[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR433.54]

[Page 74-75]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                  HEALTH AND HUMAN SERVICES (CONTINUED)
 
PART 433_STATE FISCAL ADMINISTRATION--Table of Contents
 
     Subpart B_General Administrative Requirements State Financial 
                              Participation
 
Sec. 433.54  Bona fide donations.

    (a) A bona fide donation means a provider-related donation, as 
defined in Sec. 433.52, made to the State or unit of local government, 
that has no direct or indirect relationship, as described in paragraph 
(b) of this section, to Medicaid payments made to--
    (1) The health care provider;
    (2) Any related entity providing health care items and services; or
    (3) Other providers furnishing the same class of items or services 
as the provider or entity.
    (b) Provider-related donations will be determined to have no direct 
or indirect relationship to Medicaid payments if those donations are not 
returned to the individual provider, the provider class, or related 
entity under a hold harmless provision or practice, as described in 
paragraph (c) of this section.
    (c) A hold harmless practice exists if any of the following applies:
    (1) The amount of the payment received (other than under title XIX 
of the Act) is positively correlated either to the amount of the 
donation or to the difference between the amount of the donation and the 
amount of the payment received under the State plan;
    (2) All or any portion of the payment made under Medicaid to the 
donor, the provider class, or any related entity, varies based only on 
the amount of the total donation received; or
    (3) The State or other unit of local government receiving the 
donation provides for any payment, offset, or waiver that guarantees to 
return any portion of the donation to the provider.
    (d) CMS will presume provider-related donations to be bona fide if 
the voluntary payments, including, but not limited to, gifts, 
contributions, presentations or awards, made by or on behalf of 
individual health care providers to

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the State, county, or any other unit of local government does not 
exceed--
    (1) $5,000 per year in the case of an individual provider donation; 
or
    (2) $50,000 per year in the case of a donation from any health care 
organizational entity.
    (e) To the extent that a donation presumed to be bona fide contains 
a hold harmless provision, as described in paragraph (c) of this 
section, it will not be considered a bona fide donation. When provider-
related donations are not bona fide, CMS will deduct this amount from 
the State's medical assistance expenditures before calculating FFP. This 
offset will apply to all years the State received such donations and any 
subsequent fiscal year in which a similar donation is received.