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<BODY><PRE>[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR410]

[Page 290-298]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS--Table of Contents
 
Subpart I--Payment of SMI Benefits

    Source: 51 FR 41339, Nov. 14, 1986. Redesignated at 59 FR 6577, Feb. 
11, 1994.

Sec. 410.150  To whom payment is made.

    (a) General rules. (1) Any SMI enrollee is, subject to the 
conditions, limitations, and exclusions set forth in this part and in 
parts 405, 416 and 424 of this chapter, entitled to have payment made as 
specified in paragraph (b) of this section.
    (2) The services specified in paragraphs (b)(5) through (b)(14) of 
this section must be furnished by a facility that has in effect a 
provider agreement or other appropriate agreement to participate in 
Medicare.
    (b) Specific rules. Subject to the conditions set forth in paragraph 
(a) of this section, Medicare Part B pays as follows:
    (1) To the individual, or to a physician or other supplier on the 
individual's behalf, for medical and other health services furnished by 
the physician or other supplier.
    (2) To a nonparticipating hospital on the individual's behalf for 
emergency <STRONG>outpatient</STRONG> services furnished by the hospital, in accordance 
with subpart G of part 424 of this chapter.
    (3) To the individual, for emergency <STRONG>outpatient</STRONG> services furnished 
by a nonparticipating hospital, in accordance with Sec. 424.53 of this 
chapter.
    (4) To the individual, for physicians' services and ambulance 
services furnished outside the United States in accordance with 
Sec. 424.53 of this chapter.
    (5) To a provider on the individual's behalf for medical and other 
health services furnished by the provider (or by others under 
arrangements made with them by the provider).

[[Page 291]]

    (6) To a home health agency on the individual's behalf for home 
health services furnished by the home health agency.
    (7) To a clinic, rehabilitation agency, or public health agency on 
the individual's behalf for <STRONG>outpatient</STRONG> physical therapy or speech 
pathology services furnished by the clinic or agency (or by others under 
arrangements made with them by the clinic or agency).
    (8) To a rural health clinic or Federally qualified health center on 
the individual's behalf for rural health clinic or Federally qualified 
health center services furnished by the rural health clinic or Federally 
qualified health center, respectively.
    (9) To an ambulatory surgical center (ASC) on the individual's 
behalf for covered ambulatory surgical center facility services that are 
furnished in connection with surgical procedures performed in an ASC, as 
provided in part 416 of this chapter.
    (10) To a <STRONG>comprehensive</STRONG> <STRONG>outpatient</STRONG> rehabilitation facility (CORF) on 
the individual's behalf for <STRONG>comprehensive</STRONG> <STRONG>outpatient</STRONG> rehabilitation 
facility services furnished by the CORF.
    (11) To a renal dialysis facility, on the individual's behalf, for 
institutional or home dialysis services, supplies, and equipment 
furnished by the facility.
    (12) To a critical access hospital (CAH) on the individual's behalf 
for <STRONG>outpatient</STRONG> CAH services furnished by the CAH.
    (13) To a community mental health center (CMHC) on the individual's 
behalf, for partial hospitalization services furnished by the CMHC (or 
by others under arrangements made with them by the CMHC).
    (14) To an SNF for services (other than those described in 
Sec. 411.15(p)(2) of this chapter) that it furnishes to a resident (as 
defined in Sec. 411.15(p)(3) of this chapter) of the SNF who is not in a 
covered Part A stay.
    (15) To the qualified employer of a physician assistant for 
professional services furnished by the physician assistant and for 
services and supplies furnished incident to his or her services. Payment 
is made to the employer of a physician assistant regardless of whether 
the physician assistant furnishes services under a W-2, employer-
employee employment relationship, or whether the physician assistant is 
an independent contractor who receives a 1099 reflecting the 
relationship. Both types of relationships must conform to the 
appropriate guidelines provided by the Internal Revenue Service. A 
qualified employer is not a group of physician assistants that 
incorporate to bill for their services. Payment is made only if no 
facility or other provider charges or is paid any amount for services 
furnished by a physician assistant.
    (16) To a nurse practitioner or clinical nurse specialist for 
professional services furnished by a nurse practitioner or clinical 
nurse specialist in all settings in both rural and nonrural areas and 
for services and supplies furnished incident to those services. Payment 
is made only if no facility or other provider charges, or is paid, any 
amount for the furnishing of the professional services of the nurse 
practitioner or clinical nurse specialist.
    (17) To a clinical psychologist on the individual's behalf for 
clinical psychologist services and for services and supplies furnished 
as an incident to his or her services.
    (18) To a clinical social worker on the individual's behalf for 
clinical social worker services.
    (19) To a participating HHA, for home health services (including 
medical supplies described in section 1861(m)(5) of the Act, but 
excluding durable medical equipment to the extent provided for in such 
section) furnished to an individual who at the time the item or service 
is furnished is under a plan of care of an HHA (without regard to 
whether the item or service is furnished by the HHA directly, under 
arrangement with the HHA, or under any other contracting or consulting 
arrangement).

