(c) Eligibility shall be limited to voluntary nonprofit and publicly sponsored diagnostic and/or treatment centers for the initial distribution of bad debt and charity care allowance and to diagnostic and/or treatment centers designated as preferred primary care providers for the supplemental allowance which meet the following criteria:

1. (1) the facility must demonstrate that it is licensed to provide primary medical care, must primarily provide a comprehensive range of primary care and related support services;
2. (2) the facility must be able to demonstrate on forms prescribed by the commissioner that a minimum of 15 percent of total clinic threshold visits reported for the base year were eligible visits as defined in paragraph (e)(2) of this section;
3. (3) the facility must be able to demonstrate that it has made reasonable efforts to maintain financial support from community and public funding sources;
4. (4) the facility must be able to demonstrate that it has made reasonable efforts to collect payments for services from third-party insurance payors, governmental payors and self-paying patients;
5. (5) the facility must receive an all-inclusive cost-based Medicaid reimbursement rate in accordance with section 86-4.11 of this Subpart;
6. (6) the facility must have no petition for bankruptcy filed under either chapter 7 or chapter 11 of title 11 of the U.S. Code. The commissioner may waive this criteria if the facility demonstrates that it is financially viable or a potentially financially viable organization with a comprehensive plan to maintain fiscal integrity.

(e) Allowances shall be established on a prospective basis and shall be computed on the basis of allowable fiscal and statistical data submitted by the facility for the fiscal year ended at least 15 months prior to the year for which allowances are being set. The bad debt arid charity care allowance shall be paid as an addition to the facility's rate of payment. The amount to be paid will be calculated by dividing each eligible facility's bad debt and charity care loss by base year Medicaid threshold visits.

1. (1) Eligible losses will be calculated by applying a facility's Medicaid rate of payment for the rate period for which the allowance is being determined, to identified base year eligible visits or units of service.
2. (2) An eligible visit shall be defined as the unit of service upon which title XIX payment is based provided, however, to an individual who after a reasonable period of time appears to be unable to pay all or a portion of the payment due for the service, except for those portions of the payment due which are covered by a government agency, insurer or third-party payor, including payment made directly to the diagnostic and/or treatment center and indemnity or similar payment.
3. (3) All payments received in the base year directly for eligible visits, government and entitlement revenues obtained for the purpose of subsidizing the diagnostic and/or treatment center's general operating expenses and any supplemental allowance received by a diagnostic and/or treatment center designated as a preferred primary care provider shall be offset against eligible costs to arrive at an eligible loss under this section.

4. (4) An annual amount of loss coverage will be calculated by applying eligible losses against the following nominal loss coverage formula:

   Percent of eligible bad debt and charity care clinic visits to total visits	Percent of nominal loss coverage
   up to 15%	50%
   15% to 30%	75%
   30% plus	100%

   The nominal loss coverage percentages may be increased to not more than 100 percent for voluntary nonprofit or publicly sponsored diagnostic and/or treatment centers if the sum of the nominal payments for all eligible voluntary nonprofit or public diagnostic and/or treatment centers is less than the amounts allocated for nonpublic or public agencies.

5. (5) Separate coverage ratios shall be established for voluntary nonprofit and publicly sponsored diagnostic and/or treatment centers in order to make the allocation described in subdivision (d) of this section. These coverage ratios will consist of the aggregate nominal losses for voluntary nonprofit and publicly sponsored diagnostic and/or treatment centers, divided into nonpublic and publicly sponsored disproportionate share allocations, as appropriate. These coverage ratios shall be applied to each voluntary nonprofit or publicly sponsored diagnostic and/or treatment center's annual amount of bad debt and charity care loss coverage to determine the level of bad debt and charity case losses to be incorporated into each facility's Medicaid rate of payment.

6. (6) The department may make periodic prospective adjustments to an eligible facility's Medicaid payment to ensure that each facility receives the full amount of the allowance for which it is eligible. In no instance shall a diagnostic and/or treatment center receive an allowance which in the aggregate exceeds the maximum amount for which it is eligible under this section. In no event shall a facility receive an allowance in an amount exceeding the facility's need for financing losses associated with the delivery of bad debt and charity care.

   (f)

7. (1) Eligible facilities shall submit to the department a supplement to the cost report used for title XIX (Medicaid) reimbursement. This supplement shall be provided by the department and must be returned to the department within 45 days from the date it is received by facilities for the 1990 and 1991 rate years and thereafter shall be returned to the department with the cost report used for purposes of title XIX reimbursement. The supplement shall include but not be limited to the number of eligible visits or units of service, the costs of eligible services, patient and third-party revenues associated with the eligible services, government and entitlement revenues and article 2 and article 6 Local Assistance funding associated with charity care as part of its annual reporting process.
8. (2) Eligible facilities shall collect and report actual threshold visits and revenues associated with the provision of bad debt and charity care services to their patient population. All reported data will be subject to audit. The allowance may be revised based upon audit findings.
9. (3) Facilities shall provide assurances that they will make and shall document upon request, the reasonable efforts made to maintain financial support from community and public funding sources and to collect payments from third-party payors, governmental payors and self-pay patients.
10. (4) The commissioner may retroactively reduce a facility's allowance if it is determined that actions or decisions by a facility's management have caused a significant reduction for the rate period in the delivery of comprehensive primary health care services to bad debt and charity care patients.