100-06 Medicare Financial Management Manual: Chapter 7 - Internal Control Requirements

Medicare Financial Management Manual
Chapter 7 - Internal Control Requirements
Table of Contents
(Rev. 13001; Issued:12-13-24)
Transmittals for Chapter 7
10 – Introduction
10.1 – Authority
10.1.1– Federal Managers' Financial Integrity Act of 1982 (FMFIA)
10.1.2 – FMFIA and the CMS Medicare Contractor Contract
10.1.3 – Chief Financial Officers Act of 1990 (CFO)
10.1.4 – OMB Circular A-123
10.1.5 – GAO Standards for Internal Controls in the Federal Government
10.2 – GAO Standards in the Federal Government
10.2.1 – Definition and Objectives
10.2.2 – Fundamental Concepts
10.2.3 – Standards for Internal Control
10.2.3.1 – Control Environment
10.2.3.2 – Risk Assessment
10.2.3.3 – Control Activities
10.2.3.4 – Information and Communication
10.2.3.5 – Monitoring
20 – CMS Contractor Internal Control Review Process and Timeline
20.1 – Risk Assessment
20.1.1 – Risk Analysis Chart
20.2 – Internal Control Objectives
20.2.1 – CMS Contractor Control Objectives
20.3 – Policies and Procedures
20.4 – Testing Methods
20.5 – Documentation and Working Papers
30 - Internal Control Reporting Requirements
30.1 – Certification Package for Internal Controls (CPIC) Requirements
30.1.1 – OMB Circular A-123 Appendix A: Internal Control Over Financial Reporting
(ICOFR)
30.2 – Certification Statement
30.3 – Executive Summary
30.4 – CPIC - Report of Material Weaknesses
30.5 – CPIC- Report of Internal Control Deficiencies
30.6 – Definitions of Control Deficiency, Significant Deficiency, and Material Weaknesses
30.7 – Material Weaknesses Identified During the Reporting Period
30.8 – Statement on Standards for Attestation Engagements (SSAE) Number 18 (SSAE 18),
Reporting on Controls at Service Providers
30.9 – List of Complementary User Entity Controls (CUECs)

30.9.1 – A CUECs – Information Systems
30.9.2 – B CUECs – Claims Processing
30.9.3 – F CUECs – Medical Review (MR)
30.9.4 – G CUECs – Medicare Secondary Payer (MSP)
30.9.5 – I – CUECs Provider Audit
30.9.6 – J CUECs – Financial
30.9.6.1 – J CUECs – Financial (Non-HIGLAS)
30.9.6.2 – J CUECs – Financial (HIGLAS)
30.9.7 – K CUECs – Debt Referral (MSP and Non-MSP)
30.9.7.1 – K CUECs – Debt Referral (MSP and Non-MSP) (Non-HIGLAS)
30.9.7.2 – K CUECs – Debt Referral (MSP and Non-MSP) (HIGLAS)
30.9.8 – L CUECs – Non-MSP Debt Collection
40 – Corrective Action Plans
40.1 – Submission, Review, and Approval of Corrective Action Plans
40.2 – Corrective Action Plan (CAP) Reports
40.3 – CMS Finding Numbers
40.4 – Initial CAP Report
40.5 – Quarterly CAP Report
40.6 – CMS CAP Report Template
50 – List of CMS Contractor Control Objectives
50.1 – A Controls – Information Systems
50.2 – B Controls – Claims Processing
50.3 – C Controls – Appeals
50.4 – D Controls – Beneficiary / Provider Services
50.5 – E Controls – Complementary Credits
50.6 – F Controls – Medical Review (MR)
50.7 – G Controls – Medicare Secondary Payer (MSP)
50.8 – H Controls – Administrative
50.9 – I Controls – Provider Audit
50.10 – J Controls – Financial Reporting Review Requirements
50.11 – K Controls – Debt Referral (MSP and Non-MSP)
50.12 – L Controls – Non-MSP Debt Collection
50.13 – M Controls – Provider Enrollment
60 – CMS Contractor Cycle Memo
60.1 – CMS Contractor Cycle Memo Outline
70 – List of Commonly Used Acronyms

10 - Introduction
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
Chapter 7: Internal Control Requirements provides guidelines and policies to the CMS contractors in
enabling them to strengthen their internal controls procedures. The CMS contracts with companies to
administer the Medicare program under the Social Security Act and the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA). The contractors shall administer the Medicare
program efficiently and economically in order to achieve the program objectives. Internal controls are an
essential part of managing an organization. Additionally, internal controls also serve as the first line of
defense in safeguarding assets and preventing and detecting errors and or fraud. In summary, internal
controls assists government program managers in achieving desired results through effective stewardship of
public resources.
End Section 10 – Introduction: Back to Table of Contents
10.1 - Authority
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
The Federal Managers' Financial Integrity Act of 1982 (FMFIA) establishes internal control requirements
that shall be met by CMS. For CMS to meet the requirements of FMFIA, CMS contractors shall
demonstrate that they are in compliance with the FMFIA guidelines.
End Section 10.1 – Authority: Back to Table of Contents
10.1.1 - Federal Managers' Financial Integrity Act of 1982 (FMFIA)
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
The FMFIA requires that internal accounting and administrative controls of each executive agency be
established in accordance with the standards prescribed by the Comptroller General. Under FMFIA, the
Office of Management and Budget (OMB) establishes guidelines for agencies to evaluate their systems of
internal accounting and administrative control to determine such systems' compliance with the standards
established by the Comptroller General.
Under the prescribed standards of the FMFIA, agencies must provide reasonable assurance to the President
and Congress on an annual basis that:
1. 	Obligations and costs are in compliance with applicable law;
2. 	Funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or
misappropriation; and
3. 	Revenues and expenditures applicable to agency operations are properly recorded and accounted for
to permit the preparation of accounts, reliable financial and statistical reports, and to maintain
accountability over the assets.
End Section 10.1.1 – Federal Managers' Financial Integrity Act of 1982 (FMFIA): Back to Table of
Contents
10.1.2 - FMFIA and the CMS Medicare Contractor Contract
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
The CMS contract with its Medicare Title XVIII contractors includes an article titled FMFIA. In this article,
the contractor agrees to cooperate with CMS in the development of procedures permitting CMS to comply
with FMFIA and other related standards prescribed by the Comptroller General of the United States. The
Medicare Part A and Part B (A/B) Medicare Administrative Contractor (MAC), Durable Medical Equipment
(DME) MAC, and Specialty MAC (SMAC) (A/B, DME, & Specialty MACs) Statements of Work (SOW)

states that, “the contractor shall establish and maintain efficient and effective internal controls to perform the
requirements of the contract in accordance with IOM Pub. 100-06, Chapter 7”. Under various provisions of
the Social Security Act, and the Medicare Prescription Drug, Improvement Modernization Act of 2003
(MMA), contractors shall be evaluated by CMS on administrative service performance. The CMS evaluates
contractor’s performance by various internal and external reviews.
To further sensitize the contractors as to the importance of FMFIA compliance, CMS requires the
contractors to annually provide assurance that internal controls are in place and to identify and correct any
areas of weakness in their operations. The vehicle used by the contractors to provide this assurance is the
Certification Package for Internal Controls (CPIC). The CPIC includes a self-certification representation that
the contractor’s internal controls are in compliance with FMFIA expectations, that the contractor recognizes
the importance of internal controls, and the contractor has provided required documentation in the package.
End Section 10.1.2 – FMFIA and the CMS Medicare Contractor Contract: Back to Table of Contents
10.1.3 - Chief Financial Officers Act of 1990 (CFO)
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
The CFO Act of 1990 established a leadership structure, provided for long range planning, required audited
financial statements, and strengthened accountability reporting. The aim of the CFO Act is to improve
financial management systems and information. The CFO Act also requires the development and
maintenance of agency financial management systems that comply with: applicable accounting principles,
standards, and requirements; internal control standards; and requirements of OMB, the Department of the
Treasury, and others. Under the CFO Act, CMS is subject to an annual financial statement audit. Contractors
may be included in the annual financial statement audit and shall fully cooperate as needed with the audit.
End Section 10.1.3 – Chief Financial Officers Act of 1990 (CFO): Back to Table of Contents
10.1.4 - OMB Circular A-123
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
A revised OMB Circular A-123, Management’s Responsibility for Internal Control, issued in December 21,
2004 under the authority of FMFIA, provided specific requirements for assessing and reporting on internal
controls. In July 2016, OMB Circular A-123 was again revised, and the title was changed to Management’s
Responsibility for Enterprise Risk Management and Internal Control. This Circular defines management’s
responsibilities for enterprise risk management (ERM) and internal control. The Circular provides updated
implementation guidance to federal managers to improve accountability and effectiveness of federal
programs as well as mission-support operations through implementation of ERM practices and by
establishing, maintaining, and assessing internal control effectiveness. The Circular emphasizes the need to
integrate and coordinate risk management and strong and effective internal control into existing business
activities and as an integral part of managing an Agency. Pursuant to OMB Circular A-123, agencies are
required to provide an annual assurance statement which represents the agency head’s informed judgment as
to the overall adequacy and effectiveness of internal controls related to operations, reporting, and
compliance.
Appendix A to OMB, Internal Control Over Financial Reporting, was issued in 2004, which required the
heads of certain federal agencies to annually document and assess internal controls over financial reporting
and report the results in a management assurance statement. In June 2018, an updated version of Appendix
A, Management of Reporting and Data Integrity Risk was issued, which among other changes, aligns
Appendix A with the 2014 update to the Government Accountability Office (GAO) Green Book in part, by
expanding the scope from ICOFR to include internal control over reporting (ICOR).

CMS conducts annual A-123 internal control reviews. Contractors will be subject to the annual A-123
internal control review. In lieu of an A-123 internal control review, contractors may be selected for a
Statement on Standards for Attestation Engagements No. 18 (SSAE-18) internal control examination.
End Section 10.1.4 – OMB Circular A-123: Back to Table of Contents
10.1.5 - GAO Standards for Internal Controls in the Federal Government
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
The FMFIA requires the GAO to prescribe standards for internal control in government, more commonly
known as the Green Book. GAO's "Standards for Internal Controls in the Federal Government" were
updated in September 2014. These standards provide the internal control framework and criteria for
designing, implementing, and operating an effective system of internal control. The Green Book defines
internal control as a process effected by an entity’s oversight body, management, and other personnel that
provides reasonable assurance that the objectives of an entity are achieved. These are the internal control
standards that CMS and its contractors must follow. See Section 10.2 for more information regarding GAO
Standards for Internal Controls in the Federal Government.
End Section 10.1.5 – GAO Standards for Internal Controls in the Federal Government: Back to Table of
Contents
10.2 - GAO Standards in the Federal Government
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Back to Table of Contents
10.2.1 - Definition and Objectives
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Internal controls are the checks and balances that ensure that operational objectives are carried out as
planned in the most effective and efficient manner possible. We should not look upon these controls as
separate specialized systems, but as integral parts of each system that management uses to accomplish the
objectives of the Medicare program. In this regard internal controls are not just financial tools that safeguard
assets, but are tools that are of vital importance to day-to-day programmatic and administrative operations as
well. Internal control should be the first thought in CMS' oversight process. That is, can we be sure that
there are adequate internal controls in place and operating effectively for the process we are evaluating?
Internal controls are an integral part of an organization's management to provide reasonable assurance that
the following objectives are being achieved:
• 	Effectiveness and efficiency of operations;
• 	Reliability of reporting; and
• 	Compliance with applicable laws and regulations
Internal control also serves as the first line of defense in safeguarding assets and preventing and detecting
errors and fraud. In short, internal control, which is synonymous with management control, helps program
managers achieve desired results through effective stewardship of resources.
End Section 10.2.1 – Definition and Objectives: Back to Table of Contents

10.2.2 - Fundamental Concepts
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
Three fundamental concepts provide the underlying framework for designing and applying the internal
control standards.
A. A continuous built-in component of operations
Internal control includes measures and practices that are used to mitigate risks and exposures that could
potentially prevent an organization from achieving its goals and objectives. Internal control is not one event
or circumstance, but a series of actions that permeate an organization's activities. These actions are
pervasive and are inherent in the way management runs the organization. Internal controls involve an
organization-wide commitment that defines and implements a continuous process of assessing, monitoring,
and tracking activities and risks, through an integrated and effective communication mechanism.
B. Are affected by people
An organization's management directs internal control, which is carried out by the people within that
organization. Management's commitment to establish strong internal control affects the organization's
practices. Management sets goals and policies, provides resources, and monitors and evaluates the
performance of the organization. The organization's internal control environment is established by these
policies and is controlled by available resources. Although internal control begins with this established
environment, the employees make it work and must be adequately trained. It is the manner in which the
entire organization embraces the internal control that affects their accountability and operational results.
C. Provide reasonable assurance, not absolute assurance
Reasonable assurance indicates that an internal control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance regarding achievement of an entity's objectives, and
further indicates that the likelihood of achievement of these objectives is affected by limitations inherent in
all internal control systems.

