How does Medicare Part B calculate the payment amount for a covered service under 42 CFR 410.152? Answer in under 100 words.

Details / How it works

Under 42 CFR 410.152, the basic rule for Medicare Part B payment for services furnished by a provider (other than a nominal charge provider) is the lesser of 80% of the reasonable cost of the services, or the reasonable cost of the services minus 20% of the customary charges. For nominal charge providers, the payment is 80% of fair compensation. For services furnished by persons or entities not specified in the basic rules, payment is 80% of the reasonable charges or 80% of the payment amount computed on any other payment basis. These general rules apply subject to specific exceptions for services such as home health, durable medical equipment (DME), renal dialysis, rural health clinic (RHC) and federally qualified health center (FQHC) services, preventive vaccine administration, ASC facility services, and others.

Numbers & thresholds

Exceptions & edge cases

Several specific services have their own payment rules under 42 CFR 410.152, overriding the general rules. Home health services other than DME are paid at 100% of fair compensation for nominal charge providers, or the lesser of reasonable cost and customary charges for non-nominal charge providers. DME furnished as a home health service generally follows the 80% rules, but used DME purchased at least 25% less than new equipment may qualify for 100% payment. Preventive vaccine administration has fixed per-dose amounts ($30 for influenza/hepatitis B/pneumococcal, $40 for COVID-19) plus additional home administration payments ($35.50 for COVID-19, effective Jan 1, 2022). ASC facility services are paid at 80% of the standard overhead amount or prospective payment amount. Insulin furnished through DME on or after July 1, 2023 has a coinsurance cap of $35 for a month's supply. Drugs covered as additional preventive services (DCAPS) are paid at 100% of the lesser of the actual charge or the fee schedule amount.