Section 412.505 - Conditions for payment under the prospective payment system for long-term care hospitals(a)Long-term care hospitals subject to the prospective payment system. To be eligible to receive payment under the prospective payment system specified in this subpart, a long-term care hospital must meet the criteria to be classified as a long-term care hospital set forth in § 412.23(e) for exclusion from the acute care hospital inpatient prospective payment systems specified in § 412.1(a)(1) . This condition is subject to the special payment provisions of § 412.22(c) , the provisions on change in hospital status of § 412.22(d) , the provisions related to hospitals-within-hospitals under § 412.22(e) , and the provisions related to satellite facilities under § 412.22(h) .(b)General requirements.(1) Effective for cost reporting periods beginning on or after October 1, 2002, a long-term care hospital must meet the conditions for payment of this section, § 412.22(e)(3) and (h)(6) , if applicable, and § 412.507 through § 412.511 to receive payment under the prospective payment system described in this subpart for inpatient hospital services furnished to Medicare beneficiaries.(2) If a long-term care hospital fails to comply fully with these conditions for payment with respect to inpatient hospital services furnished to one or more Medicare beneficiaries, CMS may withhold (in full or in part) or reduce Medicare payment to the hospital. 67 FR 56049 , Aug. 30, 2002, as amended at 71 FR 48140 , Aug. 19, 2006