(ii) The provisions of subdivision (i) of this subparagraph do not apply to payment for drugs in institutions where rugs are included in a reimbursement ormula.

(iii) The provisions of subdivision (i) of this subparagraph do not apply where ■ public agency makes bulk purchases of irugs. In such cases, payment will be nade in accordance with the governmental statutes and regulations governng such purchases.

(iv) The use of a formulary is optional, as are provisions for use of generic drugs. Where either is employed, there must be standards for quality, safety, and effecciveness under the supervision of professional personnel.

(3) Other services. The upper limit for payment for other services shall be the following:

(i) Non-institutional services. Customary charges which are reasonable. The prevailing charges in the locality for comparable services under comparable circumstances shall set the upper limit of payments. In reviewing prevailing charges for reasonableness, the State agency should consider the combined payments received by providers (for furmishing comparable services under comparable circumstances) from the carriers under title XVIII and beneficiaries under title XVIII of the Social Security Act and the combined payments received from other third-party insuring organizations and their regular policy holders and subscribers, using whichever of these criteria or other criteria are appropriate to the specific provider service.

(ii) Skilled nursing home services, outpatient hospital services, and clinic services. Customary charges which are reasonable. Schedules of payments established by the State agency shall not exceed the combined payments received by providers (for furnishing comparable services under comparable circumstances) from the intermediaries or carriers under title XVIII and beneficiaries under title XVIII of the Social Security Act. Schedules will be acceptable if within the upper limits either on a facility by facility basis or on the basis of average payments according to a reasonable classification of facilities based on levels of care. (In case of providers which are not participating under title

XVIII, a financial audit of the facilities to apply the title XVIII-A reimbursement principles is not required but the State shall establish schedules of charges which are consistent with the intent that upper limits do not exceed amounts paid under title XVIII-A for similar services.)

(4) Prepaid capitation arrangements. The upper limit for payment for services provided on a prepaid capitation basis shall be established by ascertaining what other third parties are paying for comparable services under comparable circumstances. The cost for providing a given scope of services to a given number of individuals under a capitation arrangement shall not exceed the cost of providing the same services while paying for them under the requirements imposed for specific provider services.

(c) Waiver for experiments. Any limitations on reimbursement imposed by the provisions of this section may be waived by the Secretary with respect to experiments conducted under the provisions of section 402, Public Law 90-248, Incentives for Economy Experimentation.

(d) Federal financial participation. Federal financial participation is available for payments, within the upper limits described in paragraph (b) of this section, in accordance with the provisions of the State plan.

[34 F.R. 1244, Jan. 25, 1969, as amended at 35 F.R. 10013, June 18, 1970]

NOTE: For interim policy published in uncodified form, see 34 F.R. 11098, July 1, 1969.

§ 250.31

Subpart A-General

Payments for medical services and care by a third party.

(a) Requirements for State Plans. A State plan for medical assistance under title XIX, Social Security Act, must provide that:

(1) The State or local agency will take reasonable measures to ascertain any legal liability of third parties arising after March 31, 1968, for the medical care and services included under the plan, the need for which arises out of injury, disease, or disability of applicants for or recipients of medical assistance.

(2) The State or local agency, in determining whether medical assistance is payable, will treat any third party liability as a current resource when such

$ 250.41

liability is found to exist and payment by the third party has been made or will be made within a reasonable time.

(3) The State or local agency will not withhold payment in behalf of an eligible individual because of the liability of a third party when such liability or the amount thereof cannot be currently established or is not currently available to pay the individual's medical expense.

(4) The State or local agency will seek reimbursement from a third party for assistance provided when the party's liability is established after assistance is granted and in any other case in which the liability of a third party existed, but was not treated as a current resource.

(b) Federal Financial Participation. The State may claim Federal financial participation in expenditures for medical assistance made in accordance with the provisions for consideration of income and resources in the approved State plan. Accordingly, since the liability of a third party is considered as a resource, the State may not include, in the amount claimed, payments made for medical care and services rendered recipients, arising out of injury, disease, or disability, to the extent that: (1) The third party liability constituted a current resource but was disregarded when such payments were made, (2) the agency failed to take reasonable steps to collect reimbursement from a third party whose liability was subsequently established, or (3) the agency received funds from a third party in satisfying his liability to the recipient. The Federal Government will receive its pro rata share of any funds received in instances representing reimbursements from third parties, if Federal participation has been claimed.

(c) For purposes of this section, the term "third party" includes an individual, institution, corporation, public or private agency who is or may be liable to pay all or part of the medical cost of injury, disease or disability of an applicant or recipient of medical assistance. [34 F.R. 752, Jan. 17, 1969]

§ 250.41 Consultative services to medical

institutions.

(a) State plan requirement. A State plan for medical assistance under title XIX of the Social Security Act must provide for consultative services by

health agencies and other appropriate agencies of the State to hospitals, nursing homes, home health agencies, clinics, and laboratories in order to assist such facilities to:

(1) Qualify for payments under the Social Security Act, including titles V and XVIII of the Act;

(2) Establish and maintain such fiscal records as may be necessary for the proper and efficient administration of the Act; and

(3) Provide information needed to determine payments due under the Act for care and services furnished to individuals.

