Subsec. (a) (2). Pub. L. 92-603, § 201(c) (6) (B), added reference to section 423 of this title.

Subsec. (b)(1). Pub. L. 92-603, § 263 (b), inserted "(whether or not such individual is also entitled for such month to a monthly insurance benefit under section 402 of this title)" after "1937" and substituted "subsection (c)" for "subsection (d)".

Subsec. (c). Pub. L. 92-603, § 263 (c), struck out former subsec. (c) covering individuals entitled both to monthly benefits under section 402 of this title and to an annuity or pension under the Railroad Retirement Act of 1937 and redesignated former subsec. (d) as (c).

Subsec. (d). Pub. L. 92-603, § 263 (c), redesignated former subsec. (e) as (d). Former subsec. (d) redesignated as (c).

Subsec. (e). Pub. L. 92-603, § 263 (c), (d) (1), redesignated former subsec. (f) as (e) and in subsec. (e) as so redesignated, substituted "subsection (c)" for "subsection (d)". Former subsec. (e) redesignated as (d).

Subsec. (f). Pub. L. 92-603, § 263 (c), (d)(2), redesignated former subsec. (g) as (f) and in subsec. (f) as so redesignated, substituted "subsections (c) or (e)" for "subsections (d) or (f)". Former subsec. (f) redesignated as (e) and amended.

Subsec. (g). Pub. L. 92-603, § 263 (c), redesignated former subsec. (h) as (g). Former subsec. (g) redesignated as (f) and amended.

Subsec. (h). Pub. L. 92-603, § 263 (c), (d) (3), redesignated former subsec. (i) as (h) and in subsec. (h) as so redesignated substituted “(c) and (d)" for "(c), (d), and (e)". Former subsec. (h) redesignated as (g).

Subsec. (i). Pub. L. 92–603, § 263(c), redesignated former subsec. (i) as subsec. (h).

EFFECTIVE DATE OF 1972 AMENDMENT

Section 263 (f) of Pub. L. 92-603 provided that: "The amendments made by this section [amending this section and sections 1395t and 1395u of this title] with respect to collection of premiums shall apply to premiums becoming due and payable after the fourth month following the month in which this Act is enacted [Oct. 1972]." SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 13951-2 of this title.

§ 1395t. Federal Supplementary Medical Insurance Trust Fund.

(a) There is hereby created on the books of the Treasury of the United States a trust fund to be known as the "Federal Supplementary Medical Insurance Trust Fund" (hereinafter in this section referred to as the "Trust Fund"). The Trust Fund shall consist of such gifts and bequests as may be made as provided in section 401 (i) (1) of this title, and such amounts as may be deposited in, or appropriated to, such fund as provided in this part.

(h) The Managing Trustee shall pay from time to time from the Trust Fund such amounts as the Secretary of Health, Education, and Welfare certifies are necessary to pay the costs incurred by the Civil Service Commission in making deductions pursuant to section 1395s (d) of this title. During each fiscal year, or after the close of such fiscal year, the Civil Service Commission shall certify to the Secretary the amount of the costs it incurred in making such deductions, and such certified amount shall be the basis for the amount of such costs certified by the Secretary to the Managing Trustee.

(i) The Managing Trustee shall pay from time to time from the Trust Fund such amounts as the Secretary of Health, Education, and Welfare certifies are necessary to pay the costs incurred by the Railroad Retirement Board for services performed pursuant to section 1395s (b) (1) and section 1395u(g)

of this title. During each fiscal year or after the close of such fiscal year, the Railroad Retirement Board shall certify to the Secretary the amount of the costs it incurred in performing such services and such certified amount shall be the basis for the amount of such costs certified by the Secretary to the Managing Trustee. (As amended Oct. 30, 1972, Pub. L. 92-603, title I, § 132 (e), title II, § 263 (d) (4), (e), 86 Stat. 1361, 1449.)

AMENDMENTS

1972 Subsec. (a). Pub. L. 92-603, § 132(e), inserted "such gifts and bequests as may be made as provided in section 401 (i) (1) of this title, and" following "consist of" and preceding "such amounts".

