42 U.S.C. § 1395uu : US Code - Section 1395UU: Payments to promote closing or conversion of underutilized hospital facilities

Search 42 U.S.C. § 1395uu : US Code - Section 1395UU: Payments to promote closing or conversion of underutilized hospital facilities

(a) Transitional allowances; procedures applicable
Any hospital may file an application with the Secretary (in such
form and including such data and information as the Secretary may
require) for establishment of a transitional allowance under this
subchapter with respect to the closing or conversion of an
underutilized hospital facility. The Secretary also may establish
procedures, consistent with this section, by which a hospital,
before undergoing an actual closure or conversion of a hospital
facility, can have a determination made as to whether or not it
will be eligible for a transitional allowance under this section
with respect to such closure or conversion.
(b) Allowable costs as transitional allowances; findings and
determinations
If the Secretary finds, after consideration of an application
under subsection (a) of this section, that -
(1) the hospital's closure or conversion -
(A) is formally initiated after September 30, 1981,
(B) is expected to benefit the program under this subchapter
by (i) eliminating excess bed capacity, (ii) discontinuing an
underutilized service for which there are adequate alternative
sources, or (iii) substituting for the underutilized service
some other service which is needed in the area, and
(C) is consistent with the findings of an appropriate health
planning agency and with any applicable State program for
reduction in the number of hospital beds in the State, and
(2) in the case of a complete closure of a hospital -
(A) the hospital is a private nonprofit hospital or a local
governmental hospital, and
(B) the closure is not for replacement of the hospital,
the Secretary may include as an allowable cost in the hospital's
reasonable cost (for the purpose of making payments to the hospital
under this subchapter) an amount (in this section referred to as a
"transitional allowance"), as provided in subsection (c) of this
section.
(c) Factors determinative of transitional allowance
(1) Each transitional allowance established shall be reasonably
related to the prior or prospective use of the facility involved
under this subchapter and shall recognize -
(A) in the case of a facility conversion or closure (other than
a complete closure of a hospital) -
(i) in the case of a private nonprofit or local governmental
hospital, that portion of the hospital's costs attributable to
capital assets of the facility which have been taken into
account in determining reasonable cost for purposes of
determining the amount of payment to the hospital under this
subchapter, and
(ii) in the case of any hospital, transitional operating cost
increases related to the conversion or closure to the extent
that such operating costs exceed amounts ordinarily
reimbursable under this subchapter; and
(B) in the case of complete closure of a hospital, the
outstanding portion of actual debt obligations previously
recognized as reasonable for purposes of reimbursement under this
subchapter, less any salvage value of the hospital.
(2) A transitional allowance shall be for a period (not to exceed
20 years) specified by the Secretary, except that, in the case of a
complete closure described in paragraph (1)(B), the Secretary may
provide for a lump-sum allowance where the Secretary determines
that such a one-time allowance is more efficient and economical.
(3) A transitional allowance shall take effect on a date
established by the Secretary, but not earlier than the date of
completion of the closure or conversion concerned.
(4) A transitional allowance shall not be considered in applying
the limits to costs recognized as reasonable pursuant to the third
sentence of subparagraph (A) and subparagraph (L)(i) of section
1395x(v)(1) of this title, or in determining whether the reasonable
cost exceeds the customary charges for a service for purposes of
determining the amount to be paid to a provider pursuant to
sections 1395f(b) and 1395l(a)(2) of this title.
(d) Hearing to review determination
A hospital dissatisfied with a determination of the Secretary on
its application under this section may obtain an informal or formal
hearing, at the discretion of the Secretary, by filing (in such
form and within such time period as the Secretary establishes) a
request for such a hearing. The Secretary shall make a final
determination on such application within 30 days after the last day
of such hearing.