Medicare General Information, Eligibility, 
and Entitlement 
Chapter 5 - Definitions 
 
Table of Contents 
(Rev. 120, 11-02-18) 
 
Transmittals for Chapter 5 
 
10 - Provider and Related Definitions 
10.1 - Provider Agreements 
10.1.1 - Basic Commitment in Provider Agreement 
10.1.2 - Part A Deductible and Coinsurance 
10.1.3 - Part B Deductible and Coinsurance 
10.1.4 - Blood 
10.1.5 - Services Requested by Beneficiary 
10.1.6 - Provider Charges to Beneficiary Where Provider Customarily 
Furnishes More Expensive Services Not Requested by Beneficiary 
10.1.7 - Hospitals Participating in State Reimbursement Control Systems 
or Demonstration Projects 
10.1.8 - Medicare Secondary Payer Involvement of Failure to File Proper 
Claims 
10.1.9 - Advance Directive Requirements 
10.1.10 - Posting of Signs in Hospital Emergency Departments 
10.2 - Admission of Medicare Patients for Care and Treatment 
10.3 - Under Arrangements 
10.4 - Term of Agreements 
10.4.1 - Agreement with a SNF 
10.4.2 - Agreement with RHC/FQHC 
10.5 - Responsibilities of Participating Provider 
10.6 - Termination of Provider Participation 
10.6.1 - Voluntary Termination 
10.6.2 - Involuntary Termination, Including SNF Agreement Cancellations 
10.6.3 - Expiration and Renewal - Nonrenwal of SNF Term Agreements  
10.6.4 - Determining Payment for Services Furnished After 
Termination of Provider Agreement 
10.6.5 - Change of Provider Ownership 
20 - Hospital Defined  20.1 - Definition of Emergency Inpatient and Outpatient Services 
20.2 - Definition of an Emergency Services Hospital 
20.3 - Psychiatric Hospital 
20.4 - Certification of Parts of Institutions as Hospital 
20.5 - Part of a Psychiatric Institution as a Psychiatric Hospital 
20.6 - General Hospital Facility of Psychiatric Hospital 
20.7 - Part of a General Hospital as a Psychiatric Hospital 
30 - Skilled Nursing Facility Defined 
30.1 - Distinct Part of an Institution as a SNF 
30.2 - Transfer Agreements 
30.3 - Hospital Providers of Extended Care Services 
40 - Religious Nonmedical Health Care Institution Defined 
50 - Home Health Agency Defined 
50.1 - Subdivisions of Agencies as Home Health Agencies 
50.2 - Arrangements by Home Health Agencies 
50.3 - Arrangements with Parent Agency and Other Entities 
50.4 - Notice of Noncoverage of Services 
50.5 - Rehabilitation Centers 
60 - Hospice Defined 
60.1 - Subdivision of Organizations as Hospices 
60.2 - Arrangements by Hospices 
70 - Physician Defined 
70.1 - Doctors of Medicine and Osteopathy 
70.2 - Dentists 
70.3 - Doctors of Podiatric Medicine 
70.4 - Physicians in Federal Hospitals 
70.5 - Optometrists 
70.6 - Chiropractors 
70.7 - Interns and Residents 
80 - Health Maintenance Organizations (HMOs) Defined 
90 - Other Definitions 
90.1 - Supplier Defined 
90.2 - Laboratory Defined 
90.3 - Practitioners Defined 
90.4 - Group Practice Defined 
  10 - Part A Provider and Related Definitions 
(Rev. 1, 09-11-02) 
 
Section 1866(e) of the Social Security Act defines the term "provider of services" (or 
provider) as: 
 
(1) A clinic, rehabilitation agency, or public health agency if, in the case of a clinic or 
rehabilitation agency, such clinic or agency meets the requirements of 
section 1861(p)(4)(A) (or meets the requirements of such section through the operation of 
section 1861(g)), or if, in the case of a public health agency, such agency meets the 
requirements of section 1861(p)(4)(B) (or meets the requirements of such section through 
the operation of section 1861(g)), but only with respect to the furnishing of outpatient 
physical therapy services (as therein defined) or (through the operation of 
section 1861(g)) with respect to the furnishing of outpatient occupational therapy 
services; and  
 
(2) A community mental health center (as defined in section 1861(ff)(3)(B)), but only 
with respect to the furnishing of partial hospitalization services (as described in 
section 1861(ff)(1)).  Definitions of providers, physicians, practitioners, and suppliers, 
and a description of the requirements that each must meet in order for their services to be 
considered covered are described in the following sections. 
 
10.1 - Provider Agreements 
 
The following provider types must have provider agreements under Medicare: 
 
  Hospitals, 
  Skilled nursing facilities (SNFs), 
  Home health agencies (HHAs), 
  Clinics, rehabilitation agencies, and public health agencies, 
  Comprehensive outpatient rehabilitation facilities (CORFs), 
  Hospices, 
  Critical access hospitals (CAHs), and  
  Community mental health centers (CMHCs). 
 
Clinics, rehabilitation agencies, and public health agencies may enter into provider 
agreements only for furnishing outpatient therapy services as defined in section 10 above. 
CMHCs may enter into provider agreements only to furnish partial hospitalization 
services. 
  The term "provider agreement" is defined in 42 CFR 489.3 as an agreement between 
CMS and one of these providers specified in this section to provide services and to 
comply with the requirements of section 1866 of the Act. 
 
A provider which has executed an agreement becomes qualified to participate after the 
agreement is accepted.  When the agreement is made retroactive, the provider must 
comply with the terms of the agreement and the provisions of title XVIII and regulations 
issued thereunder as of the retroactive date.  For payment to be made to the provider for 
covered items and services it furnishes on or after the effective date of the agreement, the 
provider must have a record keeping capability sufficient to determine the costs of 
services furnished to Medicare beneficiaries. 
 
Provider agreements require the providers to comply with regulations.  Therefore, new 
provider agreements are not made when regulations change. 
 
Providers as defined in this section may also function as suppliers and bill the program 
for other services provided as suppliers if they meet the applicable requirements for 
supplying the specific service. 
 
10.1.1 - Basic Commitment in Provider Agreement 
(Rev. 58, Issued: 03-06-09, Effective: 06-08-09, Implementation: 06-08-09) 
 
Section 1866 of the Act and 42 CFR 489 require the provider to agree to the following: 
 
1. To limit its charges to beneficiaries and to other individuals on their behalf to: 
 
  The deductible and coinsurance amounts (see 10.1.2 for details; 
  The blood deductible (see 10.1.4 for details); and  
  Services requested by the beneficiary. (See 10.1.5) 
 
2. To return any amounts incorrectly collected from a beneficiary or any other person on 
the beneficiary's behalf; 
 
3. To notify the A/B MAC (A) or (HHH) promptly if it hires an individual who at any 
time during the preceding year was employed in a managerial, accounting, auditing, or 
similar capacity by a MAC; 
 
4. In the case of a hospital or a Critical Access Hospital (CAH), either to furnish directly 
or to make arrangements (as defined in 10.3 of this chapter) for all Medicare-covered 
services to inpatients of a hospital or a CAH except the following: 
 
  Physicians' services that meet the criteria of 42 CFR 405.550(b) for payment on a 
reasonable charge basis; 
    Physician assistant services, as defined in section 1861(s)(2)(K)(I) of the Act, that 
are furnished after December 31, 1990; 
 
  Certified nurse-midwife services, as defined in section 1861(ff) of the Act, that 
are furnished after December 31, 1990; 
 
  Qualified psychologist services, as defined in section 1861(ii) of the Act, that are 
furnished after December 31, 1990; and  
 
  Services of an anesthetist, as defined in 42 CFR 410.69. 
 
5. In the case of a hospital or CAH that furnishes inpatient hospital services or inpatient 
CAH services for which payment may be made under Medicare, to maintain an 
agreement with a PRO for that organization to review the admissions, quality, 
appropriateness, and diagnostic information related to those inpatient services.  The 
requirement of this paragraph applies only if, for the area in which the hospital or CAH is 
located, there is a PRO that has a contract with CMS under Part B of title XI of the Act; 
 
6. To maintain a system that, during the admission process, identifies any primary payers 
other than Medicare so that incorrect billing and Medicare overpayments can be 
prevented; 
 
7. To bill other primary payers before billing; 
 
8. If the provider receives payment for the same services from Medicare and another 
payer that is primary to Medicare, to reimburse Medicare any overpaid amount within 60 
days; 
 
9. If the provider receives, from a payer that is primary to Medicare, a payment that is 
reduced because the provider failed to file a proper claim; to reimburse Medicare any 
overpaid amount up to the amount that would have been paid had the provider filed a 
proper claim timely. 
 
