[Federal Register Volume 62, Number 209 (Wednesday, October 29, 1997)]
[Rules and Regulations]
[Pages 56106-56111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28594]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Part 489
[BPD-748-F]
RIN 0938-AG03
Medicare Program; Changes in Provider Agreement Regulations
Related to Federal Employees Health Benefits
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule.
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SUMMARY: This final rule makes two changes to Medicare's provider
agreement regulations concerning payment for inpatient hospital
services furnished to retired enrollees of fee-for-service Federal
Employees Health Benefits (FEHB) plans who do not have Medicare Part A
coverage. The first change specifies that payment for inpatient
hospital services furnished to retired Federal workers age 65 or older
who are enrolled in a fee-for-service FEHB plan but are not covered
under Medicare Part A is limited to a payment amount that approximates
the Medicare diagnosis-related group payment rates established under
Medicare's inpatient hospital prospective payment system.
The second change specifies that HCFA will consider termination or
nonrenewal of a hospital's provider agreement with Medicare if a
hospital knowingly and willfully fails to accept, on a repeated basis,
the Medicare rate as payment in full for inpatient hospital services
provided to a retired Federal worker who is enrolled in a fee-for-
service FEHB plan and who does not have Medicare Part A coverage.
This final rule implements section 7002(f) of the Omnibus Budget
Reconciliation Act of 1990.
[[Page 56107]]
EFFECTIVE DATE: These regulations are effective on November 28, 1997.
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FOR FURTHER INFORMATION CONTACT: David Walczak, (410) 786-4475.
SUPPLEMENTARY INFORMATION:
I. Background
The Office of Personnel Management (OPM) administers the Federal
Employees Health Benefits (FEHB) program. This program provides health
insurance coverage to current Federal employees, retired Federal
workers, and their eligible family members. While most retired Federal
employees age 65 or older are eligible to receive hospital insurance
benefits under Medicare Part A, some retired Federal workers are not
covered. This group generally encompasses those Federal workers who
retired from the Federal Government before January 1, 1983, and who did
not have Medicare withholdings taken from their salary while employed
with the Federal Government or did not acquire coverage in another way.
Existing Medicare provider agreement regulations at 42 CFR
489.21(a) specify that a provider must agree not to charge a
beneficiary for services for which the beneficiary is entitled to have
payment made under Medicare. Under this provision, the provider agrees
to accept Medicare payment in full for services covered under Medicare
and furnished by the provider. However, the regulations do not require
that hospitals accept the Medicare hospital inpatient prospective
payment system (PPS) rate as payment in full when issued by a fee-for-
service FEHB plan for a FEHB enrollee not covered by Medicare Part A.
Section 7002(f) of the Omnibus Budget Reconciliation Act of 1990
(OBRA '90) (Pub. L. 101-508) requires that fee-for-service FEHB plans
limit their inpatient payment for services furnished to retired FEHB
enrollees age 65 and older who are not covered under Medicare Part A to
rates that would have been paid by Medicare under section 1886 of the
Social Security Act (the Act). Under sections 1886 (d) and (g) of the
Act, Medicare payment for hospital inpatient operating and capital-
related costs is made at a predetermined specific rate for each
hospital discharge based on the assigned diagnosis-related group (DRG)
for each patient. Thus, a hospital knows at the time of discharge what
Medicare will pay for each discharge.
Section 7002(f) of OBRA '90 also requires that OPM notify the
Secretary of Health and Human Services (the Secretary) of incidents
when a hospital knowingly and willfully attempts to collect, on a
repeated basis, more than the Medicare payment rates. The Secretary may
consider such incidents as violations of the Medicare provider
agreement and may terminate or refuse to renew the agreement. A
Medicare provider agreement is an agreement between HCFA and providers
specified in regulations to furnish services to Medicare beneficiaries
and to comply with section 1866 of the Act, which establishes
conditions that providers must meet in order to have an agreement to
participate in the Medicare program. HCFA may terminate a provider
agreement if any of the failings listed in regulations at
Sec. 489.53(a) are attributable to a provider.
