1. (a) Basic rule. Except as provided in paragraph (b) of this section, Medicare does not pay for services that are paid for directly or indirectly by a government entity.

2. (b) Exceptions. Payment may be made for the following:

   1. (1) Services furnished under a health insurance plan established for employees of the government entity.
   2. (2) Services furnished under a title of the Social Security Act other than title XVIII.

   3. (3) Services furnished in or by a participating general or special hospital that—

      1. (i) Is operated by a State or local government agency; and
      2. (ii) Serves the general community.
   4. (4) Services furnished in a hospital or elsewhere, as a means of controlling infectious diseases or because the individual is medically indigent.
   5. (5) Services furnished by a participating hospital or SNF of the Indian Health Service.

   6. (6) Services furnished by a public or private health facility that—

      1. (i) Is not a Federal provider or other facility operated by a Federal agency;
      2. (ii) Receives U.S. government funds under a Federal program that provides support to facilities that furnish health care services;
      3. (iii) Customarily seeks payment for services not covered under Medicare from all available sources, including private insurance and patients' cash resources; and

      4. (iv) Limits the amounts it collects or seeks to collect from a Medicare Part B beneficiary and others on the beneficiary's behalf to:

         1. (A) Any unmet deductible applied to the charges related to the reasonable costs that the facility incurs in providing the covered services;
         2. (B) Twenty percent of the remainder of those charges;
         3. (C) The charges for noncovered services.
   7. (7) Rural health clinic services that meet the requirements set forth in part 491 of this chapter.

[54 FR 41734, Oct. 11, 1989, as amended at 56 FR 2139, Jan. 22, 1991]