Examples of limitations are:
a. 	Judgment - the effectiveness of controls will be limited by decisions made by human judgment under
pressures to conduct business based on information at hand;
b. 	Breakdowns - even well designed internal controls can break down. Employees sometimes
misunderstand instructions or simply make mistakes. Errors may also result from new technology
and the complexity of computerized information systems;
c. 	Management Override - high-level personnel may be able to override prescribed policies and
procedures for personal gain or advantage. This should not be confused with management
intervention, which represents management actions to depart from prescribed policies and procedures
for legitimate purposes;
d. 	Collusion - control systems can be circumvented by employee collusion. Individuals acting
collectively can alter financial data or other management information in a manner that cannot be
identified by control systems.
End Section 10.2.2 – Fundamental Concepts: Back to Table of Contents
10.2.3 - Standards for Internal Control
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
Internal control consists of five interrelated standards. The GAO "Standards for Internal Control in the
Federal Government" describes these five standards:
A. Control environment;
B. Risk assessment;
C. Control activities;
D. Information and communication; and
E. 	Monitoring.
Each of these internal control standards plays an important role in the overall control environment of an
organization. These standards define the minimum level of quality acceptable for internal control in
government and provide the basis against which the internal control is to be evaluated.
While each internal control standard is an integral part of the management process and plays a specific role,
it is the combination of these standards that establishes internal control in an organization. The control
environment provides the discipline and atmosphere in which the organization conducts its activities and
carries out its control responsibilities. It also serves as the foundation for the other standards. Within this
environment, management conducts risk assessments to assess the potential effect of internal and external
risks in achieving the organization's objectives. Control activities are implemented to help ensure that
management directives are carried out as planned. Relevant information is captured and communicated in a
timely and effective manner throughout the organization on an ongoing basis. The organization's operations
are continuously monitored as an integral part of the organization's performance evaluation.
End Section 10.2.3 – Standards for Internal Control: Back to Table of Contents

10.2.3.1 - Control Environment
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Management and employees should establish and maintain an environment throughout the organization that sets a positive and supportive attitude toward
internal control and conscientious management.
The control environment of an organization sets the tone of an organization, influencing the internal control consciousness of its people. It is the foundation for
all other standards of internal control, providing discipline and structure. Control environment factors include the integrity, ethical values, and competence of
the organization's people; management's philosophy and operating style; and the way management assigns authority and responsibility and organizes and
develops its human resources.
End Section 10.2.3.1 – Control Environment: Back to Table of Contents
10.2.3.2 - Risk Assessment
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Every organization faces a variety of risks from external and internal sources that must be assessed. A precondition to risk assessment is establishment of
control objectives, linked at different levels and internally consistent.
Risk assessment is the identification and analysis of relevant risks to the achievement of established objectives. A key factor in the consideration of an internal
control structure is the importance and risk associated with a program and its associated cost effectiveness. When determining whether a particular control
objective should be established, the risk of failure and the potential affect must be considered along with the cost of establishing the control.
End Section 10.2.3.2 – Risk Assessment: Back to Table of Contents
10.2.3.3 - Control Activities
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
The control activities help ensure that management's directives are carried out. The control activities should be effective and efficient in accomplishing the
organization's control objectives.
Control activities are the written activities used to support policies and procedures that help ensure management directives are carried out. Also see Section
20.3. They help ensure that necessary actions are taken to address potential risks that may affect the organization's objectives. Control activities occur
throughout the organization, at all levels and in all functions. They include a range of activities as diverse as approvals, authorizations, verifications,
reconciliation, performance reviews, security of assets, and segregation of duties. For examples of Non-Information Systems and Information Systems control
activities, please see the GAO – Internal Control Management and Evaluation Tool at the following hyperlink:

Hyperlink: The USGAO-ICS: Internal Control Management and Evaluation Tool of August 2001 (GAO-01-1008G) [www.gao.gov/new.items/d011008g.pdf]
End Section 10.2.3.3 – Control Activities: Back to Table of Contents
10.2.3.4 - Information and Communication
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Information should be recorded and communicated to management and others within the entity who need it and in a form and within a time frame that enables
them to carry out their internal control and other responsibilities.
Pertinent information shall be identified, captured, and communicated in a form and time frame that enables employees to carry out their responsibilities.
Information systems produce reports containing operational, financial, and compliance related information that make it possible to control the organization.
Information systems deal not only with internally generated data, but also information about external events, activities and conditions necessary for informed
decision making and external reporting. Effective communication also must occur in a broader sense, flowing down, across, and up the organizational
structure. All personnel must receive a clear message from top management that control responsibilities must be taken seriously. They must understand their
own role in the internal control system, as well as how individual activities relate to the work of others. They must have a means of communicating significant
information throughout the organization. The organization must also effectively communicate with external parties, such as customers, suppliers, state officials,
and legislators.
End Section 10.2.3.4 – Information and Communication: Back to Table of Contents
10.2.3.5 - Monitoring
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Internal control monitoring should assess the quality of performance over time and ensure that the observations and findings of audits and other reviews are
promptly resolved.
Internal control systems need to be monitored. Monitoring is a process that assesses the quality of the system's performance over time. Internal control should
generally be designed to assure that ongoing monitoring occurs in the course of normal operations. This is accomplished through ongoing monitoring activities,
separate evaluations, or a combination of the two. Ongoing monitoring includes regular management and supervisory activities, and other actions (such as
periodic reviews, reconciliations, or comparison of data) personnel take in performing their duties. The scope and frequency of separate evaluations will
depend primarily on an assessment of risks and the effectiveness of ongoing monitoring procedures.

End Sections 10.2.3.5 – Monitoring and 10.2 – GAO Standards in the Federal Government: Back to Table of Contents
20 - CMS Contractor Internal Control Review Process and Timeline
(Rev. 11133, Issued:11-30-21, Effective: 10-01-21, Implementation: 12-31-21)
NOTE: The following CMS Fiscal Year Calendar of Events and Activities timeline is provided as a guide and is not considered absolute. Contractors may use
the guideline as a reference.
Fiscal Year Calendar of Events and Activities
Month 	Activity 	IOM Section
October 	1. Incorporate updated IOM changes
2. Updated Certification Package for Internal Controls (CPIC)
Report
Due: Five (5) business days after September 30 th
Reporting Period: July 1st – September 30 th
3. Submit SSAE-18 Bridge Letters
Due: 5 Business Days after September 30 th
Reporting Period: April 1st – September 30th
4. Begin the Risk Assessment Process
5. Begin updating Standard Operating Procedures
- 	Section 20.1 – Risk Assessment
- 	Section 30.1 – Certification Package for Internal
Controls (CPIC) Requirements
- 	Section 30.2 – Certification Statement
- 	Section 30.8 –Statement on Standards for Attestation
Engagements (SSAE) Number 18, (SSAE 18) Reporting
on Controls at Service Providers
January 	6. SSAE 18 Examinations (A/B, DME, & Specialty MACs) Start
7. Update and Submit A-123 Cycle Memos to CMS Central Office
Due: 15 Business Days after December 31 st
- 	Section 30.8 –Statement on Standards for Attestation
Engagements (SSAE) Number 18, (SSAE 18) Reporting
on Controls at Service Providers
February 	8. Prepare for A-123 or SSAE 18 audit onsite reviews
June 	9. Begin preparing CPIC for all geographical locations.
10. Update CPIC Report of Internal Control Deficiencies
11. Draft SSAE-18 and CAP Follow Up Reports Issued
Due: June 1 st
Reporting Period: October 1st - March 31st
12. Prepare to Draft CPIC and SSAE 18 Corrective Action Plans
CAPs

Month 	Activity 	IOM Section
July 	1. 	Final SSAE-18 and CAP Follow Up Reports Issued
Due: July 1st
Reporting Period: October 1 st - March 31 st
2. 	Submit CPIC Report
- 	Certification Statement
- 	Executive Summary
- 	Description/Documentation of the Risk Assessment Process
- 	Report of Material Weaknesses
Due: 15 Business Days after June 30 th
Reporting Period: October 1 st - June 30th
- 	Section 30.8 –Statement on Standards for Attestation
Engagements (SSAE) Number 18, (SSAE 18) Reporting
on Controls at Service Providers
- 	Section 30.1 – Certification Package for Internal
Controls (CPIC) Requirements
- 	Section 30.2 – Certification Statement
- 	Section 30.3 – Executive Summary
- 	Section 20.1 – Risk Assessment
- 	Section 30.4 – CPIC – Report of Material Weaknesses
August 	3. 	Review updated IOM to evaluate changes required to your
system of operations
4. 	Submit SSAE 18 CAPs
Due: 45 Days after Final SSAE 18 Reports
5. 	Submit CPIC CAPs
Due: 45 Days after CPIC Reports
- 	Section 40.1 – Submission, Review, and Approval of
Corrective Action Plans
September 	6. 	Determine if any new material weaknesses were identified since
the CPIC Report in July

20.1 - Risk Assessment
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
Risk assessment identifies areas that should be reviewed to determine which components of an
organization's operation present the highest probability of waste, loss, or misappropriation. The risk
assessment process is the identification, measurement, prioritization, and mitigation of risks. This process is
intended to provide the contractors with:
• 	Direction for what areas should get priority attention from management due to the nature, sensitivity,
and importance of the area's operations;
• 	A preliminary judgment from managers about the adequacy of existing internal control policies and
procedures to minimize or detect problems; and
• 	An early indication of where potential internal control weaknesses exist that should be corrected.
The CMS requires contractors to perform an annual risk assessment, to identify the most critical areas and
areas of greatest risk to be subjected to a review. Operational managers with knowledge and experience in
their particular business area shall perform risk assessments. Outside sources can assist with this process, but
should not be solely relied upon (e.g., Internal Audit departments, SSAE 18 audits, OMB Circular A-123
Appendix A reviews, etc.).
When performing your yearly risk assessment, you are to consider all results from final reports issued during
the fiscal year from internal and external reviews including GAO, OIG, CFO audit, Contractor Performance
Evaluation (CPE), CPIC, Contractor’s Monthly Bank Reconciliation Worksheet (CMBRW) and 1522
reviews, A-123 Appendix A reviews and results of your own or CMS-sponsored SSAE 18 audits. Any of
these findings could impact your risk assessment and preparation of your certification statement. Your risk
assessment process shall provide sufficient documentation to fully explain the reasoning behind and the
planned testing methodology for each selected area.
The contractor shall submit a description of the risk assessment process to CMS as an attachment with the
annual CPIC and maintain sufficient documentation to support the risk assessment process. Examples of
sufficient documentation are meeting agendas, meeting notes or minutes, and emails. The documentation
should be readily available for CMS review.
Below are the elements to include in the description or methodology of your risk assessment process:
• 	Who - List who is involved and state their roles and responsibilities.
• 	Where - List the geographical location(s) for which the certification applies. For multi-site
contractors, review and explain the roles for all sites, i.e., do they do their own risk assessment and
control objective testing. Describe the certification process for geographical locations.
• 	What – Describe the risk factors and the risk assessment process.
• 	When - List when the risk assessment process was completed.
• 	Why – Prioritize control objectives based upon their level of risk while ensuring high risk areas are
reviewed in accordance with the scoring criteria guidelines in Section 20.1.
NOTE: The A/B, DME, and Specialty MAC SOW may also include requirements regarding review
of CMS control objectives.
• 	How – Describe the scoring methodology and provide a description and definition for each risk and
exposure factor. Include specific value ranges used in your scoring methodology.

The contractor is encouraged to exceed the risk assessment approach provided below based on its unique
operations. The risk assessment process shall at a minimum include the following and shall be submitted as
part of the CPIC package:
Step 1 - Segment Operations
Segment the contractor’s operation into common operational areas of activity that can be evaluated. List the
primary components of the unit with consideration to the business purpose, objectives, or goals of the
auditable unit. Limit the list to the primary activities designed to achieve the goals and objectives of the
auditable unit. Include the CMS control objectives applicable to each auditable unit.
Step 2 - Prioritize Risk and Exposure Factors
Identify the primary risks and exposure factors that could jeopardize the achievement of the goals and
objectives of the unit as well as the organization's ability to achieve the objectives of reliable financial
reporting, safeguarding of assets, and compliance with budget, laws, regulations and instructions. Risk and
exposure factors can arise due to both internal and external circumstances. Document the definitions and
methodology of the risk and exposure factors used in the risk assessment process.
Step 3 – Create a Matrix to Illustrate the Prioritization of Risk and Exposure Factors
Create a matrix listing on the left axis by operational areas of activity (see Step 1 above). The top axis
should list all the risk and exposure factors of concern and determine the weight each column should have.
Some columns may weigh more than other columns. Develop a scoring methodology and provide a
description and definitions of this methodology used for each risk or exposure factor. This methodology can
use an absolute ranking or relative risk identification. Absolute ranking would assign predefined quantifiable
measures such as dollars, volume, or some other factor in ranges that would equate to a ranking score such
as high, medium or low. Relative risk ranking involves identifying the risk and exposure factors into natural
clusters by definition and assigning values to these clusters. Include a legend with the score ranges
representing high-risk, medium-risk, and low-risk on the risk matrix.
Assign a score to each cell based on the methodology predetermined. Retain notes to support scoring of key
risk factors such as “prior audits” and factors that are scored very high or very low. This will assist CMS in
evaluating the reasonableness of your risk assessment results. Total the scores for each line item (control
objective). The higher scores for each line item will prioritize the risk areas for consideration to be reviewed
to support the CPIC. If a high risk control objective is included in a current year Type II SSAE 18 audit, or
A-123 Appendix A review, you may rely on the SSAE 18 audit, or A-123 Appendix A review testing and
document this as the rationale for excluding it from testing.
The CMS considers system security to be a high risk area. Therefore, contractors shall include control
objective A.1 in their CPIC each year. All contractors are required to certify their system security
compliance. Contractors shall verify that a system's security plan meet CMS’ Minimum Security
Requirements as defined by the Business Partners Systems Security Manual (BPSSM). Contractors should
write a few paragraphs to self-certify that their organization has successfully completed all required security
activities including the security self-assessment of their Medicare IT systems and associated software in
accordance with the terms of their Contract. For more details, please see Section 3.4 – Certification of the
BPSSM, which can be found at the following hyperlink:
Hyperlink: CMS IOM Publication #: 100-17, CMS Business Partners Systems Security Manual, Revision
#: 12, Issued: 11/15/2013 [https://www.cms.gov/Regulations-and-
Guidance/Guidance/Manuals/Downloads/117_Systems_security.pdf]
Also, include the results of the testing of A.1 in the Executive Summary. See Section 30.3.

