42 CFR § 417.532 - General considerations.
(a)Conditions and criteria for payment.
(i) Proper and necessary;
(ii) Reasonable in amount; and
(3) In judging whether costs are reasonable, CMS applies the weighted average of the AAPCCs of each class of the HMO's or CMP's Medicareenrollees (as defined in § 417.582) for the HMO's or CMP's geographic area as an absolute limitation on the total amount payable.
(b)Method and amount of payment to the HMO or CMP.
(2)CMS adjusts the interim per capita rate as necessary during the contract period and makes final adjustments at the end of the contract period.
(3) In determining the amount due the HMO or CMP, CMS deducts from the reasonable cost actually incurred by the HMO or CMP for covered services furnished to its Medicare enrollees, an amount equal to the actuarial value of the applicable Medicare Part A and Part B deductible and coinsurance amounts that would have applied to the covered services for which payment is being made if these enrollees had not enrolled in the HMO or CMP or another HMO or CMP.
(d)Notice of election. The election must be made in writing before the beginning of the contract period and is binding for that period.
(3) Ensure that providers maintain and furnish appropriate documentation of physician certification and recertification, to the extent required under subpart B of part 424 of this chapter; and
(4) Carry out any other procedures required by CMS.
(f)Review of HMO's or CMP's bill processing capabilities. If the HMO or CMP elects to pay providers directly, CMS determines whether the HMO or CMP has the experience and capability to carry out the responsibilities specified in paragraph (e) of this section in an efficient and effective manner.
(g)Direct payment by CMS.
(1) If the HMO or CMP elects to have CMS pay for provider services, CMS pays each provider on a reasonable cost basis or under the PPS system, whichever is appropriate for the particular provider under part 412 or part 413 of this chapter.
(2) In computing the Medicarepayment to the HMO or CMP, CMS deducts these payments and any other payments made by the Medicare intermediary or carrier on behalf of the HMO or CMP (such as payment for emergency or urgently needed services under § 417.558).
(h)Payment for services furnished to Medicare beneficiaries not enrolled in the HMO or CMP.CMS pays the HMO or CMP for services it furnishes to Medicare beneficiaries who are not its enrollees through the HMO's or CMP's Medicare intermediary or carrier, as appropriate.