On February 10, 1994, we published in the Federal Register (59 FR
6228) a proposed rule to revise regulations in Part 489 to implement
section 7002(f) of OBRA '90. We proposed to:
Amend Sec. 489.21, which sets forth specific limitations
on charges under Medicare provider agreements, to make the limitations
on payment for inpatient hospital services applicable to services
furnished to retired fee-for-service FEHB plan enrollees age 65 or
older who are not covered under Medicare Part A hospital benefits.
Specify, under a new Sec. 489.21(I), that a provider may
not attempt to collect more than the amount established for Medicare
purposes for inpatient hospital services under section 1886 of the Act.
Add a new Sec. 489.53(a)(13) to specify that HCFA will
consider termination or nonrenewal of a Medicare provider agreement
with any hospital that knowingly and willfully fails to accept, on a
repeated basis, the Medicare rate established under the inpatient
hospital PPS system, minus any applicable health plan deductibles or
copayments, as payment in full from a fee-for-service FEHB plan.
Our February 10, 1994 proposed rule paralleled the provisions of a
July 20, 1993 OPM final rule (58 FR 38661) that defined a retired
enrolled individual and set forth the circumstances under which the
limit on hospital charges and FEHB benefit payments take effect.
II. Analysis of and Responses to Public Comments
We received four letters of comment on the February 10, 1994,
proposed rule. A summary of these comments and our responses are
discussed below.
Comment: Two commenters identified a number of problems with the
administrative procedures designed to enforce the limit on inpatient
charges and to monitor overcharges in fee-for-service plans. One
commenter stated that the oversight process relies on the FEHB plan
having a good system for cross-referencing actual charges against the
limits placed on hospital inpatient charges. The same commenter also
expressed concern over the lack of any provision for enrollee input
into the compliance process, except when an enrollee notices that an
overcharge has been billed and then notifies the FEHB plan or OPM. A
second commenter noted that there is no incentive for monitoring
overcharges in fee-for-service plans, since these plans base future
premiums on prior claims experience. The same commenter pointed out
that the fee-for-service plans usually pay coinsurances and copayment
amounts based on charges submitted by providers, and that the plans
will not pursue potential overcharges, especially when the hospital is
a preferred provider for the plan.
Response: We believe that there are adequate procedures and
controls in place among the FEHB plans, OPM, and HCFA to monitor
overcharges in fee-for-service plans covering retired Federal
[[Page 56108]]
enrollees age 65 or older who do not have Medicare Part A hospital
coverage.
OPM is responsible for administering the day-to-day operations of
the FEHB program. OPM's regulations governing the FEHB program are
described in 5 CFR part 890. Regulations describing the limits are in
subpart I of part 890. The FEHB plans inform both the hospital and the
enrollee of the limits on inpatient charges for covered Medicare
inpatient hospital services provided to a retired Federal enrollee age
65 or older who does not have Medicare Part A benefits. The FEHB plans
inform their enrollees through an explanation of benefits (EOB)
statement, that describes what the plan pays for, the amount the
enrollee must pay, the limits on inpatient hospital charges for
Medicare-covered services, and the date each service was provided. The
limits on hospital inpatient charges are also covered in the plans'
benefit brochures. FEHB plans inform hospitals that a hospital cannot
collect more than what Medicare would have paid if the FEHB enrollee
had been covered by Medicare Part A. In other words, the fee-for-
service FEHB plan pays the hospital an amount that approximates as
closely as possible the Medicare payment rate, minus any enrollee
deductibles or copayment amounts.
