C.F.R. » Title 42 » CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES › SUBCHAPTER B—MEDICARE PROGRAM › PART 417—HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL PLANS, AND HEALTH CARE PREPAYMENT PLANS › Subpart O—Medicare Payment: Cost Basis

42 C.F.R. § 417.560

Apportionment: Part B physician and supplier services

Read at: eCFRecfr.gov CornellLII GovInfogovinfo.gov CasesGoogle Scholar

(a) Medical services furnished directly by the HMO or CMP. The total allowable cost of Part B physician and supplier services furnished by employees or partners of the HMO or CMP or by a related entity of the HMO or CMP must be apportioned on the basis of the ratio of covered Part B services furnished to Medicare enrollees to total services furnished to all the HMO's or CMP's enrollees and nonenrolled patients. The HMO or CMP must use a method for reporting costs that is approved by CMS. CMS bases its approval on a finding that the method—

(1) Results in an accurate and equitable allocation of allowable costs; and

(2) Is justifiable from an administrative and cost efficiency standpoint.

(b) Medical services furnished under arrangements made by the HMO or CMP. When the HMO or CMP pays for Part B physician and supplier services on some basis other than fee-for-service, the reasonable cost the HMO or CMP pays under its financial arrangement with the physician or supplier must be apportioned between Medicare enrollees and others based on the ratio of covered services furnished to Medicare enrollees to the total services furnished to all enrollees and nonenrolled patients. If apportionment on this basis would result in Medicare bearing the cost of furnishing services to individuals who are not Medicare enrollees, the Medicare share must be determined on another basis (approved by CMS) to ensure that Medicare pays only for services furnished to Medicare enrollees.

(c) Medical services furnished under an arrangement that provides for the HMO or CMP to pay on a fee-for-service basis. The Medicare share of the cost of Part B physician and supplier services furnished to Medicare enrollees under arrangements, and paid for by the HMO or CMP on a fee-for-service basis, is determined by multiplying the total amount for all such services by the ratio of charges for covered services furnished to Medicare enrollees to the total charges for all such services.

(d) Emergency services, urgently needed services, and other covered medical services for which the HMO or CMP assumes financial responsibility. The Medicare share of the cost of Part B emergency or urgently needed services or other Part B services that are not furnished by a provider and for which the HMO or CMP accepts financial responsibility is determined in accordance with paragraphs (b) and (c) of this section.

[50 FR 1346, Jan. 10, 1985, as amended at 58 FR 38082, July 15, 1993; 60 FR 34888, July 5, 1995]
Notes of Decisions
Cited in 6 cases (3 in the last 5 years), 2018–2025 · leading case: Rocky Mountain Health Maint. Org., Inc. v. Price, 297 F. Supp. 3d 152 (D.C. Cir. 2018).
Sort: Relevance Newest Treatment
Rocky Mountain Health Maint. Org., Inc. v. Price, 297 F. Supp. 3d 152 (D.C. Cir. 2018). · cites it 6× “Plaintiff, on the other hand, believes that the controlling Medicare regulation, 42 C.F.R. § 417.560 (c) ("the Regulation"), allows the inclusion of carrier-paid claims in its reimbursement calculations.”
Scott & White Health Plan v. Becerra (D.D.C. 2023). · cites it 17× “When filing its year-end cost reports for 2012 and 2013, Scott & White tabulated and allocated its total costs to calculate the Medicare-eligible share, in accordance with 42 C.F.R. § 417.560 (c). In mid-2013, however, the Centers for Medicare and Medicaid Services (“CMS”)…”
Medica Ins. Co. v. Becerra (D.D.C. 2023). · cites it 10× “See 42 C.F.R. § 417.560 (c). This regulation, the “Cost Apportionment Regulation,” provides a mathematical formula to apportion costs between Medicare enrollees and non-Medicare enrollees and thus determine the reasonable cost for which Medicare ought to reimburse the HMO.”
Rocky Mountain Health Maint. Org., Inc. v. Cochran (D.D.C. 2018). · cites it 6× “Plaintiff, on the other hand, believes that the controlling Medicare regulation, 42 C.F.R. § 417.560 (c) (“the Regulation”), allows the inclusion of carrier-paid claims in its reimbursement calculations.”
Rocky Mountain Health Maint. Org., Inc. v. Price (D.D.C. 2019). · cites it 3× “42 C.F.R. § 417.560 (c). So, under the Cost Apportionment Regulation, cost-reimbursed HMOs do not bill Medicare on a “paid claims” basis, that is, they do not bill Medicare for the actual amount the HMO pays to providers for services rendered.”
Medica Ins. Co. v. Becerra (D.D.C. 2025). “42 C.F.R. § 417.560 (c). For the reasons stated in Medica I, the plainest reading of § 417.”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.