PART 505—ESTABLISHMENT OF THE HEALTH CARE INFRASTRUCTURE IMPROVEMENT PROGRAM Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C 1302 and 1395hh). Source: 70 FR 57374, Sept. 30, 2005, unless otherwise noted. Subpart A—Loan Criteria § 505.1 Basis and scope. This part implements section 1016 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) which amends section 1897 of the Act. Section 1897 of the Act as amended by section 6045 of the Tsunami Relief Act of 2005 authorizes the Secretary to establish a loan program by which qualifying hospitals may apply for a loan for the capital costs of the health care infrastructure improvement projects. Section 1897 of the Act appropriates $142,000,000 for the loan program including program administration. The funds are available beginning July 1, 2004 through September 30, 2008. This part sets forth the criteria that CMS uses to select among qualifying hospitals. § 505.3 Definitions. For purposes of this subpart, the following definitions apply: Eligible project Entity Outreach program Qualifying hospital Unique research resources [70 FR 57374, Sept. 30, 2005, as amended at 71 FR 48143, Aug. 18, 2006] § 505.5 Loan criteria. (a) Qualifying criteria. (1) Meet the definition of a “qualifying hospital” as set forth in § 505.3 of this part. (2) Request a loan for the capital costs of an “eligible project” as defined in § 505.3 of this part. The capital costs for which a qualifying hospital may obtain a loan are limited to the reasonable costs incurred by the hospital, and capitalized on the Medicare cost report, for any facility or item of equipment that it has acquired the possession or use of at the time the loan funding is awarded. (b) Selection criteria. (1) The hospital is located in a State that, based on population density, is defined as a rural State. A rural State is one of ten States with the lowest population density. An applicant entity is required to be located in one of these ten States. The ten States are prioritized beginning with the State with the lowest population density. Population density is determined based on the most recent available U.S. Census Bureau data. (2) The hospital is located in a State with multiple Indian tribes in the State. After prioritizing based on paragraph (b)(1) of this section, States are further prioritized based on the States with the most Indian tribes. The number of Indian tribes in a State is based on the most recent data available published in “Indian Entities Recognized and Eligible to Receive Services from the United State Bureau of Indian Affairs.” (68 FR 68180) published on December 5, 2003. (c) CMS will send written notice to qualifying hospitals that have been selected to participate in the loan program under this part. § 505.7 Terms of the loan. All loan beneficiaries must agree to the following loan terms: (a) Loan obligation. (b) Schedule of loan. (c) Bankruptcy protection. (d) Loan forgiveness. (e) Default. (f) Loan repayment. (1) Make payments every month for 20 years until the loan, including interest payments, are paid in full. (2) Pay interest on the unpaid principal until the full amount of principal has been paid. (3) Pay interest at a yearly rate based upon the rate as fixed by the Secretary of the Treasury and set forth at 45 CFR 30.13(a). (4) If a loan beneficiary fails to make any payment in repayment of a loan under this subpart within 10 days of its due date, that payment may be deducted from any Medicare payments otherwise due to the beneficiary. (g) Interest rate and monthly payment charges. (h) Loan recipient's right to prepay. § 505.9 State and local permits. With respect to an eligible project, the provision of a loan under this part shall not— (a) Relieve the beneficiary of the loan or any obligation to obtain any required State or local permit or approval with respect to the project. (b) Limit the right of any unit of State or local government to approve or regulate any rate of return on private equity invested in the project. (c) Supersede any State or local law (including any regulation) applicable to the construction or operation of the project. § 505.11 Loan application requirements and procedures. (a) The loan application must be received by CMS no later than 5 p.m. e.d.t. on December 29, 2005. (b) The requested information must be typed or clearly printed in ink and the loan beneficiary must mail or deliver an original copy of the loan to CMS. The loan application must contain the following information: (1) Qualifying hospital's name and street address. (2) Qualifying hospital's Medicare provider number. (3) Name, title, and telephone number of a contact person submitting the application. (4) Provide all appropriate supporting documentation for each answer made on the loan application. Subpart B—Forgiveness of Indebtedness Source: 71 FR 48144, Aug. 18, 2006, unless otherwise noted. § 505.13 Conditions for loan forgiveness. The Secretary may forgive a loan provided under this part if the qualifying hospital— (a) Has been selected to participate in the loan program specified in § 505.5(c). (b) Has established the following in accordance with a plan that meets the criteria specified in § 505.15: (1) An outreach program for cancer prevention, early diagnosis, and treatment that provides services to a substantial majority of the residents of a State or region, including residents of rural areas; (2) An outreach program for cancer prevention, early diagnosis, and treatment that provides services to multiple Indian tribes; and (3) Unique research resources (such as population databases) or an affiliation with an entity that has unique research resources. (c) Submits to CMS, within the timeframe specified by the Secretary, a— (1) Written request for loan forgiveness; and (2) Loan forgiveness plan that meets the criteria specified in § 505.15 of this subpart. § 505.15 Plan criteria for meeting the conditions for loan forgiveness. The qualifying hospital requesting loan forgiveness must submit to CMS a plan specifying how it will develop, implement, or maintain an existing outreach program for cancer prevention, early diagnosis, and treatment for a substantial majority of the residents of a State or region, including residents of rural areas and for multiple Indian tribes and specifying how the qualifying hospital will establish or maintain existing unique research resources or an affiliation with an entity that has unique research resources. (a) Outreach programs. (1) Address cancer prevention for cancers that are prevalent in the designated populations or cancers that are targeted by the qualifying hospital, interventions, and goals for decreasing the targeted cancer rates during the loan deferment program; and (2) Address early diagnosis of cancers that are prevalent in the designated populations or cancers that are targeted by the qualifying hospital, interventions, and goals for improving early diagnosis rates for the targeted cancer(s) during the loan deferment period; (3) Address cancer treatment for cancers that are prevalent in the designated populations or cancers that are targeted by the qualifying hospital, interventions, and goals for improving cancer treatment rates for the targeted cancer(s) during the loan deferment; and (4) Identify the measures that will be used to determine the qualifying hospital's annual progress in meeting the initial goals specified in paragraphs (a)(1) through (a)(3) of this section. (b) Unique research resources. § 505.17 Reporting requirements for meeting the conditions for loan forgiveness. (a) Annual reporting requirements. (1) Describing the qualifying hospital's progress in meeting its initial plan goals; (2) Describing any changes to the qualifying hospital's initial plan goals; and (3) Including at least one measure used to track the qualifying hospital's progress in meeting its plan goals. (b) Review of annual reports. (c) Final annual reporting requirements. § 505.19 Approval or denial of loan forgiveness. (a) Approval of loan forgiveness. (1) 30 days from the date of receipt of the annual report that shows the qualifying hospital has satisfied the requirements for loan forgiveness; or (2) 90 days before the end of the loan deferment period defined in § 505.7(b). (b) Denial of loan forgiveness.