42 U.S.C. § 1395e — Deductibles and coinsurance

(a) Inpatient hospital services^*; outpatient hospital diagnostic services; blood; post-hospital extended care services^*.

(1) For inpatient hospital or inpatient critical-access hospital services during a spell of illness, the amount Medicare pays is reduced by the inpatient hospital deductible, or by the charges imposed for the services if those charges are lower. If customary charges are higher than the imposed charges, customary charges are treated as the imposed charges. The payment is reduced further for days after the person^* has received 60 days of these services during the spell, but before day 91, by one-fourth of the inpatient hospital deductible per day. For each day after the person has received 90 days, and before the day after the last day for which Part A covers the services during that spell, the reduction is one-half of the deductible per day. For any day, the reduction cannot exceed that day’s charges, using customary charges when they are higher than the imposed charges.

(2)(A) For services furnished under this part, payment is reduced by the cost of the first 3 pints of whole blood, or equivalent packed red blood cells as regulations^* define, furnished to the person in each calendar year. Regulations must reduce this deductible when the blood is replaced. Blood is considered replaced when the institution or other person that furnished it receives one pint for each pint for which a deduction was made.

(B) The blood deductible is reduced to the extent a deductible was imposed under section 1395l(b) for blood or blood cells furnished to the person during that year.

(3) Payment for post-hospital extended-care services during a spell of illness is reduced by one-eighth of the inpatient hospital deductible for each day before day 101 on which the person receives those services after receiving them for 20 days during the spell.

(4)(A) Hospice payment is reduced in two ways. For outpatient drugs and biological products provided by or arranged by the hospice, the person pays the amount in the hospice’s drug^*-copayment schedule, up to $5 per prescription. The schedule must relate to and approximately equal 5 percent of the hospice’s cost. For respite care provided or arranged by the hospice, the person pays 5 percent of the amount the hospice estimates, under the Secretary’s regulations, would be its payment under section 1395f(i). Total respite-care coinsurance for one hospice coinsurance period cannot exceed the inpatient hospital deductible for the year in which that period began. A “hospice coinsurance period” begins on the first day an election under section 1395d(d) is effective and ends when the first period of 14 consecutive days without that election ends.

(B) While a person’s election under section 1395d(d)(1) is in effect, no hospice-related copayment or deductible other than those in subparagraph (A) applies, regardless of where the hospice care^* is furnished.

(b) Inpatient hospital deductible; application.

(1) The inpatient hospital deductible was $520 for 1987. For each later year, it equals the previous year’s deductible changed by the Secretary’s best estimate of the payment-weighted average of the applicable percentage increases used under section 1395ww(d)(3)(A) for discharges in the fiscal year beginning October 1 of that previous calendar year, and adjusted for changes in real case mix using the latest available case-mix data. If the resulting amount is not a multiple of $4, it is rounded to the nearest multiple of $4; if exactly halfway between two multiples, it is rounded up to the higher multiple.

(2) Between September 1 and September 15 of the year before they apply, the Secretary^* must announce the inpatient hospital deductible and all coinsurance amounts under this section.

(3) The deductible for a year applies to the basic deduction in subsection (a)(1) when the first day of inpatient hospital or inpatient critical-access hospital services in a spell occurs during that year. It also applies to the inpatient-hospital, inpatient-critical-access-hospital, and post-hospital extended-care coinsurance amounts under subsection (a) for services furnished during that year.