Medicare General Information, Eligibility, and 
Entitlement 
Chapter 3 - Deductibles, Coinsurance Amounts, and Payment 
Limitations 
 
Table of Contents 
(Rev. 11641, 10-13-22) 
 
Transmittals for Chapter 3 
 
10 - Hospital Insurance (Part A) 
10.1 - Inpatient Hospital Deductible 
10.2 - Coinsurance 
10.2.1 - Inpatient Services 
10.2.2 - Durable Medical Equipment (DME) Furnished as a Home Health Benefit 
10.3 - Basis for Determining the Part A Coinsurance Amounts 
10.4 - Benefit Period (Spell of Illness) 
10.4.1 - Starting a Benefit Period 
10.4.2 - Ending a Benefit Period 
10.4.3 - Definition of Hospital or SNF for Ending a Benefit Period 
10.4.3.1 - Hospital Stay and End of Benefit Period 
10.4.3.2 - SNF Stay and End of Benefit Period 
10.4.4 - Definition of Inpatient for Ending a Benefit Period 
20 - Supplementary Medical Insurance (SMI) (Part B) 
20.1 - Supplementary Medical Insurance Incurred Expenses 
20.2 - Part B Annual Deductible 
20.3 - Part B Coinsurance 
20.4 - Exceptions to Annual Deductible and Coinsurance 
20.4.1 - Applications of Deductible and Coinsurance in Liability and Indemnification 
Situations 
20.5 - Blood Deductibles (Part A and Part B) 
20.5.1 - Part A Blood Deductible 
20.5.2 - Part B Blood Deductible 
20.5.3 - Items Subject to Blood Deductibles 
20.5.4 - Obligations of the Beneficiary to Pay for or Replace Deductible Blood 
20.5.4.1 - Replacement of Blood 
20.6 - Part B Premium 
30 - Outpatient Mental Health Treatment Limitation 
40 - Limitation on Physical Therapy, Occupational Therapy and Speech-Language Pathology Services  10 - Hospital Insurance (Part A) 
 
10.1 - Inpatient Hospital Deductible 
(Rev. 1, 09-11-02) 
 
The patient is responsible for a deductible amount for inpatient hospital services in each benefit period.  For 
each year after 1991, the Secretary of the Department of Health and Human Services (DHHS) is required to 
set the deductible and coinsurance amounts between September 1 and September 15 of the preceding year.  
The deductible will be set at an amount equal to the deductible for the preceding year, changed by the same 
percentage as applies to PPS payment rates, and adjusted to reflect changes in real case mix.  The deductible 
and coinsurance amounts are shown in the chart in 10.3 of this chapter. 
 
The coinsurance amount is based on the deductible applicable for the calendar year in which the coinsurance 
days occur.  The deductible is satisfied only by charges for covered Part A services.  Expenses for covered 
services count toward the deductible on an incurred, rather than paid, basis.  Expenses incurred in one 
benefit period cannot be applied toward the deductible in a later benefit period.  Expenses incurred in 
meeting the blood deductible do not count toward the inpatient hospital deductible. 
 
A reduction in benefit days resulting from confinement in a psychiatric hospital, on and immediately 
preceding the date of entitlement, does not affect the amount of the deductible for which the patient is 
responsible. 
 
If the actual charge is less than the deductible and the customary charge, the customary charge is applied to 
the deductible. 
 
A beneficiary is not responsible for payment of the deductible for an inpatient stay if the provider has been 
determined to be liable because the care was not medically necessary or because the care provided was 
custodial. 
 
10.2 - Coinsurance 
(Rev. 1, 09-11-02) 
 
The following subsections describe coinsurance. 
 
10.2.1 - Inpatient Services 
(Rev. 1, 09-11-02) 
 
In each benefit period, the patient is responsible for coinsurance amounts equal to: 
 
  One-fourth of the inpatient hospital deductible for each day of inpatient hospital services from the 
61st through the 90th days; 
 
  One-half of the inpatient hospital deductible for each lifetime reserve day (the 91st through the 150th 
days of inpatient hospital services); and  
 
  One-eighth of the inpatient hospital deductible for each day of extended care services from the 21st 
through the 100th days.  A beneficiary is not responsible for payment of the coinsurance for a stay if 
the provider has been determined to be liable because the care was not medically necessary or 
because the care provided was custodial. 
 
Use the chart in 10.3 of this chapter to determine the applicable coinsurance amounts. 
 
Where the actual charge to the patient for the 61st through the 90th days of inpatient hospital services is less 
than the applicable coinsurance amount, the coinsurance is the actual charge per day.  Where the actual 
charge to the patient for lifetime reserve days is less than the coinsurance amount for those days, the  beneficiary may be deemed to have elected not to use the days because he/she would not benefit from their 
utilization. 
 
10.2.2 - Durable Medical Equipment (DME) Furnished as a Home Health Benefit 
(Rev. 1, 09-11-02) 
 
The patient is responsible for 20 percent of the payment amount for DME furnished as a home health 
benefit. 
 
10.3 - Basis for Determining the Part A Coinsurance Amounts 
(Rev. 11641; Issued:10-13-2022; Effective: 01-10-2023; Implementation: 01-03-2023) 
 
The applicable inpatient deductible is the one in effect during the calendar year in which the patient's benefit 
period begins (i.e., in most cases, the year in which the first inpatient hospital services are furnished in the 
benefit period). Except for 1989, the coinsurance amount is based on the deductible applicable for the 
calendar year in which the coinsurance days occur. 
 