Since FEHB plans do not have a system in place for routinely
checking for overcharges, any discrepancies are brought to the
attention of a fee-for-service FEHB plan by an enrollee. According to
OPM, overbilling of retired Federal enrollees of fee-for-service FEHB
plans is not a problem. There have been no known instances of a
hospital repeatedly overbilling. On the other hand, there have been a
few instances where hospitals have disagreed with the Medicare
prospective payment system rates that have been paid by the fee-for-
service FEHB plans. Disputes over the determination of the equivalent
DRG payment rate have been resolved on a case-by-case basis between the
fee-for-service FEHB plans and hospital providers.
If there are instances of overbilling, fee-for-service FEHB plans
must inform the hospital that it is violating the law. If the hospital
does not comply with the law after being notified, the fee-for-service
FEHB plans must notify OPM. If OPM determines that a hospital knowingly
and willfully attempted to collect more than the Medicare payment rate
for inpatient hospital services, OPM notifies HCFA to take appropriate
action. HCFA is authorized to either terminate or nonrenew a hospital's
provider agreement to participate in Medicare, in accordance with
section 1866(b)(2) of the Act.
HCFA's authority to take enforcement action against a hospital by
stopping its Medicare reimbursement serves as a powerful and effective
incentive for a hospital to follow acceptable billing practices. There
is also a strong incentive for fee-for-service FEHB plans to ensure
that a hospital is charging within the acceptable limits. If enrollees
are continually being overcharged, they likely will become dissatisfied
with a plan's service, and may eventually switch health plans. We
believe that if the health plans want to keep enrollees as customers,
fee-for-service FEHB plans will make every effort to monitor, prevent,
and correct a hospital's overbilling as much as possible.
Comment: One commenter stated that the language on HCFA termination
of Medicare provider agreements in Sec. 489.53(a)(13) is broad and
permissive. The commenter pointed out that a provider may misinterpret
the words. ``HCFA may terminate the agreement if the provider knowingly
and willfully charges, on a repeated basis * * *'', and suggested
replacing the word ``may'' with the word ``will.''
Response: Section 489.53(a) establishes HCFA's authority to
terminate a provider's agreement and outlines the circumstances under
which HCFA may proceed with the termination action. The phrase ``may
terminate'' is used in the regulation rather than ``will terminate''
because it provides HCFA with the discretion to evaluate each situation
carefully and to apply the termination provisions fairly. Thus, HCFA is
not forced to arbitrarily terminate a provider's agreement if
mitigating circumstances apply.
In addition, the phrases ``* * * knowingly and willfully * * *'',
``* * * on a repeated basis * * *'', and ``* * * may * * *'' are
language taken directly from section 7002(f) of OBRA '90. Our
regulations at Sec. 489.53 are based on the language and intent of this
statute. The important point is that when OPM notifies HCFA that a
violation has occurred, HCFA will investigate and make every attempt to
enforce the requirements of the statute and regulations.
Comment: One commenter believed that fee-for-service FEHB plans
should inform their enrollees who are without Medicare Part A hospital
benefits that their hospital bills have been reviewed, to assure that
the inpatient charges do not exceed the Medicare approved payment
amounts.
Response: OPM has taken several measures to inform enrollees of
fee-for-service FEHB plans of the limits on inpatient hospital charges
and fee-for-service FEHB plan payments. First, OPM published the 1991
Open Season Information and Instructions for Annuitants and included an
explanation of the limits in a highlighted section entitled ``Attention
All Enrollees''. In addition, an explanation of the limits has been
included in all brochures of fee-for-service health plans of the FEHB
program beginning in 1992 through the present.
