notice before making the required reduction.

(b) If the Administrator determines that a showing for any quarter is unsatisfactory on its face, he will make the required reduction in the grant award based on the Quarterly Statement of Expenditures for that quarter. (See 45 CFR 201.5(a)(3).)

(c) If the Administrator finds a showing satisfactory on its face, but after validation determines the showing to be unsatisfactory, he will notify the agency of any required reduction in FFP no later than the first day of the fourth calendar quarter following the calendar quarter for which the showing was made. Any required reduction will be made by amending or adjusting the agency's grant award.

(d) The agency may request reconsideration of a reduction in accordance with the procedures specified in 45 CFR Part 16.

§ 456.657 Computation of reductions in FFP.

(a) For each level of care specified in a provider agreement, and for each quarter for which a satisfactory showing is not made, the amount of the reduction in FFP is computed as follows:

(1) For each level of care, the number of recipients who received services in facilities that did not meet the requirements of this subpart is divided by the total number of recipients who received services in facilities

for which a showing was required under this subpart. If any of the requirements specified in § 456.652(a)(1) through (4) were not met for any recipient in a facility, the reduction will be computed on the total number of recipients in that facility at the level of care in question.

(2) The fraction obtained in paragraph (aX1) of this section is multiplied by one-third.

(3) the product obtained in paragraph (aX2) of this section is multiplied by the Federal Medical Assistance Percentage (FMAP).

(4) The product obtained in paragraph (a)(3) of this section is multiplied by the agency payments for longstay services furnished during the quarter at that level of care.

(b) If any of the data required to compute the amount of the reduction in FFP are unavailable, the Administrator will substitute an estimate. If the agency determines the exact data to the satisfaction of the Administrator, the estimate may later be adjusted. If the number of recipients in individual facilities is not available, the fraction specified in paragraph (a)(1) of this section will be estimated, for each level of care, by dividing the number of facilities in which the requirements were not met by the total number of facilities for which a showing is required under this subpart.

Sec.

460.55 Wisconsin.

460.56 Wyoming.

AUTHORITY: Title XI, Part B, Social Security Act; 42 U.S.C. 1320c-1320c-20; Sec. 1102, 49 Stat. 647 (42 U.S.C. 1302).

SOURCE: 39 FR 10206, Mar. 18, 1974, unless otherwise noted. Redesignated at 42 FR 52826, Sept. 30, 1977.

NOTE: Nomenclature changes affecting Part 460 appear at 42 FR 65121, Dec. 29, 1977.

§ 460.1

Definitions.

As used in this part:

(a) "Act" means the Social Security Act, as amended, (42 U.S.C. Chapter 7).

(b) "Area" means the geographical area within the boundaries of a State or within the boundaries of one or more counties or other political subdivisions in a State designated as constituting an area with respect to which a Professional Standards Review Organization may be designated, pursuant to section 1152(a) of the Act.

(c) "PSRO" means Professional Standards Review Organization.

(d) "Secretary" means the Secretary of Health, Education, and Welfare and any other officer or employee of the Department of Health, Education, and Welfare to whom the authority involved may be delegated.

(e) "State" means a State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa and the Trust Territory of the Pacific Islands.

(f) "Physician" means a licensed doctor of medicine or osteopathy.

§ 460.2 Guidelines for designation of

areas.

(a) General requirements. The Secretary will:

(1) Designate appropriate areas for which Professional Standards Review Organizations may be designated; and

(2) From time to time, review the area designations and revise those that, in his judgment, need revision.

(b) Specific guidelines. In designating areas or revising the designations,

(3) Existing boundaries of local medical review organizations and local health planning areas should be considered.

(4) An area should, to the extent possible, coincide with a medical service area and assure broad, diverse representation of all medical specialties. Consideration should be given to the location of existing medical centers and to natural geographic barriers.

(5) An area should generally include a minimum of approximately 300 practicing physicians. While the maximum can be expected to vary with local circumstances, generally it should not exceed 2,500 practicing physicians.

(6) The designation of an area should take into account the need for effective coordination with Medicare and Medicaid fiscal agents.

(c) Exception. The Secretary will designate a single Statewide area, without consideration of the foregoing guidelines, in any State for which:

(1) No areas have been designated as of January 1, 1978, and

(2) The Secretary has obtained suitable evidence that a majority of the physicians in the State favor a Statewide area.

(Sec. 1152 of the Social Security Act (42 U.S.C. 1320c-1); sec. 1102 of the Social Security Act (42 U.S.C. 1302))

[43 FR 29006, July 5, 1978]

§ 460.2a Special procedures for statewide designation.

(a) Policy and Applicability. (1) Section 1152(g) of the Act reads as follows:

(g)(1) In any case in which the Secretary has established, within a State, two or more appropriate areas with respect to which PSROS may be designated, he shall, prior to designating a PSRO for any such area, conduct in each such area a poll in which the doctors of medicine and osteopathy engaged in active practice therein will be asked: 'Do

you support a change from the present local and regional PSRO area designation to a single statewide area designation?' If, in each such area, more than 50 per centum of the doctors responding to such question respond in the affirmative, then the Secretary shall establish the entire State as a single PSRO area.