End Section 20.1 – Risk Assessment: Back to Table of Contents
20.1.1- Risk Analysis Chart
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Table 1 - This chart is provided to assist contractors in selecting the high-risk activities within
their organization. There are 3 columns that gives directions on how to rank operational areas for
potential risk.
HIGH RISK FACTORS
(1)
MEDIUM RISK FACTORS
(2)
LOW RISK FACTORS
(3)
• Recent review or audit findings
showing material weaknesses
related to internal control
processes.
• Areas affected by significant
changes in laws, regulations,
special requirements or
instructions.
• Areas where policies and
procedures regarding internal
control over financial reporting
are not well documented.
• Areas of significant financial
vulnerabilities (e. g., new
accounting or regulatory
guidelines).
• Areas where guidelines have
varied interpretations and/or
areas being restructured.
• Areas with new contract
activities.
• Areas where objectives of the
corporate mission could be in
jeopardy if not properly
implemented.
• Areas lacking performance
measures or monitoring.
• Potential program
weaknesses related to
violation of privacy issues.
• Areas with high visibility.
• Areas where due dates are
often not met or responses to
correspondence are late.
• Areas with consistent
complaints or inquiry.
• Areas where there are no
written policies and
procedures.
• Areas where recent policy
changes were implemented.
• Areas with reorganization
activities.
• Areas where there is a
breakdown in communication
with corporate, regional, state
or satellite offices, etc.
• Areas with new or
problematic performance
measures.
• Areas where CAPs have
already been
implemented.
• Areas with low visibility;
routine program
operations.
• Areas where workers are
meeting routine program
operations and
performance targets and
attitudes and staff
motivations are high.
• Areas that undergo
frequent financial audits/
reviews by external
parties (e.g., CFO, SSAE
18, A-123 Appendix A,
CPIC, etc.).
• Areas that managers
perform periodic reviews
to ensure that work
assignments are
performed consistently,
and accurately.
• Work activities are being
phased out.
• Areas with established
and validated
performance measures.
Scoring Criteria Guidelines:
Level 	Level Description
High: 	If an activity has two or more high risk rating factors, review annually.
Medium: 	If an activity has two or more medium risk factors, review biannually.
Low: 	Low activities can be reviewed within a five (5)-year timeframe or at manager’s
discretion that should be balanced with costs and resources.

End Section 20.1.1 – Risk Analysis Chart: Back to Table of Contents
20.2 - Internal Control Objectives
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Internal control objectives are established to identify risk and vulnerabilities. Control objectives may be set
for an entity as a whole, or be targeted to specific activities within the entity. Generally, objectives fall into
three categories:
1. 	Operations - relating to effective and efficient use of the organization's resources.
2. 	Financial Reporting - relating to preparation of reliable financial statements.
3. 	Compliance - relating to the organization's compliance with applicable laws and regulations.
An acceptable internal control system can be expected to provide reasonable assurance of achieving
objectives relating to the reliability of operations, financial reporting and compliance. Achievement of those
objectives depends on how activities within the organization's control are performed.
Section 50 lists the minimum set of control objectives. The contractor may add to the CMS control
objective list. For the respective operational areas selected for review in Step 2 of the Risk Assessment
discussion, cross-reference the high risk operational areas to CMS' or the contractor’s unique control
objectives on a work sheet. Some control objectives will apply to more than one operational area selected
for review. The control objectives identified in this step shall be validated by documentation of the control
activities (see Section 10.2.3.3) used as well as testing (see Section 20.4) that supports the control
objectives.
Reminder: Excessive control is costly and counterproductive. Too little control presents undue risk. There
should be a conscious effort made to achieve an appropriate balance.
End Section 20.2 – Internal Control Objectives: Back to Table of Contents
20.2.1 – CMS Contractor Control Objectives
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
CMS issues broad control objectives for which contractors shall develop control activities to ensure the
objectives are met. The complete list of control objectives is in Section 50. If your risk assessment was
completed prior to issuance of the current year CMS control objectives, ensure that any new or revised
control objectives are assessed and the risk matrix is updated. In addition, control activities should be
created or updated to support any new or revised control objectives as appropriate (see Section 10.2.3.3).
Contractors shall also include in their risk assessment any significant or material areas not covered by a
CMS control objective.
End Section 20.2.1 – CMS Contractor Control Objectives: Back to Table of Contents
20.3 – Policies and Procedures
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Policies and procedures are a set of established guidelines or rules for conducting the affairs of a business.
Good policies:
• 	Are written in clear, concise, and simple language. They are updated as necessary, signed and dated.
• 	Address what the guideline or rule is; not how to implement the guideline or rule.

• 	Are readily available and properly communicated to staff.
Procedures are a set of steps in a plan intended to influence and determine decisions and actions. Good
procedures are tied to policies and:
• 	Are written in clear, concise, and simple language.
• 	Are tied to the policy.
• 	Are developed and implemented with the user in mind.
• 	Are readily available and properly communicated to staff.
Contractors shall have written policies and procedures to achieve their control objectives. These policies
and procedures shall be updated in a timely manner to reflect changes in CMS instructions or your internal
operations.
Contractors shall demonstrate and document that its policies and procedures are actually being used as
designed and are effectively and efficiently meeting the control objective, as described in Section 50.
Evaluation and testing of the effectiveness of controls are important in determining if the major areas of risk
have been properly mitigated.
An example of a policy is, “an agency shall establish physical control to secure and safeguard vulnerable
assets”. The specific control activities, or procedures, which support this policy may include: all doors to
the facility have locks, the locks only have one key, all keys are held by security guards, security guards are
stationed at every door.
End Section 20.3 – Policies and Procedures: Back to Table of Contents
20.4 - Testing Methods
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
Testing the policies and procedures involves ensuring that the documented policies and procedures are
actually being used as designed and are effective to meet a control objective. Evaluating and testing the
effectiveness of policies and procedures is important to determine if the major areas of risks have been
properly mitigated and provide reasonable assurance that the control objective is met.
Testing and evaluating the policies and procedures consists of five (5) steps:
Step 1: Select the policies or procedures to be tested
It is both impractical and unnecessary to test all policies and procedures. The policies and procedures to be
tested are those that primarily contribute to the achievement of the control objectives. A policy or procedure
may be eliminated from testing when it does not meet the control objective to be tested due to being poorly
designed, unnecessary or duplicative, or not performed in a timely manner. However, if this justification is
invoked, other policies and procedures should be tested to validate meeting the control objective. Another
justification for testing elimination is due to the cost of testing the policy or procedure exceeds the value of
the control objective to be tested. If a policy or procedure is eliminated from testing, the reasoning should
be documented.
Step 2: Select test methods
Once the policies and procedures to be tested are determined, test methods shall be determined. A
combination of tests can be used depending on risk or type of activity. The following would be considered
acceptable tests:

1. 	Inquiry: Asking responsible personnel if certain controls are functioning as intended (e.g., “Do you
reconcile your activity or do you review a certain report each month?”).
2. 	Inspection: Analyzing evidence of a given control procedure (e.g., searching for signatures of a
reviewing official or reviewing past reconciliations).
3. 	Observation: Observing actual controls in operation (e.g., observing a physical inventory or watching
a reconciliation occur).
4. 	Re-performance: Conducting a given control procedure more than once (e.g., recalculating an
estimate or re-performing a reconciliation).
Observation and inquiry are less persuasive forms of evidence than inspection and re-performance.
Step 3: Determine how much testing is needed
The next sub-step is to determine the extent of the testing efforts. In most cases, it is unrealistic to observe
each policy and procedure or to review 100 percent of all records. Instead, policies and procedures are
tested by observing a selected number of controls performed or by reviewing a portion of the existing
records. This selection process is called sampling. A representative sample provides confidence that the
findings are not by chance by considering the factors of breadth and size.
1. 	Breadth: Breadth of the sample assures that the testing covers all bases and is a representative cross
section of the universe being tested. This will provide confidence that the sample will lead to a
conclusion about the situation as a whole.
2. 	Size: Size is the number of items sampled. The size should be large enough to allow a conclusion
that the findings have not happened by chance and provide confidence in the conclusion. The size of
the sample should not be so large that testing becomes too costly. When selecting the size of the
sample consider:
a. 	Experience: Reducing the size of the sample when controls have operated satisfactorily in the
past and no major changes have occurred.
b. 	Margin of Error: Increase the size of the sample when only a small margin of error is acceptable.
c. 	Importance: Increase the size of the sample when an important resource is at stake.
d. 	Type: Increase the size of the sample when the control to be tested requires judgment calls.
Decrease the size of the sample when the control is routine.
Step 4: Plan data collection
The sampling plan gives an idea of the "who, where, what, when, why, and how" (see Section 20.1) aspect
of the tests to be conducted. A data collection plan can be used to determine how the test results will be
recorded. The accurate recording of test results is an extremely important part of the test documentation.
Planning data collection prior to beginning the testing can be very helpful to ensure the information
collected will provide conclusive data from which to evaluate the controls.
Step 5: Conduct the tests
The final step of testing and evaluating controls consists of actually effectuating the testing protocol and
documenting the results.

At the conclusion of the testing, the results are analyzed and evaluated. Evaluating involves reviewing the
information collected and making an overall judgment on the adequacy of the internal control system as a
whole. Deficient areas are to be categorized into Control Deficiencies, Significant Deficiencies, and
Material Weaknesses and should be considered for inclusion in the CPIC submission (see Section 30.6).
End Section 20.4 – Testing Methods: Back to Table of Contents
20.5 - Documentation and Working Papers
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
The contractor shall document through its working papers, the process it employed to support its internal
control certification. This documentation shall include working papers so that a CMS reviewer can conclude
that the Risk Assessment process as described in Section 20.1 follows or exceeds these guidelines, and that
the Control Activities (Section 10.2.3.3) identified to support the high risk control objectives selected for
review are current and clearly stated. Finally, the CPIC documentation shall demonstrate how the Testing
Methods employed comply with the general parameters as described in Section 20.4 for the purpose of
Control Activity validation.
Working papers contain evidence accumulated throughout the review to support the work performed, the
results of the review, including findings made, the judgment and/or conclusion of the reviewers. They are
the records kept by the reviewer of the procedures applied, the tests performed, the information obtained,
and the pertinent judgment and/or conclusions reached in the review process. Examples of working papers
are review programs, analyses, memoranda, letters of confirmation and representation, abstracts of
documents, and schedules or commentaries prepared or obtained by the reviewer. Working papers may be
in the form of data stored on tapes, film, or other media.
General Content of Working Papers - Working papers should ordinarily include documentation showing
that:
• 	The work has been adequately planned and supervised.
• 	The review evidence obtained, the reviewing procedures applied, and the testing performed has
provided sufficient, competent evidential matter to support the reviewer's judgments and/or
conclusions.
Format of Working Papers - Working paper requirements should ensure that the working papers follow
certain standards. As a whole, a good set of working papers should contain the following:
• 	The objectives, scope, methodology, and the results of the review.
• 	Proper support for findings, judgments and/or conclusions, and to document the nature and scope of
the work conducted.
• 	Sufficient information so that supplementary oral explanations are not required.
• 	Adequate indexing and cross-referencing, and summaries and lead schedules, as appropriate.
• 	Date and signature by the preparer and reviewer.
• 	Evidence of supervisory review of the work.
• 	Proper heading should be given to the basic content of the working papers.
End Sections 20.5 – Documentation and Working Papers and 20 – CMS Contractor Internal Control Review
Process and Timeline: Back to Table of Contents

