[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR422.109]

[Page 255-256]
 
                         TITLE 42--PUBLIC HEALTH
 
                    CHAPTER IV--CENTERS FOR MEDICARE
                          & MEDICAID SERVICES,
                        DEPARTMENT OF HEALTH AND
                             HUMAN SERVICES
 
PART 422_MEDICARE ADVANTAGE PROGRAM--Table of Contents
 
             Subpart C_Benefits and Beneficiary Protections
 
Sec.  422.109  Effect of national coverage determinations (NCDs) and legislative changes in benefits.

    (a) Definitions. The term significant cost, as it relates to a 
particular NCD or legislative change in benefits, means either of the 
following:
    (1) The average cost of furnishing a single service exceeds a cost 
threshold that--
    (i) For calendar years 1998 and 1999, is $100,000; and
    (ii) For calendar year 2000 and subsequent calendar years, is the 
preceding year's dollar threshold adjusted to reflect the national per 
capita growth percentage described in Sec.  422.308(a).
    (2) The estimated cost of Medicare services furnished as a result of 
a particular NCD or legislative change in benefits represents at least 
0.1 percent of the national average per capita costs.
    (b) General rule. If CMS determines and announces that an individual 
NCD or legislative change in benefits meets

[[Page 256]]

the criteria for significant cost described in paragraph (a) of this 
section, a MA organization is not required to assume risk for the costs 
of that service or benefit until the contract year for which payments 
are appropriately adjusted to take into account the cost of the NCD 
service or legislative change in benefits. If CMS determines that an NCD 
or legislative change in benefits does not meet the ``significant cost'' 
threshold described in Sec.  422.109(a), the MA organization is required 
to provide coverage for the NCD or legislative change in benefits and 
assume risk for the costs of that service or benefit as of the effective 
date stated in the NCD or specified in the legislation.
    (c) Before payment adjustments become effective. Before the contract 
year that payment adjustments that take into account the significant 
cost of the NCD service or legislative change in benefits become 
effective, the service or benefit is not included in the MA 
organization's contract with CMS, and is not a covered benefit under the 
contract. The following rules apply to these services or benefits:
    (1) Medicare payment for the service or benefit is made directly by 
the fiscal intermediary and carrier to the provider furnishing the 
service or benefit in accordance with original Medicare payment rules, 
methods, and requirements.
    (2) Costs for NCD services or legislative changes in benefits for 
which CMS intermediaries and carriers will not make payment and are the 
responsibility of the MA organization are--
    (i) Services necessary to diagnose a condition covered by the NCD or 
legislative changes in benefits;
    (ii) Most services furnished as follow-up care to the NCD service or 
legislative change in benefits;
    (iii) Any service that is already a Medicare-covered service and 
included in the annual MA capitation rate or previously adjusted 
payments; and
    (iv) Any services, including the costs of the NCD service or 
legislative change in benefits, to the extent the MA organization is 
already obligated to cover it as a supplemental benefit under Sec.  
422.102.
    (3) Costs for significant cost NCD services or legislative changes 
in benefits for which CMS fiscal intermediaries and carriers will make 
payment are those Medicare costs not listed in paragraphs (c)(2)(i) 
through (c)(2)(iv) of this section.
    (4) Beneficiaries are liable for any applicable coinsurance amounts.
    (d) After payment adjustments become effective. For the contract 
year in which payment adjustments that take into account the significant 
cost of the NCD service or legislative change in benefits are in effect, 
the service or benefit is included in the MA organization's contract 
with CMS, and is a covered benefit under the contract. Subject to all 
applicable rules under this part, the MA organization must furnish, 
arrange, or pay for the NCD service or legislative change in benefits. 
MA organizations may establish separate plan rules for these services 
and benefits, subject to CMS review and approval. CMS may, at its 
discretion, issue overriding instructions limiting or revising the MA 
plan rules, depending on the specific NCD or legislative change in 
benefits. For these services or benefits, the Medicare enrollee will be 
responsible for MA plan cost sharing, as approved by CMS or unless 
otherwise instructed by CMS.

[68 FR 50856, Aug. 22, 2003, as amended at 70 FR 4721, Jan. 28, 2005; 70 
FR 52026, Sept. 1, 2005]