§ 417.576 Final settlement. ( a ) *General rule.* Final settlement and payment of amounts due the HMO or CMP or the appropriate Medicare trust funds are made following the HMO's or CMP's submission and CMS's review of an independently certified cost report and supporting documents as described in paragraph (b) of this section.
( b ) *Certified cost report as basis for final settlement* — ( 1 ) *Timing of cost report.* The HMO or CMP must submit to CMS an independently certified cost report and supporting documents, in the form and detail required by CMS, no later than 180 days after the end of each contract period, unless CMS extends the period for good cause shown by the HMO or CMP.
( 2 ) *Content of cost report.* The cost report and supporting documents must include the following: ( i ) The per capita costs incurred in furnishing covered services to its Medicare enrollees, determined in accordance with subpart O of this part and including— ( A ) The costs incurred by entities related to the HMO or CMP by common ownership or control; and
( B ) For reports for cost-reporting periods that begin on or after January 1, 1996, the costs of hospital and SNF services paid by Medicare's intermediaries under the option provided by § 417.532(d).
( ii ) The HMO's or CMP's methods of apportioning cost among Medicare enrollees, and nonenrolled patients, in accordance with the payment procedures specified in this subpart (as, applicable, in parts 412 and 413 of this chapter); and
( iii ) Any other information required by CMS.
( 3 ) *Failure to report required financial information.* If the HMO or CMP fails to submit the required cost report and supporting documents within 180 days (or an extended period approved by CMS under paragraph (b)(1) of this section), CMS may— ( i ) Consider the failure to report as evidence of likely overpayment; and
( ii ) Initiate recovery of amounts previously paid, or reduce interim payments, or both.
( c ) *Final determination and adjustment.* ( 1 ) After receipt of acceptable reports as specified in paragraph (b) of this section, CMS determines the total payment due the HMO or CMP for furnishing covered services to its Medicare enrollees (which is subject to the audit provisions of this subpart) and makes a retroactive adjustment to bring interim payments into agreement with the payable amount due the HMO or CMP.
( 2 ) A final settlement may be made with the HMO or CMP even though a provider that is not owned or operated by the HMO or CMP or related to the HMO or CMP by common ownership or control and that provides services to the HMO's or CMP's Medicare enrollees has not had a final settlement with CMS under parts 412 and 413 of this chapter for services furnished by the provider to Medicare beneficiaries who are not enrolled in the HMO or CMP. In this situation— ( i ) CMS must be satisfied that the costs of covered services furnished to the HMO's or CMP's Medicare enrollees, as shown in the reports specified in paragraph (b) of this section, are reasonable and that the interest of the Medicare program would best be served by not delaying final settlement with the HMO or CMP until there is a final settlement with the provider for services furnished to Medicare beneficiaries not enrolled in the HMO or CMP; and
( ii ) Prompt settlement with the HMO or CMP would be in the best interest of the Medicare program if, for instance, the provider's costs represent an insignificant portion of total payment due to the HMO or CMP; or if CMS is satisfied that the provider's costs, as shown in the reports specified in paragraph (b) of this section, will not be modified, to any significant extent, by the final settlement with the provider under parts 412 and 413 of this chapter.
( d ) *Notice of amount of payment.* The notice of amount of Medicare payment— ( 1 ) Explains CMS's determination regarding total Medicare payment due the HMO or CMP for the contract period covered by the financial information specified in paragraph (b) of this section;
( 2 ) Relates this determination to the HMO's or CMP's claimed total payable cost for that period;
( 3 ) Explains the amounts and reasons, by appropriate reference to law, regulations, and Medicare program policy and procedures, if the determined amounts differ from the HMO's or CMP's claim; and
( 4 ) Informs the HMO or CMP of its right to a hearing in accordance with the requirements specified in § 405.1801(b)(2) of this chapter
( e ) *Basis for retroactive adjustment.* ( 1 ) CMS's determination (as contained in the notice of amount of Medicare payment) constitutes the basis for making retroactive adjustments to any Medicare payment made to the HMO or CMP during the period to which the determination applies.
( 2 ) Further payments to the HMO or CMP may be withheld or offset in order to recover, or to aid in the recovery of, any overpayment identified in the determination as having been made to the HMO or CMP, even if the HMO or CMP requests a hearing in accordance with the requirements specified in § 405.1801(b)(2) of this chapter.
( 3 ) Any withholding continues until the earliest of the following occurs: ( i ) The overpayment is liquidated.
( ii ) The HMO or CMP enters into an agreement with CMS to refund the overpaid amount.
( iii ) CMS, on the basis of subsequently acquired information, determines that there was no overpayment.
( iv ) The decision of a hearing specified in paragraph (d)(4) of this section is that there was no overpayment.
[50 FR 1346, Jan. 10, 1985, as amended at 51 FR 34833, Sept. 30, 1986; 58 FR 38082, July 15, 1993; 60 FR 34888, July 5, 1995; 60 FR 46231, Sept. 6, 1995; 73 FR 30267, May 23, 2008]