Subchapter B. HOSPITALS AND HOSPITAL UNITS UNDER COST
REIMBURSEMENT PRINCIPLES

§ 1163.401. Policy.

 (a)  This subchapter applies to freestanding medical rehabilitation hospitals, drug and alcohol rehabilitation hospitals and drug and alcohol rehabilitation and medical rehabilitation units of general hospitals.

 (b)  The MA Program provides payment for medically necessary covered inpatient services provided to eligible recipients by providers of inpatient hospital care enrolled in the MA Program. Payment for these services is subject to this chapter and Chapter 1101 (relating to general provisions).

   The provisions of this §  1163.401 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

 The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

   Certified day—A day of inpatient hospital care approved by the Department, under the limits established in this chapter.

   Day of inpatient hospital care—Room, board and professional services furnished to a patient on a continuous 24-hour-a-day basis in a semiprivate room of a hospital. The term includes items and services ordinarily furnished by the hospital for the care and treatment of inpatients provided in an institution other than one maintained primarily for treatment and care of patients with tuberculosis or mental disease.

   Drug and alcohol rehabilitation hospital—A freestanding entity which meets the definition of a hospital under this section, and is licensed by the Department of Health to provide drug and alcohol treatment and rehabilitation.

   Drug and alcohol rehabilitation unit—A unit of an acute care general hospital which is licensed by the Department of Health to provide drug and alcohol treatment and rehabilitation.

   Hospital—A facility licensed as a hospital under 28 Pa. Code Part IV, Subpart B (relating to general and special hospitals) which provides equipment and services primarily for inpatient care to persons who require treatment for injury, illness, disability or pregnancy. The term does not include public or private psychiatric hospitals, general nursing facilities, hospital-based nursing facilities, county-operated nursing facilities, intermediate care facilities for the mentally retarded, psychiatric transitional facilities or special rehabilitation nursing facilities.

   Inpatient hospital services—Services other than those provided by an institution for tuberculosis or mental diseases which are ordinarily furnished in a hospital for the care and treatment of inpatients, furnished under the direction of a licensed physician, dentist, podiatrist or nurse-midwife.

   Institutionalized individual—A person who is detained or confined under one of the following:

     (i)   A civil or criminal statute in a correctional, rehabilitative or mental retardation facility, psychiatric hospital or other facility for the care and treatment of mental illness or mental retardation.

     (ii)   Voluntary commitment in a psychiatric hospital, mental retardation facility or other facility for the care and treatment of mental illness or mental retardation.

   Medical rehabilitation hospital—A freestanding entity which meets the definition of a hospital under this section, and participates in the Medicare Program as an excluded rehabilitation hospital or, for children’s hospitals only, meets the Medicare requirements for an excluded rehabilitation hospital in 42 CFR 412.23(b) (relating to excluded hospitals classifications).

   Medical rehabilitation unit—A distinct part unit of a general hospital which: is recognized as an excluded rehabilitation unit under the Medicare Program; has formally applied to Medicare for exclusion from the prospective payment system and is undergoing the 12-month evaluation period; or, for the children’s hospitals only, would meet the Medicare definition of excluded rehabilitation unit if the unit chose to apply for Medicare exclusion. For the purposes of this subchapter, units that are organized primarily for the treatment of burns are not included, but will continue to be reimbursed subject to Subchapter A and Chapter 1101 (relating to acute care general hospitals under the prospective payment system; and general provisions).

   Patient pay amount—Income or assets that a recipient has available to meet the cost of medical care as determined by the CAO. The recipient, not the MA Program, pays this amount toward the cost of care.

   Rehabilitation hospital—A hospital which meets the definition of either a drug and alcohol rehabilitation hospital or a medical rehabilitation hospital under this section.

   Therapeutic leave—A period of absence from the hospital related to the treatment of an individual’s illness.

   The provisions of this §  1163.402 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.402 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended June 16, 1989, effective immediately and applies retroactively to July 1, 1988, 19 Pa.B. 2563; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181858) to (181860).

SCOPE OF BENEFITS

§ 1163.421. Scope of benefits for the categorically needy.

 Categorically needy recipients are eligible for medically necessary inpatient hospital services, provided by participating general or rehabilitation hospitals and covered by the MA Program subject to the conditions and limitations established in this chapter and Chapter 1101 (relating to general provisions).

 Medically needy recipients are eligible for medically necessary inpatient hospital services, provided by participating general or rehabilitation hospitals and covered by the MA Program subject to the conditions and limitations established by this chapter and Chapter 1101 (relating to general provisions).

 State Blind Pension recipients are not eligible for inpatient hospital services unless the recipient is also categorically needy or medically needy.

 General Assistance recipients, age 21 to 65, whose MA benefits are funded solely by State funds, are eligible for medically necessary basic health care benefits as defined in Chapter 1101 (relating to general provisions). See §  1101.31(e) (relating to scope).

   The provisions of this §  1163.424 adopted December 11, 1992, effective January 1, 1993, 22 Pa.B. 5995.

PROVIDER PARTICIPATION

§ 1163.441. General participation requirements.

 (a)  In addition to the participation requirements established in Chapter 1101 (relating to general provisions), a cost reimbursed provider shall:

   (1)  Be licensed by the Department of Health.

   (2)  Have in effect a utilization review plan approved by Medicare or, for providers not participating in Medicare, a utilization review plan approved by the Office of Medical Assistance Programs. For a utilization review plan to be approved by the Office of Medical Assistance Programs, it shall meet the requirements in §  1163.473 (relating to hospital utilization review plan).

 (b)  Out-of-State rehabilitation hospitals furnishing inpatient hospital care to Commonwealth recipients shall:

   (1)  Be Medicare certified, or certified by the appropriate agency of the state in which the hospital is located as meeting standards comparable to Medicare or be certified by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), the American Osteopathic Association (AOA) or the Commission on Accreditation of Rehabilitation Facilities (CARF).

   (2)  Be currently participating in the Medicaid Program of the state in which the hospital is located.

   (3)  Formally enroll in the MA Program and sign a provider agreement.

 (c)  The Department reserves the right to refuse to enter into a provider agreement with a licensed hospital or a distinct part thereof if it determines that it is in the Department’s best interests to do so.

   The provisions of this §  1163.441 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1).)

 (a)  Only the following types of providers are eligible to be reimbursed under this subchapter:

   (1)  Medical rehabilitation hospitals that fully comply with the Medicare regulations at 42 CFR 412.23(b) (relating to excluded hospitals: classifications).

   (2)  Distinct part drug and alcohol rehabilitation units of general hospitals that meet the requirements set forth in subsection (b).

   (3)  Drug and alcohol rehabilitation hospitals that meet the requirements set forth in subsection (d).

   (4)  Medical rehabilitation units of general hospitals that meet the requirements in subsection (e).

 (b)  To be considered a drug and alcohol rehabilitation unit for MA purposes, the unit shall:

   (1)  Be part of a hospital enrolled in the MA Program.

   (2)  Meet the criteria of a distinct part unit as set forth in subsection (c).

   (3)  Be approved by the Department of Health, Office of Drug and Alcohol Programs to provide drug and alcohol treatment and rehabilitation.

   (4)  Be enrolled in the MA Program as a distinct part drug and alcohol treatment/rehabilitation unit.

 (c)  To qualify as a distinct part unit for MA purposes, the unit shall:

   (1)  Have written admission criteria that are applied uniformly to both MA patients and non-MA patients.

   (2)  Have admission and discharge records that are separately identified from those of the hospital in which it is located and are readily available.

   (3)  Have policies specifying that necessary clinical information is transferred to the unit when a patient of the hospital is transferred to the unit.

   (4)  Have utilization review standards applicable for the type of care offered in the unit.

   (5)  Have beds physically separate from; that is, not commingled with the hospital’s other beds.

   (6)  Be treated as a separate cost center for cost finding and apportionment purposes.

   (7)  Use an accounting system that properly allocates costs.

   (8)  Maintain adequate statistical data to support the basis of allocation.

   (9)  Report its costs in the hospital’s cost report covering the same fiscal period and using the same method of apportionment as the hospital.

 (d)  For a drug and alcohol rehabilitation hospital to be eligible for reimbursement under this subchapter, the hospital shall:

   (1)  Be enrolled in the MA Program.

   (2)  Be approved by the Department of Health to provide inpatient drug and alcohol rehabilitation services.

   (3)  Have treated, during its most recent 12-month cost reporting period, an inpatient population of which at least 75% required treatment for drug or alcohol abuse.

 (e)  To be considered a medical rehabilitation unit for MA purposes, the unit shall:

   (1)  Be part of a hospital enrolled in the MA Program.

   (2)  Meet the criteria of a distinct part unit in subsection (c).

   (3)  Be enrolled or have applied for enrollment in the Medicare Program as an excluded rehabilitation unit, unless the unit is located in a non-Medicare participating children’s hospital in which case the unit shall be able to meet the Medicare rehabilitation unit criteria, but will not be required to enroll in the Medicare Program.

   (4)  Be enrolled in the MA Program as a distinct part medical rehabilitation unit.

