42 CFR § 456.650 - Basis, purpose and scope.

---
identifier: "/us/cfr/t42/s456.650"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "42 CFR § 456.650 - Basis, purpose and scope."
title_number: 42
title_name: "Public Health"
section_number: "456.650"
section_name: "Basis, purpose and scope."
chapter_name: "CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES"
subchapter_number: "C"
subchapter_name: "MEDICAL ASSISTANCE PROGRAMS"
part_number: "456"
part_name: "UTILIZATION CONTROL"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "42 U.S.C. 1302."
regulatory_source: "43 FR 45266, Sept. 29, 1978, unless otherwise noted."
cfr_part: "456"
---


# 456.650 Basis, purpose and scope.

(a) *Basis.* Section 1903(g) of the Act requires that FFP for long-stay inpatient services at a level of care be reduced, by a specified formula, for any quarter in which a State fails to make a satisfactory showing that it has an effective program of utilization control for that level of care.

(b) *Purpose.* This subpart specifies—

(1) What States must do to make a satisfactory showing;

(2) How the Administrator will determine whether reductions will be imposed; and

(3) How the required reductions will be implemented.

(c) *Scope.* The reductions required by this subpart do not apply to—

(1) Services provided under a contract with a health maintenance organization; or

(2) Facilities in which a QIO is performing medical and utilization reviews under contract with the Medicaid agency in accordance with § 431.630 of this chapter.

[44 FR 56338, Oct. 1, 1979, as amended at 50 FR 15327, Apr. 17, 1985; 51 FR 43198, Dec. 1, 1986]