10. In the State of Oregon, because of a court decision, and in the absence of a reversal 
on appeal or a statutory clarification overturning the decision, hospitals may bill liability 
insurers first.  However, if the liability insurer does not pay "promptly," the hospital must 
withdraw its claim or lien and bill Medicare for covered services; 
 
11. In the case of home health agencies, to offer to furnish catheters, catheter supplies, 
ostomy bags, and supplies related to ostomy care to any individual who requires them as 
part of their furnishing of home health services; 
 
12. In the case of hospital emergency department services that provide for medical 
screening to determine if an emergency medical condition exists, CMS guidelines 
provided in CFR 42 489.24(d) for transfer of patients to other facilities should be 
followed;   
13. In the case of hospital emergency department services report to CMS or the State 
Survey Agency any time it has reason to believe it may have received an individual who 
has been transferred in an unstable emergency medical condition from another hospital in 
violation of the requirements of CFR 42 489.24(d); 
 
14. In the case of inpatient hospital services for admissions on and after January 1, 1987, 
to participate in the Tricare program; 
 
15. In the case of inpatient hospital services for admissions on and after July 1, 1987, to 
admit veterans whose admission is authorized by the VA and to meet related VA 
admission and payment requirements; 
 
16. In the case of a hospital, to give each beneficiary a notice about his or her discharge 
rights at or about the time of the individual's admission; 
 
17. In the case of a hospital with an emergency department: 
 
  To post conspicuously in any emergency department or in a place or places likely 
to be noticed by all individuals entering the emergency department, as well as 
those individuals waiting for examination and treatment in areas other than 
traditional emergency departments (that is, entrance, admitting area, waiting 
room, treatment area), a sign (in a form specified by the Secretary) specifying 
rights of individuals under Section 1867 of the Act with respect to examination 
and treatment for emergency medical conditions and women in labor; and  
 
  To post conspicuously information indicating whether or not the hospital or 
critical access hospital participates in the Medicaid program under a State plan 
approved under title XIX; 
 
18. In the case of a hospital with an emergency department (including both the 
transferring and receiving hospitals), to maintain: 
 
  Medical and other records related to individuals transferred to or from the hospital 
for a period of 5 years from the date of the transfer; 
 
  A list of physicians who are on call for duty after the initial examination to 
provide treatment necessary to stabilize an individual with an emergency medical 
condition; and  
 
  A central log on each individual who comes to the emergency department seeking 
assistance and whether he or she refused treatment, was refused treatment, or 
whether he or she was transferred, admitted and treated, stabilized and transferred, 
or discharged. 
  19. Effective December 1, 1991, in the case of a hospital to comply with the advance 
directive provisions of 4206 of OBRA 1990.  Hospitals must, in accordance with written 
policies and procedures, for all adult individuals: 
 
  Inform them, in writing, of State laws regarding advance directives; 
 
  Inform them, in writing, of its policies regarding the implementation of advance 
directives (including a clear and concise explanation of a conscientious objection, 
to the extent that State law permits for a hospital or any agent of a hospital that, as 
a matter of conscience, cannot implement an advance directive); 
 
  Document in the individual's medical record whether the individual has executed 
an advance directive; 
 
  Not condition the provision of care or otherwise discriminate against an 
individual based on whether that individual has executed an advance directive 
(since the law does not require the individual to do so); and  
 
  Educate staff and the community on issues concerning advance directives. 
 
20. Effective October 1, 2007, CMS revised the regulations governing provider 
agreements that require hospitals to disclose physician ownership information to patients 
when a referring physician (or his or her immediate family member) has an ownership 
interest in the hospital.  Pursuant to 42 CFR 489.20(u), hospitals must: (1) furnish written 
notice to each patient at the beginning of the patients hospital stay or outpatient visit that 
the hospital is a physician-owned hospital, in order to assist the patient in making an 
informed decision regarding his or her care.  The notice must disclose the fact that the 
hospital meets the Federal definition of a physician-owned hospital and that the list of 
physician owners or immediate family members of physicians is available upon request 
and must be provided to the patient at the time of the request; and (2) require each 
physician who is a member of the hospitals medical staff to agree, as a condition of 
continued medical staff membership or admitting privileges, to disclose in writing to all 
patients the physician refers to the hospital any ownership or investment interest in the 
hospital held by the physician or held by an immediate family member of the physician.  
Disclosure must be made at the time of the referral. 
 
Effective October 1, 2008, hospitals that do not have any physician owners who refer 
patients to the hospital are exempt from the disclosure requirements (See 42 CFR 
489.20(v)).  In addition, CMS may deny a provider agreement to a hospital that does not 
have procedures in place to notify patients of physician ownership in the hospital (See 42 
CFR 489.12). 
 
10.1.2 - Part A Deductible and Coinsurance 
(Rev. 1, 09-11-02) 
 
This section is a further explanation of 10.1.1 above.   
The provider may charge the beneficiary or his or her representative: 
 
  The amount of the inpatient hospital deductible or, if less, the actual charges for 
the services; 
 
  The amount of inpatient hospital coinsurance applicable for each day the 
individual is furnished inpatient hospital services after the 60th day, during a 
benefit period; 
 
  The posthospital extended care coinsurance amount; and  
 
  In the case of durable medical equipment (DME) furnished as a home health 
service, 20 percent of the fee schedule amount. 
 
10.1.3 - Part B Deductible and Coinsurance 
(Rev. 1, 09-11-02) 
 
This section is a further explanation of 10.1.1 above. 
 
The provider may charge the beneficiary or other person on his or her behalf: the $100 
deductible and 20 percent of the customary (insofar as reasonable) charges in excess of 
that deductible. 
 
For hospital outpatient services, the allowable deductible charges depend on whether the 
hospital can determine the beneficiary's deductible status.  If the hospital is unable to 
determine the deductible status, it may charge the beneficiary its full customary charges 
up to $100.  If the beneficiary provides official information as to deductible status, the 
hospital may charge only the unmet portion of the deductible. 
 
The hospital is required to indicate on the claim the amounts collected. 
 
In the case of DME furnished as a home health service under Medicare Part B, the 
coinsurance is 20 percent of the fee schedule amount for the services, with the following 
exception:  If the DME is used, purchased by, or on behalf of the beneficiary at a price at 
least 25 percent less than the reasonable charge for comparable new equipment, no 
coinsurance is required. 
 
10.1.4 - Blood 
(Rev. 18, Issued: 03-04-05, Effective: 07-01-05, Implementation: 07-05-05) 
 
This section is a further explanation of 10.1.1. 
 
A provider may charge the beneficiary (or other person on his or her behalf) only for the 
first three pints of blood or units of packed red cells furnished during the calendar year.  
The charges may not exceed the provider's customary charges.   
The provider may not charge for any whole blood or packed red cells in any of the 
following circumstances: 
 
  The provider obtained the blood or red cells at no charge other than a processing 
or service charge; 
 
  The blood or packed red cells have been replaced; or  
 
  The provider (or its blood supplier) receives from an individual, or a blood bank, 
a replacement offer.  This offer is applicable if the replacement blood would not 
endanger the health of a recipient and if the prospective donor's health would not 
be endangered by making a blood donation.  In this case the provider is precluded 
from charging even if it or its blood supplier rejects the replacement offer. 
 
  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). 
 
10.1.5 - Services Requested by Beneficiary 
(Rev. 1, 09-11-02) 
 
This section is a further explanation of 10.1.1. 
 
If services furnished at the request of a beneficiary (or his or her representative) are more 
expensive than, or in excess of, services covered under Medicare, a provider may charge 
the beneficiary an amount that does not exceed the difference between (1) the provider's 
customary charges for the services furnished; and (2) the provider's customary charges 
for the kinds and amounts of services that are covered under Medicare. 
 
A provider may not charge for these services unless they have been requested by the 
beneficiary (or his or her representative) and may not require a beneficiary to request 
services as a condition of admission. 
 
To avoid misunderstanding and disputes, a provider must inform any beneficiary who 
requests a service for which a charge will be made that there will be a specified charge 
for that service. 
 
10.1.6 - Provider Charges to Beneficiary Where Provider Customarily 
Furnishes More Expensive Services Not Requested by Beneficiary 
(Rev. 1, 09-11-02) 
 
A provider that customarily furnishes an individual items or services that are more 
expensive than the items or services determined to be necessary in the efficient delivery 
of needed health services, may charge an individual entitled to benefits under Medicare 
for such more expensive items or services even though not requested by the individual.   The charge, however, may not exceed the amount by which the cost of (or, if less, the 
customary charges for) more expensive items or services furnished by such provider in 
the second cost reporting period immediately preceding the cost reporting period in 
which such charges are imposed, exceeds the applicable limit imposed under the 
provisions of 42 CFR 413.30. 
 
This charge may be made only if: 
 
  The A/B MAC (A) or (HHH) determines that the charges have been calculated 
properly in accordance with the provisions of this regulation section; 
 
  The services are not emergency services as defined in 20.1 or 20.2 of this 
chapter; 
 
  The admitting physician has no direct or indirect financial interest in such 
provider; 
 
  CMS has provided notice to the public through notice in a newspaper of general 
circulation servicing the provider's locality and such other notice as the Secretary 
may require, of any charges the provider is authorized to impose on individuals 
entitled to benefits under Medicare on account of costs in excess of the costs 
determined to be necessary in the efficient delivery of needed health services 
under Medicare; and  
 
  The provider has identified such charges to such individual or person acting on 
his/her behalf as charges to meet the costs in excess of the costs determined to be 
necessary in the efficient delivery of needed health services under Medicare. 
 
10.1.7 - Hospitals Participating in State Reimbursement Control 
Systems or Demonstration Projects 
(Rev. 1, 09-11-02) 
 
This section is a further explanation of 10.1.1. 
 
A hospital receiving payment for a covered hospital stay under: 
 
  Either a State reimbursement control system approved under 1886 (c) of the Act; 
or  
 
  A demonstration project authorized under section 402(a) of Pub. L. 90 - 248 (42 
U.S.C. 1395b - 1) or section 222(a) of Pub. L. 92 - 603 (42 U.S.C.1395b - 1 
(NOTE)); and  
 
  Would otherwise be subject to the prospective payment system set forth in part 
412 of this chapter, may also charge a beneficiary for custodial care and medically  unnecessary services described in CFR CUR 412.42(c), after the conditions of 
412.42(c)(1) through(c)(4) are met. 
 
10.1.8 - Medicare Secondary Payer Involvement of Failure to File 
Proper Claims 
(Rev. 1, 09-11-02) 
 
This section is a further explanation of 10.1.1. 
 
A provider that has not filed a proper claim and has received a reduced payment because 
of this from a payer primary to Medicare agrees: 
 
  To bill Medicare for an amount no greater than would have been payable as 
secondary payment if the primary insurer's payment had been based on a proper 
claim; and  
 
  To charge the beneficiary only (a) the amount it would have been entitled to 
charge if it had filed a proper claim and received payment based on such a claim; 
and (b) an amount equal to any third-party payment reduction attributable to 
failure to file a proper claim, but only if the provider can show that: 
 
  It failed to file a proper claim solely because the beneficiary, for any 
o
reason other than mental or physical incapacity, failed to give the provider 
the necessary information; or 
 
  The beneficiary, who was responsible for filing a proper claim, failed to 
o
do so for any reason other than mental or physical incapacity. 
 
