42 C.F.R. § 456.650

Basis, purpose and scope

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(a) Basis. Section 1903(g) of the Act requires that FFP for long-stay inpatient services at a level of care be reduced, by a specified formula, for any quarter in which a State fails to make a satisfactory showing that it has an effective program of utilization control for that level of care.

(b) Purpose. This subpart specifies—

(1) What States must do to make a satisfactory showing;

(2) How the Administrator will determine whether reductions will be imposed; and

(3) How the required reductions will be implemented.

(c) Scope. The reductions required by this subpart do not apply to—

(1) Services provided under a contract with a health maintenance organization; or

(2) Facilities in which a QIO is performing medical and utilization reviews under contract with the Medicaid agency in accordance with § 431.630 of this chapter.

[44 FR 56338, Oct. 1, 1979, as amended at 50 FR 15327, Apr. 17, 1985; 51 FR 43198, Dec. 1, 1986]
Notes of Decisions
Cited in 2 cases, 1987–1991 · leading case: Johnson v. Sullivan, 758 F. Supp. 1496 (N.D. Ga. 1991).
Johnson v. Sullivan, 758 F. Supp. 1496 (N.D. Ga. 1991). · cites it 2× “42 C.F.R. § 456.650 (c)(2). 10 However, Defendants assert and the Grant Appeals Board found 11 that the State has not delegated complete authority to the Georgia Medical Care Foundation.”
State of Ind., Dept. of Pub. Welfare v. Bowen, 686 F. Supp. 692 (S.D. Ind. 1987). “§ 1396b(g) and its concomitant regulation 42 C.F.R. § 456.650 et seq. results in disallowance penalties where a satisfactory and effective state program is in effect as shown by the fact that the auditors, defective as their work allegedly was, found only six legitimate…”
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