# COMAR Title 10 — Maryland Department of Health

## Subtitle 09 — Medical Care Programs

### Chapter 29 — Residential Treatment Center Services

**Authority:** Health-General Article, §§2-104(b), 15-103, and 15-105, Annotated Code of Maryland

**Administrative History:** Effective date:

**Administrative History:** Regulations .01—.11 adopted as an emergency provision effective July 1, 1986 (13:13 Md. R. 1474); adopted permanently effective December 1, 1986 (13:24 Md. R. 2559)

**Administrative History:** Regulation .01 amended as an emergency provision effective July 1, 1997 (24:16 Md. R. 1150); amended permanently effective December 29, 1997 (24:26 Md. R. 1758)

**Administrative History:** Regulation .01B amended effective April 5, 2010 (37:7 Md. R. 571); April 4, 2022 (49:7 Md. R. 465)

**Administrative History:** Regulation .03 amended effective February 6, 1989 (16:2 Md. R. 159)

**Administrative History:** Regulations .03—.06 amended as an emergency provision effective July 1, 1997 (24:16 Md. R. 1150); amended permanently effective December 29, 1997 (24:26 Md. R. 1758)

**Administrative History:** Regulations .03, .04, .07 amended as an emergency provision effective July 1, 1992 (19:15 Md. R. 1383); amended permanently effective November 1, 1992 (19:21 Md. R. 1891)

**Administrative History:** Regulation .04E amended effective April 4, 2022 (49:7 Md. R. 465)

**Administrative History:** Regulation .05 amended effective April 5, 2010 (37:7 Md. R. 571)

**Administrative History:** Regulation .06C amended effective April 4, 2022 (49:7 Md. R. 465)

**Administrative History:** Regulation .07A amended effective February 6, 1989 (16:2 Md. R. 159)

**Administrative History:** Regulation .07A amended as an emergency provision effective November 17, 1995 (22:25 Md. R. 1958); adopted permanently effective April 8, 1996 (23:7 Md. R. 552)

**Administrative History:** Regulation .07A amended effective February 12, 2007 (34:3 Md. R. 298); April 5, 2010 (37:7 Md. R. 571); July 4, 2016 (43:13 Md. R. 712); April 4, 2022 (49:7 Md. R. 465); August 7, 2023 (50:15 Md. R. 682)

**Administrative History:** Regulation .07F amended effective July 4, 2016 (43:13 Md. R. 712)

**Administrative History:** Regulation .07H amended as an emergency provision effective January 28, 1991 (18:3 Md. R. 301); emergency status expired April 8, 1991 (18:9 Md. R. 1004)

**Administrative History:** Regulation .07H amended as an emergency provision effective April 9, 1991 (18:9 Md. R. 1005); amended permanently effective October 7, 1991 (18:18 Md. R. 2004)

**Administrative History:** Regulation .09D adopted effective January 24, 2011 (38:2 Md. R. 84)

**Administrative History:** Regulation .10 amended effective January 24, 2011 (38:2 Md. R. 84)

**Administrative History:** Regulations .12—.14 adopted effective November 23, 1992 (19:23 Md. R. 2041)

**Administrative History:** Regulations .12B and .13 amended as an emergency provision effective November 17, 1995 (22:25 Md. R. 1958); adopted permanently effective April 8, 1996 (23:7 Md. R. 552)

**Administrative History:** Regulation .13B, C amended effective February 12, 2007 (34:3 Md. R. 298)

**Administrative History:** Regulation .15 adopted effective February 12, 2007 (34:3 Md. R. 298)

#### Regulation .01 Definitions.

*COMAR 10.09.29.01*

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

  (1) “Active treatment” means inpatient psychiatric services which involve implementation of a professionally developed and supervised individual plan of care described in 42 CFR §441.155, that is:

    (a) Developed and implemented no later than 14 days after admission; and

    (b) Designed to achieve the recipient's discharge from inpatient status at the earliest possible time.