When Deductible and/or Coinsurance Are Applicable for Part A 
 
Inpatient Hospital- First 60 Days  Deductible applicable equal to national average cost per 
day 
Inpatient Hospital- 61st thru 90th Day  Coinsurance per day always equal to 1/4 of inpatient 
hospital deductible 
Inpatient Hospital- 60 Lifetime Reserve Days  Coinsurance always equal to 1/2 of inpatient hospital 
(nonrenewable) - 91st thru 150th day  deductible 
Skilled Nursing Facility 21st thru 100th Day  Coinsurance always equal to 1/8 of inpatient hospital 
deductible 
Home Health Agency  No Deductible No Coinsurance (except for 20 percent 
coinsurance for DME and prosthetics/ orthotics) 
Blood  1st 3 pints (or equivalent units of packed red blood cells) 
in a calendar year - combined Part A and B 
Hospice *   5 percent of the cost determined by the drug copayment 
a. Drugs and Biologicals  schedule (may not exceed $5 per prescription) 
b. Respite Care   5 percent of the payment for a respite care day 
 
*Hospices may charge coinsurance for two services only, drugs and biologicals, and respite care. The 
amount of coinsurance for each prescription may not exceed $5.00. The amount for respite care may not 
exceed the inpatient deductible for the year in which the hospital coinsurance period began. 
 
Deductible and Coinsurance Amounts 
Year  Part A   Part A   Part A Coinsurance,  Part A 
Deductible,   Coinsurance,   60 Lifetime Reserve  SNF Coinsurance 
1st 60 Days  61st- 90th Days  Days  21st- 100th Days 
1986  $492  123  246  61.50 
1987  520  130  260  65.00 
1988  540  135  270  67.50 
1989  560  0 (1)  0 (1)  0(2) 
1990  592  148  296  74.00 
1991  628  157  314  78.50 
1992  652  163  326  81.50 
1993  676  169  338  84.50  1994  696  174  348  87.00 
1995  716  179  358  89.50 
1996  736  184  368  92.00 
1997  760  190  380  92.00 
1998  764  191  382  95.50 
1999  768  192  384  96.00 
2000  776  194  388  97.00 
2001  792  198  396  99.00 
2002  812  203  406  101.50 
2003  840  210  420  105.00 
2004  876  219  438  109.50 
2005  912  228  456  114.00 
2006  952  238  476  119.00 
2007  992  248  496  124.00 
2008  1,024  256  512  128.00 
2009  1,068  267  534  133.50 
2010  1,100  275  550  137.50 
2011  1,132  283  566  141.50 
2012  1,156  289  578  144.50 
2013  1,184  296  592  148.00 
2014  1,216  304  608  152.00 
2015  1,260  315  630  157.50 
2016  1,288  322  644  161.00 
2017  1,316  329  658  164.50 
2018  1,340  335  670  167.50 
2019  1,364  341  682  170.50 
2020  1,408  352  704  176.00 
2021  1,484  371  742   185.50 
2022  1,556  389  778  194.50 
2023  1,600  400  800  200.00 
1. Coinsurance was not charged for inpatient hospital care in CY 1989 due to 
Catastrophic Coverage. The deductible was applied. 
 
2. Under Catastrophic Coverage, a coinsurance payment of $25.50 was due for days 1-8 
of SNF care. No SNF coinsurance was due after day 8 in 1989. 
 
10.4 - Benefit Period (Spell of Illness) 
(Rev. 1, 09-11-02) 
 
A benefit period is a period of time for measuring the use of hospital insurance benefits.  
It is a period of consecutive days during which covered services furnished to a patient, up 
to certain specified maximum amounts, may be paid for by the hospital insurance plan.  
For example, a patient is eligible for 90 days of hospital care in a benefit period and 100 
days of extended care services during the same benefit period.  A patient may be eligible 
for as many as l50 days of hospital care in a benefit period if he/she draws on his/her 
lifetime reserve.  As long as a person continues to be entitled to hospital insurance, there 
is no limit on the number of benefit periods he/she may have.  The term "benefit period" 
is synonymous with spell of illness.  Since the term "spell of illness" could connote a  single illness or a particular "spell" of sickness, the term benefit period is used in 
communications with the public. 
 
10.4.1 - Starting a Benefit Period 
(Rev. 80, Issued: 10-26-12, Effective: 04-01-13, Implementation: 04-01-13) 
 
A benefit period begins with the first day (not included in a previous benefit period) on 
which a patient is furnished inpatient hospital or extended care services by a qualified 
provider in a month for which the patient is entitled to hospital insurance benefits. 
 
A provider qualified to start a benefit period is a hospital (including a psychiatric 
hospital) or SNF that meets all the requirements of the definition of such an institution.  
A hospital which meets all requirements in Chapter 5, 20 of this manual is also a 
qualified hospital for purposes of beginning a benefit period when it furnishes the patient 
covered inpatient emergency services.  Thus, generally, the benefit period begins when 
covered inpatient services are initially furnished to an entitled individual.  However, the 
noncovered services furnished by a nonparticipating provider can begin a spell of illness 
only if the provider is a qualified provider.  A qualified provider is a hospital (including a 
psychiatric hospital) or a SNF which meets all requirements in the definition of such an 
institution even though it may not be participating.  A qualified hospital in Canada or 
Mexico is also a qualified provider for purposes of beginning a benefit period when it 
furnishes covered inpatient hospital services.  If a person is in a nonqualified institution 
and is subsequently transferred to a qualified hospital (general or psychiatric), his/her 
benefit period begins on admission to the qualified hospital. 
 
Admission to a qualified SNF or to the SNF level of care in a swing-bed hospital begins a 
benefit period even though payment for the services cannot be made because the prior 
hospitalization or thirty-day transfer requirement has not been met.  It is also worth 
noting that the SNF benefits thirty-day transfer requirement has a medical 
appropriateness exception (described in Pub. 100-02, Medicare Benefit Policy Manual, 
chapter 8, section 20.2.2), under which the allowable interval between a beneficiarys 
discharge from a qualifying prior hospitalization and the initiation of SNF care can 
exceed the normal 30-day timeframe; moreover, in a situation where the allowable 
interval under this exception is 60 days or longer, the subsequent commencement of 
extended care services in the SNF would serve to trigger the start of a new benefit period.  
Inpatient care in a Religious Non-Medical Health Care Institution (whether as hospital or 
extended care services) can begin or prolong a benefit period. 
 