[51 FR 41339, Nov. 14, 1986, as amended at 53 FR 6648, Mar. 2, 1988; 57 
FR 24981, June 12, 1992; 58 FR 30668, May 26, 1993; 59 FR 6577, Feb. 11, 
1994; 63 FR 20129, Apr. 23, 1998; 63 FR 26308, May 12, 1998; 63 FR 
58909, Nov. 2, 1998; 65 FR 41211, July 3, 2000; 66 FR 39599, July 31, 
2001]

Sec. 410.152  Amounts of payment.

    (a) General provisions--(1) Exclusion from incurred expenses. As 
used in this

[[Page 292]]

section, ``incurred expenses'' are expenses incurred by an individual, 
during his or her coverage period, for covered Part B services, 
excluding the following:
    (i) Expenses incurred for services for which the beneficiary is 
entitled to have payment made under Medicare Part A or would be so 
entitled except for the application of the Part A deductible and 
coinsurance requirements.
    (ii) Expenses incurred in meeting the Part B blood deductible 
(Sec. 410.161).
    (iii) In the case of services payable under a formula that takes 
into account reasonable charges, reasonable costs, customary charges, 
customary (insofar as reasonable) charges, charges related to reasonable 
costs, fair compensation, a pre-treatment prospective payment rate, or a 
standard overhead amount, or any combination of two or more of these 
factors, expenses in excess of any factor taken into account under that 
formula.
    (iv) Expenses in excess of the <STRONG>outpatient</STRONG> mental health treatment 
limitation described in Sec. 410.155.
    (v) In the case of expenses incurred for <STRONG>outpatient</STRONG> physical therapy 
services including speech-language pathology services, the expenses 
excluded are from the incurred expenses under Sec. 410.60(e). In the 
case of expenses incurred for <STRONG>outpatient</STRONG> occupational therapy including 
speech-language pathology services, the expenses excluded are from the 
incurred expenses under Sec. 410.59(e).
    (2) Other applicable provisions. Medicare Part B pays for incurred 
expenses the amounts specified in paragraphs (b) through (k) of this 
section, subject to the following:
    (i) The principles and procedures for determining reasonable costs 
and reasonable charges and the conditions for Medicare payment, as set 
forth in parts 405 (subparts E and X), 413, and 424 of this chapter.
    (ii) The Part B annual deductible (Sec. 410.160).
    (iii) The special rules for payment to health maintenance 
organizations (HMOs), health care prepayment plans (HCPPs), and 
competitive medical plans (CMPs) that are set forth in part 417 of this 
chapter. (A prepayment organization that does not qualify as an HMO, 
CMP, or HCPP is paid in accordance with paragraph (b)(4) of this 
section.)
    (b) Basic rules for payment. Except as specified in paragraphs (c) 
through (h) of this section, Medicare Part B pays the following amounts:
    (1) For services furnished by, or under arrangements made by, a 
provider other than a nominal charge provider, whichever of the 
following is less:
    (i) 80 percent of the reasonable cost of the services.
    (ii) The reasonable cost of, or the customary charges for, the 
services, whichever is less, minus 20 percent of the customary (insofar 
as reasonable) charges for the services.
    (2) For services furnished by, or under arrangements made by, a 
nominal charge provider, 80 percent of fair compensation.
    (3) For emergency <STRONG>outpatient</STRONG> hospital services furnished by a 
nonparticipating hospital that is eligible to receive payment for those 
services under subpart G of part 424 of this chapter, the amount 
specified in paragraph (b)(1) of this section.
    (4) For services furnished by a person or an entity other than those 
specified in paragraphs (b)(1) through (b)(3) of this section, 80 
percent of the reasonable charges or 80 percent of the payment amount 
computed on any other payment basis for the services.
    (c) Amount of payment: Home health services other than durable 
medical equipment (DME). For home health services other than DME 
furnished by, or under arrangements made by, a participating HHA, 
Medicare Part B pays the following amounts:
    (1) For services furnished by an HHA that is a nominal charge 
provider, 100 percent of fair compensation.
    (2) For services furnished by an HHA that is not a nominal charge 
provider, the lesser of the reasonable cost of the services and the 
customary charges for the services.
    (d) Amount of payment: DME furnished as a home health service.
    (1) Basic rule. Except as specified in paragraph (d)(2) of this 
section--
    (i) For DME furnished by an HHA that is a nominal charge provider,