   (5)  Be certified by the Commission on Accreditation of Rehabilitation Facilities (CARF) or the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and if certified by JCAHO, also be certified under JCAHO rehabilitation standards.

   The provisions of this §  1163.442 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.442 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended October 9, 1986, effective retroactively to July 1, 1984, 16 Pa.B. 3828; amended June 16, 1989, effective immediately and applies retroactively to July 1, 1988, 19 Pa.B. 2563; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917. Immediately preceding text appears at serial pages (177190) to (177191) and (150151) to (150152).

 In addition to the ongoing responsibilities established in Chapter 1101 (relating to general provisions), and as a condition of continued participation in the MA Program, rehabilitation hospitals and those general hospitals providing distinct part unit services that are reimbursed under this subchapter shall comply with the following:

   (1)  Maintain transfer agreements with skilled nursing and intermediate care facilities, private psychiatric hospitals, and rehabilitation hospitals, for the prompt and appropriate transfer of patients who no longer need acute inpatient hospital care. Rehabilitation hospitals need not maintain agreements with each other.

   (2)  Retain complete, accurate and auditable medical and fiscal records for 4 years for all MA patients under Chapter 1101.

   (3)  Furnish to the Department or its agents, Federal and State auditors, auditable copies of patient records and fiscal records upon request under Chapter 1101.

   (4)  For those hospitals not participating in Medicare, submit to the Office of MA for review and approval, details of any changes to the hospital’s utilization review system, including revisions to the utilization review plan, within 30 days of the date of the change.

   (5)  Hospitals being reimbursed for distinct part unit services shall keep separate patient statistics and fiscal records on the cost of, and charges for, services provided to MA patients in each distinct part unit being reimbursed under this subchapter.

   The provisions of this §  1163.443 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

PAYMENT FOR COST REIMBURSED HOSPITAL SERVICES

§ 1163.451. General payment policy.

 (a)  The payment policy established in this section and § §  1163.452—1163.458 applies to cost reimbursed inpatient services provided by participating hospitals. The Department will reimburse hospitals for the allowable costs they incur in providing compensable cost reimbursed services to MA recipients. As a condition of payment, those services shall meet the requirements of, and be provided within, the limitations in this subchapter and Chapter 1101 (relating to general provisions). The Department will assume responsibility for payment only after other possible sources of payment are exhausted.

 (b)  The Department will reimburse hospitals for cost items that it determines are allowable under §  1163.453 (relating to allowable and nonallowable costs).

 (c)  Prior to a settlement based on audited costs and charges, the Department will pay hospitals an interim per diem rate for inpatient cost reimbursed services provided to MA recipients under §  1163.452(a) (relating to payment methods and rates).

 (d)  A final settlement will be made after the hospital’s cost report has been audited by the Department of the Auditor General. The final settlement is subject to §  1163.452(c).

 (e)  The hospital shall submit invoices to the Department in accordance with the instructions in the Provider Handbook.

 (f)  The readmission of a patient to a hospital within 24 hours of the patient’s discharge from the same hospital is not considered a new admission for MA purposes. It is considered a continuation of the original admission.

 (g)  Payment for preadmission laboratory tests, radiology services and other diagnostic services provided to patients admitted to the hospital will be included in the payment for inpatient services. The hospital may not submit a separate bill for these services. If preadmission diagnostic services are provided to a scheduled inpatient who is not admitted to the hospital as expected, the diagnostic services shall be billed as outpatient services according to the fee schedule in Chapter 1150 (relating to MA Program payment policies) and the MA Program Fee Schedule.

 (h)  For payment to be made for laboratory tests and other diagnostic procedures, the studies shall be related to the patient’s condition and be specifically ordered in writing for the particular patient by the attending physician or other licensed practitioner who is responsible for determining the diagnosis or treatment of that patient. In emergency situations, an exception is made to the requirement that studies be specifically ordered in writing if the test or procedure is necessary to prevent the death or serious impairment of the health of the recipient. Payment will not be made for diagnostic services performed pursuant to a preprinted regimen.

 (i)  The hospital may not seek reimbursement from an MA recipient if certification for days of care is denied by the hospital’s utilization review committee or the Department through its Concurrent Hospital Review (CHR) process. If a patient who has been discharged by a physician refuses to leave the hospital at the end of a certified stay, the hospital may bill the recipient for days used beyond the certified length of stay.

 (j)  The hospital may bill an MA recipient for days of care related to a noncovered service if the recipient was informed, prior to receiving the service, that the particular service and the inpatient care relating to it is not covered under the MA Program.

 (k)  The hospital may not bill the MA Program for services provided to a person who has applied for MA benefits unless the CAO has notified the hospital that the person is eligible for MA benefits.

 (l)  If a hospital voluntarily terminates the provider agreement, payment for inpatient hospital services continues, for MA patients admitted prior to the date on which the facility announced its intent to withdraw from the Program, until the effective date of the termination. Departmental payment will stop for services provided on and after the effective date of the termination of the provider agreement.

 (m)  If a patient is admitted to the distinct part, medical rehabilitation or drug and alcohol detoxification/rehabilitation unit of a general hospital from the emergency room, the services provided in the emergency room shall be billed on the inpatient invoice.

 (n)  Except as specified in subsection (o), cost-reimbursed services and items provided to an inpatient shall be billed as inpatient services.

 (o)  The following services and items may not be billed as inpatient services:

   (1)  Direct care services provided by salaried practitioners.

   (2)  Ambulance services for:

     (i)   Patients transferred from the emergency room or clinic of a hospital to another hospital for admission.

     (ii)   Inpatients discharged from one hospital, transferred by ambulance to another hospital and then admitted by the second hospital.

   The provisions of this §  1163.451 amended under section 443.1(1) of the Public Welfare Code (62 P. S. §  443.1(1)); and Articles I—XI and XIV of the Public Welfare Code (62 P. S. § §  101—1411).

   The provisions of this §  1163.451 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended through October 9, 1986, effective retroactively to July 1, 1984, 16 Pa.B. 3828; amended September 30, 1988, effective October 1, 1988, 18 Pa.B. 4418; amended June 16, 1989, effective immediately and applies retroactively to July 1, 1988, 19 Pa.B. 2563; amended December 14, 1990, effective January 1, 1991, 20 Pa.B. 6164; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181864) to (181867).

 (a)  Subject to the per diem cap on interim and final payment specified in subsection (f), the Department’s payment policies relating to interim payments for cost reimbursed services are as follows:

   (1)  The Department will pay an interim per diem rate for inpatient hospital care provided by freestanding licensed rehabilitation hospitals, general hospital distinct part medical rehabilitation units and distinct part units of general hospitals that are approved by the Department of Health to provide both detoxification and rehabilitation services.

   (2)  The amount of the Department’s interim payment for services provided to each MA recipient per admission will be the hospital’s or the unit’s interim per diem rate as specified in this section multiplied by the number of compensable days minus payment owed by the recipient, a legally responsible relative or a third-party payor. Medicare Part B payments and other resources available to the patient to meet the cost of inpatient hospital care also are deducted from the interim payment.

   (3)  For Fiscal Years 1991-92—1994-95, for existing freestanding rehabilitation hospitals and medical rehabilitation units, the Department will determine the interim payment rate as described in subparagraphs (i)—(iv). ‘‘Existing’’ refers to hospitals and units which have submitted an MA cost report covering the 12-month cost reporting period ending June 30, 1988.

     (i)   The Department will use Fiscal Year 1987-88 as the base year for determining the interim payment rate.

     (ii)   The Department will use the following inflation factors in the interim rate calculation:

       (A)   5.6% from Fiscal Year 1987-88 to 1988-89.

       (B)   5.0% from Fiscal Year 1988-89 to 1989-90.

       (C)   5.3% from Fiscal Year 1989-90 to 1990-91.

       (D)   5.2% from Fiscal Year 1990-91 to 1991-92.

       (E)   4.6% from Fiscal Year 1991-92 to 1992-93.

       (F)   4.3% from Fiscal Year 1992-93 to 1993-94 to be applied as follows:

         (I)   Hospitals and units that qualified for a disproportionate share payment other than a supplemental disproportionate share payment for Fiscal Year 1992-93 will receive the 4.3% inflation factor effective July 1, 1993.

         (II)   Hospitals and units that did not qualify for a disproportionate share payment other than a supplemental disproportionate share payment for Fiscal Year 1992-93 will receive the 4.3% inflation factor effective January 1, 1994.

       (G)   For Fiscal Year 1994-95, effective January 1, 1995, hospitals and units will receive an inflation factor equal to the prospective payment system type hospital market basket moving average inflation factor published by DRI/McGraw-Hill in the fourth calendar quarter of 1993 for the second calendar quarter of 1995.

     (iii)   For freestanding rehabilitation hospitals, the Department will determine the interim rate as follows:

       (A)   The Department will identify the audited MA per diem cost without ceiling adjustments for Fiscal Year 1987-88 and later.