10.1.9 - Advance Directive Requirements 
(Rev. 1, 09-11-02) 
 
Effective December 1, 1991, participating hospitals must comply with the advance 
directive provisions of 4206 of OBRA 1990.  Therefore, an agreement per 1866 of the 
Act with a hospital includes that the hospital must, in accordance with written policies 
and procedures, for all adult individuals: inform them, in writing, of state laws regarding 
advance directives; inform them, in writing, of its policies regarding the implementation 
of advance directives (including a clear and concise explanation of a conscientious 
objection, to the extent that state law permits for a hospital or any agent of a hospital that, 
as a matter of conscience, cannot implement an advance directive); document in the 
individual's medical record whether the individual has executed an advance directive; not 
condition the provision of care or otherwise discriminate against an individual based on 
whether that individual has executed an advance directive (since the law does not require 
the individual to do so); and educate staff and the community on issues concerning 
advance directives. 
 
10.1.10 - Posting of Signs in Hospital Emergency Departments   
Section 6018(a)(2) of the Omnibus Budget Reconciliation Act of 1989 (OBRA 89), 
effective July 1, 1990, requires hospitals with emergency departments to post signs which 
specify the rights (under section 1867 of the Social Security Act) of women in labor and 
individuals with emergency medical conditions to examination and treatment. 
 
To comply with these requirements, hospitals must post signs that meet the following 
criteria: 
 
  At a minimum, the signs must specify the rights of unstable individuals with 
emergency conditions and women in labor who come to the emergency 
department for health care services; 
 
  It must indicate whether the facility participates in the Medicaid program; 
 
  The wording of the sign must be clear and in simple terms understandable by the 
population serviced; 
 
  Print the signs in English and other major languages that are common to the 
population of the area serviced; 
 
  The letters within the signs must be clearly readable at a distance of at least 20 
feet or the expected vantage point of the emergency department patrons; and  
 
  Post signs in a place or places likely to be noticed by all individuals entering the 
emergency department, as well as those individuals waiting for examination and 
treatment (e.g., entrance, admitting area, waiting room, treatment area). 
 
The sample below may be adapted, contains sufficient information to satisfy these 
requirements, and may be adapted to satisfy the visibility requirement. 
 
IT'S THE LAW! 
 
IF YOU HAVE A MEDICAL EMERGENCY OR ARE IN LABOR 
 
YOU HAVE THE RIGHT TO RECEIVE, WITHIN THE CAPABILITIES OF THIS 
HOSPITAL'S STAFF AND FACILITIES: 
 
An appropriate medical SCREENING EXAMINATION 
 
Necessary STABILIZING TREATMENT (including treatment for an unborn child) 
 
And if necessary 
 
An appropriate TRANSFER to another facility 
  Even if 
 
YOU CANNOT PAY OR DO NOT HAVE MEDICAL INSURANCE 
 
OR 
 
YOU ARE NOT ENTITLED TO MEDICARE OR MEDICAID 
 
This hospital (does/does not) participate in the Medicaid program 
 
10.2 - Admission of Medicare Patients for Care and Treatment 
(Rev. 120, Issued: 11-02-18, Effective: 12- 04-18, Implementation: 12- 04-18 
 
The participation of a provider of services, which voluntarily files an agreement to 
participate in the health insurance program, contemplates that such provider will admit 
Medicare beneficiaries for care and treatment, and upon admission, will provide them 
with such services as are ordinarily furnished by the provider to its patients generally. 
 
A provider may have restrictions on the types of services it makes available and/or the 
types of health conditions it accepts, or may establish other criteria relating to the 
admission of persons for care and treatment.  However, the law does not contemplate that 
such restrictions or criteria will apply only to Medicare beneficiaries as a class.  It does 
contemplate, however, that if such restrictions or criteria apply to Medicare beneficiaries, 
they will be applied in the same manner in which they are applied to all other persons 
seeking care and treatment by the provider.  Thus, a provider admission or patient policy 
or practice which is not consistent with the objective contemplated in the law may be 
used by CMS as a basis for termination of the agreement for cause (see the regulations at 
42 CFR 489.53(a)(2), and also see Pub. 100-04, Medicare Claims Processing Manual, 
chapter 1, 30.1.3). 
 
10.3 - Under Arrangements 
(Rev. 28; Issued:  08-12-05; Effective/Implementation:  09-12-05) 
 
A provider may have others furnish certain covered items and services to their patients 
through arrangements under which receipt of payment by the provider for the services 
discharges the liability of the beneficiary or any other person to pay for the service. In 
permitting providers to furnish services under arrangements, it was not intended that the 
provider merely serve as a billing mechanism for the other party.  Accordingly, for 
services provided under arrangements to be covered, the provider must exercise 
professional responsibility over the arranged-for services. 
 
The provider's professional supervision over arranged-for services requires application of 
many of the same quality controls as are applied to services furnished by salaried 
employees.  The provider must accept the patient for treatment in accordance with its 
admission policies, and maintain a complete and timely clinical record on the patient, 
which includes diagnoses, medical history, physician's orders, and progress NOTEs  relating to all services received, and must maintain liaison with the attending physician 
regarding the progress of the patient and the need for revised orders.  In the case of home 
health services and outpatient physical therapy or speech-language pathology services, 
the provider must ensure that the required plan of treatment is periodically reviewed by 
the physician and secure from the physician the required certifications and 
recertifications.  Additionally, the provider (other than a SNF) must ensure that the 
medical necessity of such services is reviewed on a sample basis by the utilization review 
(UR) committee if one is in place, the facility's health professional staff, or an outside UR 
group.  (Effective October 1, 1990, a SNF is no longer required to have a plan for UR.)  
The provider, including a SNF that conducts optional UR services, is responsible for 
medical necessity decisions made under arrangement by an outside group. 
 
10.4 - Term of Agreements 
(Rev. 28; Issued:  08-12-05; Effective/Implementation:  09-12-05) 
 
An agreement with a hospital, HHA, hospice, and (for the purposes of furnishing 
outpatient physical therapy, occupational therapy, or speech-language pathology services) 
a clinic, a rehabilitation agency, or public health agency is not time limited and has no 
fixed expiration date.  The agreement remains in effect until such time as there is a 
voluntary termination, or involuntary termination, or a change of ownership. 
 
10.4.1 - Agreement with a SNF 
(Rev. 1, 09-11-02) 
 
All agreements with SNFs are required to be for a specified term of up to l2 full calendar 
months with fixed expiration dates.  In appropriate situations, the agreement may also 
contain a cancellation clause.  Therefore, when it is determined that a SNF is eligible and 
that its agreement for participation in the Medicare program will be accepted for filing, 
the term of the agreement will be determined in the following manner: 
 
A.  No Deficiencies - If a SNF is certified as being in full compliance with all 
standards contained in the requirements for participation for SNFs, the term of the 
agreement is, as appropriate to the period of certification for it has been approved, 
for a term of up to 12 full calendar months. 
 
B.  Deficiencies - If a SNF is certified as not being in full compliance, the term of the 
agreement is, as appropriate to the period of certification or conditional period of 
certification for which it has been approved: 
 
1.  For a term which expires no later than the close of the 60th day following 
the last day of the time period specified in the written plan providing for 
the correction of deficiencies in meeting the requirements for 
participation, provided that such term does not exceed 12 full calendar 
months or  
  2.  Provide a conditional term of up to 12 full calendar months, subject to a 
cancellation clause that the agreement may be canceled on a 
predetermined date (no later than the close of the 60th day following the 
last day of the time period specified in the written plan providing for the 
correction of deficiencies in meeting the requirements for participation), 
provided that date will occur within the 12-month term. 
 
If the health and safety of Medicare patients are not jeopardized, the term of an 
agreement may be extended for 2 full calendar months when necessary to prevent 
irreparable harm to the facility, to prevent hardship to Medicare beneficiaries furnished 
care, or if it is impracticable within the term of the agreement to determine whether the 
SNF is complying with the provisions of the Act and regulations issued thereunder. 
 
10.4.2 - Agreement with Rurhal Health Clinic (RHC)/Federally 
Qualified Health Clinic (FQHC) 
(Rev. 1, 09-11-02) 
 
Agreements between RHCs/FQHCs and CMS are generally for a term of 1 year.  They 
may be annually renewed by mutual agreement of the RHC/FQHC and CMS, i.e., a new 
agreement need not be signed each year.  Special circumstances may result in a term of 
less than 1 year for an initial agreement, e.g., a clinic or center may wish the agreement 
year to run concurrently with the RHC/FQHC's fiscal year or have some other technical 
considerations. 
 
10.5 - Responsibilities of Participating Provider 
(Rev. 1, 09-11-02) 
 
Upon acceptance for participation, a provider becomes responsible for remaining in 
compliance with the terms of the agreement and the provisions of title XVIII and 
regulations issued thereunder.  Where the agreement is made retroactive, the provider 
must comply with its responsibilities as of the retroactive date.  Payment to the provider 
for covered items and services it furnishes on or after the effective date of the agreement 
will require that the provider have a recordkeeping capability sufficient for determining 
the cost of services furnished Medicare beneficiaries. 
 
The termination of participation (see 10.6 of this chapter) does not immediately 
abrogate all of the provider's responsibilities and in specific matters a responsibility may 
extend beyond the effective date of termination.  For example, the provider continues to 
be responsible (as applicable) for those provisions of the law and regulations which 
provide for program coverage to remain in effect for specified periods of time beyond the 
effective termination date, for those beneficiaries who were accepted for care and 
treatment by the provider before such date.  The provider also continues to be responsible 
for filing a final cost report and/or the repayment of any overpayment, as these actions 
relate to final program cost settlement after termination. 
 
10.6 - Termination of Provider Participation  (Rev. 1, 09-11-02) 
 
A provider may voluntarily terminate its participation in the program or have it 
terminated by the Secretary for cause. 
 
 
10.6.1 - Voluntary Termination 
(Rev. 1, 09-11-02) 
 
A provider may terminate its agreement (and in the case of a SNF, it may terminate its 
agreement prior to the close of the specified term of its agreement) by filing with the 
Secretary a written notice of its intention to terminate the agreement.  The Secretary may 
accept the termination date stated in the notice (the date must be the first day of a month 
and, in the case of a SNF, must occur within the specified term of such facility's 
agreement) or set a different date.  However, the termination date set by the Secretary 
may not be more than 6 months from the date the provider's notice is filed. 
 
