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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: 42CFR409]

[Page 215-241]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN <STRONG>SERVICES</STRONG>
 
PART 409--HOSPITAL INSURANCE BENEFITS

       Subpart A--Hospital Insurance Benefits: General Provisions

Sec.
409.1  Statutory basis.
409.2  Scope.
409.3  Definitions.
409.5  General description of benefits.

  Subpart B--Inpatient Hospital <STRONG>Services</STRONG> and Inpatient Critical Access 
                            Hospital <STRONG>Services</STRONG>

409.10  Included <STRONG>services</STRONG>.
409.11  Bed and board.
409.12  Nursing and related <STRONG>services</STRONG>; medical social <STRONG>services</STRONG>; use of 
          hospital or CAH facilities.
409.13  Drugs and biologicals.
409.14  Supplies, appliances, and equipment.
409.15  <STRONG>Services</STRONG> furnished by an intern or a resident-in-training.
409.16  Other diagnostic or therapeutic <STRONG>services</STRONG>.
409.18  <STRONG>Services</STRONG> related to kidney transplantations.

                    Subpart C--Posthospital SNF Care

409.20  Coverage of <STRONG>services</STRONG>.
409.21  Nursing care.
409.22  Bed and board.
409.23  Physical, occupational, and speech therapy.
409.24  Medical social <STRONG>services</STRONG>.
409.25  Drugs, biologicals, supplies, appliances, and equipment.
409.26  Transfer agreement hospital <STRONG>services</STRONG>.
409.27  Other <STRONG>services</STRONG> generally provided by (or under arrangements made 
          by) SNFs.

      Subpart D--Requirements for Coverage of Posthospital SNF Care

409.30  Basic requirements.
409.31  Level of care requirement.
409.32  Criteria for skilled <STRONG>services</STRONG> and the need for skilled <STRONG>services</STRONG>.
409.33  Examples of skilled nursing and rehabilitation <STRONG>services</STRONG>.
409.34  Criteria for ``daily basis''.
409.35  Criteria for ``practical matter''.
409.36  Effect of discharge from posthospital SNF care.

        Subpart E--Home Health <STRONG>Services</STRONG> Under Hospital Insurance

409.40  Basis, purpose, and scope.
409.41  Requirement for payment.
409.42  Beneficiary qualifications for coverage of <STRONG>services</STRONG>.
409.43  Plan of care requirements.
409.44  Skilled <STRONG>services</STRONG> requirements.
409.45  <STRONG>Dependent</STRONG> <STRONG>services</STRONG> requirements.
409.46  Allowable administrative costs.
409.47  Place of service requirements.
409.48  Visits.
409.49  Excluded <STRONG>services</STRONG>.
409.50  Coinsurance for durable medical equipment (DME) furnished as a 
          home health service.

             Subpart F--Scope of Hospital Insurance Benefits

409.60  Benefit periods.
409.61  General limitations on amounts of benefits.
409.62  Lifetime maximum on inpatient psychiatric care.
409.63  Reduction of inpatient psychiatric benefit days available in the 
          initial benefit period.
409.64  <STRONG>Services</STRONG> that are counted toward allowable amounts.
409.65  Lifetime reserve days.
409.66  Revocation of election not to use lifetime reserve days.
409.68  Guarantee of payment for inpatient hospital or inpatient CAH 
          <STRONG>services</STRONG> furnished before notification of exhaustion of 
          benefits.

        Subpart G--Hospital Insurance Deductibles and Coinsurance

409.80  Inpatient deductible and coinsurance: General provisions
409.82  Inpatient hospital deductible.
409.83  Inpatient hospital coinsurance.
409.85  Skilled nursing facility (SNF) care coinsurance.
409.87  Blood deductible.
409.89  Exemption of kidney donors from deductible and coinsurance 
          requirements.

           Subpart H--Payments of Hospital Insurance Benefits

409.100  To whom payment is made.
409.102  Amounts of payment.

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 
1302 and 1395hh).

[[Page 216]]


    Source: 48 FR 12541, Mar. 25, 1983, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 409 appear at 62 FR 
46037, Aug. 29, 1997.

       Subpart A--Hospital Insurance Benefits: General Provisions

Sec. 409.1  Statutory basis.

    This part is based on the identified provisions of the following 
sections of the Social Security Act:
    (a) Sections 1812 and 1813 establish the scope of benefits of the 
hospital insurance program under Medicare Part A and set forth 
deductible and coinsurance requirements.
    (b) Sections 1814 and 1815 establish conditions for, and limitations 
on, payment for <STRONG>services</STRONG> furnished by providers.
    (c) Section 1820 establishes the critical access hospital program.
    (d) Section 1861 describes the <STRONG>services</STRONG> covered under Medicare Part 
A, and benefit periods.
    (e) Section 1862(a) specifies exclusions from coverage.
    (f) Section 1881 sets forth the rules for individuals who have end-
stage renal disease (ESRD), for organ donors, and for dialysis, 
transplantation, and other <STRONG>services</STRONG> furnished to ESRD patients.

[60 FR 50441, Sept. 29, 1995, as amended at 65 FR 62646, Oct. 19, 2000]

Sec. 409.2  Scope.

    Subparts A through G of this part describe the benefits available 
under Medicare Part A and set forth the limitations on those benefits, 
including certain amounts of payment for which beneficiaries are 
responsible.

[48 FR 12541, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985]

Sec. 409.3  Definitions.

    As used in this part, unless the context indicates otherwise--
    Arrangements means arrangements which provide that Medicare payment 
made to the provider that arranged for the <STRONG>services</STRONG> discharges the 
liability of the beneficiary or any other person to pay for those 
<STRONG>services</STRONG>.
    Covered refers to <STRONG>services</STRONG> for which the law and the regulations 
authorize Medicare payment.
    Nominal charge provider means a provider that furnishes <STRONG>services</STRONG> 
free of charge or at a nominal charge and is either a public provider, 
or another provider that (1) demonstrates to CMS's satisfaction that a 
significant portion of its patients are low-income, and (2) requests 
that payment for its <STRONG>services</STRONG> be determined accordingly.
    Participating refers to a hospital or other facility that meets the 
conditions of participation and has in effect a Medicare provider 
agreement.
    Qualified hospital means a facility that--
    (a) Is primarily engaged in providing, by or under the supervision 
of doctors of medicine or osteopathy, inpatient <STRONG>services</STRONG> for the 
diagnosis, treatment, and care or rehabilitation of persons who are 
sick, injured, or disabled;
    (b) Is not primarily engaged in providing skilled nursing care and 
related <STRONG>services</STRONG> for inpatients who require medical or nursing care;
    (c) Provides 24-hour nursing service in accordance with Sec. 
1861(e)(5) of the Act;
    (d) If it is a U.S. hospital, is licensed, or approved as meeting 
the standards for licensing, by the State or local licensing agency; and
    (e) If it is a foreign hospital, is licensed, or approved as meeting 
the standard for licensing, by the appropriate Canadian or Mexican 
licensing agency, and for purposes of furnishing non-emergency <STRONG>services</STRONG> 
to U.S. residents, is accredited by the Joint Commission on 
Accreditation of Hospitals (JCAH), or by a Canadian or Mexican program 
under standards that CMS finds to be equivalent to those of the JCAH.

[48 FR 12541, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 
51 FR 41338, Nov. 14, 1986]

Sec. 409.5  General description of benefits.

    Hospital insurance (Part A of Medicare) helps pay for inpatient 
hospital or inpatient CAH <STRONG>services</STRONG> and posthospital SNF care. It also 
pays for home health <STRONG>services</STRONG> and hospice care. There are limitations on 
the number of days of care that Medicare can pay for

[[Page 217]]

and there are deductible and coinsurance amounts for which the 
beneficiary is responsible. For each type of service, certain conditions 
must be met as specified in the pertinent sections of this subpart and 
in part 418 of this chapter regarding hospice care. The special 
conditions for inpatient hospital <STRONG>services</STRONG> furnished by a qualified 
U.S., Canadian, or Mexican hospital are set forth in subparts G and H of 
part 424 of this chapter.

[48 FR 56026, Dec. 16, 1983, as amended at 53 FR 6648, Mar. 2, 1988; 53 
FR 12945, Apr. 20, 1988; 58 FR 30666, May 26, 1993]

  Subpart B--Inpatient Hospital <STRONG>Services</STRONG> and Inpatient Critical Access 
                            Hospital <STRONG>Services</STRONG>

Sec. 409.10  Included <STRONG>services</STRONG>.

    (a) Subject to the conditions, limitations, and exceptions set forth 
in this subpart, the term ``inpatient hospital or inpatient CAH 
<STRONG>services</STRONG>'' means the following <STRONG>services</STRONG> furnished to an inpatient of a 
participating hospital or of a participating CAH or, in the case of 
emergency <STRONG>services</STRONG> or <STRONG>services</STRONG> in foreign hospitals, to an inpatient of 
a qualified hospital:
    (1) Bed and board.
    (2) Nursing <STRONG>services</STRONG> and other related <STRONG>services</STRONG>.
    (3) Use of hospital or CAH facilities.
    (4) Medical social <STRONG>services</STRONG>.
    (5) Drugs, biologicals, supplies, appliances, and equipment.
    (6) Certain other diagnostic or therapeutic <STRONG>services</STRONG>.
    (7) Medical or surgical <STRONG>services</STRONG> provided by certain interns or 
residents-in-training.
    (8) Transportation <STRONG>services</STRONG>, including transport by ambulance.
    (b) Inpatient hospital <STRONG>services</STRONG> does not include the following types 
of <STRONG>services</STRONG>:
    (1) Posthospital SNF care, as described in Sec. 409.20, furnished by 
a hospital or a critical access hospital that has a swing-bed approval.
    (2) Nursing facility <STRONG>services</STRONG>, described in Sec. 440.155 of this 
chapter, that may be furnished as a Medicaid service under title XIX of 
the Act in a swing-bed hospital that has an approval to furnish nursing 
facility <STRONG>services</STRONG>.
    (3) Physician <STRONG>services</STRONG> that meet the requirements of Sec. 415.102(a) 
of this chapter for payment on a fee schedule basis.
    (4) Physician assistant <STRONG>services</STRONG>, as defined in section 
1861(s)(2)(K)(i) of the Act.
    (5) Nurse practitioner and clinical nurse specialist <STRONG>services</STRONG>, as 
defined in section 1861(s)(2)(K)(ii) of the Act.
    (6) Certified nurse mid-wife <STRONG>services</STRONG>, as defined in section 
1861(gg) of the Act.
    (7) Qualified psychologist <STRONG>services</STRONG>, as defined in section 1861(ii) 
of the Act.
    (8) <STRONG>Services</STRONG> of an anesthetist, as defined in Sec. 410.69

[48 FR 12541, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 
58 FR 30666, May 26, 1993; 64 FR 3648, Jan. 25, 1999; 65 FR 18535, Apr. 
7, 2000]

Sec. 409.11  Bed and board.

    (a) Semiprivate and ward accommodations. Except for applicable 
deductible and coinsurance amounts, Medicare Part A pays in full for bed 
and board and semiprivate (2 to 4 beds), or ward (5 or more beds) 
accommodations.
    (b) Private accommodations--(1) Conditions for payment in full. 
Except for applicable deductible and coinsurance amounts, Medicare Part 
A pays in full for a private room if--
    (i) The patient's condition requires him or her to be isolated;
    (ii) The hospital or CAH has no semiprivate or ward accommodations; 
or
    (iii) The hospital's or CAH's semiprivate and ward accommodations 
are fully occupied by other patients, were so occupied at the time the 
patient was admitted to the hospital or CAH, respectively, for treatment 
of a condition that required immediate inpatient hospital or inpatient 
CAH care, and have been so occupied during the interval.
    (2) Period of payment. In the situations specified in paragraph 
(b)(1) (i) and (iii) of this section, Medicare pays for a private room 
until the patient's condition no longer requires isolation or until 
semiprivate or ward accommodations are available.
    (3) Conditions for patient's liability. The hospital or CAH may 
charge the patient the difference between its customary charge for the 
private room and its most prevalent charge for a semiprivate room if--

[[Page 218]]

    (i) None of the conditions of paragraph (b)(1) of this section is 
met; and
    (ii) The private room was requested by the patient or a member of 
the family, who, at the time of the request, was informed what the 
hospital's or CAH's charge would be.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30666, May 26, 1993]

Sec. 409.12  Nursing and related <STRONG>services</STRONG>, medical social <STRONG>services</STRONG>; use 
          of hospital or CAH facilities.

    (a) Except as provided in paragraph (b) of this section, Medicare 
pays for nursing and related <STRONG>services</STRONG>, use of hospital or CAH 
facilities, and medical social <STRONG>services</STRONG> as inpatient hospital or 
inpatient CAH <STRONG>services</STRONG> only if those <STRONG>services</STRONG> are ordinarily furnished 
by the hospital or CAH, respectively, for the care and treatment of 
inpatients.
    (b) Exception. Medicare does not pay for the <STRONG>services</STRONG> of a private 
duty nurse or attendant. An individual is not considered to be a private 
duty nurse or attendant if he or she is a hospital or CAH employee at 
the time the <STRONG>services</STRONG> are furnished.