(b) Consultation to other facilities. Similar services may also be provided to other types of facilities, specified in the plan, which provide medical care to individuals for which payments are made under the Social Security Act.

[35 F.R. 6322, Apr. 18, 1970]

§ 250.71 Information reporting requirements, Internal Revenue Code.

State plan requirements: A State plan for medical assistance under title XIX of the Social Security Act must provide for:

(a) Identification of providers of service by social security number or by employer identification number. When the provider is in solo practice, identification shall be by social security number. When the provider is in other than solo practice, identification shall depend upon the group's billing practices; where billing is by the individual, then identification shall be by social security number; where billing is by a partnership or a corporation, then identification shall be by employer identification number.

(b) Compliance with the information reporting requirements of the Internal Revenue Code (26 U.S.C. 6041). With respect to payments for services under the plan, the Internal Revenue Code requires that annual information returns be filed showing aggregate amounts paid to providers of service identified by name, address, and social security number or employer identification number.

(c) Establishing a basis for verifying with recipients whether services billed by providers were actually received. Such basis may be by random sample of patients for each provider who is paid

ignificant amounts under the program nd for groups of providers, none of hom receive a significant amount.

35 F.R. 3898, Feb. 28, 1970] ubpart B-Personnel Administration 250.120 Staffing for administration of medical assistance programs, Federal financial participation.

With respect to expenditures made fter December 31, 1967, under a State lan for medical assistance approved Inder title XIX of the Social Security act, Federal financial participation at 75 ercent is available for the compensaion of skilled professional medical perConnel, and staff directly supporting such ersonnel, of the State agency or any ther public agency, in the administraion of the medical assistance program at the State or local level, and for their raining and educational leave with espect to title XIX.

34 F.R. 205, Jan. 7, 1969]

Subpart C-Fiscal Administration

250.210 State financial participation;

State plan requirements.

Effective July 1, 1969, a State plan for medical assistance under title XIX of the Social Security Act must:

(a) Provide that State funds will be used to pay all of the non-Federal share of the total expenditures under the plan; or

(b) If there is local financial participation, provide a method of apportioning State and Federal funds among the political subdivisions on an equalization or other basis that will assure that lack of funds from local sources does not result in lowering the amount, duration, scope or quality of care and services or level of administration under the plan in any part of the State.

[34 F.R. 205, Jan. 7, 1969]

AUTHORITY: The provisions of this Part 252 issued under secs. 1102, 1902, 1908, 49 Stat. 647, 81 Stat. 908; 42 U.S.C. 1302, 1396a, 1396g.

SOURCE: The provisions of this Part 252 appear at 35 F.R. 3968, Feb. 28, 1970, unless otherwise noted.

§ 252.40 State programs for licensing administrators of nursing homes.

(a) Purpose. This section establishes the procedures for States to follow to comply with the requirement for States participating in a title XIX program to establish programs for the licensure of administrators of nursing homes.

(b) Definitions. When used in this section:

(1) "Nursing home" means any institution or facility defined as such for licensing purposes under State law, or, if State law does not employ the term nursing home, the equivalent term or terms as determined by the Secretary of Health, Education, and Welfare.

(2) "Nursing home administrator" means any individual who is charged with the general administration of a nursing home, whether or not such individual has an ownership interest in such home, and whether or not his functions and duties are shared with one or more other individuals.

(3) "Board" means a duly appointed State board, representative of the professions and institutions concerned with the care of chronically ill and infirm aged patients, established for the purpose of carrying out a State program for the licensure of administrators of nursing homes.

(4) "Agency," unless otherwise indicated, means the agency of the State responsible for licensing individual practitioners under the healing arts licensing act of the State.

(5) "License" means a certificate or other written evidence issued by a State agency or board to indicate that the bearer has been certified by that body to meet all the standards required of a licensed nursing home administrator under this section.

(6) "Provisional license" means a temporary license issued by the State agency or board to an individual who meets the conditions for waiver under paragraph (d) of this section.

(c) State plan requirements. Effective July 1, 1970, a State plan for medical assistance under title XIX of the Social Security Act must include a State program for the licensure of administrators of nursing homes which:

(1) Provides that no nursing home within the State may operate except under the supervision of an administrator licensed in the manner provided in this section.

