[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: 42CFR405.501]

[Page 87-88]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED--Table of Contents
 
         Subpart E--Criteria for Determining Reasonable Charges
 
Sec. 405.501  Determination of reasonable charges.

    (a) Except as specified in paragraphs (b), (c), and (d) of this 
section, Medicare pays no more for Part B medical and other health 
services than the ``reasonable charge'' for such service. The reasonable 
charge is determined by the carriers (subject to any deductible and 
coinsurance amounts as specified in Secs. 410.152 and 410.160 of this 
chapter).
    (b) Part B of Medicare pays on the basis of ``reasonable cost'' (see 
part 413 of this chapter) for certain institutional services, certain 
services furnished under arrangements with institutions, and services 
furnished by entities that elect to be paid on a cost basis (including 
health maintenance organizations, rural health clinics, Federally 
qualified health centers and end-stage renal disease facilities).
    (c) Carriers will determine the reasonable charge on the basis of 
the criteria specified in Sec. 405.502, and the customary and prevailing 
charge screens in effect when the service was furnished. (Also see 
Secs. 415.55 through 415.70 and Secs. 415.100 through 415.130 of this 
chapter, which pertain to the determination of reimbursement for 
services

[[Page 88]]

performed by hospital-based physicians.) However, when services are 
furnished more than 12 months before the beginning of the fee screen 
year (January 1 through December 30) in which a request for payment is 
made, payment is based on the customary and prevailing charge screens in 
effect for the fee screen year that ends immediately preceding the fee 
screen year in which the claim or request for payment is made.
    (d) Payment under Medicare Part B for durable medical equipment and 
prosthetic and orthotic devices is determined in accordance with the 
provisions of subpart D of part 414 of this chapter.

[47 FR 63274, Dec. 31, 1981, as amended at 51 FR 34978, Oct. 1, 1986; 51 
FR 37911, Oct. 27, 1986; 54 FR 9003, Mar. 2, 1989; 57 FR 24975, June 12, 
1992; 57 FR 33896, July 31, 1992; 57 FR 57688, Dec. 7, 1992; 60 FR 
63176, Dec. 8, 1995]