  (2) “Acute psychiatric services” mean psychiatric services rendered in response to a severe psychiatric condition requiring intervention in order to bring the patient's symptoms under control.

  (3) “Admissions team” means an independent team that certifies the need for services (as specified in 42 CFR §§441.152 and 441.153). The certification shall be made by an independent team that:

    (a) Includes a physician;

    (b) Has competence in diagnosis and treatment of mental illness, preferably in child psychiatry; and

    (c) Has knowledge of the individual's situation.

  (3-1) “Children's residential treatment center” means a residential treatment center that admits patients 12 years old and younger.

  (4) “Department” means the Maryland Department of Health, the State agency designated to administer the Maryland Medical Assistance Program under Title XIX of the Social Security Act, 42 U.S.C. §1396 et seq.

  (5) “Department of Human Services” means the department of State government encompassing the Family Investment Administration, the Social Services Administration, and the Child Support Enforcement Administration.

  (6) “Family Investment Administration” means the administrative unit of the Department of Human Services and its affiliated local departments responsible for determining a person's eligibility for Medical assistance.

  (7) “Individual plan of care” means a written plan developed for each recipient in accordance with 42 CFR §§456.180—456.181, and §§456.280—456.281, and defined in 42 CFR §441.155 (individual plan of care). The plan of care shall:

    (a) Be based on a diagnostic evaluation that includes examination of the medical, psychological, social, behavioral, and developmental aspects of the recipient's situation and reflects the need for inpatient psychiatric care;

    (b) Be developed by a team of professionals in consultation with the recipient and the recipient's parents, legal guardians, or others in whose care the recipient will be released after discharge;

    (c) State treatment objectives;

    (d) Prescribe an integrated program of therapies, activities, and experiences designed to meet the objectives; and

    (e) Include, at an appropriate time, post-discharge plans and coordination of inpatient services with partial discharge plans and related community services to ensure continuity of care with the recipient's family, school, and community upon discharge.

  (8) “Local department of social services” means that unit of the Baltimore City or county social services department under the supervision of the Family Investment Administration.

  (9) “Medical Assistance Program” means a program of comprehensive medical and other health-related care for indigent and medically indigent persons.

  (10) “Medicare” means the medical insurance program administered by the federal government under Title XVIII of the Social Security Act, 42 U.S.C. §1395 et seq.

  (10-1) “Mental health services” means those services described in COMAR 10.09.59.06 rendered to treat an individual for a diagnosis set forth in COMAR 10.67.08.02M.

  (11) “Physician” means an individual who is currently licensed to practice medicine in the state in which his practice is located.

  (12) “Preauthorization” means an approval required from the Department or its designee and transmitted to the provider before services can be rendered.

  (13) “Program” means the Maryland Medical Assistance Program, which administers comprehensive medical and health-related benefits to indigent and medically indigent persons.

  (14) “Provider” means a residential treatment center which, through appropriate agreement with the Department, has been identified as a Program provider by the issuance of an individual account number.

  (15) “Recipient” means a person who is certified as eligible for, and is receiving, Medical Assistance benefits.

  (16) “Recipient under 21 years old” means a recipient who is either:

    (a) Under 21 years old; or

    (b) Twenty-one years old and received residential treatment center services immediately before the recipient reached age 21. The recipient continues to be recognized as a recipient under 21 years old until the earlier of the date the recipient either:

      (i) No longer requires inpatient psychiatric services; or

      (ii) Reaches 22 years old.

  (17) “Residential treatment center” means any institution which falls within the jurisdiction of Health-General Article, §19-308, Annotated Code of Maryland, and is licensed as required by COMAR 10.07.04 or other applicable standards established by the state in which the service is provided.

  (18) “Secretary” means the Secretary of Health.