30 - Internal Control Reporting Requirements
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
Several reporting methods are required for internal controls. Medicare Contractors shall use the following
CPIC and SSAE 18 guidance to successfully meet them.
Back to Table of Contents
30.1 – Certification Package for Internal Controls (CPIC) Requirements
(Rev. 11133, Issued:11-30-21, Effective: 10-01-21, Implementation: 12-31-21)
NOTE: This section is only applicable to the following listed CMS Contractors:
# 	Contractor Workload
1 	DME MAC Jurisdiction A
2 	DME MAC Jurisdiction B
3 	DME MAC Jurisdiction C
4 	DME MAC Jurisdiction D
5 	Parts A & B MAC Jurisdiction 5
6 	Parts A & B MAC Jurisdiction 6
7 	Parts A & B MAC Jurisdiction 8
8 	Parts A & B MAC Jurisdiction 15
9 	Parts A & B MAC Jurisdiction E
10 	Parts A & B MAC Jurisdiction F
11 	Parts A & B MAC Jurisdiction H
12 	Parts A & B MAC Jurisdiction J
13 	Parts A & B MAC Jurisdiction K
14 	Parts A & B MAC Jurisdiction L
15 	Parts A & B MAC Jurisdiction M
16 	Parts A & B MAC Jurisdiction N
17 	Specialty MAC Railroad Board (RRB)
18 	Pricing, Data Analysis, and Coding (PDAC) Contractor
19 	Affordable Care Act Exchange Contractor
20 	Benefits Coordination and Recovery Center (BCRC),
Medicare Secondary Payer Recovery Contractor (MSPRC)
21 	Commercial Repayment Center (CRC), MSPRC
22 	Retiree Drug Subsidy (RDS) Part D Contractor
The contractor certification process provides CMS with assurance that contractors are in compliance with
the FMFIA, OMB Circular A-123, and CFO Act of 1990 by incorporating internal control standards into
their operations. The contractor certification process supports the audit of CMS' financial statements by the
Office of Inspector General (OIG) and the CMS Administrator's FMFIA assurance statement.
This compliance is achieved by an annual certification statement included in its annual CPIC submission.
CMS has required each contractor to certify that internal controls are in place to identify and correct areas of
weakness in its operations. Contractors are expected to evaluate the effectiveness of their operations against
CMS' control objectives discussed above. The control objectives represent the minimum expectations for
contractor performance in the area of internal controls.
Contractors shall have written policies and procedures regarding their annual CPIC preparation and
submission process. Contractors shall also have written policies and procedures to address potential internal
control deficiencies identified by employees and managers in the course of their daily operations. This

includes the process for reporting issues upward through the appropriate levels of management, tracking and
correcting deficiencies, and inclusion in the CPIC submission.
The CPIC represents a summary of your internal control environment for the period October 1 st through
June 30th (the CPIC period), as certified by your organization. It shall include an explicit conclusion as to
whether the internal controls over financial reporting are effective (see Section 30.1.1). All material
weaknesses identified during this period shall be included in the CPIC submission. Contractors should
consider the results of internal and external audits and reviews, such as GAO, OIG, and CFO Act audits,
consultant reviews, management control reviews, CPE reviews, SSAE 18 audits, A-123 Appendix A
reviews, and other similar activities. These findings should be classified as control deficiencies, significant
deficiencies, or material weaknesses based upon the definitions provided in Section 30.6.
The contractor shall submit one CPIC report for each type of contract (i.e., A/B, DME, & Specialty MAC
workloads, Retiree Drug Subsidy (RDS), and Medicare Secondary Payer Recovery Contractor (MSPRC)
workloads). The contractor shall follow these guidelines when submitting the CPIC for A/B, DME, &
Specialty MACs:
• 	Contractors with multiple A/B and DME MAC jurisdictions shall submit one CPIC report for each
type of contract (i.e., A/B, Durable Medical Equipment (DME), & Specialty MAC workloads).
Therefore. Contractors with multiple A/B and DME MACs jurisdiction shall submit a CPIC for each
jurisdiction.
Example Multiple A/B & DME CPIC Submission Situation:
• 	XYZ Corporation has four (4) A/B and DME MAC jurisdictions A, C, 6, & M.
• 	XYZ Corporation shall submit four (4) separate CPICs for each jurisdiction:
o 	CPIC for DME Jurisdiction A
o 	CPIC for DME Jurisdiction C
o 	CPIC for A/B Jurisdiction 6
o 	CPIC for A/B Jurisdiction M
• 	The Specialty MAC RRB shall submit a CPIC.
• 	Contractors that transitioned out of the program prior to June 30th , and are not assuming additional
workloads are not required to submit a CPIC.
Electronic CPIC reports shall be received by CMS within fifteen (15) business days after June 30 th . The
contractor is not required to submit a hard copy report if it has the capability to insert electronic signatures
or if the CPIC is sent from the VP of Operations’ email or the CFO’s email.
An electronic version of all documents (including updates) submitted as part of your CPIC submission shall
be sent to CMS’ Office of Financial Management (OFM) at internalcontrols@cms.hhs.gov as Microsoft
Excel or Word files. Electronic copies shall also be sent as follows:
• 	A/B, DME, and Specialty MACs shall send to the:
o 	The assigned CFO Technical Monitor and the Financial Management (FM) Division Director
of that CMS office location area.
o 	Contracting Officer’s Representative (COR) of the A/B, DME, or Specialty MAC.
• 	RDS and MSPRC Contractors shall send to the CMS COR.
A hard copy is not required to be submitted.
The CPIC Report Package shall include:
• 	Certification Statement, see Section 30.2;
• 	Executive Summary, see Section 30.3;
• 	Description of your Risk Assessment Process, see Section 20.1. This should include a:

o 	Matrix to illustrate the prioritization of risk and exposure factors
o 	Narrative or flowchart that outlines the risk assessment process
• 	CPIC Report of Material Weaknesses, see Section 30.4.
Contractors shall submit an update for the period July 1st through September 30th to report any
subsequently identified material weaknesses. The update shall be no more than a one page summary of any
material weaknesses and the proposed corrective action. If no material weaknesses have been identified, the
contractor shall submit the following for each jurisdiction or a combined statement for all jurisdictions: “As
of September 30th, no material weaknesses (or no additional material weaknesses) have been identified
during the period July 1 through September 30th for Fiscal Year 20XX”. The submission of the update
should follow the same guidelines as the initial CPIC. The CPIC update is due within five (5) business days
after September 30 th . If a material weakness is identified, then a CAP shall be completed in accordance to
the guidelines shown at Section 40.1.
The file names for all electronic files submitted, as part of your CPIC package should begin with the three,
four, or five letter abbreviation assigned to each contractor in Section 40.3. Additionally, in the subject line
of your email submission, you shall include the corporate name of the entity submitting the CPIC.
Maintain the appropriate and necessary documents to support any assertions and conclusions made during
the self-assessment process. In your working papers, you are required to document the respective policies
and procedures for each control objective reviewed. These policies and procedures should be in writing, be
updated to reflect any changes in operations, and be operating effectively and efficiently within your
organization.
The supporting documentation and rationale for your certification statement, whether prepared internally or
by an external organization, shall be available for review and copying by CMS and its authorized
representatives.
End Section 30.1 – Certification Package for Internal Controls (CPIC) Requirements: Back to Table of
Contents
30.1.1 - OMB Circular A-123, Appendix A: Internal Controls Over Financial
Reporting (ICOFR)
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
CMS contractors, including A/B, DME, and Specialty MACs, MSPRC and RDS, shall use the five steps
below to assess the effectiveness of its internal control over financial reporting. Documentation shall occur
within each of the basic steps, whether documenting the assessment methodology during the planning phase
or documenting key processes and test results during the evaluation and testing steps.
1) Plan and Scope the Evaluation
During this phase, the CMS contractor shall leverage existing internal and external audits/reviews performed
(Such as SSAE 18 audits, A-123 Appendix A Internal Control Reviews, CPIC, 912 Evaluations, Federal
Information Security Management (FISMA), Contractor Performance Evaluations (CPE), etc.) when
conducting its assessment of internal control over financial reporting. Management shall consider the results
of these audits/reviews in order to identify gaps between current control activities and the documentation of
them. The control objectives of A, B, F, G, I, J, K, and L shall be considered, if applicable.
If a CMS contractor had an SSAE 18 audit, or an A-123 Appendix A Internal Control Review in the current
or past two fiscal years, it shall be used as a basis for the statement of assurance combined with other audits
and reviews as appropriate. The contractor shall conduct additional testing for Circular A-123 as deemed
necessary (see A-123 Appendix A Internal Control Review/SSAE 18 Reliance Examples chart). For
example, if the A-123 Appendix A assurance statement was unqualified, then the contractor is not required
to conduct additional testing. Similarly, if the SSAE 18 audit report was unqualified (no findings in Section I

(Opinion Letter)), then the contractor is not required to conduct additional testing. However, if the previous
year’s A-123 Appendix A assurance statement is qualified, then the contractor shall conduct additional
testing on the control deficiencies identified. Similarly, if Section I of the prior year’s SSAE 18 audit report
is qualified (one or more findings that have not been corrected and validated), then the contractor shall
conduct additional testing on the findings identified in Section I and the exceptions identified in Section III
(See A-123 Appendix A Internal Control Review Reliance Examples chart). If other audits and reviews
contradict the SSAE 18 audit or A-123 Appendix A Internal Control Review, then that contradiction shall be
addressed via testing if the issue has not already been corrected and validated.
2) Document Controls and Evaluate Design of Controls
This step begins with the documentation and evaluation of entity-level controls. Consideration must be
given to the five standards of internal control (control environment, risk assessment, control activities,
information and communication, and monitoring) (see Section 10.2.3 – Standards for Internal Control) that
can have a pervasive effect on the risk of error or fraud, and will aid in determining the nature and extent of
internal control testing that may be required at the transaction or process level. The GAO issued an internal
control evaluation tool (The GAO Internal Control Management and Evaluation Tool) to assess the
effectiveness of internal control and identify important aspects of control in need of improvement. This tool
shall be used in conducting your assessment.
Contractors shall prepare cycle memos for financial reporting, accounts receivable, accounts payable, and
claims expense (Note: Contractors may combine related cycles (e.g., accounts payable and claims expense).
These major transaction cycles relate to significant line items on the financial reports. Cycle memos should
identify the key control activities that are relied upon to assure the relevant financial statement assertions are
met:
• 	Existence and Occurrence: All reported transactions actually occurred during the reporting period
and all assets and liabilities exist as of the reporting date. Recorded transactions represent economic
events that actually occurred during a stated period of time.
• 	Rights and Obligations: The entity legally owns all its assets collectively and all liabilities are legal
obligations of the entity. Assets and liabilities reported on the Balance Sheet are bona fide rights and
obligations of the entity as of that point in time.
• 	Completeness: All assets, liabilities, and transactions that should be reported have been included,
and no unauthorized transactions or balances are included. All transactions during a specific period
should have been recorded in that period. No unrecorded assets, liabilities, transactions or omitted
disclosures.
• 	Valuation or Allocation: Assets, liabilities, revenue, and expenses have been included in the
financial statements at appropriate amounts. Where applicable, all costs have been properly
allocated. Assets and liabilities are recorded at appropriate amounts in accordance with relevant
accounting principles and policies.
• 	Presentation and Disclosure: The financial report is presented in the proper form and any required
disclosures are present. Financial statement items are properly described, classified and fairly
presented.
Not all assertions will be significant to all accounts. A single key control will often not cover all assertions;
which may necessitate several key controls to support the selected assertions for each line item. However,
each assertion is applicable to every major transaction cycle and all associated assertions must be covered to
avoid any control gaps.
Documenting transaction flows accurately is one of the most important steps in the assessment process, as it
provides a foundation for the A-123 assessment. Thorough, well-written documents and flowcharts can

facilitate the review of key controls. The documentation should reflect an understanding, from beginning to
end, of the underlying processes and document flows involved in each major transaction cycle. This would
include the procedures for initiating, authorizing, recording, processing, and reporting accounts and
transactions that affect the financial reports. The cycle memo shall include Information Technology (IT) key
control activities pertinent to the transaction cycle.
The documentation should start with the collection and review of documentation that already exists. The
following are examples of existing documentation that could be used:
• 	Existing policy and procedure manuals;
• 	Existing forms and documents;
• 	Documentation from independent auditors and the OIG;
• 	Risk assessments;
• 	Accounting manuals;
• 	Memoranda;
• 	Flowcharts;
• 	Job descriptions;
• 	Decision tables;
• 	Procedural write-ups; and/or
• 	Self-assessment reports.
Interviews should be conducted with personnel who have knowledge of the relevant operations to validate
that manuals, policies, forms, and documents are accurate and being applied.
A major transaction cycle narrative is a written summary of the transaction process. For each major
transaction cycle, the narrative describes:
• 	The initiation point;
• 	The processing type (e.g., automated versus manual, preventative versus detective);
• 	The completion point;
• 	Other data characteristics, such as source; receipt; processing; and transmission;
• 	Key activities/class of transactions within the process;
• 	Controls in place to mitigate the risk of financial statement errors;
• 	Supervisor/manager review; process and calculations performed in preparation of financial reporting;
and process outputs;
• 	Use of computer application controls and controls over spreadsheets used in the preparation of
financial reporting;
• 	Identification of errors; types of errors found; reporting errors; and resolving errors; and
• 	Ability of personnel to override the process or controls.
Within the cycle memo, the key controls should be clearly identified by highlighting, bolding, or
underlining. Contractors are responsible for reviewing and updating cycle memos to keep them current.
Control activities are the specific policies, procedures, and activities that are established to manage or
mitigate risks. Key controls are those controls designed to meet the control objectives and support
management’s financial statement assertions. In other words, they are the controls that management relies
upon to prevent and detect material errors and misstatements. For each key control activity, state: (a) the
frequency of performance; (b) the specific steps performed; (c) how exceptions are resolved; and (d) how
the performance of the control activity and related results/disposition are documented.
Examples of control activities that may be identified include:
• 	Top-level reviews of actual performance;
o 	Compare major achievements to plans, goals, and objectives

• 	Reviews by management at the functional or actual level;
o 	Compare actual performance to planned or expected results
• 	Management of human capital;
o 	Match skills to organizational goals
o 	Manage staff to ensure internal control objectives are achieved
• 	Controls over information processing;
o 	Edit checks of data
o 	Control totals on data files
o 	Access controls
o 	Review of audit logs
o 	Change controls
o 	Disaster recovery
• 	Physical controls over vulnerable assets;
o 	Access controls to equipment or other assets
o 	Periodic inventory of assets and reconciliation to control records
• 	Establishment and review of performance measures and indicators;
o 	Relationship monitoring of data
• 	Segregation of duties;
• 	Proper execution of transactions and events
o 	Communicating names of authorizing officials
o 	Proper signatures and authorizations
• 	Accurate and timely recording of transactions and events
o 	Interfaces to record transactions
o 	Regular review of financial reports
• 	Access restrictions to and accountability for resources and records; and
o 	Periodic reviews of resources and job functions
• 	Appropriate documentation of transactions and internal control.
o 	Clear documentation
o 	Readily available for examination
o 	Documentation should be included in management directives, policies, or operating manuals
To document management’s understanding of major transaction cycles, management should use a
combination of the following:
• 	Narratives;
• 	Flowcharts; and
• 	Control matrices.
To illustrate this process, we have provided cycle memo guidelines in Section 60. Updated cycle memos
shall be submitted to the CMS Internal Controls mailbox within fifteen business days after December 31.
Note: The cycle memos must be 508 compliant when released to the Internal Controls mailbox. For
information on 508 compliance, please visit the website at the following hyperlink:
Hyperlink: The US Department of Health and Human Services (HHS) Section 508 Compliance Information
In addition, the A/B, DME, and Specialty MAC contractors shall provide updated cycle memos to the SSAE
18 auditors.
3) Test Operating Effectiveness
Testing of the operation of key controls shall be performed and documented (refer to “Plan and Scope the
Evaluation” (above) as well as the chart below with regard to testing applicability), to determine whether the
control is operating effectively, partially effectively, or not effectively. Testing shall address both manual

and automated controls. Ideally, testing should be performed throughout the year. The results of testing
completed prior to June 30th will form the basis of the June 30th assurance statement. As testing continues
into the fourth quarter, the results of that testing, along with any items corrected since the June 30th
assurance statement will be considered in the September 30 th assurance statement update. The chart below is
provided to assist contractors in determining when to conduct testing.

