[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR403.318]

[Page 47]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 403--SPECIAL PROGRAMS AND PROJECTS--Table of Contents
 
      Subpart C--Recognition of State Reimbursement Control Systems
 
Sec. 403.318  Approval of State systems.

    (a) Approval agreement. If CMS approves a State system, a written 
agreement will be executed between CMS and the Chief Executive Officer 
of the State. The agreement must incorporate any terms of the State's 
application for approval of the system as agreed to by the parties and, 
as a minimum, must contain provisions that require the following:
    (1) The system is operated directly by the State or an entity 
designated by State law.
    (2) For purposes of the Medicare program, the State's system applies 
only to Medicare payments for inpatient, and if applicable, outpatient 
hospital services.
    (3) The system conforms to applicable Medicare law and regulations 
other than those relating to the amount of reimbursement for inpatient 
hospital services, or for inpatient and outpatient services, whichever 
the State system covers. Applicable regulations include, for example, 
those describing Medicare benefits and entitlement requirements for 
program beneficiaries, as explained in parts 406 and 409 of this 
chapter; the requirements at part 405, subpart J of this chapter 
specifying conditions of participation for hospitals; the requirements 
at part 405, subparts A, G, and S of this chapter on Medicare program 
administration; and all applicable fraud and abuse regulations contained 
in titles 42 and 45 of the CFR.
    (4) The State must obtain CMS's approval of the State's reporting 
forms and of provider cost reporting forms or other forms that have not 
been approved by CMS but that are necessary for the collection of 
required information.
    (b) Effective date. An approved State system may not be effective 
earlier than the date of the approval agreement, which may not be 
retroactive.