(A) If an ICF/IID provider required by section 5124.10 of the Revised Code to file a cost report for the ICF/IID fails to file the cost report by the date it is due or the date, if any, to which the due date is extended pursuant to division (E) of that section, or files an incomplete or inadequate report for the ICF/IID under that section, the department of developmental disabilities shall do both of the following:

1. (1) Give written notice to the provider that the provider agreement for the ICF/IID will be terminated in thirty days unless the provider submits a complete and adequate cost report for the ICF/IID within thirty days;
2. (2) Reduce the per medicaid day payment rate for the provider's ICF/IID by the amount specified in division (B) of this section for the period of time specified in division (C) of this section.

(B) For the purpose of division (A)(2) of this section, an ICF/IID's per medicaid day payment rate shall be reduced by the following amount:

1. (1) In the case of a reduction made during the period beginning on the effective date of this amendment and ending on the first day of the first fiscal year beginning after the effective date of this amendment, two dollars;
2. (2) In the case of a reduction made during the first fiscal year beginning after the effective date of this amendment and each fiscal year thereafter, the amount of the reduction in effect on the last day of the fiscal year immediately preceding the fiscal year in which the reduction is made adjusted by the rate of inflation during that immediately preceding fiscal year, as shown in the consumer price index for all items for all urban consumers for the midwest region, published by the United States bureau of labor statistics.

(C) The period of time that an ICF/IID's per medicaid day payment rate is reduced under this section shall begin and end as follows:

1. (1) The period shall begin on the following date:

   1. (a) The day immediately following the date the cost report is due or to which the due date is extended, as applicable, if the reduction is made because the provider fails to file a cost report by that date;
   2. (b) The day the department gives the provider written notice under division (A)(1) of this section of the proposed provider agreement termination, if the reduction is made because the provider files an incomplete or inadequate cost report.
2. (2) The period shall end on the last day of the thirty-day period specified in the notice given under division (A)(1) of this section or any additional period allowed for an appeal of the proposed provider agreement termination.