C.F.R. » Title 42 » CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES › SUBCHAPTER B—MEDICARE PROGRAM › PART 412—PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES › Subpart B—Hospital Services Subject to and Excluded From the Prospective Payment Systems for Inpatient Operating Costs and Inpatient Capital-Related Costs

42 C.F.R. § 412.20

Hospital services subject to the prospective payment systems

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(a) Except for services described in paragraphs (b), (c), (d), and (e) of this section, all covered hospital inpatient services furnished to beneficiaries during the subject cost reporting periods are paid under the prospective payment system as specified in § 412.1(a)(1).

(b) Effective for cost reporting periods beginning on or after January 1, 2005, covered inpatient hospital services furnished to Medicare beneficiaries by an inpatient psychiatric facility that meets the conditions of § 412.404 are paid under the prospective payment system described in subpart N of this part.

(c)(1) Effective for cost reporting periods beginning on or after January 1, 2002, covered inpatient hospital services furnished to Medicare beneficiaries by a rehabilitation hospital or rehabilitation unit that meet the conditions of § 412.604 are paid under the prospective payment system described in subpart P of this part.

(2) CMS will not pay for services under subpart P of this part if the services are paid for by a health maintenance organization (HMO) or competitive medical plan (CMP) that elects not to have CMS make payments to an inpatient rehabilitation facility for services, which are inpatient hospital services, furnished to the HMO's or CMP's Medicare enrollees, as provided under part 417 of this chapter.

(d) Effective for cost reporting periods beginning on or after October 1, 2002, covered inpatient hospital services furnished to Medicare beneficiaries by a long-term care hospital that meets the conditions for payment of §§ 412.505 through 412.511 are paid under the prospective payment system described in subpart O of this part.

(e) Inpatient hospital services will not be paid under the prospective payment systems specified in § 412.1(a)(1) under any of the following circumstances:

(1) The services are furnished by a hospital (or hospital unit) explicitly excluded from the prospective payment systems under §§ 412.23, 412.25, 412.27, and 412.29.

(2) The services are emergency services furnished by a nonparticipating hospital in accordance with § 424.103 of this chapter.

(3) The services are paid for by an HMO or competitive medical plan (CMP) that elects not to have CMS make payments directly to a hospital for inpatient hospital services furnished to the HMO's or CMP's Medicare enrollees, as provided in §§ 417.240(d) and 417.586 of this chapter.

[50 FR 12741, Mar. 29, 1985, as amended at 53 FR 6648, Mar. 2, 1988; 57 FR 39820, Sept. 1, 1992; 59 FR 45400, Sept. 1, 1994; 66 FR 41386, Aug. 7, 2001; 67 FR 56048, Aug. 30, 2002; 68 FR 45698, Aug. 1, 2003; 69 FR 66976, Nov. 15, 2004]
Notes of Decisions
Cited in 6 cases, 1991–2015 · leading case: Alhambra Hosp. Mem'l Hosp. of Gardena v. Tommy G. Thompson , Sec'y, United States Dep't of Health & Human Servs., 259 F.3d 1071 (9th Cir. 2001).
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Alhambra Hosp. Mem'l Hosp. of Gardena v. Tommy G. Thompson , Sec'y, United States Dep't of Health & Human Servs., 259 F.3d 1071 (9th Cir. 2001). “The scope of PPS is defined by 42 C.F.R. § 412.20 (a): Except for services described in paragraph (b) of this section, all covered inpatient hospital services furnished to beneficiaries during subject cost reporting periods are paid for under the prospective payment systems.”
United States Ex Rel. Thompson v. Columbia/HCA Healthcare Corp., 20 F. Supp. 2d 1017 (S.D. Tex. 1998). “§ 1395ww(b); 42 C.F.R. §§ 412.20 et seq. Furthermore, Medicare payments for hospital outpatient services are based on a provider’s hospital-specific costs and, subject to various exceptions, hospitals usually are reimbursed 80% of their allowable costs of providing outpatient…”
Rye Psychiatric Hosp. Ctr., Inc. v. Shalala, 52 F.3d 1163 (2d Cir. 1995). “§§ 1395ww(b), 1395ww(d)(l)(B) (1988); 42 C.F.R. §§ 412.20 (b)-412.30 (1993). Second, the PPS statute and regulations contain a number of adjustment provisions, only one of which, 42 U.”
St. Francis Med. Ctr. v. Shalala, 32 F.3d 805 (3rd Cir. 1994). “§ 1395ww(b), and (d)(l)(A)-(B); 42 C.F.R. §§ 412.20 (b), 412.22(b). Among the excluded units were distinct part rehabilitation units.”
Hosp. San Rafael, Inc. v. Sullivan, 784 F. Supp. 927 (D.P.R. 1991). “§ 1395ww(d)(l)(A) and (B); 42 C.F.R. §§ 412.20 and 412.23(f). Unlike the cost-based system, PPS provides payment to hospitals on a uniform standard, grounded in the economic experience of hospitals as a whole.”
East Texas Med. Ctr. Gilmer v. Birder Porter (Tex. App. 2015). “Also, where appropriate, the hospital must be in compliance with the PPS exclusionmy criteria at 42 CFR 412.20 Subpart Band the swing-bed requirements at 42 CFR 482.”
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