CMS Pub. 100-16, ch. mc86c17c, § 70.2

The Part B physician and supplier services that the cost-based HMO/CMP furnishes

under arrangement are grouped into two categories for apportionment purposes. The

basis the HMO/CMP uses to pay for a service determines in which category the service is

grouped. The two categories are:

• Services furnished under an arrangement that provides for the cost-based

HMO/CMP to pay for the service on a fee-for-service (FFS) basis; and

• Services furnished under an arrangement that provides for the cost-based

HMO/CMP to pay for the service on some basis other than FFS.

If the arrangement provides for the HMO/CMP to pay for these services on a FFS basis,

the total cost for the services furnished under such arrangement shall be apportioned

between Medicare enrollees and others based on the ratio of charges for Medicare-covered services furnished to Medicare enrollees to total charges for services furnished to

all enrollees and non-enrolled patients. (See payment limitations contained in Chapter

17, Subchapter B, §§250-300). If apportionment on this basis would result in Medicare

bearing the cost of furnishing services to individuals who are not Medicare enrollees, the

Medicare share must be determined on another basis (approved by CMS) to ensure that

Medicare pays only for services furnished to Medicare enrollees.

If the arrangement provides for the HMO/CMP to pay for these services on some basis

other than FFS, the reasonable cost the HMO/CMP pays, under the financial arrangement

for the services furnished, shall be apportioned between Medicare enrollees and others

based on the ratio of Medicare-covered services furnished to Medicare enrollees to total

services furnished to all enrollees and non-enrolled patients. If apportionment on this

basis would result in Medicare bearing the cost of furnishing services to individuals who

are not Medicare enrollees, the Medicare share must be determined on another basis

(approved by CMS) to ensure that Medicare pays only for services furnished to Medicare

enrollees.