[[Page 293]]

Medicare Part B pays 80 percent of fair compensation.
    (ii) For DME furnished by an HHA that is not a nominal charge 
provider, Medicare Part B pays the lesser of the following:
    (A) 80 percent of the reasonable cost of the service.
    (B) The reasonable cost of, or the customary charge for, the 
service, whichever is less, minus 20 percent of the customary (insofar 
as reasonable) charge for the service.
    (2) Exception. If the DME is used DME purchased by or on behalf of 
the beneficiary at a price at least 25 percent less than the reasonable 
charge for new equipment--
    (i) For used DME furnished by an HHA that is a nominal charge 
provider, Medicare Part B pays 100 percent of fair compensation.
    (ii) For used DME furnished by an HHA that is not a nominal charge 
provider, Medicare Part B pays 100 percent of the reasonable cost of, or 
the customary charge for, the services, whichever is less.
    (e) Amount of payment: Renal dialysis services, supplies, and 
equipment. Effective for services furnished on or after August 1, 1983, 
Medicare Part B pays for the institutional dialysis services specified 
in Sec. 409.250 and the home dialysis services, supplies, and equipment 
specified in Sec. 409.252, as follows:
    (1) Except as provided in paragraph (d)(2) of this section, 80 
percent of the per treatment prospective reimbursement rate established 
under Sec. 413.170 of this chapter, for <STRONG>outpatient</STRONG> maintenance dialysis 
furnished by ESRD facilities approved in accordance with subpart U of 
part 405 of this chapter.
    (2) Exception. If a home dialysis patient elects to obtain home 
dialysis supplies or equipment (or both) from a party other than an 
approved ESRD facility, payment is in accordance with paragraph (b)(4) 
of this section.
    (f) Amount of payment: Rural health clinic and Federally qualified 
health center services. Medicare Part B pays, for services by a 
participating independent rural health clinic or Federally qualified 
health center, 80 percent of the costs determined under subpart X of 
part 405 of this chapter, to the extent those costs are reasonable and 
related to the cost of furnishing rural health clinic or Federally 
qualified health center services or reasonable on the basis of other 
tests specified by CMS.
    (g) Amount of payment: Used durable medical equipment furnished by 
otherthan an HHA. Medicare Part B pays the following amounts for used 
DME purchased by or on behalf of the beneficiary at a price at least 25 
percent less than the reasonable charge for comparable new equipment:
    (1) For used DME furnished by, or under arrangements made by, a 
nominal charge provider, 100 percent of fair compensation.
    (2) For used DME furnished by or under arrangements made by a 
provider that is not a nominal charge provider, 100 percent of the 
reasonable cost of the service or the customary charge for the service, 
whichever is less.
    (3) For used DME furnished by other than a provider, 100 percent of 
the reasonable charge.
    (h) Amount of payment: Pneumococcal vaccine. Medicare Part B pays 
for pneumococcal vaccine and its administration as follows:
    (1) For services furnished by a nominal charge provider, 100 percent 
of fair compensation.
    (2) For services furnished by a provider that is not a nominal 
charge provider, the reasonable cost of the services or the customary 
charge for the service, whichever is less.
    (3) For services furnished by other than a provider, a rural health 
clinic or a Federally qualified health center, 100 percent of the 
reasonable charge.
    (4) For services furnished by a rural health clinic or a Federally 
qualified health center, 100 percent of the reasonable cost.
    (i) Amount of payment: ASC facility services. For ASC facility 
services that are furnished in connection with the surgical procedures 
specified in part 416 of this chapter, Medicare Part B pays 80 percent 
of a standard overhead amount, as specified in Sec. 416.120(c) of this 
chapter.&lt;SUP&gt;1&lt;/SUP&gt;
---------------------------------------------------------------------------