       (B)   If the audited MA per diem cost for Fiscal Year 1987-88 or thereafter is not available, the Department will use the reported MA per diem cost for Fiscal Year 1987-88 in the calculation.

       (C)   The Department will inflate each per diem cost identified under clause (A) or (B), as applicable, by the applicable inflation factors in subparagraph (ii).

       (D)   The Department will establish the interim per diem rate at the lowest of the rates calculated under clause (C).

     (iv)   For medical rehabilitation units, the Department will determine the interim rate as follows:

       (A)   The Department will identify audited MA per diem costs without ceiling adjustment for all fiscal years and MA reported per diem costs for unaudited years.

       (B)   The Department will inflate each per diem identified under clause (A) by the applicable inflation factors in subparagraph (ii).

       (C)   The Department will establish the interim rate at the lowest of the rates calculated under clause (B).

   (4)  For Fiscal Years 1991-92—1994-95, for new freestanding rehabilitation hospitals and medical rehabilitation units, the Department will determine the interim payment rate as described in subparagraphs (i)—(iii). ‘‘New’’ refers to facilities which had not completed a 12-month cost report for the period ending June 30, 1988.

     (i)   For the first fiscal year of operation, the Department will base the interim per diem rate on a projected budget submitted to, and accepted by, the Department for the forthcoming fiscal year.

     (ii)   For subsequent fiscal years except as provided under subparagraph (iii), the Department will base the interim per diem rate on the projected budget submitted to the Department for the first fiscal year of operation, adjusted for inflation by the applicable inflation factors specified in paragraph (3)(ii).

     (iii)   When a full fiscal year cost report is submitted to the Department by a new hospital or unit, covered under this paragraph, the interim per diem rate paid by the Department will be based on the full fiscal year reported cost, adjusted for inflation by the applicable inflation factors under paragraph (3)(ii).

   (5)  The MA Program recognizes only one interim per diem rate for a hospital at one time.

   (6)  If the patient pay amount plus the insurance payment for hospital care equals or exceeds the hospital’s interim per diem rate multiplied by the number of compensable days, the Department will not make payment for the hospital care.

   (7)  For Fiscal Years 1993-94 to 1994-95, for existing drug and alcohol units, the Department will determine the interim payment rate as described in subparagraphs (i)—(iii). ‘‘Existing’’ refers to hospitals and units which have submitted an MA cost report covering the 12-month cost reporting period ending June 30, 1990.

     (i)   The Department will identify the following per diem rates for each facility:

       (A)   The Fiscal Year 1989-90 audited MA per diem cost without ceiling adjustment.

       (B)   The latest MA final audited per diem payment rate, subsequent to Fiscal Year 1989-90.

       (C)   The reported MA per diem costs for unaudited Fiscal Years 1989-90 or later.

     (ii)   The Department will inflate each per diem rate identified under subparagraph (i) to the forthcoming fiscal year by the applicable inflation factors in paragraph (3)(ii).

     (iii)   The Department will establish the interim rate at the lowest of the per diem rates calculated under subparagraph (ii).

   (8)  For Fiscal Years 1993-94 and 1994-95, for new drug and alcohol units, the Department will determine the interim payment rate as described in subparagraphs (i)—(iii). ‘‘New’’ refers to units which have not submitted an MA cost report covering the 12-month cost reporting period ending June 30, 1990.

     (i)   For the first fiscal year, the Department will base the interim per diem rate on a projected budget submitted to, and accepted by, the Department for the forthcoming fiscal year of operation.

     (ii)   Except as provided under subparagraph (iii), for subsequent fiscal years, the Department will base the interim per diem rate on the projected budget submitted to the Department for the first fiscal year of operation adjusted for inflation by the applicable inflation factors specified in paragraph (3)(ii).

     (iii)   When a full fiscal year cost report is submitted to the Department for a unit covered under this paragraph, the interim per diem rate paid by the Department will be based on the full fiscal year reported cost adjusted for inflation by the applicable factors under paragraph (3)(ii).

 (b)  The Department’s payment policies relating to cost settlements pertaining to cost reimbursed providers are as follows:

   (1)  A hospital shall complete form MA 336 (Financial Report for Hospital and Hospital-Health Care Complex Under the Medical Assistance Program of the Department of Public Welfare, Commonwealth of Pennsylvania) or its successor in accordance with Medicare principles at 42 CFR Part 413 (relating to principles of reasonable cost reimbursement; payment for end-stage renal disease services) and in accordance with the instructions accompanying the cost report.

   (2)  The hospital shall submit form MA 336 to the Department’s Office of Medical Assistance Programs by September 30 of each year. If the cost reimbursed provider participates in Medicare, a completed copy of Form HCFA-2552 (Hospital and Hospital Health Care Complex Cost Report) also shall be submitted by the hospital to the Department as a supplement to form MA 336.

   (3)  The cost reimbursed provider’s cost report shall:

     (i)   Be prepared using the accrual basis of accounting.

     (ii)   Cover a fiscal period of 12 consecutive months from July 1 to June 30, except as noted in subparagraph (iv).

     (iii)   Include information necessary for the proper determination of costs payable under the program, including financial records and statistical data.

     (iv)   Cover the period from the date of approval for participation in the MA Program to the end of that fiscal year, for a cost reimbursed provider beginning operations during the fiscal year.

     (v)   Identify separately the costs attributed to each of those units, for distinct part drug and alcohol detoxification/rehabilitation and medical rehabilitation units of general hospitals.

     (vi)   Be adjusted to remove the costs of direct care by salaried physicians and other salaried practitioners.

   (4)  For cost reporting periods ending prior to October 1, 1985, if the total amount of the MA payment for interim claims for services rendered by a cost reimbursed provider during the fiscal year exceeds that provider’s total audited costs, the Department will notify the provider that an overpayment has occurred. If an overpayment has occurred, the Department offsets the overpayment against the current payments due to the provider unless the provider, within 60 days of the notification of the overpayment, either:

     (i)   Makes payment in full for the overpayment.

     (ii)   Makes arrangements for repayment with the Department’s Office of the Comptroller and repays the overpayment with 180 days of this arrangement.

 (c)  Subject to the per diem cap on final payment specified in subsection (f), the Department’s payment policies relating to upper limits to final audited payments to cost reimbursed providers are as follows:

   (1)  Except as specified in paragraphs (2) and (3), the Department will not pay a final audited per diem rate that exceeds the hospital’s or the unit’s audited per diem rate for the preceding fiscal year multiplied by the applicable inflation factor in subsection (a)(3)(ii). The audited per diem rate ceiling will be calculated to exclude costs excluded under subsection (d).

   (2)  For Fiscal Years 1991-92—1994-95, for freestanding rehabilitation hospitals and distinct part medical rehabilitation units of general hospitals, the Department will use Fiscal Year 1987-88 as the base year to establish reimbursement ceilings. The Department will use the first complete fiscal year of enrollment as the base year for new hospitals and units. For hospitals and units covered under this paragraph, the Department will calculate reimbursement ceilings by inflating the base year MA audited per diem by the applicable inflation factors in subsection (a)(3)(ii). The Department will establish the final per diem payment rate at the lesser of the facility’s audited per diem cost or the reimbursement ceiling. If a facility’s audited per diem cost falls below the reimbursement ceiling, its base year will be its lowest cost year.

   (3)  For Fiscal Year 1993-94—1994-95, for distinct part drug and alcohol units of general hospitals, the Department will use Fiscal Year 1989-90 as the base year to establish reimbursement ceilings. For units which enrolled in the MA Program after July 1, 1989, the Department will use the first complete fiscal year of enrollment as the base year. For units covered under this paragraph, the Department will calculate reimbursement ceilings by inflating the base year MA audited per diem by the applicable inflation factors listed in subsection (a)(3)(ii). The Department will establish the final per diem payment rate at the lesser of the facility’s audited per diem cost or reimbursement ceiling. If a facility’s audited per diem cost falls below the reimbursement ceiling, its base year will be its lowest cost year.

   (4)  For a medical rehabilitation unit that is not recognized by Medicare for exclusion after completing the 12-month evaluation period, final payment will be the lesser of the unit’s audited per diem rate determined by the Department in accordance with the Department’s regulations and Medicare cost reimbursement principles, or the number of allowable MA days for the unit multiplied by a Statewide average of the final per diem rates of enrolled Medicare excluded medical rehabilitation units for the same fiscal year.

   (5)  Payment for inpatient hospital services, including acute care general hospitals and their distinct part units, private psychiatric hospitals and freestanding rehabilitation hospitals, may not exceed the lower of the amount that would be paid in the aggregate for the services under Medicare principles of reimbursement under 42 CFR Part 413 (relating to principles of reasonable cost reimbursement, payment for end stage renal disease services), or the hospital’s customary charges to the general public for the services.

 (d)  The Department’s payment policies relating to costs excluded from upper limits on payments to cost reimbursed providers are as follows:

   (1)  The Department will exclude certain costs from the final audited per diem rate limits established in subsection (c). To apply for this cost exclusion, a provider shall submit documentation sufficient to enable the Department to verify that the requirements of this section are met. For the purposes of this subsection, ‘‘provider’’ refers to the cost reimbursed hospital or cost reimbursed hospital unit covered under this subchapter, and references to the provider’s costs or data refer to the specific costs or data of the cost reimbursed provider.

