§ 1395y. Exclusions from coverage and medicare as secondary payer
(a)
Items or services specifically excluded
Notwithstanding any other provision of this subchapter, no payment may be made under part A or part B of this subchapter for any expenses incurred for items or services—
(1)
(A)
which, except for items and services described in a succeeding subparagraph or additional preventive services (as described in section
1395x
(ddd)(1) of this title), are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member,
(B)
in the case of items and services described in section
1395x
(s)(10) of this title, which are not reasonable and necessary for the prevention of illness,
(C)
in the case of hospice care, which are not reasonable and necessary for the palliation or management of terminal illness,
(D)
in the case of clinical care items and services provided with the concurrence of the Secretary and with respect to research and experimentation conducted by, or under contract with, the Medicare Payment Advisory Commission or the Secretary, which are not reasonable and necessary to carry out the purposes of section
1395ww
(e)(6) of this title,[1]
(E)
in the case of research conducted pursuant to section
1320b–12 of this title, which is not reasonable and necessary to carry out the purposes of that section,
(F)
in the case of screening mammography, which is performed more frequently than is covered under section
1395m
(c)(2) of this title or which is not conducted by a facility described in section
1395m
(c)(1)(B) of this title, in the case of screening pap smear and screening pelvic exam, which is performed more frequently than is provided under section
1395x
(nn) of this title, and, in the case of screening for glaucoma, which is performed more frequently than is provided under section
1395x
(uu) of this title,
(G)
in the case of prostate cancer screening tests (as defined in section
1395x
(oo) of this title), which are performed more frequently than is covered under such section,
(H)
in the case of colorectal cancer screening tests, which are performed more frequently than is covered under section
1395m
(d) of this title,
(I)
the frequency and duration of home health services which are in excess of normative guidelines that the Secretary shall establish by regulation,
(J)
in the case of a drug or biological specified in section
1395w–3a
(c)(6)(C) of this title for which payment is made under part B of this subchapter that is furnished in a competitive area under section
1395w–3b of this title, that is not furnished by an entity under a contract under such section,
(K)
in the case of an initial preventive physical examination, which is performed more than 1 year after the date the individual’s first coverage period begins under part B of this subchapter,
(L)
in the case of cardiovascular screening blood tests (as defined in section
1395x
(xx)(1) of this title), which are performed more frequently than is covered under section
1395x
(xx)(2) of this title,
(M)
in the case of a diabetes screening test (as defined in section
1395x
(yy)(1) of this title), which is performed more frequently than is covered under section
1395x
(yy)(3) of this title,
(N)
in the case of ultrasound screening for abdominal aortic aneurysm which is performed more frequently than is provided for under section
1395x
(s)(2)(AA) of this title, and
(2)
for which the individual furnished such items or services has no legal obligation to pay, and which no other person (by reason of such individual’s membership in a prepayment plan or otherwise) has a legal obligation to provide or pay for, except in the case of Federally qualified health center services;
(3)
which are paid for directly or indirectly by a governmental entity (other than under this chapter and other than under a health benefits or insurance plan established for employees of such an entity), except in the case of rural health clinic services, as defined in section
1395x
(aa)(1) of this title, in the case of Federally qualified health center services, as defined in section
1395x
(aa)(3) of this title, in the case of services for which payment may be made under section
1395qq
(e) of this title, and in such other cases as the Secretary may specify;
(4)
which are not provided within the United States (except for inpatient hospital services furnished outside the United States under the conditions described in section
1395f
(f) of this title and, subject to such conditions, limitations, and requirements as are provided under or pursuant to this subchapter, physicians’ services and ambulance services furnished an individual in conjunction with such inpatient hospital services but only for the period during which such inpatient hospital services were furnished);
(5)
which are required as a result of war, or of an act of war, occurring after the effective date of such individual’s current coverage under such part;
(6)
which constitute personal comfort items (except, in the case of hospice care, as is otherwise permitted under paragraph (1)(C));
(7)
where such expenses are for routine physical checkups, eyeglasses (other than eyewear described in section
1395x
(s)(8) of this title) or eye examinations for the purpose of prescribing, fitting, or changing eyeglasses, procedures performed (during the course of any eye examination) to determine the refractive state of the eyes, hearing aids or examinations therefor, or immunizations (except as otherwise allowed under section
1395x
(s)(10) of this title and subparagraph (B), (F), (G), (H), or (K) of paragraph (1));
(8)
where such expenses are for orthopedic shoes or other supportive devices for the feet, other than shoes furnished pursuant to section
1395x
(s)(12) of this title;
(9)
where such expenses are for custodial care (except, in the case of hospice care, as is otherwise permitted under paragraph (1)(C));
(10)
where such expenses are for cosmetic surgery or are incurred in connection therewith, except as required for the prompt repair of accidental injury or for improvement of the functioning of a malformed body member;
(11)