10.6.2 - Involuntary Termination, Including SNF Agreement 
Cancellations 
(Rev. 1, 09-11-02) 
 
The Secretary may terminate an agreement (and in the case of a SNF, he/she may 
terminate its agreement prior to the close of the specified term of the agreement) with a 
provider if it is determined that the provider: 
 
  Is not complying substantially with the provisions of the agreement or with the 
applicable provisions of title XVIII of the Act and regulations; 
 
  No longer meets the appropriate requirements for participation; 
 
  Has failed to supply information which is necessary to determine whether 
payments are due or were due and the amounts of such payments; or  
 
  Refuses to permit examinations of fiscal and other records, including medical 
records. 
 
The cancellation of a SNF agreement at the close of the predetermined date stated in the 
cancellation clause contained in such agreement (see 10.6.2 of this chapter) is viewed as 
an involuntary termination of the agreement by the Secretary for cause.  Such actions 
involve a finding that the SNF has not satisfactorily completed its written plan providing 
for the correction of deficiencies with respect to one or more of the standards in the 
applicable requirements for participation, or that the facility has not made substantial 
effort and progress in correcting such deficiencies. 
 
A provider which is dissatisfied with the Secretary's determination terminating its 
agreement is entitled to request a hearing thereon in accordance with the appeals  procedures contained in 42 CFR Part 498.  There is no reconsideration step before the 
opportunity for a hearing. 
 
NOTE:  The involuntary termination of a hospital's approval authorizing it to provide 
extended care services, i.e., to be a swing bed facility, does not automatically result in the 
involuntary termination of the hospital's agreement relating to the provision of hospital 
services. 
 
10.6.3 - Expiration and Renewal - Nonrenewal of SNF Term 
Agreements 
(Rev. 1, 09-11-02) 
 
All agreements with skilled nursing facilities are required to be for a specified term of up 
to 12 full calendar months with fixed expiration dates.  The agreement expires at the 
close of the last day of its specified term and is not automatically renewable from term to 
term.  When the term of an agreement is extended (see 10.6.3 of this chapter), the close 
of the last day of its specified term is the close of the day of the extension of the 
agreement.  Thus, when the term of an agreement is extended, the provider's participation 
in the program continues, and the agreement does not expire until the close of the last day 
to which it has been extended. 
 
Since an agreement with a SNF is not automatically renewable from term to term, each 
term agreement with a SNF requires that the SNF qualify for participation and that its 
agreement be accepted for filing.  A participating SNF may, however, continue its 
participation under the agreement form previously accepted for filing, provided the SNF 
continues to qualify for participation and the agreement form is again accepted for filing 
and renewed for a term which begins on the date immediately following the close of the 
last day of the prior term of the agreement.  When the requirements for participation 
continue to be met, there is no limit to the number of times that the SNF's agreement 
form may again be accepted and renewed for a specified term. 
 
When the time-limited agreement (including an agreement which has had its term 
extended) is renewed on the day immediately following the close of the last day of its 
term, the expiration of the agreement is not considered a termination of participation in 
the program. 
 
However, once an agreement with a SNF is (1) not renewed, or (2) voluntarily terminated 
by the SNF, or (3) involuntarily terminated (including cancellations) by the Secretary, the 
previously accepted agreement cannot again be accepted and renewed.  In such cases, the 
SNF is required to execute and file a new agreement if it is again found eligible to 
participate in the Medicare program.  The effective date of the new agreement must be 
determined in accordance with regulatory provisions (42 CFR 489.13). 
 
The Secretary's determination not to accept and renew a SNF agreement is a 
determination relating to the qualifications of the SNF in the period immediately 
following the close of the SNF's existing agreement and the SNF is entitled to request a  reconsideration of the determination in accordance with the appeals procedure contained 
in 42 CFR part 405, subpart 0.  Such determinations involve a finding that: 
 
  Based on a State agency resurvey and recertification, the SNF will not be 
approved for a period of certification because it is out of compliance with one or 
more requirements for participation; 
 
  Based on a State agency resurvey and recertification, the SNF continues to be out 
of compliance with the same standard(s) in the requirements for participation as 
were found out of compliance during the term of the agreement and the facility 
will not be approved for a new period of certification; or  
 
  The SNF has violated the terms of its agreement or the provisions of title XVIII or 
regulations promulgated thereunder. 
 
In cases of nonrenewal by the Secretary, the A/B MAC (A)'s role is the same as for 
involuntary terminations. 
 
10.6.4 - Determining Payment for Services Furnished After Termination 
of Provider Agreement 
(Rev. 42, Issued: 11-09-06, Effective: N/A, Implementation: 12-11-06) 
 
Effective with the date a provider agreement (or swing bed approval) terminates no 
payment is made to the provider under such agreement for the following: 
 
A. Hospital 
 
1.  Termination-Hospital Agreement - Inpatient hospital services (including inpatient 
psychiatric hospital services) and swing bed extended care services furnished on 
or after the effective date of the hospital's termination, except that payment can 
continue to be made for up to 30 days of inpatient hospital services and/or swing 
bed extended care services (total of no more than 30 days) furnished on or after 
the termination date to beneficiaries who were admitted (at either the acute or 
extended care level) prior to the termination date. 
 
2.  Termination-Swing Bed Approval - Swing bed extended care services furnished 
on or after the effective date of the termination of the hospital's swing bed 
approval, except that payment can continue for up to 30 days of extended care 
services furnished on or after the termination date to beneficiaries who were 
admitted (at either the acute or extended care level) prior to the termination date. 
 
B. Skilled Nursing Facility 
 
1.  Termination-SNF - Posthospital extended care services furnished on or after the 
effective date of termination of the agreement, where such agreement has been 
voluntarily terminated by the provider (see 10.6.1 of this chapter) or  involuntarily terminated by the Secretary for cause (see 10.6.2 of this chapter), 
except that payment can continue to be made for up to 30 days of posthospital 
extended care services furnished on and after the termination date to beneficiaries 
who were admitted prior to the termination date. 
 
C. HHA and Hospice 
 
Payment may be made for services under a plan of treatment for up to 30 days following 
the effective termination date of a home health agency or hospice if the plan was 
established before the termination date. 
 
D. Providers - Termination 
 
See Medicare Claims Processing Manual Chapter 1 for billing instructions concerning 
other items and services, including outpatient physical therapy or speech-language 
pathology and diagnostic services, furnished on or after the effective date of termination 
on or after the day following the close of such agreement. 
 
10.6.5 - Change of Provider Ownership 
(Rev. 1, 09-11-02) 
 
When an organization having a provider agreement undergoes a change of ownership, the 
agreement is automatically assigned to the new owner.  A participating provider which 
plans to change ownership should give advance notice of its intention so that necessary 
action can be taken in the event the newly-owned institution does not wish to participate 
in the Medicare program. 
 
A participating provider which plans to enter into a lease arrangement (in whole, or in 
part) should also give advance notice of its intention.  A change of ownership would 
occur for example: 
 
  Where a sole proprietor transfers title to an enterprise to another party; 
 
  Where, in the case of a partnership, the addition, removal, or substitution of a 
partner effects a termination of such partnership and creates a successor 
partnership or other entity; 
 
  Where an incorporated provider merges with an incorporated institution which is 
not participating in the program and the nonparticipating institution is the 
surviving corporation or where two or more corporate providers consolidate and 
such consolidation results in the creation of a new corporate entity; or  
 
  Where an unincorporated provider (a sole proprietorship or partnership) becomes 
incorporated. 
  Whenever A/B MACs (A) learn of an impending change of ownership, or possible 
change of ownership, they inform the regional office immediately.  They refer any 
questions they may have concerning change of ownership situations to the regional 
office. 
 
20 - Hospital Defined 
(Rev. 42, Issued: 11-09-06, Effective: N/A, Implementation: 12-11-06) 
 
A hospital (other than psychiatric) means an institution which is primarily engaged in 
providing, by or under the supervision of physicians, to inpatients, diagnostic and 
therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or 
sick persons; or rehabilitation services for the rehabilitation of injured, disabled, or sick 
persons. 
 
To be eligible to participate in Medicare, a hospital must also be an institution which: 
 
  Maintains clinical records on all patients; 
 
  Has bylaws in effect with respect to its staff of physicians; 
 
  Has a requirement that every patient must be under the care of a physician; 
 
  Provides 24-hour nursing service rendered or supervised by a registered 
professional nurse, and has a licensed practical nurse or registered professional 
nurse on duty at all times; 
 
  Has in effect a hospital utilization review plan; 
 
  Is licensed or is approved by the State or local licensing agency as meeting the 
standards established for such licensing; and 
 
  Meets other health and safety requirements found necessary by the Secretary of 
Health, and Human Services.  (These additional requirements may not be higher 
than comparable ones prescribed for accreditation by the Joint Commission on 
Accreditation of Hospitals with exceptions specified in the law). 
 
Such an institution, if approved to participate as a hospital, may also be approved as a 
swing bed facility pursuant to demonstration authority or if the hospital is a rural hospital 
with less than 100 beds. (See 30.3 below.) 
 
20.1 - Definition of Emergency Inpatient and Outpatient Services 
(Rev. 1, 09-11-02) 
 
Payment may be made for certain Part A inpatient hospital services and Part B outpatient 
hospital services provided in a nonparticipating U.S. hospital where they are necessary to 
prevent the death or serious impairment of the health of the individual.  Because of the  threat to the life or health of the individual, the use of the most accessible hospital 
equipped to furnish such services is necessary.  The determination of emergency services 
depends upon three separate findings: 
 
  The hospital meets the definition of an emergency hospital (see 20.2 of this 
chapter), 
 
  The services meet the definition of emergency services (see Claims Processing 
Manual, Chapter 3, 110), and  
 
  The hospital is substantially more accessible from the site of the emergency than 
is the nearest participating hospital. 
 