(2) The provisions of paragraph (1) shall not be applicable with respect to the designation of PSRO areas in any State, if, prior to the date of enactment of this subsection, ' the Secretary has entered into an agreement (on a conditional basis or otherwise) with an organization designating it as the PSRO for any area in the State.

(2) This section is applicable to the special procedures for statewide designation pursuant to section 1152(g) of the Act.

(b) Determination of Number of Doctors in each PSRO Area in the State. In each State identified by the Secretary under paragraph (a) of this section, as requiring a poll on the change to statewide designation, the Secretary will determine, on the basis of the latest available information which he deems appropriate for such purposes, the names, current mailing addresses, and total number of doctors of medicine or osteopathy engaged in active practice in each PSRO area in such State, as designated in this part. The information on the basis of which the total number of doctors in each such area is determined by the Secretary will be available for public inspection in accordance with 5 U.S.C. 552 and 45 CFR 5.1 et seq.

(c) Notice of Poll. The Secretary will publish a notice in the FEDERAL REGISTER and in at least one newspaper of general circulation serving each of the areas in the State, and will notify by letter appropriate State and county medical societies, that he will conduct a poll in each such area in the State to determine whether the doctors engaged in actual practice in each area support a change from the present local PSRO area designation to a statewide area designation, pursuant to section 1152(g) of the Act. The notice will set forth the dates on which such poll will be initiated and completed and will state that doctors

'Section 1152(g) was added by section 105 of Pub. 94-182, enacted December 31, 1975.

in such area who have not received a ballot within five (5) days after initiation of the poll may request a ballot prior to the expiration of the polling period from the Secretary at the address specified in the notice.

(d) Mailing of Ballots. The Secretary will mail, by regular mail, to each individual doctor of medicine or osteopathy whom the Secretary determines, pursuant to paragraph (b) of this section, to be engaged in the active practice of medicine or osteopathy in each PSRO area in the State, the following:

(1) A ballot in which the doctor is requested to check one of two boxes indicating an affirmative or negative response to the question: “Do you support a change from the present local and regional Professional Standards Review Organization area designation to a single statewide area designation?";

(2) A preaddressed, franked and coded envelope; and

(3) A cover letter describing the purpose of the poll, and specifically including:

(i) The date of initiation of the poll, which will be not more than two days prior to the date on which the polling material is mailed;

(ii) A request that the doctor complete the ballot and mail it by regular mail in the enclosed envelope;

(iii) A statement that if, in each PSRO area in the State, more than 50 per centum of the doctors responding to the poll indicate that they support a change from the present local area designations to a statewide area designation, the Secretary will establish the entire State as a single PSRO area;

(iv) A statement that all completed ballots which are mailed in the enclosed self-addressed envelope, and postmarked within 30 days of the date of initiation of the poll and received by the Department of Health, Education, and Welfare officer, whose address appears on the enclosed envelope, will be counted in determining the result of the poll; and

(v) A statement that doctors who are identified by the Secretary as being in active practice in more than one area may vote with respect to each of the areas in which they practice.

(e) Tabulation of Ballots. After the expiration of 30 days following the date of initiation of the poll, as described in paragraph (d)(3)(i) of this section, the Secretary will tabulate the completed ballots which have been received in the self-addressed envelopes provided and which are postmarked prior to the end of such 30-day period. (1) The ballots will be tabulated separately for each area in the State, to determine whether or not, in each PSRO area in the State, more than 50 percent of the doctors responding to the poll indicate that they support a change from the present local area designations to a Statewide area designation.

(2) The ballots will be tabulated in such a fashion as to assure that the vote of each individual doctor responding to the poll will not be disclosed.

(3) The tabulation proceeding will be publicly announced and will be open to the public in a central location in the State.

(f) Retention of Ballots. All ballots received by the Secretary will be retained for such period as may be necessary to assure their availability for a recount in accordance with paragraph (h) of this section, and will be available for public inspection during such period at a place announced in the notice published pursuant to paragraph (g) of this section.

(g) Notice of Poll Results. After tabulating the ballots received for each area in the State, the Secretary will publish a notice in the FEDERAL REGISTER and in at least one newspaper of general circulation in each area, and will notify by letter the appropriate State and county medical societies, as follows:

(1) That more than 50 percent of the doctors, in each PSRO area of the State, by checking the appropriate box on the ballot, responded in the affirmative to the question: "Do you support a change from the present local and regional Professional Standards Review Organization area designation to a single statewide area designation?" and, therefore, the Secretary will proceed to establish the entire State as a single PSRO area; or

(2) That, in one PSRO area in the State (or the number of such areas if

more than one) more than 50 percent of the doctors, by checking the appropriate box on the ballot, responded in the negative to the question: “Do you support a change from the present local and regional Professional Standards Review Organization area designation to a single statewide PSRO area?" and, therefore, the PSRO areas established in the State under this Part 460 will remain in effect.

(h) Recount. The count under paragraph (e) of this section will be final, except that the Secretary will conduct a recount of an area in the State if at least five (5) doctors in such area so request in writing, postmarked within 10 days following the date of publication of the notice in the FEDERAL REGISTER under paragraph (g) of this section. Such recount will be conducted in a public proceeding, and the result of the recount will be final.

[41 FR 33436, Aug. 9, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977]

§ 460.3 Alabama.