where such expenses constitute charges imposed by immediate relatives of such individual or members of his household;
(12)
where such expenses are for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, except that payment may be made under part A of this subchapter in the case of inpatient hospital services in connection with the provision of such dental services if the individual, because of his underlying medical condition and clinical status or because of the severity of the dental procedure, requires hospitalization in connection with the provision of such services;
(14)
which are other than physicians’ services (as defined in regulations promulgated specifically for purposes of this paragraph), services described by section
1395x
(s)(2)(K) of this title, certified nurse-midwife services, qualified psychologist services, and services of a certified registered nurse anesthetist, and which are furnished to an individual who is a patient of a hospital or critical access hospital by an entity other than the hospital or critical access hospital, unless the services are furnished under arrangements (as defined in section
1395x
(w)(1) of this title) with the entity made by the hospital or critical access hospital;
(15)
(A)
which are for services of an assistant at surgery in a cataract operation (including subsequent insertion of an intraocular lens) unless, before the surgery is performed, the appropriate utilization and quality control peer review organization (under part B of subchapter XI of this chapter) or a carrier under section
1395u of this title has approved of the use of such an assistant in the surgical procedure based on the existence of a complicating medical condition, or
(16)
in the case in which funds may not be used for such items and services under the Assisted Suicide Funding Restriction Act of 1997 [42 U.S.C. 14401 et seq.];
(17)
where the expenses are for an item or service furnished in a competitive acquisition area (as established by the Secretary under section
1395w–3
(a) of this title) by an entity other than an entity with which the Secretary has entered into a contract under section
1395w–3
(b) of this title for the furnishing of such an item or service in that area, unless the Secretary finds that the expenses were incurred in a case of urgent need, or in other circumstances specified by the Secretary;
(18)
which are covered skilled nursing facility services described in section
1395yy
(e)(2)(A)(i) of this title and which are furnished to an individual who is a resident of a skilled nursing facility during a period in which the resident is provided covered post-hospital extended care services (or, for services described in section
1395x
(s)(2)(D) of this title, which are furnished to such an individual without regard to such period), by an entity other than the skilled nursing facility, unless the services are furnished under arrangements (as defined in section
1395x
(w)(1) of this title) with the entity made by the skilled nursing facility;
(19)
which are for items or services which are furnished pursuant to a private contract described in section
1395a
(b) of this title;
(20)
in the case of outpatient physical therapy services, outpatient speech-language pathology services, or outpatient occupational therapy services furnished as an incident to a physician’s professional services (as described in section
1395x
(s)(2)(A) of this title), that do not meet the standards and conditions (other than any licensing requirement specified by the Secretary) under the second sentence of section
1395x
(p) of this title (or under such sentence through the operation of subsection (g) or (ll)(2) of section
1395x of this title) as such standards and conditions would apply to such therapy services if furnished by a therapist;
(21)
where such expenses are for home health services (including medical supplies described in section
1395x
(m)(5) of this title, but excluding durable medical equipment to the extent provided for in such section) furnished to an individual who is under a plan of care of the home health agency if the claim for payment for such services is not submitted by the agency;
(22)
subject to subsection (h) of this section, for which a claim is submitted other than in an electronic form specified by the Secretary;
(23)
which are the technical component of advanced diagnostic imaging services described in section
1395m
(e)(1)(B) of this title for which payment is made under the fee schedule established under section
1395w–4
(b) of this title and that are furnished by a supplier (as defined in section
1395x
(d) of this title), if such supplier is not accredited by an accreditation organization designated by the Secretary under section
1395m
(e)(2)(B) of this title; or
(24)
where such expenses are for renal dialysis services (as defined in subparagraph (B) of section
1395rr
(b)(14) of this title) for which payment is made under such section unless such payment is made under such section to a provider of services or a renal dialysis facility for such services.
Paragraph (7) shall not apply to Federally qualified health center services described in section
1395x
(aa)(3)(B) of this title. In making a national coverage determination (as defined in paragraph (1)(B) of section
1395ff
(f) of this title) the Secretary shall ensure consistent with subsection (l) of this section that the public is afforded notice and opportunity to comment prior to implementation by the Secretary of the determination; meetings of advisory committees with respect to the determination are made on the record; in making the determination, the Secretary has considered applicable information (including clinical experience and medical, technical, and scientific evidence) with respect to the subject matter of the determination; and in the determination, provide a clear statement of the basis for the determination (including responses to comments received from the public), the assumptions underlying that basis, and make available to the public the data (other than proprietary data) considered in making the determination.