10.4.2 - Ending a Benefit Period 
(Rev. 80, Issued: 10-26-12, Effective: 04-01-13, Implementation: 04-01-13) 
 
The benefit period ends with the close of a period of 60 consecutive days during which 
the patient was neither an inpatient of a hospital nor of a SNF.  To determine the 60 
consecutive day period, begin counting with the day the individual was discharged. (See 
10.4.3.2 of this chapter for determining the end of a benefit period when an individual 
remains in a SNF.)   
As noted in section 10.4, the term benefit period is synonymous with spell of illness.  
However, the statutory language (at 1861(a) of the Social Security Act) that describes a 
benefit period as a spell of illness is sometimes misunderstood to mean that a benefit 
period is linked to a particular medical episode or type of condition, so that the onset of a 
new and entirely unrelated condition could serve to end a benefit period even in the 
absence of a 60-day break in the beneficiarys inpatient status.  In fact, the onset of a 
new condition is not, in itself, relevant to the ending of a benefit period, which can occur 
only through a 60-day break in inpatient status, as described above. 
 
10.4.3 - Definition of Hospital or SNF for Ending a Benefit Period 
(Rev.10880, Issued: 08-06-21, Effective: 11-08- 21, Implementation: 11-08-21) 
 
It is important to note that a benefit period cannot end while a beneficiary is an inpatient 
(see 10.4.4) of an institution that meets the basic definition of a hospital at 
1861(e)(1) of the Social Security Act (the Act), even if the hospital does not meet all of 
the additional requirements that are necessary for starting a benefit period, as discussed 
further in 10.4.3.1 below (see also 1861(e) following (9) of the Act and the regulations 
at 42 CFR 409.60(b)(1)).  Similarly, a benefit period cannot end while a beneficiary is an 
inpatient (see 10.4.4) of an institution that meets the basic definition of a SNF at 
1819(a)(1) of the Act, as discussed further in 10.4.3.2 below. 
 
As noted in 2164 of the State Operations Manual (Pub. 100-07), Chapter 2, all hospitals 
and SNFs that are Medicare-certified are automatically considered to meet the applicable 
basic definition in this context by reason of the Medicare certification itself. Moreover, 
even an institution (or portion of an institution) that is not certified for Medicare can 
serve to prolong an inpatients benefit period if it meets either the basic hospital or 
SNF definition discussed above. 
 
10.4.3.1 - Hospital Stay and End of Benefit Period 
(Rev. 1, 09-11-02) 
 
In order to end a benefit period, for at least 60 consecutive days, a beneficiary cannot 
have been in a hospital which meets the initial requirement in the definitions in Chapter 
5, 20.1 through 20.7 of this publication.  That is, the beneficiary cannot have been in a 
facility that is primarily engaged in providing, by or under the supervision of a 
physician(s), to inpatients: 
 
  Diagnostic and therapeutic services for medical diagnosis, treatment, and care of 
injured, disabled, or sick persons or rehabilitation services for injured, disabled, or 
sick persons; or  
 
  Psychiatric services for the diagnosis and treatment of mentally ill persons.  A 
stay in a hospital outside the United States prolongs a benefit period. It may be 
assumed, in the absence of evidence to the contrary, that: 
    A foreign hospital in which a beneficiary spent one or more days meets the 
requirement of the definition in Chapter 5, 20 of this manual; and  
 
  The beneficiary's statement about length and place of stay is correct. 
 
10.4.3.2 - SNF Stay and End of Benefit Period 
(Rev.10880, Issued: 08-06-21, Effective: 11-08- 21, Implementation: 11-08-21 
 
Similarly, to end a benefit period, a beneficiary cannot have been an inpatient (see 
10.4.4) of a SNF for at least 60 consecutive days; where SNF is defined in accordance 
with 1861(a)(2) and 1819(a)(1) of the Social Security Act as a facility which is 
primarily engaged in providing skilled nursing care and related services to residents who 
require medical or nursing care, or rehabilitation services for the rehabilitation of injured, 
disabled, or sick persons.  As indicated above in 10.4.3, all Medicare-certified SNFs 
(including Medicare-certified distinct part SNFs) are automatically considered to meet 
this basic SNF definition by reason of the Medicare certification itself.  See 2166 of 
the State Operations Manual (Pub. 100-07), Chapter 2, for the administrative criteria used 
in determining whether the basic SNF definition is met by a nursing home that is not 
Medicare-certified (including the noncertified portion of an institution that also contains a 
Medicare-certified distinct part SNF). 
 
Examples: An individual may be discharged from and readmitted to a hospital or SNF 
several times during a benefit period and still be in the same benefit period if 60 
consecutive days have not elapsed between discharge and readmission.  The stays need 
not be for related physical or mental conditions. 
 
Example 1: X was born 8/9/1936. On 7/28/2001, X entered a participating general 
hospital. After he/she had been in the hospital for 2 weeks, X was discharged on 
8/11/2001.  On his/her doctors orders, X entered a participating SNF on 8/15/2001, and 
remained an inpatient there (see 10.4.4) until his/her discharge on 10/27/2001.  He/she 
had no further inpatient stays in 2001. 
 
Xs benefit period began on 8/1/2001, the first day of the month he/she attained age 65 
and was entitled to hospital insurance.  The benefit period ended 12/25/2001, the end of 
the 60-day period beginning with the date of his/her last discharge. 
 
Example 2: Y, over age 65, entered a participating general hospital on 8/28/2000 for 
treatment of a heart condition.  He/she was discharged on 9/11/2000.  On 10/3/2000, Y 
entered a Medicaid-only nursing facility, and remained an inpatient of this facility (see 
10.4.4) until his/her discharge on 11/17/2000. On 12/26/2000, Y was again admitted to a 
participating hospital because of injuries suffered in an accident.  He/she was discharged 
on 1/13/2001 and had no further inpatient stays in 2001. 
 