    \1\ For services furnished before July 1, 1987, Medicare Part B paid 
100 percent of the standard amount.

---------------------------------------------------------------------------

[[Page 294]]

    (j) Amount of payment: services of Federally funded health 
facilities prior to October 1, 1991. Medicare Part B pays 80 percent of 
charges related to the reasonable costs that a Federally funded health 
facility incurs in furnishing the services. See Sec. 411.8(b)(6) of this 
chapter.
    (k) Amount of payment: <STRONG>Outpatient</STRONG> CAH services. (1) Payment for CAH 
<STRONG>outpatient</STRONG> services is the reasonable cost of the CAH in providing these 
services, as determined in accordance with section 1861(v)(1)(A) of the 
Act, with Sec. 413.70(b) and (c) of this chapter, and with the 
applicable principles of cost reimbursement in part 413 and in part 415 
of this chapter.
    (2) Payment for CAH <STRONG>outpatient</STRONG> services is subject to the applicable 
Medicare Part B deductible and coinsurance amounts, except as described 
in Sec. 413.70(b)(2)(iii) of this chapter, with Part B coinsurance being 
calculated as 20 percent of the customary (insofar as reasonable) 
charges of the CAH for the services.
    (l) Amount of payment: Flu vaccine. Medicare Part B pays 100 percent 
of the Medicare allowed charge.

[51 FR 41339, Nov. 14, 1986; 52 FR 4499, Feb. 12, 1987, as amended at 53 
FR 6648, Mar. 2, 1988; 56 FR 2138, Jan. 22, 1991; 56 FR 8841, Mar. 1, 
1991; 57 FR 24981, June 12, 1992; 58 FR 30668, May 26, 1993; 59 FR 
63462, Dec. 8, 1994; 62 FR 46025, Aug. 29, 1997; 63 FR 20129, Apr. 23, 
1998; 63 FR 26357, May 12, 1998; 63 FR 35066, June 26, 1998; 63 FR 
58910, Nov. 2, 1998; 65 FR 47047, 47105, Aug. 1, 2000; 66 FR 32192, June 
13, 2001]

Sec. 410.155  <STRONG>Outpatient</STRONG> mental health treatment limitation.