[48 FR 12541, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 
58 FR 30666, 30667, May 26, 1993]

Sec. 409.13  Drugs and biologicals.

    (a) Except as specified in paragraph (b) of this section, Medicare 
pays for drugs and biologicals as inpatient hospital or inpatient CAH 
<STRONG>services</STRONG> only if--
    (1) They represent a cost to the hospital or CAH;
    (2) They are ordinarily furnished by the hospital or CAH for the 
care and treatment of inpatients; and
    (3) They are furnished to an inpatient for use in the hospital or 
CAH.
    (b) Exception. Medicare pays for a limited supply of drugs for use 
outside the hospital or CAH if it is medically necessary to facilitate 
the beneficiary's departure from the hospital and required until he or 
she can obtain a continuing supply.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30666, May 26, 1993]

Sec. 409.14  Supplies, appliances, and equipment.

    (a) Except as specified in paragraph (b) of this section, Medicare 
pays for supplies, appliances, and equipment as inpatient hospital or 
inpatient CAH <STRONG>services</STRONG> only if--
    (1) They are ordinarily furnished by the hospital or CAH to 
inpatients; and
    (2) They are furnished to inpatients for use in the hospital or CAH.
    (b) Exceptions. Medicare pays for items to be used beyond the 
hospital or CAH stay if--
    (1) The item is one that the beneficiary must continue to use after 
he or she leaves the hospital or CAH, for example, heart valves or a 
heart pacemaker, or
    (2) The item is medically necessary to permit or facilitate the 
beneficiary's departure from the hospital or CAH and is required until 
the beneficiary can obtain a continuing supply. Tracheostomy or draining 
tubes are examples.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30666, May 26, 1993]

Sec. 409.15  <STRONG>Services</STRONG> furnished by an intern or a resident-in-training.

    Medical or surgical <STRONG>services</STRONG> provided by an intern or a resident-in-
training are included as ``inpatient hospital or inpatient CAH 
<STRONG>services</STRONG>'' if they are provided--
    (a) By an intern or a resident-in-training under a teaching program 
approved by the Council on Medical Education of the American Medical 
Association, or the Bureau of Professional Education of the American 
Osteopathic Association;
    (b) By an intern or a resident-in-training in the field of dentistry 
under a teaching program approved by the Council on Dental Education of 
the American Dental Association; or
    (c) By an intern or a resident-in-training in the field of podiatry 
under a teaching program approved by the Council on Podiatry Education 
of the American Podiatry Association.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30666, May 26, 1993]

[[Page 219]]

Sec. 409.16  Other diagnostic or therapeutic <STRONG>services</STRONG>.

    Diagnostic or therapeutic <STRONG>services</STRONG> other than those provided for in 
Secs. 409.12, 409.13, and 409.14 are considered as inpatient hospital or 
inpatient CAH <STRONG>services</STRONG> if--
    (a) They are furnished by the hospital or CAH, or by others under 
arrangements made by the hospital or CAH;
    (b) Billing for those <STRONG>services</STRONG> is through the hospital or CAH; and
    (c) The <STRONG>services</STRONG> are of a kind ordinarily furnished to inpatients 
either by the hospital or CAH or under arrangements made by the hospital 
or CAH.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30666, May 26, 1993]

Sec. 409.18  <STRONG>Services</STRONG> related to kidney transplantations.

    (a) Kidney transplants. Medicare pays for kidney transplantation 
surgery only if performed in a renal transplantation center approved 
under subpart U of part 405 of this chapter.
    (b) <STRONG>Services</STRONG> in connection with kidney donations. Medicare pays for 
<STRONG>services</STRONG> related to the evaluation or preparation of a potential or 
actual donor, to the donation of the kidney, or to postoperative 
recovery <STRONG>services</STRONG> directly related to the kidney donation--
    (1) If the kidney is intended for an individual who has ESRD and is 
entitled to Medicare benefits or can be expected to become so entitled 
within a reasonable time; and
    (2) Regardless of whether the donor is entitled to Medicare.

                    Subpart C--Posthospital SNF Care

Sec. 409.20  Coverage of <STRONG>services</STRONG>.

    (a) Included <STRONG>services</STRONG>. Subject to the conditions and limitations set 
forth in this subpart and subpart D of this part, ``posthospital SNF 
care'' means the following <STRONG>services</STRONG> furnished to an inpatient of a 
participating SNF, or of a participating hospital or critical access 
hospital (CAH) that has a swing-bed approval:
    (1) Nursing care provided by or under the supervision of a 
registered professional nurse.
    (2) Bed and board in connection with the furnishing of that nursing 
care.
    (3) Physical, occupational, or speech therapy.
    (4) Medical social <STRONG>services</STRONG>.
    (5) Drugs, biologicals, supplies, appliances, and equipment.
    (6) <STRONG>Services</STRONG> furnished by a hospital with which the SNF has a 
transfer agreement in effect under Sec. 483.75(n) of this chapter.
    (7) Other <STRONG>services</STRONG> that are generally provided by (or under 
arrangements made by) SNFs.
    (b) Excluded <STRONG>services</STRONG>--(1) <STRONG>Services</STRONG> that are not considered 
inpatient hospital <STRONG>services</STRONG>. No service is included as posthospital SNF 
care if it would not be included as an inpatient hospital service under 
Secs. 409.11 through 409.18.
    (2) <STRONG>Services</STRONG> not generally provided by (or under arrangements made 
by) SNFs. Except as specifically listed in Secs. 409.21 through 409.27, 
only those <STRONG>services</STRONG> generally provided by (or under arrangements made 
by) SNFs are considered as posthospital SNF care. For example, a type of 
medical or surgical procedure that is ordinarily performed only on an 
inpatient basis in a hospital is not included as ``posthospital SNF 
care,'' because such procedures are not generally provided by (or under 
arrangements made by) SNFs.
    (c) Terminology. In Secs. 409.22 through 409.36--
    (1) The terms SNF and swing-bed hospital are used when the context 
applies to the particular facility.
    (2) The term facility is used to mean both SNFs and swing-bed 
hospitals.
    (3) The term ``swing-bed hospital'' includes a CAH with swing-bed 
approval under subpart F of part 485 of this chapter.

[48 FR 12541, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 
58 FR 30667, May 26, 1993; 63 FR 26306, May 12, 1998; 64 FR 3648, Jan. 
25, 1999; 64 FR 41681, July 30, 1999]

Sec. 409.21  Nursing care.

    (a) Basic rule. Medicare pays for nursing care as posthospital SNF 
care when provided by or under the supervision of a registered 
professional nurse.
    (b) Exception. Medicare does not pay for the <STRONG>services</STRONG> of a private 
duty nurse or attendant. An individual is not considered to be a private 
duty nurse or

[[Page 220]]

attendant if he or she is an SNF employee at the time the <STRONG>services</STRONG> are 
furnished.

[63 FR 26306, May 12, 1998]

Sec. 409.22  Bed and board.

    (a) Semiprivate and ward accommodations. Except for applicable 
deductible and coinsurance amounts Medicare Part A pays in full for 
semiprivate (2 to 4 beds), or ward (5 or more beds) accommodations.
    (b) Private accommodations--(1) Conditions for payment in full. 
Except for applicable coinsurance amounts, Medicare pays in full for a 
private room if--
    (i) The patient's condition requires him to be isolated;
    (ii) The SNF has no semiprivate or ward accommodations; or
    (iii) The SNF semiprivate and ward accommodations are fully occupied 
by other patients, were so occupied at the time the patient was admitted 
to the SNF for treatment of a condition that required immediate 
inpatient SNF care, and have been so occupied during the interval.
    (2) Period of payment. In the situations specified in paragraph 
(b)(1) (i) and (iii) of this section. Medicare pays for a private room 
until the patient's condition no longer requires isolation or until 
semiprivate or ward accommodations are available.
    (3) Conditions for patient's liability. The facility may charge the 
patient the difference between its customary charge for the private room 
furnished and its most prevalent charge for a semiprivate room if:
    (i) None of the conditions of paragraph (b)(1) of this section is 
met, and
    (ii) The private room was requested by the patient or a member of 
the family who, at the time of request was informed what the charge 
would be.

Sec. 409.23  Physical, occupational, and speech therapy.

    Medicare pays for physical, occupational, or speech therapy as 
posthospital SNF care if--
    (a) It is furnished by the facility or under arrangements made by 
the facility, and
    (b) Billing for the therapy is by or through the facility.

Sec. 409.24  Medical social <STRONG>services</STRONG>.

    Medicare pays for medical social <STRONG>services</STRONG> as posthospital SNF care, 
including--
    (a) Assessment of the social and emotional factors related to the 
beneficiary's illness, need for care, response to treatment, and 
adjustment to care in the facility;
    (b) Case work <STRONG>services</STRONG> to assist in resolving social or emotional 
problems that may have an adverse effect on the beneficiary's ability to 
respond to treatment; and
    (c) Assessment of the relationship of the beneficiary's medical and 
nursing requirements to his or her home situation, financial resources, 
and the community resources available upon discharge from facility care.

[63 FR 26306, May 12, 1998]

Sec. 409.25  Drugs, biologicals, supplies, appliances, and equipment.

    (a) Drugs and biologicals. Except as specified in paragraph (b) of 
this section, Medicare pays for drugs and biologicals as posthospital 
SNF care only if--
    (1) They represent a cost to the facility;
    (2) They are ordinarily furnished by the facility for the care and 
treatment of inpatients; and
    (3) They are furnished to an inpatient for use in the facility.
    (b) Exception. Medicare pays for a limited supply of drugs for use 
outside the facility if it is medically necessary to facilitate the 
beneficiary's departure from the facility and required until he or she 
can obtain a continuing supply.
    (c) Supplies, appliances, and equipment. Except as specified in 
paragraph (d) of this section, Medicare pays for supplies, appliances, 
and equipment as posthospital SNF care only if they are--
    (1) Ordinarily furnished by the facility to inpatients; and
    (2) Furnished to inpatients for use in the facility.
    (d) Exception. Medicare pays for items to be used after the 
individual leaves the facility if--

[[Page 221]]

    (1) The item is one that the beneficiary must continue to use after 
leaving, such as a leg brace; or
    (2) The item is necessary to permit or facilitate the beneficiary's 
departure from the facility and is required until he or she can obtain a 
continuing supply, for example, sterile dressings.

[63 FR 26307, May 12, 1998]

Sec. 409.26  Transfer agreement hospital <STRONG>services</STRONG>.

    (a) <STRONG>Services</STRONG> furnished by an intern or a resident-in-training. 
Medicare pays for medical <STRONG>services</STRONG> that are furnished by an intern or a 
resident-in-training (under a hospital teaching program approved in 
accordance with the provisions of Sec. 409.15) as posthospital SNF care, 
if the intern or resident is in--
    (1) A participating hospital with which the SNF has in effect an 
agreement under Sec. 483.75(n) of this chapter for the transfer of 
patients and exchange of medical records; or
    (2) A hospital that has a swing-bed approval, and is furnishing 
<STRONG>services</STRONG> to an SNF-level inpatient of that hospital.
    (b) Other diagnostic or therapeutic <STRONG>services</STRONG>. Medicare pays for 
other diagnostic or therapeutic <STRONG>services</STRONG> as posthospital SNF care if 
they are provided--
    (1) By a participating hospital with which the SNF has in effect a 
transfer agreement as described in paragraph (a)(1) of this section; or
    (2) By a hospital or a CAH that has a swing-bed approval, to its own 
SNF-level inpatient.

[63 FR 26307, May 12, 1998]

Sec. 409.27  Other <STRONG>services</STRONG> generally provided by (or under arrangements 
          made by) SNFs.

    In addition to those <STRONG>services</STRONG> specified in Secs. 409.21 through 
409.26, Medicare pays as posthospital SNF care for such other diagnostic 
and therapeutic <STRONG>services</STRONG> as are generally provided by (or under 
arrangements made by) SNFs, including--
    (a) Medical and other health <STRONG>services</STRONG> as described in subpart B of 
part 410 of this chapter, subject to any applicable limitations or 
exclusions contained in that subpart or in Sec. 409.20(b);
    (b) Respiratory therapy <STRONG>services</STRONG> prescribed by a physician for the 
assessment, diagnostic evaluation, treatment, management, and monitoring 
of patients with deficiencies and abnormalities of cardiopulmonary 
function; and
    (c) Transportation by ambulance that meets the general medical 
necessity requirements set forth in Sec. 410.40(d)(1) of this chapter.

[63 FR 26307, May 12, 1998, as amended at 64 FR 41681, July 30, 1999]

      Subpart D--Requirements for Coverage of Posthospital SNF Care

Sec. 409.30  Basic requirements.

