CMS Pub. 100-06, ch. 8, § 120.3

The responsibility for completing the desk review and scoping the audit of the home

office cost statement rests with the responsible/designated contractor. If more than one

contractor services the providers in the chain, the responsible/designated contractor may

request any information its auditors need to scope the audit of the home office cost

statement from other contractors. However, if you are the responsible/designated

contractor, do not audit a home office cost statement if all the providers in the chain are

paid entirely under the prospective payment methodology or the aggregate amount of the

related Medicare reimbursement for all the providers in the chain is immaterial. In those

situations, you do not have to complete the desk review.

If the home office cost statement is scoped for audit, the other contractors forward to the

responsible contractor the requested information and any other information they have

related to the providers they service which they consider relevant to the home office

audit. This could include aspects of the chain's operations or their experience in their

relationship with the chain that the responsible/designated contractor should be aware of,

or should consider during the audit.

If some of the records for an individual provider are maintained at the home office (e.g.,

insurance or loan records), the servicing contractor for that provider may determine

during the desk review/scoping process that some of those records need to be audited.

Since the responsibility for auditing any provider records maintained at the home office

rests with the responsible/designated contractor, the servicing contractor must submit a

written request to the responsible/designated contractor to audit those records. The

servicing contractor’s written request must include: (1) the provider’s cost report, (2)

completed desk review, (3) specific areas to be audited, and (4) scope of the audit to be

performed.

The responsible/designated contractor considers the exceptions identified during the desk

review of the home office cost statement, the additional information furnished by other

contractors in response to its request, and the servicing contractors’ requests for audit of

provider records maintained at the home office in determining the scope of the home

office audit.