[Code of Federal Regulations]

[Title 42, Volume 2]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR403.306]



[Page 46]

 

                         TITLE 42--PUBLIC HEALTH

 

                    CHAPTER IV--CENTERS FOR MEDICARE

                          & MEDICAID SERVICES,

                        DEPARTMENT OF HEALTH AND

                             HUMAN SERVICES

 

PART 403_SPECIAL PROGRAMS AND PROJECTS--Table of Contents

 

      Subpart C_Recognition of State Reimbursement Control Systems

 

Sec. 403.306  Additional requirements for State systems--mandatory 

approval.



    (a) General policy--(1) Mandatory approval. HFCA will approve an 

application for Medicare reimbursement under a State system if the 

system meets all of the requirements of Sec. 403.304 and of paragraph 

(b) of this section.

    (2) Exception. CMS may approve an application if the State system 

meets all of the requirements of Sec. 403.304 but only some of the 

requirements of paragraph (b) of this section.

    (b) Additional requirements--(1) Operation of system. The system 

must--

    (i) Be operated directly by the State or by entity designated under 

State law;

    (ii) Provide for payments to hospitals using a methodology under 

which--

    (A) Prospectively determined payment rates are established; and

    (B) Exceptions, adjustments, and methods for changes in methodology 

are set forth;

    (iii) Provide that a change by the State in the system that has the 

effect of materially changing payments to hospitals can take effect only 

upon 60 days notice to CMS and to the hospitals likely to be materially 

affected by the change and upon CMS's approval of the change.

    (2) Satisfactory assurances--(i) Admissions practice. The State must 

assure that the operation of the system will not result in any change in 

hospital admission practices that result in--

    (A) A significant reduction in the proportion of patients receiving 

hospital services covered under the system who have no third-party 

coverage and who are unable to pay for hospital services;

    (B) A significant reduction in the proportion of individuals 

admitted to hospitals for inpatient hospital services for which payment 

is less, or is likely to be less, than the anticipated charges for or 

cost of the services;

    (C) A refusal to admit patients who would be expected to require 

unusually costly or prolonged treatment for reasons other than those 

related to the appropriateness of the care available at the hospital; or

    (D) A refusal to provide emergency services to any person who is in 

need of emergency services, if the hospital provides the services.

    (ii) Consultation with local government officials. The State must 

provide documentation that it has consulted with local government 

officials concerning the impact of the system on publicly owned or 

operated hospitals.