    Posthospital SNF care, including SNF-type care furnished in a 
hospital or CAH that has a swing-bed approval, is covered only if the 
beneficiary meets the requirements of this section and only for days 
when he or she needs and receives care of the level described in 
Sec. 409.31. A beneficiary in an SNF is also considered to meet the 
level of care requirements of Sec. 409.31 up to and including the 
assessment reference date for the 5-day assessment prescribed in 
Sec. 413.343(b) of this chapter, when assigned to one of the Resource 
Utilization Groups that is designated (in the annual publication of 
Federal prospective payment rates described in Sec. 413.345 of this 
chapter) as representing the required level of care. For the purposes of 
this section, the assessment reference date is defined in accordance 
with Sec. 483.315(d) of this chapter, and must occur no later than the 
eighth day of posthospital SNF care.
    (a) Pre-admission requirements. The beneficiary must--
    (1) Have been hospitalized in a participating or qualified hospital 
or participating CAH, for medically necessary inpatient hospital or 
inpatient CAH care, for at least 3 consecutive calendar days, not 
counting the date of discharge; and
    (2) Have been discharged from the hospital or CAH in or after the 
month he or she attained age 65, or in a month for which he or she was 
entitled to hospital or CAH insurance benefits on the basis of 
disability or end-stage renal disease, in accordance with part 406 of 
this chapter.

[[Page 222]]

    (b) Date of admission requirements.&lt;SUP&gt;1&lt;/SUP&gt; (1) Except as 
specified in paragraph (b)(2) of this section, the beneficiary must be 
in need of posthospital SNF care, be admitted to the facility, and 
receive the needed care within 30 calendar days after the date of 
discharge from a hospital or CAH.
---------------------------------------------------------------------------

    &lt;SUP&gt;1&lt;/SUP&gt; Before December 5, 1980, the law required that 
admission and receipt of care be within 14 days after discharge from the 
hospital or CAH and permitted admission up to 28 days after discharge if 
a SNF bed was not available in the geographic area in which the patient 
lived, or at the time it would be medically appropriate to begin an 
active course of treatment, if SNF care would not be medically 
appropriate within 14 days after discharge.
---------------------------------------------------------------------------

    (2) Exception. A beneficiary for whom posthospital SNF care would 
not be medically appropriate within 30 days after discharge from the 
hospital or CAH may be admitted at the time it would be medically 
appropriate to begin an active course of treatment.

[48 FR 12541, Mar. 25, 1983, as amended at 51 FR 41338, Nov. 14, 1986; 
58 FR 30666, 30667, May 26, 1993; 62 FR 46025, Aug. 29, 1997; 63 FR 
26307, May 12, 1998; 64 FR 41681, July 30, 1999]

Sec. 409.31  Level of care requirement.

    (a) Definition. As used in this section, skilled nursing and skilled 
rehabilitation <STRONG>services</STRONG> means <STRONG>services</STRONG> that:
    (1) Are ordered by a physician;
    (2) Require the skills of technical or professional personnel such 
as registered nurses, licensed practical (vocational) nurses, physical 
therapists, occupational therapists, and speech pathologists or 
audiologists; and
    (3) Are furnished directly by, or under the supervision of, such 
personnel.
    (b) Specific conditions for meeting level of care requirements. (1) 
The beneficiary must require skilled nursing or skilled rehabilitation 
<STRONG>services</STRONG>, or both, on a daily basis.
    (2) Those <STRONG>services</STRONG> must be furnished for a condition--
    (i) For which the beneficiary received inpatient hospital or 
inpatient CAH <STRONG>services</STRONG>; or
    (ii) Which arose while the beneficiary was receiving care in a SNF 
or swing-bed hospital for a condition for which he or she received 
inpatient hospital or inpatient CAH <STRONG>services</STRONG>.
    (3) The daily skilled <STRONG>services</STRONG> must be ones that, as a practical 
matter, can only be provided in a SNF, on an inpatient basis.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30666, May 26, 1993]

Sec. 409.32  Criteria for skilled <STRONG>services</STRONG> and the need for skilled 
          <STRONG>services</STRONG>.

    (a) To be considered a skilled service, the service must be so 
inherently complex that it can be safely and effectively performed only 
by, or under the supervision of, professional or technical personnel.
    (b) A condition that does not ordinarily require skilled <STRONG>services</STRONG> 
may require them because of special medical complications. Under those 
circumstances, a service that is usually nonskilled (such as those 
listed in Sec. 409.33(d)) may be considered skilled because it must be 
performed or supervised by skilled nursing or rehabilitation personnel. 
For example, a plaster cast on a leg does not usually require skilled 
care. However, if the patient has a preexisting acute skin condition or 
needs traction, skilled personnel may be needed to adjust traction or 
watch for complications. In situations of this type, the complications, 
and the skilled <STRONG>services</STRONG> they require, must be documented by physicians' 
orders and nursing or therapy notes.
    (c) The restoration potential of a patient is not the deciding 
factor in determining whether skilled <STRONG>services</STRONG> are needed. Even if full 
recovery or medical improvement is not possible, a patient may need 
skilled <STRONG>services</STRONG> to prevent further deterioration or preserve current 
capabilities. For example, a terminal cancer patient may need some of 
the skilled <STRONG>services</STRONG> described in Sec. 409.33.

[48 FR 12541, Mar. 25, 1983, as amended at 59 FR 65493, Dec. 20, 1994]

Sec. 409.33  Examples of skilled nursing and rehabilitation <STRONG>services</STRONG>.

    (a) <STRONG>Services</STRONG> that could qualify as either skilled nursing or skilled 
rehabilitation <STRONG>services</STRONG>--(1) Overall management and evaluation of care 
plan. (i) When overall management and evaluation of care

[[Page 223]]

plan constitute skilled <STRONG>services</STRONG>. The development, management, and 
evaluation of a patient care plan based on the physician's orders 
constitute skilled <STRONG>services</STRONG> when, because of the patient's physical or 
mental condition, those activities require the involvement of technical 
or professional personnel in order to meet the patient's needs, promote 
recovery, and ensure medical safety. Those activities include the 
management of a plan involving a variety of personal care <STRONG>services</STRONG> only 
when, in light of the patient's condition, the aggregate of those 
<STRONG>services</STRONG> requires the involvement of technical or professional 
personnel.
    (ii) Example. An aged patient with a history of diabetes mellitus 
and angina pectoris who is recovering from an open reduction of a 
fracture of the neck of the femur requires, among other <STRONG>services</STRONG>, 
careful skin care, appropriate oral medications, a diabetic diet, an 
exercise program to preserve muscle tone and body condition, and 
observation to detect signs of deterioration in his or her condition or 
complications resulting from restricted, but increasing, mobility. 
Although any of the required <STRONG>services</STRONG> could be performed by a properly 
instructed person, such a person would not have the ability to 
understand the relationship between the <STRONG>services</STRONG> and evaluate the 
ultimate effect of one service on the other. Since the nature of the 
patient's condition, age, and immobility create a high potential for 
serious complications, such an understanding is essential to ensure the 
patient's recovery and safety. Under these circumstances, the management 
of the plan of care would require the skills of a nurse even though the 
individual <STRONG>services</STRONG> are not skilled. Skilled planning and management 
activities are not always specifically identified in the patient's 
clinical record. Therefore, if the patient's overall condition supports 
a finding that recovery and safety can be ensured only if the total care 
is planned, managed, and evaluated by technical or professional 
personnel, it is appropriate to infer that skilled <STRONG>services</STRONG> are being 
provided.
    (2) Observation and assessment of the patient's changing condition--
(i) When observation and assessment constitute skilled <STRONG>services</STRONG>. 
Observation and assessment constitute skilled <STRONG>services</STRONG> when the skills 
of a technical or professional person are required to identify and 
evaluate the patient's need for modification of treatment or for 
additional medical procedures until his or her condition is stabilized.
    (ii) Examples. A patient with congestive heart failure may require 
continuous close observation to detect signs of decompensation, abnormal 
fluid balance, or adverse effects resulting from prescribed 
medication(s) that serve as indicators for adjusting therapeutic 
measures. Similarly, surgical patients transferred from a hospital to an 
SNF while in the complicated, unstabilized postoperative period, for 
example, after hip prosthesis or cataract surgery, may need continued 
close skilled monitoring for postoperative complications and adverse 
reaction. Patients who, in addition to their physical problems, exhibit 
acute psychological symptoms such as depression, anxiety, or agitation, 
may also require skilled observation and assessment by technical or 
professional personnel to ensure their safety or the safety of others, 
that is, to observe for indications of suicidal or hostile behavior. The 
need for <STRONG>services</STRONG> of this type must be documented by physicians' orders 
or nursing or therapy notes.
    (3) Patient education <STRONG>services</STRONG>--(i) When patient education <STRONG>services</STRONG> 
constitute skilled <STRONG>services</STRONG>. Patient education <STRONG>services</STRONG> are skilled 
<STRONG>services</STRONG> if the use of technical or professional personnel is necessary 
to teach a patient self-maintenance.
    (ii) Examples. A patient who has had a recent leg amputation needs 
skilled rehabilitation <STRONG>services</STRONG> provided by technical or professional 
personnel to provide gait training and to teach prosthesis care. 
Similarly, a patient newly diagnosed with diabetes requires instruction 
from technical or professional personnel to learn the self-
administration of insulin or foot-care precautions.
    (b) <STRONG>Services</STRONG> that qualify as skilled nursing <STRONG>services</STRONG>. (1) 
Intravenous or intramuscular injections and intravenous feeding.

[[Page 224]]

    (2) Enteral feeding that comprises at least 26 per cent of daily 
calorie requirements and provides at least 501 milliliters of fluid per 
day.
    (3) Nasopharyngeal and tracheostomy aspiration;
    (4) Insertion and sterile irrigation and replacement of suprapubic 
catheters;
    (5) Application of dressings involving prescription medications and 
aseptic techniques;
    (6) Treatment of extensive decubitus ulcers or other widespread skin 
disorder;
    (7) Heat treatments which have been specifically ordered by a 
physician as part of active treatment and which require observation by 
nurses to adequately evaluate the patient's progress;
    (8) Initial phases of a regimen involving administration of medical 
gases;
    (9) Rehabilitation nursing procedures, including the related 
teaching and adaptive aspects of nursing, that are part of active 
treatment, e.g., the institution and supervision of bowel and bladder 
training programs.
    (c) <STRONG>Services</STRONG> which would qualify as skilled rehabilitation <STRONG>services</STRONG>. 
(1) Ongoing assessment of rehabilitation needs and potential: <STRONG>Services</STRONG> 
concurrent with the management of a patient care plan, including tests 
and measurements of range of motion, strength, balance, coordination, 
endurance, functional ability, activities of daily living, perceptual 
deficits, speech and language or hearing disorders;
    (2) Therapeutic exercises or activities: Therapeutic exercises or 
activities which, because of the type of exercises employed or the 
condition of the patient, must be performed by or under the supervision 
of a qualified physical therapist or occupational therapist to ensure 
the safety of the patient and the effectiveness of the treatment;
    (3) Gait evaluation and training: Gait evaluation and training 
furnished to restore function in a patient whose ability to walk has 
been impaired by neurological, muscular, or skeletal abnormality;
    (4) Range of motion exercises: Range of motion exercises which are 
part of the active treatment of a specific disease state which has 
resulted in a loss of, or restriction of, mobility (as evidenced by a 
therapist's notes showing the degree of motion lost and the degree to be 
restored);
    (5) Maintenance therapy; Maintenance therapy, when the specialized 
knowledge and judgment of a qualified therapist is required to design 
and establish a maintenance program based on an initial evaluation and 
periodic reassessment of the patient's needs, and consistent with the 
patient's capacity and tolerance. For example, a patient with 
Parkinson's disease who has not been under a rehabilitation regimen may 
require the <STRONG>services</STRONG> of a qualified therapist to determine what type of 
exercises will contribute the most to the maintenance of his present 
level of functioning.
    (6) Ultrasound, short-wave, and microwave therapy treatment by a 
qualified physical therapist;
    (7) Hot pack, hydrocollator, infrared treatments, paraffin baths, 
and whirlpool; Hot pack hydrocollator, infrared treatments, paraffin 
baths, and whirlpool in particular cases where the patient's condition 
is complicated by circulatory deficiency, areas of desensitization, open 
wounds, fractures, or other complications, and the skills, knowledge, 
and judgment of a qualified physical therapist are required; and
    (8) <STRONG>Services</STRONG> of a speech pathologist or audiologist when necessary 
for the restoration of function in speech or hearing.
    (d) Personal care <STRONG>services</STRONG>. Personal care <STRONG>services</STRONG> which do not 
require the skills of qualified technical or professional personnel are 
not skilled <STRONG>services</STRONG> except under the circumstances specified in 
Sec. 409.32(b). Personal care <STRONG>services</STRONG> include, but are not limited to, 
the following:
    (1) Administration of routine oral medications, eye drops, and 
ointments;
    (2) General maintenance care of colostomy and ileostomy;
    (3) Routine <STRONG>services</STRONG> to maintain satisfactory functioning of 
indwelling bladder catheters;
    (4) Changes of dressings for noninfected postoperative or chronic 
conditions;
    (5) Prophylactic and palliative skin care, including bathing and 
application

[[Page 225]]

of creams, or treatment of minor skin problems;
    (6) Routine care of the incontinent patient, including use of 
diapers and protective sheets;
    (7) General maintenance care in connection with a plaster cast;
    (8) Routine care in connection with braces and similar devices;
    (9) Use of heat as a palliative and comfort measure, such as 
whirlpool and hydrocollator;
    (10) Routine administration of medical gases after a regimen of 
therapy has been established;
    (11) Assistance in dressing, eating, and going to the toilet;
    (12) Periodic turning and positioning in bed; and
    (13) General supervision of exercises which have been taught to the 
patient; including the actual carrying out of maintenance programs, 
i.e., the performance of the repetitive exercises required to maintain 
function do not require the skills of a therapist and would not 
constitute skilled rehabilitation <STRONG>services</STRONG> (see paragraph (c) of this 
section). Similarly, repetitious exercises to improve gait, maintain 
strength, or endurance; passive exercises to maintain range of motion in 
paralyzed extremities, which are not related to a specific loss of 
function; and assistive walking do not constitute skilled rehabilitation 
<STRONG>services</STRONG>.

