Medicare program; reasonable charge limitations--HCFA. Final rule with comment period

This final rule implements section 9304(a) of the Consolidated Omnibus Budget Reconciliation Act of 1985 which enacted section 1842(b)(8) of the Social Security Act (Act). In accordance with section 1842(b)(8) of the Act, we specify the circumstances under which HCFA or its Medicare Part B carriers will consider establishing special reasonable charge payment limits for services (including supplies and equipment) reimbursed under Part B of the Medicare program. The rule describes the factors HCFA or a carrier will consider and the procedures it will follow in establishing them. The limits would be either an upper limit to correct a grossly excessive charge or a lower limit to correct a grossly deficient charge. In either case, the limit would be either a specific dollar amount, or a special method used in determining reasonable charges to be allowed for a particular service or category of service. The purpose of this rule is to establish a stronger framework for setting special reasonable charge limits for services when the standard reimbursement methodology results in payments that are grossly excessive or deficient. A related purpose is to protect the Medicare program from excessive outlays and to prevent any adverse effects on both Medicare beneficiaries and consumers in general that we believe would result from a lack of such limits. The rule also will protect suppliers from reimbursement that is grossly deficient.