42 U.S.C. § 1395y — Exclusions from coverage and medicare as secondary payer

(a) Items and services specifically excluded. Despite other provisions of this subchapter, neither part A nor part B may pay expenses for items or services—(1) that are not reasonable and necessary: (A) generally, for diagnosing or treating illness or injury or improving the function of a malformed body part, except for items covered by a later subparagraph, additional preventive services described in section 1395x(ddd)(1), and multi-cancer early detection screening tests defined in section 1395x(nnn); (B) for items and services described in section 1395x(s)(10), for preventing illness; (C) for hospice care^*, for easing or managing a terminal illness; (D) for clinical-care items and services provided with the Secretary’s concurrence in research or experimentation conducted by, or under contract with, the Medicare Payment Advisory Commission or the Secretary^*, for the purposes of section 1395ww(e)(6); or (E) for research under section 1320b–12, for that section’s purposes. This also excludes (F) screening mammography done more often than section 1395m(c)(2) covers or at a facility other than one described in section 1395m(c)(1)(B); screening Pap smears or pelvic examinations done more often than section 1395x(nn) allows; and glaucoma screening done more often than section 1395x(uu) allows; (G) prostate-cancer screening tests defined in section 1395x(oo), when done more often than that section covers; (H) colorectal-cancer screening tests done more often than section 1395m(d) covers; (I) home-health frequency or duration exceeding guidelines the Secretary sets by regulation; (J) a specified part-B drug^* or biological furnished in a competitive area under section 1395w–3b by an entity that does not have a contract under that section; (K) an initial preventive physical examination performed more than one year after the person’s first part-B coverage period begins; (L) cardiovascular screening blood tests defined in section 1395x(xx)(1), when done more often than section 1395x(xx)(2) covers; (M) diabetes screening tests defined in section 1395x(yy)(1), when done more often than section 1395x(yy)(3) covers; (N) abdominal-aortic-aneurysm ultrasound screening done more often than section 1395x(s)(2)(AA) provides; (O) kidney-disease education services defined in section 1395x(ggg)(1), when more sessions are furnished than section 1395x(ggg)(4) covers; and (P) personalized prevention-plan services defined in section 1395x(hhh)(1), when done more often than that section covers. (2) Items or services for which the individual has no legal duty to pay and no other person^* has a legal duty to provide or pay, because of a prepayment plan or otherwise, except Federally qualified health center services^*. (3) Items or services paid directly or indirectly by a governmental entity, other than under this chapter or an employee health-benefit or insurance plan of that entity. Exceptions include rural health clinic services defined in section 1395x(aa)(1), Federally qualified health center^* services defined in section 1395x(aa)(3), services payable under section 1395qq(e), and other cases the Secretary specifies. (4) Items or services provided outside the United States^*, except inpatient hospital services^* provided outside the country under section 1395f(f), and related physician^* and ambulance services provided during the period those inpatient services are provided, subject to this subchapter’s conditions and limits. (5) Items or services required because of a war or act of war occurring after the person’s current coverage under the part began. (6) Personal-comfort items, except as hospice care rules otherwise allow. (7) Routine physical checkups; eyeglasses other than the eyewear described in section 1395x(s)(8); eye examinations to prescribe, fit, or change eyeglasses; procedures during an eye examination to determine the eyes’ refractive state^*; hearing aids or examinations for them; and immunizations, except where section 1395x(s)(10) or paragraph (1)(B), (F), (G), (H), (K), or (P) allows them. Paragraph (7) does not apply to Federally qualified health center services described in section 1395x(aa)(3)(B). (8) Orthopedic shoes^* or other supportive foot devices, except shoes furnished under section 1395x(s)(12). (9) Custodial care, except as hospice rules otherwise allow. (10) Cosmetic surgery or related expenses, except prompt repair of accidental injury or improvement of a malformed body member’s function. (11) Charges imposed by the individual’s immediate relatives or household members. (12) Dental care, treatment^*, filling, removal, or replacement of teeth or directly supporting structures. Part A may pay for inpatient hospital services connected with dental services if the person’s medical condition, clinical status, or the severity of the dental procedure requires hospitalization^*. (13) Expenses for (A) treating flat feet or prescribing supports for them, (B) treating foot subluxations, or (C) routine foot care, including cutting or removing corns or calluses, trimming nails, and other routine hygiene. (14) Services other than physicians’ services as specially defined by regulation, services described in section 1395x(s)(2)(K), certified nurse-midwife services, qualified psychologist services, and certified registered nurse anesthetist^* services, when 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)) with the hospital or critical access hospital. (15) (A) An assistant’s services in cataract surgery, including later insertion of an intraocular lens, unless before surgery the appropriate quality-improvement organization or a section 1395u carrier approved the assistant because of a complicating medical condition; or (B) assistant-at-surgery services to which section 1395w–4(i)(2)(B) applies. (16) Items and services for which the Assisted Suicide Funding Restriction Act of 1997 bars use of funds. (17) An item or service furnished in a competitive-acquisition area by an entity without the Secretary’s contract for that area, unless the Secretary finds urgent need or another specified circumstance. (18) Covered skilled-nursing-facility services described in section 1395yy(e)(2)(A)(i), furnished to a skilled-nursing-facility resident during covered post-hospital extended care, or certain section 1395x(s)(2)(D) services furnished to that resident, by an entity other than the facility, unless the facility made arrangements with that entity. (19) Items or services furnished under a private contract described in section 1395a(b). (20) Outpatient physical, speech-language, or occupational therapy furnished as part of a physician’s professional services that does not meet the standards and conditions that would apply if a therapist furnished it, except for a licensing requirement specified by the Secretary. (21) Home-health services, including specified medical supplies but excluding durable medical equipment^* to the stated extent, furnished to a person under a home-health agency’s care plan when the agency did not submit the payment claim. (22) Subject to subsection (h), services for which the claim was not submitted in the electronic form the Secretary specifies. (23) The technical component of specified advanced diagnostic imaging paid under the fee schedule, when furnished by a supplier^* that lacks accreditation from an organization the Secretary designated. (24) Renal dialysis services defined in section 1395rr(b)(14)(B), unless payment under that section is made to a provider or renal dialysis facility for those services. (25) No later than January 1, 2014, payments made other than by electronic funds transfer or an electronic remittance in the ASC X12 835 standard or a later standard.
When making a national coverage determination, the Secretary must follow subsection (l): give the public notice and a chance to comment before implementing it; hold related advisory-committee meetings on the record; consider relevant clinical, medical, technical, and scientific information; clearly state the basis and assumptions for the decision and respond to public comments; and make nonproprietary data used for the decision public.