[48 FR 12541, Mar. 25, 1983, as amended at 63 FR 26307, May 12, 1998; 64 
FR 41681, July 30, 1999]

Sec. 409.34  Criteria for ``daily basis''.

    (a) To meet the daily basis requirement specified in 
Sec. 409.31(b)(1), the following frequency is required:
    (1) Skilled nursing <STRONG>services</STRONG> or skilled rehabilitation <STRONG>services</STRONG> must 
be needed and provided 7 days a week; or
    (2) As an exception, if skilled rehabilitation <STRONG>services</STRONG> are not 
available 7 days a week those <STRONG>services</STRONG> must be needed and provided at 
least 5 days a week.
    (b) A break of one or two days in the furnishing of rehabilitation 
<STRONG>services</STRONG> will not preclude coverage if discharge would not be practical 
for the one or two days during which, for instance, the physician has 
suspended the therapy sessions because the patient exhibited extreme 
fatigue.

Sec. 409.35  Criteria for ``practical matter''.

    (a) General considerations. In making a ``practical matter'' 
determination, as required by Sec. 409.31(b)(3), consideration must be 
given to the patient's condition and to the availability and feasibility 
of using more economical alternative facilities and <STRONG>services</STRONG>. However, 
in making that determination, the availability of Medicare payment for 
those <STRONG>services</STRONG> may not be a factor. Example: The beneficiary can obtain 
daily physical therapy from a physical therapist in independent 
practice. However, Medicare pays only the appropriate portion (after 
deduction of applicable deductible and coinsurance amounts) of the first 
$500 of <STRONG>services</STRONG> furnished by such a practitioner in a year. This 
limitation on payment may not be a basis for finding that the needed 
care can only be provided in a SNF.
    (b) Examples of circumstances that meet practical matter criteria. 
(1) Beneficiary's condition. Inpatient care would be required ``as a 
practical matter'' if transporting the beneficiary to and from the 
nearest facility that furnishes the required daily skilled <STRONG>services</STRONG> 
would be an excessive physical hardship.
    (2) Economy and efficiency. Even if the beneficiary's condition does 
not preclude transportation, inpatient care might be more efficient and 
less costly if, for instance, the only alternative is daily 
transportation by ambulance.

[48 FR 12541, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985]

Sec. 409.36  Effect of discharge from posthospital SNF care.

    If a beneficiary is discharged from a facility after receiving 
posthospital SNF care, he or she is not entitled to additional <STRONG>services</STRONG> 
of this kind in the same benefit period unless--
    (a) He or she is readmitted to the same or another facility within 
30 calendar days following the day of discharge (or, before December 5, 
1980, within 14 calendar days after discharge); or
    (b) He or she is again hospitalized for at least 3 consecutive 
calendar days.

[[Page 226]]

        Subpart E--Home Health <STRONG>Services</STRONG> Under Hospital Insurance

Sec. 409.40  Basis, purpose, and scope.

    This subpart implements sections 1814(a)(2)(C), 1835(a)(2)(A), and 
1861(m) of the Act with respect to the requirements that must be met for 
Medicare payment to be made for home health <STRONG>services</STRONG> furnished to 
eligible beneficiaries.

[59 FR 65493, Dec. 20, 1994]

Sec. 409.41  Requirement for payment.

    In order for home health <STRONG>services</STRONG> to qualify for payment under the 
Medicare program the following requirements must be met:
    (a) The <STRONG>services</STRONG> must be furnished to an eligible beneficiary by, or 
under arrangements with, an HHA that--
    (1) Meets the conditions of participation for HHAs at part 484 of 
this chapter; and
    (2) Has in effect a Medicare provider agreement as described in part 
489, subparts A, B, C, D, and E of this chapter.
    (b) The physician certification and recertification requirements for 
home health <STRONG>services</STRONG> described in Sec. 424.22.
    (c) All requirements contained in Secs. 409.42 through 409.47.

[59 FR 65494, Dec. 20, 1994]

Sec. 409.42  Beneficiary qualifications for coverage of <STRONG>services</STRONG>.

    To qualify for Medicare coverage of home health <STRONG>services</STRONG>, a 
beneficiary must meet each of the following requirements:
    (a) Confined to the home. The beneficiary must be confined to the 
home or in an institution that is not a hospital, SNF or nursing 
facility as defined in section 1861(e)(1), 1819(a)(1) or 1919(a)(1) of 
the Act, respectively.
    (b) Under the care of a physician. The beneficiary must be under the 
care of a physician who establishes the plan of care. A doctor of 
podiatric medicine may establish a plan of care only if that is 
consistent with the functions he or she is authorized to perform under 
State law.
    (c) In need of skilled <STRONG>services</STRONG>. The beneficiary must need at least 
one of the following skilled <STRONG>services</STRONG> as certified by a physician in 
accordance with the physician certification and recertification 
requirements for home health <STRONG>services</STRONG> under Sec. 424.22 of this chapter.
    (1) Intermittent skilled nursing <STRONG>services</STRONG> that meet the criteria for 
skilled <STRONG>services</STRONG> and the need for skilled <STRONG>services</STRONG> found in Sec. 409.32. 
(Also see Sec. 409.33(a) and (b) for a description of examples of 
skilled nursing and rehabilitation <STRONG>services</STRONG>.)
    (2) Physical therapy <STRONG>services</STRONG> that meet the requirements of 
Sec. 409.44(c).
    (3) Speech-language pathology <STRONG>services</STRONG> that meet the requirements of 
Sec. 409.44(c).
    (4) Continuing occupational therapy <STRONG>services</STRONG> that meet the 
requirements of Sec. 409.44(c) if the beneficiary's eligibility for home 
health <STRONG>services</STRONG> has been established by virtue of a prior need for 
intermittent skilled nursing care, speech-language pathology <STRONG>services</STRONG>, 
or physical therapy in the current or prior certification period.
    (d) Under a plan of care. The beneficiary must be under a plan of 
care that meets the requirements for plans of care specified in 
Sec. 409.43.
    (e) By whom the <STRONG>services</STRONG> must be furnished. The home health <STRONG>services</STRONG> 
must be furnished by, or under arrangements made by, a participating 
HHA.

[59 FR 65494, Dec. 20, 1994; 60 FR 39122, Aug. 1, 1995]

Sec. 409.43  Plan of care requirements.

    (a) Contents. The plan of care must contain those items listed in 
Sec. 484.18(a) of this chapter that specify the standards relating to a 
plan of care that an HHA must meet in order to participate in the 
Medicare program.
    (b) Physician's orders. The physician's orders for <STRONG>services</STRONG> in the 
plan of care must specify the medical treatments to be furnished as well 
as the type of home health discipline that will furnish the ordered 
<STRONG>services</STRONG> and at what frequency the <STRONG>services</STRONG> will be furnished. Orders 
for <STRONG>services</STRONG> to be provided ``as needed'' or ``PRN'' must be accompanied 
by a description of the beneficiary's medical signs and symptoms that 
would occasion the visit and a specific limit on the number of those 
visits to be made under the order before an additional physician order 
would have to be obtained. Orders for care may indicate a specific range 
in

[[Page 227]]

frequency of visits to ensure that the most appropriate level of 
<STRONG>services</STRONG> is furnished. If a range of visits is ordered, the upper limit 
of the range is considered the specific frequency.
    (c) Physician signature. (1) Request for Anticipated payment 
signature requirements. If the physician signed plan of care is not 
available at the time the HHA requests an anticipated payment of the 
initial percentage prospective payment in accordance with Sec. 484.205, 
the request for the anticipated payment must be based on--
    (i) A physician's verbal order that--
    (A) Is recorded in the plan of care;
    (B) Includes a description of the patient's condition and the 
<STRONG>services</STRONG> to be provided by the home health agency;
    (C) Includes an attestation (relating to the physician's orders and 
the date received) signed and dated by the registered nurse or qualified 
therapist (as defined in 42 CFR 484.4) responsible for furnishing or 
supervising the ordered service in the plan of care; and
    (D) Is copied into the plan of care and the plan of care is 
immediately submitted to the physician; or
    (ii) A referral prescribing detailed orders for the <STRONG>services</STRONG> to be 
rendered that is signed and dated by a physician.
    (2) Reduction or disapproval of anticipated payment requests. CMS 
has the authority to reduce or disapprove requests for anticipated 
payments in situations when protecting Medicare program integrity 
warrants this action. Since the request for anticipated payment is based 
on verbal orders as specified in paragraph (c)(1)(i) and/or a 
prescribing referral as specified in (c)(1)(ii) of this section and is 
not a Medicare claim for purposes of the Act (although it is a ``claim'' 
for purposes of Federal, civil, criminal, and administrative law 
enforcement authorities, including but not limited to the Civil Monetary 
Penalties Law (as defined in 42 U.S.C. 1320a-7a (i) (2)), the Civil 
False Claims Act (as defined in 31 U.S.C. 3729(c)), and the Criminal 
False Claims Act (18 U.S.C. 287)), the request for anticipated payment 
will be canceled and recovered unless the claim is submitted within the 
greater of 60 days from the end of the episode or 60 days from the 
issuance of the request for anticipated payment.
    (3) Final percentage payment signature requirements. The plan of 
care must be signed and dated--
    (i) By a physician as described who meets the certification and 
recertification requirements of Sec. 424.22 of this chapter; and
    (ii) Before the claim for each episode for <STRONG>services</STRONG> is submitted for 
the final percentage prospective payment.
    (4) Changes to the plan of care signature requirements. Any changes 
in the plan must be signed and dated by a physician.
    (d) Oral (verbal) orders. If any <STRONG>services</STRONG> are provided based on a 
physician's oral orders, the orders must be put in writing and be signed 
and dated with the date of receipt by the registered nurse or qualified 
therapist (as defined in Sec. 484.4 of this chapter) responsible for 
furnishing or supervising the ordered <STRONG>services</STRONG>. Oral orders may only be 
accepted by personnel authorized to do so by applicable State and 
Federal laws and regulations as well as by the HHA's internal policies. 
The oral orders must also be countersigned and dated by the physician 
before the HHA bills for the care.
    (e) Frequency of review. (1) The plan of care must be reviewed by 
the physician (as specified in Sec. 409.42(b)) in consultation with 
agency professional personnel at least every 60 days or more frequently 
when there is a--
    (i) Beneficiary elected transfer;
    (ii) Significant change in condition resulting in a change in the 
case-mix assignment; or
    (iii) Discharge and return to the same HHA during the 60-day 
episode.
    (2) Each review of a beneficiary's plan of care must contain the 
signature of the physician who reviewed it and the date of review.
    (f) Termination of the plan of care. The plan of care is considered 
to be terminated if the beneficiary does not receive at least one 
covered skilled nursing, physical therapy, speech-language pathology 
<STRONG>services</STRONG>, or occupational therapy visit in a 60-day period unless the 
physician documents that the interval without such care is appropriate 
to the treatment of the beneficiary's illness or injury.

[59 FR 65494, Dec. 20, 1994, as amended at 65 FR 41210, July 3, 2000]

[[Page 228]]

Sec. 409.44  Skilled <STRONG>services</STRONG> requirements.

