[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR405.501]

[Page 108-109]
 
                         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.  405.501  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 Sec. Sec.  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 Sec. Sec.  415.55 through 415.70 and Sec. Sec.  415.100 
through 415.130 of this chapter, which pertain to the determination of 
reimbursement for services 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

[[Page 109]]

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]