Subsec. (h). Pub. L. 92-603, § 263 (d) (4), substituted "1395s (d)" for "1395s (e)".

Subsec. (i). Pub. L. 92–603, § 263 (e), added subsec. (i). EFFECTIVE DATE OF 1972 AMENDMENT Amendment of subsec. (a) of this section by section 132(e) of Pub. L. 92-603 applicable with respect to gifts and bequests received after Oct. 30, 1972, see section 132 (f) of Pub. L. 92-603, set out as a note under section 401 of this title.

Amendment by section 263 (d) (4) and (e) of Pub. L. 92-603 with respect to collection of premiums applicable to premiums becoming due and payable after the fourth month following the month of enactment of Pub. L. 92603 which was approved on Oct. 30, 1972, see section 263 (f) of Pub. L. 92-603, set out as a note under section 1395s of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1395b-1 of this title.

§ 1395u. Use of carriers or administration of benefits. (a) In order to provide for the administration of the benefits under this part with maximum efficiency and convenience for individuals entitled to benefits under this part and for providers of services and other persons furnishing services to such individual, and with a view to furthering coordination of the administration of the benefits under part A and under this part, the Secretary is authorized to enter into contracts with carriers, including carriers with which agreements under section 1395h of this title are in effect, which will perform some or all of the following functions (or, to the extent provided in such contracts, will secure performance thereof by other organizations); and, with respect to any of the following functions which involve payments for physicians' services on a reasonable charge basis, the Secretary shall to the extent possible enter into such contracts:

(b) (1)

(3) Each such contract shall provide that the carrier

(B) will take such action as may be necessary to assure that, where payment under this part for a service is on a charge basis, such charge will be reasonable and not higher than the charge applicable, for a comparable service and under comparable circumstances, to the policyholders and subscribers of the carrier, and such payment will (except as otherwise provided in section 1395gg (f) of this title) be made

(i) on the basis of an itemized bill; or

(ii) on the basis of an assignment under the terms of which (I) the reasonable charge is the full charge for the service and (II) the physician or other person furnishing such service agrees not to charge for such service if payment may not be made therefor by reason of the provisions of paragraph (1) of section 1395y of this title, and if the individual to whom such service was furnished was without fault in incurring the expenses of such service, and if the Secretary's determination that payment (pursuant to such assignment) was incorrect and was made subsequent to the third year following the year in which notice of such payment was sent to such individual; except that the Secretary may reduce such three-year period to not less than one year if he finds such reduction is consistent with the objectives of this subchapter (except in the case of physicians' services and ambulance service furnished as described in section 1395y (a) (4) of this title, other than for purposes of section 1395gg (f) of this title);

but (in the case of bills submitted, or requests for payment made, after March 1968) only if the bill is submitted, or a written request for payment is made in such other form as may be permitted under regulations, no later than the close of the calendar year following the year in which such service is furnished (deeming any service furnished in the last 3 months of any calendar year to have been furnished in the succeeding calendar year);

(C) will establish and maintain procedures pursuant to which an individual enrolled under this part will be granted an opportunity for a fair hearing by the carrier, in any case where the amount in controversy is $100 or more, when requests for payment under this part with respect to services furnished him are denied or are not acted upon with reasonable promptness or when the amount of such payment is in controversy;

and shall contain such other terms and conditions not inconsistent with this section as the Secretary may find necessary or appropriate. In determining the reasonable charge for services for purposes of this paragraph, there shall be taken into consideration the customary charges for similar services generally made by the physician or other person furnishing such services, as well as the prevailing charges in the locality for similar services. No charge may be determined to be reasonable in the case of bills submitted or requests for payment made under this part after December 31, 1970, if it exceeds the higher of (i) the prevailing charge recognized by the carrier and found acceptable by the Secretary for similar services in the same locality in administering this part on December 31, 1970, or (ii) the prevailing charge level that, on the basis of statistical data and methodology acceptable to the Secretary, would cover 75 percent of the customary charges made for similar services in the same locality during the last preceding calendar year elapsing prior to the start of the fiscal year in which the bill is submitted

