CMS Pub. 100-04, ch. 1, § 40.2.2

A2-2801, A2-2801.1

Most terminations of provider agreements are based primarily on health and safety

factors, but fiscal considerations may also play an important role in the decision to

terminate. The provider agreement and the Social Security Act impose certain obligations

on the provider with respect to costs, charges, financial records, and related matters.

Deficiencies in these areas may, of themselves, or in the combination with deficiencies in

health and safety factors, constitute significant reasons for termination.

Upon receipt of a State agency recommendation of termination, the RO notifies the

servicing FI and requests a report concerning any reimbursement aspects that might

constitute additional grounds for termination. The FI’s report should include such

information as: cost reports not filed; cost reports past due and a description of the action

taken; the provider’s refusal to permit the necessary examination of its fiscal records;

status of any cost report settlements still pending; provisions for recoupment of current

financing and accelerated payments; amount of unpaid billings for covered services

rendered which may be used as an offset against any overpayment; and any potential

overpayment in the current period.