20.2 - Definition of an Emergency Services Hospital 
(Rev. 1, 09-11-02) 
 
An emergency services hospital is a nonparticipating hospital which meets the 
requirements of the law's definition of a "hospital" relating to full-time nursing services 
and licensure under State or applicable local law.  (A Federal hospital need not be 
licensed under State or local licensing laws to meet the definition of emergency hospital.) 
In addition, the hospital must be primarily engaged in providing, under the supervision of 
doctors of medicine or osteopathy, services of the type that 20.1 describes in defining 
the term hospital, and must not be primarily engaged in providing skilled nursing care 
and related services for patients who require medical or nursing care. (See the definition 
of a SNF in 30 of this chapter.)  Psychiatric hospitals that meet these requirements can 
qualify as emergency hospitals. 
 
Inpatient hospital services and related physician and ambulance services furnished 
outside the U.S. are covered under the limited conditions in Medicare Claims Processing 
Manual Chapter 1. 
 
20.3 - Psychiatric Hospital 
(Rev. 1, 09-11-02) 
 
A psychiatric hospital is an institution which is primarily engaged in providing by or 
under the supervision of a physician, psychiatric services for the diagnosis and treatment 
of mentally ill persons.  To be eligible for participation in the program as a psychiatric 
hospital, it must meet the Medicare conditions of participation for hospitals or be deemed 
to meet those conditions based on accreditation by the Joint Commission on 
Accreditation of Hospitals (JCAH), have a utilization review plan, and comply with 
additional staffing and medical record requirements necessary to carry out an active 
program of treatment and intensive care. 
 
20.4 - Certification of Parts of Institutions as Hospital 
(Rev. 1, 09-11-02) 
  Under certain conditions a distinct part of a psychiatric institution may be certified as a 
psychiatric or general hospital. 
 
20.5 - Part of a Psychiatric Institutions as a Psychiatric Hospital 
(Rev. 1, 09-11-02) 
 
A distinct part of a psychiatric institution can be certified as a psychiatric hospital if it 
meets the conditions of participation even though the institution of which it is a part does 
not.  If the distinct part meets requirements equivalent to the accreditation requirements 
of the JCAH, it can qualify under the program even though the institution itself is not 
accredited. 
 
20.6 - General Hospital Facility of Psychiatric Hospital 
(Rev. 1, 09-11-02) 
 
A general hospital facility within a psychiatric hospital may be certified as a general 
hospital independent of the institution as a whole provided the general facility is a self-
contained operational entity distinct from the rest of the institution.  The general hospital 
facility would be regarded as a separate institution for this purpose since the law does not 
provide for certifying a "distinct part' of an institution as a general hospital.  Services 
furnished in a separately certified general hospital facility are not subject to any of the 
benefit limitations applicable to the other parts of the institution, i.e., the reduction in 
benefit days in the first spell of illness and the 190-day lifetime maximum on inpatient 
services in psychiatric hospitals. 
 
20.7 - Part of a General Hospital as a Psychiatric Hospital 
(Rev. 1, 09-11-02) 
 
There is no provision for a psychiatric wing of a general hospital to be certified as a 
psychiatric hospital.  The distinct part provisions apply only to psychiatric institutions 
and not to general hospitals.  However, this does not prevent the certification of a 
psychiatric hospital which is a part of a medical center or other large complex, provided 
the hospital operates as a separate functioning entity, i.e., it is located in a separate 
building, wing, or part of a building, has its own administration and maintains separate 
fiscal records. 
 
30 - Skilled Nursing Facility Defined 
(Rev. 1, 09-11-02) 
 
A SNF is an institution or a distinct part of an institution (see 30.1 of this chapter), such 
as a skilled nursing home or rehabilitation center, which has a transfer agreement in 
effect with one or more participating hospitals (see 30.2 of this chapter for transfer 
agreements and 10.1 of this chapter, for definition of a participating hospital) and 
which: 
    Is primarily engaged in providing skilled nursing care and related services for 
residents who require medical or nursing care; or rehabilitation services for the 
rehabilitation of injured, disabled, or sick persons, and  
 
  Meets the requirements for participation in 1819(a) through 1819 (d) as amended 
by 4201 of OBRA 1987 of the Social Security Act and in regulations at 42 CFR 
483, B. 
 
A qualified SNF is one that meets all the requirements in the preceding definition.  For 
Medicare purposes, the term SNF does not include any institution which is primarily for 
the care and treatment of mental diseases.  (This restriction does not apply to title XIX 
(Medicaid)).  Also, the term "skilled nursing facility" does not include swing bed 
hospitals authorized to provide and be paid for extended care services.  Swing bed 
hospitals must meet many of the same requirements that apply to SNFs (for more details 
regarding swing bed hospitals, see 30.3.) 
 
30.1 - Distinct Part of an Institution as a SNF 
(Rev. 1, 09-11-02) 
 
The term "distinct part" refers to a portion of an institution or institutional complex (e.g., 
a nursing home or a hospital) that is certified to provide SNF and/or Nursing Facility 
(NF) services.  To qualify for participation in the program as a distinct part SNF of an 
institution, it must be physically separate from the rest of the institution, i.e., it must 
represent an entire physically identifiable unit consisting of all the beds within that unit, 
such as a separate building, floor, wing, or ward.  A distinct part must be fiscally separate 
for cost reporting purposes.  Although it is required that the distinct part be identifiable as 
a separate unit within the institution, it need not necessarily be confined to a single 
location within the institution's physical plant.  The distinct part may, for example, 
consist of several floors or wards which are scattered throughout several different 
buildings within the institutional complex.  In each case, however, the patients of the 
distinct part must be located in units which are physically separate from those units 
housing all other patients of the institution.  Various beds scattered throughout the 
institution do not comprise a distinct part for purposes of being approved by Medicare as 
a SNF. 
 
An institution or institutional complex can only be certified with one distinct part SNF 
and/or one distinct part NF.  A hospital-based SNF is by definition a distinct part. 
Multiple certifications within the same institution or institutional complex are strictly 
prohibited.  The distinct part must consist of all beds within the designated area.  Where 
an institution or institutional complex owns and operates a SNF and/or a NF distinct part, 
that SNF and/or NF distinct part is a single distinct part even if it is operated at various 
locations throughout the institution or institutional complex.  The aggregate of the SNF 
and/or NF locations represents a single distinct part subprovider, not multiple 
subproviders, and must be assigned a single provider number. 
 
  30.2 - Transfer Agreements 
(Rev. 114, Issued: 03-16-18, Effective: 06-19-18, Implementation: 06-19-18) 
 
To participate in the program, a SNF must have a written transfer agreement with one or 
more participating hospitals (see 10.1 of this chapter) providing for the transfer of 
patients between the hospital and the SNF, and for the interchange of medical and other 
information.  If an otherwise qualified SNF has attempted in good faith, but without 
success, to enter into a transfer agreement, this requirement may be waived by the State 
agency.  (See 42 CFR 483.70(j) for the detailed requirements for transfer agreements.) 
 
30.3 - Hospital Providers of Extended Care Services 
(Rev.114, Issued: 03-16-18, Effective: 06-19-18, Implementation: 06-19-18) 
 
In order to address the shortage of rural SNF beds for Medicare patients, rural hospitals 
with fewer than 100 beds may be reimbursed under Medicare Part A for furnishing post 
hospital extended care services to Medicare beneficiaries if the hospital has obtained a 
swing bed approval from the Department of Health and Human Services.  Such a 
hospital, known as a swing bed hospital, can "swing" its beds between hospital and SNF 
levels of care, on an as needed basis.  In accordance with 1883 of the Act, rural hospitals 
with fewer than 100 beds must make application and request approval to be a swing bed 
hospital from the regional office.  In order to obtain swing bed approval, the hospital 
must: 
 
  As noted above, be located in a rural area (i.e., located outside of an "urbanized 
area," as defined by the Census Bureau and based on the most recent census, see 42 CFR 
482.58(a)(2)) and have fewer than 100 beds (excluding intensive care-type beds and 
newborn bassinets) 
 
  Have a Medicare provider agreement, as a hospital; 
 
  Be substantially in compliance with the SNF participation requirements identified 
in 42 CFR 482.58; (most other SNF participation requirements would be largely met by 
virtue of the facility's compliance with comparable hospital conditions); 
 
  Not have in effect a 24-hour nursing waiver granted under 42 CFR 488.54(c); and  
 
  Not have had a swing bed approval terminated within the 2 years previous to 
application for swing bed participation. 
 
However, the Department may grant swing bed approval, on a demonstration basis, with 
hospitals meeting all of the statutory requirements except bed size and geographic 
location. 
 
Prior to October 1, 1990, a swing-bed hospital could also furnish intermediate care 
facility (ICF) type services to non-Medicare patients.  Effective with services furnished 
on or after October 1, 1990, the distinction between SNFs and ICFs for certifying a  facility for the Medicaid program was eliminated.  Thus, for purposes of the Medicaid 
program, facilities may no longer be certified as ICFs but instead may be certified only as 
nursing facilities (NFs) and can provide services as defined in 1919(a)(1) of the Act.  
Effective October 1, 1990, such services furnished by swing-bed hospitals to Medicaid 
and to other non-Medicare patients are referred to as NF-type services. 
 
See 10.3 of Pub. 100-02, Medicare Benefit Policy Manual, chapter 8, for additional 
information on Part A coverage of SNF-level swing-bed services as extended care 
services. 
 
40 - Religious Nonmedical Health Care Institution Defined 
(Rev. 35, Issued:  02-10-06; Effective/Implementation Dates:  05-11-06) 
 
In order for a Medicare or Medicaid provider to meet the definition of an RNHCI, it must 
satisfy the ten qualifying provisions as contained in Section 1861(ss)(1) of the Act. 
Section 1861(ss)(1) of the Act states that an RNHCI means an institution that: 
 
1. Is described in Subsection (c)(3) of Section 501 of the Internal Revenue Code 
of 1986 and is exempt from taxes under Subsection (a) of that section.  The 
inability to either gain or retain this status will disqualify an institution from 
participation as an RNHCI. 
 