(b) Medicare as secondary payer. (1) Group health plans. (A) Working aged. (i) A group health plan^* may not consider a person’s or spouse’s Medicare entitlement based on current employment. It must give a person age 65 or older, and an age-65-or-older spouse, the same benefits under the same conditions it gives a younger person or spouse. (ii) This does not apply unless the employer has at least 20 employees on each working day in at least 20 weeks of the current or preceding year. (iii) It also does not apply to a multiemployer or multiple-employer plan for people covered through an employer below that threshold if the plan elects this exception. (iv) For a month in which a person has, or would have upon application, end-stage renal disease entitlement under section 426–1, subparagraph (C) applies instead. (v) “Group health plan” has the meaning in section 5000(b)(1) of the Internal Revenue Code, without section 5000(d). (B) Disabled people in large group plans. (i) A large group plan may not consider Medicare entitlement based on current employment and disability. (ii) The end-stage-renal-disease exception in (C) applies instead. (iii) “Large group health plan” has the meaning in section 5000(b)(2), without section 5000(d). (C) End-stage renal disease. A group health plan may not, during the 12-month period beginning with the first month of part-A entitlement under section 426–1, or the first month the person would have been entitled if an application had been filed, consider that entitlement or eligibility. It may not give different benefits because of end-stage renal disease, dialysis, or another related reason. After that period it may pay secondary to Medicare. For older periods, the statute substitutes 18 months for 12 months for the specified 1991–1997 period, and 30 months for 12 months for items and services in the specified period beginning before August 5, 1997. (D) Religious orders. Service performed as a member of a religious order is not employment when it is treated as employment only because of the order’s election under section 3121(r) of the Internal Revenue Code. (E) General rules. (i) Related employers, affiliated-service-group employees, and qualifying leased employees are treated as employed by one employer, using Treasury regulations^* and decisions for the Internal Revenue Code provisions. (ii) “Current employment status” means being an employee, the employer, or associated with the employer in a business relationship. (iii) “Employer” includes a self-employed person. (iv) A plan may still determine eligibility for the Postal Service Health Benefits Program as section 8903c(e) of title 5 allows. (F) A Medicare beneficiary is not liable to repay an incorrectly paid benefit under this paragraph unless the payment was made to the beneficiary. (2) Medicare secondary payer. (A) Medicare generally may not pay an item or service to the extent a group plan, large group plan, workers’ compensation, automobile or liability insurance (including self-insurance), or no-fault insurance has paid or can reasonably be expected to pay. These are “primary plans.” A business that carries its own risk is treated as self-insured. (B) Conditional payments. (i) The Secretary may pay when a primary plan described above has not paid and cannot promptly be expected to pay. The payment is conditional on repayment to the proper Trust Fund. (ii) A primary plan and anyone paid by it must repay the Trust Fund when the plan had responsibility to pay. Responsibility may be shown by a judgment, a payment conditioned on a settlement or release, or other means. If repayment is not made within 60 days after notice or information about responsibility, the Secretary may charge interest from receipt of that notice. (iii) The United States may sue any responsible insurer, self-insurer, administrator^*, employer, or plan and may recover double damages. It may also recover from a recipient of primary-plan money, subject to the stated limits for third-party administrators and a three-year deadline after notice of a settlement, judgment, award, or other payment. (iv) The United States is subrogated, up to its payment, to the individual’s or another entity’s right to payment under the primary plan. (v) The Secretary may waive all or part of these rules for an individual claim when doing so is in the program’s best interest. (vi) The United States may seek recovery when its request was submitted within three years after the service. (vii) Starting 120 days before an expected settlement, judgment, award, or other payment, a claimant or applicable plan may notify the Secretary, beginning 120 days before the reasonably expected date of the settlement, judgment, award, or other payment; an applicable plan’s notice must be made with the individual’s consent. The Secretary must provide the individual, an authorized family member or other representative recognized under regulations, and an applicable plan that has obtained the individual’s consent with password-protected website access to claims and payment information, update it no later than 15 days after payment, identify providers, diagnoses, service dates, conditional amounts, related claims, secure communications, official transmission dates, and downloadable reimbursement statements. A statement downloaded during the protected period, including within three business days before payment, sets the final conditional amount. The Secretary must provide a discrepancy process: the claimant supplies documents and a proposed correction; the Secretary has 11 business days to decide; failure to decide accepts the proposal. This is not an appeal and is not subject to administrative or judicial review. The protected period starts after the Secretary’s 65-day response period, which may be extended 30 days and may be extended for justified system failures under regulations limited so that no more than 1 percent of obligations qualify. Regulations were due within nine months after January 10, 2013, and “website” includes successor technology. (viii) The Secretary must create by regulation an appeal right and process for applicable plans, or their attorneys, agents, or administrators, to appeal conditional-payment determinations involving liability, no-fault, or workers’ compensation coverage, and must