Pennsylvania Code › Title 28 - HEALTH AND SAFETY › Part IV - Health Facilities › Subpart D - Health Planning › Chapter 301 - LIMITATION ON FEDERAL PARTICIPATION FOR CAPITAL EXPENDITURES › Section 301.3 - Expenditures covered

Current through Register Vol. 54, No. 28, July 13, 2024
(a) A capital
				  expenditure proposed by or on behalf of a health care facility or health
				  maintenance organization, the obligation for which is incurred by or on behalf
				  of a health care facility or health maintenance organization after March 31,
				  1973, shall be subject to this chapter; provided, that in the case of a health
				  care facility providing health care services as of December 18, 1970, which on
				  such date was committed to a formal plan of expansion or replacement, this
				  chapter does not apply with respect to such expenditures as may be made or such
				  obligations as may be incurred for capital items included in such plan where
				  preliminary expenditures toward the plan of expansion or replacement including
				  payments for studies, surveys, designs, plans, working drawings,
				  specifications, and site acquisition essential to the acquisition, improvement,
				  expansion or replacement of the health care facility or equipment concerned, of
				  $100,000 or more, had been made during the 3-year period ended December 17,
				  1970.
(b) For purposes of this
				  chapter, a "capital expenditure" is an expenditure, including a force account
				  expenditure, that is, an expenditure for a construction project undertaken by
				  the facility as its own contractor which under generally accepted accounting
				  principles is not properly chargeable as an expense of operation and
				  maintenance and which exceeds $100,000, changes the bed capacity of the
				  facility with respect to which such expenditure is made, or substantially
				  changes the services of the facility with respect to which such expenditure is
				  made.
(c) For purposes of
				  subsection (b), the cost of studies, surveys, designs, plans, working drawings,
				  specifications and other activities essential to the acquisition, improvement,
				  expansion or replacement of the plant and equipment with respect to which the
				  expenditure is made shall be included in determining whether such expenditure
				  exceeds $100,000.
(d) For purposes
				  of subsection (b), where the estimated cost of a proposed project, including
				  cost escalation factors appropriate to the area in which the project is
				  located, is, within 60 days of the date on which the obligation for the
				  expenditure is incurred, certified by a licensed architect or engineer to be
				  $100,000 or less, the expenditure may be deemed not to exceed $100,000
				  regardless of the actual cost of such project; provided, that in a case where
				  the actual cost of the project exceeds $100,000, the health care facility or
				  health maintenance organization on whose behalf the expenditure is made shall
				  provide written notification of the cost to the designated planning agency not
				  more than 30 days after the date on which the expenditure is incurred. The
				  notification shall include a copy of the certified estimate.
(e) For purposes of subsection (b), a capital
				  expenditure which changes the bed capacity of a facility means a capital
				  expenditure which results in any increase or decrease in licensed
				  capacity.
(f) For purposes of
				  subsection (b), a capital expenditure which substantially changes the services
				  of a facility means a capital expenditure which results in the addition of a
				  clinically related, that is, diagnostic, curative, or rehabilitative service
				  not previously provided in the facility or in the termination of such a service
				  which had previously been provided in the facility.
(g) A change in a proposed capital
				  expenditure which itself meets the criteria set forth in subsection (b) shall,
				  for purposes of this chapter, be deemed a capital expenditure; provided, that
				  an increase or decrease in the cost of a proposed capital expenditure which
				  increase or decrease is not related to a change in bed capacity or a
				  substantial change in services and does not increase the cost of the project
				  more than 20%, may, at the option of the designated planning agency, be exempt
				  from review under this chapter.
(h)
				  When a person obtains, under lease or comparable arrangement or through
				  donation a facility or part thereof or equipment for a facility the expenditure
				  for which would have been considered a capital expenditure and subject to
				  exclusion from reimbursement under this chapter if the person had acquired it
				  by purchase, the acquisition shall be deemed a capital expenditure by or on
				  behalf of the facility and the designated planning agency shall recommend that
				  the Secretary of HHS:
(1) In the case of a
				  lease or comparable arrangement, in computing the person's rental expense, in
				  determining the Federal payments to be made under Titles V, XVIII and XIX of
				  the act (42 U.S.C.A.
				  §§
												701-709,
				  1395-1395zz and
				  1396-1396ff) with respect
				  to services furnished in the facility, deduct the amount which in his judgment
				  is a reasonable equivalent of the amount that would have been excluded if the
				  person had acquired the facility or equipment by purchase.
(2) In the case of a lease or comparable
				  arrangement, in computing the person's return on equity capital, deduct an
				  amount deposited under the terms of the lease or comparable
				  arrangement.
(3) In the case of a
				  donation which is carried by the person as a capital asset, exclude from
				  reimbursement for services provided under Titles V, XVIII and XIX of the act
				  (42 U.S.C.A. §§
												701-709,
				  1395-1395zz and
				  1396-1396ff) an amount
				  claimed for depreciation on the facility or equipment, and other costs related
				  to its acquisition.