(a) Effect of certification. The Secretary may certify a facility which meets the requirements of paragraphs (b) and (c) of this section as a “facility with a small annual obligation.” A facility which is so certified is not required to comply with this subpart except as otherwise herein provided.

(b) Criteria for qualification. A facility may qualify for certification under this section if all of the following criteria are met:

(1)(i) Title VI-assisted facilities. (A) For the facility's fiscal year in which this section becomes effective, the level, computed under § 124.503(c) (3), divided by the number of years remaining in its period of obligation (including an additional year or portion of a year for each year or portion of a year in which a deficit was incurred and has not been made up), is not more than $10,000;

(B) For a subsequent fiscal year, the level computed under paragraph (A) of this paragraph (b)(1)(i), is at or less than $10,000, adjusted by a percentage equal to the percentage change in the CPI available in the year in which this section becomes effective and the most recent year for which a published index is available.

(ii) Title XVI-assisted facilities. (A) For the facility's fiscal year in which this section becomes effective, the level under § 124.503(a), plus the amount of any noncompliance deficits which have not been made up, is at or less than $10,000.

(B) For a subsequent fiscal year, the level, computed under paragraph (A) of this paragraph (b)(1)(ii), is at or less than $10,000, adjusted as provided in paragraph (b)(1)(i)(B) of this section.

(2) It provides health services without charge or at a substantially reduced rate to persons who are determined by the facility to qualify threrefor under a program of discounted health services. A “program of discounted health services” must provide for financial and other objective eligibility criteria and procedures, including notice prior to nonemergency service, that assure effective opportunity for all persons to apply for and obtain a determination of eligibility for such services, including a determination prior to service where requested; Provided that, such criteria and procedures are not required where the facility makes all services available to all persons at no or nominal charge.

(c) Procedures for certification. To be certified under this section, a facility must submit to the Secretary, in addition to other materials that the Secretary may from time to time require, a complete description of its program(s) of discounted health services, including charging and collection policies of the facility, and eligibility criteria and notice and determination precedures used under its program(s) of discounted services.

(d) Period of effectiveness. A certification by the Secretary under this section remains in effect until withdrawn. During the period in which such certification is in effect, the facility must provide uncompensated services in an amount not less than the level applicable under paragraph (b)(1) of this section for each fiscal year. The Secretary may disallow credit under this subpart when the Secretary determines that there has been a material change in any factor upon which certification was based or substantial noncompliance with this subpart. The Secretary may withdraw certification where the change or noncompliance cannot be or has not been adequately remedied or noncompliance otherwise continues.

(e) Deficits. (1) Where the compliance level of a facility assisted under title VI of the Act is computed under paragraph (b)(1)(i)(A) of this section as including additional year(s) or a portion of a year, the facility's period of obligation under this subpart shall be extended by such additional period, until certification is withdrawn.

(2) Where a facility has been assessed as having a deficit under § 124.503(b) that has not been made up prior to withdrawal of certification under this section or fails to provide services as required by paragraph (d) of this section, the facility must make up the deficit in accordance with § 124.503(b) following withdrawal of certification.