(a) For each level of care specified in a provider agreement, and for each quarter for which a satisfactory showing is not made, the amount of the reduction in FFP is computed as follows:

(1) For each level of care, the number of beneficiaries who received services in facilities that did not meet the requirements of this subpart is divided by the total number of beneficiaries who received services in facilities for which a showing was required under this subpart. If any of the requirements specified in §456.652(a)(1) through (4) were not met for any beneficiary in a facility, the reduction will be computed on the total number of beneficiaries in that facility at the level of care in question.

(2) The fraction obtained in paragraph (a)(1) of this section is multiplied by one-third.

(3) The product obtained in paragraph (a)(2) of this section is multiplied by the Federal Medical Assistance Percentage (FMAP).

(4) The product obtained in paragraph (a)(3) of this section is multiplied by the agency payments for longstay services furnished during the quarter at that level of care.

(b) If any of the data required to compute the amount of the reduction in FFP are unavailable, the Administrator will substitute an estimate. If the agency determines the exact data to the satisfaction of the Administrator, the estimate may later be adjusted. If the number of beneficiaries in individual facilities is not available, the fraction specified in paragraph (a)(1) of this section will be estimated, for each level of care, by dividing the number of facilities in which the requirements were not met by the total number of facilities for which a showing is required under this subpart.