available for public inspection and copying to the extent provided in the Freedom of Information Act (5 U.S.C. 552), the Federal Advisory Committee Act (5 U.S.C. App. I), the Privacy Act (5 U.S.C. 552a), and implementing Department of Health and Human Services regulations (45 CFR parts 5, 5b).

§ 52h.7 Grants; matters to be reviewed.

(a) No awarding official will make a grant based upon an application covered by this part unless the application has been reviewed by a peer review group in accordance with the provisions of this part and said group has made recommendations concerning the scientific merit of such application. In addition, where under applicable law an awarding official is required to secure the approval or advice of a national advisory council or board concerning an application, said application will not be considered by the council or board unless it has been reviewed by a peer review group in accordance with the provisions of this part and said group has made recommendations concerning the scientific merit of the application except where the council or board is the peer review group.

(b) Except to the extent otherwise provided for by law, such recommendations are advisory only and not binding on the awarding official or national advisory council or board.

§ 52h.8 Grants; review criteria.

In carrying out its review under § 52h.7, the peer review group will take into account, among other factors:

(a) The significance and originality from a scientific or technical standpoint of the goals of the proposed research;

(b) The adequacy of the methodology proposed to carry out the research;

(c) The qualifications and experience of the principal investigator and proposed staff;

(d) The reasonable availability of resources necessary to the research;

(e) The reasonableness of the proposed budget and duration in relation to the proposed research; and

(f) Where an application involves activities which could have an adverse effect upon humans, animals, or the environment, the adequacy of the pro

posed means for protecting against or minimizing such effects.

§ 52h.9 Unsolicited contract proposals; matters to be reviewed.

(a) No awarding official will award a contract based upon an unsolicited contract proposal covered by this part unless the proposal has been reviewed by a peer review group in accordance with the provisions of this part (pursuant to procedures set forth in 41 CFR subpart 3-4.52) and said group has made recommendations concerning the scientific merit of such proposal.

(b) Except to the extent otherwise provided for by law, such recommendations are advisory only and not binding on the awarding official.

§ 52h.10 Contract projects involving solicited contract proposals; matters to be reviewed.

(a) Subject to paragraph (b) of this section, no awarding official will issue a request for contract proposals with respect to a contract project involving solicited contract proposals unless the project concept has been reviewed by a peer review group in accordance with the provisions of this part and said group has made recommendations concerning the scientific merit of said concept. Where in the judgment of the awarding official the project approach has been sufficiently well defined by the time the review required by the preceding sentence is conducted, this review and the resulting recommendations shall include the project approach as well.

(b) The awarding official may waive the requirements of paragraph (a) of this section for peer review before issuing a request for contract proposals if he determines that the accomplishments of essential program objectives would otherwise be placed in jeopardy and any further delay would clearly not be in the best interest of the Government. The awarding official shall specify in writing the grounds on which this determination is based. Under such circumstances, the awarding official will not award a contract based on the request for contract proposals unless the proposals received in response to the request have been reviewed by a peer review group and that group has

made recommendations concerning the scientific merit of the project concept and of the approaches outlined in the proposals. The request for proposals will indicate that the project concept has not been reviewed by a peer review group and that no award will be made until such review is conducted and recommendations made based on such re

view.

(c) The Director of the National Institutes of Health, the Administrator of the Alcohol, Drug Abuse and Mental Health Administration, the Administrator of the Health Resources and Service Administration, or their designees may identify individual contracts or classes of contracts which may not be awarded unless all pertinent contract proposals have been reviewed by a peer review group in accordance with the provisions of this part and that group has made recommendations concerning the scientific merit of the proposals.

(d) Except to the extent otherwise provided for by law, such recommendations are advisory only and not binding on the awarding official.

(Sec. 215, Public Health Service Act, 58 Stat. 690, as amended (42 U.S.C. 216); sec. 475, Public Health Service Act, 88 Stat. 360, 89 Stat. 351, 92 Stat. 3436 (42 U.S.C. 2891-4); sec. 955(a), Pub. L. 97-35, 95 Stat. 590 (42 U.S.C. 300z-7(e))) [43 FR 7862, Feb. 24, 1978, as amended at 45 FR 35328, May 27, 1980; 49 FR 38111, Sept. 27, 1984]

§ 52h.11 Contract projects and proposals; review criteria.

(a) In carrying out its review of a project concept under §52h.10(a) or § 52h.10(b), the peer review group will take into account, among other factors:

(1) The significance from a scientific or technical standpoint of the goals of the proposed research or development activity;

(2) The availability of the technology and other resources necessary to achieve these goals;

(3) The extent to which there are identified, practical uses for the anticipated results of the activity; and

(4) Where the review includes the project approach, the adequacy of the

Subpart L-Services for Persons Unable to Pay; Community Service; Nondiscrimination.