A-123 Appendix A Internal Control Review/SSAE 18 Reliance Examples
Scenar
io
Prior Fiscal Year
2
Prior Fiscal Year 1 	Current Fiscal Year 	Additional Testing
Required or Not
Required*
1 	No SSAE 18/A-
123 Appendix A
Review
No SSAE 18/A-123
Appendix A Review
Unqualified 	Not Required
2 	No SSAE 18/A-
123 Appendix A
Review
Unqualified 	No SSAE 18/A-123
Appendix A Review
Not Required
3 	Unqualified 	No SSAE 18/A-123
Appendix A Review
No SSAE 18/A-123
Appendix A Review
Not Required
4 	Qualified 	Unqualified 	No SSAE 18/A-123
Appendix A Review
Not Required
5 	No SSAE 18/A-
123 Appendix A
Review
No SSAE 18/A-123
Appendix A Review
Qualified 	Required
6 	No SSAE 18/A-
123 Appendix A
Review
Qualified 	No SSAE 18/A-123
Appendix A Review
and the Findings are
Corrected and
Validated by CMS
(CAP Closure
Letter Received)
Not Required
7 	Unqualified 	Qualified 	No SSAE 18/A-123
Appendix A Review
and the Findings are
Corrected and
Validated by CMS
(CAP Closure
Letter Received)
Not Required
8 	Qualified 	No SSAE 18/A-123
Appendix A Review and
the Findings are Corrected
and Validated by CMS
(CAP Closure Letter
Received)
No SSAE 18/A-123
Appendix A Review
Not Required
9 	Unqualified 	Qualified 	No SSAE 18/A-123
Appendix A Review
and the Findings are
NOT Corrected or
Validated by CMS
(No CAP Closure
Letter)
Required
10 	No SSAE 18/A-
123 Appendix A
Review
Qualified 	No SSAE 18/A-123
Appendix A Review
and the Findings are
NOT Corrected or
Validated by CMS
(No CAP Closure
Letter)
Required

Scenar
io
Prior Fiscal Year
2
Prior Fiscal Year 1 	Current Fiscal Year 	Additional Testing
Required or Not
Required*
11 	Qualified 	No SSAE 18/A-123
Appendix A Review and
the Findings are NOT
Corrected or Validated by
CMS (No CAP Closure
Letter)
No SSAE 18/A-123
Appendix A Review
and the Findings are
NOT Corrected or
Validated by CMS
(No CAP Closure
Letter)
Required
Unqualified Report
SSAE 18: No findings in Section I
A-123 Appendix A Internal Control Review: No material weaknesses were noted
Qualified Report
SSAE 18: 1 or More Findings in Section I
A-123 Appendix A Internal Control Review: Material weaknesses were noted, but were not pervasive
*Note:
Assumes other subsequent audits and reviews do not contradict the SSAE 18/A-123 Appendix A Review
or contradictions have been corrected and validated.

4) Identify and Correct Deficiencies
If design or operating deficiencies are noted, the potential impact of control gaps or
deficiencies on financial reporting shall be discussed with management. The magnitude
or significance of the deficiency will determine if it should be categorized as a control
deficiency, a significant deficiency, or a material weakness (see Section 30.6).
Corrective action plans (CAPs) shall be created and implemented to remediate identified
deficiencies (see Section 40). The contractor shall submit corrective action plans for all
deficiencies (control deficiencies, significant deficiencies, and material weaknesses)
identified as a result of A-123 Appendix A reviews and SSAE 18 Section I findings.
5) Report on Internal Controls / Certification Statement
The culmination of the contractor’s assessment will be the assurance statement regarding
its internal control over financial reporting. The statement will be one of three types:
1) Unqualified Statement of Assurance
Each contractor shall submit, as part of the CPIC report, an assurance statement for
internal controls over financial reporting (ICOFR) stating:
“… (Contractor) has effective internal controls over financial reporting (ICOFR) in
compliance with OMB Circular A-123, Appendix A.”
NOTE: The contractor’s statement of assurance should be unqualified if this is consistent
with the A-123 Appendix A Internal Control Review statement per the CPA firm report
(augmented by internal reviews, if necessary). Similarly, if the SSAE 18 audit
(augmented by internal reviews, if necessary) did not result in any Section I findings or
the contractor has not classified any findings as material weaknesses, then an unqualified
statement of assurance would be applicable.
2) Qualified Statement of Assurance
Each contractor shall submit, as part of the CPIC report, an assurance statement for
internal controls over financial reporting stating:
“…(Contractor) has effective internal controls over financial reporting in compliance
with OMB Circular A-123, Appendix A, except for the SSAE 18 Section I finding(s)
and/or material weakness(es) identified in the attached Report of Material Weaknesses.”
Note: The contractor’s statement of assurance should be qualified if this is consistent
with the A-123 Appendix A Internal Control Review statement per the CPA firm report
(augmented by internal reviews, if necessary). Similarly, if a SSAE 18 audit disclosed at
least one Section I finding and/or internal reviews in the current year disclosed a material
weakness, then a qualified statement of assurance (see above) or a statement of no

assurance (see below) would be issued, depending on the pervasiveness of the Section I
findings or material weakness. The results of work performed in other control-related
activities may also be used to support your assertion as to the effectiveness of internal
controls.
3) Statement of No Assurance
Each contractor shall submit, as part of the CPIC report, an assurance statement for
internal controls over financial reporting stating:
“…(Contractor) is unable to provide assurance that its internal control over financial
reporting was operating effectively due to the material weakness(es) identified in the
attached Report of Material Weaknesses.”
or
“…(Contractor) did not fully implement the requirements included in OMB Circular A-
123, Appendix A and therefore cannot provide assurance that its internal control over
financial reporting was operating effectively.”
End Section 30.1.1 – OMB Circular A-123, Appendix A: Internal Controls Over
Financial Reporting (ICOFR): Back to Table of Contents
30.2 - Certification Statement
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
Contractors shall provide a certification statement to CMS pertaining to your internal
controls. On the following page is a generic certification statement. This statement should
be included as part of your CPIC. The statement is to be signed jointly by your Medicare
CFO and Vice President (VP) for Medicare, RDS or MSPRC or the equivalent Senior
Executive responsible for Medicare, RDS or MSPRC.
The CPIC is due within fifteen (15) business days after June 30 th and shall cover the
period from October 1st through June 30th . An updated assurance statement for the period
July 1st through September 30th is due to CMS within five (5) business days after
September 30th . Your certification statement should follow this outline:

Sample Certification Statement:
Chief Financial Officer
Office of Financial Management
Attn: Accounting Management Group, C3-13-08
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850
Dear Chief Financial Officer:
As the (Chief Financial Officer and Vice President of (contractor name), we are writing
to provide certification of reasonable assurance for the period October 1 through June
30 that (contractor name) internal controls are in compliance with the Federal
Managers' Financial Integrity Act (FMFIA) and Chief Financial Officers (CFO) Act by
incorporating internal control standards into our operations. We are also providing an
unqualified [or qualified] statement of assurance that (contractor name) has effective
internal controls over financial reporting in compliance with revised OMB Circular A-
123, Appendix A [except for the SSAE 18 Section I finding(s) and/or material
weakness(es) identified in the attached Report of Material Weaknesses].
We are cognizant of the importance of internal controls. We have taken the necessary
actions to assure that an evaluation of the system of internal controls and the inherent
risks have been conducted and documented in a conscientious and thorough manner.
Accordingly, we have included an assessment and testing of the programmatic,
administrative, and financial controls for the (type of program) operations.
In the enclosures to this letter, we have provided an executive summary that identifies
a list of the minimum requirements. (See Section 30.3 - Executive Summary for the list of
minimum requirements to be provided in your CPIC.)
If material weaknesses have been identified, use the following language: "Material
weaknesses have been reported to you and the appropriate Innovation & Financial
Management (IFM) office, and/or COR. The respective Corrective Action Plans have
been forwarded to your office." If no material weaknesses were identified, use the
following language: "No material weaknesses have been identified during our review;
therefore no material weaknesses have been reported."
We have included a description of our risk assessment analysis and our CPIC Report of
Material Weaknesses. This letter and attachments summarize the results of our review.
We also understand that officials from the Centers for Medicare & Medicaid Services,
Office of Inspector General, Government Accountability Office, or any other
appropriate Government agency have authority to request and review the working
papers from our evaluation.
Sincerely,

______________________________________
[Chief Financial Officer Signature]
______________________________________
[Vice President for (type of program) Signature]
End Section 30.2 – Certification Statement: Back to Table of Contents
30.3 - Executive Summary
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
An executive summary shall be included in your CPIC, and at a minimum provide:
A. The contractor identification numbers;
B. The geographical locations for which the certification applies - include all
locations for the contractor line of business;
C. A list of the control objectives selected for internal review;
D. The specific time period during which each of the reviews were conducted;
E. 	The name and title of the person(s) who conducted the review;
F. 	The location and custodian of the working papers for the review;
G. The name, telephone number, and email address of a contact person who can
explain the risk assessment process, the certification review, the results, and the
status of any corrective action plans;
H. The total number of material weaknesses reported in the CPIC Report of Material
Weaknesses;
I. 	The total number of control deficiencies and significant deficiencies reported in
the CPIC Report of Internal Control Deficiencies; and
J. 	A list of all other internal and external reviews conducted during the CPIC
reporting period. The list should include the type of review, who conducted the
review, dates conducted, functional areas reviewed, and the number of findings in
each area. (Do not include the certification reviews already listed in ‘C’ above.)
End Section 30.3 – Executive Summary: Back to Table of Contents

30.4 - CPIC- Report of Material Weaknesses
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
The CPIC Report of Material Weaknesses (MW) shall include all initial MW identified
during the CPIC period and not yet corrected and approved by a CAP closing letter. This
report shall be updated as new findings are identified. It shall be prepared as a
spreadsheet and include the following columns of information:
1. 	CMS Finding Number. The contractor shall use the CMS finding number
assigned in the final audit report for all external findings. Assign a CMS finding
number (see Section 40.3) to all internally-identified MWs. This shall be done as
soon as the determination is made that the finding is a MW. Note: Information
related to each MW should be on only one row of the spreadsheet; the “wrap text”
function in Excel should be used.
2. 	Control Objective Impacted (see Section 50). Each MW shall have at least one
control objective associated with it. However, a MW could have more than one
control objective associated with it. If more than one control objective is impacted
by the MW, the finding shall be listed only once with multiple control objectives
listed with it. Prioritize the control objectives impacted by each finding and limit
them to no more than five.
3. 	Summary of the material weakness.
4. 	Corrective action plan (CAP).
5. 	Date the MW was first identified at the contractor level.
6. 	Date initial CAP submitted to CMS.
7. 	CAP target completion date.
8. 	Actual completion date.
9. 	Original source of the finding. If the original source is a Contractor Performance
Evaluation review, you shall include the report date and site location of the
review. If the original source is an internal control review to support your CPIC
certification, identify the MW either FMFIA or financial reporting (FR).

Example Report of Material Weaknesses
CMS Contractor XYZ
CPIC Report of Material Weaknesses
1. CMS
Finding
Number
2. Control
Objective(s)
Impacted
3. Summary
of the MW
4.Corrective
Action Plan
(CAP)
5. Date MW
Identified at
the contractor
level
6. Date
Initial CAP
Submitted to
CMS
7. CA
Targe
Comp
Date
XYZ-XX-S-001 	A.1 	No Entity Wide
Security Plan
Create an entity
Wide Security Plan
03/01/20YY 	03/10/20YY 	6/30/2
XYZ-XX-C-001 	J.4 	One individual opens
Medicare checks and
records them in the
cash receipts log. This
indicates inadequate
separation of duties
for this process.
Duties of opening
mail and logging in
cash receipts are
being assigned to
separate individuals.
02/03/20YY 	02/27/20YY 	03/15/
XYZ-XX-C-002 	J.3 	There is no integrated
general ledger
accounting system to
adequately track all
Medicare financial
data.
The services of a
consulting firm have
been obtained to
develop an
integrated general
ledger system for
reporting Medicare
financial data.
02/20/20YY 	02/27/20YY 	04/30/
Reporting Period FY 20YY
End Section 30.4 – Report of Material Weaknesses: Back to Table of Contents
30.5 - CPIC- Report of Internal Control Deficiencies
(Rev. 11133, Issued:11-30-21, Effective: 10-01-21, Implementation: 12-31-21)
The CPIC Report of Internal Control Deficiencies is an internal report and it shall include
control deficiencies, significant deficiencies, and SSAE 18 Section III/IV exceptions. The
CPIC report of Internal Control Deficiencies shall not be submitted as part of the annual
CPIC submission. However, you are required to report in the Executive Summary the
number of control deficiencies and significant deficiencies identified during the period
covered by the CPIC. The CPIC Report of Internal Control Deficiencies should be
prepared as a spreadsheet and include the following columns of information:
1. 	The original source of the finding.
2. 	The type of control deficiency (control deficiency or significant deficiency).
3. 	Whether it is a design deficiency or operating deficiency.
4. 	The control objective numbers impacted (from Section 50).
5. 	The corrective action plan.

