CHANGE OF OWNERSHIP
§ 1163.511. Change of ownership or control.
(a) A hospital or hospital unit is not entitled to additional reimbursement due solely to change of ownership or control.
(b) In the event of change of ownership, the Department will establish interim per diem rates as follows:
(1) If the change involves only one hospital or unit, the Department will use the interim per diem rate assigned to the entity before the change.
(2) If the change combines two or more hospitals or units into a single entity, such as a merger or consolidation, the Department will establish an interim per diem rate for the new entity by averaging the rates of the previous entities on a days-weighted basis. To determine that days-weighted average, the Department will use the MA days of each previously enrolled entity as reported in the most recent fiscal year for which the previous entities filed acceptable Cost Reports (MA 336).
(3) If the change divides one enrolled hospital or unit into two or more entities, the Department will use the interim per diem rate assigned to the entity before the change, for the resulting entities.
(c) In the event of change of ownership, the Department will establish final audited per diem rates based on the following ceilings:
(1) If the change involves only one hospital or unit, the Department will use the ceiling for the entity existing before the change.
(2) If the change combines two or more hospitals or units into a single entity, such as a merger or consolidation, the Department will establish a ceiling by averaging the audited per diem rates of the previous entities on a days-weighted basis. To determine that days-weighted average, the Department will use audited MA days for the previous entities in the final full fiscal year of operation before the change.
(3) If the change divides one enrolled hospital or unit into two or more entities, the ceiling assigned to the entity before the change is used for each resulting entity.
(4) The Department will not rebase ceilings established under this subsection until Statewide rebasing occurs.
(5) If after a change of ownership has occurred, the Department rebases ceilings Statewide, using a base year which predates or corresponds to the year of the change, the Department will use the Cost Report (MA 336) and the claims data for the base year regardless of who owned the entity in that base year.
(d) In the event of change of ownership, the Department will establish disproportionate share payments as follows:
(1) If the change involves only one hospital or unit, the Department will use the disproportionate share status assigned to the entity before this change, so long as the resulting entity maintains the nonemergency obstetric services by which the previous entity complied with section 1923(d) of the Social Security Act (42 U.S.C.A. § 1396r-4(d)).
(2) If the change combines two or more hospitals or units into a single entity, such as a merger or consolidation, the Department will establish the new entity as eligible for disproportionate share payments if one or more of the previous entities was eligible for disproportionate share payments, so long as the resulting entity maintains the nonemergency obstetric services by which one of the previous entities complied with section 1923(d) of the Social Security Act. To determine the monthly disproportionate share payment for the new entity, the Department will add the monthly disproportionate share payments of the previous entities.
(3) If the change divides one enrolled hospital or unit into two or more entities, the Department will use the disproportionate share status assigned to the hospital or unit before the change, so long as each of the resulting entities maintains the nonemergency obstetric services by which the previous entity complied with section 1923(d) of the Social Security Act. The Department will prorate the monthly disproportionate share payment of the previous entity on the basis of ratio of utilization agreed upon by the entities.
(4) The Department will not recalculate a hospital’s disproportionate share status established under this subsection until it recalculates disproportionate share status Statewide.
(5) If the Department makes a Statewide redetermination of disproportionate share status after a change of ownership has occurred, and uses a base year which predates or corresponds to the year of the change, the Department will use the cost reports for the base year, regardless of who owned the entity in that base year.
(6) For a Statewide redetermination of disproportionate share status, the determination of disproportionate share status for the entities resulting from the division is made on the basis of ratio of utilization for the base year as agreed upon by the entities.
(e) A hospital that changes ownership or closes shall submit final Cost Reports (MA 336) to the Department within 45 days of the change of ownership or closure.
(f) This section applies only to hospitals and units which change ownership in the period July 1, 1993, through June 30, 1995.
Authority The provisions of this § 1163.511 issued under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § § 201 and 443.1(1)).
Source The provisions of this § 1163.511 adopted June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181895) to (181898).
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