    (a) Limitation. Only 62\1/2\ percent of the expenses incurred for 
services subject to the limit as specified in paragraph (b) of this 
section are considered incurred expenses under Medicare Part B when 
determining the amount of payment and deductible under Secs. 410.152 and 
410.160, respectively.
    (b) Application of the limitation--(1) Services subject to the 
limitation. Except as specified in paragraph (b)(2) of this section, the 
following services are subject to the limitation if they are furnished 
in connection with the treatment of a mental, psychoneurotic, or 
personality disorder (that is, any condition identified by a diagnosis 
code within the range of 290 through 319) and are furnished to an 
individual who is not an inpatient of a hospital:
    (i) Services furnished by physicians and other practitioners, 
whether furnished directly or as an incident to those practitioners' 
services.
    (ii) Services provided by a CORF.
    (2) Services not subject to the limitation. Services not subject to 
the limitation include the following:
    (i) Services furnished to a hospital inpatient.
    (ii) Brief office visits for the sole purpose of monitoring or 
changing drug prescriptions used in the treatment of mental, 
psychoneurotic, or personality disorders.
    (iii) Partial hospitalization services not directly provided by a 
physician.
    (iv) Diagnostic services, such as psychological testing, that are 
performed to establish a diagnosis.
    (v) Medical management, as opposed to psychotherapy, furnished to a 
patient diagnosed with Alzheimer's disease or a related disorder.
    (c) Examples. (1) A clinical psychologist submitted a claim for $200 
for <STRONG>outpatient</STRONG> treatment of a beneficiary's mental disorder. The 
Medicare approved amount was $180. Since clinical psychologists must 
accept assignment, the beneficiary is not liable for the $20 in excess 
charges. The beneficiary previously satisfied the $100 annual Part B 
deductible. The limitation reduces the amount of incurred expenses to 
62\1/2\ percent of the approved amount. After subtracting any unmet 
deductible, Medicare pays 80 percent of the remaining incurred expenses. 
Medicare payment and beneficiary liability are computed as follows:

------------------------------------------------------------------------

------------------------------------------------------------------------
1. Actual charges.............................................   $200.00
2. Medicare approved amount...................................    180.00
3. Medicare incurred expenses (0.625 x line 2)................    112.50
4. Unmet deductible...........................................      0.00
5. Remainder after subtracting deductible (line 3 minus line      112.50
 4)...........................................................
6. Medicare payment (0.80 x line 5)...........................     90.00
7. Beneficiary liability (line 2 minus line 6)................     90.00
------------------------------------------------------------------------

    (2) A clinical social worker submitted a claim for $135 for 
<STRONG>outpatient</STRONG> treatment of a beneficiary's mental disorder. The Medicare 
approved amount was $120. Since clinical social workers

[[Page 295]]

must accept assignment, the beneficiary is not liable for the $15 in 
excess charges. The beneficiary previously satisfied $70 of the $100 
annual Part B deductible, leaving $30 unmet.

------------------------------------------------------------------------

------------------------------------------------------------------------
1. Actual charges.............................................   $135.00
2. Medicare approved amount...................................    120.00
3. Medicare incurred expenses (0.625 x line 2)................     75.00
4. Unmet deductible...........................................     30.00
5. Remainder after subtracting deductible (line 3 minus line       45.00
 4)...........................................................
6. Medicare payment (0.80 x line 5)...........................     36.00
7. Beneficiary liability (line 2 minus line 6)................     84.00
------------------------------------------------------------------------

    (3) A physician who did not accept assignment submitted a claim for 
$780 for services in connection with the treatment of a mental disorder 
that did not require inpatient hospitalization. The Medicare approved 
amount was $750. Because the physician did not accept assignment, the 
beneficiary is liable for the $30 in excess charges. The beneficiary had 
not satisfied any of the $100 Part B annual deductible.

