Audit Responsibility for Home Office Costs of Chain

120.1 – Audit Responsibility for Home Office Costs of Chain Organizations (Rev. 27, 12-19-03) Ordinarily, the contractor responsible for settlement of the provider’s cost report and, if necessary, auditing its records is also responsible for auditing the home office cost statement to verify the validity of the costs allocated to the provider. However, if more than one contractor services providers that are members of the chain, this could result in duplication of audit expenses and inconvenience to the home office. Therefore, where more than one contractor services the providers of a chain organization, CMS designates the contractor that will be responsible for the audit of home office cost statement. In making this determination, CMS Central Office (CO) may consult with the relevant regional offices (ROs) and contractors and consider such factors as geographical location of the home office, number of providers serviced by each contractor, total amount of reimbursement to the chain by each contractor and other relevant factors. When CMS CO determines which contractor will be responsible for the home office audit, it communicates its decision in writing to all the contractors servicing the providers in the chain and relevant ROs. If the contractors servicing the providers in the chain prefer to have a different contractor perform the audit, they may request CMS to assign the audit responsibility to another contractor. CMS notifies the contractors, in writing, of its final decision.