(b)
Medicare as secondary payer
(1)
Requirements of group health plans
(A)
Working aged under group health plans
(i)
In general
A group health plan—
(ii)
Exclusion of group health plan of a small employer
Clause (i) shall not apply to a group health plan unless the plan is a plan of, or contributed to by, an employer that has 20 or more employees for each working day in each of 20 or more calendar weeks in the current calendar year or the preceding calendar year.
(iii)
Exception for small employers in multiemployer or multiple employer group health plans
Clause (i) also shall not apply with respect to individuals enrolled in a multiemployer or multiple employer group health plan if the coverage of the individuals under the plan is by virtue of current employment status with an employer that does not have 20 or more individuals in current employment status for each working day in each of 20 or more calendar weeks in the current calendar year and the preceding calendar year; except that the exception provided in this clause shall only apply if the plan elects treatment under this clause.
(iv)
Exception for individuals with end stage renal disease
Subparagraph (C) shall apply instead of clause (i) to an item or service furnished in a month to an individual if for the month the individual is, or (without regard to entitlement under section
426 of this title) would upon application be, entitled to benefits under section
426–1 of this title.
(B)
Disabled individuals in large group health plans
(i)
In general
A large group health plan (as defined in clause (iii)) may not take into account that an individual (or a member of the individual’s family) who is covered under the plan by virtue of the individual’s current employment status with an employer is entitled to benefits under this subchapter under section
426
(b) of this title.
(ii)
Exception for individuals with end stage renal disease
Subparagraph (C) shall apply instead of clause (i) to an item or service furnished in a month to an individual if for the month the individual is, or (without regard to entitlement under section
426 of this title) would upon application be, entitled to benefits under section
426–1 of this title.
(C)
Individuals with end stage renal disease
A group health plan (as defined in subparagraph (A)(v))—
(i)
may not take into account that an individual is entitled to or eligible for benefits under this subchapter under section
426–1 of this title during the 12-month period which begins with the first month in which the individual becomes entitled to benefits under part A of this subchapter under the provisions of section
426–1 of this title, or, if earlier, the first month in which the individual would have been entitled to benefits under such part under the provisions of section
426–1 of this title if the individual had filed an application for such benefits; and
(ii)
may not differentiate in the benefits it provides between individuals having end stage renal disease and other individuals covered by such plan on the basis of the existence of end stage renal disease, the need for renal dialysis, or in any other manner;
except that clause (ii) shall not prohibit a plan from paying benefits secondary to this subchapter when an individual is entitled to or eligible for benefits under this subchapter under section
426–1 of this title after the end of the 12-month period described in clause (i). Effective for items and services furnished on or after February 1, 1991, and before August 5, 1997,[2] (with respect to periods beginning on or after February 1, 1990), this subparagraph shall be applied by substituting “18-month” for “12-month” each place it appears. Effective for items and services furnished on or after August 5, 1997,[2] (with respect to periods beginning on or after the date that is 18 months prior to August 5, 1997), clauses (i) and (ii) shall be applied by substituting “30-month” for “12-month” each place it appears.
(D)
Treatment of certain members of religious orders
In this subsection, an individual shall not be considered to be employed, or an employee, with respect to the performance of services as a member of a religious order which are considered employment only by virtue of an election made by the religious order under section 3121(r) of the Internal Revenue Code of 1986.
(E)
General provisions
For purposes of this subsection:
(i)
Aggregation rules
(I)
All employers treated as a single employer under subsection (a) or (b) of section
52 of the Internal Revenue Code of 1986 shall be treated as a single employer.
(II)
All employees of the members of an affiliated service group (as defined in section 414(m) of such Code) shall be treated as employed by a single employer.
(III)
Leased employees (as defined in section 414(n)(2) of such Code) shall be treated as employees of the person for whom they perform services to the extent they are so treated under section 414(n) of such Code.
In applying sections of the Internal Revenue Code of 1986 under this clause, the Secretary shall rely upon regulations and decisions of the Secretary of the Treasury respecting such sections.
(F)
Limitation on beneficiary liability
An individual who is entitled to benefits under this subchapter and is furnished an item or service for which such benefits are incorrectly paid is not liable for repayment of such benefits under this paragraph unless payment of such benefits was made to the individual.
(2)
Medicare secondary payer
(A)
In general
Payment under this subchapter may not be made, except as provided in subparagraph (B), with respect to any item or service to the extent that—
(i)
payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (1), or
(ii)
payment has been made, or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.
