[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: 42CFR421.124]

[Page 821-822]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 421--INTERMEDIARIES AND CARRIERS--Table of Contents
 
                        Subpart B--Intermediaries
 
Sec. 421.124  Intermediary's failure to perform efficiently and effectively.

    (a) Failure by an intermediary to meet, or to demonstrate the 
capacity to meet, the criteria or standards specified in Secs. 421.120 
and 421.122 may be grounds for adverse action by the Secretary or by 
CMS, such as reassignment of providers, offer of a short-term agreement, 
termination of a contract, or non-renewal of a contract. If an 
intermediary meets all criteria and standards in its overall 
performance, but does not meet them with respect to a specific provider 
or class of providers, CMS may reassign that provider or class of 
providers to another intermediary in accordance with Sec. 421.114.
    (b) In addition, notwithstanding whether an intermediary meets the 
criteria and standards, if the cost incurred by the intermediary to meet 
its contractual requirements exceeds the amount which CMS finds to be 
reasonable and adequate to meet the cost

[[Page 822]]

which must be incurred by an efficiently and economically operated 
intermediary, those high costs may also be grounds for adverse action.

[59 FR 682, Jan. 6, 1994]