   (2)  Costs excluded from the per diem rate limit are:

     (i)   Increases in a provider’s allowable depreciation and interest costs for a fixed asset which was entered in the hospital’s fixed asset ledger in the year being audited.

     (ii)   Costs incurred by a provider which meets the requirements of paragraph (3).

     (iii)   Costs attributable to a fixed asset project that is:

       (A)   Subject to review for Certificate of Need approval and approved under 28 Pa. Code Chapter 301 or 401 (relating to limitation on Federal participation for capital expenditures; or Certificate of Need Program).

       (B)   Related to patient care under Medicare standards.

   (3)  For cost reimbursed providers to qualify for the cost exclusion in this subsection, the following requirements shall be met:

     (i)   The provider’s rate of increase in overall audited costs shall exceed 15%. This rate of increase is established by comparing the provider’s audited costs for the fiscal year for which eligibility for the exclusion is being sought to its audited costs for the preceding fiscal year.

     (ii)   The provider’s rate of increase for allowable depreciation and interest shall exceed its rate of increase for net operating costs. The rate of increase in a provider’s net operating costs is established by comparing the provider’s audited net operating costs for the fiscal year for which eligibility for the exclusion is being sought to its audited net operating costs for the preceding fiscal year. The rate of increase of a provider’s depreciation and interest costs is established as follows:

       (A)   The provider’s allowable audited depreciation and interest costs for the preceding fiscal year are determined, including costs excluded in a preceding fiscal year, under paragraph (2).

       (B)   The amount allowable under paragraph (2) for the fiscal year being audited is added to the amount determined in clause (A).

       (C)   The amounts determined in clauses (A) and (B) are compared to determine the rate of increase.

   (4)  Costs excluded from the limits established in subsection (c) are excluded in subsequent fiscal years, until base year rates are rebased to a period which is either the same as, or is subsequent to, the period of the cost exclusion.

 (e)  For cost reporting periods ending on or after October 1, 1985, if the total amount of MA payment for interim claims for services during the fiscal year exceeds the total audited costs, the Department will recover the overpaid amount from the provider under §  1101.69(b) (relating to overpayment—underpayment).

 (f)  For Fiscal Years 1993-94 and 1994-95, the cap on both the interim and final per diem rates for cost reimbursed services will be as set forth in paragraphs (1) and (2). The cap does not apply to services rendered to a recipient who has not attained his first birthday, or in the case of such an individual who is an inpatient on his first birthday until the individual is discharged.

   (1)  For Fiscal Year 1993-94, $950 inclusive of costs which may be excluded from the upper limits on payment under subsection (d), but exclusive of disproportionate share payments determined under §  1163.459 (relating to disproportionate share payments).

   (2)  For Fiscal Year 1994-95, $950, adjusted for inflation effective January 1, 1995, by the inflation factor listed in subsection (a)(3)(ii)(G), inclusive of cost which may be excluded from the upper limits on payment under subsection (d), but exclusive of disproportionate share payments determined under §  1163.459.

   The provisions of this §  1163.452 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.452 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended July 12, 1985, effective July 13, 1985, 15 Pa.B. 2572, and will apply to reimbursement for services for FY 1984-85 and for each fiscal year thereafter; amended November 7, 1986, effective July 1, 1986, 16 Pa.B. 4384; corrected April 10, 1987, effective July 13, 1985, 17 Pa.B. 1502; amended February 5, 1988, effective February 6, 1988, 18 Pa.B. 556; amended June 16, 1989, effective immediately and applies retroactively to July 1, 1988, 19 Pa.B. 2563; amended June 1, 1990, effective retroactively to July 1, 1988, 20 Pa.B. 2913; amended June 18, 1993, provisions relating to reimbursement for inpatient rehabilitation services for Fiscal Years 1991-92 and 1992-93 are effective July 1, 1991 and subsection (c)(7)—(11) is effective July 1, 1984; corrected July 9, 1993, 23 Pa.B. 3289; amended October 29, 1993, the provisions relating to reimbursement for inpatient rehabilitation services for Fiscal Years 1991-1992 and 1992-1993 is July 1, 1991, and subsection (c)(7)—(11) is effective July 1, 1984, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181867) to (181874).

 (a)  Payment for cost reimbursed inpatient hospital services is based on the allowable cost for the services in this section.

 (b)  Unless clearly specified to the contrary in this chapter, allowable costs for the MA Program are computed under Medicare principles under the Social Security Act (42 U.S.C.A. § §  301—1397f) and Federal regulations and instructions.

 (c)  The Department may not make payment for a service at a rate higher than the hospital’s customary charge. For the purpose of this chapter, the hospital’s customary charge is the usual charge to the general public for a specific service.

 (d)  Costs not allowable under the MA Program are:

   (1)  Costs exceeding the limits established by the Department of Health and Human Services under Medicare regulations set forth at 42 CFR 413.30 (relating to limitations on reimbursable costs).

   (2)  Costs related to the provision of a noncompensable service or item under §  1163.455 (relating to noncompensable services and items).

   (3)  Costs related to depreciation and interest for rehabilitation hospitals unless the hospital was one of the following:

     (i)   Constructed prior to July 1, 1983.

     (ii)   Issued either a Section 1122 approval letter or letter of nonreviewability under 28 Pa. Code Chapter 301 (relating to limitation on Federal participation for capital expenditures) or a certificate of need or letter of nonreviewability under 28 Pa. Code Chapter 401 (relating to Certificate of Need Program) for the project by the Department of Health no later than June 30, 1983. The Department will not recognize depreciation or interest as an allowable cost if the facility does not substantially implement the project as defined at 28 Pa. Code §  401.5(j)(2) (relating to Certificate of Need) within the effective period of the original Section 1122 approval or the original certificate of need.

   (4)  Costs for legal services relating to litigation against the Commonwealth, including administrative appeals, if the litigation is finally decided in favor of the Commonwealth.

   (5)  Costs for relocating or housing employes.

   (6)  Telephone, television and radio services in patient rooms.

   (7)  Personal care and maternity kits.

   (8)  Costs related to depreciation and interest for providers reimbursed under this subchapter except for medical rehabilitation units unless:

     (i)   An application for a certificate of need for the new or additional beds has been approved by the Department of Health, with an effective date of June 30, 1986, or earlier. In order for the facility to receive payment, the project shall be substantially implemented as defined at 28 Pa. Code §  401.5(j)(2) within the effective period of the certificate of need.

     (ii)   A letter nonreviewability has been issued on or before June 30, 1986.

   (9)  For medical rehabilitation units, costs related to capital costs for new or additional beds unless one of the following applies:

     (i)   The new or additional medical rehabilitation beds were placed in service prior to July 1, 1988, and are located in a medical rehabilitation unit which was enrolled in the MA Program with an effective date no later than July 1, 1988. This includes beds which are one of the following:

       (A)   Located in a unit which has applied to the Medicare Program for exclusion prior to July 1, 1988 and completes its 12-month evaluation period prior to July 1, 1989.

       (B)   Placed in service during the 12-month Medicare evaluation period ending prior to July 1, 1989.

       (C)   Covered in Medicare’s initial letter of exclusion related to those beds.

     (ii)   Either a Section 1122 approval or letter of nonreviewability under 28 Pa. Code Chapter 301 or a certificate of need or letter of nonreviewability under 28 Pa. Code Chapter 401 for the new or additional medical rehabilitation unit beds was issued by the Department of Health no later than June 30, 1988. In addition, the project shall have been substantially implemented as defined at 28 Pa. Code §  401.5(j)(2) within the effective period of the original Section 1122 approval or the original certificate of need, including one 6-month extension period.

 (e)  Allowable costs in addition to those costs allowable under subsection (b) are:

   (1)  Costs for direct and indirect chaplaincy expenses related to patient care, excluding training costs associated with the chaplaincy program.

   (2)  Costs for necessary diagnostic services provided to a recipient by another hospital. The costs may be included by the hospital at which the recipient is an inpatient at the time of the cost settlement.

 (f)  For providers reimbursed under this subchapter, capital costs related to replacement beds will be recognized as allowable if:

   (1)  The facility received a certificate of need or letter of nonreviewability for the replacement beds.

   (2)  The replacement beds are physically replacing beds in the same facility and capital costs related to the beds being replaced were recognized as allowable.

   (3)  The project is substantially implemented as defined at 28 Pa. Code §  401.5(j)(2) within the effective period of the original Section 1122 approval or the original certificate of need, including one 6-month extension period.

   The provisions of this §  1163.453 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.453 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended February 28, 1986, effective March 1, 1986, 16 Pa.B. 600; amended November 7, 1986, effective July 1, 1986, 16 Pa.B. 4384; amended June 16, 1989, effective immediately and applies retroactively to July 1, 1988, 19 Pa.B. 2563; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181874) to (181877).