notify the beneficiary of the plan’s intent. (C) The Secretary may not deny payment solely because a person failed to complete a questionnaire about a primary plan. (3) Enforcement. (A) A primary plan that fails to pay or reimburse as required is subject to a private action for double damages. (B) Section 5000 of the Internal Revenue Code contains the excise-tax provision for nonconforming group plans. (C) An employer or other entity may not offer money or another incentive to keep a Medicare beneficiary from enrolling in, or to make the beneficiary leave, a group or large group plan that would be primary. Each violation may bring a civil penalty up to $5,000, under the stated section 1320a–7a procedures. (4) Coordination. If a primary plan pays less than the charge, Medicare may pay the remainder without applying Medicare deductibles or coinsurance, but Medicare’s payment cannot exceed what it would have paid without the primary plan. The combined payment also cannot exceed the applicable reasonable-cost amount, or, for other payment methods, the greater of the primary-plan amount without its deductible and coinsurance or Medicare’s reasonable charge without its deductible and coinsurance. (5) Identifying secondary-payer situations. (A)(i) At least yearly, the Social Security Commissioner must send the Treasury Secretary Medicare beneficiaries’ names and taxpayer-identification numbers and request the information described in section 6103(l)(12)(A). (ii) At least yearly, the CMS Administrator must request from the Social Security Administration^* the information described in section 6103(l)(12)(B). (B) CMS must give the received information to fiscal intermediaries and carriers for this subsection. (C)(i) Intermediaries or carriers must contact each employee identified through a qualified employer’s statement to determine the periods and nature of group coverage for the employee or spouse, including the plan’s identifying information. (ii) The employer must respond within 30 days. A non-government employer that willfully or repeatedly fails to respond accurately and on time may be fined up to $1,000 per person under the stated procedures. (D) Before part-A application or part-B enrollment, CMS must mail a questionnaire about primary coverage and its details. (E) This paragraph does not apply to information required on or after July 1, 2016. (6) Providers and suppliers. (A) Part B cannot pay unless the furnishing entity completes, from available information, the claim-form part about other health plans. (B) A knowing, willful, repeated failure or inaccurate information may result in a civil penalty up to $2,000 per incident under the stated procedures. (7) Group-plan reporting. (A) On and after the first day of the first calendar quarter beginning after the date that is 18 months after December 29, 2007, a group-plan insurer or third-party administrator, and a self-insured, self-administered plan’s administrator or fiduciary, must obtain information from sponsors and participants and report it as the Secretary specifies to identify plans primary for Medicare, and, for quarters beginning January 1, 2020, plans primary for part-D prescription-drug benefits. (B)(i) Failure to comply carries a $1,000-per-day penalty for each affected individual, in addition to other penalties and Medicare claims. (ii) Collected money goes to the Federal Hospital Insurance Trust Fund. (C) The Secretary must share Medicare entitlement and enrollment information with these plans, may share it with others, and may share collected information for benefit coordination. (D) The Secretary may implement this paragraph by instructions or otherwise. (8) Liability, no-fault, and workers’ compensation reporting. (A) After the specified date, an applicable plan must determine whether each claimant, including one with an unresolved claim, is Medicare-entitled and, if so, report the claimant and other information the Secretary requires for coordination and recovery. (B) It must report the claimant’s identity and other specified information. The Secretary must modify the system to permit, but not require, use of Social Security account or health-identification numbers, with possible one-year extensions when privacy or program integrity is threatened. (C) Reporting is due within the time the Secretary sets after settlement, judgment, award, or other payment resolves the claim. (D) “Claimant” includes a person who alleges a physical or mental injury, disease, or illness connected to the incident for which the plan has responsibility. (E) “Applicable plan” includes liability insurance, self-insurance, no-fault insurance, and workers’ compensation laws or plans. (F) The Secretary may share information with applicable plans and may require them to protect it. (G) The Secretary may impose a civil penalty up to $1,000 for each day of noncompliance for each claimant, under the stated procedures, and may obtain information by subpoena. (H) A plan’s reporting duty does not require it to report when it is otherwise prohibited from paying or reporting under law, but it must report when the prohibition ends. (9) Limitations on recovery. The Secretary may compromise, waive, or release recovery claims under rules for amounts owed by a primary plan or claimant. (A) Recovery may be waived when the likely recovery is less than the cost of collection. (B) For liability insurance, the Secretary must calculate one threshold amount each year for certain settlements, judgments, awards, or other payments, using the prior year’s collections and costs; the threshold cannot be less than zero, must be published by November 15 of the preceding year, and may be applied only as the statute provides. For 2014 the Secretary must inform and seek review from the Comptroller General before publication. The publication must include estimated collection costs and the method and data used. (C) For a payment involving ongoing medical-payment responsibility, the calculation includes only cumulative medical payments under this subchapter, excluding workers’ compensation and no-fault payments. (D) Before each year, the Secretary must report to Congress the liability threshold and similar thresholds for workers’ compensation and no-fault cases, including the methods, data, and estimated savings.

