42 CFR §417.550

1. (a)Principle. CMS pays the full reasonable cost incurred by an HMO or CMP for activities that are solely for Medicare purposes and unique to Medicare contracts under section 1876 of the Act.
2. (b)Application. CMS pays the full reasonable cost of the following activities:
   1. (1)Reporting increases and decreases in the number of Medicare enrollees.
   2. (2)Obtaining independent certification of the HMO's or CMP's cost report to the extent that it is for Medicare purposes.
   3. (3)Reporting special data that CMS requires solely for program planning and evaluation.
3. (c)Prior approval requirement. The costs specified in paragraph (b) of this section must be separately budgeted and approved by CMS before the contract period begins.
4. (d)Limit on full payment. Full payment is limited to the costs specified in paragraph (b) of this section. All other administrative costs must be apportioned in accordance with § 417.552.