connection with such request, and such comments as the Secretary may request from the designated planning agency.

(3) Notice of any reconsidered determination under this paragraph shall be sent to the designated planning agency and the person requesting such reconsideration.

(e) A determination by the Secretary is, under section 1122 of the Act, not subject to administrative or judicial review.

NOTE: Where the Secretary makes the determination described in 42 CFR 100.108(a)(1), he will follow the following policy in establishing the time period during which reimbursement will be withheld:

(1) Where the health care facility or health maintenance organization by or on behalf of which the expenditure was made demonstrates to the satisfaction of the Secretary that a reasonable effort had been made to determine from the designated planning agency whether the expenditure was subject to review, and the designated planning agency had not informed the facility or organization within a reasonable period of time that the proposed expenditure was subject to review, the Secretary will not withhold reimbursement related to the capital expenditure.

(2) Where the designated planning agency has, in accordance with requirements of section 1122 of the Act and its regulations (42 CFR Part 100), submitted to the Secretary its finding that such expenditure is not consistent with the standards, criteria, or plans described in § 100.104(a)(2) of the regulations, and where paragraph (1) above is not applicable, the Secretary will withhold all reimbursement related to the capital expenditure: Provided, That where the designated planning agency, in accordance with § 100.109(c), submits to the Secretary a revised funding in accordance with paragraph (c)(2) of that section, the Secretary will apply the provisions of paragraph (3) or paragraph (4) below, whichever is applicable.

(3) Where (i) the designated planning agency submits to the Secretary its finding that for the proponent to comply with the requirement of § 100.106 for timely notice of intent to incur the obligation for a capital expenditure, which capital expenditure was not for the purpose of providing a new service or expanding the capacity of the health care facility or health maintenance organization to offer an existing service, would have placed in jeopardy the health or the safety of the patients of the facility or organization, and that the proponent gave such notice as, in the opinion of the designated

planning agency, was reasonable under the circumstances, and (ii) if the facility or organization submitted to the designated planning agency within 60 days following the date of the obligation for the expenditure or 90 days following the date of publication of this policy in the FEDERAL REGISTER, whichever is later, a complete application and (iii) the designated planning agency submits to the Secretary its finding that the capital expenditure is consistent with the standards, criteria, and plans described in § 100.104(a)(2) which apply at the time of the review by the designated planning agency, the Secretary will not withhold reimbursement related to the capital expenditure.

(4) Where the designated planning agency submits to the Secretary its finding that the capital expenditure is consistent with the standards, criteria, and plans described in § 100.104(a)(2) which apply at the time of the review by the designated planning agency, but the provisions of neither paragraph (1) nor paragraph (3) above apply, the Secretary will withhold reimbursement related to the capital expenditure for a period of one year.

[38 FR 31381, Nov. 13, 1973, as amended at 42 FR 4848, Jan. 26, 1977]

§ 100.109 Continuing effect of determinations.

(a) Except in the case of a long-term construction plan of the type described in paragraph (b) of this section, where the designated planning agency has found that a proposed capital expenditure is in conformity with the standards, criteria, and plans described in § 100.104(a)(2), the obligation for such capital expenditure shall be incurred not more than one year following the date of such finding, or such shorter period as may be required by applicable State law: Provided, That in the absence of any State law to the contrary, the designated planning agency may, pursuant to a showing of good cause by the person proposing such expenditure, 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.

(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 expenses 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 proposed, 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.

§ 100.110 Payment by Secretary of costs of agency review.

(a) In accordance with section 1122(c) of the Act, the Secretary will pay to each designated planning agency, from the Federal Hospital Insurance Trust Fund, an amount for each fiscal year beginning with the fiscal year ending June 30, 1974, to be determined as follows:

(1) The Secretary will determine, on the basis of information furnished to him by the designated planning agency and such other information as may be available to him, (i) the amount of funds, both Federal and non-Federal, which were expended in such State during the fiscal year ending June 30, 1974, to carry out sections 314 (a) and (b) of the Public Health Service Act, and (ii) the amount of such funds which were expended for the purpose of cost containment.

