42 CFR 510.505 - Distribution arrangements.

§ 510.505 Distribution arrangements.
Link to an amendment published at 82 FR 620, Jan. 3, 2017.
This amendment was delayed until Oct. 1, 2017, at 82 FR 14464, Mar. 21, 2017.
This amendment was further delayed until Jan. 1, 2018, at 82 FR 22895, May 19, 2017.


(1) A PGP that has entered into a collaborator agreement with a participant hospital may distribute all or a portion of any gainsharing payment it receives from the hospital only in accordance with a distribution arrangement.

(2) All distribution arrangements must comply with the provisions of paragraph (b) of this section and all applicable laws and regulations, including the fraud and abuse laws.


(1) All distribution arrangements must be in writing and signed by the PGP and practice collaboration agent.

(2) Participation in a distribution arrangement must be voluntary and without penalty for nonparticipation.

(3) The distribution arrangement must require the practice collaboration agent to comply with the requirements set forth in this part.

(4) The opportunity to receive a distribution payment must not be conditioned directly or indirectly on the volume or value of referrals or business otherwise generated by, between or among the participant hospital, PGP, other CJR collaborators, practice collaboration agents, and any individual or entity affiliated with a participant hospital, CJR collaborator, or practice collaboration agent.

(5) Methodologies for determining distribution payments must not directly account for volume or value of referrals, or business otherwise generated, by, between or among the participant hospital, PGP, other CJR collaborators, practice collaboration agents, and any individual or entity affiliated with a participant hospital, CJR collaborator, or practice collaboration agent.

(6) A practice collaboration agent is eligible to receive a distribution payment only if the PGP billed for an item or service furnished by the practice collaboration agent to a CJR beneficiary during a CJR episode that occurred during the calendar year in which the participating hospital accrued the internal cost savings or earned the reconciliation payment that comprise the gainsharing payment made to the PGP.

(7) When a PGP receives a gainsharing payment from a participant hospital in accordance with a sharing arrangement, all monies contained in such a gainsharing payment must be shared only with the physician or nonphysician practitioners that are PGP members that furnished a service to a CJR beneficiary during an episode of care in the calendar year from which the NPRA, as that term is defined in this part, or internal cost savings was generated, either or both of which are the only permitted sources of funds for a gainsharing payment.

(8) The total amount of distribution payments for a calendar year paid to a practice collaboration agent must not exceed 50 percent of the total Medicare approved amounts under the Physician Fee Schedule for services billed by the PGP and furnished by the practice collaboration agent to the participant hospital's CJR beneficiaries during a CJR episode.

(9) With respect to the distribution of any gainsharing payment received by a PGP, the total amount of all distribution payments must not exceed the amount of the gainsharing payment.

(10) All distribution payments must be made through EFT.

(11) The practice collaboration agents must retain their ability to make decisions in the best interests of the patient, including the selection of devices, supplies, and treatments.

(12) The distribution arrangement must not -

(i) Induce a practice collaboration agent to reduce or limit medically necessary services to any Medicare beneficiary; or

(ii) Reward the provision of items and services that are medically unnecessary.

(13) The PGP must maintain contemporaneous documentation regarding distribution arrangements in accordance with § 510.500(e), including the relevant written agreements, the date and amount of any distribution payment, the identity of each practice collaboration agent who received a distribution payment, and a description of the methodology and accounting formula for determining the amount of any distribution payment.

(14) The PGP may not enter into a distribution arrangement with any member of the PGP that has a collaborator agreement in effect with a participant hospital.

Title 42 published on 07-Jun-2018 03:52

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 42 CFR Part 510 after this date.

  • 2018-06-08; vol. 83 # 111 - Friday, June 8, 2018
    1. 83 FR 26604 - Medicare Program; Changes to the Comprehensive Care for Joint Replacement Payment Model (CJR): Extreme and Uncontrollable Circumstances Policy for the CJR Model
      GPO FDSys XML | Text
      DEPARTMENT OF HEALTH AND HUMAN SERVICES, Centers for Medicare & Medicaid Services
      Final rule.
      Effective July 9, 2018.
      42 CFR Part 510