 (a)  Payment for blood will be limited to the first three pints of whole blood provided during a period of hospitalization. An exception to this limit is made only if the patient has hemophilia, in which case payment is made for the amount of whole blood or blood products the patient requires.

 (b)  Payment for cost reimbursed drug and alcohol detoxification-rehabilitation services in a general hospital will be limited to days certified under §  1163.471 (relating to scope of claims review process) during which the inidividual with a drug or alcohol diagnosis is a patient in a drug and alcohol detoxification rehabilitation unit approved by the Department of Health.

 (c)  A recipient is limited to two periods of therapeutic leave per calendar month. Neither of these periods of therapeutic leave may exceed 12 hours in a calendar day.

   The provisions of this §  1163.454 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.454 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended July 12, 1985, effective July 13, 1985, 15 Pa.B. 2572, and will apply to reimbursement for services for FY 1984-85 for each fiscal year thereafter; amended November 7, 1986, effective July 1, 1986, 16 Pa.B. 4384; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181877) to (181878).

 (a)  The Department will not pay hospitals for inpatient services directly or indirectly related to or in conjunction with:

   (1)  Inpatient hospital services provided in conjunction with physicians’ services which are identified as outpatient procedures in Chapter 1150 (relating to MA Program payment policies) and the MA Program Fee Schedule unless the procedure is performed as a secondary necessary procedure.

   (2)  Diagnostic tests and procedures that can be performed on an outpatient basis and diagnostic tests and procedures not related to the diagnoses that require that particular inpatient stay.

   (3)  Services and items for which full payment is available through Medicare, other financial resources or other health insurance programs.

   (4)  Services and items not ordinarily provided to the general public.

   (5)  Periods of absence from the hospital for a purpose such as employment or school attendance except for therapeutic leaves that enable individuals to attend family matters of significant importance. The number of therapeutic leaves during one period of hospitalization is limited under §  1163.454(c) (relating to limitations on payment).

   (6)  Diagnostic or therapeutic procedures solely for experimental, research or educational purposes.

   (7)  Unnecessary admissions and conditions which do not require hospital-type care, such as rest cures and room and board for relatives during a patient’s hospitalization.

   (8)  Inpatient services provided to patients who no longer require acute short-term inpatient hospital care—inappropriate hospital services. For patients who do require skilled nursing or intermediate care, payment will be made to the hospital under Chapter 1181 (relating to nursing facility care) or successor provisions for this care only if the patient is in a certified and approved hospital-based skilled nursing or intermediate care unit.

   (9)  Inpatient hospital days not certified under the Department’s Concurrent Hospital Review (CHR) process or, if the hospital is granted an exemption from CHR, not certified by the hospital’s in-house utilization review process. If an MA patient refuses to leave after being discharged by the attending practitioner when the approved length of stay is exhausted, the hospital may bill the patient.

   (10)  Days of inpatient care due to unnecessary delay in applying for a court-ordered commitment, grace periods, administrative days and custodial care related or unrelated to court commitments or to the child protective services. For purposes of this chapter, custodial care is defined as maintenance, rather than curative care, on an indefinite basis. Grace periods and administrative days relate to days of care while awaiting placement elsewhere.

   (11)  Inpatient hospital services provided to a recipient by the transferring hospital on or after the effective date of a court commitment to another facility.

   (12)  Days of inpatient hospitalization due to the failure to promptly request or perform necessary diagnostic studies, medical-surgical procedures or consultations.

   (13)  Friday or Saturday admissions unless one of the following occurs:

     (i)   The admission is an emergency as documented in the patient’s medical record by the admitting physician.

     (ii)   The medical or surgical procedure for which the patient was admitted is performed on the day of or the day following admission.

   (14)  The day of discharge from inpatient hospital care except for same calendar day admissions and discharges.

   (15)  A day of inpatient hospital care provided to a recipient whose medical condition makes the person suitable for an alternate level of care.

   (16) Drug or alcohol, or both, detoxification and rehabilitation or rehabilitation services in an inpatient facility unless one of the following circumstances exists:

     (i)   Complications exist, or there is a reasonable expectation of complications, that require inpatient facility medical treatment, including:

       (A)   An individual requires acute inpatient treatment based on the presence of a major medical complication or a significant psychiatric problem, or an individual has a history of significant substance abuse and a complication as described in §  1163.59(d)(1)(i), (ii), (iii) or (iv) (relating to noncompensable services, items and outlier days).

       (B)   An individual in residential care exhibits significant medical or psychiatric complications as described in §  1163.59(d)(1)(i), (ii), (iii) or (iv), and requires more intensive treatment and observation.

     (ii)   Detoxification has been certified by the Department and completed in an acute care general hospital, and the patient is discharged directly from the acute care general hospital where the detoxification occurred to the inpatient hospital rehabilitation setting.

     (iii)   A nonhospital, medically appropriate bed is not available within a 50-mile radius of the inpatient hospital to which the patient presents for drug or alcohol detoxification or rehabilitation services and the inpatient hospital rehabilitation facility includes documentation of the nonavailability of the nonhospital bed in the medical record. A nonhospital bed will be considered to be not available if the medically appropriate nonhospital facility has no beds available or refuses to accept the patient.

 (b)  The Department will not pay hospitals for services or items listed in subsection (a) even if the attending physician or hospital utilization review committee determines that the stay was medically necessary.

 (c)  The Department will not pay hospitals on a cost related basis for services or items covered under this subchapter even if the attending physician or hospital utilization review committee determines that the services or items were medically necessary.

   The provisions of this §  1163.455 amended under sections 201(2) and 443.1(1) of the Public Welfare Code (62 P. S. § §  201(2) and 443.1(1)).

   The provisions of this §  1163.455 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended through October 10, 1986, effective retroactively to July 1, 1984, 16 Pa.B. 3828; amended September 30, 1988, effective October 1, 1988, 18 Pa.B. 4418; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241; amended November 3, 1995, effective November 4, 1995, and apply retroactively to October 1, 1995, 25 Pa. B. 4700; amended November 24, 1995, effective November 25, 1995, and apply retroactively to November 1, 1995, 25 Pa. B. 5241. Immediately preceding text appears at serial pages (181878) to (181880).

 (a)  For inpatient adult drug and alcohol services rendered on or after May 1, 1998, the Department will use the Pennsylvania Client Placement Criteria (PCPC) developed by the Bureau of Drug and Alcohol Programs (BDAP) in the Department of Health as utilization guidelines, both for prospective and retrospective reviews of patient care.

 (b)  If the BDAP modifies the PCPC guidelines, the Department will also adopt those modifications.

 (c)  Providers who do not already have a copy of the PCPC may obtain one by contacting the Department of Health, Bureau of Drug and Alcohol Programs, Room 929, Health and Welfare Building, Harrisburg, Pennsylvania 17108.

 In addition to the conditions set forth in Chapter 1101 (relating to general provisions) the following policies apply to third-party resources for hospital services:

   (1)  Sources of payment other than MA shall be researched prior to billing the Department. If a resource is found, it shall be depleted to the full extent of the liability of that resource prior to billing MA. Lifetime reserve days under Medicare are considered an available resource.

   (2)  If the hospital receives payment from a third party subsequent to payment from the Department, repayment to the MA Program shall be made by way of a claim adjustment.

   The provisions of this §  1163.456 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 (a)  Payment is made on a per diem basis for out-of-State hospital services if the services are covered by the MA Program and are provided under § §  1163.451—1163.456 and 1163.458, including the limitations on inpatient days of care as set forth at §  1163.454 (relating to limitations on payment). Out-of-State hospitals shall meet the requirements for rehabilitation hospitals and distinct part units as set forth in §  1163.442 (relating to requirements for reimbursement under this subchapter).

 (b)  MA recipients are eligible for care provided by an out-of-State hospital only if one of the following occurs:

   (1)  Residents in a given area generally receive their care in that particular hospital. This would apply when the out-of-State hospital is closer to, or substantially more accessible from, the residence of the recipient than the nearest hospital in this Commonwealth that is adequately equipped to deal with, and is available for the treatment of, the individual’s illness or injury.

   (2)  Documentation is provided verifying one of the following:

     (i)   While temporarily out of this Commonwealth, the recipient required inpatient hospital services on an emergency basis. For the purposes of this chapter, emergency services are those inpatient hospital services that are necessary to prevent the death, or serious impairment of the health of the individual, and which, because of the threat to the life or health of the individual, necessitate the use of the most accessible hospital available that is equipped to furnish the services.

     (ii)   An out-of-State hospital is the only facility equipped to provide the type of care that the individual requires.

 (c)  The final payment for inpatient hospital services provided by an out-of-State cost related provider is the lowest of:

   (1)  The hospital’s interim per diem rate, if one is established by the Medicaid agency in the hospital’s state.

   (2)  The projected average interim per diem MA rate in this Commonwealth as developed by the Department for the fiscal year.

   (3)  The amount of total charges billed by the hospital.

   (4)  The Medicare deductible or coinsurance, if applicable, under §  1163.456 (relating to third-party liability).