Ys benefit period began on 8/28/2000.  His/her stay in the nursing facility began less 
than 60 days after his/her hospital stay and the benefit period was continued because 
he/she remained an inpatient there (see 10.4.4) even though Medicare did not cover the  stay.  The subsequent hospital stay began less than 60 days after the nursing facility stay 
and continued the benefit period although the condition treated was unrelated to his/her 
prior stays.  The benefit period ended on 3/14/2001, the end of the 60-day period 
beginning with the day of last discharge. 
 
Example 3: Z, over age 65 and entitled to hospital insurance benefits, was admitted to 
General Hospital on 8/l/2000 and discharged on 8/10/2000, having received 
nonemergency hospital services.  General Hospital met all the requirements in the 
definition of a hospital except those concerning utilization review and health and safety.  
While General Hospital met the minimum requirements of an emergency hospital, Zs 
benefit period did not begin with his/her admission to this hospital because: 
 
1.  The hospital did not meet all of the requirements in the definition of a hospital; 
and  
 
2.  Although the hospital satisfied the minimum requirements for coverage of 
emergency services, Z did not receive emergency inpatient care there. 
 
(As noted previously, a stay in an emergency hospital does not begin a benefit period 
unless it actually involves the receipt of covered inpatient emergency services; by 
contrast, even a nonemergency stay in such a hospital can serve as a qualifying hospital 
stay for purposes of coverage under the posthospital extended care benefit.)  Z was 
admitted to Haven Convalescent Home on 8/20/2000 and remained an inpatient of the 
home (see 10.4.4) until his/her discharge on 3/1/2001.  He/she had no further inpatient 
stays in 2001.  Haven Convalescent Home became a participating SNF on 1/1/2001. 
 
Z's benefit period began 1/1/2001, the day Haven Convalescent Home was determined to 
be a qualified SNF.  The services Z received from that date through discharge were 
extended care services even though they were not covered and, therefore, not charged 
against Zs Medicare SNF utilization.  (The services were not covered posthospital 
extended care services because Z was not admitted to a participating SNF within 30 days 
after discharge from the hospital.)  Zs benefit period ended 4/29/2001, the end of the 60-
day period beginning with the date of his discharge from the convalescent home. 
 
10.4.4 - Definition of Inpatient for Ending a Benefit Period 
(Rev. 80, Issued: 10-26-12, Effective: 04-01-13, Implementation: 04-01-13) 
 
Generally, a beneficiary is an inpatient of a hospital if the beneficiary is receiving 
inpatient services in the hospital (i.e., not on an outpatient basis).  The type of care 
actually received is not relevant. 
 
However, a different definition of inpatient applies in determining the end of a benefit 
period for a beneficiary in a SNF, under which such a beneficiary is considered an 
inpatient in this context only if the beneficiary's care in the SNF meets certain skilled 
level of care standards.  Specifically, the beneficiary must need and receive a skilled level 
of care while in the SNF.   
This means that in order to have been an inpatient for benefit period purposes while in 
a SNF, the beneficiary must have required and received skilled services on a daily basis 
which could, as a practical matter, only have been provided in a SNF on an inpatient 
basis.  (Under the regulations at 42 CFR 409.60(b)(2), an additional level of care criterion 
at 42 CFR 409.31(b)(2)--requiring that the SNF care must in some way relate back to a 
condition that was present during the beneficiarys qualifying hospital stay--does not 
apply to benefit period determinations.)  If these provisions were not met during the prior 
SNF stay, the beneficiary was not an inpatient of the SNF for purposes of prolonging the 
benefit period.  Conversely, a beneficiary would remain an SNF inpatient in this 
context (thus prolonging his or her current benefit period) for as long as the beneficiary 
continues receiving a skilled level of care in the SNF--even if Part A payment has ended 
due to the beneficiarys exhaustion of SNF benefits. 
 
Use the following presumptions for determining whether the skilled level of care 
standards were met during a prior SNF stay. 
 
Presumption 1: A beneficiary's care in a SNF met the skilled level of care standards if a 
Medicare SNF claim was paid for the care, unless such payment was made under 
limitation on liability rules. 
 
Presumption 2: A beneficiary's care in a SNF met the skilled level of care standards if a 
SNF claim was paid for the services provided in the SNF under the special Medicare 
limitation on liability rules pursuant to placement in a non-certified bed. 
 
Presumption 3: A beneficiary's care in a SNF did not meet the skilled level of care 
standards if a claim was paid for the services provided in the SNF pursuant to the general 
Medicare limitation on liability rules.  (This presumption does not apply to placement in 
a non-certified bed.  For claims paid under these special provisions, see Presumption 2.) 
 
Presumption 4: A beneficiary's care in a Medicaid nursing facility (NF) did not meet the 
skilled level of care standards if a Medicaid claim for the services provided in the NF was 
denied on the grounds that the services received were not at the NF level of care (even if 
paid under applicable Medicaid administratively necessary days provisions which result 
in payment for care not meeting the NF level of care requirements). 
 
Presumption 5: A beneficiary's care in a SNF met the skilled level of care standards if a 
Medicare SNF claim for the services provided in the SNF was denied on grounds other 
than that the services were not at the skilled level of care. 
 
Presumption 6: A beneficiary's care in a SNF did not meet the skilled level of care 
standards if a Medicare claim for the services provided in the SNF was denied on the 
grounds that the services were not at the skilled level of care and no limitation of liability 
payment was made. 
  Presumption 7: A beneficiary's care in a SNF did not meet the skilled level of care 
standards if no Medicare or Medicaid claim was submitted by the SNF. 
 
Presumptions 1 through 4 cannot be rebutted.  Thus, prior Medicare and Medicaid claim 
determinations that necessarily required a level of care determination for the time period 
under consideration are binding for purposes of a later benefit period calculation. 
 