#### Regulation .02 Licensure Requirements.

*COMAR 10.09.29.02*

A. In order to participate in the Program a provider shall:

  (1) Be licensed by the Department in accordance with requirements of Health-General Article, §19-308, Annotated Code of Maryland;

  (2) Meet the standards established by COMAR 10.07.04; and

  (3) Obtain other licenses as may be required by applicable State and local laws.

B. A physician providing services in a residential treatment center shall be licensed and legally authorized to practice medicine in the state in which the service is provided.

#### Regulation .03 General Conditions for Participation.

*COMAR 10.09.29.03*

To participate in the Program as a residential treatment center for emotionally disturbed children and adolescents, a provider shall:

A. Meet the requirements for participation as defined in 42 CFR §440.160 (inpatient psychiatric services for individuals under 21 years old) and have acute psychiatric services that meet the requirements of 42 CFR Part 441, Subpart D (inpatient psychiatric services for individuals under 21 years old in psychiatric facilities or programs).

B. Be accredited by the Joint Commission on Accreditation of Healthcare Organizations.

C. Meet the applicable conditions and requirements of Regulation .04 of this chapter.

D. Apply for participation in the Program by completing the application form designated by the Program.

E. Be approved for participation and be assigned a provider account number by the Department.

F. Have a current written agreement with the Program.

G. Verify the licenses and credentials of all professionals employed by or under contract with the residential treatment center to provide services.

H. Verify the recipient's eligibility.

I. Provide services without regard to race, color, age, sex, national origin, marital status, or physical or mental handicap, unless limitations are those specifically required by 42 CFR Subpart D.

J. Place no restriction on a recipient's right to select providers of the recipient's choice.

K. Have a written individual plan of care for each recipient as specifically defined by 42 CFR §441.155, and developed by an interdisciplinary team of physicians and other personnel as required in 42 CFR §441.156. The plan shall be reviewed every 30 days by the team to determine that services being provided are or were required on an inpatient basis, and recommend changes in the plan as indicated by the recipient's overall adjustment as an inpatient. The team shall be capable of:

  (1) Assessing the recipient's immediate and long-range therapeutic needs, developmental priorities, and personal strengths and liabilities;

  (2) Assessing the potential resources of the recipient's family which includes the recipient's parents, legal guardians, or others in whose care the recipient will be released after discharge;

  (3) Setting treatment objectives; and

  (4) Prescribing therapeutic modalities to achieve the plan's objectives.

L. Employ for purposes of developing an individual plan of care an interdisciplinary team which shall:

  (1) Include as a minimum:

    (a) A Board-eligible or Board-certified psychiatrist,

    (b) A clinical psychologist who has a doctoral degree and a physician licensed to practice medicine or osteopathy, or

    (c) A physician licensed to practice medicine or osteopathy with specialized training and experience in the diagnosis and treatment of mental diseases, and a psychologist who has a master's degree in clinical psychology or who has been certified by the State or by the State psychological association;

  (2) Include one of the following:

    (a) A psychiatric social worker,

    (b) A registered nurse with specialized training or 1 year's experience in treating mentally ill individuals,

    (c) An occupational therapist who is licensed, if required by the State, and who has specialized training or 1 year of experience in treating mentally ill individuals,

    (d) A psychologist who has a master's degree in clinical psychology or who has been certified by the State or by the State psychological association.

M. Maintain adequate administrative and medical records for a minimum of 6 years and make them available upon request to the Department or its designee. Adequate administrative and medical records are defined as having documentation sufficient in quantity, scope, and detail to confirm that the residential treatment center services are provided in accordance with this regulation.

N. Not knowingly contract or employ a person, partnership, or corporation which has been disqualified from the Program to provide or supply services to Medical Assistance recipients unless prior written approval has been received from the Department.

O. Accept payment by the Department as payment in full for services rendered and make no additional charge to any person for covered service.

P. Agree that if the Program denies payment or requests repayment on the basis that an otherwise covered service was not medically necessary or preauthorized, the provider may not seek payment for that service from the recipient or his family.