or the request for payment is made. In the case of physician services the prevailing charge level determined for purposes of clause (ii) of the preceding sentence for any fiscal year beginning after June 30, 1973, may not exceed (in the aggregate) the level determined under such clause for the fiscal year ending June 30, 1973, except to the extent that the Secretary finds, on the basis of appropriate economic index data, that such higher level is justified by economic changes. In the case of medical services, supplies, and equipment (including equipment servicing) that, in the judgment of the Secretary, do not generally vary significantly in quality from one supplier to another, the charges incurred after December 31, 1972, determined to be reasonable may not exceed the lowest charge levels at which such services, supplies, and equipment are widely and consistently available in a locality except to the extent and under the circumstances specified by the Secretary. The requirement in subparagraph (B) that a bill be submitted or request for payment be made by the close of the following calendar year shall not apply if (i) failure to submit the bill or request the payment by the close of such year is due to the error or misrepresentation of an officer, employee, fiscal intermediary, carrier, or agent of the Department of Health, Education, and Welfare performing functions under this subchapter and acting within the scope of his or its authority, and (ii) the bill is submitted or the payment is requested promptly after such error or misrepresentation is eliminated or corrected.

(5) No payment under this part for a service provided to any individual shall (except as provided in section 1395gg of this title) be made to anyone other than such individual or (pursuant to an assignment described in subparagraph (B) (ii) of paragraph (3)) the physician or other person who provided the service, except that payment may be made (A) to the employer of such physician or other person if such physician or other person is required as a condition of his employment to turn over his fee for such service to his employer, or (B) (where the service was provided in a hospital, clinic, or other facility) to the facility in which the service was provided if there is a contractual arrangement between such physician or other person and such facility under which such facility submits the bill for such service.

(g) The Railroad Retirement Board shall, in accordance with such regulations as the Secretary may prescribe, contract with a carrier or carriers to perform the functions set out in this section with respect to individuals entitled to benefits as qualified railroad retirement beneficiaries pursuant to section 426(a) of this title and section 228s-2(b) of Title 45. (As amended Oct. 30, 1972, Pub. L. 92-603, title II, §§ 211 (c) (3), 224(a), 227(e) (3), 236(a), 258(a), 262 (a), 263(d) (5), 281(d), 86 Stat. 1384, 1395, 1407, 1414, 1447-1449, 1455.)

AMENDMENTS

1972 Subsec. (a). Pub. L. 92-603, § 227(e) (3), substituted "which involve payments for physicians' services on

a reasonable charge basis" for "which involve payments for physicians' services".

Subsec. (b) (3). Pub. L. 92-603, §§ 244 (a), 258 (a) added provisions relating to the determination of reasonableness of physician charges, medical services, supplies, and equipment and for the extension of time for filing claims for supplementary medical insurance benefits where the delay is due to administrative error, at the end of the par. Subsec. (b) (3) (B) (ii). Pub. L. 92-603, §§ 211 (c) (3), 281 (d), designated existing provisions as subcl. (I), added subcl. II, added exception in the case of services furnished as described in section 1395y (a) (4) of this title, other than for purposes of section 1395gg (f) of this title.

Subsec. (b) (3) (C). Pub. L. 92-603, § 262(a), added provisions setting a $100 minimum amount on claims to establish entitlement to a hearing.

Subsec. (b) (5). Pub. L. 92-603, § 236 (a), added subsec. (b) (5).

Subsec. (g). Pub. L. 92-603, § 263 (d) (5), added subsec. (g).

EFFECTIVE DATE OF 1972 AMENDMENT Amendment of subsec. (b) (3) (B) (ii) of this section by section 211(c)(3) of Pub. L. 92-603 applicable to services furnished with respect to admissions occurring after Dec. 31, 1972, see section 211(d) of Pub. L. 92-603, set out as a note under section 1395f of this title.

Amendment of section by section 227(e) (3) of Pub. L. 92-603 applicable with respect to accounting periods beginning after June 30, 1973, see section 227(g) of Pub. L. 92-603, set out as a note under section 1395x of this title. Section 236 (c) of Pub. L. 92-603 provided that: "The amendment made by subsection (a) [amending subsec. (b) of this section] shall apply with respect to bills submitted and requests for payments made after the date of the enactment of this Act [Oct. 30, 1972]. The amendments made by subsection (b) [amending section 1396a of this title shall be effective January 1, 1973 (or earlier if the State plan so provides)."