Presumptions 5 through 7 can be rebutted by the beneficiary showing that the level of 
care needed or received is other than that which the presumption dictates. 
 
Presumption 6 can be rebutted because the Medicare skilled level of care definition for 
coverage purposes is broader than the skilled level of care definition used here for benefit 
period determinations.  Specifically, the requirement referred to in Chapter 4, 40.2 
regarding prior hospital care related to the SNF care is included in the Medicare SNF 
coverage requirements but is not included in the standard for benefit period 
determinations.  Therefore, Medicare payment could have been denied for a SNF stay on 
level of care grounds (i.e., not even waiver payment was made) because of 
noncompliance with that requirement, even though skilled level of care requirements for 
benefit period determinations were in fact met by the SNF stay.  Consequently, when 
Medicare SNF payment is denied on level of care grounds, the beneficiary must be given 
the opportunity to demonstrate that he/she still needed and received a skilled level of care 
for purposes of benefit period determinations. 
 
NOTE:  Effective October 1, 1990, the levels of care that were previously covered 
separately under the Medicaid SNF and intermediate care facility (ICF) benefits are 
combined in a single Medicaid nursing facility (NF) benefit.  Thus, the Medicaid NF 
benefit includes essentially the same type of skilled care covered by Medicare's SNF 
benefit, but it includes less intensive care as well.  This means that when a person is 
found not to require at least a Medicaid NF level of care (as under Presumption 4), it can 
be presumed that he or she also does not meet the Medicare skilled level of care 
standards.  However, since the NF benefit can include care that is less intensive than 
Medicare SNF care, merely establishing that a person does require NF level care does not 
necessarily mean that he or she also meets the Medicare skilled level of care standards.  
Determining whether an individual who requires NF level care also meets the Medicare 
skilled level of care standards requires an actual examination of the medical evidence and 
cannot be accomplished through the simple use of a presumption.  Therefore, the 
previous references to Medicaid claims have been deleted from those presumptions 
which establish that an individual does meet the Medicare standards. 
 
Medicare no-payment bills submitted by a SNF result in Medicare program payment 
determinations (i.e., denials).  Therefore, such no-payment bills trigger the appropriate 
presumptions.  This also applies in any State where the Medicaid program utilizes no-
payment bills which lead to Medicaid program payment determinations.  If a SNF 
erroneously fails to submit a Medicare claim (albeit a no-pay claim) when Medicare rules 
require such submission, A/B MACs (A) request a SNF to submit one.  Once the no-pay 
bill is submitted and denied, the applicable presumption (other than presumption 7) is  triggered.  If a patient is moving from a SNF level of care to a non-SNF level of care in a 
facility certified to provide SNF care, occurrence code 22 (date active care ended) is used 
to signify the beginning of the no-pay period on the bill and trigger the appropriate 
presumptions. 
 
Where the presumptions are rebuttable (i.e., 5 through 7), rebuttal showings are permitted 
at both A/B MAC (A) determination levels under 42 CFR 405, Subpart G (i.e., a rebuttal 
showing regarding the status of a prior SNF stay is made at the time that an inpatient 
claim is submitted and/or at the reconsideration level).  A/B MACs (A) evaluate rebuttal 
documentation even if the presumption being rebutted was triggered by a Medicaid 
denial. 
 
This special rule for determining whether a beneficiary in a SNF is an inpatient for 
benefit period purposes is applicable in all cases where a prior SNF stay affects benefit 
period status, not only when a beneficiary is in exhausted or copay status and is seeking 
to renew a benefit period.  The rule has equal application where it results in the 
beneficiary starting a new benefit period and paying a new deductible without receiving 
an increase in the amount of Medicare benefits paid. 
 
20 - Supplementary Medical Insurance (SMI) (Part B) 
(Rev. 1, 09-11-02) 
 
Supplementary Medical Insurance is described in the following subsections. 
 
20.1 - Supplementary Medical Insurance Incurred Expenses 
(Rev. 1, 09-11-02) 
 
The SMI plan includes coverage for expenses incurred for the services described in 
Chapter 1, 10.3: 
 
Payment may not be made under Part B for services furnished an individual entitled to 
have payment made for those services under Part A, e.g., if the expenses incurred were to 
satisfy a Part A deductible or coinsurance amount, or if payment would be made under 
Part A except for the lack of request for payment or physician certification. 
 
20.2 - Part B Annual Deductible 
(Rev. 11641; Issued:10-13-2022; Effective: 01-10-2023; Implementation: 01-03-2023) 
 
In each calendar year, a cash deductible must be satisfied before payment can be 
made under SMI. (See 20.4 of this chapter for exceptions.) 
 
Calendar Year  Deductible 
1966  1972  $50 
1973  1981  $60 
1982  1990  $75 
1991  2004  $100  2005  $110 
2006  $124 
2007  $131 
2008  $135 
2009  $135 
2010  $155 
2011  $162 
2012  $140 
2013  $147 
2014  $147 
2015  $147 
2016  $166 
2017  $183 
2018  $183 
2019  $185 
2020  $198 
2021  $203 
2022  $233 
2023  $226 
 
Expenses count toward the deductible on the basis of incurred, rather than paid 
expenses, and are based on Medicare allowed amounts. Non-covered expenses do not 
count toward the deductible. Even though an individual is not entitled to Part B 
benefits for the entire calendar year (i.e., insurance coverage begins after the first 
month of a year or the individual dies before the last month of the year), he or she is 
still subject to the full deductible for that year. Medical expenses incurred in the 
portion of the year preceding entitlement to medical insurance are not credited toward 
the deductible. 
 
The date of service generally determines when expenses were incurred, but expenses 
are allocated to the deductible in the order in which the bills are received. Services 
not subject to the deductible cannot be used to satisfy the deductible. 
 
