For Medicare purposes, the terms “interns” and “residents” include physicians participating in approved postgraduate training programs and physicians who are not in approved programs but who are authorized to practice only in a hospital setting (e.g., unlicensed graduates of foreign medical schools). As a general rule, services of interns and residents are reimbursed on a reasonable cost basis by the Part A intermediary. However, the services of an intern or resident are reimbursable by the carrier on a reasonable charge basis as physicians' services when the individual: (1) renders the services off provider premises (however, see also B. below, regarding certain “moonlighting” interns and residents); (2) is not compensated by a provider; and (3) is fully licensed to practice medicine by the State in which the services are performed.

Services a moonlighting intern or resident performs in the outpatient department or emergency room of the hospital which has the training program in which moonlighting intern or resident is participating are reimbursable only on a Part B reasonable cost basis (i.e., all services performed in the hospital with the training program are treated as part of the training program.) In addition, any services a “moonlighting” intern or resident furnishes in the hospital other than the one with approved training program under which the intern or resident is in training are reimbursable on a Part B reasonable cost basis if the intern or resident is paid for such services on a salary or other fixed compensation basis by the hospital in which such services are rendered (or by another hospital). However, such services are reimbursable by the carrier on a reasonable charge basis as physicians' services if the intern or resident is not so compensated, the intern or resident is fully licensed to practice medicine in the State in which the services are performed, and the services are performed under the terms of a written contract or agreement and can be separately identified from those services that are required as part of the training program.