(c) Drug products. Part B may not pay for (1) a prescription drug described in section 107(c)(3) of the Drug Amendments of 1962 for which the Secretary has given notice of a hearing on proposed withdrawal because the drug is less than effective for all labeled uses, unless the Secretary has found a compelling medical need; or (2) another drug identical, related, or similar under 21 CFR 310.6 to that drug, unless the Secretary has found a compelling medical need, until the proposed withdrawal order is withdrawn.

(d) Emergency medical conditions. For an item or service that section 1395dd requires to be provided to a Medicare beneficiary, whether it is reasonable and necessary is judged from information available to the treating physician or practitioner when ordered or furnished, including the presenting symptoms or complaint, and not from the principal diagnosis. The Secretary may not consider how often the service was provided before or after the admission or visit.

(e) Excluded individuals or entities. (1) Medicare may not pay for an item or service, other than an emergency item or service, not including items or services furnished in an emergency room of a hospital, furnished (A) by an individual or entity while excluded from the program under the listed sections, or (B) at the direction or prescription of an excluded physician when the furnisher knew or had reason to know of the exclusion after reasonable notice and time. (2) If a beneficiary submits a claim for services by an excluded person or entity and did not know or have reason to know of the exclusion, payment must be made to the extent this subchapter permits. The Secretary must notify the beneficiary. Payment stops for services furnished after the reasonable period set by regulation following that notice.

(f) Home-health utilization guidelines. The Secretary must establish guidelines for deciding whether part A or B may pay home-health expenses consistently with subsection (a)(1)(A), and must implement them through selective postpayment review by intermediaries or otherwise.

(g) Quality-improvement contracts. (1) To make health-care delivery effective, efficient, economical, and high quality, the Secretary must contract with quality-improvement organizations under part B of subchapter XI when making the determinations under subsection (a)(1) and (9). (2) In addition to other available funds, $200,000,000 is appropriated to the Secretary, available until spent, to require multiple such organizations to give skilled nursing facilities infection-control and vaccination-uptake support for preventing or reducing COVID-19, as the Secretary considers appropriate.

(h) Waiver of electronic claims. (1) The Secretary (A) must waive subsection (a)(22) when no electronic submission method exists or the claimant is a small provider or supplier, and (B) may waive it in unusual cases the Secretary finds appropriate. (2) A “small provider of services or supplier” means (A) a provider with fewer than 25 full-time-equivalent employees, or (B) a physician, practitioner, facility, or supplier other than a provider, with fewer than 10 full-time-equivalent employees.

(i) Original research and experimentation. To supplement the Medicare Payment Advisory Commission’s assessment of new and existing medical procedures, the Secretary may conduct or fund original research and experimentation of the type described in section 1395ww(e)(6)(E)(ii) if the Secretary finds: (1) the procedure has too little commercial value to justify commercial research; (2) the research is not the kind an NIH institute, division, or bureau can appropriately conduct; and (3) the procedure could treat a condition more cost-effectively than procedures now used for it.