 (d)  At the discretion of the Department, out-of-State hospitals are subject to the Department’s Concurrent Hospital Review (CHR) process in accordance with § §  1163.471—1163.481 (relating to utilization control).

 (e)  In no case will the Department’s payment rate be based on costs which are precluded from recognition by Title XVIII of the Social Security Act (42 U.S.C.A. § §  1395—1395XX).

   The provisions of this §  1163.457 issued under sections 201 and 443.1 of the Public Welfare Code (62 P. S. § §  201 and 443.1).

   The provisions of this §  1163.457 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended February 28, 1986 effective March 1, 1986, 16 Pa.B. 600. Immediately preceding text appears at serial pages (99366) to (99367).

 (a)  The Department pays for inpatient stays consisting of an admission with subsequent discharge during the same calendar day.

 (b)  The services must be provided under this chapter.

 (c)  The interim payment rate is based on 50% of the inpatient per diem rate on file determined in this chapter.

 (d)  Payment for ancillary services provided to patients during same- calendar-day stays are included in the interim payment. The hospital may not submit a separate bill for these services.

 (e)  For auditing purposes each same-calendar-day admission and discharge will be counted as 1/2 day.

 (f)  Without exception same-calendar-day stays, regardless of the reason for the stay, are subject to § §  1163.471—1163.481 (relating to utilization control) and will be reimbursed only if provided under this section.

   The provisions of this §  1163.458 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 (a)  The Department will annually determine the acute care general hospitals including their distinct part units, private psychiatric hospitals and freestanding rehabilitation hospitals that qualify for disproportionate share payments by the method in subsections (b)—(e). The Department will annually determine the amount of disproportionate share payments for eligible freestanding rehabilitation hospitals and distinct part rehabilitation units of acute care general hospitals by the method in subsections (f)—(i).

 (b)  A hospital that meets at least one of the requirements under subsection (d) qualifies for disproportionate share payments if one of the following applies:

   (1)  The hospital’s ratio of Title XIX inpatient days to total inpatient days is equal to or greater than one standard deviation above the mean of the ratios for hospitals in this Commonwealth. To determine the ratio for an acute care general hospital, the Department will include inpatient days covered under Subchapter A and Chapter 1151 (relating to acute care general hospitals under the prospective payment system; and inpatient psychiatric services), as well as days covered under this subchapter. The Department will include in the database MA administrative days, days of care provided to recipients in other states’ Medicaid Programs, MA Health Maintenance Organization (HMO) days and MA Health Insuring Organization (HIO) days.

   (2)  The hospital’s low income utilization rate, as defined under section 1923 of the Social Security Act (42 U.S.C.A. §  1396r-4(b)(3)), exceeds 25% under one of the following methods:

     (i)   The hospital’s low income utilization rate as reported on its Cost Report (MA 336) computation of low income utilization rate worksheet exceeds 25%.

     (ii)   The hospital’s low income utilization rate as determined by its ratio of Title XIX and General Assistance inpatient days to total inpatient days exceeds 25%. To determine the ratio for an acute care general hospital, the Department will include inpatient days covered under Subchapter A and Chapter 1151, as well as days covered under this subchapter. The Department will include in the database MA administrative days, days of care provided to recipients in other states’ Medicaid Programs, MA HMO days and MA HIO days.

 (c)  The Department will utilize the following data sources in making disproportionate share eligibility determinations:

   (1)  For Fiscal Year 1993-94, the Department will utilize data from Fiscal Year 1991-92 Cost Reports (MA 336) and from Fiscal Year 1991-92 for services provided to recipients enrolled in MA HMO Programs and MA HIO Programs. To determine the Title XIX percentage of total MA days, the Department will utilize the most currently available data.

   (2)  For Fiscal Year 1994-95, the Department will utilize data from Fiscal Year 1992-93 Cost Reports (MA 336) and from Fiscal Year 1992-93 for services provided to recipients enrolled in MA HMO Programs and MA HIO Programs. To determine the Title XIX percentage of total MA days, the Department will utilize the most currently available data.

 (d)  To qualify for disproportionate share payments, a hospital shall meet at least one of the following requirements:

   (1)  The hospital shall be a children’s hospital, as defined under §  1163.2 (relating to definitions).

   (2)  The hospital shall have at least two physicians with staff privileges who have agreed to provide obstetric services to individuals entitled to those services under the MA Program.

   (3)  The hospital has not since December 21, 1987, offered nonemergency obstetric services to the general population.

 (e)  To determine hospitals that qualify for disproportionate share payments based on the ratio of Title XIX inpatient days to total inpatient days, the Department will:

   (1)  Identify the total number of MA inpatient days from the hospital’s Cost Report (MA 336), including days of care provided to recipients in other states’ Medicaid Programs, and to that number:

     (i)   Add the hospital’s number of inpatient days for MA recipients enrolled in MA HMO Programs and MA HIO Programs.

     (ii)   Add the hospital’s number of MA administrative days from the hospital’s Cost Report (MA 336).

     (iii)   Subtract the hospital’s number of days of care provided to General Assistance recipients.

   (2)  Divide the days determined under paragraph (1) by the total number of inpatient days from the hospital’s Cost Report (MA 336) to determine the hospital’s ratio of Title XIX inpatient days to total inpatient days.

   (3)  Array the hospitals, from high to low, according to the ratios determined under paragraph (2) and determines the mean and standard deviation of the array.

   (4)  Identify as disproportionate share providers hospitals with a ratio of Title XIX inpatient days to total inpatient days equal to or greater than one standard deviation above the mean.

 (f)  Once the Department determines which hospitals qualify as disproportionate share providers under this section, the Department will calculate annual payments to qualifying freestanding rehabilitation hospitals and distinct part rehabilitation units of acute care general hospitals by:

   (1)  Arraying the qualifying rehabilitation hospitals and units from high to low according to each hospital’s ratio of Title XIX inpatient days to total inpatient days.

   (2)  For Fiscal Years 1990-91—1992-93, for each hospital or unit covered by this subchapter and included in the array, prospectively calculating the annual disproportionate share percentage, which is 0.5%, plus 8.0% multiplied by a fraction, the numerator of which is the ratio of Title XIX inpatient days to total inpatient days of the qualifying hospital or unit, minus the ratio of Title XIX inpatient days to total inpatient days of the lowest hospital in the array; and the denominator of which is the ratio of Title XIX inpatient days to total inpatient days of the highest hospital in the array, minus the ratio of Title XIX inpatient days to total inpatient days of the lowest hospital in the array.

   (3)  For Fiscal Years 1993-94 and 1994-95, for each hospital or unit covered by this subchapter and included in the array, prospectively calculating the annual disproportionate share percentage which is 1.0%, plus 9.0% multiplied by a fraction, the numerator of which is the ratio of Title XIX inpatient days to total inpatient days of the qualifying hospital or unit, minus the ratio of Title XIX inpatient days to total inpatient days of the lowest hospital in the array; and the denominator of which is the ratio of Title XIX inpatient days to total inpatient days of the highest hospital in the array, minus the ratio of Title XIX inpatient days to total inpatient days of the lowest hospital in the array.

   (4)  Multiplying the following:

     (i)   The facility’s disproportionate share percentage determined under paragraph (2) or (3).

     (ii)   The facility’s base per diem rate in effect on July 1 of the fiscal year, except that the Department will use the new base rate for a hospital whose rate changes during the fiscal year for any reason except for the annual inflationary increase.

     (iii)   The facility’s projected Title XIX inpatient days determined as follows:

       (A)   For Fiscal Year 1993-94, the number of Title XIX inpatient days based on the hospital’s Fiscal Year 1991-92 Cost Report (MA 336) increased by 3.52% and then by 2.8%.

       (B)   For Fiscal Year 1994-95, the number of Title XIX inpatient days based on the hospital’s Fiscal Year 1992-93 Cost Report (MA 336) increased by utilization increase factors consistent with the Governor’s Fiscal Year 1994-95 budget proposal.

   (5)  For Fiscal Years 1993-94 and 1994-95 for hospitals that do not receive an inflationary increase on July 1, further inflating one-half of the amount calculated under paragraph (4) by the annual inflation increase.

 (g)  Effective with Fiscal Year 1993-94, the Department will pay the interim disproportionate share amounts, determined under subsection (f)(4), in equal monthly installments.

 (h)  The Department will determine final semiannual disproportionate share amounts for hospitals and units under this subchapter by multiplying the following:

   (1)  The facility’s disproportionate share percentage determined under subsection (f)(2) or (3).

   (2)  The facility’s final audited per diem rate for the period.

   (3)  The facility’s final audited Title XIX inpatient days for the period.

 (i)  The Department will add the semiannual disproportionate share payments calculated under subsection (h) and reconcile any difference between the final payment and the interim payment determined under subsection (f)(4) at cost settlement for the fiscal year.

 (j)  The Department will publish annually a notice in the Pennsylvania Bulletin listing the qualifying hospitals and their annual disproportionate share payment percentages.