    (a) General. The intermediary's decision on whether care is 
reasonable and necessary is based on information provided on the forms 
and in the medical record concerning the unique medical condition of the 
individual beneficiary. A coverage denial is not made solely on the 
basis of the reviewer's general inferences about patients with similar 
diagnoses or on data related to utilization generally but is based upon 
objective clinical evidence regarding the beneficiary's individual need 
for care.
    (b) Skilled nursing care. (1) Skilled nursing care consists of those 
<STRONG>services</STRONG> that must, under State law, be performed by a registered nurse, 
or practical (vocational) nurse, as defined in Sec. 484.4 of this 
chapter, and meet the criteria for skilled nursing <STRONG>services</STRONG> specified in 
Sec. 409.32. See Sec. 409.33(a) and (b) for a description of skilled 
nursing <STRONG>services</STRONG> and examples of them.
    (i) In determining whether a service requires the skill of a 
licensed nurse, consideration must be given to the inherent complexity 
of the service, the condition of the beneficiary, and accepted standards 
of medical and nursing practice.
    (ii) If the nature of a service is such that it can safely and 
effectively be performed by the average nonmedical person without direct 
supervision of a licensed nurse, the service cannot be regarded as a 
skilled nursing service.
    (iii) The fact that a skilled nursing service can be or is taught to 
the beneficiary or to the beneficiary's family or friends does not 
negate the skilled aspect of the service when performed by the nurse.
    (iv) If the service could be performed by the average nonmedical 
person, the absence of a competent person to perform it does not cause 
it to be a skilled nursing service.
    (2) The skilled nursing care must be provided on a part-time or 
intermittent basis.
    (3) The skilled nursing <STRONG>services</STRONG> must be reasonable and necessary 
for the treatment of the illness or injury.
    (i) To be considered reasonable and necessary, the <STRONG>services</STRONG> must be 
consistent with the nature and severity of the beneficiary's illness or 
injury, his or her particular medical needs, and accepted standards of 
medical and nursing practice.
    (ii) The skilled nursing care provided to the beneficiary must be 
reasonable within the context of the beneficiary's condition.
    (iii) The determination of whether skilled nursing care is 
reasonable and necessary must be based solely upon the beneficiary's 
unique condition and individual needs, without regard to whether the 
illness or injury is acute, chronic, terminal, or expected to last a 
long time.
    (c) Physical therapy, speech-language pathology <STRONG>services</STRONG>, and 
occupational therapy. To be covered, physical therapy, speech-language 
pathology <STRONG>services</STRONG>, and occupational therapy must satisfy the criteria 
in paragraphs (c)(1) through (4) of this section. Occupational therapy 
<STRONG>services</STRONG> initially qualify for home health coverage only if they are 
part of a plan of care that also includes intermittent skilled nursing 
care, physical therapy, or speech-language pathology <STRONG>services</STRONG> as 
follows:
    (1) Speech-language pathology <STRONG>services</STRONG> and physical or occupational 
therapy <STRONG>services</STRONG> must relate directly and specifically to a treatment 
regimen (established by the physician, after any needed consultation 
with the qualified therapist) that is designed to treat the 
beneficiary's illness or injury. <STRONG>Services</STRONG> related to activities for the 
general physical welfare of beneficiaries (for example, exercises to 
promote overall fitness) do not constitute physical therapy, 
occupational therapy, or speech-language pathology <STRONG>services</STRONG> for Medicare 
purposes.
    (2) Physical and occupational therapy and speech-language pathology 
<STRONG>services</STRONG> must be reasonable and necessary. To be considered reasonable 
and necessary, the following conditions must be met:
    (i) The <STRONG>services</STRONG> must be considered under accepted standards of 
medical practice to be a specific, safe, and effective treatment for the 
beneficiary's condition.
    (ii) The <STRONG>services</STRONG> must be of such a level of complexity and 
sophistication or the condition of the beneficiary must be such that the 
<STRONG>services</STRONG> required can safely and effectively be performed only by a 
qualified physical therapist

[[Page 229]]

or by a qualified physical therapy assistant under the supervision of a 
qualified physical therapist, by a qualified speech-language 
pathologist, or by a qualified occupational therapist or a qualified 
occupational therapy assistant under the supervision of a qualified 
occupational therapist (as defined in Sec. 484.4 of this chapter). 
<STRONG>Services</STRONG> that do not require the performance or supervision of a 
physical therapist or an occupational therapist are not considered 
reasonable or necessary physical therapy or occupational therapy 
<STRONG>services</STRONG>, even if they are performed by or supervised by a physical 
therapist or occupational therapist. <STRONG>Services</STRONG> that do not require the 
skills of a speech-language pathologist are not considered to be 
reasonable and necessary speech-language pathology <STRONG>services</STRONG> even if they 
are performed by or supervised by a speech-language pathologist.
    (iii) There must be an expectation that the beneficiary's condition 
will improve materially in a reasonable (and generally predictable) 
period of time based on the physician's assessment of the beneficiary's 
restoration potential and unique medical condition, or the <STRONG>services</STRONG> must 
be necessary to establish a safe and effective maintenance program 
required in connection with a specific disease, or the skills of a 
therapist must be necessary to perform a safe and effective maintenance 
program. If the <STRONG>services</STRONG> are for the establishment of a maintenance 
program, they may include the design of the program, the instruction of 
the beneficiary, family, or home health aides, and the necessary 
infrequent reevaluations of the beneficiary and the program to the 
degree that the specialized knowledge and judgment of a physical 
therapist, speech-language pathologist, or occupational therapist is 
required.
    (iv) The amount, frequency, and duration of the <STRONG>services</STRONG> must be 
reasonable.

[59 FR 65494, Dec. 20, 1994]

Sec. 409.45  <STRONG>Dependent</STRONG> <STRONG>services</STRONG> requirements.

    (a) General. <STRONG>Services</STRONG> discussed in paragraphs (b) through (g) of 
this section may be covered only if the beneficiary needs skilled 
nursing care on an intermittent basis, as described in Sec. 409.44(b); 
physical therapy or speech-language pathology <STRONG>services</STRONG> as described in 
Sec. 409.44(c); or has a continuing need for occupational therapy 
<STRONG>services</STRONG> as described in Sec. 409.44(c) if the beneficiary's eligibility 
for home health <STRONG>services</STRONG> has been established by virtue of a prior need 
for intermittent skilled nursing care, speech-language pathology 
<STRONG>services</STRONG>, or physical therapy in the current or prior certification 
period; and otherwise meets the qualifying criteria (confined to the 
home, under the care of a physician, in need of skilled <STRONG>services</STRONG>, and 
under a plan of care) specified in Sec. 409.42. Home health coverage is 
not available for <STRONG>services</STRONG> furnished to a beneficiary who is no longer 
in need of one of the qualifying skilled <STRONG>services</STRONG> specified in this 
paragraph. Therefore, <STRONG>dependent</STRONG> <STRONG>services</STRONG> furnished after the final 
qualifying skilled service are not covered, except when the <STRONG>dependent</STRONG> 
service was not followed by a qualifying skilled service as a result of 
the unexpected inpatient admission or death of the beneficiary, or due 
to some other unanticipated event.
    (b) Home health aide <STRONG>services</STRONG>. To be covered, home health aide 
<STRONG>services</STRONG> must meet each of the following requirements:
    (1) The reason for the visits by the home health aide must be to 
provide hands-on personal care to the beneficiary or <STRONG>services</STRONG> that are 
needed to maintain the beneficiary's health or to facilitate treatment 
of the beneficiary's illness or injury. The physician's order must 
indicate the frequency of the home health aide <STRONG>services</STRONG> required by the 
beneficiary. These <STRONG>services</STRONG> may include but are not limited to:
    (i) Personal care <STRONG>services</STRONG> such as bathing, dressing, grooming, 
caring for hair, nail and oral hygiene that are needed to facilitate 
treatment or to prevent deterioration of the beneficiary's health, 
changing the bed linens of an incontinent beneficiary, shaving, 
deodorant application, skin care with lotions and/or powder, foot care, 
ear care, feeding, assistance with elimination (including enemas unless

[[Page 230]]

the skills of a licensed nurse are required due to the beneficiary's 
condition, routine catheter care, and routine colostomy care), 
assistance with ambulation, changing position in bed, and assistance 
with transfers.
    (ii) Simple dressing changes that do not require the skills of a 
licensed nurse.
    (iii) Assistance with medications that are ordinarily self-
administered and that do not require the skills of a licensed nurse to 
be provided safely and effectively.
    (iv) Assistance with activities that are directly supportive of 
skilled therapy <STRONG>services</STRONG> but do not require the skills of a therapist to 
be safely and effectively performed, such as routine maintenance 
exercises and repetitive practice of functional communication skills to 
support speech-language pathology <STRONG>services</STRONG>.
    (v) Routine care of prosthetic and orthotic devices.
    (2) The <STRONG>services</STRONG> to be provided by the home health aide must be--
    (i) Ordered by a physician in the plan of care; and
    (ii) Provided by the home health aide on a part-time or intermittent 
basis.
    (3) The <STRONG>services</STRONG> provided by the home health aide must be reasonable 
and necessary. To be considered reasonable and necessary, the <STRONG>services</STRONG> 
must--
    (i) Meet the requirement for home health aide <STRONG>services</STRONG> in paragraph 
(b)(1) of this section;
    (ii) Be of a type the beneficiary cannot perform for himself or 
herself; and
    (iii) Be of a type that there is no able or willing caregiver to 
provide, or, if there is a potential caregiver, the beneficiary is 
unwilling to use the <STRONG>services</STRONG> of that individual.
    (4) The home health aide also may perform <STRONG>services</STRONG> incidental to a 
visit that was for the provision of care as described in paragraphs 
(b)(3)(i) through (iii) of this section. For example, these incidental 
<STRONG>services</STRONG> may include changing bed linens, personal laundry, or preparing 
a light meal.
    (c) Medical social <STRONG>services</STRONG>. Medical social <STRONG>services</STRONG> may be covered 
if the following requirements are met:
    (1) The <STRONG>services</STRONG> are ordered by a physician and included in the plan 
of care.
    (2)(i) The <STRONG>services</STRONG> are necessary to resolve social or emotional 
problems that are expected to be an impediment to the effective 
treatment of the beneficiary's medical condition or to his or her rate 
of recovery.
    (ii) If these <STRONG>services</STRONG> are furnished to a beneficiary's family 
member or caregiver, they are furnished on a short-term basis and it can 
be demonstrated that the service is necessary to resolve a clear and 
direct impediment to the effective treatment of the beneficiary's 
medical condition or to his or her rate of recovery.
    (3) The frequency and nature of the medical social <STRONG>services</STRONG> are 
reasonable and necessary to the treatment of the beneficiary's 
condition.
    (4) The medical social <STRONG>services</STRONG> are furnished by a qualified social 
worker or qualified social work assistant under the supervision of a 
social worker as defined in Sec. 484.4 of this chapter.
    (5) The <STRONG>services</STRONG> needed to resolve the problems that are impeding 
the beneficiary's recovery require the skills of a social worker or a 
social work assistant under the supervision of a social worker to be 
performed safely and effectively.
    (d) Occupational therapy. Occupational therapy <STRONG>services</STRONG> that are not 
qualifying <STRONG>services</STRONG> under Sec. 409.44(c) are nevertheless covered as 
<STRONG>dependent</STRONG> <STRONG>services</STRONG> if the requirements of Sec. 409.44(c)(2)(i) through 
(iv), as to reasonableness and necessity, are met.
    (e) Durable medical equipment. Durable medical equipment in 
accordance with Sec. 410.38 of this chapter, which describes the scope 
and conditions of payment for durable medical equipment under Part B, 
may be covered under the home health benefit as either a Part A or Part 
B service. Durable medical equipment furnished by an HHA as a home 
health service is always covered by Part A if the beneficiary is 
entitled to Part A.
    (f) Medical supplies. Medical supplies (including catheters, 
catheter supplies, ostomy bags, and supplies relating to ostomy care but 
excluding drugs and biologicals) may be covered as a home health 
benefit. For medical supplies to be covered as a Medicare home health 
benefit, the medical supplies must be needed to treat the beneficiary's 
illness

[[Page 231]]

or injury that occasioned the home health care.
    (g) Intern and resident <STRONG>services</STRONG>. The medical <STRONG>services</STRONG> of interns 
and residents in training under an approved hospital teaching program 
are covered if the <STRONG>services</STRONG> are ordered by the physician who is 
responsible for the plan of care and the HHA is affiliated with or under 
the common control of the hospital furnishing the medical <STRONG>services</STRONG>.

Approved means--
    (1) Approved by the Accreditation Council for Graduate Medical 
Education;
    (2) In the case of an osteopathic hospital, approved by the 
Committee on Hospitals of the Bureau of Professional Education of the 
American Osteopathic Association;
    (3) In the case of an intern or resident-in-training in the field of 
dentistry, approved by the Council on Dental Education of the American 
Dental Association; or
    (4) In the case of an intern or resident-in-training in the field of 
podiatry, approved by the Council on Podiatric Medical Education of the 
American Podiatric Medical Association.

[59 FR 65495, Dec. 20, 1994; 60 FR 39122, 39123, Aug. 1, 1995]

Sec. 409.46  Allowable administrative costs.