Section 258(b) of Pub. L. 92-603 provided that: "The amendment made by subsection (a) [amending subsec. (b) (3) of this section] shall apply with respect to bills submitted and requests for payment made after March 1968."

Section 262(b) of Pub. L. 92-603 provided that: "The amendment made by subsection (a) [amending subsec. (b) (3) (C) of this section] shall apply with respect to hearings requested (under the procedures established under section 1842 (b) (3) (C) of the Social Security Act [subsec. (b) (3) (C) of this section]) after the date of the enactment of this Act [Oct. 30, 1972]."

Amendment by section 263 (d) (5) of Pub. L. 92-603 with respect to collection of premiums applicable to premiums becoming due and payable after the fourth month following the month of enactment of Pub. L. 92-603 which was approved on Oct. 30, 1972, see section 263 (f) of Pub. L. 92-603, set out as a note under section 1395s of this title. Amendment of subsec. (b) (3) (B) (ii) of this section by section 282(d) of Pub. L. 92-603 to apply in the case of notices sent to individuals after 1968, see section 281(g) of Pub. L. 92-603, set out as a note under section 1395gg of this title.

REPORT BY THE HEALTH INSURANCE BENEFITS ADVISORY COUNCIL ON THE METHODS OF REIMBURSEMENT OF PHYSICIANS FOR THEIR SERVICES

Section 224 (b) of Pub. L. 92-603 provided that: "The Health Insurance Benefits Advisory Council established under section 1867 of the Social Security Act [section 1395dd of this title] shall conduct a study of the methods of reimbursement for physicians' services under Medicare for the purpose of evaluating their effects on (1) physicians' fees generally, (2) the extent of assignments accepted by physicians, and (3) the share of total physicianfee costs which the Medicare program does not pay and which the beneficiary must assume. The Council shall report the results of such study to the Congress no later than January 1, 1973, together with a presentation of alternatives to the present methods and its recommendations as to the preferred method."

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 706, 1320c-14, 1395t, 1395mm, 1395pp, 1396b of this title.

§ 1395v. State agreements for coverage of eligible individuals who are receiving money payments under public assistance programs or are eligible for medical assistance; continuation of State agreements for coverage of certain individuals respecting supplemental security income.

(b) An agreement entered into with any State pursuant to subsection (a) of this section may be applicable to either of the following coverage groups:

except as provided in subsection (g) of this section, there shall be excluded from any coverage group any individual who is entitled to monthly insurance benefits under subchapter II of this chapter or who is entitled to receive an annuity or pension under the Railroad Retirement Act of 1937. Effective January 1, 1974, and subject to section 1396a (f) of this title, the Secretary shall, at the request of any State not eligible to participate in the State plan program established under subchapter XVI of this chapter, continue in effect the agreement entered into under this section with such State subject to such modification as the Secretary may by regulations provide to take account of the termination of any plans of such State approved under subchapters I, X, XIV, and XVI and the establishment of the supplemental security income program under subchapter XVI of this chapter.

(As amended Dec. 31, 1973, Pub. L. 93-233, § 18(1), 87 Stat. 970.)

AMENDMENTS

1973-Subsec. (b). Pub. L. 93-233 provided for continuation of State agreements for coverage of certain individuals in connection with establishment of supplemental security income program.

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-233 effective Jan. 1, 1974, see section 18(z-3) (1) of Pub. L. 93-233, set out as a note under section 1320b of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1396a of this title.

§ 1395w. Appropriations to cover Government contributions and contingency reserve.

