extend the period during which such obligation must be incurred for up to an additional six months. If no such obligation is incurred within such period, the designated planning agency's approval shall, for purposes of this subpart, be deemed to be terminated upon the expiration of such period.

(b) In the case of any plan for capital expenditures proposed by or on behalf of a health care facility or health maintenance organization under which a series of obligations for capital expenditures for discrete components of the plan is to be incurred over a period longer than one year, the designated planning agency may review and approve or disapprove, for purposes of this subpart, those of such capital expenditures which it estimates will be incurred within three years following the date of such approval or disapproval.

ex

(c)(1) In any case in which the Secretary has determined pursuant to a finding by the designated planning agency that a proposed capital expenditure is not in conformity with the standards, criteria, or plans described in § 100.104(a)(2), that penses related to such capital expenditure shall not be included in determining Federal payments under titles V, XVIII, and XIX of the Act the health care facility or health maintenance organization to whom such payments are made shall be entitled, upon its request to the designated planning agency in such form and manner and supported by such information as such agency may require, to a reconsideration by the designated planning agency of such finding:

(i) Whenever there is a substantial change in existing or proposed health facilities or services, of the type pro

posed, in the area served by such facility or organization; or

(ii) Upon a substantial change in the need for facilities or services, of the type proposed, in the area served by such facility or organization, as reflected in the standards, criteria or plans referred to in § 100.104(a)(2); or (iii) At any time following the expiration of three years from the date of the finding of the designated planning agency or of its last reconsideration of such finding pursuant to this paragraph, whichever is later.

(2)(i) If, upon reconsideration of its finding pursuant to this paragraph, and after consulting with and taking into consideration the findings and recommendations of the other agencies described in § 100.105, the designated planning agency finds that the facilities or services provided by such capital expenditure are in conformity with the standards, criteria, and plans described in § 100.104(a)(2) it shall promptly so notify the Secretary and the person submitting such request.

(ii) If the designated planning agency, upon such reconsideration, reaffirms its previous finding, the procedure set forth in § 100.106 following an initial determination shall be followed.

(3) Upon notification by a designated planning agency of a revised finding in accordance with paragraph (c)(2) of this section, the Secretary will include, in determining future payments under titles V, XVIII, and XIX of the Act, expenses related to such capital expenditure. Such expenses will be included for periods following the date of such notification only, and amounts previously excluded shall not be taken into account in determining Federal payments under titles V, XVIII, and XIX of the Act.

§ 100.109

110.1005 What information must be submitted by an applicant which has received a commitment for a loan to be made or guaranteed under this supbart before the closing of the loan?

110.1006 What are the limitations on loans and guaranteed loans?

110.1007 What requirements apply to projects assisted under this subpart? 110.1008 What is an eligible cost? 110.1009 What security is required? 110.1010 How and over what period are

loans and guaranteed loans to be repaid? 110.1011 On what basis may the Secretary waive rights of recovery?

AUTHORITY: Sec. 215, 58 Stat. 690, (42 U.S.C. 216); secs. 1301-1316, as amended, 90 Stat. 1945-1960 (42 U.S.C. 300e-300e-15), unless otherwise noted.

SOURCE: 40 FR 37311, Oct. 18, 1974, unless otherwise noted.

EDITORIAL NOTE: For a document giving notice of statutory amendments which affect 42 CFR Part 110, see 46 FR 45694, Sept. 14, 1981, and 46 FR 51246, Oct. 19, 1981.

(2) Outpatient services and inpatient hospital services (§ 110.102(a)(2));

(3) Medically necessary emergency health services (§ 110.102(a)(3)); and

(4) Diagnostic laboratory and diagnostic and therapeutic radiologic services (§ 110.102(a)(6)).

"Direct service contract" means a contract for the provision of basic or supplemental health services or both between an HMO and (1) a health professional other than a member of the staff of the HMO, or (2) an entity other than a medical group or an IPA.

"Full-time student" means a student who is enrolled for a sufficient number of credit hours in a semester or other academic term to enable the student to complete the course of study within not more than the number of semesters or other academic terms normally required to complete that course of study on a fulltime basis at the school in which the student is enrolled.

"Health maintenance organization" (HMO) means a legal entity which provides or arranges for the provision of basic and supplemental health services to its members in the manner prescribed by, is organized and operated in the manner prescribed by, and otherwise meets the requirements of, section 1301 of the Act and the regulations of this subpart.

"Health professionals" means physicians (doctors of medicine and doctors of osteopathy), dentists, nurses, podiatrists, optometrists, physicians' assistants, clinical psychologists, social workers, pharmacists, nutritionists, occupational therapists, physical thera

pists, and other professionals engaged in the delivery of health services who are licensed, practice under an institutional license, are certified, or practice under authority of the HMO, a medical group, individual practice association, or other authority consistent with State law.

or

(ii) Pool their income from practice as members of the group and distribute it among themselves according to a prearranged salary or drawing account or other similar plan unrelated to the provision of specific health services;

(1) That these health professionals shall provide their professional services in accordance with a compensation arrangement established by the entity; and

(2) To the extent feasible, for the sharing by these health professionals of health (including medical) and other records, equipment, and professional, technical, and administrative staff.