Q. Agree that if the Program denies payment due to late billing, the provider may not seek payment from the recipient or his family.

R. Meet the requirements for admission to regional institutes for children and adolescents, established by COMAR 10.21.06.

S. Agree that if the Program denies payment due to the provider's failure to satisfy mandatory federal requirements as specified in 42 CFR Part 441, Subpart D—Inpatient Psychiatric Services for Individuals Under Age 21 in Psychiatric Facilities or Programs, the provider may not seek payment from the recipient or his family.

T. Comply with all requirements for the delivery of mental health services contained in COMAR 10.67.08.

#### Regulation .04 Covered Services.

*COMAR 10.09.29.04*

The Program covers inpatient psychiatric services for the diagnosis, active treatment, and care of recipients under 21 years old with mental disease when the services are:

A. Medically necessary;

B. Performed under the direction of a physician;

C. Certified as necessary by an admissions team before the recipient's admission to the residential treatment center;

D. In the case of a recipient already residing in the residential treatment center, certified as necessary by the team developing the individual plan of care in accordance with 42 CFR §441.153(b);

E. For the treatment of a mental illness listed in COMAR 10.67.08.02M.

#### Regulation .05 Limitations.

*COMAR 10.09.29.05*

The Program does not cover the following:

A. Services not specified in Regulation .04 of this chapter;

B. Services not medically necessary;

C. Investigational and experimental drugs and procedures;

D. A day of inpatient care solely for the purpose of performing diagnostic tests that can be performed on an outpatient basis;

E. Admissions with a primary diagnosis of alcoholism, drug addiction, or severe brain damage, or the following diagnoses in the ICD-9-CM,

  (1) 294.0—Amnestic syndrome,

  (2) 294.8—Other specified organic brain syndromes (chronic),

  (3) 294.9—Unspecified organic brain syndromes (chronic),

  (4) 299.00—299.8—Psychoses with origin specific to childhood,

  (5) 301.7—Antisocial personality disorder,

  (6) 302.70—302.79—Psychosexual dysfunction,

  (7) 306.0—306.9—Physiological malfunction arising from mental factor,

  (8) 307.0—Special symptoms or syndromes, not elsewhere classified (NEC),

  (9) 307.2 —Tics,

  (10) 307.40—307.49—Specific disorders of sleep of nonorganic origin,

  (11) 307.9—Other and unspecified special symptoms or syndromes (NEC), or

  (12) 316—Psychic factors associated with disease classified elsewhere;

F. Days of care for recipients remaining in the residential treatment center beyond the length of stay certified by the team which develops the individual plan of care;

G. Psychiatric services to recipients over 21 years old except as specified in Regulation .01B(16) of this chapter.

#### Regulation .06 Preauthorization Requirements.

*COMAR 10.09.29.06*

The following procedures or services require preauthorization:

A. Out-of-State admissions. Adequate documentation shall be provided demonstrating that the placement meets one of the conditions as follows:

  (1) Effective services at an in-State facility are not available;

  (2) For similar services, an inpatient placement is not currently available in Maryland; or

  (3) The recipient resides out-of-State and the cost for the out-of-State service is comparable to the cost of similar services in Maryland.

B. Services which are determined by Medicare to be ineffective, unsafe, or without proven clinical value are generally presumed to be not medically necessary, but will be preauthorized if the provider can satisfactorily document sufficient medical necessity except as specified in Regulation .05C of this chapter.

C. All admissions, which shall comply with the requirements under COMAR 10.09.59.08 for preauthorization.

#### Regulation .07 Payment Procedures.

*COMAR 10.09.29.07*

A. Reimbursement Principles.

  (1) The Department will make no direct reimbursement to any State-operated residential treatment center for recipients. The Department will claim federal fund recoveries from the Department of Health and Human Services for services to federally eligible Title XIX patients in these residential treatment centers.