Pro Rata Amounts 
 
Pro Rata Amounts 
  First Month  Second Month 
2012  $100.20  $39.80 
2013  $103.95  $43.05 
2014  $114.99  $32.01 
2015  $114.99  $32.01 
2016  $118.86  $47.14 
2017  $125.73  $57.27 
2018 $126.88  $56.12 
 2019  $133.57  $51.43 
 
  2020  $140.46  $57.54 
2021  $145.31  $57.69 
2022  $150.66  $82.34 
2023  $154.95  $71.05 
 
The Part B deductible is split into pro rata amounts. The purpose of the pro rata 
amount is to provide beneficiaries who are enrolled in managed care plans the 
benefit of assuming they have paid their deductible as if they were not enrolled in a 
managed care plan. The pro rata amount does not apply only to just the first two 
months of the year but rather for the number of months after first enrollment in a 
managed care plan that is necessary to cover the Part B deductible. Each year starts 
the deduction for the pro rata amount over again. 
 
20.3 - Part B Coinsurance 
(Rev. 1, 09-11-02) 
 
After the deductible has been satisfied, coinsurance of 20 percent is usually applicable. 
 
For providers and suppliers that bill A/B MAC(A) or (HHH), the 20 percent may be 
based on the allowed amount, billed charges, or a preset rate per service (APC), 
depending upon the type of service.  See Claims Processing instructions for a description 
of coinsurance calculation for each benefit type. 
 
Physicians and other suppliers will be paid 80 percent of allowed amount under the fee 
schedule amounts or in some instances reasonable charges incurred during the balance of 
the calendar year.  The patient is responsible for a coinsurance amount equal to 20 
percent of the fee schedule amounts or reasonable charges for the items and services. 
(See 20.4 of this chapter for exceptions.) 
 
20.4 - Exceptions to Annual Deductible and Coinsurance 
(Rev. 11, Issued: 10-22-04, Effective: 11-22-04, Implementation: 11-22-04) 
 
There is no deductible for screening mammography effective for services January 1, 1998 
and later. 
 
Neither the annual deductible nor the 20 percent coinsurance apply with respect to: 
 
  Parts A and B home health services, except that there is a coinsurance of 20 
percent of the payment amount for supplies, drugs, DME and prosthetics 
/orthotics furnished as a home health benefit; 
  Clinical diagnostic laboratory tests (including specimen collection fees) 
performed or supervised by a physician, laboratory, or other entity paid on an 
assigned basis; 
  Pneumococcal vaccine and its administration; 
  Influenza vaccine and its administration; and     Services or items denied as medically unnecessary. 
 
NOTE:  Services which are not subject to the deductible cannot be used to satisfy the 
deductible. 
 
20.4.1 - Applications of Deductible and Coinsurance in Liability and 
Indemnification Situations 
(Rev. 12, Issued:  10-22-04, Effective:  04-01-05, Implementation:  04-04-05) 
 
Under 1879 of the Act, a beneficiary is not responsible for payment of the Part B 
deductible or coinsurance for items or services that are neither reasonable and necessary 
to diagnose or treat the illness or injury, nor to improve the functioning of a malformed 
body member.  If the provider knew, or should have known, that Medicare considered 
such services medically unnecessary, but failed to inform the beneficiary before 
furnishing them, the provider is held liable for their cost.  If the beneficiary made 
payment for such items or services, he/she can be indemnified for them. 
 
In most cases, however, funds can be collected while awaiting the outcome of review of a 
demand bill for institutional services-- See Publication 100-04, Chapter 1, 60.3, See 
60.3.1 in the same chapter for specific information on limitations on collecting funds 
from beneficiaries in SNF Part A stays.  In general, see Chapter 30 of that publication for 
information on limitation of liability. 
 
20.5 - Blood Deductibles (Part A and Part B) 
(Rev. 1, 09-11-02) 
 
Program payment may not be made for the first 3 pints of whole blood or equivalent units 
of packed red cells received under Part A and Part B combined in a calendar year.  
However, blood processing (e.g., administration, storage) is not subject to the deductible. 
 
The blood deductibles are in addition to any other applicable deductible and coinsurance 
amounts for which the patient is responsible. 
 
The deductible applies only to the first 3 pints of blood furnished in a calendar year, even 
if more than one provider furnished blood. 
 
20.5.1 - Part A Blood Deductible 
(Rev. 1, 09-11-02) 
 
Blood must be furnished on a Medicare covered day in a hospital or SNF to be counted 
under Part A.  Blood furnished to an inpatient after benefits exhausted or before 
entitlement is not counted toward the combined deductible.  Blood furnished during a 
lifetime extension election period is counted toward the combined A/B 3 pint total. 
 
20.5.2 - Part B Blood Deductible 
(Rev. 1, 09-11-02)   
Blood is furnished on an outpatient basis or is subject to the Part B blood deductible and 
is counted toward the combined limit.  It should be noted that payment for blood may be 
made to the hospital under Part B only for blood furnished in an outpatient setting.  Blood 
is not covered for inpatient Part B services. 
 
20.5.3 - Items Subject to Blood Deductibles 
(Rev. 18, Issued: 03-04-05, Effective: 07-01-05, Implementation: 07-05-05) 
 
The blood deductibles apply only to whole blood and packed red cells.  The term whole 
blood means human blood from which none of the liquid or cellular components have 
been removed.  Where packed red cells are furnished, a unit of packed red cells is 
considered equivalent to a pint of whole blood.  Other components of blood such as 
platelets, fibrinogen, plasma, gamma globulin, and serum albumin are not subject to the 
blood deductible.  However, these components of blood are covered as biologicals. 
 
Refer to Pub. 100-04, Medicare Claims Processing Manual, chapter 4, 231 regarding 
billing for blood and blood products under the Hospital Outpatient Prospective Payment 
System (OPPS). 
 
20.5.4 - Obligations of the Beneficiary to Pay for or Replace Deductible 
Blood 
(Rev. 1, 09-11-02) 
 
A provider may charge the beneficiary or a third party its customary charge for whole 
blood or units of packed red cells which are subject to either the Part A or Part B blood 
deductible, unless the individual, another person, or a blood bank replaces the blood or 
arranges to have it replaced. 
 
