Medicare Financial Management Manual (Pub. 100-06), Ch. 5 § 120
Reviewing Bank Agreements - (Rev. 5, 08-30-02)
120 - Reviewing Bank Agreements - (Rev. 5, 08-30-02)
A1-1420, B1-4418
The contractor shall determine if it wants to continue, renegotiate, or terminate the bank
agreement by reviewing the bank's performance and processing charges for the present
term. It shall review 165 days prior to the expiration of the three-party bank agreement.
If the bank's performance is acceptable, and the bank does not request a rate increase, the
contractor shall recommend to the RO, in writing, that it wants to continue with the bank
agreement and that it be continued for another year or two year period. It shall advise the
RO as soon as a bank's request for a rate increase is received along with its evaluation of
the bank's performance and recommendation, to continue or renegotiate the contract. The
RO develops comparative analysis of three banks' charges with similar volumes to
support the recommendation to continue the bank agreement at a higher processing
charge. If the higher processing charge is not justified, the contractor will be advised to
begin the termination process.