  (2) The Department will pay the residential treatment center the lesser of the provider’s customary charge or the provider’s per diem costs for covered services according to the principles established under Title XVIII of the Social Security Act, as required in 42 CFR 413, or on the basis of charges not to exceed $750 per day effective July 1, 2021 through December 31, 2022, or $850 per day effective January 1, 2023. The average increase in the Department’s reimbursement to the provider per inpatient day for each fiscal year over the cost-settled rate for the previous fiscal year, State Fiscal Year 2019 final cost per diem effective July 1, 2021, may not exceed the rate of increase of the Hospital Wage and Price Index plus 1 percentage point, described in 42 CFR §413.40. The target rate percentage increase for each calendar year will equal the prospectively estimated increase in the Hospital Wage and Price Index (market basket index) for each year, plus 1 percentage point. If the service is free to individuals not covered by Medicaid:

    (a) The provider:

      (i) May charge the Program; and

      (ii) Shall be reimbursed in accordance with the provisions of this regulation; and

    (b) The provider’s reimbursement is not limited to the provider’s customary charge.

  (3) An in-State children’s residential treatment center shall be reimbursed the lesser of:

    (a) The provider’s customary charge to the general public unless the service is free to individuals not covered by Medicaid;

    (b) The provider’s per diem cost for covered services established in accordance with Medicare principles of reasonable cost reimbursement as described in 42 CFR 413;

    (c) Effective July 1, 2021, $750 per day; or

    (d) Effective January 1, 2023, $850 per day.

  (4) The Department rebases prices in §A(2) and (3) of this regulation between every 2 and 4 years. Prices may be rebased more frequently if the State determines that there is an error in the data or in the calculation that results in a substantial difference in payment, or if a significant change in provider behavior or costs has resulted in payment that is inequitable across providers. In years in which rates are not rebased, rates are subject to annual indexing.

  (5) For purposes of §A(3)(b) of this regulation, the percentage increase in the Department's cost reimbursement to the provider, per inpatient day for each cost reporting year over the cost-settled payment rate for the previous cost reporting year, State Fiscal Year 2019 final cost per diem effective July 1, 2021, may not exceed the Centers for Medicare and Medicaid Services' published federal fiscal year market basket index relating to hospitals excluded from the prospective payment system, plus 1 percent.

  (6) The rate stated in §A(2) and (3)(c) of this regulation shall be updated annually for each provider's cost reporting period by the Centers for Medicare and Medicaid Services' published federal fiscal year market basket index relating to hospitals excluded from the prospective payment system.

  (7) Effective July 1, 2021, the rate stated in §A(2) and (3)(c) of this regulation shall be updated annually for each provider's cost reporting period by the Centers for Medicare and Medicaid Services' published federal fiscal year market basket index relating to hospitals excluded from the prospective payment system, plus 1 percent.

  (8) Out-of-State Providers. To be reimbursed for services provided to Maryland Medical Assistance recipients, an out-of-State provider shall be licensed or formally approved as a psychiatric facility or as an inpatient program in a psychiatric facility, either of which is accredited by the Joint Commission on Accreditation of Healthcare Organizations.

B. Recipient's Contribution.

  (1) The local department of social services or the State-operated facility's fiscal agent shall determine the amount the recipient has available to pay toward the cost of medical or remedial care for inpatient services, and so inform the provider.

  (2) The provider shall collect from the recipient that amount as shown available on the designated form.

  (3) The provider may not collect a total amount, including the amount the recipient has available and the Department's payment, which exceeds the provider's rate established by the Department or its designee.

  (4) The provider shall show to the Department sums collected from the recipient.

C. The provider shall submit request for payment on the form designated by the Department.

D. The provider shall submit, with invoices, properly completed attachments as requested by the Department.

E. A provider may not bill the Program a charge exceeding that charged the general public for similar services.

F. The provider may not bill the Department for:

  (1) Completion of forms and reports;

  (2) Broken or missed appointments; or

  (3) Professional services rendered by mail or telephone.