In this subsection, the term “primary plan” means a group health plan or large group health plan, to the extent that clause (i) applies, and a workmen’s compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance, to the extent that clause (ii) applies. An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part.
(B)
Conditional payment
(i)
Authority to make conditional payment
The Secretary may make payment under this subchapter with respect to an item or service if a primary plan described in subparagraph (A)(ii) has not made or cannot reasonably be expected to make payment with respect to such item or service promptly (as determined in accordance with regulations). Any such payment by the Secretary shall be conditioned on reimbursement to the appropriate Trust Fund in accordance with the succeeding provisions of this subsection.
(ii)
Repayment required
A primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this subchapter with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means. If reimbursement is not made to the appropriate Trust Fund before the expiration of the 60-day period that begins on the date notice of, or information related to, a primary plan’s responsibility for such payment or other information is received, the Secretary may charge interest (beginning with the date on which the notice or other information is received) on the amount of the reimbursement until reimbursement is made (at a rate determined by the Secretary in accordance with regulations of the Secretary of the Treasury applicable to charges for late payments).
(iii)
Action by United States
In order to recover payment made under this subchapter for an item or service, the United States may bring an action against any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan. The United States may, in accordance with paragraph (3)(A) collect double damages against any such entity. In addition, the United States may recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity. The United States may not recover from a third-party administrator under this clause in cases where the third-party administrator would not be able to recover the amount at issue from the employer or group health plan and is not employed by or under contract with the employer or group health plan at the time the action for recovery is initiated by the United States or for whom it provides administrative services due to the insolvency or bankruptcy of the employer or plan.
(iv)
Subrogation rights
The United States shall be subrogated (to the extent of payment made under this subchapter for such an item or service) to any right under this subsection of an individual or any other entity to payment with respect to such item or service under a primary plan.
(v)
Waiver of rights
The Secretary may waive (in whole or in part) the provisions of this subparagraph in the case of an individual claim if the Secretary determines that the waiver is in the best interests of the program established under this subchapter.
(vi)
Claims-filing period
Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished.
(3)
Enforcement
(A)
Private cause of action
There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).
(B)
Reference to excise tax with respect to nonconforming group health plans
For provision imposing an excise tax with respect to nonconforming group health plans, see section 5000 of the Internal Revenue Code of 1986.
(C)
Prohibition of financial incentives not to enroll in a group health plan or a large group health plan
It is unlawful for an employer or other entity to offer any financial or other incentive for an individual entitled to benefits under this subchapter not to enroll (or to terminate enrollment) under a group health plan or a large group health plan which would (in the case of such enrollment) be a primary plan (as defined in paragraph (2)(A)). Any entity that violates the previous sentence is subject to a civil money penalty of not to exceed $5,000 for each such violation. The provisions of section
1320a–7a of this title (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section
1320a–7a
(a) of this title.
(4)
Coordination of benefits
Where payment for an item or service by a primary plan is less than the amount of the charge for such item or service and is not payment in full, payment may be made under this subchapter (without regard to deductibles and coinsurance under this subchapter) for the remainder of such charge, but—
(A)
payment under this subchapter may not exceed an amount which would be payable under this subchapter for such item or service if paragraph (2)(A) did not apply; and
(B)
payment under this subchapter, when combined with the amount payable under the primary plan, may not exceed—
(i)
in the case of an item or service payment for which is determined under this subchapter on the basis of reasonable cost (or other cost-related basis) or under section
1395ww of this title, the amount which would be payable under this subchapter on such basis, and
(ii)
in the case of an item or service for which payment is authorized under this subchapter on another basis—
(I)
the amount which would be payable under the primary plan (without regard to deductibles and coinsurance under such plan), or
(II)
the reasonable charge or other amount which would be payable under this subchapter (without regard to deductibles and coinsurance under this subchapter),
whichever is greater.
(5)
Identification of secondary payer situations
(A)
Requesting matching information
(i)
Commissioner of Social Security
The Commissioner of Social Security shall, not less often than annually, transmit to the Secretary of the Treasury a list of the names and TINs of medicare beneficiaries (as defined in section 6103(l)(12) of the Internal Revenue Code of 1986) and request that the Secretary disclose to the Commissioner the information described in subparagraph (A) of such section.
(ii)
Administrator
The Administrator of the Centers for Medicare & Medicaid Services shall request, not less often than annually, the Commissioner of the Social Security Administration to disclose to the Administrator the information described in subparagraph (B) of section 6103(l)(12) of the Internal Revenue Code of 1986.
