[Code of Federal Regulations]

[Title 42, Volume 2]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR405.508]



[Page 117]

 

                         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 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.



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