G. The Department will make no direct payment to the recipient.

H. Billing time limitations for claims submitted pursuant to this chapter are set forth in COMAR 10.09.36.

I. The Department reserves the right to return to the provider, before payment, all invoices not properly completed.

#### Regulation .08 Recovery and Reimbursement.

*COMAR 10.09.29.08*

A. If the recipient has insurance, or if any other person is obligated either legally or contractually to pay for, or to reimburse, the recipient for any services covered by this chapter, the provider shall seek payment from that source. If payment is made by both the Program and the insurance or other source, the provider shall report, within 15 days after the close of each month, on a form designated by the Department, the amount paid by the Program, and the insurance or the other source, whichever is less, and refund the total amount of the lesser of the two payments reported to the Program at that time.

B. If refund of a payment as specified in §A, of this regulation, is not made, the Department will have the right to reduce its current payment to the provider by the amount of the duplicate payment, overpayment, or third-party payment.

#### Regulation .09 Cause for Suspension or Removal and Imposition of Sanctions.

*COMAR 10.09.29.09*

A. If the Department determines that a provider, any agent or employee of the provider, or any person with an ownership interest in the provider has failed to comply with applicable federal or State laws or regulations, the Department may initiate one or more of the following actions against the responsible party:

  (1) Suspension from the Program;

  (2) Withholding of payment by the Program;

  (3) Removal from the Program;

  (4) Disqualification from future participation in the Program, either as a provider or as a person providing services for which Program payment will be claimed.

B. If the Secretary of Health and Human Services suspends or removes a provider from participation in Medicare, the Department will take similar action.

C. A provider who voluntarily withdraws from the Program or is removed or suspended from the Program according to this regulation shall notify recipients that it no longer honors Medical Assistance cards before it renders additional services.

D. The Department shall give to the provider reasonable written notice of the Department’s intention to impose sanctions. In the notice, the Department shall:

  (1) Establish the:

    (a) Effective date of the proposed action; and

    (b) Reasons for the proposed action; and

  (2) Advise the provider of the right to appeal.

#### Regulation .10 Appeal Procedures.

*COMAR 10.09.29.10*

Providers filing appeals from administrative decisions made in connection with these regulations shall do so according to COMAR 10.09.36.09.

#### Regulation .11 Interpretive Regulation.

*COMAR 10.09.29.11*

Except when the language of a specific regulation indicates an intent by the Department to provide reimbursement for covered services to program recipients without regard to the availability of federal financial participation, State regulations shall be interpreted in conformity with applicable federal statutes and regulations.

#### Regulation .12 Cost Reporting.

*COMAR 10.09.29.12*

A. The provider shall:

  (1) Include, for purposes of cost finding, direct and indirect costs applicable to recipient care;

  (2) In the cost report, specifically identify costs associated with related organizations;

  (3) Maintain adequate financial records and statistical data, according to generally accepted accounting principles and procedures, which shall provide, as a minimum:

    (a) Maintenance of:

      (i) A chronological cash receipts and disbursements journal in sufficient detail to show the exact nature of the receipts and disbursements,

      (ii) An appropriate time reporting system for all personnel and proper payroll authorizations and vouchers,

      (iii) Records on all assets capitalized and depreciation on the assets,

      (iv) Appropriate records of client days,

      (v) Records on an accrual basis,

      (vi) A daily midnight bed census by recipient name in a form prescribed by the Department, although use of the prescribed form may be waived by the Department or its designee when a provider demonstrates the ability to maintain a superior system of census information,

      (vii) Other records as required by the Department, and

      (viii) A Maryland Medical Assistance log on forms prescribed by the Department;

    (b) Proper reference to supporting invoices, vouchers, or other forms of original evidence; and

    (c) A provision for payment by check, although when financial transactions involve numerous small expenditures, an imprest petty cash fund may be established, provided adequate supporting vouchers are maintained;

