CMS Pub. 100-16, ch. mc86c17c, § 50

Through Arrangements

(Rev. 4, 10-01-01)

Costs of covered services the cost-based HMO/CMP furnishes to Medicare enrollees

through arrangements with non-plan providers will, in most cases, be the amount the

HMO/CMP pays the provider under its financial arrangement, to the extent it is found

reasonable (subject to the rules in Chapter 17 (Subchapters A and B)). The

apportionment process used to determine the reasonable cost of, or prospective payment

for, provider services furnished to the Medicare enrollees must be on the same basis that

is used by the provider in determining the reasonable cost of, or prospective payment for,

provider services furnished to Medicare beneficiaries who are not cost-based HMO/CMP

enrollees, subject to the rules set forth in Chapter 17. However, if the special nature or

terms of the cost-based HMO/CMP’s financial arrangements with the provider would

result in the Medicare program bearing the costs of delivering care to individuals other

than Medicare enrollees of the cost-based HMO/CMP, the apportionment must be on

some other appropriate basis approved by CMS intended to assure that the share allocated

to the Medicare program does not include costs of delivering care to non-Medicare

enrollees.

When the HMO/CMP elects to have hospital or skilled nursing facility providers seek

reimbursement directly from the Fee-For-Service (FFS) system for covered services

furnished to the HMO/CMP’s Medicare enrollees, the share to be borne by CMS is the

amount that the FFS system pays the provider. This will be determined on the same

approved basis otherwise used by the hospital or skilled nursing facility provider in

apportioning Medicare’s share of allowable costs or the Medicare prospective payment

for covered services furnished Medicare beneficiaries who are not enrollees of the

HMO/CMP.