    <STRONG>Services</STRONG> that are allowable as administrative costs but are not 
separately billable include, but are not limited to, the following:
    (a) Registered nurse initial evaluation visits. Initial evaluation 
visits by a registered nurse for the purpose of assessing a 
beneficiary's health needs, determining if the agency can meet those 
health needs, and formulating a plan of care for the beneficiary are 
allowable administrative costs. If a physician specifically orders that 
a particular skilled service be furnished during the evaluation in which 
the agency accepts the beneficiary for treatment and all other coverage 
criteria are met, the visit is billable as a skilled nursing visit. 
Otherwise it is considered to be an administrative cost.
    (b) Visits by registered nurses or qualified professionals for the 
supervision of home health aides. Visits by registered nurses or 
qualified professionals for the purpose of supervising home health aides 
as required at Sec. 484.36(d) of this chapter are allowable 
administrative costs. Only if the registered nurse or qualified 
professional visits the beneficiary for the purpose of furnishing care 
that meets the coverage criteria at Sec. 409.44, and the supervisory 
visit occurs simultaneously with the provision of covered care, is the 
visit billable as a skilled nursing or therapist's visit.
    (c) Respiratory care <STRONG>services</STRONG>. If a respiratory therapist is used to 
furnish overall training or consultative advice to an HHA's staff and 
incidentally provides respiratory therapy <STRONG>services</STRONG> to beneficiaries in 
their homes, the costs of the respiratory therapist's <STRONG>services</STRONG> are 
allowable as administrative costs. Visits by a respiratory therapist to 
a beneficiary's home are not separately billable. However, respiratory 
therapy <STRONG>services</STRONG> that are furnished as part of a plan of care by a 
skilled nurse or physical therapist and that constitute skilled care may 
be separately billed as skilled visits.
    (d) Dietary and nutrition personnel. If dieticians or nutritionists 
are used to provide overall training or consultative advice to HHA staff 
and incidentally provide dietetic or nutritional <STRONG>services</STRONG> to 
beneficiaries in their homes, the costs of these professional <STRONG>services</STRONG> 
are allowable as administrative costs. Visits by a dietician or 
nutritionist to a beneficiary's home are not separately billable.

[59 FR 65496, Dec. 20, 1994]

Sec. 409.47  Place of service requirements.

    To be covered, home health <STRONG>services</STRONG> must be furnished in either the 
beneficiary's home or an outpatient setting as defined in this section.
    (a) Beneficiary's home. A beneficiary's home is any place in which a 
beneficiary resides that is not a hospital, SNF, or nursing facility as 
defined in sections 1861(e)(1), 1819(a)(1), of 1919(a)(1) of the Act, 
respectively.
    (b) Outpatient setting. For purposes of coverage of home health 
<STRONG>services</STRONG>, an outpatient setting may include a hospital, SNF or a 
rehabilitation center with which the HHA has an arrangement in 
accordance with the requirements of Sec. 484.14(h) of this chapter and

[[Page 232]]

that is used by the HHA to provide <STRONG>services</STRONG> that either--
    (1) Require equipment that cannot be made available at the 
beneficiary's home; or
    (2) Are furnished while the beneficiary is at the facility to 
receive <STRONG>services</STRONG> requiring equipment described in paragraph (b)(1) of 
this section.

[59 FR 65496, Dec. 20, 1994]

Sec. 409.48  Visits.

    (a) Number of allowable visits under Part A. To the extent that all 
coverage requirements specified in this subpart are met, payment may be 
made on behalf of eligible beneficiaries under Part A for an unlimited 
number of covered home health visits. All Medicare home health <STRONG>services</STRONG> 
are covered under hospital insurance unless there is no Part A 
entitlement.
    (b) Number of visits under Part B. To the extent that all coverage 
requirements specified in this subpart are met, payment may be made on 
behalf of eligible beneficiaries under Part B for an unlimited number of 
covered home health visits. Medicare home health <STRONG>services</STRONG> are covered 
under Part B only when the beneficiary is not entitled to coverage under 
Part A.
    (c) Definition of visit. A visit is an episode of personal contact 
with the beneficiary by staff of the HHA or others under arrangements 
with the HHA, for the purpose of providing a covered service.
    (1) Generally, one visit may be covered each time an HHA employee or 
someone providing home health <STRONG>services</STRONG> under arrangements enters the 
beneficiary's home and provides a covered service to a beneficiary who 
meets the criteria of Sec. 409.42 (confined to the home, under the care 
of a physician, in need of skilled <STRONG>services</STRONG>, and under a plan of care).
    (2) If the HHA furnishes <STRONG>services</STRONG> in an outpatient facility under 
arrangements with the facility, one visit may be covered for each type 
of service provided.
    (3) If two individuals are needed to provide a service, two visits 
may be covered. If two individuals are present, but only one is needed 
to provide the care, only one visit may be covered.
    (4) A visit is initiated with the delivery of covered home health 
<STRONG>services</STRONG> and ends at the conclusion of delivery of covered home health 
<STRONG>services</STRONG>. In those circumstances in which all reasonable and necessary 
home health <STRONG>services</STRONG> cannot be provided in the course of a single visit, 
HHA staff or others providing <STRONG>services</STRONG> under arrangements with the HHA 
may remain at the beneficiary's residence between visits (for example, 
to provide non-covered <STRONG>services</STRONG>). However, if all covered <STRONG>services</STRONG> could 
be provided in the course of one visit, only one visit may be covered.

[59 FR 65497, Dec. 20, 1994]

Sec. 409.49  Excluded <STRONG>services</STRONG>.

    (a) Drugs and biologicals. Drugs and biologicals are excluded from 
payment under the Medicare home health benefit.
    (1) A drug is any chemical compound that may be used on or 
administered to humans or animals as an aid in the diagnosis, treatment 
or prevention of disease or other condition or for the relief of pain or 
suffering or to control or improve any physiological pathologic 
condition.
    (2) A biological is any medicinal preparation made from living 
organisms and their products including, but not limited to, serums, 
vaccines, antigens, and antitoxins.
    (b) Transportation. The transportation of beneficiaries, whether to 
receive covered care or for other purposes, is excluded from home health 
coverage. Costs of transportation of equipment, materials, supplies, or 
staff may be allowable as administrative costs, but no separate payment 
is made for them.
    (c) <STRONG>Services</STRONG> that would not be covered as inpatient <STRONG>services</STRONG>. 
<STRONG>Services</STRONG> that would not be covered if furnished as inpatient hospital 
<STRONG>services</STRONG> are excluded from home health coverage.
    (d) Housekeeping <STRONG>services</STRONG>. <STRONG>Services</STRONG> whose sole purpose is to enable 
the beneficiary to continue residing in his or her home (for example, 
cooking, shopping, Meals on Wheels, cleaning, laundry) are excluded from 
home health coverage.
    (e) <STRONG>Services</STRONG> covered under the End Stage Renal Disease (ESRD) 
program.

[[Page 233]]

<STRONG>Services</STRONG> that are covered under the ESRD program and are contained in 
the composite rate reimbursement methodology, including any service 
furnished to a Medicare ESRD beneficiary that is directly related to 
that individual's dialysis, are excluded from coverage under the 
Medicare home health benefit.
    (f) Prosthetic devices. Items that meet the requirements of 
Sec. 410.36(a)(2) of this chapter for prosthetic devices covered under 
Part B are excluded from home health coverage. Catheters, catheter 
supplies, ostomy bags, and supplies relating to ostomy care are not 
considered prosthetic devices if furnished under a home health plan of 
care and are not subject to this exclusion from coverage.
    (g) Medical social <STRONG>services</STRONG> provided to family members. Except as 
provided in Sec. 409.45(c)(2), medical social <STRONG>services</STRONG> provided solely 
to members of the beneficiary's family and that are not incidental to 
covered medical social <STRONG>services</STRONG> being provided to the beneficiary are 
not covered.

[59 FR 65497, Dec. 20, 1994; 60 FR 39123, Aug. 1, 1995]

Sec. 409.50  Coinsurance for durable medical equipment (DME) furnished 
          as a home health service.

    The coinsurance liability of the beneficiary or other person for DME 
furnished as a home health service is 20 percent of the customary 
(insofar as reasonable) charge for the <STRONG>services</STRONG>.

[51 FR 41339, Nov. 14, 1986. Redesignated at 59 FR 65496, Dec. 20, 1994]

             Subpart F--Scope of Hospital Insurance Benefits

Sec. 409.60  Benefit periods.

    (a) When benefit periods begin. The initial benefit period begins on 
the day the beneficiary receives inpatient hospital, inpatient CAH, or 
SNF <STRONG>services</STRONG> for the first time after becoming entitled to hospital 
insurance. Thereafter, a new benefit period begins whenever the 
beneficiary receives inpatient hospital, inpatient CAH, or SNF <STRONG>services</STRONG> 
after he or she has ended a benefit period as described in paragraph (b) 
of this section.
    (b) When benefit periods end--(1) A benefit period ends when a 
beneficiary has, for at least 60 consecutive days not been an inpatient 
in any of the following:
    (i) A hospital that meets the requirements of section 1861(e)(1) of 
the Act.
    (ii) A CAH that meets the requirements of section 1820 of the Act.
    (iii) A SNF that meets the requirements of sections 1819(a)(1) or 
1861(y) of the Act.
    (2) For purposes of ending a benefit period, a beneficiary was an 
inpatient of a SNF if his or her care in the SNF met the skilled level 
of care requirements specified in Sec. 409.31(b) (1) and (3).
    (c) Presumptions. (1) For purposes of determining whether a 
beneficiary was an inpatient of a SNF under paragraph (b)(2) of this 
section--
    (i) A beneficiary's care met the skilled level of care requirements 
if inpatient SNF claims were paid for those <STRONG>services</STRONG> under Medicare or 
Medicaid, unless:
    (A) Such payments were made under Sec. 405.330 or Medicaid 
administratively necessary days provisions which result in payment for 
care not meeting the skilled level of care requirements, or
    (B) A Medicare denial and a Medicaid payment are made for the same 
period, in which case the presumption in paragraph (c)(2)(ii) of this 
section applies;
    (ii) A beneficiary's care met the skilled level of care requirements 
if a SNF claim was paid under section 1879(e) of the Social Security 
Act;
    (iii) A beneficiary's care did not meet the skilled level of care 
requirements if a SNF claim was paid for the <STRONG>services</STRONG> under 
Sec. 405.330;
    (iv) A beneficiary's care did not meet the skilled level of care 
requirements if a Medicaid SNF claim was denied on the grounds that the 
<STRONG>services</STRONG> were not at the skilled level of care (even if paid under 
applicable Medicaid administratively necessary days provisions which 
result in payment for care not meeting the skilled level of care 
requirements);
    (2) For purposes of determining whether a beneficiary was an 
inpatient of a SNF under paragraph (b)(2) of this section a 
beneficiary's care in a SNF is presumed--
    (i) To have met the skilled level of care requirements during any 
period

[[Page 234]]

for which the beneficiary was assigned to one of the Resource 
Utilization Groups designated as representing the required level of 
care, as provided in Sec. 409.30.
    (ii) To have met the skilled level of care requirements if a 
Medicaid or Medicare claim was denied on grounds other than that the 
<STRONG>services</STRONG> were not at the skilled level of care;
    (iii) Not to have met the skilled level of care requirements if a 
Medicare SNF claim was denied on the grounds that the <STRONG>services</STRONG> were not 
at the skilled level of care and payment was not made under 
Sec. 405.330; or
    (iv) Not to have met the skilled level of care requirements if no 
Medicare or Medicaid claim was submitted by the SNF.
    (3) If information upon which to base a presumption is not readily 
available, the intermediary may, at its discretion review the 
beneficiary's medical records to determine whether he or she was an 
inpatient of a SNF as set forth under paragraph (b)(2) of this section.
    (4) When the intermediary makes a benefit period determination based 
upon paragraph (c)(1) of this section, the beneficiary may seek to 
reverse the benefit period determination by timely appealing the prior 
Medicare SNF claim determination under part 405, subpart G of this 
chapter, or the prior Medicaid SNF claim under part 431, subpart E of 
this chapter.
    (5) When the intermediary makes a benefit period determination under 
paragraph (c)(2) of this section, the beneficiary will be notified of 
the basis for the determination, and of his or her right to present 
evidence to rebut the determination that the skilled level of care 
requirements specified in Sec. 409.31 (b)(1) and (b)(3) were or were not 
met on reconsideration and appeal under 42 CFR, part 405, subpart G of 
this chapter.
    (d) Limitation on benefit period determinations. When the 
intermediary considers the same prior SNF stay of a particular 
beneficiary in making benefit period determinations for more than one 
inpatient Medicare claim--
    (1) Medicare will recognize only the initial level of care 
characterization for that prior SNF stay (or if appealed under 42 CFR 
part 405, subpart G of this chapter, the level of care determined under 
appeal); or
    (2) If part of a prior SNF stay has one level of care 
characterization and another part has another level of care 
characterization, Medicare will recognize only the initial level of care 
characterization for a particular part of a prior SNF stay (or if 
appealed under 42 CFR part 405, subpart G of this chapter, the level of 
care determined under appeal).
    (e) Relation of benefit period to benefit limitations. The 
limitations specified in Secs. 409.61 and 409.64, and the deductible and 
coinsurance requirements set forth in subpart G of this part apply for 
each benefit period. The limitations of Sec. 409.63 apply only to the 
initial benefit period.