2. Is lawfully operated under all applicable Federal, State, and local laws and 
regulations.  Federal law supersedes State and local laws unless the State and 
local requirements are more stringent than the Federal requirements. 
 
3. Furnishes only nonmedical nursing items and services to patients who choose 
to rely solely upon a religious method of healing and for whom the acceptance of 
medical services would be inconsistent with their religious beliefs.  Medicare 
does not cover the religious component of the healing. 
 
4. Furnishes nonmedical items and services exclusively through nonmedical 
nursing personnel who are experienced in caring for the physical needs of these 
patients.  This care frequently involves: assistance in moving, turning, 
positioning, and ambulation; meeting nutritional needs; and comfort and support 
measures. 
 
5. Furnishes nonmedical items and services to inpatients on a 24-hour basis. 
 
6. Does not furnish, on the basis of its religious beliefs, through its personnel or 
otherwise, medical items and services (including any medical screening, 
examination, diagnosis, prognosis, treatment, or the administration of drugs) for 
its patients. 
 
7. Is not owned by, under common ownership with, or has an ownership interest 
of 5 percent or more in, a provider of medical treatment or services, and is not  affiliated with a provider of medical treatment or services, or with an individual 
who has an ownership interest of 5 percent or more in, a provider of medical 
treatment or services.  For purposes of this requirement, an affiliation does not 
exist in the circumstances described in Section 1861(ss)(4) of the Act or 42 CFR 
403.738(c). 
 
8. Has in effect a utilization review plan that: 
 
  Provides for review of admissions to the institution, of the duration of 
stays, of cases of continuous extended duration, and of the items and 
services furnished by the institution; 
 
  Requires that the reviews be made by an appropriate committee of the 
institution that includes the individuals responsible for overall 
administration and for supervision of nursing personnel at the institution; 
 
  Provides that records be maintained of the meetings, decisions, and 
actions of the committee; and  
 
  Meets other requirements as the Secretary finds necessary to establish 
an effective utilization review plan. 
 
9. Provides information the Secretary may require to implement Section 1821 of 
the Act, including information relating to quality of care and coverage 
determinations. 
 
10. Meets other requirements the Secretary finds necessary in the interest of the 
health and safety of individuals who are furnished services in the institution.  
These requirements include the conditions of participation in 42 CFR 403, 
Subpart G. An RNHCI must meet or exceed the conditions of participation in 
order to qualify as a Medicare provider.  The RNHCI must also have a valid 
provider agreement with CMS. 
 
50 - Home Health Agency Defined 
(Rev. 28; Issued:  08-12-05; Effective/Implementation:  09-12-05) 
 
A home health agency is a public agency or private organization, or a subdivision of such 
an agency or organization, which meets the following requirements: 
 
  It is primarily engaged in providing skilled nursing services and other therapeutic 
services, such as physical therapy, occupational therapy, or speech-language 
pathology, medical social services, and home health aide services.  A public or 
voluntary nonprofit health agency may qualify by: 
 
  Furnishing both skilled nursing and at least one other therapeutic service 
o
directly to patients, or    
  Furnishing directly either skilled nursing services or at least one other 
o
therapeutic service and having arrangements with another public or 
voluntary nonprofit agency to furnish the services which it does not 
provide directly. 
 
NOTE:  A proprietary agency can qualify only by providing directly both 
skilled nursing services and at least one other therapeutic service. 
 
  It has policies established by a professional group associated with the agency or 
organization (including at least one physician and at least one registered 
professional nurse) to govern the services, and provides for supervision of such 
services by a physician or a registered professional nurse; 
 
  It maintains clinical records on all patients; 
 
  It is licensed in accordance with State or local law or is approved by the State or 
local licensing agency as meeting the licensing standards (where State or local 
law provides for the licensing of such agencies or organizations); and  
 
  It meets other conditions found by the Secretary of the Department of Health and 
Human Services to be necessary for health and safety. 
 
A private organization which is not exempt from Federal income taxation under section 
501 of the Internal Revenue Code of 1954 (sometimes referred to as a "proprietary" 
organization) must be licensed pursuant to State law.  If the State has no licensing law for 
such organizations, a proprietary agency cannot participate in the health insurance 
program. 
 
For services under hospital insurance, the term "home health agency" does not include 
any agency or organization which is primarily for the care and treatment of mental 
disease.  There is no such restriction under supplementary medical insurance. 
 
50.1 - Subdivisions of Agencies as Home Health Agencies 
(Rev. 1, 09-11-02) 
 
When the subdivision of an agency, such as the home care department of a hospital or the 
nursing division of a health department, wishes to participate as a home health agency, 
the subdivision must meet the conditions of participation and must maintain records in 
such a way that subdivision activities and expenditures attributable to services provided 
under the health insurance program are identifiable. 
 
50.2 - Arrangements by Home Health Agencies 
(Rev. 19, Issued: 03-11-05, Effective/Implementation: N/A) 
  A.  A home health agency (HHA) may have others furnish covered items or services 
through arrangements under which receipt of payment by the HHA for the services 
discharges the liability of the patient or any other person to pay for the services.  Whether 
the items and services are provided by the HHA itself or by another agency under 
arrangement, both must agree not to charge the patient for covered items and services and 
must also agree to return money incorrectly collected. 
 
In permitting HHAs to furnish services under arrangements, it was not intended that the 
agency merely serve as a billing mechanism for the other party.  Accordingly, for 
services provided under arrangements to be covered, the agency must exercise 
professional responsibility over the arranged-for services and ensure compliance with the 
home health conditions of participation. 
 
The agency's professional supervision over arranged-for services requires application of 
many of the same quality controls as are applied to services furnished by salaried 
employees.  The agency must accept the patient for treatment in accordance with its 
administration policies, maintain a complete and timely clinical record of the patient that 
includes diagnosis, medical history, physician's orders, and progress notes relating to all 
services received; maintain liaison with the attending physician with regard to the 
progress of the patient and to assure that the required plan of treatment is periodically 
reviewed by the physician; secure from the physician the required certifications and 
recertifications; and ensure that the medical necessity of such services is reviewed on a 
sample basis by the agency's staff or an outside review group. 
 
There are three situations in which an HHA may have arrangements with another health 
organization or person to provide home health services to patients: 
 
  Where an agency or organization, in order to be approved to participate in the 
program, makes arrangements with another organization or individual to provide 
the nursing or other therapeutic services that it cannot provide directly; 
 
  Where an agency that is already approved for participation, makes arrangements 
with others to provide services or items it does not provide directly; and  
 
  Where an agency that is already approved for participation makes arrangements 
with a hospital, skilled nursing facility, or rehabilitation center for services on an 
outpatient basis because the services involve the use of equipment that cannot be 
made available to the patient in his/her place of residence. 
 
B.  If an agency's subdivision (acting in its capacity as an HHA) makes an arrangement 
with its parent agency for the provision of certain items or services, there need not be a 
contract or formal agreement.  If, however, the arrangement is made between the HHA 
and another provider participating in the health insurance program (hospital, skilled 
nursing facility, or HHA, and, in the case of physical therapy, occupational therapy, or 
speech-language pathology services, clinics, rehabilitation agencies, and public health  agencies), there must be a written statement regarding the services to be provided and the 
financial arrangements. 
 
C.  If the arrangements are with an agency or organization that is not a qualified provider 
of services, there must be a written contract that includes all of the following: 
 
1.  A description of the services to be provided. 
 
2.  The duration of the agreement and how frequently it is to be reviewed. 
 
3.  A description of how personnel will be supervised. 
 
4.  A statement that the contracting organization will provide services in accordance 
with the plan of care established by the patient's physician in conjunction with the 
HHA's staff. 
 
5.  A description of the contracting organization's standards for personnel, including 
qualifications, functions, supervision, and inservice training. 
 
6.  A description of the method of determining reasonable costs and reimbursement 
by the HHA for the specific services to be provided by the contracting 
organization. 
 
7.  An assurance that the contracting organization will comply with title VI of the 
Civil Rights Act. 
 
  If an HHA notifies a beneficiary of noncoverage of services that another party has 
been furnishing under arrangements entered into by the agency, the initial notice, 
in and of itself, does not negate the contract between the agency and the other 
party.  Unless the evidence shows that the contract has been formally terminated, 
the beneficiary is still considered to be the agency's patient and the other party to 
be the representative of the agency.  Consequently, if upon initial notice that a 
service is no longer covered the other party continues to provide services to the 
patient, the other party is considered to be furnishing the services under 
arrangements with the home health agency, absent evidence to the contrary.  
Thus, if a beneficiary appeals the noncoverage of any or all of the arranged for 
services furnished after the notice, and a ruling is made in favor of the 
beneficiary, those services ruled on favorably would be reimbursable since they 
would constitute services furnished under arrangements by a certified HHA.  If 
the denial is sustained, however, the other party cannot bill the beneficiary for the 
denied services since the HHA, not the other party, is responsible for the care 
rendered. 
 
50.3 - Arrangements with Parent Agency and Other Entities 
(Rev. 1, 09-11-02) 
  If an agency's subdivision (acting in its capacity as an HHA) makes an arrangement with 
its parent agency for the provision of certain items or services, there need not be a 
contract or formal agreement.  If, however, the arrangement is made between the HHA 
and another provider participating in the health insurance program (hospital, skilled 
nursing facility, or HHA, and, in the case of physical therapy, occupational therapy, or 
speech-language pathology services, clinics, rehabilitation agencies, and public health 
agencies), there must be a written statement regarding the services to be provided and the 
financial arrangements. 
 
If the arrangements are with an agency or organization that is not a qualified provider of 
services, there must be a written contract that includes all of the following: 
 
  A description of the services to be provided; 
 
  The duration of the agreement and how frequently it is to be reviewed; 
 
  A description of how personnel will be supervised; 
 
  A statement that the contracting organization will provide services in accordance 
with the plan of care established by the patient's physician in conjunction with the 
HHA's staff; 
 
  A description of the contracting organization's standards for personnel, including 
qualifications, functions, supervision, and inservice training; 
 
  A description of the method of determining reasonable costs and reimbursement 
by the HHA for the specific services to be provided by the contracting 
organization; and  
 
  An assurance that the contracting organization will comply with title VI of the 
Civil Rights Act. 
 
