Physician and Other Part B Services Furnished Directly by the

130 - Physician and Other Part B Services Furnished Directly by the HMO/CMP (Rev. 4, 10-01-01) Amounts paid by HMO/CMPs to physicians who are employees of the HMO/CMP or a related facility by common ownership or control will be found reasonable to the extent they commensurate with amounts paid for similar services performed by similar physicians in the same or similar locality. The amount paid (e.g., salaries, capitation, fixed sum, incentive payments) as well as fringe benefits will be compared in the aggregate to that received by physicians generally in the community and amounts received by physicians in similar organizations. Compensation paid by the HMO/CMP for personal services of physicians (e.g., salaries, wages, incentive payments, fringe benefits) must be distinguished from payments to physicians for nonpersonal services (e.g., expenses attributable to facilities, equipment, support personnel, supplies), in determining whether compensation is allowable. Physician compensation may take various forms, but the aggregate compensation must be reasonable in relation to the services personally furnished. If aggregate physician compensation costs exceed what is normally incurred, the excess is not considered reasonable. Costs incurred for other Part B items and services, including payments to physicians for nonpersonal services, will be found to be reasonable to the extent they: • Are commensurate with amounts paid for similar items and services furnished by similar personnel and suppliers in the same or similar locality; • Do not exceed those that a prudent and cost conscious buyer would incur to purchase those services.