---
kind: "section"
citation: "42 C.F.R. § 419.62"
title: "42"
number: "419.62"
heading: "Transitional pass-through payments: General rules."
url: "https://uscodex.org/cfr/42/419.62"
---

# §419.62. Transitional pass-through payments: General rules.

- (a) **General.** CMS provides for additional payments under §§ [419.64](/cfr/42/419.64.md) and [419.66](/cfr/42/419.66.md) for certain innovative medical devices, drugs, and biologicals.
- (b) **Budget neutrality.** CMS establishes the additional payments under §§ [419.64](/cfr/42/419.64.md) and [419.66](/cfr/42/419.66.md) in a budget neutral manner.
- (c) **Uniform prospective reduction of pass-through payments.**
  - (1) If CMS estimates before the beginning of a calendar year that the total amount of pass-through payments under §§ [419.64](/cfr/42/419.64.md) and [419.66](/cfr/42/419.66.md) for the year would exceed the applicable percentage (as described in [paragraph (c)(2)](#c-2) of this section) of the total amount of Medicare payments under the outpatient prospective payment system. CMS will reduce, pro rata, the amount of each of the additional payments under §§ [419.64](/cfr/42/419.64.md) and [419.66](/cfr/42/419.66.md) for that year to ensure that the applicable percentage is not exceeded.
  - (2) **The applicable percentages are as follows—**
    - (i) For a year before CY 2004, the applicable percentage is 2.5 percent.
    - (ii) For 2004 and subsequent years, the applicable percentage is a percentage specified by CMS up to (but not to exceed) 2.0 percent.
- (d) **CY 2002 incorporated amount.** For the portion of CY 2002 affected by these rules, CMS incorporated 75 percent of the estimated pass-through costs (before the incorporation and any pro rata reduction) for devices into the procedure APCs associated with these devices.

## Notes

### Amendments

[66 FR 55856, 55865, Nov. 2, 2001; 67 FR 9568, Mar. 1, 2002]

### Source

Source: 66 FR 55856, Nov. 2, 2001, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 1302, 1395l(t), and 1395hh.

### Source

Source: 65 FR 18542, Apr. 7, 2000, unless otherwise noted.

### Amendments

[66 FR 55856, 55865, Nov. 2, 2001; 67 FR 9568, Mar. 1, 2002]