CMS Pub. 100-16, ch. 11, § 110.4.5

Each MA organization must have a Management Information System to compile,

evaluate, and produce reports for CMS, its enrollees, and the public as needed. This

system must insure the confidentiality of the doctor-patient relationship and the privacy

of individual's records. The system must be able to produce statistics and other

information with respect to:

• The cost of the MA organization's operations;

• The patterns of utilization of its services;

• The availability, accessibility, and acceptability of its services;

• To the extent practical, developments in the health status of its enrollees;

• Information demonstrating that the MA organization has a fiscally sound

operation; and

• And any other information required by CMS when it gives advance notice before

the beginning of the contract year.

In addition, each MA organization, through its Management Information System, must

report to CMS:

• With respect to Business Transactions as defined above, MA organizations must

provide either:

o A showing that the costs of the transactions listed do not exceed the costs

that would be incurred if these transactions were with someone who is not

a party in interest; or

o If they do exceed the limit of $25,000 or 5 percent of the MA

organization's total operating expenses, a justification that the higher costs

are consistent with prudent management and fiscal soundness

requirements;

• A combined financial statement for the MA organization and a party in interest if

either 35 percent or more of the costs of operation of the MA organization go to a

party in interest or 35 percent or more of the revenue of a party in interest is from

the MA organization.