20.5.4.1 - Replacement of Blood 
(Rev. 1, 09-11-02) 
 
For replacement purposes, a pint of whole blood is considered equivalent to a unit of 
packed red cells.  A deductible pint of whole blood or unit of packed red cells is 
considered replaced when a medically acceptable pint or unit is given or offered to the 
provider or, at the provider's request, to its blood supplier.  Accordingly, where an 
individual or a blood bank offers blood as a replacement for a deductible pint or unit 
furnished a Medicare beneficiary, the provider may not charge the beneficiary for the 
blood, whether or not the provider or its blood supplier accepts the replacement offer.  
Thus a provider may not charge a beneficiary merely because it is the policy of the 
provider or its blood supplier not to accept blood from a particular source which has 
offered to replace blood on behalf of the beneficiary.  However, a provider would not be 
barred from charging a beneficiary for deductible blood, if there is a reasonable basis for 
believing that replacement blood offered by or on behalf of the beneficiary would 
endanger the health of a recipient or that the prospective donor's health would be 
endangered by making a blood donation.  Once a provider accepts a pint of replacement  blood from a beneficiary or another individual acting on his/her behalf, the blood is 
deemed to have been replaced, and, the beneficiary may not be charged for the blood, 
even though the replacement blood is later found to be unfit and has to be discarded. 
 
When a provider accepts blood donated in advance, in anticipation of need by a specific 
beneficiary, whether the beneficiary's own blood, that is, an autologous donation, or 
blood furnished by another individual or blood assurance group, such donations are 
considered replacement for pints or units subsequently furnished the beneficiary. 
 
 
20.6  Part B Premium  
(Rev. 11641; Issued:10-13-2022; Effective: 01-10-2023; Implementation: 01-03-2023) 
 
 
The Centers for Medicare and Medicaid Services (CMS) updates the Part B premium 
each year. These adjustments are made according to formulas set by statute. By law, the 
monthly Part B premium must be sufficient to cover 25 percent of the programs costs, 
including the costs of maintaining a reserve against unexpected spending increases.  
The federal government pays the remaining 75 percent. 
 
Below are the annual Part B premium amounts from Calendar Year (CY) 1996 to 2006. 
For these years, and years prior to 1996, the Part B premium is a single established rate 
for all beneficiaries. 
 
Year  Part B Premium 
1996  $42.50 
1997  $43.80 
1998  $43.80 
1999  $45.50 
2000  $45.50 
2001  $50.00 
2002  $54.00 
2003  $58.70 
2004  $66.60 
2005  $78.20 
2006  $88.50 
 
Beginning on January 1, 2007, the Part B premium is based on the income of the 
beneficiary. See the following Change Requests (CRs) for more information. 
 
For 2008, see CR 5345 at http://www.cms.hhs.gov/transmittals/downloads/R41GI.pdf  
  For 2008, see CR 5830 at http://www.cms.hhs.gov/transmittals/downloads/R49GI.pdf  
For 2009, see CR 6258 at http://www.cms.hhs.gov/transmittals/downloads/R56GI.pdf  
For 2010, see CR 6690 found on the 2009 Transmittals page at 
http://www.cms.hhs.gov/Transmittals/2009Trans/list.asp 
For 2011, see CR 7224 found on the 2010 Transmittals page at  http://www.cms.gov/Transmittals/2010Trans/list.asp 
For 2012, see CR 7567 found on the 2011 Transmittals page at 
http://www.cms.gov/Transmittals/2011Trans/list.asp 
For 2013, see CR 8052 found on the 2012 Transmittals page at 
http://www.cms.gov/Transmittals/2012Trans/list.asp 
For 2014, see CR 8527 found on the 2013 Transmittals page at 
http://www.cms.gov/Transmittals/2013Trans/list.asp 
For 2015, see CR 8982 found on the 2014 Transmittals page at 
http://www.cms.gov/Transmittals/2014Trans/list.asp 
For 2016, see CR 9410 found on the 2015 Transmittals page at 
http://www.cms.gov/Transmittals/2015Trans/list.asp 
For 2017, see CR 9902 found on the 2016 Transmittals page at 
http://www.cms.gov/Transmittals/2016Trans/list.asp 
For 2018, see CR 10405 found on the 2017 Transmittals page at 
http://www.cms.gov/Transmittals/2017Trans/list.asp 
For 2019, see CR 11025 found on the 2018 Transmittals page at 
http://www.cms.gov/Transmittals/2018Trans/list.asp 
For 2020, see CR 11542 found on the 2019 Transmittals page at  
http://www.cms.gov/Transmittals/2019Trans/list.asp 
For 2021, see CR 12024 found on the 2020 Transmittals page at  
http://www.cms.gov/Transmittals/2020Trans/list.asp 
For 2022, see CR 12507 found on the 2021 Transmittals page at  
http://www.cms.gov/Transmittals/2021Trans/list.asp 
For 2023, see CR 12903 found on the 2022 Transmittals page at  
http://www.cms.gov/Transmittals/2022Trans/list.asp 
 
 
30 - Outpatient Mental Health Treatment Limitation 
(Rev. 60, Issued: 10-30-09, Effective: 01-01-10, Implementation: 01-04-10) 
 
Regardless of the actual expenses a beneficiary incurs in connection with the treatment of 
mental, psychoneurotic, and personality disorders while the beneficiary is not an inpatient 
of a hospital at the time such expenses are incurred, the amount of those expenses that 
may be recognized for Part B deductible and payment purposes is limited to 62.5 percent 
of the Medicare approved amount for those services.  The limitation is called the 
outpatient mental health treatment limitation (the limitation).  The 62.5 percent limitation 
has been in place since the inception of the Medicare Part B program and it will remain 
effective at this percentage amount until January 1, 2010.  However, effective January 1, 
2010, through January 1, 2014, the limitation will be phased out as follows: 
 
  January 1, 2010  December 31, 2011, the limitation percentage is 68.75%. 
(Medicare pays 55% and the patient pays 45%). 
 