6. 	A summary of the control deficiency and significant deficiencies including when
the condition was observed and if a corrective action plan was implemented (or
the status if not corrected).
Each control deficiency and significant deficiency shall be listed, and the total number of
control deficiencies and significant deficiencies shall be included in the report. The
contractors are required to prepare and maintain this report and update this report as new
control deficiencies are identified. When CPIC control deficiencies are identified,
evaluate internal corrective actions for each of the deficiencies and correct each problem.
While you are required to document, track, and correct problems identified as control
deficiencies, significant deficiencies and material weaknesses, CPIC CAPs are not
required to be submitted to CMS for control deficiencies and significant deficiencies.
End Section 30.5 – Report of Internal Control Deficiencies: Back to Table of Contents
30.6 - Definitions of Control Deficiency, Significant Deficiency, and
Material Weakness
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
The terms below are definitions and reporting classifications for FMFIA and A-123
Internal Controls over Financial Reporting:
CONTROL DEFICIENCY:
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned
functions, to prevent or detect misstatements on a timely basis. A design deficiency
exists when a control necessary to meet the control objective is missing or an existing
control is not properly designed, so that even if the control operates as designed the
control objective is not always met. An operational deficiency exists when a properly
designed control does not operate as designed or when the person performing the
control is not qualified or properly skilled to perform the control effectively. Controls
that are not properly designed shall be documented as a control deficiency in the
control deficiency log. A deficiency in operations of a control exists if a properly
designed control is not working as intended.
SIGNIFICANT DEFICIENCY:
A deficiency or combination of deficiencies in internal control that is less severe than
a material weakness, yet important enough to merit attention by those charged with
governance.
MATERIAL WEAKNESS:
A deficiency or combination of deficiencies in internal control such that there is a
reasonable possibility that a material misstatement of the entity’s financial statements
will not be prevented, or detected and corrected on a timely basis.

NOTE: The terms Significant Deficiency and Material Weaknesses may also apply to
FMFIA operational findings or issues.
End Section 30.6 – Definitions of Control Deficiency, Significant Deficiency, and
Material Weakness: Back to Table of Contents
30.7 - Material Weaknesses Identified During the Reporting Period
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
The evaluation of your internal control environment should be an ongoing process
throughout the fiscal year. It should not be a once-a-year event, which occurs prior to
submission of your annual CPIC. The identification and reporting of material weaknesses
should not wait until the end of the CPIC reporting period. During the reporting period, if
material weaknesses are identified, send an electronic Initial CAP report within 45 days
of identifying the problem, via E-mail, to CAPS@cms.hhs.gov. (See Section 40.4).
Within that same time frame A/B, DME, and Specialty MACs are required to provide
written notification, to your Associate Regional Administrator for Financial Management
and Fee for Service Operations, RO CFO Coordinator, and the COR of the A/B, DME,
and Specialty MAC, RDS, and MSPRC shall send to the CMS COR.
End Section 30.7 – Material Weaknesses Identified During the Reporting Period: Back to
Table of Contents
30.8 –Statement on Standards for Attestation Engagements (SSAE)
Number 18, (SSAE 18) Reporting on Controls at Service Providers
(Rev. 11133, Issued:11-30-21, Effective: 10-01-21, Implementation: 12-31-21)
NOTE: This section is only applicable to the following listed A/B, DME, and
Specialty MACs:
# 	MAC Type & Jurisdiction/Workload
1 	DME MAC Jurisdiction A
2 	DME MAC Jurisdiction B
3 	DME MAC Jurisdiction C
4 	DME MAC Jurisdiction D
5 	Parts A & B MAC Jurisdiction 5
6 	Parts A & B MAC Jurisdiction 6
7 	Parts A & B MAC Jurisdiction 8
8 	Parts A & B MAC Jurisdiction 15
9 	Parts A & B MAC Jurisdiction E
10 	Parts A & B MAC Jurisdiction F
11 	Parts A & B MAC Jurisdiction H
12 	Parts A & B MAC Jurisdiction J
13 	Parts A & B MAC Jurisdiction K
14 	Parts A & B MAC Jurisdiction L
15 	Parts A & B MAC Jurisdiction M

# 	MAC Type & Jurisdiction/Workload
16 	Parts A & B MAC Jurisdiction N
17 	Specialty MAC Railroad Board (RRB)
In lieu of receiving an A-123 Appendix A review, A/B, DME, and Specialty MACs are
required to undergo a SSAE 18 SOC 1, Type II audit.
CMS shall contract with an independent certified public accounting (CPA) firm to
perform the SSAE 18 audit. The A/B, DME, and Specialty MACs shall cooperate with
the audit which may include, but is not limited to, providing all documentation requested,
CPIC results, management assertions, coordinating interviews with key personnel,
participating in entrance and exit conferences, providing workspace, and internet
connectivity, etc.
The A/B, DME, and SMACs shall ensure that all subcontractors are properly identified as
inclusive and/or carved out. Based on the subcontractors’ impact on the MAC’s financial
statement, the subcontractor may be in scope (i.e. inclusive method) for the SSAE 18
audit.
The scope of the SSAE 18 audit begins October 1st of each federal fiscal year and ends
no earlier than March 31st (6 months) (e.g. For Federal Fiscal Year 2020, the scope of the
audit begins October 1st, 2019, and ends March 31st, 2020).
Initial SSAE 18 Control Objectives:
For new A/B, DME, and Specialty MACs, excluding cases where incumbent MACs
transition to a new MAC jurisdiction, initial SSAE 18 audit shall include the following
thirteen (13) listed CMS Control Objectives as described under Section 50 of this IOM:
# 	CMS Control Objective Areas for Initial SSAE 18 Audit Testing
1 	50.1 – A Controls – Information Systems
2 	50.2 – B Controls – Claims Processing
3 	50.3 – C Controls – Appeals
4 	50.4 – D Controls – Beneficiary / Provider Services
5 	50.5 – E Controls – Complementary Credits
6 	50.6 – F Controls – Medical Review (MR)
7 	50.7 – G Controls – Medicare Secondary Payer (MSP)
8 	50.8 – H Controls – Administrative
9 	50.9 – I Controls – Provider Audit
10 	50.10 – J Controls – Financial Reporting Review Requirements
11 	50.11 – K Controls – Debt Referral (MSP and Non-MSP)
12 	50.12 – L Controls – Non-MSP Debt Collection
13 	50.13 – M Controls – Provider Enrollment
Recurring SSAE 18 Control Objectives:
In subsequent years, A/B, DME, and Specialty MACs SSAE 18 audits shall include the
following eight (8) control objectives:

# 	CMS Control Objective Areas for Recurring SSAE 18 Audit Testing
1 	50.1 – A Controls – Information Systems
2 	50.2 – B Controls – Claims Processing
3 	50.6 – F Controls – Medical Review (MR)
4 	50.7 – G Controls – Medicare Secondary Payer (MSP)
5 	50.9 – I Controls – Provider Audit
6 	50.10 – J Controls – Financial Reporting Review Requirements
7 	50.11 – K Controls – Debt Referral (MSP and Non-MSP)
8 	50.12 – L Controls – Non-MSP Debt Collection
The remaining Control Objectives may be audited based on professional judgment and/or
based on the risk identified from the annual CPIC assessment.
Points of Contact (POC) – The A/B, DME, and Specialty MACs shall assign a POC that
will assist to ensure that all required parties are invited to the following scheduled events.
Entrance Conference – The A/B, DME, and Specialty MACs shall participate in the
SSAE 18 entrance conference. The entrance conference is the start of each engagement
to discuss the scope, timeframe, and any other issues relating to the engagement.
Status Meetings – The A/B, DME, and Specialty MACs shall participate in the SSAE 18
status meetings. The status meetings will include discussion of the audit activities
performed to date. The meeting will including a status of CAPs, potential findings and/or
exceptions and any issues that may affect the completion of the work.
Preliminary Exit Conference – The A/B, DME, and Specialty MACs shall participate in
the SSAE 18 preliminary exit conference. The preliminary exit conference will include a
status of the engagement, any outstanding issues, additional documentation requests,
potential findings and/or exceptions to date, estimated exit conference date, and other
topics to be addressed.
Exit Conference Report – Prior to the exit conference, the A/B, DME, and Specialty
MACs will receive the SSAE 18 exit conference report from the CPA firm. The exit
conference report shall include any outstanding issues, summary of findings and/or
exceptions, and any other items that requires the MAC’s attention. The A/B, DME, and
Specialty MACs shall review the exit conference report in preparation of the exit
conference.
Exit Conference – The A/B, DME, and Specialty MAC shall participate in the SSAE 18
exit conference. The exit conference will include items such as the status of the
examination, outstanding issues, any findings and/or exceptions, agree disagree letter,
management representation letter, estimated draft report issuance date, etc.
Draft SSAE-18 and CAP Follow up Reports – The A/B, DME, and Specialty MACs
should receive the draft SSAE-18 and CAP Follow up reports no later than June 1 st . The

A/B, DME, and Specialty MACs shall review the draft reports for accuracy and provide
any comments back to the CPA firm and CMS no later than ten (10) business days after
June 1st .
Final SSAE-18 and CAP Follow Up Reports – The A/B, DME, and Specialty MACs
will receive final SSAE 18 and CAP Follow Up reports no later than July 1st.
SSAE 18 Bridge Letters – The A/B, DME, and Specialty MACs shall submit a bridge
letter attesting to the internal controls environment for the period of April 1st to
September 30 th . This bridge letter is critically important to the maintenance and
demonstration of a strong internal control environment that supports the CMS internal
control objectives: effective and efficient operations, reliable reporting, and compliance
with applicable laws and regulations. The bridge letter is due within five (5) business
days after September 30th and should be submitted via email to
InternalControls@cms.hhs.gov. The contractor shall complete/submit a separate bridge
letter for each jurisdiction. The bridge letter shall be signed by the Chief Financial
Officer (or designee).
A/B, DME, and Specialty MACs may use the attached sample language as the basis for
their bridge letter or they may submit original language. At a minimum, the bridge letter
shall have these key points addressed:
• 	Name of CPA firm who prepared the latest SSAE 18 report;
• 	Date the SSAE 18 report was issued;
• 	Audit period covered by the most recent SSAE 18 report;
• 	The date the service organization is providing this assertion (through the date of
the bridge letter or the as of date provided in the request for the bridge letter);
• 	Any material changes to the internal control environment (if applicable);
• 	Statement that the service organization is not aware of any material changes to the
control environment;
• 	Statement that user entities are responsible for adhering to complementary user
entity control from SSAE 18 report;
• 	Disclaimer that the bridge letter is not a substitute for the actual SSAE 18 report.
The bridge letter will be reviewed by the CMS A-123 Technical Team (ATT) for
compliance. If there are any questions regarding the letter, the ATT will contact the A/B,
DME, and Specialty MAC’s POC.

[This letter should go on the A/B, DME, or Specialty MAC’s letter head]
Sample Bridge Letter – No Material Changes:
[Current Date]
Bridge Letter
Centers for Medicare & Medicaid Services
Office of Financial Management
7500 Security Boulevard, Mailstop C3-13-08
Baltimore, MD 21244-1850
Attn: Internal Control Team
Dear CMS Internal Controls Team:
We have received your request for information regarding material changes in internal
control related to the [list services here (A/B, DME, or Specialty MAC)]. [CPA firm
name] prepared the latest Type II SSAE 18 for these services and the report is dated
[report date]. This report includes tests of operating effectiveness for the period ending
[period end date].
[Name of A/B, DME, or Specialty MAC] recognizes the need to maintain an appropriate
internal control environment and report upon the effectiveness, as well as material
changes to its internal controls. As of [current date], I am not aware of any material
changes in our control environment that would adversely affect the Auditor’s Opinion
reached in the [report end date (not the same as the report date)] report for the above
named SSAE 18.
You should also be aware that [A/B, DME, or Specialty MAC name], as a normal part of
its operations, continually updates its services and technology as appropriate. In addition,
the controls for all of [A/B, DME, or Specialty MAC name] services were designed with
certain responsibilities required of the system users (See Complimentary User Entity
Control in the SSAE 18 report). [A/B, DME, or Specialty MAC name] controls must
always be evaluated in conjunction with an assessment of the strength of these user
controls.
Finally, in order to conclude upon the design and effectiveness of internal controls for
[A/B, DME, or Specialty MAC name], you must read the current SSAE 18 report. This
letter is not intended to be a substitute for the SSAE 18 report.
Sincerely,
[Name of Member of Management1]
[Title]
1 Should be a signature from one of the same persons that signed the letter of representations.

