[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR405.508]

[Page 113-114]
 
                         TITLE 42--PUBLIC HEALTH
 
                    CHAPTER IV--CENTERS FOR MEDICARE
                          & MEDICAID SERVICES,
                        DEPARTMENT OF HEALTH AND
                             HUMAN SERVICES
 
PART 405_FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
--Table of Contents
 
          Subpart E_Criteria for Determining Reasonable Charges
 
Sec. 405.508  Determination of comparable circumstances; limitation.

    (a) Application of limitation. The carrier may not in any case make 
a determination of reasonable charge which would be higher than the 
charge upon which it would base payment to its own policyholders for a 
comparable service in comparable circumstances. The charge upon which it 
would base payment, however, does not necessarily mean the amount the 
carrier would be

[[Page 114]]

obligated to pay. Under certain circumstances, some carriers pay amounts 
on behalf of individuals who are their policyholders, which are below 
the customary charges of physicians or other persons to other 
individuals. Payment under the supplementary medical insurance program 
would not be limited to these lower amounts.
    (b) When comparability exists. ``Comparable circumstances,'' as used 
in the Act and this subpart, refers to the circumstances under which 
services are rendered to individuals and the nature of the carrier's 
health insurance programs and the method it uses to determine the 
amounts of payments under these programs. Generally, comparability would 
exist where:
    (1) The carrier bases payment under its program on the customary 
charges, as presently constituted, of physicians or other persons and on 
current prevailing charges in a locality, and
    (2) The determination does not preclude recognition of factors such 
as speciality status and unusual circumstances which affect the amount 
charged for a service.
    (c) Responsibility for determining comparability. Responsibility for 
determining whether or not a carrier's program has comparability will in 
the first instance fall upon the carrier in reporting pertinent 
information about its programs to the Centers for Medicare & Medicaid 
Services. When the pertinent information has been reported, the Centers 
for Medicare & Medicaid Services will advise the carrier whether any of 
its programs have comparability.