------------------------------------------------------------------------

------------------------------------------------------------------------
1. Actual charges.............................................   $780.00
2. Medicare approved amount...................................    750.00
3. Medicare incurred expenses (0.625 x line 2)................    468.75
4. Unmet deductible...........................................    100.00
5. Remainder after subtracting deductible (line 3 minus line      368.75
 4)...........................................................
6. Medicare payment (0.80 x line 5)...........................    295.00
7. Beneficiary liability (line 1 minus line 6)................    485.00
------------------------------------------------------------------------

    (4) A beneficiary's only Part B expenses during 1995 were for a 
physician's services in connection with the treatment of a mental 
disorder that initially required inpatient hospitalization. The 
remaining services were furnished on an <STRONG>outpatient</STRONG> basis. The 
beneficiary had not satisfied any of the $100 annual Part B deductible 
in 1995. The physician, who accepted assignment, submitted a claim for 
$780. The Medicare-approved amount was $750. The beneficiary incurred 
$350 of the approved amount while a hospital inpatient and incurred the 
remaining $400 of the approved amount for <STRONG>outpatient</STRONG> services. Only $400 
of the approved amount is subject to the 62\1/2\ percent limitation 
because the statutory limitation does not apply to services furnished to 
hospital inpatients.

------------------------------------------------------------------------

------------------------------------------------------------------------
1. Actual charges.............................................   $780.00
2. Medicare approved amount...................................   $750.00
  2A. Inpatient portion.......................................      $350
  2B. <STRONG>Outpatient</STRONG> portion......................................      $400
3. Medicare incurred expenses.................................   $600.00
  3A. Inpatient portion.......................................      $350
  3B. <STRONG>Outpatient</STRONG> portion (0.625 x line 2B)....................      $250
4. Unmet deductible...........................................   $100.00
5. Remainder after subtracting deductible (line 3 minus line     $500.00
 4)...........................................................
6. Medicare payment (0.80 x line 5)...........................   $400.00
7. Beneficiary liability (line 2 minus line 6)................   $350.00
------------------------------------------------------------------------


[63 FR 20129, Apr. 23, 1998]

Sec. 410.160  Part B annual deductible.

    (a) Basic rule. Except as provided in paragraph (b) of this section, 
incurred expenses (as defined in Sec. 410.152) are subject to, and count 
toward meeting the annual deductible.
    (b) Exceptions. Expenses incurred for the following services are not 
subject to the Part B annual deductible and do not count toward meeting 
that deductible:
    (1) Home health services.
    (2) Pneumococcal vaccines and their administration.
    (3) Federally qualified health center services.
    (4) ASC facility services furnished before July 1987 and physician 
services furnished before April 1988 that met the requirements for 
payment of 100 percent of the reasonable charges.
    (5) Screening mammography services as described in Sec. 410.34 (c) 
and (d).
    (6) Screening pelvic examinations as described in Sec. 410.56.
    (c) Application of the Part B annual deductible. (1) Before payment 
is made under Sec. 410.152, an individual's incurred expenses for the 
calendar year are reduced by the Part B annual deductible.
    (2) The Part B annual deductible is applied to incurred expenses in 
the order in which claims for those expenses are processed by the 
Medicare program.
    (3) Only one Part B annual deductible may be imposed for any 
calendar year and it may be met by any combination of expenses incurred 
in that year.
    (d) Special rule for services reimbursable on a formula basis. (1) 
In applying the formula that takes into account reasonable costs, 
customary charges, and customary (insofar as reasonable)

[[Page 296]]

