Costs in Excess of Annual Capitation Rate

80.3 - Costs in Excess of Annual Capitation Rate (Rev. 4, 10-01-01) In evaluating the reasonableness of costs for a cost-based HMO/CMP, CMS may take into account the cost-based HMO/CMP's per capita incurred costs for providing covered services to Medicare enrollees, in relation to the Adjusted Average Per Capita Cost (AAPCC) for the geographic areas served by the HMO/CMP or a similar area. The AAPCC is used as a general guideline to evaluate the reasonableness of a cost-based HMO/CMP rather than a strict payment limitation.