[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR433.40]

[Page 72-73]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                  HEALTH AND HUMAN SERVICES (CONTINUED)
 
PART 433_STATE FISCAL ADMINISTRATION--Table of Contents
 
    Subpart A_Federal Matching and General Administration Provisions
 
Sec. 433.40  Treatment of uncashed or cancelled (voided) Medicaid checks.

    (a) Purpose. This section provides the rules to ensure that States 
refund the Federal portion of uncashed or cancelled (voided) checks 
under title XIX.
    (b) Definitions. As used in this section--
    Cancelled (voided) check means a Medicaid check issued by a State or 
fiscal agent which prior to its being cashed is cancelled (voided) by 
the State or fiscal agent, thus preventing disbursement of funds.
    Check means a check or warrant that a State or local agency uses to 
make a payment.
    Fiscal agent means an entity that processes or pays vendor claims 
for the Medicaid State agency.
    Uncashed check means a Medicaid check issued by a State or fiscal 
agent which has not been cashed by the payee.
    Warrant means an order by which the State agency or local agency 
without the authority to issue checks recognizes a claim. Presentation 
of a warrant by the payee to a State officer with authority to issue 
checks will result in release of funds due.
    (c) Refund of Federal financial participation (FFP) for uncashed 
checks--(1) General provisions. If a check remains uncashed beyond a 
period of 180 days from the date it was issued; i.e., the date of the 
check, it will no longer be regarded as an allowable program 
expenditure. If the State has claimed and received FFP for the amount of 
the uncashed check, it must refund the amount of FFP received.
    (2) Report of refund. At the end of each calendar quarter, the State 
must identify those checks which remain uncashed beyond a period of 180 
days after issuance. The State agency must refund all FFP that it 
received for uncashed checks by adjusting the Quarterly Statement of 
Expenditures for that quarter. If an uncashed check is cashed after the 
refund is made, the State may file a claim. The claim will be considered 
to be an adjustment to the costs for the quarter in which the check was 
originally claimed. This claim will be paid if otherwise allowed by the 
Act and the regulations issued pursuant to the Act.
    (3) If the State does not refund the appropriate amount as specified 
in paragraph (c)(2) of this section, the amount will be disallowed.
    (d) Refund of FFP for cancelled (voided) checks--(1) General 
provision. If the State has claimed and received FFP for the amount of a 
cancelled (voided) check, it must refund the amount of FFP received.

[[Page 73]]

    (2) Report of refund. At the end of each calendar quarter, the State 
agency must identify those checks which were cancelled (voided). The 
State must refund all FFP that it received for cancelled (voided) checks 
by adjusting the Quarterly Statement of Expenditures for that quarter.
    (3) If the State does not refund the appropriate amount as specified 
in paragraph (d)(2) of this section, the amount will be disallowed.

[51 FR 36227, Oct. 9, 1986]