CMS Pub. 100-06, ch. 1, § 500.1

Settlement Information Where There is No Common Audit Program -

(Rev. 1, 08-30-02)

A1-1604.1

Administrative cost incurred in furnishing settlement information should be charged to

the title XVIII audits of providers' function. Amounts collected for furnishing this

information must be deposited in the intermediary's Medicare bank account. Funds so

deposited must be clearly identified as to source and purpose to facilitate auditing. The

funds must be deposited in the Medicare account because the cash outlay for the cost of

obtaining the information was charged to Medicare. Funds received for this purpose

should be shown as a separate credit item on the Interim Expenditure Report (Form

CMS-1527) and the Final Administrative Cost Proposal (Form CMS-1615).

510 - Reporting Costs for Assistance Provided QIOs - (Rev. 1, 08-30-02)

A3-1610

Section 249F of Public Law 92-603 provides for the establishment of Quality

Improvement Organizations. These organizations require varying amounts of assistance

from intermediaries.

Intermediaries incurring costs in providing assistance to QIOs (including planning,

conditional, and operating) should use the guidelines provided below in reporting costs

on their Estimate of Administrative Costs, Cumulative Interim Expenditure Report and

Budget, and Final Cost Proposals. Funds have not been included in CMS's allocation for

contractor operations to provide assistance to QIOs. Therefore, requests from QIOs for

data as described in B below should not be undertaken until agreement for reimbursement

of costs incurred has been reached with the QIO. It is suggested that this agreement be

included in the Memorandum of Understanding.

Assistance to QIOs will generally fall into two categories:

A. Activities Which Are to be Charged to Medicare

Incidental items will be charged to Medicare on regular lines. Such items include general

discussions on the Memorandum of Understanding, available data, operating procedures,

meetings to discuss specific agenda items, phone calls, etc. Similar items, but involving

more than an incidental amount of time, staff, or cost such as an all day meeting, a series

of meetings to discuss and explain available data, etc., should be identified, reported on

the PRO line and charged to Medicare.

B. Activities Which Are to be Charged to QIOs

This category consists of data requested by the QIO for use in carrying out their function

such as photocopying existing data, special computer runs, and other similar requests for

information. As indicated above, an agreement regarding requests and reimbursement for

costs incurred for completing the requests should be reached in advance and with CMS

RO concurrence, is to be incorporated in a Memorandum of Understanding. The costs for

this type of data are to be billed directly to the QIO and an informational report of the

costs incurred is to be attached to the Medicare fiscal reports to CMS. Costs for this type

of activity are not to be charged to Medicare.

520 - Exhibits - (Rev. 1, 08-30-02)

A1-1699

Exhibit l - Agreement for Common Audit Under Titles X, XVIII and XIX

EXHIBIT l

Agreement for Common Audit Under Titles V, XVIII and XIX

WHEREAS the Secretary of Health, Education and Welfare has the responsibility for the

administration of titles V, XVIII and XIX of the Social Security Act and has urged

coordination of these programs to the extent practicable;

WHEREAS it is required that under titles V, XVIII and XIX participating health care

institutions, hereinafter referred to as providers, are to be reimbursed for inpatient

services on a reasonable cost basis;

WHEREAS representatives of the Social Security Administration, the Medical Services

Administration and the Maternal and Child Health Services of the Department of Health,

Education, and Welfare have agreed that whatever audit of providers is required should

serve the purpose of the three programs;

WHEREAS the (name of intermediary or intermediaries), hereinafter referred to as the

intermediary, has entered into an agreement with the Secretary of Health, Education, and

Welfare to act as the fiscal intermediary under title XVIII, and that the intermediary is

contractually obligated to make such audit of records of providers of services as is

necessary to assure that the facilities are being reimbursed in accordance with the

provisions of the Act and the Regulations promulgated pursuant thereto;

WHEREAS the Secretary has authorized intermediaries and State agencies to enter into

agreements for use of common audit information under titles V, XVIII and XIX and

sharing of such audit costs;

THEREFORE, the intermediary and the (name of State agency or agencies), hereinafter

referred to as the ______________________________________, hereby agree to the

following:

1. The intermediary shall have responsibility for performance of desk reviews of

provider cost reports to determine their acceptability and for deciding the need for

and scope of field audits. It is expected that the intermediary will arrange for

appropriate consultation with the (name of State agency or agencies) in arriving at

its decision regarding need for or scope of any audit.

2. The intermediary and the (name of State agency or agencies), shall select a

mutually acceptable audit capability to be used in the conduct of field audits,

including the consideration of the intermediary's and the State agency's in-house

audit staff. The intermediary and the (name of State agency or agencies) shall

enter into any subcontracts which might be necessary to accomplish field audits

under the common audit program, in accordance with their responsibilities under

their agreements with the Secretary of Health, Education, and Welfare for

administration of their respective programs. (Administration of subcontracts will

be arranged between the intermediary and State agency.)

3. Cost sharing

a. The cost of common audits, including desk review, field audit activities,

and, if applicable, final settlement activities, will be shared by the

intermediary and the (State agency or agencies);

b. The cost to each party to this agreement will be based upon the ratio of

benefits paid to individual providers by titles V, XVIII, and XIX for the

period covered by the cost report;

c. (This provision will set forth the mutually satisfactory arrangements to be

reached whereby each party contributes its share of the audit costs on a

timely basis.)

4. This agreement shall begin on (date) and end on (date). It will automatically be

renewed for successive periods of one year unless the intermediary or the State

agency(s) gives written notice of intention not to renew the agreement at least 90

days before the end of the current period.

5. Any costs incurred as a result of termination of this agreement will be shared on

an equal basis.

6. Final settlement with the providers will be made (by the intermediary for all

parties/or separately). (If separate settlements are to be made, the following

should be added, "Coordination of settlements by the intermediary and the (State

agency or agencies) will be necessary to insure consistent treatment of questioned

items.")

7. The provisions of the Agreement shall be applicable only in connection with the

audit of those providers receiving reimbursement under title XVIII and at least

one of the other titles referred to in this agreement.

(Intermediary)

BY: __________________________

(name and title of Intermediary's authorized representative)

(State Agency)

BY :__________________________

(name and title of the authorized State representative)