42 CFR § 412.89 - Payment adjustment for certain replaced devices.

---
identifier: "/us/cfr/t42/s412.89"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "42 CFR § 412.89 - Payment adjustment for certain replaced devices."
title_number: 42
title_name: "Public Health"
section_number: "412.89"
section_name: "Payment adjustment for certain replaced devices."
chapter_name: "CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES"
subchapter_number: "B"
subchapter_name: "MEDICARE PROGRAM"
part_number: "412"
part_name: "PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "42 U.S.C. 1302 and 1395hh."
regulatory_source: "50 FR 12741, Mar. 29, 1985, unless otherwise noted."
cfr_part: "412"
---


# 412.89 Payment adjustment for certain replaced devices.

(a) *General rule.* For discharges occurring on or after October 1, 2007, the amount of payment for a discharge described in paragraph (b) of this section is reduced when—

(1) A device is replaced without cost to the hospital;

(2) The provider received full credit for the cost of a device; or

(3) The provider receives a credit equal to 50 percent or more of the cost of the device.

(b) *Discharges subject to payment adjustment.* (1) Payment is reduced in accordance with paragraph (a) of this section only if the implantation of the device determines the DRG assignment.

(2) CMS lists the DRGs that qualify under paragraph (b)(1) of this section in the annual final rule for the hospital inpatient prospective payment system.

(c) *Amount of reduction.* (1) For a device provided to the hospital without cost, the cost of the device is subtracted from the DRG payment.

[72 FR 47411, Aug. 22, 2007]