As stated in a previous response, a fee-for-service FEHB plan
informs both the hospital and the enrollee of the current Medicare
approved payment limits. The FEHB plan notifies the enrollee what the
enrollee is obligated to pay (the deductible or copayment amount) in
the EOB statement. When a fee-for-service FEHB plan receives a hospital
bill for an enrollee covered by section 7002(f) of OBRA '90, the FEHB
plan pays the hospital an amount that approximates the Medicare DRG
payment amount minus any enrollee deductible or copayment. Thus, a
hospital bears the responsibility not to collect more than the Medicare
DRG payment rate established under the inpatient hospital prospective
payment system, minus any enrollee deductibles or copayments, as
payment in full from a fee-for-service FEHB plan. HCFA may terminate or
nonrenew a hospital's provider agreement with Medicare, if OPM reports
that a hospital is refusing to accept an amount that approximates the
Medicare rate as payment in full for inpatient hospital services
provided to a retired Federal worker who is enrolled in a fee-for-
service FEHB plan and who does not have Medicare Part A.
Comment: One commenter believed that it is sometimes difficult to
identify the appropriate primary payer types for all patients. Thus,
the commenter recommended that every retired Federal enrollee who is
not covered under Medicare Part A be issued an identification card to
be presented when the individual receives inpatient hospital services.
The commenter also suggested that the card include a message on one
side stating that the card carrier is a Medicare limited-reimbursement
patient, and display an accompanying telephone number for benefit
information.
Response: As noted above, OPM has operational authority over the
administration of the FEHB program. HCFA does not have any
responsibility in this area. We have forwarded this suggestion to OPM
for its consideration.
However, OPM did comment to us that the cost of producing a
different identification card for retirees over age 65 not covered by
Medicare Part A
[[Page 56109]]
cannot be justified when FEHB plans inform hospitals each time the
limits apply, and by now, hospitals know the category of individuals
that are covered by the limits.
Comment: One commenter stated that the proposed rule did not
address the Medicare payment limits established for providers that are
excluded from PPS, such as psychiatric hospitals and units,
rehabilitation hospitals and units, long-term care hospitals,
children's hospitals, and cancer hospitals. Providers that are excluded
from PPS are paid on a reasonable cost basis, subject to a hospital-
specific target rate per discharge.
Response: Section 7002(f) of OBRA '90 specifies that a hospital may
not charge more than the limitations on hospital charges established
under section 1886 of the Act to fee-for-service FEHB plans for
inpatient hospital services provided to retired Federal enrollees age
65 or older who do not have Medicare Part A hospital coverage. Section
1886 of the Act refers to Medicare payment to hospitals for inpatient
services, which could be construed as including both the PPS rates and
the payment limits for hospitals excluded from PPS. Both OPM and HCFA
interpret that the intent of section 7002(f) of OBRA '90 applies only
to hospitals that are paid under the PPS as specified in sections
1886(d) and (g) of the Act. On the other hand, hospitals and units that
are excluded from PPS are paid on a reasonable cost basis, known as the
TEFRA payment system, and are not intended to be covered under section
7002(f) of OBRA '90. There are a number of operational and
administrative reasons why the limits on a fee-for-service FEHB plan's
payment to a hospital for inpatient services provided to a retired
Federal enrollee, age 65 or older, who is without Medicare Part A, are
subject to Medicare's prospective payment system, rather than to
Medicare's reasonable cost system of payment (TEFRA).
First, under PPS, payment for acute inpatient hospital stays under
Medicare Part A are based on prospectively set rates. Under this
system, Medicare payment is made at a predetermined, specific rate for
each hospital discharge, according to a DRG payment rate. A PPS
hospital generally knows at the time of discharge what Medicare will
pay for each Medicare discharge. In contrast, Medicare payment to
providers subject to the TEFRA target limit is based on total Medicare
discharges times a hospital-specific cost limit per discharge. Thus,
hospitals and units that are excluded from PPS do not know what their
total Medicare payments will be until after their year-end cost reports
have been settled.
Moreover, it is not feasible for fee-for-service FEHB plans to
calculate Medicare payments rates for inpatient hospital services
provided in PPS excluded hospitals and units. OPM and HCFA agree that
the intent of section 7002(f) of OBRA '90 was not to have the fee-for-
service FEHB plans perform year-end settlements of hospital cost
reports to determine a hospital's TEFRA payments, which are hospital-
specific as opposed to the patient-specific payments under PPS.
