| (a) For purposes of the Medicare inpatient hospital
prospective payment system (42 U.S.C. 1395ww), a prospective payment
hospital located in an urban area may be reclassified as a rural hospital
if it meets certain conditions. The Secretary will treat a hospital
as being located in the rural area of the state in which the hospital
is located if the hospital is located in an area designated as a rural
area by state law or regulation, or the hospital is designated as
a rural hospital by state law or regulation.
(b) In accordance with §487.401, Texas Government
Code, this division establishes the procedures under which the department
will designate a hospital as a rural hospital in order for the hospital
to qualify for federal funds under 42 CFR Part 412, "Prospective Payment
Systems for Inpatient Hospital Services."
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