SSR 68-26: Section 1862(a)(3).—Hospital Insurance Benefits and Supplementary Medical Insurance Benefits—Services Furnished Prisoners in State and Local Governmental Hospitals Servicing the Public Generally
20 CFR 405.312(c)
Held, section 405.312(c) of Social Security Administration Regulations No. 5 (20 CFR 405.312(c)), which authorizes payment under title XVIII of the Act for items or services furnished an individual in or by a participating State or local governmental hospital which serves the general community, is not applicable to items or services furnished a prisoner, since such prisoners are public charges who cannot incur expenses which are reimbursable under title XVIII of the Act.
Section 1862(a)(3) of the Social Security Act provides, in part, that no payment may be made under title XVIII of the Act for any expenses incurred for items or services "which are paid for directly or indirectly by a governmental entity * * * except in such cases as the Secretary may specify." Pursuant to authority derived from this section, the Secretary of Health, Education, and Welfare has authorized by regulation an exception permitting participating State or local governmental hospitals which serve the general community to receive payment for covered services furnished to individuals, regardless of the restrictions in section 1862(a)(3).
Section 405.312 of Social Security Administration Regulations No. 5 (20 CFR 405.312) provides, in part, as follows:
Payment may not be made under title XVIII of the Act for expenses incurred for items or services that are paid for directly or indirectly by a governmental entity, except:
* * * * * *
(c) Payment made be made for items and services furnished an individual in or by a participating hospital operated by a State or local governmental entity, where such hospital is a general or special hospital serving the general community, including a mental or tuberculosis hospital or a hospital for treatment of infectious disease.
A question has arisen whether the foregoing provision of the regulations authorizes payment under title XVIII of the Act for otherwise covered items and services which are provided a prisoner in a participating hospital which serves the general community and is operated by a State or local government entity.
One objective of the exception specified by the Secretary in section 405.312(c) of the regulations was to make medical services available to the elderly indigent without requiring them to submit to a test of their ability to pay. In addition, a number of States provide free medical treatment to victims of tuberculosis and other communicable diseases, regardless of their ability to pay, so as to encourage all persons with these conditions to seek treatment with the knowledge that they will not have to pay for this treatment. In this way, the State protects all its residents against the danger of the spread of communicable diseases. It is felt that these programs further the objectives of title XVIII and that permitting payment for ages persons treated by the States under these programs is a desirable exercise of the Secretary's discretion. The exception thus appears to recognize the title XVIII program responsibility to encourage public health programs.
However, the intention of section 405.312(c) of the regulations was not to create an exception relieving the States of their obligation to maintain prisoners; the specification of such an exception would not be within the authority granted the Secretary because section 1862(a)(2) controls situations where individuals (e.g., prisoners) have no legal obligation to pay for the items and services furnished to them. The authorities responsible for the custody of the prisoners are obligated to provide for their needs as a cost attendant upon their confinement in custody. However, a prisoner is not a recipient of a public bounty; he is a public charge. He has no right to elect the method of procuring care, whereas the authorities who hold him must provide this care because he is deprived of choice of action. Since he cannot obtain his own medical care and treatment and is not chargeable with the expense of such care and treatment, he cannot incur expenses for which reimbursement could be made under title XVIII of the Act.
Accordingly, it is held that section 405.312(c) of Regulations No. 5, which authorizes payment under title XVIII of the Act for items or services furnished an individual by a participating State or local governmental hospital which serves the general community, is not applicable to items or services furnished prisoners.