Although it is feasible for a fee-for-service FEHB plan to compare
prospective payments for a single beneficiary against a hospital's
charges for that patient, it would not be feasible for a fee-for-
service FEHB to compare the TEFRA limit to the charges for a specific
patient that would in effect involve aggregating all individual
patients' charges and then imposing the limits. Instead, HCFA and OPM
agree that the intent of section 7002(f) of OBRA '90 is to establish
Medicare payment limits on inpatient hospital charges in accordance
with the payment rates established under sections 1886(d) and (g) of
the Act.
We note that both OPM's interim final rule (published March 27,
1992, in the Federal Register at 57 FR 10609) and final rule (published
July 20, 1993, in the Federal Register at 58 FR 38661) specify that
limitations on inpatient hospital charges and FEHB program payments are
based on Medicare's DRG equivalent payment amount (a rate that
represents as closely as possible the amount that Medicare would have
paid had a retired FEHB enrollee been covered under Medicare Part A).
Again, because of the differences in the two payment systems (PPS and
TEFRA) and the difficulty in comparing what Medicare would have paid
for a particular patient in a TEFRA provider, both HCFA and OPM agree
that section 7002(f) of OBRA '90 does not apply to inpatient hospital
services provided in non-PPS hospitals and units.
Comment: One commenter stated that it has encountered a problem in
receiving correct payment amounts for inpatient hospital services
furnished to retired Federal workers age 65 and older who are enrolled
in a fee-for-service FEHB plan and who do not have Medicare Part A
benefits. The commenter expressed concern that payment rates for some
hospitals have not been equal to Medicare payment rates for the same
services, and that the payment rates used by OPM and the fee-for-
service FEHB plans are not the most recent rates. The commenter
recommended that the Medicare payment rates received by OPM and the
fee-for-service FEHB plans be current and updated as of October 1 of
each year when new DRG rates are known and technical corrections have
been made. Two commenters also requested that the payment rates include
all applicable adjustments to the DRG rate, such as the indirect
medical education cost adjustment, payment for direct graduate medical
education costs, outlier payments, inpatient capital costs, kidney
acquisition costs, etc.
Response: OPM addressed a similar comment in its July 20, 1993
final rule (58 FR 38661). We agree with OPM's response, which stated
that OPM and the FEHB plans intend to calculate the DRG equivalent
amount as closely as possible to the amount that would have been paid
by Medicare.
We have been working with OPM to provide the latest DRG payment
rates. In fact, the data provided by HCFA to OPM for calculating the
DRG equivalent payment amount include all applicable adjustments to the
DRG rate, such as the indirect medical education cost adjustment,
payment for direct graduate medical education costs, organ acquisition
costs, capital costs, and outlier payments. Any dispute involving a
payment made by a fee-for-service FEHB plan for inpatient hospital
services provided to a retired Federal worker who is enrolled in the
fee-for-service FEHB plan and who does not have Medicare Part A
coverage should be resolved by the particular FEHB plan and the
provider.
Medicare Grouper, Code Editor and Pricer software data provide
current DRG payment data to OPM as of October 1 of each fiscal year.
The Medicare fiscal intermediaries send HCFA a provider file every 3
months. The provider-specific file includes the data needed to
calculate adjustments to the DRG rate, such as outlier payments, the
indirect medical education cost adjustment, payment for direct graduate
medical education costs, organ acquisition costs, and inpatient capital
costs.
Because of a transition to a new capital payment system, capital
cost data for 1992 were not available to the fee-for-service FEHB
plans. The fee-for-service FEHB plans were advised by OPM to use
``pass-through'' information multiplied by the length of stay to
determine an equivalent capital cost adjustment amount. Capital cost
information has been available to the fee-for-service FEHB plans since
the 1993 coverage year.
