Provider Permanent File

130 – Provider Permanent File (Rev. 107, Issued: 09-22-06; Effective: 10-01-06; Implementation: 10-02-06) The permanent reference files are central files that contain provider information. Where appropriate, maintain a current permanent reference file on each provider with pertinent information for use during interim rate reviews, desk reviews, and field audits. Depending on the provider type and payment methodology, the following are examples of the information that can be maintained in the permanent reference file. A. General Information. (1) Accounting Systems and Records 42 CFR 413.20 requires providers to maintain sufficient financial and statistical data for proper determination of costs payable under Medicare. Standardized accounting, statistics, and reporting practices are followed. In keeping with this requirement, establish and maintain surveillance over the provider's capability to maintain records needed to reflect accurate cost reporting data and other information capable of verification by qualified auditors. Document these determinations and retain them in the permanent files. (2) Accounting System Request any significant modifications to the provider's accounting system as updates to the initial system survey performed when the provider entered Medicare. Indicate reliance upon the provider's independent accounting firms' opinions by making reference to them in the permanent reference files. (3) Provider's Organization Obtain, or develop with the assistance of the provider, an organizational chart. Update it where there are significant changes during any cost reporting period. Document information for owners and/or partners of providers to include: • Title of position(s) held by owner and/or partner of provider. • The same information for officers and members of the board and their stock ownership, if any. • Duties and responsibilities of all owners, partners, officers, etc., as appropriate, and individual qualifications related to the duties performed where compensation for them is claimed in the cost report. • Ownership or interest in other providers participating or not participating in the program. • Ownership or interest in any other entity doing business with the provider. • Ownership by a chain organization, where applicable, with the name and address of the home office, description of costs which flow from the parent organization, and the contractor responsible for the home office audit. • Information for nonprofit organization providers to include: − Copy of the Internal Revenue Service certificate of nonprofit status under §501(c) of the Internal Revenue Code; and − Documentation to support the legal and operating name of the sponsoring organization(s) or person(s). • Information for providers requesting multiple-facility status for cost reimbursement purposes includes: − Documentation that the provider consists of several component facilities which provide clearly different types of care; and − Determination that the provider's records have the capability to separate costs and revenues between the various entities of the facility. (4) Floor Plan of Provider's Facility If feasible, retain a copy or pertinent extracts of the facility's floor plan. Update significant changes. Indicate that the floor plan was tested during an audit or during an on-site visit. (5) Provider’s State License and Medicare Tie-In Notice If you obtain these documents as part of your field audit of the number of beds or excluded unit/subprovider costs, retain them in your permanent file. B Contracts for Services (1) Services Purchased Under Arrangements Where a provider purchases services, such as housekeeping, physical therapy, prescription drugs, laboratory tests, etc., obtain a listing of all services furnished by outside suppliers. Where they are performed under contract, document information, the services to be furnished and, where applicable, the charge or fee schedule. (2) Property-Lease Agreements • Maintain copies of major lease agreements or extracts for all leased parts of the facility. Include major movable equipment or other assets. • Determine if the lessor is related and/or if the lease agreement constitutes a lease purchase contract. Where such circumstances exist, apply policies applicable to either related organizations, from PRM-1, Chapter 10 or to lease-purchase agreements, PRM-1, §110B. (3) Provider-Based Physicians Obtain a copy of all current written agreements or extracts, or a written summary of oral agreements between the provider and physicians which: • Identifies each department where they work in the provider; • Lists each physician furnishing services in each department; • Describes each physician's professional and provider activities; • Describes all compensation arrangements; • Lists any fee schedules utilized; and • Lists billing methods selected by the physicians with detailed information pertaining to the specific method selected. • Maintain amendments or new agreements. Maintain copies of contracts or extracts and results of any analyses performed. Have them available for desk review personnel and field auditors. (4) Management and Consultant Services Have on file management and consultant agreements to identify the services furnished in sufficient detail to determine if these services are necessary and proper for the delivery of patient care and that their costs are reasonable. (5) Franchise Arrangement Maintain a copy of the franchise agreement and your analysis supporting the provider's identity and evaluation of specific services furnished and made available by a franchiser, for which the provider claims franchise fee expenses; or evidence that the provisions of the franchise agreement do not meet the conditions necessary to include franchise expenses. (6) Provider's Certified Public Accounting Firm Maintain the name of the provider's certified public accounting firm. C Accounting Policies (1) Capital-Related Costs Maintain copies of documents that include the areas of capitalization, relifing of depreciable assets, estimated useful lives of depreciable assets and componentized depreciation. Review capital-related costs for the following areas: • Current year assets acquisitions; • Consistency of capitalization; • Gain/loss on disposal of assets; and • Relifing of assets. (2) Fixed Assets Identify provider assets shown on the balance sheet. Usually, a listing of assets by class, e.g., land, buildings, equipment, indicating the acquisition date, the cost, useful life, method of depreciation, and the annual depreciation for each asset, is sufficient to support the asset and depreciation costs shown on the provider's financial statements. Where such records are extensive, maintain at least a summary of the asset accounts, updated as required. Determine if fixed asset accounting is adequate and if depreciation is based upon guidelines included in Provider Reimbursement Manual, Part I, Chapter I. (3) Loan or Mortgage Documents Obtain copies (if practical) of all outstanding material loans or mortgages, or bond indentures to establish the allowability, necessity, and reasonableness of interest expense. (4) Exceptions to Reimbursement Limitations Evaluate provider requests for exceptions to reimbursement limitations (e.g., limitations on coverage of costs). Maintain a complete file to support exceptions, exemptions, and classification adjustments. (5) Education Program Approvals Approved educational activities means formally organized or planned programs of study operated by the staff of the institution. Include current copies of State licenses or professional organization recognition, to support the determination of the acceptance of graduate medical education, nursing school, and allied health programs. (6) Insurance Document the allowance of insurance costs regardless of whether they are for commercial, self-insurance, or alternative forms to provide full coverage. Include copies of policies where practical or pertinent extracts, copies of prior pertinent audit working papers, and/or a summary of the key provisions which fulfill the conditions for Medicare reimbursement. (7) Preparation of Cost Reports Determine whether the provider has the capability of preparing an acceptable cost report. Where a provider proposes a change from CMS’ reporting procedure, determine whether it properly reflects Medicare cost reporting requirements and is acceptable to CMS and you. (8) Deferred Compensation or Pension Plan Have on file, for each provider having a deferred compensation or pension plan, a copy of the written agreement or extract and all amendments existing between the provider and participating employees which: • Describes the method for determining all contributions to the fund; • Describes the funding mechanism; • Provides protection for the plan's assets; • Designates the requirements for vested benefits; • States the basis for determining the amount of benefits to be paid; • Describes the treatment of such items as dividends, interest income, capital gains or losses in regard to the corpus of the fund; and • Designates the handling of loan(s) made from the deferred compensation plan to the provider.