[52 FR 22645, June 15, 1987; 52 FR 28824, Aug. 4, 1987, as amended at 58 
FR 30667, May 26, 1993; 63 FR 26307, May 12, 1998]

Sec. 409.61  General limitations on amount of benefits.

    (a) Inpatient hospital or inpatient CAH <STRONG>services</STRONG>. (1) Regular 
benefit days. Up to 90 days are available in each benefit period, 
subject to the limitations on days for psychiatric hospital <STRONG>services</STRONG> set 
forth in Secs. 409.62 and 409.63.
    (i) For the first 60 days (referred to in this subpart as full 
benefit days), Medicare pays the hospital or CAH for all covered 
<STRONG>services</STRONG> furnished the beneficiary, except for a deductible which is the 
beneficiary's responsibility. (Section 409.82 specifies the requirements 
for the inpatient hospital deductible.)
    (ii) For the next 30 days (referred to in this subpart as 
coinsurance days), Medicare pays for all covered <STRONG>services</STRONG> except for a 
daily coinsurance amount, which is the beneficiary's responsibility. 
(Section 409.83 specifies the inpatient hospital coinsurance amounts.)
    (2) Lifetime reserve days. Each beneficiary has a non-renewable 
lifetime reserve of 60 days of inpatient hospital or inpatient CAH 
<STRONG>services</STRONG> that he may draw upon whenever he is hospitalized for more than 
90 days in a benefit period. Upon exhaustion of the regular benefit 
days, the reserve days will be used unless the beneficiary elects not to 
use them, as provided in Sec. 409.65. For lifetime reserve days, 
Medicare pays for all covered <STRONG>services</STRONG> except for a

[[Page 235]]

daily coinsurance amount that is the beneficiary's responsibility. (See 
Sec. 409.83.)
    (3) Order of payment for inpatient hospital or inpatient CAH 
<STRONG>services</STRONG>. Medicare pays for inpatient hospital <STRONG>services</STRONG> in the following 
order.
    (i) The 60 full benefit days;
    (ii) The 30 coinsurance days;
    (iii) The remaining lifetime reserve days.
    (b) Posthospital SNF care furnished by a SNF, or by a hospital or a 
CAH with a swing-bed approval. Up to 100 days are available in each 
benefit period after discharge from a hospital or CAH. For the first 20 
days, Medicare pays for all covered <STRONG>services</STRONG>. For the 21st through 100th 
day, Medicare pays for all covered <STRONG>services</STRONG> except for a daily 
coinsurance amount that is the beneficiary's responsibility.
    (c) Renewal of inpatient benefits. The beneficiary's full 
entitlement to the 90 inpatient hospital or inpatient CAH regular 
benefit days, and the 100 SNF benefit days, is renewed each time he or 
she begins a benefit period. However, once lifetime reserve days are 
used, they can never be renewed.
    (d) Home health <STRONG>services</STRONG>. Medicare Part A pays for all covered home 
health <STRONG>services</STRONG>&lt;SUP&gt;1&lt;/SUP&gt; with no deductible, and subject to the 
following limitations on payment for durable medical equipment (DME):
---------------------------------------------------------------------------

    \1\ Before July 1, 1981, Medicare Part A paid for not more than 100 
home health visits during one year following the beneficiary's most 
recent discharge from a hospital or a SNF.
---------------------------------------------------------------------------

    (1) For DME furnished by an HHA that is a nominal charge provider, 
Medicare Part A pays 80 percent of fair compensation.
    (2) For DME furnished by an HHA that is not a nominal charge 
provider, Medicare Part A pays the lesser of the following:
    (i) 80 percent of the reasonable cost of the service.
    (ii) 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.

[48 FR 12541, Mar. 25, 1983, as amended at 51 FR 41339, Nov. 14, 1986; 
54 FR 4027, Jan. 27, 1989; 58 FR 30666, 30667, May 26, 1993]

Sec. 409.62  Lifetime maximum on inpatient psychiatric care.

    There is a lifetime maximum of 190 days on inpatient psychiatric 
hospital <STRONG>services</STRONG> available to any beneficiary. Therefore, once an 
individual receives benefits for 190 days of care in a psychiatric 
hospital, no further benefits of that type are available to that 
individual.

Sec. 409.63  Reduction of inpatient psychiatric benefit days available 
          in the initial benefit period.

    (a) Reduction rule. (1) If the individual was an inpatient in a 
psychiatric hospital on the first day of Medicare entitlement and for 
any of the 150 days immediately before that first day of entitlement, 
those days are subtracted from the 150 days (90 regular days plus 60 
lifetime reserve days) which would otherwise be available in the initial 
benefit period for inpatient psychiatric <STRONG>services</STRONG> in a psychiatric or 
general hospital.
    (2) Reduction is required only if the hospital was participating in 
Medicare as a psychiatric hospital on the individual's first day of 
entitlement.
    (3) The reduction applies only to the beneficiary's first benefit 
period. For subsequent benefit periods, the 90 benefit days, plus any 
remaining lifetime reserve days, subject to the 190 day lifetime limit 
on psychiatric hospital care, are available.
    (b) Application to general hospital days. (1) Days spent in a 
general hospital before entitlement are not subtracted under paragraph 
(a) of this section even if the stay was for diagnosis or treatment of 
mental illness.
    (2) After entitlement, all psychiatric care days, whether in a 
general or a psychiatric hospital, are counted toward the number of days 
available in the initial benefit period.
    (c) Examples: (1) The individual was an inpatient of a participating 
psychiatric hospital for 20 days before the first day of entitlement and 
remained there for another 6 months. Therefore, 130 days of benefits 
(150 minus 20) are payable. Payment could be made for: 60 full benefit 
days, 30 coinsurance days, and 40 lifetime reserve days.

[[Page 236]]

    (2) During the 150-day period preceding Medicare entitlement, an 
individual had been a patient of a general hospital for 60 days of 
inpatient psychiatric care and had spent 90 days in a psychiatric 
hospital, ending with the first day of entitlement. During the initial 
benefit period, the beneficiary spent 90 days in a general hospital and 
received psychiatric care there. The 60 days spent in the general 
hospital for psychiatric treatment before entitlement do not reduce the 
benefits available in the first benefit period. Only the 90 days spent 
in the psychiatric hospital before entitlement reduce such benefits, 
leaving a total of 60 available psychiatric days. However, after 
entitlement, the reduction applies not only to days spent in a 
psychiatric hospital, but also to days of psychiatric treatment in a 
general hospital. Thus, Medicare payment could be made only for 60 of 
the 90 days spent in the general hospital.
    (3) An individual was admitted to a general hospital for a mental 
condition and, after 10 days, transferred to a participating psychiatric 
hospital. The individual remained in the psychiatric hospital for 78 
days before becoming entitled to hospital insurance benefits and for 130 
days after entitlement. The beneficiary was then transferred to a 
general hospital and received treatment of a medical condition for 20 
days. The 10 days spent in the general hospital during the 150-day pre-
entitlement period have no effect on the inpatient hospital benefit days 
available to the individual for psychiatric care in the first benefit 
period, even though the general hospital stay was for a mental 
condition. Only the 78 days spent in the psychiatric hospital during the 
pre-entitlement period are subtracted from the 150 benefit days. 
Accordingly, the individual has 72 days of psychiatric care (150 days 
less 78 days) available in the first benefit period. Benefits could be 
paid for the individual's hospitalization during the first benefit 
period in the following manner. For the 130-day psychiatric hospital 
stay, 72 days (60 full benefit days and 12 coinsurance days), and for 
the general hospital stay, 20 days (18 coinsurance and 2 lifetime 
reserve days).

Sec. 409.64  <STRONG>Services</STRONG> that are counted toward allowable amounts.

    (a) Except as provided in paragraph (b) of this section for lifetime 
reserve days, all covered inpatient days and home health visits are 
counted toward the allowable amounts specified in Secs. 409.61 through 
409.63 if--
    (1) They are paid for by Medicare; or
    (2) They would be paid for by Medicare if the following requirements 
had been met:
    (i) A proper and timely request for payment had been filed; and
    (ii) The hospital, CAH, SNF, or home health agency had submitted all 
necessary evidence, including physician certification of need for 
<STRONG>services</STRONG> when such certification was required; or
    (3) They could not be paid for because the total payment due was 
equal to, or less than, the applicable deductible and coinsurance 
amounts.
    (b) Exception. Even though the requirements of paragraph (a)(2) of 
this section are met, lifetime reserve days are not counted toward the 
allowable amounts if the beneficiary elected or is deemed to have 
elected not to use them as set forth in Sec. 409.65.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30667, May 26, 1993]

Sec. 409.65  Lifetime reserve days.

    (a) Election not to use lifetime reserve days. (1) Whenever a 
beneficiary has exhausted the 90 regular benefit days, the hospital or 
CAH may bill Medicare for lifetime reserve days unless the beneficiary 
elects not to use them or, in accordance with paragraph (b) of this 
section, is deemed to have elected not to use them.
    (2) It may be advantageous to elect not to use lifetime reserve days 
if the beneficiary has private insurance coverage that begins after the 
first 90 inpatient days in a benefit period, or if the daily charge is 
only slightly higher than the lifetime reserve days coinsurance amount. 
In such cases, the beneficiary may want to save the lifetime reserve 
days for future care that may be more expensive.
    (3) If the beneficiary elects not to use lifetime reserve days for a 
particular hospital or CAH stay, they are still available for a later 
stay. However,

[[Page 237]]

once the beneficiary uses lifetime reserve days, they can never be 
renewed.
    (4) If the beneficiary elects not to use lifetime reserve days, the 
hospital or CAH may require him or her to pay for any <STRONG>services</STRONG> furnished 
after the regular days are exhausted.
    (b) Deemed election. A beneficiary will be deemed to have elected 
not to use lifetime reserve days if the average daily charges for such 
days is equal to or less than the applicable coinsurance amount 
specified in Sec. 409.83. A beneficiary would get no benefit from using 
the days under those circumstances.
    (c) Who may file an election. An election not to use reserve days 
may be filed by--
    (1) The beneficiary; or
    (2) If the beneficiary is physically or mentally unable to act, by 
the beneficiary's legal representative. In addition, if some other 
payment source is available, such as private insurance, any person 
authorized under Sec. 405.1664 of this chapter to execute a request for 
payment for the beneficiary may file the election.
    (d) Filing the election. (1) The beneficiary's election not to use 
lifetime reserve days must be filed in writing with the hospital or CAH.
    (2) The election may be filed at the time of admission to the 
hospital or CAH or at any time thereafter up to 90 days after the 
beneficiary's discharge.
    (3) A retroactive election (that is, one made after lifetime reserve 
days have been used because the regular days were exhausted), is not 
acceptable unless it is approved by the hospital or CAH.
    (e) Period covered by election--(1) General rule. Except as provided 
in paragraph (e)(2) of this section, an election not to use lifetime 
reserve days may apply to an entire hospital or CAH stay or to a single 
period of consecutive days in a stay, but cannot apply to selected days 
in a stay. For example, a beneficiary may restrict the election to the 
period covered by private insurance but cannot use individual lifetime 
reserve days within that period. If an election not to use reserve days 
is effective after the first day on which reserve days are available, it 
must remain in effect until the end of the stay, unless it is revoked in 
accordance with Sec. 409.66.
    (2) Exception. A beneficiary election not to use lifetime reserve 
days for an inpatient hospital or inpatient CAH stay for which payment 
may be made under the prospective payment system (part 412 of this 
chapter) is subject to the following rules:
    (i) If the beneficiary has one or more regular benefit days (see 
Sec. 409.61(a)(1) of this chapter) remaining in the benefit period upon 
entering the hospital or CAH, an election not to use lifetime reserve 
days will apply automatically to all days that are not outlier days. The 
beneficiary may also elect not to use lifetime reserve days for outlier 
days but this election must apply to all outlier days.
    (ii) If the beneficiary has no regular benefit days (see 
Sec. 409.61(a)(1) of this chapter) remaining in the benefit period upon 
entering the hospital or CAH, an election not to use lifetime reserve 
days must apply to the entire hospital or CAH stay.

[48 FR 12541, Mar. 25, 1983, as amended at 48 FR 39837, Sept. 1, 1983; 
49 FR 323, Jan. 3, 1984; 58 FR 30666, 30667, May 26, 1993]

Sec. 409.66  Revocation of election not to use lifetime reserve days.

    (a) Except as provided in paragraph (c) of this section, a 
beneficiary (or anyone authorized to execute a request for payment, if 
the beneficiary is incapacitated) may revoke an election not to use 
lifetime reserve days during hospitalization or within 90 days after 
discharge.
    (b) The revocation must be submitted to the hospital or CAH in 
writing and identify the stay or stays to which it applies.
    (c) Exceptions. A revocation of an election not to use lifetime 
reserve days may not be filed--
    (1) After the beneficiary dies; or
    (2) After the hospital or CAH has filed a claim under the 
supplementary medical insurance program (Medicare Part B), for medical 
and other health <STRONG>services</STRONG> furnished to the beneficiary on the days in 
question.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30666, May 26, 1993]

[[Page 238]]

Sec. 409.68  Guarantee of payment for inpatient hospital or inpatient 
          CAH <STRONG>services</STRONG> furnished before notification of exhaustion of 
          benefits.

