CMS Pub. 100-06, ch. 5, § 110.2

To ensure a continuing evaluation of all bank services and associated charges, the

contractor shall adhere to the following procedures:

• Arrange to receive from the bank its account analysis on a regular monthly basis

no later than the 10th of the following month. Bank analysis must include:

o Bank Processing Charges (Schedule of Itemized Bank Services Provided

Report); and

o A list of daily closing bank balances (Recap of Daily Available Balances).

• The contractor shall verify the accuracy of the data presented for the average daily

bank balance, units of service, and all other computations on the bank's account

analysis.

• The contractor shall complete and forward, within 15 calendar days after the end

of each month to CMS electronically (Excel; Banking2009@cms.hhs.gov;), the

following schedules:

o Monthly account activity of bank processing charges (Schedule of

Itemized Bank Services Provided Report); and

o Recap of Daily Available Balances (Recap of Daily Available Balances).

120 - Reviewing Bank Agreements - (Rev. 5, 08-30-02)

A1-1420, B1-4418

The contractor shall determine if it wants to continue, renegotiate, or terminate the bank

agreement by reviewing the bank's performance and processing charges for the present

term. It shall review 165 days prior to the expiration of the three-party bank agreement.

If the bank's performance is acceptable, and the bank does not request a rate increase, the

contractor shall recommend to the RO, in writing, that it wants to continue with the bank

agreement and that it be continued for another year or two year period. It shall advise the

RO as soon as a bank's request for a rate increase is received along with its evaluation of

the bank's performance and recommendation, to continue or renegotiate the contract. The

RO develops comparative analysis of three banks' charges with similar volumes to

support the recommendation to continue the bank agreement at a higher processing

charge. If the higher processing charge is not justified, the contractor will be advised to

begin the termination process.

120.1 - Terminating Bank Agreements - (Rev. 5, 08-30-02)

A1-1420.1, B1-4418.1

The contractor, the Government, or the bank may terminate the bank agreement when the

party wishing to terminate submits written notification to the other parties 150 days prior

to the expiration of the current term. In the event of termination, the bank agrees to retain

the contractor's Federal Health Insurance Account(s) for an additional 180-day period

(phase-out) beyond the current term to allow for clearance of outstanding checks.

120.2 - Terminating Federal Health Insurance Accounts - (Rev. 5, 08-

30-02)

A1-1420.2, B1-4418.2

• Initial Adjustment to the Federal Health Insurance Time Account - Pending

receipt of the prior month's bank statement, the contractor shall reduce on the first

day of the phase-out period the current balance in the Federal Health Insurance

Time Account by seventy-five percent (75%). It shall prepare a Time Account

withdrawal slip that instructs the bank to immediately transfer the computed

amount to the FHIBA.

• Time Account Analysis - Within 7 days of the expiration of the current term, the

contractor shall complete Schedule TAA in its entirety to determine whether the

time account should remain open during the phase-out period. It shall include in

line 4 the total projected service charges for the entire phase-out period. It shall

modify the 25 percent figure on line 10 to reflect the actual length of the phase-out period, e.g., 6-month period would show 50 percent.

o If line 13 of Schedule TAA (page 1 of 3) indicates a positive amount, the

contractor shall maintain that amount of money in the time account during

the phase-out period, and adjust the present time account balance

accordingly in lines 14-16.

o If line 9 of Schedule TAA (page 1 of 3) indicates a negative amount, the

contractor shall immediately transfer the current time account balance to

the benefits account, and the contractor should secure from the bank a

check payable to the benefits account in an amount equal to the negative

amount reflected on line 9.

• Closing Federal Health Insurance Time Accounts - At the expiration of the phase-out period, the contractor shall transfer all funds on deposit in the Time Account,

if applicable, and FHIBA immediately to the new FHIBA.