Calculating Return on Investment Where the Contractor's Year

400 - Calculating Return on Investment Where the Contractor's Year for Insurance Commission Filing Differs from the Medicare Contract Year - (Rev. 1, 08-30-02) A1-1130, B1-4130 The contractor shall compute the rate of return on investment in accordance with Appendix B of the contract/agreement. If the contractor's accounting year is different from its Medicare contract year, CMS recommends the following weighted average calculation: Assumption: Rate of return for October 1, 1998, to December 31, 1998, is 10 percent. Rate of return for January 1, 1999, to September 30, 1999, is 8 percent. Calculation of weighted average: 10 (Percent) x 3 (months) = 30% 8 (Percent) x 9 (months) = 72% Total 102% 102% divided by 12 (months) = 8.5% (weighted average)