Medicare program: access to books, documents, and records of subcontractors--Health Care Financing Administration

These regulations implement section 952 of the Omnibus Reconciliation Act of 1980 (Pub. L. 96-499), which conditions Medicare reimbursement for the cost of services performed under certain contracts upon compliance with prescribed criteria. If a contract between a provider and a subcontractor covers services valued at or costing $10,000 or more over a 12-month period, Medicare reimbursement cannot be made for the services unless the contract includes a clause allowing the Secretary of Health and Human Services and the Comptroller General access to the contract and to the subcontractor's books, documents, and records necessary to verify the costs of the contract. The clause in the contract must also permit similar access top any subcontract between the subcontractor and a related organization of the subcontractor when the subcontract is worth or costs $10,000 or more over a 12-month period. These regulations specify the criteria and procedures that the Department will use to obtain access to affected books, documents, and records. The purpose of the legislation and these proposed regulations is to permit the Secretary and Comptroller General to make an accurate determination of the reasonable costs under these contracts.