BASIC (09-06)

Citations:

Regulations 20 CFR 404.1624 and 404.1519k

A. Policy – fee schedule rates

Each State determines its rates of payment for purchasing medical or other services necessary to make determinations of disability.

• Rates may not exceed the highest rate paid by Federal or other agencies in the State for the same or similar type services.

• States must adhere to the cost principles and standards in:

  • Cost Principles for State Governments, Regulations 2 CFR 225.

  • DDS Financial Management, DI 39506.001.

B. Procedure – DDS responsibilities

• Maintain documentation to support the rates of payment it uses.

• Provide documentation and obtain RO approval when fee schedules increase. The request could include documentation of the difficulties in obtaining the necessary testing/source, specific proposed fees with an explanation of how those fees were derived, and an analysis of projected change in annual medical costs.

C. Policy – laboratory fees

If a consultative examination (CE) provider bill (or a request for payment for a provider's services) includes a charge for a laboratory test for which payment may be made, the amount payable is determined as follows.

1. If the bill (or payment request) indicates the test was personally performed or supervised by the provider who submitted the bill (or by another provider with whom that provider shares his/her practice), the payment will be based on the provider's usual and customary charge for the test or the rates of payment in the State’s fee schedule, whichever is the lesser amount.

2. If the bill (or payment request) indicates the test was performed by an independent laboratory, the payment will be based on the billed cost of the independent laboratory or the State’s fee schedule, whichever is the lesser amount. The provider may be paid a nominal payment for obtaining laboratory samples, e.g., drawing blood, if the provider bills for the service. However, the total reimbursement may not exceed the State’s fee schedule.

NOTE: States are responsible for monitoring and overseeing the rates of payment it uses to ensure compliance with DI 39545.600C.1. and DI 39545.600C.2.

D. Policy – negotiated rates

Each State should be cost-efficient and make every attempt to negotiate fees below the highest allowable rates.

• DDS should not enter into any negotiated agreement that would result in fee payments in excess of the maximum amount of their fee schedule without obtaining prior written approval from the RO.

• DDSs are responsible for maintaining oversight of all CE providers to ensure compliance with the CE procedures and fee schedules.