Sample Bridge Letter – Material Changes:
[Current Date]
Bridge Letter
Centers for Medicare & Medicaid Services
Office of Financial Management
7500 Security Boulevard, Mailstop C3-13-08
Baltimore, MD 21244-1850
Attn: Internal Control Team
Dear CMS Internal Controls Team:
We have received your request for information regarding material changes in internal
control related to the [list services here (A/B, DME, or Specialty MAC)]. [CPA firm
name] prepared the latest Type II SSAE 18 for these services and the report is dated
[report date]. This report includes tests of operating effectiveness for the period ending
[period end date].
[A/B, DME, or Specialty MAC name] recognizes the need to maintain an appropriate
internal control environment and report upon the effectiveness, as well as material
changes to its internal controls. On [date or approximate date material change happened],
[describe the control add/change/removal that was made. Two sentences is sufficient]. As
of [current date], I am not aware of any other material changes in our control
environment that would adversely affect the Auditor’s Opinion reached in the [report end
date (not the same as the report date)] report for the above named SSAE 18.
You should also be aware that [A/B, DME, or Specialty MAC name], as a normal part of
its operations, continually updates its services and technology as appropriate. In addition,
the controls for all of [A/B, DME, or Specialty MAC name] services were designed with
certain responsibilities required of the system users (See Complimentary User Entity
Control in the SSAE 18 report). [A/B, DME, or Specialty MAC name] controls must
always be evaluated in conjunction with an assessment of the strength of these user
controls.
Finally, in order to conclude upon the design and effectiveness of internal controls for
[A/B, DME, or Specialty MAC name], you must read the current SSAE 18 report. This
letter is not intended to be a substitute for the SSAE 18 report.
Sincerely,
[Name of Member of Management2]
[Title]
2 Should be a signature from one of the same person(s) that signed the letter of representations.

End Section 30.8 – Statement on Standards for Attestation Engagements (SSAE) Number
18, (SSAE 18) Reporting on Controls at Service Providers: Back to Table of Contents
30.9 – List of Complementary User Entity Controls (CUECs)
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
The following listed CUECs are recommended for consideration by control objective:
Control
Objective
CUEC
Description
Back to Table of Contents
30.9.1 – A CUECs – Information Systems
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
A – Control
Objective
Number
A – CUEC Description
A.1 	CMS maintains, updates, and makes available current CMS
Acceptable Risk Safeguards (ARS), Business Partners Systems
Security Manual (BPSSM), and other applicable policy to provide
Medicare Administrative Contractors (MACs) requirements and
guidance for the establishment of an entity-wide security program.
A.3 	CMS, as the Authorizing Official (AO), reviews and approves the
Information System Security Categorization through the Authority
to Operate (ATO) process.
A.7 	For shared systems, outside of the MAC’s ATO boundary, CMS or
its contractors update and / or remove user logical access accounts
and system permissions as requested and approved by the MAC for
transferred personnel in a timely fashion. In addition, CMS or its
contractors remove logical access accounts and system permissions
as requested and approved by the MAC for separated personnel in a
timely fashion.
A.9 	CMS, as the Authorizing Official (AO), authorizes the information
system for processing prior to commencing operations and
periodically thereafter. In addition, the Information Security and
Privacy Group (ISPG) of CMS inputs, in a timely manner,
POA&Ms into the CMS FISMA Controls Tracking System
(CFACTS).

A – Control
Objective
Number
A – CUEC Description
A.12 	For shared systems, outside of the MAC’s ATO boundary, CMS or
its contractors:
• Create MAC and non-MAC user accounts (including remote
access accounts, temporary, emergency, and privileged accounts if
applicable) as requested and approved by the MAC.
• If emergency and / or temporary accounts are utilized they are
automatically removed as required by CMS standards and/or based
on request by the MAC.
• CMS or its contractors update information system accounts in a
timely fashion based on periodic reviews conducted by the MACs.
A.13 	For shared systems, outside of the MAC’s ATO boundary, CMS or
its contractors remove logical access accounts and system
permissions as requested and approved by the MAC for separated
personnel in a timely fashion. Further, CMS or its contractors
automatically disable inactive accounts as required by CMS.
A.15 	For shared systems, outside of the MAC’s ATO boundary, CMS or
its contractors configure password based authentication for major
applications / information systems in accordance with current CMS
ARS, BPSSM, and other applicable policies.
A.17 	For shared systems, outside of the MAC’s ATO boundary, CMS or
its contractors produce and distribute security audit logs to the
MACs for investigation as needed.
A.18 	CMS collaborates with the MAC to analyze, respond, and report
security incidents.
A.21 	CMS maintains, updates, and makes available the current CMS
Target Life Cycle (TLC) and other applicable policy to provide the
MACs requirements and guidance for the establishment of change
management and SDLC processes.
A.22 	For shared systems, outside of the MAC’s ATO boundary, CMS or
its contractors are responsible for software development and
maintenance processes including authorization of changes,
documentation, testing, and approvals in accordance with the
current CMS ARS, BPSSM, and other applicable policy.

A – Control
Objective
Number
A – CUEC Description
A.23 	For shared systems, outside of the MAC’s ATO boundary, CMS or
its contractors are responsible for properly restricting and
controlling the movement of code between libraries.
A.27 	For shared systems, outside of the MAC’s ATO boundary, CMS or
its contractors have implemented system backup and recovery
procedures including contingency plans, disaster recovery plans,
testing of plans, and corrective action based on lessons learned in
accordance with the current CMS ARS, BPSSM, and other
applicable policy.
End Section 30.9.1 – A CUECs – Information Systems: Back to Table of Contents
30.9.2 – B CUECs – Claims Processing
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
B – Control
Objective
Number
B – CUEC Description
B.4 	Updates to the Sanction/Reinstatement file are provided to the
Contractors on a monthly basis.
B.4 	CMS sends Denial of Payment for New Admissions (DPNA) letters
indicating a facility is not in compliance.
B.5 	CMS provides guidance on the claims appeal process and provides
accurate and timely notification of appeal status.
B.4, B.5 	CMS provides the Office of Inspector General/Supplemental
Medical Review Contractor requests to the Contractor.
B.6 	CMS issues annual and quarterly change requests timely and
accurately for CMS applied software pricing modules and
FISS/MCS changes.
B.8 	Claims are properly aged from the actual receipts date to the actual
date of payment in compliance with CMS instructions. Receipt
dates for claims are date stamped and entered into the claims
processing system by CMS maintainer organizations. The CMS
maintainer organizations are responsible for completely and
accurately logging and entering receipt date of claims into the
claims processing system.

B – Control
Objective
Number
B – CUEC Description
B.9 	The Shared System Maintainers will provide guidance and controls
to track and adjudicate claims, complete base system edits, process
Informational Unsolicited Responses (IURs), and analyze/model
data from the warehouse to allow detection and prevention of fraud
at the MACs.
ALL 	CMS deploys and manages CMSNET, a private communication
network that allows data to be encrypted during the transmission to
prevent any unauthorized sources from intercepting data. The
Contractors utilize CMSNET to transmit data with the Enterprise
Data Centers (EDCs) and other business partners that utilize
CMSNET.
ALL 	CMS accurately and timely communicates mandated regulatory
requirement changes and internal policy changes.
ALL 	CMS ensures CWF and the Beneficiary Data Streamlining (BDS)
have accurate and timely data.
End Section 30.9.2 – B CUECs – Claims Processing: Back to Table of Contents
30.9.3 – F CUECs – Medical Review (MR)
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
F – Control
Objective
Number
F – CUEC Description
F.1 	CMS provides proper access to the CERT Claim Status website for
retrieval and reporting of CERT feedback data.
F.2 	CMS reviews and approves the workloads and costs submitted by
the contractor.
F.1, F.2 	CMS reviews and approves the Strategy Analysis Report (SAR)
through its CMS ART System and analyses projected workload,
cost, variances to projections and assigns a unique control
number/system location code for suspended claims.
F.1, F.3 	CMS provides accurate Comprehensive Error Rate Testing (CERT)
feedback data that is utilized by the contractor in the development of
the IPRS, prioritized problem list and continuous data analysis.

F – Control
Objective
Number
F – CUEC Description
F.2, F.3 	CMS accepts the Monthly Status Reports (MSRs) through its CMS
ART System.
F.3, F.12 	CMS provides Recovery Audit Contractor (RAC) vulnerability
reports and findings that are utilized by the contractor in the IPRS,
prioritized problem list and continuous data analysis.
F.1, F.2, F.3 and
F.10
CMS reviews and approves the Improper Payment Reduction
Strategy (IPRS) through its CMS ART System prior to the
beginning of each contract year.
F.4 	CMS provides the mechanism for posting Local Coverage
Determinations and Articles that are developed by the Contractor
Medical Directors (CMD) and policy staff.
ALL 	CMS regularly communicates and makes available Change
Requests (CRs), Technical Direction Letters (TDLs) and Medicare
rules and regulations to the contractor.
ALL 	Access to the all CMS systems are restricted by user identifier (ID)
and password. Inactive ID’s are suspended after 30 calendar days
and deleted after 90 calendar days. Controls are in place to suspend
an account after three unsuccessful login attempts
End Section 30.9.3 – F CUECs – Medical Review (MR): Back to Table of Contents
30.9.4 – G CUECs – Medicare Secondary Payer (MSP)
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
G – Control
Objective
Number
G – CUEC Description
G.1 	The Fiscal Intermediary Standard System (FISS), a Part A CMS
system, automatically creates “I” records as needed.
This control objective does not pertain to BCRC or the CRC
contractors.
G.1 	MSP edits (including 6800) codes are automatically processed by
CWF and reported to the contractors for claim review through audit
and error codes in the applicable shared system in order to assist
examiners in the processing of claims. The applicable systems are
configured with automated help messages to aid claims processing
and edit resolution.

G – Control
Objective
Number
G – CUEC Description
G.1 	The applicable systems are configured to process claims. The
MSPPAY module calculates the amount Medicare should pay as
secondary payer. These MSP amounts are automatically updated in
the applicable shared systems and the final MSP payment amount is
sent to CWF.
G.2 	HIGLAS and CAFM records overpayments as adjustments are
posted, sets up accounts receivable, and tracks interest assessment
on debt.
G.3, G.4 	The CMS provides software, the Common Working File (CWF) for
editing, and the Electronic Correspondence Referral System (ECRS)
to address assistance requests and MSP inquiries.
G.5 	CMS accurately and timely communicates mandated regulatory
requirement changes and internal policy changes.
ALL 	Access to the all CMS systems are restricted by user identifier (ID)
and password. Inactive ID’s are suspended after 30 calendar days
and deleted after 90 calendar days. Controls are in place to suspend
an account after three unsuccessful login attempts.
End Section 30.9.4 – G CUECs – Medicare Secondary Payer (MSP): Back to Table of
Contents
30.9.5 – I CUECs – Provider Audit
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
I – Control
Objective
Number
I – CUEC Description
I.1 	CMS ensures that applicable CMS systems are appropriately
updated.
I.2 	CMS provides information to the contractor regarding new
providers, change of ownership for an existing provider, termination
of a provider, or a change of Medicare Administrative Contractor
(MAC) to ensure the information is processed in System Tracking
for Audit and Reimbursement (STAR) in a timely and accurate
manner and reflected in subsequent audit activities.

I – Control
Objective
Number
I – CUEC Description
1.3 	CMS provides general instructions to ensure that Provider Cost
Reports are properly submitted and accepted. Appropriate program
policies and instructions are provided to address situations where
the provider did not file a cost report.
I.4 	CMS provides Uniform Desk Review thresholds for determination
of limited and full reviews.
I.5 	CMS provides general instructions to ensure that Provider Cost
Reports are issued a Notice of Program Reimbursement timely.
I.6 	CMS provides general instructions to ensure audit systems (STAR)
are updated in compliance with program instructions.
I.7 	CMS regulations and program policy are provided to ensure that the
contractor’s cost report re-opening process is in compliance.
I.8 	CMS regulations, program policy, and Provider Reimbursement
Review Board (PRRB) rules are provided to ensure that the
contractor’s appeals process is in compliance.
I.9 	Control number I.9 reserved. Control not in use as of IOM revision
number 278.
I.10 	CMS provides general instructions for audit work that allows for an
internal quality control process to be established.
I.11 	CMS provides guidelines and instructions to ensure that cost reports
are scoped and selected for audit or settled without audit and that
audit plans are approved by CMS and in compliance.
I.12 	CMS provides manual instructions and timelines to ensure that the
contractor’s audit process is conducted in compliance, i.e.,
timeframes for issuance of the engagement letter, documentation
requests, pre-exit and exit conferences, and settlement of the audited
cost report.
I.13 	CMS provides instructions for audit programs, desk review
programs and CMS audit and reimbursement policies, and other
audit related instructions so that they can be communicated to audit
staff.
I.14 	CMS provides instructions to ensure the contractor’s audit staff
maintains its necessary knowledge and skills by completing
continuing education and training (CET).