"Medical group" means a partnership, association, corporation, or other group:

(1) Which is composed of health professionals licensed to practice medicine or osteopathy and of such other licensed health professionals (including dentists, optometrists, and podiatrists) as are necessary for the provision of health services or which the group is responsible;

(2) A majority of the members of which are licensed to practice medicine or osteopathy; and

(3) The members of which:

(i) After the end of the 48 month period beginning after the month in which the HMO for which the group provides health services becomes a qualified HMO, as their principal professional activity (over 50 percent individually) engage in the coordinated practice of their profession and as a group responsibility have substantial responsibility (over 35 percent in the aggregate of their professional activity) for the delivery of health services to members of an HMO;

"Medical group members" means (1) a health professional engaged as a partner, associate, or shareholder in the medical group, or (2) any other health professional employed by the group who may be designated as a medical group member by the medical group.

"Medically underserved population" means the population of an urban or rural area designated by the Secretary as an area with a shortage of personal health services. The Secretary will designate these areas as described in § 110.203(d).

"Member," when used in connection with an HMO, means an individual who has entered into a contractual relationship with the HMO or on whose behalf a contractual arrangement has been entered into with the HMO by a subscriber under which the HMO assumes the responsibility for the provision to the member of basic health services and such supplemental health services as may be contracted for.

"Nonmetropolitan area" means an area no part of which is within a standard metropolitan statistical area as designated by the Office of Management and Budget and which does not contain a city whose population exceeds 50,000 individuals.

"Party in interest" means: (1) Any director, officer, partner, or employee responsible for management or administration of an HMO, any person who is directly or indirectly the beneficial owner of more than 5 percent of the equity of the HMO, any person who is the beneficial owner of a mortgage, deed of trust, note, or other interest secured by, and valuing more than 5 percent of the assets of the HMO, and,

in the case of an HMO organized as a nonprofit corporation, an incorporator or member of the corporation under applicable State corporation law;

(2) Any entity in which a person described in paragraph (1):

(i) Is an officer or director;

(ii) Is a partner (if the entity is organized as a partnership);

(iii) Has directly or indirectly a beneficial interest of more than 5 percent of the equity; or

(iv) Has a mortgage, deed of trust, note, or other interest valuing more than 5 percent of the assets of such entity;

(3) Any spouse, child, or parent of an individual described in paragraph (1).

"Policymaking body" of an HMO means a board of directors, governing body, or other body of individuals which has the authority to establish policy for the HMO.

“Qualified HMO” means an HMO found by the Secretary to be qualified within the meaning of Section 1310 of the Act and Subpart F of this part.

"Rural area" means any area not listed as a place having a population of 2,500 or more in Document #PC(1)A, "Number of Inhabitants," Table VI, "Population of Places," and not listed as an urbanized area in Table XI, "Population of Urbanized Areas" of the same document (1970 Census or most recent update of this document, Bureau of Census, U.S. Department of Commerce).

"Secretary" means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

"Service area" means the geographic area as defined through zip codes, census tracts, or other geographic subdivisions, found by the Secretary to be the area within which the HMO provides or arranges for basic and supplemental health services that are available and accessible to its members as required by section 1301(b)(4) of the Act.

"Significant business transaction" means any business transaction or series of transactions during any one fiscal year of the HMO, the total value of which exceeds the lesser of $25,000

or 5 percent of the total operating expenses of the HMO.

"Staff of the HMO" means health professionals who are employees of the HMO and who:

(1) Provide services to HMO members at an HMO facility subject to the staff policies and operational procedures of the HMO;

(2) Engage in the coordinated practice of their profession and provide to members of the HMO the health services which the HMO has contracted to provide;

(3) Share medical and other records, equipment, and professional, technical, and administrative staff of the HMO;

(4) Provide their professional services in accordance with a compensation arrangement, other than fee-forservice, established by the HMO. This arrangement may include, but is not limited to, fee-for-time, retainer or salary.

"Subscriber" means a member who has entered into a contractual relationship with the IMO or who is responsible for making payments for basic health services (and contracted for supplemental health services) to the HMO or on whose behalf these payments are made. "Supplemental

health services" means the health services described in § 110.103(a).

"Unusual or infrequently used health services" means: (1) Those health services which are projected to involve fewer than 1 percent of the encounters per year for the entire HMO membership, or,

(2) Those health services the provision of which, given the enrollment projection of the HMO and generally accepted staffing patterns, is projected will require less than 0.25 full time equivalent health professionals.

[45 FR 72528, Oct. 31, 1980, as amended at 47 FR 19338, May 5, 1982]

90-149 0-82--10