(j) Nonvoting members and experts. (1) An advisory committee^* advising the Secretary about subsection (a)(1) must ensure a nonvoting member fully participates and receives the information and data given to voting members, except trade-secret information exempt under 5 U.S.C. 552(b)(4) or information the Secretary finds would create a conflict of interest. (2) If the committee creates expert panels by item or service type, a panel may send its recommendation directly to the Secretary without prior approval by the committee or its executive committee.

(k) Dental benefits in group plans. (1) Subject to paragraph (2), a group health plan providing supplemental or secondary coverage to people also entitled to Medicare services may not require a Medicare determination for dental benefits specifically excluded under subsection (a)(12) before deciding the dental claim under the group plan. (2) The plan may require a Medicare determination when the case involves or appears to involve inpatient dental hospital services or dental services expressly covered under this subchapter by the Secretary.

(l) National and local coverage decisions. (1) The Secretary must make public the factors used in national decisions about whether an item or service is reasonable and necessary, and must develop guidance similarly to guidance under section 371(h) of title 21. (2) A national decision request must be decided within six months if it needs neither outside technology assessment nor Medicare Coverage Advisory Committee deliberation, or within nine months if it needs that assessment or deliberation but no clinical trial is requested. (3)(A) By the end of the applicable six- or nine-month period, the Secretary must post a draft proposed decision. (B) The Secretary must allow 30 days for public comments. (C) Within 60 days after comments close, the Secretary must (i) decide finally, (ii) summarize and answer comments, (iii) publish clinical evidence and other data when the decision differs from the Advisory Committee’s recommendation, and (iv) if granting the request, assign and implement a temporary or permanent code, existing or unclassified. (4) For a request not reviewed by the Advisory Committee, the Secretary must consult suitable outside clinical experts. (5)(A) The Secretary must develop a plan to evaluate new local decisions and decide which should be adopted nationally and how to improve consistency. (B) Intermediaries or carriers serving the same area must consult on every new local decision. (C) The Secretary should distribute information about local decisions to reduce duplicated work. (D) A Medicare administrative contractor^* must post a local decision on its website and the Medicare website at least 45 days before it takes effect, including (i) the full decision, (ii) where and when the proposed decision was first made public, (iii) links to the proposal and the contractor’s response to comments, (iv) an evidence summary and source list, and (v) the supporting rationale. (6)(A) “National coverage determination” means the Secretary’s decision whether an item or service is nationally covered under this subchapter. (B) “Local coverage determination” has the meaning in section 1395ff(f)(2)(B).

(m) Routine costs in category-A device trials. (1) For a person entitled to part-A benefits, enrolled in part B, or both, who participates in a category-A clinical trial, the Secretary may not exclude coverage of routine care costs, as the Secretary defines them, under subsection (a)(1). (2) A “category A clinical trial” is a medical-device trial if (A) it tests an experimental or investigational category-A device as defined in the cited regulation, (B) it meets the Secretary’s scientific and ethical criteria, and (C) if begun before January 1, 2010, the Secretary determined the device was intended to diagnose, monitor, or treat an immediately life-threatening disease or condition.

(n) Surety bonds. (1) The Secretary may require an appropriate provider or supplier to continuously provide a bond in the Secretary’s specified form, for at least $50,000 and an amount matching the billing volume. The Secretary may waive this if the provider or supplier has a comparable state-law bond. (2) The covered provider or supplier is one the Secretary selects based on risk and consistently with the bond requirements in sections 1395m(a)(16)(B) and 1395x(o)(7)(C).

(o) Suspending payments during fraud investigations. (1) The Secretary may suspend payments to a provider or supplier while investigating a credible fraud allegation, unless the Secretary finds good cause not to suspend them. (2) The Secretary must consult the Department of Health and Human Services Inspector General about whether the allegation is credible. (3) The Secretary must issue regulations implementing this subsection and the listed Medicare and Medicaid provisions. (4) A fraud-hotline tip, as the Secretary defines it, is not enough by itself to be a credible fraud allegation; additional evidence is required.