(a) There are authorized to be appropriated from time to time, out of any moneys in the Treasury not otherwise appropriated, to the Federal Supplementary Medical Insurance Trust Fund

(1) (A) a Government contribution equal to the aggregate premiums payable for a month for enrollees age 65 and over under this part and deposited in the Trust Fund, multiplied by the ratio of

(i) twice the dollar amount of the actuarially adequate rate per enrollee age 65 and over as determined under section 1395r (c) (1) of this title for such month minus the dollar amount of the premium per enrollee for such month, as determined under section 1395r (c) (3) of this title, to

(ii) the dollar amount of the premium per enrollee for such month, plus

(B) a Government contribution equal to the aggregate premiums payable for a month for enrollees under age 65 under this part and deposited in the Trust Fund, multiplied by the ratio of—

(i) twice the dollar amount of the actuarially adequate rate per enrollee under age 65 as determined under section 1395r(c) (4) of this title for such month minus the dollar amount of the premium per enrollee for such month, as determined under section 1395r(c)(3) of this title, to (ii) the dollar amount of the premium per enrollee for such month.

(As amended Oct. 30, 1972, Pub. L. 92-603, title II, § 203 (e), 86 Stat. 1377.)

AMENDMENT

1972 Subsec. (a)(1). Pub. L. 92-603 designated existing provisions as subsec. (a)(1)(A), and, as so designated, substituted provisions relating to government contributions equal to the aggregate premiums payable for a month for enrollees age 65 and over under this part and deposited in the Trust Fund, and multiplied by the specified ratio, for provisions relating to government contributions equal to the aggregate premiums payable under this part and deposited in the Trust Fund, and added subsec. (a) (1) (B).

EFFECTIVE DATE OF 1972 AMENDMENT

Section 203 (e) of Pub. L. 92-603 provided in part that the amendment of subsec. (a) (1) by Pub. L. 92-603 shall be effective with respect to enrollee premiums payable for months after June 1973.

(2) such nursing services and other related services, such use of hospital facilities, and such medical social services as are ordinarily furnished by the hospital for the care and treatment of inpatients, and such drugs, biologicals, supplies, appliances, and equipment, for use in the hospital, as are ordinarily furnished by such hospital for the care and treatment of inpatients; and

(3) such other diagnostic or therapeutic items or services, furnished by the hospital or by others under arrangements with them made by the hospital, as are ordinarily furnished to inpatients either by such hospital or by others under such arrangements;

excluding, however

(4) medical or surgical services provided by a physician, resident, or intern; and

(5) the services of a private-duty nurse or other private-duty attendant. Paragraph (4) shall not apply to services provided in a hospital by

(6) an intern or a resident-in-training under a teaching program approved by the Council on Medical Education of the American Medical Association or, in the case of an osteopathic hospital, approved by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association, or, in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of dentistry, approved by the Council on Dental Education of the American Dental Association, or in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of podiatry, approved by the Council on Podiatry Education of the American Podiatry Association; or

(7) a physician where the hospital has a teaching program approved as specified in paragraph (6), unless (A) such inpatient is a private patient (as defined in regulations), or (B) the hospital establishes that during the two-year period ending December 31, 1967, and each year thereafter all inpatients have been regularly billed by the hospital for services rendered by physicians and reasonable efforts have been made to collect in full from all patients and payment of reasonable charges (including applicable deductibles and coinsurance) has been regularly collected in full or in substantial part from at least 50 percent of all inpatients.

(e) Hospital.

The term "hospital" (except for purposes of sections 1395f (d), 1395f (f), and 1395n (b) of this title, subsection (a) (2) of this section, paragraph (7) of this subsection, and subsections (i) and (n) of this section) means an institution which—

(7) in the case of an institution in any State in which State or applicable local law provides for the licensing of hospitals, (A) is licensed pursuant to such law or (B) is approved, by the agency of such State or locality responsible for licensing hospitals, as meeting the standards established for such licensing;

(8) has in effect an overall plan and budget that meets the requirements of subsection (z) of this section; and

(9) meets such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the institution.