  January 1, 2012  December 31, 2012, the limitation percentage is 75%. 
(Medicare pays 60% and the patient pays 40%). 
    January 1, 2013  December 31, 2013, the limitation percentage is 81.25%. 
(Medicare pays 65% and the patient pays 35%). 
 
  January 1, 2014  onward, the limitation percentage is 100%. 
(Medicare pays 80% and the patient pays 20%). 
 
For additional details concerning the outpatient mental health treatment limitation, please 
see the Medicare Claims Processing Manual, Publication 100-04, chapter 9, section 60 
and chapter 12, section 210. 
 
40 - Limitation on Physical Therapy, Occupational Therapy and 
Speech-Language Pathology Services 
(Rev. 28; Issued:  08-12-05; Effective/Implementation:  09-12-05) 
 
Coverage of outpatient physical therapy, occupational therapy, and speech-language 
pathology services under Part B has been limited in some years.  For descriptions of these 
limitations see Pub 100-04, Chapter 5, 10.2.  Transmittals Issued for this Chapter 
Rev #  Issue Date  Subject  Impl Date  CR# 
R11641GI  10/13/2022  Update to Medicare Deductible,  01/03/2023  12903 
Coinsurance and Premium Rates for 
Calendar Year (CY) 2023 
R11136GI  11/30/2021  Update to Medicare Deductible,  01/03/2022  12507 
Coinsurance and Premium Rates for 
Calendar Year (CY) 2022 
R10880GI  08/06/2021  Internet Only Manual Updates to Pub. 100- 11/08/2021  12009 
01, 100-02, and 100-04 to Implement 
Consolidated Appropriations Act Changes 
and Correct Errors and Omissions (SNF) 
R10469GI  11/20/2020  Update to Medicare Deductible,  01/04/2021  12024 
Coinsurance and Premium Rates for 
Calendar Year (CY) 2021 
  11/22/2019  Update to Medicare Deductible,  01/06/2020  11542 
Coinsurance and Premium Rates for 2020 
R119GI  11/02/2018  Update to Medicare Deductible,  01/07/2019  11025 
Coinsurance and Premium Rates for 2019 
R111GI  12/08/2017  Update to Medicare Deductible,  01/02/2018  10405 
Coinsurance and Premium Rates for 2018 
R103GI  12/02/2016  Update to Medicare Deductible,  01/03/2017  9902 
Coinsurance and Premium Rates for 2017 
R96GI  11/25/2015  Update to Medicare Deductible,  01/04/2016  9410 
Coinsurance and Premium Rates for 2016 
R89GI  11/21/2014  Update to Medicare Deductible,  01/05/2015  8982 
Coinsurance and Premium Rates for 2015 
R82GI  11/15/2013  Update to Medicare Deductible,  01/06/2014  8527 
Coinsurance and Premium Rates for 2014 
R81GI  12/07/2012  Update to Medicare Deductible,  01/07/2013  8052 
Coinsurance and Premium Rates for 2013 
R80GI  10/26/2012  Manual Updates to Clarify SNF Claims  04/01/2013  8044 
Processing 
R74GI  12/16/2011  Update to Medicare Deductible,  01/03/2012  7567 
Coinsurance and Premium Rates for 2011 
R72GI  11/18/2011  Update to Medicare Deductible,  01/03/2012  7567 
Coinsurance and Premium Rates for 2011  
Rescinded and replaced by Transmittal 74 
R65GI  11/19/2010  Update to Medicare Deductible,  01/03/2011  7224 
Coinsurance and Premium Rates for 2011 
R61GI  11/13/2009  Update to Medicare Deductible,  01/04/2010  6690 
Coinsurance and Premium Rates for 2010 
R60GI  10/30/2009  Outpatient Mental Health Treatment  01/04/2010  6686 
Limitation 
R56GI  11/17/2008  Update to Medicare Deductible,  01/05/2009  6258 
Coinsurance and Premium Rates for 2009  R55GI  11/07/2008  Update to Medicare Deductible,  01/05/2009  6258 
Coinsurance and Premium Rates for 2009 - 
Rescinded and replaced by Transmittal 56 
R49GI  12/14/2007  Update to Medicare Deductible,  01/07/2008  5830 
Coinsurance and Premium Rates for 2008 
R41GI  10/27/2006  Update to Medicare Deductible,  01/02/2007  5345 
Coinsurance and Premium Rates for 2007 
R31GI  11/04/2005  Update to Medicare Deductible,  01/03/2006  4132 
Coinsurance and Premium Rates for 2006 
R28GI  08/12/2005  Conforming Changes for Change Request  09/12/2005  3912 
3648 to Pub. 100-01 
R18GI  03/04/2005  Billing for Blood and Blood Products Under  07/05/2005  3681 
the Hospital Outpatient Prospective 
Payment System (OPPS) 
R12GI  10/22/2004  New Policy and Refinements on Billing  04/04/2005  3416 
Noncovered Charges to Fiscal 
Intermediaries (FIs) 
R11GI  10/22/2004  Manual Revision Regarding Waiver of  11/22/2004  3471 
Annual Deductible and Coinsurance for 
Both ASC Facility, and ASC/Hospital 
Outpatient Department Physician Services 
R10GI  09/10/2004  Update to Medicare Deductible,  01/03/2005  3463 
Coinsurance and Premium Rates for 
Calendar Year 2005 
R09GI  09/03/2004  Update to Medicare Deductible,  01/03/2005  3463 
Coinsurance and Premium Rates for 
Calendar Year 2005 
R03GI  03/12/2004  New Part B Annual Deductible  01/03/2005  3121 
R01GI  09/11/2002  Initial Publication of Manual  NA  NA 
 
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