CMS Pub. 100-06, ch. 3, § 50.2

The incoming FI is responsible for effectuating final settlements for the cost report periods after the

change of FI becomes effective. If the FI receives a cost report from a prior period it should forward it

to the outgoing FI to make the final settlement. If the outgoing FI is no longer participating in the

Medicare program, the incoming FI shall contact the RO for further instructions.

After the outgoing FI has completed its review of the cost report, it notifies the incoming FI whether the

cost report is acceptable, and the final settlement. The incoming FI, in accordance with Ch. 4, §40,

disposes of funds withheld during the suspension of interim payments (for an unfiled cost report) and

initiates recoupment by the withhold of interim payments if necessary.

While overpayments are outstanding at the outgoing FI, the incoming FI must keep the outgoing FI up

to date regarding the provider’s location and participation in the Medicare program. If the incoming FI

learns of a provider’s termination from the Medicare program it must notify the outgoing FI so that it

may act accordingly.

A. Reduction of Outstanding Overpayment

Any actions taken by the incoming FI which reduce or eliminate the overpayment made by the outgoing

FI shall be communicated, in writing, to the outgoing FI within 5 working days after the month in which

the actions occurred. In addition, unless the provider indicates to the contrary, any collections or

payment are applied first to the earliest overpayment. See Chapter 5, Financial Reporting for

instructions on transferring any payment(s) between FIs.