  (4) Keep all records available for inspection or audit by the Department or its designee at any reasonable time during normal business hours, with records for each fiscal year's cost report to be retained for 6 years after the filing date of the cost report specified in §A(5) of this regulation;

  (5) Submit financial and statistical cost reports to the Department or its designee:

    (a) In a prescribed form; and

    (b) Within 3 months after the end of the provider's fiscal year unless the:

      (i) Department grants the provider an extension, or

      (ii) Provider discontinues participation in the Program;

  (6) Be considered for an extension as cited in §A(5)(b)(i) of this regulation, which may be granted upon written request by the provider, setting forth the specific reasons for the request, if the Department determines, taking into consideration the totality of the circumstances, that the request is reasonable; and

  (7) If it discontinues participation, submit financial and statistical data to the Department within 45 days after the effective date of termination.

B. The Department shall:

  (1) For cost reports requested in §A(5) of this regulation, which have not been received within the 3-month time period and when an extension has not been granted:

    (a) Withhold from the provider a maximum of 5 percent of the current interim payment starting at the beginning of the second calendar month after the month in which the report is due,

    (b) Continue withholding as described in §B(1)(a) of this regulation in any subsequent calendar months, and

    (c) Retain all withholdings until final cost settlement is completed;

  (2) When a report is not submitted by the last day of the 6th month after the end of the provider's fiscal year, impose one or more sanctions as provided for in Regulation .09 of this chapter; and

  (3) When a report is not submitted by the last day of the 6th month after the end of the provider's fiscal year, make final cost settlement for that fiscal year at the last final per diem rates for which the Department has verified costs for that facility, if the rates established do not exceed the maximum per diem rates in effect when the facility was last field verified.

C. For purposes of this regulation, reports are considered received when the submitted reports are completed according to instructions issued by the Department or its designee.

D. The Program may not make an initial retroactive adjustment when cost reports are received, and tentative settlements may not be made before final settlement.

E. When a provider receives notification of final settlement as set forth in Regulation .14A(4) of this chapter and an appeal is filed, undisputed amounts of settlement may not be paid to the appropriate recipients until final findings of the appeal.

#### Regulation .13 Interim Rates.

*COMAR 10.09.29.13*

A. A provider shall have its interim rate updated annually.

B. A provider's interim rate shall be adjusted at the beginning of each fiscal year, by applying the Centers for Medicare and Medicaid Services' published federal fiscal year market basket index relating to hospitals excluded from the prospective payment system, subject to the limitations in Regulation .07A of this chapter, to the provider's interim rate in effect on the last day of the preceding fiscal year.

C. The rate established in §B of this regulation is in effect until such time as a new rate can be calculated as specified in §§D—F of this regulation.

D. The provider shall submit annually, with the cost report described in Regulation .12 of this chapter, schedules detailing projected increases/decreases from the year just ended to the current year.

E. The provider shall submit a calculation reflecting the rate being requested for the current year.

F. The Department or its designee shall use the submitted cost report, schedules, calculations, and other information as appropriate to calculate an updated interim rate for the current year.

G. The rate established in accordance with §F of this regulation shall be implemented for the remainder of the fiscal year with no retroactive supplemental billing or payment for differences in rates.

H. Providers may request an interim rate revision:

  (1) If the revised interim rate exceeds the current rate by 7 percent; and

  (2) Not more than two times during a fiscal year.

I. A request for a revised interim rate shall include, at a minimum:

  (1) A completed cost report based on a minimum of 3 months of recent actual cost and statistics;

  (2) An adjusted trial balance covering the cost report period in §I(1) of this regulation; and

  (3) A calculation reflecting the revised rate being requested.

J. A new provider seeking payment for services shall submit to the Department or its designee a projected budgeted cost report and other appropriate information for the period from the beginning of its operations as a provider to the end of its first fiscal year, along with a projected charge rate schedule, for establishment of an initial interim rate by the Department or its designee, subject to the limitations in Regulation .07A of this chapter.

