CMS Pub. 100-16, ch. mc86c17a, § 10.3.1

Cost-based HMO/CMPs must submit an annual operating budget and enrollment forecast

at least 90 days before the start of each contract year. The operating budget uses

estimated costs. The budget and enrollment forecast must reflect the HMO/CMP's past

experience and present the HMO/CMP's anticipated enrollment and costs (both total and

Medicare) for the coming year. The reports are then used to compute the interim per

capita rate. Its other purpose is to establish Medicare deductible and coinsurance

premiums, including determining past over or under collections of such premiums and

the budget period's voluntary undercollection of premium. If the annual budget and

enrollment forecast is not submitted on a timely basis, CMS may:

• Establish an interim per capita rate of payment on the basis of the best available

data and adjust payments based on such a rate until such time as the required

reports are submitted and the new interim per capita rate can be established, or

• Advise the HMO/CMP if there is not enough data on which to base an interim

rate, then interim payments will not be made until the required reports are

submitted.

CMS reserves the right to examine all records and statistical data used by the HMO/CMP

in completing these reports. To the extent the annual operating budget and enrollment

forecast is accurate, interim payments will approximate the total CMS obligation.