---
kind: "section"
citation: "42 C.F.R. § 417.480"
title: "42"
number: "417.480"
heading: "Maintenance of records: Cost HMOs and CMPs."
url: "https://uscodex.org/cfr/42/417.480"
---

# §417.480. Maintenance of records: Cost HMOs and CMPs.


A reasonable cost contract must provide that the HMO or CMP agrees to maintain books, records, documents, and other evidence of accounting procedures and practices that—

- (a) **Are sufficient to—**
  - (1) Ensure an audit trail; and
  - (2) Properly reflect all direct and indirect costs claimed to have been incurred under the contract; and
- (b) **Include at least records of the following—**
  - (1) Ownership, HMO or CMP, and operation of the HMO's or CMP's financial, medical, and other recordkeeping systems.
  - (2) **Financial statements for the current contract period and three prior periods.**
  - (3) **Federal income tax or information returns for the current contract period and three prior periods.**
  - (4) **Asset acquisition, lease, sale, or other action.**
  - (5) **Agreements, contracts, and subcontracts.**
  - (6) **Franchise, marketing, and management agreements.**
  - (7) **Schedules of charges for the HMO's or CMP's fee-for-service patients.**
  - (8) **Matters pertaining to costs of operations.**
  - (9) **Amounts of income received by source and payment.**
  - (10) **Cash flow statements.**
  - (11) **Any financial reports filed with other Federal programs or State authorities.**

## Notes

### Amendments

[50 FR 1346, Jan. 10, 1985, as amended at 58 FR 38082, July 15, 1993; 60 FR 45680, Sept. 1, 1995]

### Source

Source: 50 FR 1346, Jan. 10, 1985, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 1302 and 1395hh, and 300e, 300e-5, and 300e-9, and 31 U.S.C. 9701.

### Amendments

[50 FR 1346, Jan. 10, 1985, as amended at 58 FR 38082, July 15, 1993; 60 FR 45680, Sept. 1, 1995]