C.F.R. » Title 42 » CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES › SUBCHAPTER B—MEDICARE PROGRAM › PART 405—FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED › Subpart E—Criteria for Determining Reasonable Charges

42 C.F.R. § 405.505

Determination of locality

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“Locality” is the geographical area for which the carrier is to derive the reasonable charges or fee schedule amounts for services or items. Usually, a locality may be a State (including the District of Columbia, a territory, or a Commonwealth), a political or economic subdivision of a State, or a group of States. It should include a cross section of the population with respect to economic and other characteristics. Where people tend to gravitate toward certain population centers to obtain medical care or service, localities may be recognized on a basis constituting medical services areas (interstate or otherwise), comparable in concept to “trade areas.” Localities may differ in population density, economic level, and other major factors affecting charges for services. Carriers therefore shall delineate localities on the basis of their knowledge of local conditions. However, distinctions between localities are not to be so finely made that a locality includes only a very limited geographic area whose population has distinctly similar income characteristics (e.g., a very rich or very poor neighborhood within a city).

[57 FR 27305, June 18, 1992]
Notes of Decisions
Cited in 2 cases, 1992–1995 · leading case: Martin v. Shalala, 63 F.3d 497 (7th Cir. 1995).
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Martin v. Shalala, 63 F.3d 497 (7th Cir. 1995). · cites it 2× “It established the “prevailing charges in the locality for similar services” under § 1395u(b)(3) and the “locality” classifications under 42 C.F.R. § 405.505 . 4 Associated classified Dearborn County as a “Category 03” rural locality, with the lowest Medicare Part B…”
Queen City Home Health Care Co. v. Sullivan, 978 F.3d 236 (6th Cir. 1992). “The regulations direct carriers to examine the standard fee screens in a specific locality, 42 C.F.R. § 405.505 (1991), or, failing that, in the carrier’s region.”
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