Page 18 - Medicare Benefit Policy Manual

insurance coverage, is not viewed as furnishing free services and may therefore receive
program payment.

Medicare regulations permit payment to the following two categories of governmental
providers even though they furnish services free of charge:

• Payment may be made for items and services furnished in or by a participating
State or local Government hospital, including a psychiatric or tuberculosis
hospital, which serves the general community. A psychiatric hospital to which
patients convicted of crimes are committed involuntarily is considered to be
serving the general community if State law provides for voluntary commitment to
the institution. However, payment may not be made for services furnished in or
by State or local hospitals, which serve only a special category of the population,
but do not serve the general community, e.g., prison hospitals.

• Payment may be made for items and services paid for by a State or local
governmental entity and furnished an individual as a means of controlling
infectious diseases or because the individual is medically indigent.

50.3.2 - Application of Exclusion to Nongovernmental Providers,
Physicians and Suppliers
(Rev. 1, 10-01-03)
A3-3153.3.B, HO-260.3.D, B3-2309.4

Payment may not be made for items or services furnished by a nongovernmental
provider, physician or supplier if the charges have been paid for by a government
program other than Medicare, or if the provider, physician, or supplier intends to look to
another government program for payment, unless the payment by the other program is
limited to the Medicare deductible and coinsurance amounts, as it is for certain
individuals covered under TRICARE/CHAMPVA. (See §50.4).

The mere fact that a nongovernmental provider receives government financing does not
mean that the items and services it furnishes are considered paid for by a governmental
entity. However, if a clinic receives government financing earmarked for particular
services to patients (e.g., in the form of a research grant), Medicare may not pay for the
same services.

If an individual has the option of receiving care free of charge at a government provider
or care which is not free at a nongovernment provider, and the individual, chooses the
latter, Medicare payment may be made for the care at the nongovernment provider.
However, items and services authorized by a Federal agency (for example, by the VA at a
nongovernmental hospital) are excluded. (See §50.3.3, below.)

50.3.3 - Examples of Application of Government Entity Exclusion
(Rev. 122, Issued: 04-09-10, Effective/Implementation Date: 07-09-10)