    (a) Conditions for payment. Payment may be made for inpatient 
hospital or inpatient CAH <STRONG>services</STRONG> furnished a beneficiary after he or 
she has exhausted the available benefit days if the following conditions 
are met:
    (1) The <STRONG>services</STRONG> were furnished before CMS or the intermediary 
notified the hospital or CAH that the beneficiary had exhausted the 
available benefit days and was not entitled to have payment made for 
those <STRONG>services</STRONG>.
    (2) At the time the hospital or CAH furnished the <STRONG>services</STRONG>, it was 
unaware that the beneficiary had exhausted the available benefit days 
and could reasonably have assumed that he or she was entitled to have 
payment made for these <STRONG>services</STRONG>.
    (3) Payment would be precluded solely because the beneficiary has no 
benefit days available for the particular hospital or CAH stay.
    (4) The hospital or CAH claims reimbursement for the <STRONG>services</STRONG> and 
refunds any payments made for those <STRONG>services</STRONG> by the beneficiary or by 
another person on his or her behalf.
    (b) Limitations on payment. (1) If all of the conditions in 
paragraph (a) of this section are met, Medicare payment may be made for 
the day of admission, and up to 6 weekdays thereafter, plus any 
intervening Saturdays, Sundays, and Federal holidays.
    (2) Payment may not be made under this section for any day after the 
hospital or CAH is notified that the beneficiary has exhausted the 
available benefit days.
    (c) Recovery from the beneficiary. Any payment made to a hospital or 
CAH under this section is considered an overpayment to the beneficiary 
and may be recovered from him or her under the provisions set forth 
elsewhere in this chapter.

[48 FR 12541, Mar. 25, 1983, as amended at 50 FR 33033, Aug. 16, 1985; 
58 FR 30666, May 26, 1993]

        Subpart G--Hospital Insurance Deductibles and Coinsurance

Sec. 409.80  Inpatient deductible and coinsurance: General provisions.

    (a) What they are. (1) The inpatient deductible and coinsurance 
amounts are portions of the cost of covered hospital or CAH or SNF 
<STRONG>services</STRONG> that Medicare does not pay.
    (2) The hospital or CAH or SNF may charge these amounts to the 
beneficiary or someone on his or her behalf.
    (b) Changes in the inpatient deductible and coinsurance amounts. (1) 
The law requires the Secretary to adjust the inpatient hospital 
deductible each year to reflect changes in the average cost of hospital 
care. In adjusting the deductible, the Secretary must use a formula 
specified in section 1813(b)(2) of the Act. Under that formula, the 
inpatient hospital deductible is increased each year by about the same 
percentage as the increase in the average Medicare daily hospital costs. 
The result of the deductible increase is that the beneficiary continues 
to pay about the same proportion of the hospital bill.
    (2) Since the coinsurance amounts are, by statute, specific 
fractions of the deductible, they change when the deductible changes.

[48 FR 12541, Mar. 25, 1983, as amended at 58 FR 30666, May 26, 1993]

Sec. 409.82  Inpatient hospital deductible.

    (a) General provisions--(1) The inpatient hospital deductible is a 
fixed amount chargeable to the beneficiary when he or she receives 
covered <STRONG>services</STRONG> in a hospital or a CAH for the first time in a benefit 
period.
    (2) Although the beneficiary may be hospitalized several times 
during a benefit period, the deductible is charged only once during that 
period. If the beneficiary begins more than one benefit period in the 
same year, a deductible is charged for each of those periods.
    (3) For <STRONG>services</STRONG> furnished before January 1, 1982, the applicable 
deductible is the one in effect when the benefit period began.

[[Page 239]]

    (4) For <STRONG>services</STRONG> furnished after December 31, 1981, the applicable 
deductible is the one in effect during the calendar year in which the 
<STRONG>services</STRONG> were furnished.
    (b) Specific deductible amounts. The specific deductible amounts for 
each calendar year are published in the Federal Register no later than 
October 1 of the preceding year.
    (c) Exception to published amounts. If the total hospital or CAH 
charge is less than the deductible amount applicable for the calendar 
year in which the <STRONG>services</STRONG> were furnished, the amount of the charge is 
the deductible for the year.

[48 FR 12541, Mar. 25, 1983, as amended at 54 FR 4026, Jan. 27, 1989; 58 
FR 30666, 30667, May 26, 1993]

Sec. 409.83  Inpatient hospital coinsurance.

    (a) General provisions--(1) Inpatient hospital coinsurance is the 
amount chargeable to a beneficiary for each day after the first 60 days 
of inpatient hospital care or inpatient CAH care or both in a benefit 
period.
    (2) For each day from the 61st to the 90th day, the coinsurance 
amount is \1/4\ of the applicable deductible.
    (3) For each day from the 91st to the 150th day (lifetime reserve 
days), the coinsurance amount is \1/2\ of the applicable deductible.
    (4) For coinsurance days before January 1, 1982, the coinsurance 
amount is based on the deductible applicable for the calendar year in 
which the benefit period began. The coinsurance amounts do not change 
during a beneficiary's benefit period even though the coinsurance days 
may fall in a subsequent year for which a higher deductible amount has 
been determined.
    (5) For coinsurance days after December 31, 1981, the coinsurance 
amount is based on the deductible applicable for the calendar year in 
which the <STRONG>services</STRONG> were furnished. For example, if an individual starts 
a benefit period by being admitted to a hospital in 1981 and remains in 
the hospital long enough to use coinsurance days in 1982, the 
coinsurance amount charged for those days is based on the 1982 inpatient 
hospital deductible.
    (b) Specific coinsurance amounts. The specific coinsurance amounts 
for each calendar year are published in the Federal Register no later 
than October 1 of the preceding year.
    (c) Exceptions to published amounts. (1) If the actual charge to the 
patient for the 61st through the 90th day of inpatient hospital or 
inpatient CAH <STRONG>services</STRONG> is less than the coinsurance amount applicable 
for the calendar year in which the <STRONG>services</STRONG> were furnished, the actual 
charge per day is the daily coinsurance amount.
    (2) If the actual charge to the patient for the 91st through the 
150th day (lifetime reserve days) is less than the coinsurance amount 
applicable for the calendar year in which the <STRONG>services</STRONG> were furnished, 
the beneficiary is deemed to have elected not to use the days because he 
or she would not benefit from using them.

[48 FR 12541, Mar. 25, 1983, as amended at 54 FR 4026, Jan. 27, 1989; 58 
FR 30666, 30667, May 26, 1993]

Sec. 409.85  Skilled nursing facility (SNF) care coinsurance.

    (a) General provisions. (1) SNF care coinsurance is the amount 
chargeable to a beneficiary after the first 20 days of SNF care in a 
benefit period.
    (2) For each day from the 21st through the 100th day, the 
coinsurance is \1/8\ of the applicable inpatient hospital deductible.
    (3) For coinsurance days before January 1, 1982, the coinsurance 
amount is based on the deductible applicable for the year in which the 
benefit period began. The coinsurance amounts do not change during a 
beneficiary's benefit period even though the coinsurance days may fall 
in a subsequent year for which a higher deductible amount has been 
determined.
    (4) For coinsurance days after December 31, 1981, the coinsurance 
amount is based on the deductible applicable for the calendar year in 
which the <STRONG>services</STRONG> were furnished.
    (b) Specific coinsurance amounts. The specific SNF coinsurance 
amounts for each calendar year are published in the Federal Register no 
later than October 1 of the preceding year.
    (c) Exception to published amounts. If the actual charge to the 
patient is less than the coinsurance amount applicable for the calendar 
year in which the

[[Page 240]]

<STRONG>services</STRONG> were furnished, the actual charge per day is the daily 
coinsurance.

[48 FR 12541, Mar. 25, 1983, as amended at 54 FR 4026, Jan. 27, 1989]

Sec. 409.87  Blood deductible.

    (a) General provisions. (1) As used in this section, packed red 
cells means the red blood cells that remain after plasma is separated 
from whole blood.
    (2) A unit of packed red cells is treated as the equivalent of 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 a beneficiary receives, during a calendar 
year, as an inpatient of a hospital or CAH or SNF, or on an outpatient 
basis under Medicare Part B.
    (4) The deductible does not apply to other blood components such as 
platelets, fibrinogen, plasma, gamma globulin, and serum albumin, or to 
the cost of processing, storing, and administering blood.
    (5) The blood deductible is in addition to the inpatient hospital 
deductible and daily coinsurance.
    (6) The Part A blood deductible is reduced to the extent that the 
Part B blood deductible has been applied. For example, if a beneficiary 
had received one unit under Medicare Part B, and later in the same 
benefit period received three units under Medicare Part A, Medicare Part 
A would pay for the third of the latter units. (As specified in 
Sec. 410.161 of this chapter, the Part B blood deductible is reduced to 
the extent a blood deductible has been applied under Medicare Part A.)
    (b) Beneficiary's responsibility for the first 3 units of whole 
blood or packed red cells. (1) Basic rule. Except as specified in 
paragraph (b)(2) of this section, the beneficiary is responsible for the 
first 3 units of whole blood or packed red cells. He or she has the 
option of paying the hospital's or CAH's charges for the blood or packed 
red cells or arranging for it to be replaced.
    (2) Exception. The beneficiary is not responsible for the first 3 
units of whole blood or packed red cells if the provider obtained that 
blood or red cells at no charge other than a processing or service 
charge. In that case, the blood or red cells is deemed to have been 
replaced.
    (c) Provider's right to charge for the first 3 units of whole blood 
or packed red cells--(1) Basic rule. Except as specified in paragraph 
(c)(2) of this section, a provider may charge a beneficiary its 
customary charge for any of the first 3 units of whole blood or packed 
red cells.
    (2) Exception. A provider may not charge the beneficiary for the 
first 3 units of whole blood or packed red cells in any of the following 
circumstances:
    (i) The blood or packed red cells has been replaced.
    (ii) The provider (or its blood supplier) receives, from an 
individual or a blood bank, a replacement offer that meets the criteria 
specified in paragraph (d) of this section. The provider is precluded 
from charging even if it or its blood supplier rejects the replacement 
offer.
    (iii) The provider obtained the blood or packed red cells at no 
charge other than a processing or service charge and it is therefore 
deemed to have been replaced.
    (d) Criteria for replacement of blood. A blood replacement offer 
made by a beneficiary, or an individual or a blood bank on behalf of a 
beneficiary, discharges the beneficiary's obligation to pay for 
deductible blood or packed red cells if the replacement blood meets the 
applicable criteria specified in Food and Drug Administration 
regulations under 21 CFR part 640, i.e.--
    (1) The replacement blood would not endanger the health of a 
recipient; and
    (2) The prospective donor's health would not be endangered by making 
a blood donation.

[48 FR 12541, Mar. 25, 1983, as amended at 56 FR 8840, Mar. 1, 1991; 57 
FR 36014, Aug. 12, 1992; 58 FR 30666, 30667, May 26, 1993]

Sec. 409.89  Exemption of kidney donors from deductible and coinsurance 
          requirements.

    The deductible and coinsurance requirements set forth in this 
subpart do not apply to any <STRONG>services</STRONG> furnished to an individual in 
connection with the donation of a kidney for transplant surgery.

[[Page 241]]

            Subpart H--Payment of Hospital Insurance Benefits

    Source: 53 FR 6633, Mar. 2, 1988, unless otherwise noted.

Sec. 409.100  To whom payment is made.

    (a) Basic rule. Except as provided in paragraph (b) of this section-
-
    (1) Medicare pays hospital insurance benefits only to a 
participating provider.
    (2) For home health <STRONG>services</STRONG> (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, payment is made to the 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).
    (b) Exceptions. Medicare may pay hospital insurance benefits as 
follows:
    (1) For emergency <STRONG>services</STRONG> furnished by a nonparticipating hospital, 
to the hospital or to the beneficiary, under the conditions prescribed 
in subpart G of part 424 of this chapter.
    (2) For <STRONG>services</STRONG> furnished by a Canadian or Mexican hospital, to the 
hospital or to the beneficiary, under the conditions prescribed in 
subpart H of part 424 of this chapter.

[53 FR 6633, Mar. 2, 1988, as amended at 65 FR 41211, July 3, 2000]

Sec. 409.102  Amounts of payment.

    (a) The amounts Medicare pays for hospital insurance benefits are 
generally determined in accordance with part 412 or part 413 of this 
chapter.
    (b) Except as provided in Secs. 409.61(d) and 409.89, hospital 
insurance benefits are subject to the deductible and coinsurance 
requirements set forth in subpart G of this part.



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