[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: 42CFR415.60]



[Page 793-794]

 

                         TITLE 42--PUBLIC HEALTH

 

                    CHAPTER IV--CENTERS FOR MEDICARE

                          & MEDICAID SERVICES,

                        DEPARTMENT OF HEALTH AND

                             HUMAN SERVICES

 

PART 415_SERVICES FURNISHED BY PHYSICIANS IN PROVIDERS, SUPERVISING 

PHYSICIANS IN TEACHING SETTINGS, AND RESIDENTS IN CERTAIN SETTINGS

--Table of Contents

 

   Subpart B_Fiscal Intermediary Payments to Providers for Physician 

                                Services

 

Sec. 415.60  Allocation of physician compensation costs.



    (a) Definition. For purposes of this subpart, physician compensation 

costs means monetary payments, fringe benefits, deferred compensation, 

and any other items of value (excluding office space or billing and 

collection services) that a provider or other organization furnishes a 

physician in return for the physician services. Other organizations are 

entities related to the provider within the meaning of Sec. 413.17 of 

this chapter or entities that furnish services for the provider under 

arrangements within the meaning of the Act.

    (b) General rule. Except as provided in paragraph (d) of this 

section, each provider that incurs physician compensation costs must 

allocate those costs, in proportion to the percentage of total time that 

is spent in furnishing each category of services, among--

    (1) Physician services to the provider (as described in Sec. 

415.55);

    (2) Physician services to patients (as described in Sec. 415.102); 

and

    (3) Activities of the physician, such as funded research, that are 

not paid under either Part A or Part B of Medicare.

    (c) Allowable physician compensation costs. Only costs allocated to 

payable physician services to the provider (as described in Sec. 

415.55) are allowable costs to the provider under this subpart.

    (d) Allocation of all compensation to services to the provider. 

Generally, the total physician compensation received by a physician is 

allocated among all services furnished by the physician, unless--

    (1) The provider certifies that the compensation is attributable 

solely to the physician services furnished to the provider; and

    (2) The physician bills all patients for the physician services he 

or she furnishes to them and personally receives



[[Page 794]]



the payment from or on behalf of the patients. If returned directly or 

indirectly to the provider or an organization related to the provider 

within the meaning of Sec. 413.17 of this chapter, these payments are 

not compensation for physician services furnished to the provider.

    (e) Assumed allocation of all compensation to beneficiary services. 

If the provider and physician agree to accept the assumed allocation of 

all the physician services to direct services to beneficiaries as 

described under Sec. 415.102(a), CMS does not require a written 

allocation agreement between the physician and the provider.

    (f) Determination and payment of allowable physician compensation 

costs. (1) Except as provided under paragraph (e) of this section, the 

intermediary pays the provider for these costs only if--

    (i) The provider submits to the intermediary a written allocation 

agreement between the provider and the physician that specifies the 

respective amounts of time the physician spends in furnishing physician 

services to the provider, physician services to patients, and services 

that are not payable under either Part A or Part B of Medicare; and

    (ii) The compensation is reasonable in terms of the time devoted to 

these services.

    (2) In the absence of a written allocation agreement, the 

intermediary assumes, for purposes of determining reasonable costs of 

the provider, that 100 percent of the physician compensation cost is 

allocated to services to beneficiaries as specified in paragraph (b)(2) 

of this section.

    (g) Recordkeeping requirements. Except for services furnished in 

accordance with the assumed allocation under paragraph (e) of this 

section, each provider that claims payment for services of physicians 

under this subpart must meet all of the following requirements:

    (1) Maintain the time records or other information it used to 

allocate physician compensation in a form that permits the information 

to be validated by the intermediary or the carrier.

    (2) Report the information on which the physician compensation 

allocation is based to the intermediary or the carrier on an annual 

basis and promptly notify the intermediary or carrier of any revisions 

to the compensation allocation.

    (3) Retain each physician compensation allocation, and the 

information on which it is based, for at least 4 years after the end of 

each cost reporting period to which the allocation applies.