(2) Provides for licensing of nursing home administrators by the single agency of the State responsible for licensing individual practitioners under the healing arts act of the State, or, in the absence of such an act or agency, a State licensing board representative of the professions and institutions concerned with the care of chronically ill and infirm aged patients and established to carry out the purposes of section 1908 of the Social Security Act. It shall be the function and duty of such agency or board to: (1) Develop, impose, and enforce standards which must be met by individuals in order to receive a license as a nursing home administrator, which standards shall be designed to insure that nursing home administrators will be individuals who are of good character and are otherwise suitable, and who, by training or experience in the field of institutional administration, are qualified to serve as nursing home administrators;

(ii) Develop and apply appropriate techniques, including examinations and investigations, for determining whether an individual meets such standards:

(iii) Issue licenses to individuals determined, after the application of such techniques, to meet such standards, and revoke or suspend licenses previously issued by the agency or board in any case where the individual holding such license is determined substantially to have failed to conform to the requirements of such standards;

(iv) Establish and carry out procedures designed to insure that individuals licensed as nursing home administrators will, during any period that they serve as such, comply with the requirements of such standards;

(v) Receive, investigate, and take appropriate action with respect to any charge or complaint filed with the agency or board to the effect that any

individual licensed as a nursing home administrator has failed to comply with the requirements of such standards; and

(vi) Conduct a continuing study and investigation of nursing homes and administrators of nursing homes within the State with a view to the improvement of the standards imposed for the licensing of such administrators and of procedures and methods for the enforcement of such standards with respect to administrators of nursing homes who have been licensed as such.

(d) Waivers. The agency or board may waive any of the standards referred to in paragraph (c) (2) (i) of this section,

other than the standards relating to good character and suitability, with respect to any individual who, during all of the calendar year immediately preceding the calendar year in which the requirements prescribed in paragraph (c) of this section are first met by the State, has served in the capacity of a nursing home administrator provided that:

(1) The agency or board issues to such an individual a provisional license to indicate that the bearer has been certified to meet the conditions specified in this paragraph, which provisional license may be valid only for a period of 2 years. or until July 1, 1972, or until the individual meets the qualifications of a fully licensed nursing home administrator, whichever is earlier; and

(2) There is provided in the State, during all of the period for which the waiver is in effect, a program of training and instruction designed to enable all individuals, with respect to whom any such waiver is granted, to attain the qualifications necessary to meet the standards referred to in paragraph (c) (2) (i) of this section.

(e) Federal financial participation. Federal financial participation is not available in the costs incurred by the licensing board in establishing and maintaining standards for the licensing of nursing home administrators.

training and instruction to enable all individuals who have been granted provisional licenses under section 252.40 (d) of this part to attain the minimum qualifications necessary to meet the State standards for licensure as nursing home administrators.

(b) Definitions. When used in this section:

(1) "Nursing home" means any institution or facility defined as such for licensing purposes under State law, or if State law does not employ the term nursing home, the equivalent term or terms as determined by the Secretary of Health, Education, and Welfare.

(2) "Nursing home administrator" means any individual who is charged with the general administration of a nursing home, whether or not such individual has an ownership interest in such home, and whether or not his functions and duties are shared with one or more other individuals.

(3) "Board" means a duly appointed State board, representative of the professions and institutions concerned with the care of chronically ill and infirm aged patients, established for the purpose of carrying out a State program for the licensure of administrators of nursing homes.

(4) "Agency," unless otherwise indicated, means the agency of the State responsible for licensing individual practitioners under the healing arts licensing act of the State.

(5) "License" means a certificate or other written evidence issued by a State agency or board to indicate that the bearer has been certified by that body to meet all the standards required of a licensed nursing home administrator under this section.

(6) "Provisional license" means a temporary license issued by the State agency or board to an individual who meets the conditions for waiver under § 252.40 (d).

(7) "Core of knowledge" means the group of basic subject areas in the field of nursing home administration, of which an individual should be well informed and have a working understanding, to qualify as a licensed administrator of a nursing home.

(c) Eligibility and program content. (1) Grants, not to exceed 75 percent of the cost of instituting and conducting training and instruction programs to carry out the provisions of this section, may be made to the single State agency responsible for the administration of the State's title XIX program subject to the requirements of subparagraphs (2) through (5) of this paragraph.

(2) Such programs of training and instruction must provide valid preparation for the specific level of knowledge and proficiency necessary to meet the standards of the State for licensure as nursing home administrators.

(3) The program must include approximately 100 classroom hours of training and instruction, or the relative equivalent in home study courses.

(4) The program must be limited to: (i) Credit granting courses offered by an accredited university or college,

(ii) Noncredit courses offered by identifiable academic departments of accredited universities or colleges,

(ii) Nondegree courses, offered by extension divisions or programs associated with accredited universities or colleges independent of identifiable academic departments,

(iv) Courses, jointly sponsored by accredited universities or colleges, offered by recognized State associations or national professional societies, or

(v) Other courses, jointly sponsored by an accredited university or college.

(5) Course content may not be modified subsequent to approval for Federal grant without approval of the Regional Commissioner, Social and Rehabilitation Service.

(d) Application. The single State agency responsible for the administration of the State's title XIX program shall file an application for a grant under this section with the Regional Commissioner, Social and Rehabilitation Service. The application must contain the following information:

(1) Identification of sponsoring institution(s) or organization(s).

(2) Identification of instructor(s) presenting the training and instruction.

(3) Identification of the mode of instruction to be followed.