50.4 - Notice of Noncoverage of Services 
(Rev. 1, 09-11-02) 
 
If an HHA notifies a beneficiary of noncoverage of services that another party has been 
furnishing under arrangements entered into by the agency, the initial notice, in and of 
itself, does not negate the contract between the agency and the other party.  Unless the 
evidence shows that the contract has been formally terminated, the beneficiary is still 
considered to be the agency's patient and the other party to be the representative of the 
agency.  Consequently, if upon initial notice that a service is no longer covered the other 
party continues to provide services to the patient, the other party is considered to be 
furnishing the services under arrangement. 
 
50.5 - Rehabilitation Centers 
(Rev. 19, Issued: 03-11-05, Effective/Implementation: N/A)   
When the services are of such a nature that they cannot be administered at the patient's 
residence and are administered at a rehabilitation center which is not participating in the 
program as a hospital, skilled nursing facility, or home health agency, the rehabilitation 
center must meet certain standards.  The physical plant and equipment of such a 
rehabilitation center must meet all applicable State and local legal requirements for 
construction, safety, health, and design, including safety, sanitation and fire regulations, 
building codes, and ordinances.  Given the statutory definition, a community mental 
health center is not considered a rehabilitation center. 
 
60 - Hospice Defined 
(Rev. 1, 09-11-02) 
 
A hospice is a public agency or private organization or a subdivision of either that is 
primarily engaged in providing care to terminally ill individuals and meets the conditions 
of participation for hospices, and has a valid provider agreement. 
 
60.1 - Subdivision of Organizations as Hospices 
(Rev. 1, 09-11-02) 
 
When a subdivision of an organization, such as the home care department of a hospital, 
wishes to participate as a hospice, the subdivision must meet the hospice conditions of 
participation and must maintain records in such a way that activities and expenditures 
attributable to services provided under the hospice program are identifiable. 
 
60.2 - Arrangements by Hospices 
(Rev. 1, 09-11-02) 
 
Hospices are required to provide core services directly, that is, nursing services, medical 
social services, and counseling. Other covered services may be provided under 
arrangement. 
 
70 - Physician Defined 
(Rev. 1, 09-11-02) 
 
Physician means doctor of medicine, doctor of osteopathy (including osteopathic 
practitioner), doctor of dental surgery or dental medicine (within the limitations in 
subsection 70.2 ), doctor of podiatric medicine (within the limitations in 
subsection 70.3), or doctor of optometry (within the limitations of subsection 70.5), 
and, with respect to certain specified treatment, a doctor of chiropractic legally authorized 
to practice by a State in which he/she performs this function.  The services performed by 
a physician within these definitions are subject to any limitations imposed by the State on 
the scope of practice. 
 
The issuance by a State of a license to practice medicine constitutes legal authorization. 
Temporary State licenses also constitute legal authorization to practice medicine.  If State  law authorizes local political subdivisions to establish higher standards for medical 
practitioners than those set by the State licensing board, the local standards determine 
whether a particular physician has legal authorization.  If State licensing law limits the 
scope of practice of a particular type of medical practitioner, only the services within the 
limitations are covered. 
 
The issuance by a State of a license to practice medicine constitutes legal authorization. 
Temporary State licenses also constitute legal authorization to practice medicine.  If State 
law authorizes local political subdivisions to establish higher standards for medical 
practitioners than those set by the State licensing board, the local standards determine 
whether a particular physician has legal authorization.  If State licensing law limits the 
scope of practice of a particular type of medical practitioner, only the services within the 
limitations are covered. 
 
NOTE:   The term physician does not include such practitioners as a Christian Science 
practitioner or naturopath. 
 
70.1 - Doctors of Medicine and Osteopathy 
(Rev. 1, 09-11-02) 
 
The requirement that a doctor of medicine be legally authorized to practice medicine and 
surgery by the State in which he/she performs his/her services means a physician is 
licensed to practice medicine and surgery. 
 
A doctor of osteopathy who is legally authorized to practice medicine and surgery by the 
State in which he/she performs his/her services qualifies as a physician.  In addition, a 
licensed osteopath or osteopathic practitioner qualifies as a physician to the extent that 
he/she performs services within the scope of his/her practice as defined by State law. 
 
70.2  Dentists 
(Rev. 1, 09-11-02) 
 
A dentist qualifies as a physician if he/she is a doctor of dental surgery or of dental 
medicine who is legally authorized to practice dentistry by the State in which he/she 
performs such function and who is acting within the scope of his/her license when he/she 
performs such functions.  Such services include any otherwise covered service that may 
legally and alternatively be performed by doctors of medicine, osteopathy and dentistry; 
e.g., dental examinations to detect infections prior to certain surgical procedures, 
treatment of oral infections and interpretations of diagnostic X-ray examinations in 
connection with covered services.  Because the general exclusion of payment for dental 
services has not been withdrawn, payment for the services of dentists is also limited to 
those procedures which are not primarily provided for the care, treatment, removal, or 
replacement of teeth or structures directly supporting the teeth.  The coverage of any 
given dental service is not affected by the professional designation of the physician 
rendering the service; i.e., an excluded dental service remains excluded and a covered  dental service is still covered whether furnished by a dentist or a doctor of medicine or 
osteopathy. 
 
70.3 - Doctors of Podiatric Medicine 
(Rev. 1, 09-11-02) 
 
A doctor of podiatric medicine is a physician, but only with respect to those functions 
which he/she is legally authorized to perform in the State in which he/she performs them.  
The professional services furnished by a doctor of podiatric medicine within the scope of 
his/her applicable State license (except services which are specifically excluded) are 
physician's services payable on a reasonable charge basis under Part B.  Where 
permissible by State law, these services include ordering laboratory tests that are 
reasonably related to the legal scope of podiatric practice, that are reasonable and 
necessary for the diagnosis or treatment of a patient's condition and are not in connection 
with excluded services, such as treatment of flat foot and routine foot care. 
 
A doctor of podiatric medicine may hold any of the following professional degrees:  Pod. 
D. or D. P. (Doctor of Podiatry), D.S.C. (Doctor of Surgical Chiropody), D.P.M. (Doctor 
of Podiatric Medicine), D.S.P. (Doctor of Surgical Podiatry), Graduate in Podiatry, 
Master Chiropodist, Graduate Chiropodist, or in some instances another podiatry degree.  
Within a particular State, all individuals holding any of these degrees are licensed to 
perform the same functions; however, there are variations from State to State as to the 
authorized scope of podiatric practice. 
 
For purposes of the Medicare program, a doctor of podiatric medicine is considered a 
physician for any of the following purposes: 
 
  Making the required physician certification and recertification of the medical 
necessity for services; 
 
  Having a patient in a home health agency under his/her care, and establishing and 
periodically reviewing a home health plan of treatment; or  
 
  Serving as a member of a Utilization Review (UR) committee, but only if at least 
two of the physicians on the UR committee are doctors of medicine or osteopathy.  
The performance of these functions must be consistent with the scope of the 
professional services provided by a doctor of podiatric medicine as authorized by 
applicable State law. 
 
A doctor of podiatric medicine is not a physician for the purpose of performing any of the 
physician activities required to qualify an institution or organization as a SNF. 
 
70.4 - Physicians in Federal Hospitals 
(Rev. 1, 09-11-02) 
  There are many physicians performing services in hospitals operated by the Federal 
Government, e.g., military, Veterans Administration, and Public Health Service hospitals.  
Normally, the services provided by a physician in a Federal hospital are not payable 
except when the hospital provides services to the public as a community institution.  A 
physician working in the scope of his/her Federal employment is considered a physician 
even though he/she may not have a license to practice in the State in which he/she is 
employed. 
 
70.5  Optometrists 
(Rev. 1, 09-11-02) 
 
A.  Services Furnished Through March 31, 1987 
 
Prior to April 1, 1987, a doctor of optometry who was legally authorized to practice 
optometry by the State in which he or she performed such a function was considered a 
physician under Medicare, but only for the purpose of services related to the condition of 
aphakia.  Aphakia is defined as the absence of the natural crystalline lens of the eye, 
whether or not an intraocular lens has been implanted.  The services performed by 
optometrists within this definition were subject to limitations set by the State relating to 
the scope of practice of optometry. 
 
The following are examples of examination services which were covered when furnished 
by optometrists if related to the condition of aphakia: case history, external examination, 
ophthalmoscopy, biomicroscopy, tonometry, visual fields, ocular motility, binocular 
function, and evaluation for contact lenses, if the optometrist furnishing these services is 
legally authorized to perform them. 
 
B.  Services Furnished After March 31, 1987 
 
Effective April 1, 1987, a doctor of optometry is considered a physician with respect to 
all services the optometrist is authorized to perform under State law or regulation.  To be 
covered under Medicare, the services must be medically reasonable and necessary for the 
diagnosis or treatment of illness or injury, and must meet all applicable coverage 
requirements.  (See Benefit Policy Manual for information concerning exclusions from 
coverage that apply to vision care services.) 
 
70.6  Chiropractors 
(Rev. 1, 09-11-02) 
 
A.  General 
 
A licensed chiropractor who meets uniform minimum standards (see subsection C) is a 
physician for specified services.  Coverage extends only to treatment by means of manual 
manipulation of the spine to correct a subluxation demonstrated by X-ray, provided such 
treatment is legal in the State where performed.  All other services furnished or ordered 
by chiropractors are not covered.  An X-ray obtained by a chiropractor for his or her own  diagnostic purposes before commencing treatment may suffice for claims documentation 
purposes.  This means that if a chiropractor orders, takes, or interprets an X-ray to 
demonstrate a subluxation of the spine, the X-ray can be used for claims processing 
purposes.  However, there is no coverage or payment for these services or for any other 
diagnostic or therapeutic service ordered or furnished by the chiropractor. 
 
In addition, in performing manual manipulation of the spine, some chiropractors use 
manual devices that are hand-held with the thrust of the force of the device being 
controlled manually.  While such manual manipulation may be covered, there is no 
separate payment permitted for use of this device. 
 