(B)
Disclosure to fiscal intermediaries and carriers
In addition to any other information provided under this subchapter to fiscal intermediaries and carriers, the Administrator shall disclose to such intermediaries and carriers (or to such a single intermediary or carrier as the Secretary may designate) the information received under subparagraph (A) for purposes of carrying out this subsection.
(C)
Contacting employers
(i)
In general
With respect to each individual (in this subparagraph referred to as an “employee”) who was furnished a written statement under section 6051 of the Internal Revenue Code of 1986 by a qualified employer (as defined in section 6103(l)(12)(E)(iii) of such Code), as disclosed under subparagraph (B), the appropriate fiscal intermediary or carrier shall contact the employer in order to determine during what period the employee or employee’s spouse may be (or have been) covered under a group health plan of the employer and the nature of the coverage that is or was provided under the plan (including the name, address, and identifying number of the plan).
(ii)
Employer response
Within 30 days of the date of receipt of the inquiry, the employer shall notify the intermediary or carrier making the inquiry as to the determinations described in clause (i). An employer (other than a Federal or other governmental entity) who willfully or repeatedly fails to provide timely and accurate notice in accordance with the previous sentence shall be subject to a civil money penalty of not to exceed $1,000 for each individual with respect to which such an inquiry is made. The provisions of section
1320a–7a of this title (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section
1320a–7a
(a) of this title.
(D)
Obtaining information from beneficiaries
Before an individual applies for benefits under part A of this subchapter or enrolls under part B of this subchapter, the Administrator shall mail the individual a questionnaire to obtain information on whether the individual is covered under a primary plan and the nature of the coverage provided under the plan, including the name, address, and identifying number of the plan.
(6)
Screening requirements for providers and suppliers
(A)
In general
Notwithstanding any other provision of this subchapter, no payment may be made for any item or service furnished under part B of this subchapter unless the entity furnishing such item or service completes (to the best of its knowledge and on the basis of information obtained from the individual to whom the item or service is furnished) the portion of the claim form relating to the availability of other health benefit plans.
(B)
Penalties
An entity that knowingly, willfully, and repeatedly fails to complete a claim form in accordance with subparagraph (A) or provides inaccurate information relating to the availability of other health benefit plans on a claim form under such subparagraph shall be subject to a civil money penalty of not to exceed $2,000 for each such incident. The provisions of section
1320a–7a of this title (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section
1320a–7a
(a) of this title.
(7)
Required submission of information by group health plans
(A)
Requirement
On and after the first day of the first calendar quarter beginning after the date that is 1 year after December 29, 2007, an entity serving as an insurer or third party administrator for a group health plan, as defined in paragraph (1)(A)(v), and, in the case of a group health plan that is self-insured and self-administered, a plan administrator or fiduciary, shall—
(B)
Enforcement
(i)
In general
An entity, a plan administrator, or a fiduciary described in subparagraph (A) that fails to comply with the requirements under such subparagraph shall be subject to a civil money penalty of $1,000 for each day of noncompliance for each individual for which the information under such subparagraph should have been submitted. The provisions of subsections (e) and (k) of section
1320a–7a of this title shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section
1320a–7a
(a) of this title. A civil money penalty under this clause shall be in addition to any other penalties prescribed by law and in addition to any Medicare secondary payer claim under this subchapter with respect to an individual.
(ii)
Deposit of amounts collected
Any amounts collected pursuant to clause (i) shall be deposited in the Federal Hospital Insurance Trust Fund under section
1395i of this title.
(C)
Sharing of information
Notwithstanding any other provision of law, under terms and conditions established by the Secretary, the Secretary—
(i)
shall share information on entitlement under part A and enrollment under part B under this subchapter with entities, plan administrators, and fiduciaries described in subparagraph (A);
(8)
Required submission of information by or on behalf of liability insurance (including self-insurance), no fault insurance, and workers’ compensation laws and plans
(A)
Requirement
On and after the first day of the first calendar quarter beginning after the date that is 18 months after December 29, 2007, an applicable plan shall—
(C)
Timing
Information shall be submitted under subparagraph (A)(ii) within a time specified by the Secretary after the claim is resolved through a settlement, judgment, award, or other payment (regardless of whether or not there is a determination or admission of liability).
(E)
Enforcement
(i)
In general
An applicable plan that fails to comply with the requirements under subparagraph (A) with respect to any claimant shall be subject to a civil money penalty of $1,000 for each day of noncompliance with respect to each claimant. The provisions of subsections (e) and (k) of section
1320a–7a of this