   The provisions of this §  1163.459 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.459 adopted June 1, 1990, effective retroactively to July 1, 1988, 20 Pa.B. 2913; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1990, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181882) to (181885).

   This section cited in 55 Pa. Code §  1163.452 (relating to payment methods and rates).

UTILIZATION CONTROL

§ 1163.471. Scope of claim review process.

 All cost reimbursed services provided to MA recipients are subject to the utilization review procedures set forth in this chapter and in Chapter 1101 (relating to general provisions).

   The provisions of this §  1163.471 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 (a)  For cost reimbursed services, the Department reviews the need for a recipient’s admission and continued hospitalization through its Concurrent Hospital Review (CHR) process and approves or disapproves the stay unless a hospital has been granted an exemption by the Department.

 (b)  For cost reimbursed services, each hospital shall follow the instructions in the Department’s Manual for Concurrent Review of Inpatient Hospital Services. The provisions of the Department’s Manual shall take precedence over the hospital’s Utilization Review Plan.

 (a)  A hospital participating in the MA Program shall have in effect a written utilization review plan approved by Medicare that provides for the review of each recipient’s need for hospital inpatient services. The terms and conditions imposed under the hospital’s utilization review plan for Medicare will, if applicable, apply to MA. If the Medicare utilization review plan is not consistent with this chapter, the Manual for Concurrent Review of Inpatient Hospital Services will take precedence. Those hospitals not participating in Medicare shall submit to the Department’s Bureau of Utilization Review, a utilization review plan which meets the requirements of this chapter.

 (b)  A hospital utilization review plan shall provide for a utilization review committee that meets the requirements set forth in §  1163.474 (relating to requirements for hospital utilization review committees).

 (c)  A hospital utilization review plan shall describe the organization, composition and functions of the utilization review committee and shall specify the frequency of the meetings of the committee.

 (d)  A hospital utilization review plan shall provide that for utilization review purposes each recipient’s record includes:

   (1)  Identification of the recipient.

   (2)  Copies of the certification of days records.

   (3)  The name of the recipient’s physician.

   (4)  The date of admission and date of application for an authorization of MA benefits if application is made after admission.

   (5)  The plan of care required under §  1163.476 (relating to plan of care).

   (6)  Initial and subsequent review dates specified under this chapter.

   (7)  Reasons and plan for continued stay, if the physician believes continued stay is necessary.

   (8)  Other supporting material the utilization review committee believes appropriate.

 (e)  A hospital utilization review plan shall provide for a review of a recipient’s admission to the hospital under §  1163.477 (relating to admission review requirements).

 (f)  A hospital utilization review plan shall provide for a review of a recipient’s continued stay in the hospital under §  1163.478 (relating to continued stay review requirements).

 (g)  A hospital utilization review plan shall describe the methods that the utilization review committee uses to select and conduct Medical Care Evaluation studies under §  1163.479 (relating to Medical Care Evaluation studies).

   The provisions of this §  1163.472 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 (a)  Each hospital shall have a utilization review committee composed of two or more physicians, and assisted by other professional personnel as required under 42 CFR 456.106 (relating to organization and composition of UR committee; disqualification from UR committee membership). Committee members need not be members of the hospital medical staff.

 (b)  A member of the hospital utilization review committee may not participate in the review of a patient’s case if he is or was responsible for the care of that patient.

 (c)  A member of the hospital utilization review committee may not have a direct or indirect financial interest in any hospital.

   The provisions of this §  1163.474 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 The hospital utilization review committee or its representative shall:

   (1)  Conduct admission reviews under §  1163.477 (relating to admission review requirements).

   (2)  Conduct continued stay reviews under §  1163.478 (relating to continued stay review requirements).

   (3)  Conduct Medical Care Evaluation studies under §  1163.479 (relating to Medical Care Evaluation studies).

   (4)  Notify the Department’s Concurrent Hospital Review Section of a recipient’s assigned initial or continued length of stay. This notification shall be done on the form specified and in accordance with the instructions in the Manual for Concurrent Hospital Review of Inpatient Services.

   (5)  Provide that the justification for a recipient’s need for admission and need for continued hospital inpatient services be documented by the attending physician in the recipient’s medical record.

   (6)  Notify the Department’s Concurrent Hospital Review Section of a change in a recipient’s diagnosis.

   (7)  Maintain utilization review records for a minimum of 4 years from the date of submission of the year end cost report.

   (8)  Submit copies of utilization review records and documents, medical records, certification of days records and discharge planning information to the Department upon request.

   (9)  Maintain copies of certification of days records with the patient’s medical record and with the hospital copy of the invoice submitted for payment.

   (10)  Review cases that the Department has identified as being of questionable utilization of hospital facilities or services or that contain noncompensable services or items as listed in §  1163.455 (relating to noncompensable services and items).

   (11)  Initiate discharge planning during the admission review process to provide timely placement in an appropriate level of care for those patients that may require posthospital care.

   (12)  Follow the procedures specified in the Department’s Manual for Concurrent Hospital Review of Inpatient Services in conducting utilization review activities.

   The provisions of this §  1163.475 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 (a)  Before admission or no later than 2 days after admission of a recipient to a cost reimbursed hospital or hospital unit, the attending or staff physician shall establish, and include in the recipient’s medical record, an individual written plan of care.

 (b)  The plan of care must include:

   (1)  Medical justification for admission and continued stay.

   (2)  Diagnoses, symptoms, complaints and complications indicating the need for admission.

   (3)  A description of the functional level of the individual.

   (4)  Orders for medications, treatments, restorative and rehabilitative services, activities, therapies, social services and diet.

   (5)  Plans for continuing care including review and modification of the plan of care.

   (6)  Plans for discharge.

 (c)  The orders and activities shall be developed in accordance with physician’s instructions and be reviewed and revised as appropriate to treat the recipient’s condition.

   The provisions of this §  1163.476 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 (a)  The hospital utilization review committee or its representative shall review the need for admission of each MA recipient admitted to the hospital within 24 hours after admission. The committee shall make a final determination of the need for admission within 2 working days after admission, unless the case or category of admission is designated for preadmission review.

 (b)  The hospital utilization review committee shall establish written criteria on which it bases a recipient’s need for admission. The criteria shall be more extensive for admissions known to be associated with high costs, associated with the frequent furnishing of excessive services or authorized by a physician whose patterns of care are questionable.

 (c)  The hospital utilization review committee shall assess the need for hospital inpatient services by comparing each admission to the hospital’s written criteria established in accordance with subsection (b).

 (d)  Except as noted in subsection (e), an initial length of stay for general hospitals must be no greater than the 50th percentile of the latest Hospital Utilization Project (HUP) length of stay guidelines per diagnosis category, per age group. Ten days will be assigned as the initial length of stay for rehabilitation hospitals when the HUP 50th percentile for the admitting diagnosis is 10 days or less with the actual HUP 50th percentile used to assign the initial length of stay for other admissions. The HUP length of stay guidelines appear in the HUP Length of Stay Manual designated by the Department, and are statistical tables reflecting the length of stay of inpatient hospital stays in the Mid-Atlantic Region of the United States.

 (e)  If a recipient’s diagnosis is unconfirmed upon admission, the hospital utilization review committee, or its representative, shall assign an initial length of stay of no more than 2 days. If the committee is unable to confirm the recipient’s diagnosis within 2 days, the committee shall notify the Department’s Concurrent Hospital Review unit and initiate continued stay review in accordance with §  1163.478 (relating to continued stay review requirements).

 (f)  The hospital utilization review committee shall allow the attending physician the opportunity to present his views before making a final decision on the need for admission.

 (g)  In the event of an adverse determination, the hospital utilization review committee shall follow the procedures in §  1163.480 (relating to adverse determinations).

 (h)  The hospital utilization review committee shall conduct a review of cases identified by the Office of MA Programs, as being a questionable utilization of hospital services and facilities.

   The provisions of this §  1163.477 amended under sections 201 and 443.1(1) of the act of June 13, 1967 (P. L. 31, No. 21) (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.477 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917. Immediately preceding text appears at serial pages (150179) to (150181).

 (a)  The hospital utilization review committee or its representative shall review the need for continued stay of each MA recipient admitted to the hospital.

 (b)  The hospital utilization review committee shall establish written criteria on which it bases a recipient’s need for continued stay. The criteria shall be more extensive for those admissions known to be associated with high costs, associated with the frequent furnishing of excessive services, or authorized by a physician whose patterns of care are questionable.

 (c)  The hospital utilization review committee shall assess the need for continued stay in the hospital by comparing each case to the written criteria established under subsection (b).

 (d)  The hospital utilization review committee shall assign a subsequent review date based on the recipient’s medical condition and the time continued hospitalization will no longer be necessary.

 (e)  The hospital utilization review committee shall conduct the continued stay review and provide the Department’s Concurrent Hospital Review Section with the medical justification for the continued stay on or before the expiration date of the initial length of stay. Subsequent reviews shall be completed, and the Department shall be notified before the expiration of the previously assigned length of stay.

