[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR421.100]

[Page 816-817]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 421--INTERMEDIARIES AND CARRIERS--Table of Contents
 
                        Subpart B--Intermediaries
 
Sec. 421.100  Intermediary functions.


    An agreement between CMS and an intermediary specifies the functions 
to be performed by the intermediary, which must include, but are not 
necessarily limited to, the following:
    (a) Coverage. (1) The intermediary ensures that it makes payments 
only for services that are:
    (i) Furnished to Medicare beneficiaries;
    (ii) Covered under Medicare; and
    (iii) In accordance with QIO determinations when they are services 
for which the QIO has assumed review responsibility under its contract 
with CMS.
    (2) The intermediary takes appropriate action to reject or adjust 
the claim if--
    (i) The intermediary or the QIO determines that the services 
furnished or proposed to be furnished were not reasonable, not medically 
necessary, or not furnished in the most appropriate setting; or
    (ii) The intermediary determines that the claim does not properly 
reflect the kind and amount of services furnished.
    (b) Fiscal management. The intermediary must receive, disburse, and 
account for funds in making Medicare payments.
    (c) Provider audits. The intermediary must audit the records of 
providers of services as necessary to assure proper payments.
    (d) Utilization patterns. The intermediary must assist providers to-
-
    (1) Develop procedures relating to utilization practices;
    (2) Make studies of the effectiveness of those procedures and 
recommend methods to improve them;
    (3) Evaluate the results of utilization review activity; and
    (4) Assist in the application of safeguards against unnecessary 
utilization of services.
    (e) Resolution of cost report disputes. The intermediary must 
establish and

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maintain procedures approved by CMS to consider and resolve any disputes 
that may result from provider dissatisfaction with an intermediary's 
determinations concerning provider cost reports.
    (f) Reconsideration of determinations. The intermediary must 
establish and maintain procedures approved by CMS for the 
reconsideration of its determinations to deny payments to an individual 
or to the provider that furnished services to the individual. The QIO 
performs reconsideration of cases in which it made a determination 
subject to reconsideration.
    (g) Information and reports. The intermediary must furnish to CMS 
any information and reports that CMS requests in order to carry out its 
responsibilities in the administration of the Medicare program.
    (h) Other terms and conditions. The intermediary must comply with 
all applicable laws and regulations and with any other terms and 
conditions included in its agreement.
    (i) Dual intermediary responsibilities. With respect to the 
responsibility for service to provider-based HHAs and provider-based 
hospices, where the HHA or hospice and its parent provider will be 
served by different intermediaries under Sec. 421.117 of this part, the 
designated regional intermediary will process bills, make coverage 
determinations and make payments to the HHAs and hospices. The 
intermediary serving the parent provider will perform all fiscal 
functions, including audits and settlement of the Medicare cost reports 
and the HHA and hospice supplement worksheets.

[45 FR 42179, June 23, 1980, as amended at 48 FR 7178, Feb. 18, 1983; 49 
FR 3659, Jan. 30, 1984; 51 FR 43198, Dec. 1, 1986; 53 FR 17944, May 19, 
1988; 54 FR 4026, Jan. 27, 1989]