Application of Exclusion to State and Local Government

50.3.1 - Application of Exclusion to State and Local Government Providers (Rev. 1, 10-01-03) A3-3153.3.A, HO-260.3.C Except for the two categories of facilities referred to below, payment may not be made for items and services which a State or local government facility furnishes free of charge, i.e., without expectation of payment from any source and without regard to the individuals’ ability to pay. A facility which reduces or waives its charges for patients unable to pay, or charges patients only to the extent of their Medicare and other health 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.