 (f)  If the hospital utilization review committee fails to conduct the continued stay review or fails to notify the Department on or before the expiration of the previously assigned length of stay, the Department does not certify those hospital days between the expiration of the previously assigned length of stay and the date the request for continued stay is made and approved.

 (g)  If an individual applies for MA while in the hospital, the committee shall:

   (1)  Assign the continued stay review date within 1 working day after the hospital is notified that the individual has applied for MA.

   (2)  Contact the Department’s Concurrent Hospital Review (CHR) Section for approval of the assigned length of stay.

 (h)  The hospital utilization review committee shall allow the attending physician the opportunity to present his views before making a final decision on the need for continued stay.

 (i)  In the event of an adverse determination, the hospital utilization review committee shall follow the procedures under §  1163.480 (relating to adverse determinations).

   The provisions of this §  1163.478 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 (a)  The hospital utilization review committee shall conduct Medical Care Evaluation (MCE) studies in accordance with this section.

 (b)  MCE studies shall identify and analyze medical or administrative factors related to patient care rendered in the hospital and, when indicated, make recommendations for changes that would be beneficial to patients, staff, the hospital and the community.

 (c)  MCE studies shall include analysis of at least:

   (1)  Admissions.

   (2)  Length of stay.

   (3)  Diagnostic categories.

   (4)  Ancillary services, including drugs and biologicals.

   (5)  Professional services performed in the hospital.

 (d)  At least one MCE study shall be in progress at any time.

 (e)  At least one MCE study shall be completed each calendar year.

 (f)  The results of each MCE study shall be documented.

 (g)  Documentation shall be made describing how the MCE study results have been used to institute improvements in the quality of care and to promote the efficient and effective use of hospital facilities.

   The provisions of this §  1163.479 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

 (a)  If the hospital utilization review committee denies admission or continued stay, the committee shall forward a letter regarding the adverse determination to:

   (1)  The recipient.

   (2)  The recipient’s next of kin or sponsor, if applicable.

   (3)  The attending physician.

   (4)  The hospital administrator.

   (5)  The Office of MA Programs.

 (b)  The adverse determination letter shall include:

   (1)  The patient’s name.

   (2)  The patient’s age.

   (3)  The patient’s full MA number.

   (4)  The hospital’s name.

   (5)  The admission date.

   (6)  The discharge date, if known.

   (7)  The diagnoses—required only on copy sent to the Office of MA Programs.

 (c)  The hospital utilization review committee shall send the adverse determination letter no later than by the last day of the approved length of stay or the day after the determination, whichever is earlier.

 (d)  If a continued stay has been denied, based on lack of medical necessity, the hospital shall attach a copy of the adverse determination letter to the invoice submitted for payment.

 (e)  Each month the hospital utilization review committee shall complete and submit to the Office of Medical Assistance Programs a summary report of adverse determinations in accordance with the instructions in the Provider Handbook or in the Manual for Concurrent Review of Inpatient Hospital Services.

 (f)  The hospital utilization review committee shall mail the monthly summary report specified in subsection (e) within 5 days after the end of the month.

   The provisions of this §  1163.480 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1169.480 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181893) to (181894).

 (a)  The Office of MA Programs regularly monitors each hospitals utilization review program to determine whether or not it is operating under the Concurrent Hospital Review process and this part. Monitoring is carried out through review of admissions, continued stays, patient records and claims paid by the Department.

 (b)  If the Department identifies delays in assigning the initial or continued length of stay, the Department will deny payment for all or part of the hospital stay.

 (c)  If the Department determines that services or items provided by the hospital were not medically justified, or were unnecessary, inappropriate or noncompensable, the Department will deny payment for the service or item and for services related to the provision of that service or item. Payment will also be denied to the practitioner who ordered the service.

   The provisions of this §  1163.481 amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.481 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917. Immediately preceding text appears at serial page (150184).

   This section cited in 55 Pa. Code §  1163.457 (relating to payment policies relating to out-of-State hospitals); and 55 Pa. Code §  1163.458 (relating to payment policies relating to same-calendar-day admissions and discharges).

ADMINISTRATIVE SANCTIONS

§ 1163.491. Provider misutilization.

 Providers determined to have billed for services inconsistent with this part, to have provided services outside the scope of customary standards of medical practice, or to have otherwise violated the standards set forth in the provider agreement are subject to the sanctions described in Chapter 1101 (relating to general provisions).

 If a hospital appeals a decision by the Department to fully or partially deny payment for a case, the denied payments will continue to be withheld pending decision on the appeal.

   The provisions of this §  1163.492 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

RIGHT OF APPEAL

§ 1163.501. Provider right to appeal.

 (a)  The hospital’s right of appeal is under Chapter 1101 (relating to general provisions).

 (b)  Hospitals and practitioners do not have the right to a separate appeal on the same inpatient case. For purposes of this chapter, inpatient services are considered to be those services provided by hospital personnel. Practitioner appeals relating to inpatient services are expected to be resolved through the utilization review process.

 (c)  For cases undergoing the appeal process, payment, including adjustments, will be withheld until the case is adjudicated.

   The provisions of this §  1163.501 adopted June 22, 1984, effective July 1, 1984, 14 Pa.B. 2185.

CHANGE OF OWNERSHIP

§ 1163.511. Change of ownership or control.

 (a)  A hospital or hospital unit is not entitled to additional reimbursement due solely to change of ownership or control.

 (b)  In the event of change of ownership, the Department will establish interim per diem rates as follows:

   (1)  If the change involves only one hospital or unit, the Department will use the interim per diem rate assigned to the entity before the change.

   (2)  If the change combines two or more hospitals or units into a single entity, such as a merger or consolidation, the Department will establish an interim per diem rate for the new entity by averaging the rates of the previous entities on a days-weighted basis. To determine that days-weighted average, the Department will use the MA days of each previously enrolled entity as reported in the most recent fiscal year for which the previous entities filed acceptable Cost Reports (MA 336).

   (3)  If the change divides one enrolled hospital or unit into two or more entities, the Department will use the interim per diem rate assigned to the entity before the change, for the resulting entities.

 (c)  In the event of change of ownership, the Department will establish final audited per diem rates based on the following ceilings:

   (1)  If the change involves only one hospital or unit, the Department will use the ceiling for the entity existing before the change.

   (2)  If the change combines two or more hospitals or units into a single entity, such as a merger or consolidation, the Department will establish a ceiling by averaging the audited per diem rates of the previous entities on a days-weighted basis. To determine that days-weighted average, the Department will use audited MA days for the previous entities in the final full fiscal year of operation before the change.

   (3)  If the change divides one enrolled hospital or unit into two or more entities, the ceiling assigned to the entity before the change is used for each resulting entity.

   (4)  The Department will not rebase ceilings established under this subsection until Statewide rebasing occurs.

   (5)  If after a change of ownership has occurred, the Department rebases ceilings Statewide, using a base year which predates or corresponds to the year of the change, the Department will use the Cost Report (MA 336) and the claims data for the base year regardless of who owned the entity in that base year.

 (d)  In the event of change of ownership, the Department will establish disproportionate share payments as follows:

   (1)  If the change involves only one hospital or unit, the Department will use the disproportionate share status assigned to the entity before this change, so long as the resulting entity maintains the nonemergency obstetric services by which the previous entity complied with section 1923(d) of the Social Security Act (42 U.S.C.A. §  1396r-4(d)).

   (2)  If the change combines two or more hospitals or units into a single entity, such as a merger or consolidation, the Department will establish the new entity as eligible for disproportionate share payments if one or more of the previous entities was eligible for disproportionate share payments, so long as the resulting entity maintains the nonemergency obstetric services by which one of the previous entities complied with section 1923(d) of the Social Security Act. To determine the monthly disproportionate share payment for the new entity, the Department will add the monthly disproportionate share payments of the previous entities.

   (3)  If the change divides one enrolled hospital or unit into two or more entities, the Department will use the disproportionate share status assigned to the hospital or unit before the change, so long as each of the resulting entities maintains the nonemergency obstetric services by which the previous entity complied with section 1923(d) of the Social Security Act. The Department will prorate the monthly disproportionate share payment of the previous entity on the basis of ratio of utilization agreed upon by the entities.

   (4)  The Department will not recalculate a hospital’s disproportionate share status established under this subsection until it recalculates disproportionate share status Statewide.

   (5)  If the Department makes a Statewide redetermination of disproportionate share status after a change of ownership has occurred, and uses a base year which predates or corresponds to the year of the change, the Department will use the cost reports for the base year, regardless of who owned the entity in that base year.

   (6)  For a Statewide redetermination of disproportionate share status, the determination of disproportionate share status for the entities resulting from the division is made on the basis of ratio of utilization for the base year as agreed upon by the entities.

 (e)  A hospital that changes ownership or closes shall submit final Cost Reports (MA 336) to the Department within 45 days of the change of ownership or closure.

 (f)  This section applies only to hospitals and units which change ownership in the period July 1, 1993, through June 30, 1995.

   The provisions of this §  1163.511 issued under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § §  201 and 443.1(1)).

   The provisions of this §  1163.511 adopted June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181895) to (181898).