#### Regulation .14 Field Verification.

*COMAR 10.09.29.14*

A. The Department or its designee shall:

  (1) Conduct a field verification, at least every 3 years, of the reported costs of each facility participating in the Program, if the amount of the facility's reimbursement would justify the expense of a field verification;

  (2) Desk review the reported costs of the facility in those years when a field verification is not conducted;

  (3) Notify each provider participating in the Program of the results of the field verification or desk review; and

  (4) Calculate final settlements by comparing the verified allowable reimbursement to the interim reimbursement.

B. Appeal Findings.

  (1) After the Department receives the findings of an appeal filed under Regulation .10 of this chapter, the Department shall determine the amount that is due either to the Program or to the provider, and notify the provider of that amount.

  (2) If the provider has accepted the determination made under §B(1) of this regulation, and within 60 days after the provider receives the notification under §B(1) of this regulation, the Program shall pay the amount the Department has determined is due the provider, if any.

  (3) Subject to the provisions of §B(5) and (6) of this regulation, within 60 days after the provider receives the notification under §B(1) of this regulation, the provider shall pay the amount due the Program, if any.

  (4) After the expiration of the 60-day period in §B(3) of this regulation, the Department may, in addition to the sanctions provided for in Regulation .09 of this chapter, recover the unpaid balance by withholding the amount due from the interim payment which would otherwise be payable to the provider.

  (5) If a provider requests a longer payment schedule within 30 days after the provider receives notification of the amount due the Program, the Department may establish, after consultation with the provider, a longer payment schedule.

  (6) The Department shall establish a longer payment schedule if, in the Department's reasonable judgment, failure to grant a longer payment schedule would:

    (a) Result in financial hardship to the provider; or

    (b) Have an adverse effect on the quality of patient care furnished by the facility.

#### Regulation .15 Change of Ownership.

*COMAR 10.09.29.15*

A. The current owner of a residential treatment center shall:

  (1) Notify the Program of the contemplated sale of a facility or controlling interest in it not less than 30 days before the date of the change of ownership; and

  (2) Before the date of the change of ownership, post an indemnity bond or standby letter of credit, or provide some assurance satisfactory to the Program that the purchaser will assume and be responsible for all financial obligations of the current owner.

B. The bond or standby letter of credit under §A(2) of this regulation shall be in the amount of 1 month's Program billings for each unsettled fiscal period outstanding. This amount shall equal the median monthly payment for each unsettled fiscal period.

C. The new owner of a residential treatment center shall:

  (1) Notify the Program of the intent to purchase an existing facility or controlling interest in it, and the desire to enroll in the Program, not less than 30 days before the date of the change of ownership; and

  (2) Enter into a provider agreement with the Department before being assigned new interim per diem rates.

D. Interim Per Diem Rates.

  (1) For the purpose of establishing interim per diem rates, the new owner in an arm's length change of ownership shall be treated as a new provider under the provisions of Regulation .13J of this chapter.

  (2) The Department shall establish new interim per diem rates within 90 days after the date of the change of ownership, applicable retroactively to the date of the change of ownership, if the information specified in Regulation .13J of this chapter is submitted to the Department or its designee within 60 days after the date of the change of ownership.

  (3) Until the new interim per diem rates are established, the new provider may be reimbursed at the interim per diem rates that existed before the date of the change of ownership.

  (4) Failure by the provider to provide data for interim rate determination within 60 days after the change of ownership may result in temporary withholding of the interim per diem payments.

E. Failure to comply with §§A and B of this regulation shall result in all unsettled fiscal periods to be immediately settled at 90 percent of the rates used for the most recently settled fiscal period, and amounts due shall be paid immediately.

F. If the provider elects to file an appeal against any action taken under the provisions of §E of this regulation, any amount due to the Department shall be escrowed pending the final outcome of the appeal.

G. The Department, in its sole discretion, may waive any of the requirements of this regulation based on exceptional circumstances.