Medicare program; health care prepayment plans--Health Care Financing Administration. Final rule.

Prepaid health care organizations that furnish or arrange to furnish medical and other health services under Medicare Part B may elect to receive Medicare reimbursement on either a reasonable cost or a reasonable charge basis. These regulations amend the rules governing payment under both methods. The regulations provide that reasonable cost reimbursement to such plans will be based on reimbursement principles similar, to the extent possible, to those for Health maintenance Organizations (HMOs) reimbursed on a reasonable cost basis. Previously, the reimbursement rules for the two types of prepayment organizations were substantially different. The regulations require that prepayment organizations that elect to be paid on a reasonable charge basis be paid on the same basis as other suppliers, non-hospital clinics and physicians. Previously, prepayment plans were permitted a number of alternative methodologies for calculating reasonable charges (such as charges related to cost, reasonable charge payment on a non-bill basis, and so forth), which will be eliminated under these regulations. The purpose of these regulations is to clarify and simplify payment policy, and to assure consistent treatment of prepayment plans and other organizations and suppliers of services under Medicare.