(2) The amount to be paid to each designated planning agency under this paragraph will be computed by multiplying the lesser of (i) the amount determined pursuant to clause (ii) of paragraph (a)(1) of this section or (ii) 50 percent of the amount determined pursuant to clause (i) of paragraph (a)(1), of this section, by the percentage obtained by dividing the total

amount of Federal expenditures for hospital and nursing home services under Titles V, XVIII and XIX of the Act in such State by the total amount of all expenditures for hospital and nursing home services, from whatever source in such State. This computation shall utilize data from the latest fiscal year for which all necessary data are available, as determined by the Secretary.

(3) The percentage for each State obtained by dividing the total amount of Federal expenditures for hospital and nursing home services under Titles V, XVIII and XIX of the Act in such State by the total amount of all expenditures for hospital and nursing home services from whatever source in such State for each fiscal year will be published in the FEDERAL REGISTER as soon as practicable following the beginning of such fiscal year.

(b) Each designated planning agency shall be responsible for making payments from funds paid to it by the Secretary pursuant to paragraph (a) of this section to the other agencies described in § 100.105 in such State.

The method for computing such payments shall be described in the Agreement entered into pursuant to § 100.104.

(c) The Secretary shall from time to time make payments to a designated planning agency of all or a portion of the amount determined pursuant to paragraph (a) of this section, in advance or by way of reimbursement as provided in the Agreement, to the extent he determines such payments necessary to promote the carrying out of the purposes of section 1122 of the Act in such State.

Such payments shall be subject to adjustments, on account of overpayments or underpayments previously made, in accordance with the Agreement.

(d) The designated planning agency shall keep such records and accounts, and furnish such reports to the Secretary, as may be required pursuant to the Agreement.

[38 FR 31381, Nov. 13, 1973, as amended at 39 FR 32030, Sept. 4, 1974]

Subpart A-Requirements for a Health Maintenance Organization

SOURCE: 42 FR 29401, June 8, 1977, unless otherwise noted.

§ 110.101 Definitions.

As used in this part:

(a) "Health maintenance organization" 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 under this subpart.

(b) "Basic health services" means: (1) Physicians services (including consultant and referral services by a physician);

(2) Outpatient services and inpatient hospital services;

(3) Medically necessary outpatient and inpatient emergency health services;

(4) Short-term (not to exceed twenty visits), outpatient evaluative, and crisis intervention mental health services;

(5) Medical treatment and referral services (including referral services to appropriate ancillary services) for the abuse of or addiction to alcohol and drugs;

(6) Diagnostic laboratory and diagnostic and therapeutic radiologic services;

(7) Home health services; and

(8) Preventive health services (including (i) immunizations, (ii) wellchild care from birth, (iii) periodic health evaluation for adults, (iv) voluntary family planning services, (v) services for infertility, and (vi) children's eye and ear examinations conducted to determine the need for vision and hearing correction).

(c) "Supplemental health services" means:

(1) Services of facilities for intermediate and long-term care;

(2) Vision care not included as a basic health service;

(3) Dental services;

(4) Mental health services not included as a basic health service;

(5) Long-term physical medicine and rehabilitative services (including physical therapy); and

(6) The provision of prescription drugs prescribed in the delivery of a basic health service or a supplemental health service provided by the health maintenance organization.

(d) "In-area" means the geographical area defined by the health maintenance organization as its service area in which it provides health services to its members directly through its own or through arrangements with other providers in the area.

resources

(e) "Out-of-area" means that area outside of the geographical area defined by the health maintenance organization as its service area.

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

(g) "Subscriber" means a member who has entered into a contractual relationship with the health maintenance organization.

(h)(1) "Health professionals" means physicians, dentists, nurses, podiatrists, optometrists, physicians' assistants, clinical psychologists, social workers, pharmacists, nutritionists, occupational therapists, physical therapists, 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 health maintenance organization, a medical group, individual practice association or other authority consistent with State law.

(2) "Physician" means a doctor of medicine or a doctor of osteopathy. (i) "Medical group" means a partnership, association, corporation, or other entity:

(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)