charges, and is used to determine payment for services furnished by a 
provider that is not a nominal charge provider, the Medicare 
intermediary takes the following steps:
    (i) Reduces the customary charges for the services by an amount 
equal to any unmet portion of the deductible for the calendar year, in 
accordance with paragraph (b) of this section. (The amount of this 
reduction is considered to be the amount of the deductible that is met 
on the basis of the services to which it is applied.)
    (ii) Determines 20 percent of any remaining portion of the customary 
(insofar as reasonable) charge.
    (iii) Determines the lesser of the reasonable cost of the services 
and the customary charges for the services.
    (iv) Reduces the amount determined under paragraph (c)(1)(iii) of 
this section by the sum of the reduction made under paragraph (c)(1)(i) 
of this section and the amount determined under parargaph (c)(1)(ii) of 
this section.
    (v) Reduces the reasonable cost of the services by the amount of the 
reduction made under paragraph (c)(1)(i) of this section and multiplies 
the result by 80 percent.
    (2) In accordance with Sec. 410.152(b)(1), the amount payable is the 
amount determined under paragraph (c)(1)(iv) of this section, or the 
amount determined under paragraph (c)(1)(v) of this section, whichever 
is less.
    (e) Special rule for services of an independent rural health clinic. 
Application of the Part B annual deductible to rural health clinic 
services is in accordance with Sec. 405.2425(b)(2) of this chapter.
    (f) Amount of the Part B annual deductible. (1) Beginning with 
expenses for services furnished during calendar year 1982, the Part B 
annual deductible is $75.
    (2) From 1973 through 1981, the deductible was $60.
    (3) From 1966 through 1972, the deductible was $50.
    (g) Carryover of Part B annual deductible. For calendar years before 
1982, the Part B annual deductible was reduced by the amount of expenses 
incurred during the last quarter of the preceding year that was applied 
to meet the deductible for that preceding year. Example: If $20 of 
expenses incurred in November 1980 was used to meet the 1980 deductible, 
the 1981 deductible was reduced to $40 ($60-$20).
    (h) Examples of application of the annual deductible. (1) Mr. A 
submitted claims for the following expenses incurred during 1982: $20 
for services furnished in March by physician X; $30 for services 
furnished in April by physician Y; $50 for services furnished in June by 
physician Z, for a total of $100. The carrier determined that the 
charges as submitted were the reasonable charges. The first $75 of 
expenses for which claims were processed is applied to meet the $75 
deductible for that year. Medicare Part B pays 80 percent of the 
remaining $25, or $20.
    (2) Mr. B submitted a claim that included a $25 charge by a doctor 
for an examination to prescribe a hearing aid and an $80 charge for 
office surgery. This was the first claim relating to Mr. B's medical 
expenses processed in the calendar year. The carrier disallowed the $25 
charge because the type of examination is not covered by Medicare. The 
carrier reduced the $80 surgery charge to a reasonable charge of $40. 
Only the $40 reasonable charge for covered services will count toward 
meeting Mr. B's deductible. Since the remainder of the surgery charge 
constitutes and excess over the reasonable charge, it cannot be applied 
to satisfy Mr. B's deductible.
    (3) Mr. C became entitled to Medicare Part B benefits on July 1, 
1982. He incurred expenses of $200 in July, August, and September. The 
carrier determined that the changes as submitted were reasonable. Even 
though Mr. C was entitled to benefits for only half the year, he must 
meet the full $75 deductible. Thus, $75 of this expense constitutes Mr. 
C's deductible. Medicare would pay $100, which is 80 percent of the 
remaining $125.

[51 FR 41339, Nov. 14, 1986, as amended at 56 FR 8842 and 8852, Mar. 1, 
1991; 57 FR 24981, June 12, 1992; 62 FR 59101, Oct. 31, 1997]

Sec. 410.161  Part B blood deductible.

    (a) General rules. (1) As used in this section, packed red cells 
means the red blood cells that remain after plasma is separated from 
whole blood.

[[Page 297]]

    (2) A unit of packed red cells is treated as the equivalent of a 
pint of whole blood, which in this section is referred to as a unit of 
whole blood.
    (3) Medicare does not pay for the first 3 units of whole blood or 
units of packed red cells that are furnished under Part A or Part B in a 
calendar year. The Part B blood deductible is reduced to the extent that 
a blood deductible has been applied under Part A.
    (4) The blood deductible does not apply to other blood components 
such as platelets, fibrinogen, plasma, gamma globulin and serum albumin, 
or to the costs of processing, storing, and administering blood.
    (5) The blood deductible is in addition to the Part B annual 
deductible specified in Sec. 410.160.
    (b) Beneficiary's responsibility for the first 3 units of blood. (1) 
The beneficiary is responsible for the first three units of whole blood 
or packed red cells received during a calendar year.
    (2) If the blood is furnished by a hospital or CAH, the rules set 
forth in Sec. 409.87 (b), (c), and (d) of this chapter apply.
    (3) If the blood is furnished by a physician, clinic, or other 
supplier that has accepted assignment of Medicare benefits, or claims 
payment under Sec. 424.64 of this chapter because the beneficiary died 
without assigning benefits, the supplier may charge the beneficiary the 
reasonable charge for the first 3 units, to the extent that those units 
are not replaced.