For purposes of subsection (a) (2) of this section, such term includes any institution which meets the requirements of paragraph (1) of this subsection. For purposes of sections 1395f (d) and 1395n(b) of this title (including determination of whether an individual received inpatient hospital services or diagnostic services for purposes of such sections), section 1395f (f) (2) of this title, and subsections (i) and (n) of this section, such term includes any insti

tution which (i) meets the requirements of paragraphs (5) and (7) of this subsection, (ii) is not primarily engaged in providing the services described in subsection (j) (1) (A) of this section and (iii) is primarily engaged in providing, by or under the supervision of individuals referred to in paragraph (1) of subsection (r) of this section, to inpatients diagnostic services 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. For purposes of section 1395f (f) (1) of this title, such term includes an institution which (i) is a hospital for purposes of sections 1395f (d), 1395f (f) (2), and 1395n(b) of this title, and (ii) is accredited by the Joint Commission on Accreditation of Hospitals, or is accredited by or approved by a program of the country in which such institution is located if the Secretary finds the accreditation or comparable approval standards of such program to be essentially equivalent to those of the Joint Commission on Accreditation of Hospitals. Notwithstanding the preceding provisions of this subsection, such term shall not, except for purposes of subsection (a)(2) of this section, include any institution which is primarily for the care and treatment of mental diseases or tuberculosis unless it is a tuberculosis hospital (as defined in subsection (g) of this section) or unless it is a psychiatric hospital (as defined in subsection (f) of this section). The term "hospital" also includes a Christian Science sanatorium operated, or listed and certified, by the First Church of Christ, Scientist, Boston, Massachusetts, but only with respect to items and services ordinarily furnished by such institution to inpatients, and payment may be made with respect to services provided by or in such an institution only to such extent and under such conditions, limitations, and requirements (in addition to or in lieu of the conditions, limitations, and requirements otherwise applicable) as may be provided in regulations. For provisions deeming certain requirements of this subsection to be met in the case of accredited institutions, see section 1395bb of this title.

(f) Psychiatric hospital.

The term "psychiatric hospital" means an institution which

*

(2) satisfies the requirements of paragraphs (3) through (9) of subsection (e) of this section;

(g) Tuberculosis hospital.

The term "tuberculosis hospital" means an institution which

(2) satisfies the requirements of paragraphs (3) through (9) of subsection (e) of this section;

(h) Extended care services.

The term "extended care services" means the following items and services furnished to an inpatient of a skilled nursing facility and (except as provided in paragraphs (3) and (6)) by such skilled nursing facility

(3) physical, occupational, or speech therapy furnished by the skilled nursing facility or by others under arrangements with them made by the facility;

(4) medical social services;

(5) such drugs, biologicals, supplies, appliances, and equipment, furnished for use in the skilled nursing facility, as are ordinarily furnished by such facility for the care and treatment of inpatients;

(7) such other services necessary to the health of the patients as are generally provided by skilled nursing facilities;

excluding, however, any item or service if it would not be included under subsection (b) of this section if furnished to an inpatient of a hospital.

(i) Post-hospital extended care services.

The term "post-hospital extended care services" means extended care services furnished an individual after transfer from a hospital in which he was an inpatient for not less than 3 consecutive days before his discharge from the hospital in connection with such transfer. For purposes of the preceding sentence, items and services shall be deemed to have been furnished to an individual after transfer from a hospital, and he shall be deemed to have been an inpatient in the hospital immediately before transfer therefrom, if he is admitted to the skilled nursing facility (A) within 14 days after discharge from such hospital, or (B) within 28 days after such discharge, in the case of an individual who was unable to be admitted to a skilled nursing facility within such 14 days because of a shortage of appropriate bed space in the geographic area in which he resides, or (C) within such time as it would be medically appropriate to begin an active course of treatment, in the case of an individual whose condition is such that skilled nursing facility care would not be medically appropriate within 14 days after discharge from a hospital; and an individual shall be deemed not to have been discharged from a skilled nursing facility if, within 14 days after discharge therefrom, he is admitted to such facility or any other skilled nursing facility.

(j) Skilled nursing facility.

The term "skilled nursing facility" means (except for purposes of subsection (a) (2) of this section) an institution (or a distinct part of an institution) which has in effect a transfer agreement (meeting the requirements of subsection (7) of this section) with one or more hospitals having agreements in effect under section 1395cc of this title and which

(9) in the case of an institution in any State in which State or applicable local law provides for the licensing of institutions of this nature, (A) is licensed pursuant to such law, or (B) is approved, by the agency of such State or locality responsible for licensing institutions of this nature, as meeting the standards established for such licensing;

(10) has in effect an overall plan and budget that meets the requirements of subsection (z) of this section;