Medicare Program; Changes in Provider Agreement Regulations Related to Federal Employees Health Benefits

This final rule makes two changes to Medicare's provider agreement regulations concerning payment for inpatient hospital services furnished to retired enrollees of fee-for-service Federal Employees Health Benefits (FEHB) plans who do not have Medicare Part A coverage. The first change specifies that payment for inpatient hospital services furnished to retired Federal workers age 65 or older who are enrolled in a fee-for-service FEHB plan but are not covered under Medicare Part A is limited to a payment amount that approximates the Medicare diagnosis-related group payment rates established under Medicare's inpatient hospital prospective payment system. The second change specifies that HCFA will consider termination or nonrenewal of a hospital's provider agreement with Medicare if a hospital knowingly and willfully fails to accept, on a repeated basis, the Medicare rate as payment in full for inpatient hospital services provided to a retired Federal worker who is enrolled in a fee-for- service FEHB plan and who does not have Medicare Part A coverage. This final rule implements section 7002(f) of the Omnibus Budget Reconciliation Act of 1990.