[51 FR 41339, Nov. 14, 1986, as amended at 53 FR 6648, Mar. 2, 1988; 56 
FR 8852, Mar. 1, 1991; 58 FR 30668, May 26, 1993]

Sec. 410.163  Payment for services furnished to kidney donors.

    Notwithstanding any other provisions of this chapter, there are no 
deductible or coinsurance requirements with respect to services 
furnished to an individual who donates a kidney for transplant surgery.

Sec. 410.165  Payment for rural health clinic services and ambulatory 
          surgical center services: Conditions.

    (a) Medicare Part B pays for covered rural health clinic and 
Federally qualified health center services if--
    (1) The services are furnished in accordance with the requirements 
of subpart X of part 405 of this chapter and subpart A of part 491 of 
this chapter; and
    (2) The clinic or center files a written request for payment on the 
form and in the manner prescribed by CMS.
    (b) Medicare Part B pays for covered ambulatory surgical center 
(ASC) services if--
    (1) The services are furnished in accordance with the requirements 
of part 416 of this chapter; and
    (2) The ASC files a written request for payment on the form and in 
the manner prescribed by CMS.

[51 FR 41339, Nov. 14, 1986, as amended at 57 FR 24981, June 12, 1992]

Sec. 410.170  Payment for home health services, for medical and other 
          health services furnished by a provider or an approved ESRD 
          facility, and for <STRONG>comprehensive</STRONG> <STRONG>outpatient</STRONG> rehabilitation 
          facility (CORF) services: Conditions.

    Payment under Medicare Part B, for home health services, for medical 
and other health services, or for CORF services, may be made to the 
provider or facility only if the following conditions are met:
    (a) Request for payment. A written request for payment is filed by 
or on behalf of the individual to whom the services were furnished.
    (b) Physician certification. (1) For home health services, a 
physician provides certification and recertification in accordance with 
Sec. 424.22 of this chapter.
    (2) For medical and other health services, a physician provides 
certification and recertification in accordance with Sec. 424.24 of this 
chapter.
    (3) For CORF services, a physician provides certification and 
recertification in accordance with Sec. 424.27 of this chapter.
    (c) In the case of home dialysis support services described in 
Sec. 410.52, the services are furnished in accordance with a written 
plan prepared and periodically reviewed by a team that includes the 
patient's physician and other professionals familiar with the

[[Page 298]]

patient's condition as required by Sec. 405.2137(b)(3) of this chapter.

[51 FR 41339, Nov. 14, 1986, as amended at 53 FR 6648, Mar. 2, 1988]

Sec. 410.172  Payment for partial hospitalization services in CMHCs: 
          Conditions.

    Medicare Part B pays for partial hospitalization services furnished 
in a CMHC on behalf of an individual only if the following conditions 
are met:
    (a) The CMHC files a written request for payment on the CMS form 
1450 and in the manner prescribed by CMS; and
    (b) The services are furnished in accordance with the requirements 
described in Sec. 410.110.

[59 FR 6578, Feb. 11, 1994]

Sec. 410.175  Alien absent from the United States.

    (a) Medicare does not pay Part B benefits for services furnished to 
an individual who is not a citizen or a national of the United States if 
those services are furnished in any month for which the individual is 
not paid monthly social security cash benefits (or would not be paid if 
he or she were entitled to those benefits) because he or she has been 
outside the United States continuously for 6 full calendar months.
    (b) Payment of benefits resumes with services furnished during the 
first full calendar month the alien is back in the United States.

[53 FR 6634, Mar. 2, 1988]



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