42 CFR 403.300 - Basis and purpose.
(a) Basis. This subpart implements section 1886(c) of the Act, which authorizes payment for Medicare inpatient hospital services in accordance with a State's reimbursement control system rather than under the Medicare reimbursement principles as described in CMS's regulations and instructions.
(b) Purpose. Contained in this subpart are -
(1) The basic requirements that a State reimbursement control system must meet in order to be approved by CMS;
(2) A description of CMS's review and evaluation procedures; and
(3) The conditions that apply if the system is approved.