[Code of Federal Regulations]
[Title 38, Volume 1]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 38CFR17.56]

[Page 605-606]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
                CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS
 
PART 17--MEDICAL--Table of Contents
 
Sec. 17.56  Payment for non-VA physician services associated with outpatient and inpatient care provided at non-VA facilities.

    (a) Except for anesthesia services, payment for non-VA physician 
services associated with outpatient and inpatient care provided at non-
VA facilities authorized under Sec. 17.52, or made under Sec. 17.120 of 
this part, shall be the lesser of the amount billed or the amount 
calculated using the formula developed by the Department of Health & 
Human Services, Health Care Financing Administration (HCFA) under 
Medicare's participating physician fee schedule for the period in which 
the service is provided (see 42 CFR Parts 414 and 415). This payment 
methodology is set forth in paragraph (b) of this section. If no amount 
has been calculated under Medicare's participating physician fee 
schedule or if the services constitute anesthesia services, payment for 
such non-VA physician services associated with outpatient and inpatient 
care provided at non-VA facilities authorized under Sec. 17.52, or made 
under Sec. 17.120 of this part, shall be the lesser of the actual amount 
billed or the amount calculated using the 75th percentile methodology 
set forth in paragraph (c) of this section; or the usual and customary 
rate if there are fewer than 8 treatment occurrences for a procedure 
during the previous fiscal year.
    (b) The payment amount for each service paid under Medicare's 
participating physician fee schedule is the product of three factors: a 
nationally uniform relative value for the service; a geographic 
adjustment factor for each physician fee schedule area; and a nationally 
uniform conversion factor for the service. The conversion factor 
converts the relative values into payment amounts. For each physician 
fee schedule service, there are three relative values: An RVU for 
physician work; an RVU for practice expense; and an RVU for malpractice 
expense. For each of these components of the fee schedule, there is a 
geographic practice cost index (GPCI) for each fee schedule area. The 
GPCIs reflect the relative costs of practice expenses, malpractice 
insurance, and physician work in an

[[Page 606]]

area compared to the national average. The GPCIs reflect the full 
variation from the national average in the costs of practice expenses 
and malpractice insurance, but only one-quarter of the difference in 
area costs for physician work. The general formula calculating the 
Medicare fee schedule amount for a given service in a given fee schedule 
area can be expressed as: Payment = [(RVUwork x GPCIwork) + (RVUpractice 
expense x GPCIpractice expense) + (RVUmalpractice x GPCImalpractice)] x 
CF.
    (c) Payment under the 75th percentile methodology is determined for 
each VA medical facility by ranking all occurrences (with a minimum of 
eight) under the corresponding code during the previous fiscal year with 
charges ranked from the highest rate billed to the lowest rate billed 
and the charge falling at the 75th percentile as the maximum amount to 
be paid.
    (d) Payments made in accordance with this section shall constitute 
payment in full. Accordingly, the provider or agent for the provider may 
not impose any additional charge for any services for which payment is 
made by VA.
    (e) Notwithstanding other provisions of this section, VA, for 
physician services covered by this section, will pay the lesser of the 
amount determined under paragraphs (a) through (d) of this section or 
the amount negotiated with the physician or the physician's agent.

(Authority: 38 U.S.C. 513, 38 U.S.C. 1703, 38 U.S.C. 1728)

[63 FR 39515, July 23, 1998, as amended at 65 FR 66637, Nov. 7, 2000]

              Use of Community Nursing Home Care Facilities