§ 53.111 Services for persons unable to pay.

(a) Applicability. The provisions of this section apply to every applicant which heretofore has given or hereafter will give an assurance that it will make available a reasonable volume of services to persons unable to pay therefor but shall not apply to an applicant (1) for more than 20 years after the completion of construction of any facility with respect to which funds have been paid under section 606 of the Act or (2) beyond the period during which any amount of a direct loan made under sections 610 or 623 of the Act, or any amount of a loan with respect to which a loan guarantee and interest subsidy has been provided under sections 623 and 624 of the Act remains unpaid.

(b) Definitions. As used in this section:

(1) The term facility includes hospitals, facilities for long-term care, outpatient facilities, rehabilitation facilities, and public health centers;

(2) The term applicant means an applicant for, or recipient of, a grant, a loan guarantee or a loan under the Act;

(3) Fiscal year means the fiscal year of the applicant;

(4) The term operating costs means the actual operating costs of the applicant for a fiscal year as determined in accordance with cost determination principles and requirements under title XVIII of the Social Security Act (42 U.S.C. 1395): Provided, That such "operating costs" shall be determined for the applicant's entire facility and for all patients regardless of the source of payment for such care: And provided further, That in determining such operating costs there shall be deducted the amount of all actual or estimated reimbursements, as applicable, for services received or to be received pursuant to title XVIII and XIX of the Social Security Act (42 U.S.C. 1395 and 1936);

(5) The term reasonable cost means the cost of providing services to a specific patient determined in accordance with the cost determination principles and requirements under title XVIII of

the Social Security Act (42 U.S.C. 1395) and subpart D of the regulations thereunder (20 CFR part 405,1 part 401 et seq.);

(6) The term uncompensated services means services which are made available to persons unable to pay therefor without charge or at a charge which is less than the reasonable cost of such services. The level of such services is measured by the difference between the amount charged such persons for such services and the reasonable cost thereof;

(7) Reasonable volume of services to persons unable to pay therefor means a level of uncompensated services which meets a need for such services in the area served by an applicant and which is within the financial ability of such applicant to provide.

(c) Assurance. (1) Before an application under this part is recommended by a State agency to the Secretary for approval, the State agency shall obtain an assurance from the applicant that there will be made available in the facility or portion thereof to be constructed or modernized a reasonable volume of services to persons unable to pay therefor. The requirement of an assurance from an applicant shall be waived if the applicant demonstrates to the satisfaction of the State agency, subject to subsequent approval by the Secretary, that such a requirement is not feasible from a financial viewpoint.

(2) Prior to recommending that such requirement be waived, the State agency shall publish in a newspaper of general circulation in the area served by the applicant a notice of the request for such waiver and invite public comment thereon, allowing not less than 30 days therefor. All comments received shall be available for public inspection, and shall be considered by the State agency in arriving at its recommendation. Notice of the determination on the request for waiver shall be given to all interested persons and to the public before the approval of the Secretary is sought.

(d) Presumptive compliance guideline. An applicant which, for a fiscal year, (1) budgets for the support of, and

1 Redesignated as 42 CFR part 405 at 42 FR 52826, Sept. 30, 1977.

makes available on request, uncompensated services at a level not less than the lesser of 3 percent of operating costs or 10 percent of all Federal assistance provided to or on behalf of the applicant under the Act, or (2) certifies that it will not exclude any person from admission on the ground that such person is unable to pay for needed services and that it will make available to each person so admitted services provided by the facility without charge or at a charge below reasonable cost which does not exceed any such person's ability to pay therefor as determined in accordance with criteria established pursuant to paragraph (g), shall be deemed in presumptive compliance with its assurance. In the case of a loan guarantee with interest subsidy or a direct loan guarantee be sold by the Secretary with an interest subsidy, the amount of Federal assistance shall include the total amount of the interest subsidy which the Secretary is, or will be, obligated to pay over the full life of the loan, as well as any other payments which the Secretary makes on behalf of the applicant in connection with the loan guarantee or the direct loan which has been sold.

(e) Compliance reports. (1) Each applicant shall, not later than 120 days after the end of a fiscal year, unless a longer period is approved by the State agency for good cause shown, file with the State agency a copy of its annual statement for such year as required by section 646 of the Act and §53.128(q), which shall set forth its operating costs.

(2) With respect to each fiscal year for which a level of uncompensated services has been established in accordance with this section, the annual statement shall also set forth the amount of uncompensated services provided in such year.

(i) The provision of a level of uncompensated services in such year which equals or exceeds the level established pursuant to paragraph (h) of this section for such year shall constitute compliance with the assurance.