Comment: One commenter recommended that an appeal mechanism be put
in place to resolve payment differences and ensure that
[[Page 56110]]
correct payments are made to providers. The same commenter suggested
that a paid Medicare remittance for an identical DRG should be adequate
documentation to ensure that a provider is being paid the correct
amount, that is, the equivalent Medicare DRG payment amount.
Response: In its July 20, 1993 final rule, OPM stated that fee-for-
service FEHB plans have an obligation to work with hospital providers
to determine the correct payment amounts and to make any necessary
adjustments. Any decision to implement an appeals mechanism would be at
the discretion of OPM, since OPM administers the FEHB program.
Therefore, whether or not a paid Medicare remittance for identical DRG
constitutes acceptable documentation is a matter for OPM and the FEHB
plans to decide.
III. Provisions of the Final Regulations
After further review of the regulation text set forth in the
February 10, 1994 proposed rule, we believe that several changes are
needed to improve clarity.
The proposed rule would have revised the introductory text of
Sec. 489.21 and adding a new paragraph (I). We have determined that the
proposed language does not have the same context as the language in
Sec. 489.21, and Sec. 489.21 does not have the same meaning as the
intent of section 7002(f) of OBRA '90. The existing introductory
paragraph in Sec. 489.21 states that providers agree not to charge a
beneficiary for any of the services listed in this section (which would
have included the services listed in the proposed paragraph (I)).
However, the intent of section 7002(f) of OBRA '90 is that a fee-for-
service FEHB plan should not pay a provider for inpatient hospital
services furnished to a retired FEHB enrollee age 65 or older who is
without Medicare Part A hospital insurance, more than the amount that
Medicare would have paid had the enrollee been covered under Part A,
minus any enrollee deductibles or copayment. Therefore, we are
withdrawing the proposed language change to the existing regulation
text in Sec. 489.21.
Instead, we are adding a new Sec. 489.23, which will require a
provider to accept, as payment in full, an amount that approximates the
Medicare payment rate established under the inpatient hospital PPS for
inpatient hospital services furnished to retired Federal workers age 65
or older who are enrolled in a fee-for-service FEHB plan and who do not
have Medicare Part A benefits.
We also proposed to amend Sec. 489.53 to specify that HCFA may
terminate the Medicare provider agreement with any hospital that
knowingly and willfully fails to accept, on a repeated basis, the
Medicare payment rate established under PPS, minus any enrollee
deductibles or copayments, as payment in full from a fee-for-service
FEHB plan for inpatient services provided to retired Federal enrollees
age 65 or older who do not have Medicare Part A benefits. In order to
further clarify the proposed change, we are revising
Sec. 489.53(a)(13)(redesignated now as (a)(15)) to specify that the
provision applies only to providers that furnish inpatient hospital
services to retired Federal enrollees of fee-for-service FEHB plans who
are 65 or older who do not have Medicare Part A benefits.
IV. Regulatory Impact Statement
HCFA has examined the impacts of this final rule as required by
Executive Order 12866 and the regulatory Flexibility Act (Pub. L. 96-
354). Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, when regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects; distributive impacts; and equity). The Regulatory Flexibility
Act requires agencies to analyze options for regulatory relief for
small businesses. Most hospitals, and most other providers are small
entities, either by nonprofit status or by having revenues of $5
million or less annually.
This final rule requires a provider that furnishes inpatient
hospital services to retired Federal workers age 65 or older who are
enrolled in a fee-for-service FEHB plan but who are not covered under
Medicare Part A hospital benefits to accept as payment in full an
amount that approximates the Medicare payment rates established under
the prospective payment system.
In addition, HCFA may terminate the Medicare provider agreement
with any provider that knowingly and willfully fails to accept, on a
repeated basis, an amount that approximates the Medicare rate
established under the inpatient hospital prospective payment system,
minus any health plan deductible or copayment, as payment in full from
a fee-for-service FEHB plan, for inpatient hospital services provided
to a retired Federal enrollee of the fee-for-service FEHB plan who does
not have Medicare Part A benefits.
