patient to bathe, to get in and out of bed, to exercise and to take medications.

(c) This benefit does not cover household and housekeeping services or other services that would constitute custodial care.

(d) For purposes of this section, "homebound" means an individual who is permanently or temporarily confined to his or her place of residence because of a medical or health condition. The individual may be considered homebound if he or she leaves the place of residence infrequently. For this purpose, "place of residence" does not include a hospital or long term care facility.

§ 405.2417 Visiting nurse services: Determination of shortage of agencies.

A shortage of home health agencies exists if the Secretary determines that the rural health clinic:

(a) Is located in a county, parish, or similar geographic area in which there is no participating home health agency or adequate home health services are not available to patients of the rural health clinic;

(b) Has (or expects to have) patients whose permanent residences are not within the area serviced by a participating home health agency; or

(c) Has (or expects to have) patients whose permanent residences are not within a reasonable traveling distance, based on climate and terrain, of a participating home health agency.

§ 405.2418 Applicability of general payment exclusions.

The payment conditions, limitations, and exclusions set out in Subpart C of this part and part 410 of this chapter are applicable to payment for services provided by rural health clinics.

[43 FR 8261, Mar. 1, 1978, as amended at 51 FR 41351, Nov. 14, 1986]

§ 405.2425 Payment for rural health clinic services.

(a) Payment to provider clinics. A clinic will be paid in accordance with Subpart D of this part if:

(1) The clinic is an integral and subordinate part of a hospital, skilled nursing facility or home health agency participating in Medicare (i.e., a provider of services); and

(2) The clinic is operated with other departments of the provider under common licensure, governance and professional supervision.

(b) Payment to independent clinics. (1) All other clinics will be paid on the basis of an all inclusive rate for each beneficiary visit for covered services. This rate will be determined by the carrier, in accordance with this subpart and general instructions issued by HCFA.

(2) The amount payable by the carrier for a visit will be determined as follows:

(i) If the deductible has been fully incurred by the beneficiary prior to the visit, 80 percent of the all-inclusive rate will be paid.

(ii) If the deductible has not been fully incurred by the beneficiary before the visit, and the amount of the clinic's reasonable customary charges for the services that is applied to the deductible is less than the all-inclusive rate, the amount applied to the deductible will be subtracted from the all-inclusive rate and 80 percent of the remainder, if any, will be paid to the clinic.

(iii) If the deductible has not been fully incurred by the beneficiary before the visit, and the amount of the clinic's reasonable customary charges for the services that is applied to the deductible is equal to or exceeds the all-inclusive rate, no payment will be made to the clinic.

(3) In order to receive payment, the payment procedures established in accordance with § 410.165 of this chapter shall be followed.

[45 FR 13075, Feb. 28, 1980, as amended at 46 FR 41063, Aug. 14, 1981; 51 FR 41351, Nov. 14, 1986]

§ 405.2426 All-inclusive rate.

(a) Determination of rate. (1) An allinclusive rate will be determined by the carrier at the beginning of the reporting period.

(2) The rate will be determined by dividing the estimated total allowable costs by estimated total visits for rural health clinic services.

(3) The rate determination will be subject to any tests of reasonableness that may be established in accordance with this subpart.

(b) Adjustment of rate. (1) The carrier will, during each reporting period, periodically review the rate to assure that payments approximate actual allowable costs and visits for rural health clinic services, and will adjust it if:

(i) There is a significant change in the utilization of clinic services;

(ii) Actual allowable costs vary materially from the clinic's estimated allowable 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.

8 405.2427

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]

8 405.2428 Allowable costs.

(a) Applicability of general Medicare principles. In determining whether a specific type or item of cost is allowable, such as interest, depreciation, bad debts and owner compensation, the principles for reimbursement of provider costs, as set forth in subpart D of this part, will be followed as applicable.

(b) Typical rural health clinic costs. The following types and items of cost will be included in allowable costs to the extent that they are reasonable:

(1) Compensation for the services of physicians, physician assistants, nurse practitioners, nurse midwives, specialized nurse practitioners and visiting nurses employed by the clinic.

(2) Compensation for the duties that a supervising physician is required to perform under the agreement specified in § 491.8 of this chapter.

(3) Costs of services and supplies incident to the services of a physician, physician assistant, nurse practitioner, nurse midwife 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, physician assistants, and nurse practitioners); 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 reasonable 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.