(ii) If the level of services provided was less than the level of uncompensated services established pursuant to paragraph (h) of this section, the applicant shall submit with such statement:

A justification therefor, showing that the provision of such lower level of uncompensated services was reasonable under the circumstances; and a description of the steps it proposes to take to assure the availability and utilization of the level of uncompensated services to be established for the current fiscal year, which shall include an affirmative action plan, utilizing press releases or other appropriate means as the facility may desire to bring to the attention of the public the availability of such uncompensated services and the conditions of eligibility therefor.

(3) Each applicant shall file with its annual statement a copy of that portion of its adopted budget for the current fiscal year relating to the support of uncompensated services in such year. Such budget for uncompensated services shall be based on the operating costs of the applicant for the preceding fiscal year and shall give due cognizance to probable increases in operating costs. Except in the case of a certification pursuant to paragraph (d)(2) of this section, if the budget statement does not conform to the presumptive compliance guideline, the applicant shall submit with its statement.

(i) A justification therefor, showing that such lower level of uncompensated services is reasonable under the circumstances, and

(ii) A plan to increase such uncompensated services to meet the presumptive compliance guideline or such other level of uncompensated services as may have been established or as it requests the State agency to establish in accordance with paragraph (h) of this section.

(4) The applicant shall also submit such additional reports related to compliance with its assurance as the State agency may reasonably require.

(5) Pending the establishment of a level of uncompensated services for any fiscal year pursuant to paragraph (h) of this section, the applicant shall, in such fiscal year, provide a level of services which is the higher of

(i) The level established for the preceding fiscal year (or if no such level has been established for such prior year, the level of services provided in such year) or

(ii) The level proposed in its adopted budget for the current fiscal year.

(f) Qualifying services. (1) In determining the amount of uncompensated services provided by an applicant, there shall be included only those services provided to an individual with respect to whom the applicant has made a written determination prior to the provision of such services that such individual is unable to pay therefor under the criteria established pursuant to 42 CFR 53.111(g), except that:

(i) Such determination may be made after the provision of such services in the case of services provided on an emergency basis: Provided, That when billing is made for such service, such billing must be accompanied by substantially the information required in the posted notice under paragraph (i) of this section; and

(ii) Such determination may be made after the provision of such services in the case of a change in circumstances as a result of the illness or injury occasioning such services (e.g., the patient's financial condition has changed due to a loss of wages resulting from the illness) or in case of insurance coverage or other resources being less than anticipated or the costs of services being greater than anticipated. Further, in all cases where such determination was not made prior to the provision of services, such services may not be included as uncompensated services if any collection effort has been made other than the rendering of bills permissible in the above exceptions: Provided, That such a determination may be made at any time if the determination was hindered or delayed by reason of erroneous or incomplete information furnished by or in behalf of the patient.

(2) There shall be excluded from the computation of uncompensated serv

ices:

(i) Any amount which the applicant has received, or is entitled to receive, from a third party insurer or under a governmental program; and

(ii) The reasonable cost of any services for which payment in whole or in part would be available under a governmental program (e.g., Medicare and Medicaid) in which the applicant, although eligible to do so, does not par

ticipate, but only to the extent of such otherwise available payment.

(g) Persons unable to pay for services. (1) The State agency shall set forth in its State plan, subject to approval by the Secretary, criteria for identifying persons unable to pay for services, which shall include persons who are otherwise self-supporting but unable to pay the full charge for needed services. Such criteria shall be based on the following or similar factors:

(i) The health and medical care insurance coverage, personal or family income, the size of the patient's family, and other financial obligations and resources of the patient or the family in relation to the reasonable cost of the services;

(ii) Generally recognized standards of need such as:

(a) The State standard for the medically needy as determined for the purposes of the Aid for Families with Dependent Children program;

(b) The current Social Security Administration poverty income level;

(c) The current Office of Economic Opportunity Income Poverty Guidelines applicable in the area; or

(iii) Any other equivalent measures which are found by the Secretary to provide a reasonable basis for determining an individual's ability to pay for medical and hospital services.

(2) A copy of such criteria shall be provided by the applicant, upon request, to any patient or former patient of the applicant and to any person seeking services from the applicant.

(3) The State agency shall provide a copy of such criteria to any person requesting it.

(h) Level of uncompensated services. (1) The State agency shall set forth in its State plan procedures for the determination for each applicant of the level of uncompensated services which constitutes a reasonable volume of services to persons unable to pay therefor provided that in no event shall the level of uncompensated services established under this section exceed the presumptive compliance guideline.

(2) The State agency shall for the purpose of making such determination, review, and evaluate the annual statement, the budget and the related documents submitted by each applicant