B.  Licensure and Authorization to Practice 
 
A chiropractor must be licensed or legally authorized to furnish chiropractic services by 
the State or jurisdiction in which the services are furnished. 
 
C.  Uniform Minimum Standards 
 
l. Prior to July 1, 1974, Chiropractors licensed or authorized to practice prior to July 1, 
1974, and those individuals who commenced their studies in a chiropractic college before 
that date must meet all of the following minimum standards to render payable services 
under the program: 
 
  a. Preliminary education equal to the requirements for graduation from an 
accredited high school or other secondary school; 
 
  b. Graduation from a college of chiropractic approved by the State's chiropractic 
examiners that included the completion of a course of study covering a period of not less 
than 3 school years of 6 months each year in actual continuous attendance covering 
adequate course of study in the subjects of anatomy, physiology, symptomatology and 
diagnosis, hygiene and sanitation, chemistry, histology, pathology, and principles and 
practice of chiropractic, including clinical instruction in vertebral palpation, nerve tracing 
and adjusting; and 
 
  c. Passage of an examination prescribed by the State's chiropractic examiners 
covering the subjects listed in subsection b. 
 
2. After June 30, 1974 - Individuals commencing their studies in a chiropractic college 
after June 30, 1974, must meet all of the following additional requirements: 
 
  a. Satisfactory completion of 2 years of pre-chiropractic study at the college level; 
 
  b. Satisfactory completion of a 4-year course of 8 months each year (instead of a 
3-year course of 6 months each year) at a college or school of chiropractic that includes 
not less than 4,000 hours in the scientific and chiropractic courses specified in subsection 
1.b, plus courses in the use and effect of X-ray and chiropractic analysis; and   
  c. The practitioner must be over 21 years of age. 
 
70.7 - Interns and Residents 
(Rev. 1, 09-11-02) 
 
A.  General 
 
For Medicare purposes, the terms "interns" and "residents" include physicians 
participating in approved graduate training programs and physicians who are not in 
approved programs but who are authorized to practice only in a hospital setting; e.g., 
individuals with temporary or restricted licenses, or unlicensed graduates of foreign 
medical schools.  Where a senior resident has a staff or faculty appointment or is 
designated, for example, a "fellow," it does not change the resident's status for the 
purposes of Medicare coverage and payment.  As a general rule, services of interns and 
residents are paid as provider services by the A/B MAC (A). 
 
B.  Services Furnished by Interns and Residents Within the Scope of an Approved 
Training Program 
 
Medical and surgical services furnished by interns and residents within the scope of their 
training program are covered as provider services.  Effective with services furnished on 
or after July 1, 1987, this includes services furnished in a setting which is not part of the 
provider where a hospital has agreed to incur all or substantially all of the costs of 
training in the nonprovider facility.  The Medicare A/B MAC (A) is required to notify the 
A/B MAC (B) of such agreements.  Where the provider does not incur all or substantially 
all of the training costs and the services are performed by a licensed physician, the 
services are payable on a fee schedule basis by the A/B MAC (B).  Prior to July 1, 1987, 
the covered services of interns and residents were paid by the A/B MAC (B) on a 
reasonable charge basis as physician services if furnished by a licensed physician off the 
provider premises regardless of who incurred the training costs. 
 
C.  Services Furnished by Interns and Residents Outside the Scope of an Approved 
Training Program-Moonlighting 
 
Medical and surgical services furnished by interns and residents that are not related to 
their training program, and are performed outside the facility where they have their 
training program, are covered as physicians' services and paid on a fee schedule or 
reasonable charge basis where the requirements in the first 2 bullets below are met.  
Medical and surgical services furnished by interns and residents that are not related to 
their training program, and are performed in an outpatient department or emergency room 
of the hospital where they have their training program, are covered as physicians' services 
and paid on a fee schedule or reasonable charge basis where the following criteria are 
met: 
    The services are identifiable physicians' services, the nature of which requires 
performance by a physician in person and which contributes to the diagnosis or 
treatment of the patient's condition; 
 
  The intern or resident is fully licensed to practice medicine, osteopathy, dentistry, 
or podiatry by the State in which the services are performed; and  
 
  The services performed can be separately identified from those services that are 
required as part of the training program. 
 
When these criteria are met, the services are considered to have been furnished by the 
individuals in their capacity as physicians and not in their capacity as interns and 
residents. 
 
80 - Health Maintenance Organizations (HMOs) Defined 
(Rev. 1, 09-11-02) 
 
An HMO for Medicare purposes is a public or private organization that provides, either 
directly or through arrangement with others, comprehensive health services to enrolled 
members.  An HMO must service those who live within a specified service area.  It must 
provide services based on a predetermined periodic rate or periodic per capita rate basis 
without regard to the frequency or extent of covered services it furnishes.  An HMO must 
also meet other statutory requirements. 
 
An HMO's service area is a geographic area in which a full range of its services are 
offered to its members.  This geographic area differs from an HMO's enrollment area 
since it may include locations outside its service area where it offers less than its full 
range of services.  (For example, an HMO may cover house calls in emergencies in its 
service area but not for members who live outside the service area.) 
 
Section 1876 of the Act allows a Medicare beneficiary eligible for Part A and Part B, or 
Part B only, to choose to have covered items and services furnished through a Medicare 
qualified HMO.  An HMO enters into a contract with the Secretary in order to participate 
under Medicare. 
 
90 - Other Definitions 
(Rev. 1, 09-11-02) 
 
NOTE:  We anticipate adding to this section as we find the need to define other terms. 
 
90.1 - Supplier Defined 
(Rev. 1, 09-11-02) 
 
The term supplier means an entity that is qualified to furnish health services covered by 
Medicare, other than providers, physicians, and practitioners. 
  The following suppliers must meet the conditions in order to receive Medicare payment: 
ambulatory surgical centers (ASCs), independent physical therapists, mammography 
facilities, DMEPOS suppliers, independent occupational therapists, clinical laboratories, 
portable X-ray suppliers, dialysis facilities, rural health clinics, and Federally-qualified 
health centers. 
 
An ASC is a distinct entity that operates exclusively for the purpose of furnishing 
outpatient surgical services to patients. It enters into an agreement with CMS to do so.  
An ASC is either independent (i.e., not a part of a provider of services or any other 
facility), or operated by a hospital (i.e., under the common ownership, licensure, or 
control of a hospital). 
 
A DME supplier is an entity that furnishes DME and has a number assigned by the 
National Supplier Clearinghouse. 
 
90.2 - Laboratory Defined 
(Rev. 1, 09-11-02) 
 
Laboratory means a facility for the biological, microbiological, serological, chemical, 
immuno-hematological, hematological, biophysical, cytological, pathological, or other 
examination of materials derived from the human body for the purpose of providing 
information for the diagnosis, prevention, or treatment of any disease or impairment of, 
or the assessment of the health of, human beings.  These examinations also include 
procedures to determine, measure, or otherwise describe the presence or absence of 
various substances or organisms in the body.  Facilities only collecting or preparing 
specimens (or both) or only serving as a mailing service and not performing testing are 
not considered laboratories. 
 
90.3 - Practitioners Defined 
(Rev. 1, 09-11-02) 
 
Practitioners except for physicians are health professionals who may deliver covered 
Medicare services if the services are incident to a physician's service or if there is specific 
authorization in the law.  The following practitioners may deliver services without direct 
physician supervision: nurse practitioners and physician assistants in rural health clinics, 
designated manpower shortage area or HMOs, qualified clinical psychologists, clinical 
social workers, certified nurse midwives, and certified registered nurse anesthetists. 
 
90.4 - Group Practice Defined 
(Rev. 1, 09-11-02) 
 
A group practice is a group of two or more physicians and non-physician practitioners 
legally organized in a partnership, professional corporation, foundation, not-for-profit 
corporation, faculty practice plan, or similar association: 
    In which each physician who is a member of the group provides substantially the 
full range of services which the physician routinely provides (including medical 
care, consultation, diagnosis, or treatment) through the joint use of shared office 
space, facilities, equipment, and personnel; 
 
  For which substantially all of the services of the physicians who are members of 
the group are provided through the group and are billed in the name of the group 
and amounts so received are treated as receipts of the group; 
 
  In which the overhead expenses of and the income from the practice are 
distributed in accordance with methods previously determined by members of the 
group; and  
 
  Which meets such other standards as the Secretary may impose by regulation to 
implement 1877(h)(4) of the Social Security Act.  The group practice definition 
also applies to health care practitioners. 
  Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R120GI  11/02/2018  Internet Only Manual Updates to Pub.  12/04/2018  11004 
100-01, 100-02 and 100-04 to Correct 
Errors and Omissions (SNF) (2018 Q4) 
R114GI  03/16/2018  Internet Only Manual Updates to Pub.  06/19/2018  10512 
100-01, 100-02 and 100-04 to Correct 
Errors and Omissions (SNF) (2018) 
R101GI  09/16/2016  Internet Only Manual Updates to Pub.  10/18/2016  9748 
100-01, 100-02 and 100-04 to Correct 
Errors and Omissions (SNF) 
R58GI  03/06/2009  Disclosure of Physician Ownership in  06/08/2009  6306 
Hospitals 
R42GI  11/09/2006  Swing bed Hospital Updates  12/11/2006  5114 
R35GI  02/10/2006  Revisions to Instructions for Contractors  05/11/2006  4218 
Other Than the Religious Nonmedical 
Health Care Institution (RNHCI) Specialty 
Contractor Regarding Claims for 
Beneficiaries with RNHCI Elections 
R28GI  08/12/2005  Conforming Changes for Change Request  09/12/2005  3912 
3648 for Pub. 100-01 
R19GI  03/11/2005  Definition of Home Health Agency  N/A  3698 
R18GI  03/04/2005  Billing for Blood and Blood Products  07/05/2005  3681 
Under the Hospital Outpatient Prospective 
Payment System (OPPS) 
R01MGI  09/11/2002  Initial Publication of Manual  NA  NA 
 
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