(a) General requirements. In order to avoid a reduction in FFP, the Medicaid agency must make a satisfactory showing to the Administrator, in each quarter, that it has met the following requirements for each beneficiary:

(1) Certification and recertification of the need for inpatient care, as specified in §§ 456.60, 456.160, 456.360 and 456.481.

(2) A plan of care established and periodically reviewed and evaluated by a physician, as specified in §§ 456.80, 456.180, and 456.481.

(3) A continuous program of utilization review under which the admission of each beneficiary is reviewed or screened in accordance with section 1903(g)(1)(C) of the Act; and

(4) A regular program of reviews, including medical evaluations, and annual on-site reviews of the care of each beneficiary, as specified in §§ 456.170, and 456.482 and subpart I of this part.

(b) Annual on-site review requirements. (1) An agency meets the quarterly on-site review requirements of paragraph (a)(4) of this section for a quarter if it completes on-site reviews of each beneficiary in every facility in the State, and in every State-owned facility regardless of location, by the end of the quarter in which a review is required under paragraph (b)(2) of this section.

(2) An on-site review is required in a facility by the end of a quarter if the facility entered the Medicaid program during the same calendar quarter 1 year earlier or has not been reviewed since the same calendar quarter 1 year earlier. If there is no Medicaid beneficiary in the facility on the day a review is scheduled, the review is not required until the next quarter in which there is a Medicaid beneficiary in the facility.

(3) If a facility is not reviewed in the quarter in which it is required to be reviewed under paragraph (b)(2) of this section, it will continue to require a review in each subsequent quarter until the review is performed.

(4) The requirement for an on-site review in a given quarter is not affected by the addition or deletion of a level of care in a facility's provider agreement.

(c) Facilities without valid provider agreements. The requirements of paragraphs (a) and (b) of this section apply with respect to beneficiaries for whose care the agency intends to claim FFP even if the beneficiaries receive care in a facility whose provider agreement has expired or been terminated.