[Code of Federal Regulations]
[Title 32, Volume 2]
[Revised as of July 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR220.3]

[Page 430-431]
 
                       TITLE 32--NATIONAL DEFENSE
 
        CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE (CONTINUED)
 
PART 220_COLLECTION FROM THIRD PARTY PAYERS OF REASONABLE CHARGES FOR 
 
Sec. 220.3  Exclusions impermissible.

    (a) Statutory requirement. Under 10 U.S.C. 1095(b), no provision of 
any third party payer's plan having the effect of excluding from 
coverage or limiting payment for certain care if that care is provided 
in a facility of the uniformed services shall operate to prevent 
collection by the United States.
    (b) General rules. Based on the statutory requirement, the following 
are general rules for the administration of 10 U.S.C. 1095 and this 
part.
    (1) Express exclusions or limitations in third party payer plans 
that are inconsistent with 10 U.S.C. 1095(b) are inoperative.
    (2) No objection, precondition or limitation may be asserted that 
defeats the statutory purpose of collecting from third party payers.
    (3) Third party payers may not treat claims arising from services 
provided in facilities of the uniformed services less favorably than 
they treat claims arising from services provided in other hospitals.
    (4) No objection, precondition or limitation may be asserted that is 
contrary to the basic nature of facilities of the uniformed services.
    (c) Specific examples of impermissible exclusion. The following are 
several specific examples of impermissible exclusions, limitations or 
preconditions. These examples are not all inclusive.
    (1) Care provided by a government entity. A provision in a third 
party payer's plan that purports to disallow or limit payment for 
services provided by a government entity or paid for by a government 
program (or similar exclusion) is not a permissible ground for refusing 
or reducing third party payment.
    (2) No obligation to pay. A provision in a third party payer's plan 
that purports to disallow or limit payment for services for which the 
patient has no obligation to pay (or similar exclusion) is not a 
permissible ground for refusing or reducing third party payment.
    (3) Exclusion of military beneficiaries. No provision of an employer 
sponsored program or plan that purports to make ineligible for coverage 
individuals who are uniformed services health care beneficiaries shall 
be permissible.
    (4) No participation agreement. The lack of a participation 
agreement or the absence of privity of contract between a third party 
payer and a facility of the uniformed services is not a permissible 
ground for refusing or reducing third party payment.
    (5) Medicare carve-out and Medicare secondary payer provisions. A 
provision in a third party payer plan, other than a Medicare 
supplemental plan under Sec. 220.10, that seeks to make Medicare the 
primary payer and the plan the secondary payer or that would operate to 
carve out of the plan's coverage an amount equivalent to the Medicare 
payment that would be made if the services were provided by a provider 
to whom payment would be made under Part A or Part B of Medicare is not 
a permissible ground for refusing or reducing payment as the primary 
payer

[[Page 431]]

to the facility of the Uniformed Services by the third party payer 
unless the provision:
    (i) Expressly disallows payment as the primary payer to all 
providers to whom payment would not be made under Medicare (including 
payment under Part A, Part B, a Medicare HMO, or a Medicare+Choice 
plan); and
    (ii) Is otherwise in accordance with applicable law.

[55 FR 21748, May 29, 1990, as amended at 57 FR 41101, Sept. 9, 1992; 65 
FR 7728, Feb. 16, 2000]