The physical exam applies to beneficiaries whose coverage period under Medicare Part B began on or after Jan. 1, 2005, and it must be performed within the first six months of the beneficiary's enrollment. The regulations do not waive the coinsurance or Part B deductible for the initial exam. The beneficiary pays the usual coinsurance, and the payment for the exam will be applied to the deductible ($110 for 2005), if the deductible has not been met. Hospitals and physicians will be paid separately for their services.