(a) Applicability. The provisions of this section apply to every applicant which heretofore has given or hereafter will give a community service assurance.

(b) Definitions. As used in this section:

(1) The term community service assurance means an assurance required by regulations promulgated pursuant to section 603(e)(1) of the Act or the predecessor of that section (section 622(f), Public Health Service Act, enacted by Pub. L. 79-725, 60 Stat. 1041).

(2) The term facility has the same meaning as is given it in § 53.111(b)(1).

(3) The term applicant has the same meaning as is given it in § 53.111(b)(2).

(4) The term fiscal year has the same meaning as is given it in § 53.111(b)(3).

(c) Assurance. Before an application under this part is recommended by a State agency to the Secretary for approval, the State agency shall obtain an assurance from the applicant that the facility will furnish a community service.

(d) Compliance. In order to comply with its community service assurance an applicant must:

(1)(i) Make the services it furnishes available to the general public, or

(ii) Limit the availability of such services only on the basis of age, medical indigency, or type or kind of medical or mental disability, or

(iii) If the facility constitutes a medical or nursing care unit of a home or other institution, make such home or other institution available in accordance with paragraph (d)(1) (i) or (ii) of this section; and

(2)(i) Make arrangements, if eligible to do so, for reimbursement for services with:

(A) Those principal State and local governmental third-party payors which provide reimbursement for services that is not less than the actual cost of such services as determined in accordance with accepted cost accounting principles; and

(B) Those Federal governmental third-party programs, such as Medicare and Medicaid, to the extent that the applicant is entitled to reimbursement at reasonable cost under a formula established in accordance with applicable Federal law.

(ii) Take such additional steps as may be necessary to ensure that admission to and services of the facility will be available to beneficiaries of the governmental programs specified in paragraph (d)(2)(i) of this section without discrimination (or preference) on account of their being such beneficiaries.

(e) Reports. The annual statement required by section 646 of the Act and § 53.128(q), a copy of which must be submitted to the State agency in accordance with the requirements of § 53.111(e)(1), shall set forth the amount of the reimbursement received pursuant to each arrangement with a principal governmental third-party payor.

(f) Evaluation and enforcement. The State plan shall provide for evaluation and enforcement of the community service assurance in accordance with the following requirements:

(1) The State agency shall,

(i) At least annually, evaluate the compliance of facilities with such assurance; and

(ii) Establish procedures for the investigation of complaints that such assurance is not being complied with.

(2) The State plan shall provide for adequate methods of enforcement of the assurance, including effective sanctions to be applied against any facility which fails to comply with such assurance. Such sanctions may include, but need not be limited to, license revocation, termination of State assistance and court action.

(g) Reports. (1) The State agency shall, not less often than annually, report in writing to the Secretary its general evaluation of facilities' compliance with the assurance, the disposition of each complaint received by the State agency, proposed remedial action with respect to each facility found by the State agency to be not in compliance with the assurance, and the status of such remedial action.

(2) In addition, the State agency shall promptly report to the Regional Attorney and Regional Health Director of the Department of Health and Human Services the institution of any legal action against a facility or the State agency involving compliance with the assurance.