Section 7002(f) of OBRA '90 became effective January 1, 1992,
without rulemaking. Because hospitals will not be able to charge what
they would normally charge private pay patients and other commercial
insurers, it is estimated that there will be a substantial savings, per
affected enrollee, to the FEHB program. Hospitals have been notified of
their obligations through OPM administrative procedures. Savings will
accrue directly through the OPM program, and compliance will be
obtained and monitored by OPM.
HCFA is involved only because the Congress required that we
establish a sanction mechanism in case any hospitals knowingly and
willfully violate the requirement on a repeated basis. These sanction
procedures would come into play only after an OPM determination of a
violation and notification to HCFA. Hospitals that do not charge more
than an amount that approximates the hospital payments established for
Medicare purposes would not be affected by this rule. We do not believe
that any hospitals will knowingly refuse to comply, or that any
hospital will lose provider status. Therefore, this final rule will
have negligible economic effects.
Section 1102(b) of the Act requires us to prepare a regulatory
impact analysis if a final rule may have a significant impact on the
operations of a substantial number of small rural hospitals. Such an
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside a Metropolitan
Statistical Area and has fewer than 50 beds. We are not preparing a
rural hospital impact statement because we have determined, and we
certify, that this final rule will not affect a significant number of
small entities and will not have a significant economic impact on the
operations of a substantial number of small rural hospitals.
In accordance with the provisions of Executive Order 12866, this
final regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 489
Health facilities, Medicare, Reporting and recordkeeping
requirements.
42 CFR part 489 is amended as set forth below:
PART 489--PROVIDER AND SUPPLIER AGREEMENTS
1. The authority citation for part 489 continues to read as
follows:
Authority: Secs. 1102, 1861, 1864(m), 1866, and 1871 of the
Social Security Act (42 U.S.C. 1302, 1395x, 1395aa(m), 1395cc, and
1395hh).
2. A new Sec. 489.23 is added to read as follows:
[[Page 56111]]
Sec. 489.23 Specific limitation on charges for services provided to
certain enrollees of fee-for-service FEHB plans.
A provider that furnishes inpatient hospital services to a retired
Federal worker age 65 or older who is enrolled in a fee-for-service
FEHB plan and who is not covered under Medicare Part A, must accept, as
payment in full, an amount that approximates as closely as possible the
Medicare inpatient hospital prospective payment system (PPS) rate
established under part 412. The payment to the provider is composed of
a payment from the FEHB plan and a payment from the enrollee. This
combined payment approximates the Medicare PPS rate. The payment from
the FEHB plan approximates, as closely as possible, the Medicare PPS
rate minus any applicable enrollee deductible, coinsurance, or
copayment amount. The payment from the enrollee is equal to the
applicable deductible, coinsurance, or copayment amount.
3. In Sec. 489.53, the introductory text to paragraph (a) is
republished and a new paragraph (a)(14) is added to read as follows:
Sec. 489.53 Termination by HCFA.
(a) Basis for termination of agreement with any provider. HCFA may
terminate the agreement with any provider if HCFA finds that any of the
following failings is attributable to that provider:
* * * * *
(14) The hospital knowingly and willfully fails to accept, on a
repeated basis, an amount that approximates the Medicare rate
established under the inpatient hospital prospective payment system,
minus any enrollee deductibles or copayments, as payment in full from a
fee-for-service FEHB plan for inpatient hospital services provided to a
retired Federal enrollee of a fee-for-service FEHB plan, age 65 or
older, who does not have Medicare Part A benefits.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: October 17, 1997.
Nancy-Ann Min DeParle,
Deputy Administrator, Health Care Financing Administration.
[FR Doc. 97-28594 Filed 10-28-97; 8:45 am]
BILLING CODE 4120-01-P
