C.F.R. » Title 42 » CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES › SUBCHAPTER B—MEDICARE PROGRAM › PART 413—PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT RATES FOR SKILLED NURSING FACILITIES; PAYMENT FOR ACUTE KIDNEY INJURY DIALYSIS › Subpart E—Payments to Providers

42 C.F.R. § 413.60

Payments to providers: General

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(a) The fiscal contractors will establish a basis for interim payments to each provider. This may be done by one of several methods. If an contractor is already paying the provider on a cost basis, the contractor may adjust its rate of payment to an estimate of the result under the Medicare principles of reimbursement. If no organization is paying the provider on a cost basis, the contractor may obtain the previous year's financial statement from the provider and, by applying the principles of reimbursement, compute or approximate an appropriate rate of payment. The interim payment may be related to the last year's average per diem, or to charges, or to any other ready basis of approximating costs.

(b) At the end of the period, the actual apportionment, based on the cost finding and apportionment methods selected by the provider, determines the Medicare reimbursement for the actual services provided to beneficiaries during the period.

(c) Basically, therefore, interim payments to providers will be made for services throughout the year, with final settlement on a retroactive basis at the end of the accounting period. Interim payments will be made as often as possible and in no event less frequently than once a month. The retroactive payments will take fully into account the costs that were actually incurred and settle on an actual, rather than on an estimated basis.

Notes of Decisions
Cited in 31 cases (2 in the last 5 years), 1988–2022 · leading case: United States v. Bourseau
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United States v. Bourseau (2008) ca9 · cites it 3× “§ 1395g(e); 42 C.F.R. §§ 413.60 , 413.64. At the end of the year, providers submit a final accounting of their actual costs for the year to their intermediaries in a document called a cost report.”
Good Samaritan Hospital v. Shalala (1993) scotus · cites it 2× “" 42 CFR § 413.60 (a) (1992). And for purposes of devising preliminary estimates, this makes perfect sense; working through a permissible method for determining costs in all its detail may not improve the quality of an estimate if the raw figures used are mostly guesswork.”
Fischer v. United States (2000) scotus · cites it 2× “§ 1395g(a); 42 CFR §§ 413.60 , 413.64 (1999). The payment system serves to "protect providers' liquidity," Good Samaritan Hospital v.”
United States Ex Rel. Colucci v. Beth Israel Medical Center (2011) nysd · cites it 2× “42 C.F.R. § 413.60 . At the end of the fiscal year, each hospital must submit an Institutional Cost Report (“ICR”) and audited financial statements to its fiscal intermediary.”
Kemp v. Bowen (In Re Visiting Nurse Ass'n of Western Pennsylvania) (1992) pawd · cites it 2× “According to the stipulation of facts, VNA provided home nursing services for which it received Medicare cost reimbursement pursuant to the Periodic Interim Payment Plan (“PIP”) codified at 42 C.F.R. § 413.60 . Stipulation of Facts, ¶¶ 1-2.”
United States Ex Rel. Augustine v. Century Health Services, Inc. (2000) tnmd · cites it 2× “42 C.F.R. § 413.60 (1995). Many home health agency chains have a central or “home” office that provides administrative and centralized management services to individual agencies within the chain.”
Visiting Nurse Ass'n of Brooklyn v. Thompson (2004) nyed “42 C.F.R. §§ 413.60 , 405.1803(a)-(b). If it is determined that a provider has been overpaid, the NPR is used to adjust the provider’s payments to recover the amounts of overpayment.”
In Re St. Johns Home Health Agency, Inc. (1994) flsb “42 C.F.R. § 413.60 . Fiscal intermediaries calculate *240 these estimated payments by projecting the services likely to be provided during a given fiscal year based on performance during past years.”
MaineGeneral Medical Center v. Shalala (2000) ca1 “§ 1395g(a); 42 C.F.R. § 413.60 (a), (c). Providers are required to submit a cost report after the end of each fiscal year.”
In Re Vitalsigns Homecare, Inc. (2008) mab · cites it 2× “42 C.F.R. § 413.60 . This results in payments to a provider prior to a determination that the services rendered are covered and the costs reasonable.”
Loyola University of Chicago, Cross-Appellant v. Otis R. Bowen, M.D., Secretary of the Department of Health and Human Se (1990) ca7 “§ 1395h; 42 C.F.R. § 413.60 (1982). As the agent of the Secretary, the intermediary reviews the provider’s cost report and approves or disapproves payment for services rendered in compliance with the program’s fee schedule, regulations and guidelines set forth in the manuals…”
In Re Heffernan Memorial Hospital District (1996) casb “42 C.F.R. §§ 413.60 , 413.64. The Medicare statute requires such periodic payments to be made before an audit is conducted to determine the amount of reimbursement due under applicable law.”
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