I – Control
Objective
Number
I – CUEC Description
I.15 	Supervisory reviews of the audit and settlement process are
conducted and the policies and procedures for these reviews are
communicated to all supervisors in accordance with CMS program
instructions.
I.16 	All cost reports where fraud and abuse is suspected shall be referred
to the Unified Program Integrity Contractor (UPIC) in accordance
with CMS and contractor instructions.
I.17 	The contractor has processes and procedures in place to document
that supervisory reviews by provider audit department management
were completed on all provider audit Corrective Action Plans
(CAPs) from the establishment of the CAPs to the implementation
and validation of the CAPs.
I.18 	HITECH incentive payments for Medicare subsection (d) and critical
access hospitals are calculated properly, in accordance with CMS’
regulations, policies, and instructions. Data is properly entered into the
FISS screens in order for the HITECH system to generate the incentive
payments.
I.19 	CMS provides instructions and guidelines to ensure that cap
determination letters are issued accurately and timely to Hospices and
include all related documentation.
I.1, I.2, I.3, and
I.6
CMS provides a database, System Tracking for Audit and
Reimbursement, so that information is accurate and timely. CMS
maintains and updates program instructions to ensure that inputs
into the STAR system are in compliance.
End Section 30.9.5 – I CUECs – Provider Audit: Back to Table of Contents
30.9.6 – J CUECs – Financial
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
Back to Table of Contents
30.9.6.1 – J CUECs – Financial (Non-HIGLAS)
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)

J – Control
Objective
Number
J – CUEC Description
J.2, J.6 	CMS Innovation & Financial Management (IFM) Group (Formerly
called Regional Office) reviews and approves Extended Repayment
Schedules (ERSs) that exceed 36 months.
J.2, J.6 	CMS reviews and approves write-offs and status reclassifications of
receivables.
J.9 	Incoming checks are controlled, sorted, and prepared for scanning
and deposit by CMS.
J.9 	Treasury Collection Notifications are received from the Program
Support Center (PSC)/US Treasury Department, reconciled and sent
to the Contractors.
End Section 30.9.6.1 – J CUECs – Financial (Non-HIGLAS): Back to Table of Contents
30.9.6.2 – J CUECs – Financial (HIGLAS)
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
J – Control
Objective
Number
J – CUEC Description
J.1, J.7 	Contractors on HIGLAS/CAFM rely on controls at CMS to obtain
reasonable assurance that HIGLAS systematically records all
activity resulting in the Treasury Report on Receivables (TROR),
Balance Sheets, Income Statements and cash (letter of credit)
transactions.
J.3, J.6 	Contractors on HIGLAS/CAFM rely on controls at CMS to provide
reasonable assurance that CMS has communicated standard
language for demand letters to the system maintainer and in
HIGLAS.
J.4 	Contractors on HIGLAS/CAFM rely on CMS to approve employee
access to HIGLAS for specific job functions.
J.6 	Contractors on HIGLAS/CAFM rely on CMS to ensure that
HIGLAS calculates the aged accounts receivable completely and
accurately.
J.5, J.6 	Contractors on HIGLAS/CAFM rely on CMS to provide oversight
on the HIGLAS support contractor and system maintainer to
maintain controls to properly record the accounting activity.
ALL 	CMS accurately and timely communicates mandated regulatory
requirement changes and internal policy changes.

End Section 30.9.6.2 – J CUECs – Financial (HIGLAS): Back to Table of Contents
30.9.7 – K CUECs – Debt Referral (MSP and Non-MSP)
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
Back to Table of Contents
30.9.7.1 – K CUECs – Debt Referral (MSP and Non-MSP) (Non-
HIGLAS)
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
K – Control
Objective
Number
K – CUEC Description
K.1 	CMS maintains and updates policies and procedures that are
available for review by contractors to reflect changes in the debt
referral instructions and to assist in monitoring debts eligible for
referral to Treasury for cross servicing and the Treasury Offset
Program prior to the debt becoming 120 days delinquent.
K.1 	CMS reviews and approves the Currently Not Collectible and
Write-Off Reports.
K.1, K.5 and
K.6
CMS monitors Collections/Refund Spreadsheets that are available
for retrieval from HIGLAS by contractors when collections/refunds
on debts are received from Treasury. Internal systems are
systematically updated with refund/adjustment information as
appropriate.
K.8 	CMS reviews the CMSDM-RTA reports to make sure that the
contractors have made the necessary updates and status changes.
End Section 30.9.7.1 – K CUECs – Debt Referral (MSP and Non-MSP) (Non-HIGLAS):
Back to Table of Contents
30.9.7.2 – K CUECs – Debt Referral (MSP and Non-MSP) (HIGLAS)
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
K – Control
Objective
Number
K – CUEC Description
K.2 	The initial demand letter is either manually created or systematically
created in HIGLAS. The content of the initial demand letters and
Intent to Refer (ITR) letters are consistent with CMS instructions.
K.6 	HIGLAS ages accounts receivable accurately.

K – Control
Objective
Number
K – CUEC Description
ALL 	HIGLAS provides eligible debt for referral based on the number of
days delinquent and AR status.
ALL 	HIGLAS tracks debt including interest assessment.
ALL 	CMS accurately and timely communicates mandated regulatory
requirement changes and internal policy changes.
End Section 30.9.7.2 – K CUECs – Debt Referral (MSP and Non-MSP) (HIGLAS): Back
to Table of Contents
30.9.8 – L CUECs – Non-MSP Debt Collection
(Rev. 13001; Issued: 12-13-24; Effective: 10-01-24; Implementation: 01-15-25)
L – Control
Objective
Number
L – CUEC Description
L.1, L.3 and L.5 	The initial demand letter is either manually created or systematically
created in HIGLAS. The content of the initial demand letters and
Intent to Refer (ITR) letters are consistent with CMS instructions.
L.1, L.3 and L.5 	As under tolerance overpayments reach the threshold, HIGLAS
automatically aggregates and demands the debt.
L.1, L.3 and L.5 	CMS ensures the Contractor has the ability in HIGLAS to make
adjustments and generate various HIGLAS reports on an as-needed
basis for debt management.
L.2 	CMS Regional Office (RO) review ERS requests (only) when
contractors request additional guidance. CMS Central Office will
evaluate ERS requests as needed or requested by the RO.
L.3 	CMS provides quarterly interest rate updates, and interest is
automatically calculated by the system on the overpayment.
L.4 	CMS provides guidance to the Contractor upon receipt of a
notification of bankruptcy of a debtor.
L.5 	CMS reviews and approves the Write-Off Reports.
L.8 	CMS Systems are configured to stop collection activity once
overpayment cases are updated with certain appeal statuses.

L – Control
Objective
Number
L – CUEC Description
ALL 	CMS accurately and timely communicates mandated regulatory
requirement changes and internal policy changes.
No
Corresponding
Control Number
CMS establishes systematic controls to ensure recoupment of
Medicare overpayments and Federal tax and non-tax debts in
accordance with the Federal Payment Levy Program (FPLP), which
is managed by the Internal Revenue Service (IRS).
End Sections 30.9.8 – L CUECs – Non-MSP Debt Collection and 30 – Internal Control
Reporting Requirements: Back to Table of Contents
40 - Corrective Action Plans
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
CMS contractors are subject to various financial management and information
technology (IT) audits/reviews performed by the OIG, GAO, independent CPA firms,
and the CMS staff to provide reasonable assurance that contractors have developed and
implemented internal controls. The results of these audits/reviews indicate whether the
contractors’ internal controls are operating as designed. Correcting these deficiencies is
essential to improving financial management and internal control. Therefore, audit
resolution remains a top priority at CMS.
The CMS has established policies and procedures to ensure that the contractors have
appropriate CAPs for addressing findings identified through the following:
• 	CFO financial or information technology (IT) audits related to annual CFO
Financial Statement audits, which may include network vulnerability
assessment/security testing (NVA/ST);
• 	SSAE 18 audits;
• 	Health & Human Services (HHS), OIG Information Technology (IT) Controls
Assessments;
• 	Financial reviews conducted by the GAO;
• 	CMS’ 1522 and CMBRW workgroup reviews;
• 	CMS’ CPIC reviews; and
• 	OMB Circular A-123 Appendix A reviews.

Administrative cost audits, provider audits conducted by the OIG, the contractor initiated
systems security annual compliance audits, and system penetration tests are excluded
from these procedures. The word “finding” includes control deficiency, significant
deficiency, and material weakness. For SSAE 18 audits, CAPs to be submitted to CMS
are required for findings noted in the opinion letter only (Section I), not those reported in
Section III/IV of the SSAE 18 report. Section III/IV findings are not required to be
included on the Initial and Quarterly CAP Reports. Section III/IV findings shall be
tracked internally and corrected. Contractors are required to prepare and maintain
documentation to support the status and corrective actions taken on Section III/IV
findings. It shall be available for review and submitted to CMS central and/or IFM
office, upon request. For A-123 Appendix A reviews, the contractor shall submit
corrective action plans for all deficiencies: control deficiencies, significant deficiencies,
and material weaknesses.
Back to Table of Contents
40.1 - Submission, Review, and Approval of Corrective Action Plans
(Rev. 13001 ;Issued: 12-13-24; Effective: 10-01-24; Implementation: 01-15-25)
Upon completion of any of the audits/reviews noted in Section 40, with the exception of
the CPIC, the contractor will receive a final report from the auditors/reviewers noting all
findings identified during their audit/review. Within 45 calendar days of the date of
electronic receipt of the final report, the contractor is required to submit an Initial CAP
Report, using the excel Initial CAP Report that is found in Section 40.6. The excel
Initial CAP Report can be obtained via email upon request from CAPS@cms.hhs.gov.
For SSAE 18, CFO, and A-123 Appendix A reviews, initial CAPS are due within 45
calendar days of the electronic receipt date of the final report. When submitting the
Initial CAP Report, the email subject line shall denote the following information: Initial
CAP Report, IOM entity abbreviated name (see Section 40.3, Table I), jurisdiction code,
and reporting due date.
The Initial CAP Report shall address new findings that have been assigned a finding
number either by the auditor/reviewer (e.g., SSAE 18 audit or A-123 Appendix A review)
or by the contractor (i.e., CPIC). All entities shall submit an Initial CAP Report even if
the entity has no new findings. If there are no findings, this should be annotated on the
Initial CAP Report. The CAP shall summarize the procedures that have been or will be
implemented to correct the finding. Upon receipt of the Initial CAP Reports, the Internal
Control Team will send the reports to the appropriate CMS business owner for review of
the CAP. Business owners may either approve the CAP as submitted, or may request
additional information to be included in the CAP. All business owner comments shall be
provided to the contractors before the due date of the next Quarterly CAP Report.
Responses to the CMS business owner comments on the initial CAPs shall be included in
the next Quarterly CAP Report due after the date of receipt of the comments.
After an initial CAP has been submitted, the CAP shall be merged onto the Quarterly
CAP report. This report will contain all findings and CAPs that have not been closed
through an official CMS CAP closure letter and provide updates to the actions taken to
resolve the findings. All entities shall submit a Quarterly CAP Report even if the entity

has no CAPs. If there are no open CAPs, this must be annotated on the Quarterly CAP
Report. Only one Quarterly CAP Report shall be submitted for each jurisdiction that
shall include all FYs and review types, i.e., SSAE 18 audits, A-123 reviews, CFO audits,
etc.
The quarterly updates will also be reviewed; however, CMS will not respond to the
quarterly updates unless the CAP indicates that the contractor is not making adequate
progress on implementing the CAP or has made significant changes to target completion
dates.
The Quarterly CAP Report is due within 30 days following the end of each quarter.
Therefore, all electronic and hardcopy CAP reports should be received by CMS on or
before January 30, April 30, July 30, and October 30 annually. When submitting the
Quarterly CAP report, the email subject line shall denote the following information:
Quarterly CAP Report, IOM entity abbreviated name (see Section 40.3, Table I),
jurisdiction code, and reporting due date. The Quarterly CAP Report shall address all
open findings, as well as continue to report information on all findings reported as closed
by the contractors until CMS sends the contractor a closeout letter indicating which
findings are officially closed. After the contractor receives the closeout letter, the CAP
shall be removed from the Quarterly CAP Report.
Submit Initial and Quarterly CAP Reports electronically to: CAPS@cms.hhs.gov.
Contractors are required to furnish an electronic copy of the CAP reports to their CMS
Associate IFM Administrator for Financial Management and Fee for Service Operations,
and the designated IFM CFO coordinator. MACs and DME MACs shall submit initial
and quarterly CAPs to the CAPS@cms.hhs.gov mail box, and the MAC COR. RDS and
MSPRC shall submit initial and quarterly CAPs to the CAPS@cms.hhs.gov, and the
Central Office COR.
NOTE: If the electronic copy of the Initial and Quarterly CAP Reports has the Vice
President (VP) of Operations electronic signature or is sent from the VP of Medicare
Operations email or the CFO’s email, then a hardcopy is not required to be sent to CMS.
Otherwise, a hardcopy is required.
Contractors shall maintain and have available for review backup documentation to
support implementation of each CAP. This will facilitate the validation of CAPS by
CMS or its agents.
End Section 40.1 – Submission, Review, and Approval of Corrective Action Plans: Back
to Table of Contents
40.2 - Corrective Action Plan (CAP) Reports
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
The Initial or Quarterly CAP Report shall include the data explained below using the
excel template located in Section 40.6; in addition to a Field Legend providing field
completion instructions. Findings should be grouped by type of review (i.e. CFO, SSAE
18, A-123 Appendix A, CPIC, etc.). Definitions of CAP report data fields:

A. 	Contractor – The abbreviated name assigned to the Medicare Administrative
Contractor (MAC), Shared System Maintainer (SSM), Data Center (DC), RDS or
MSPRC see tables 2, 3, and 4 in Section 40.3.
B. 	Fiscal Year (XX) – The last two digits of the fiscal year reviewed/audited (e.g.,
FY 2020 would be entered as 20).
C. 	Review/Audit Type – Refer to Section 40.3 Table 1 to identify the code for the
review or audit type performed.
D. 	CAP No. – Sequential three digit number (starting with 001) issued by the
auditor/reviewer (or assigned by the contractor if it is a CPIC material weakness) for each
finding type.
E. 	Jurisdiction Identifier – Applicable to MACs only-refer to Section 40.3 Table 2
for jurisdiction code.
F. 	Repeat CAP – Indicate if original CAP has any repeat CAPs (“Yes”/”No”).
G. 	CAP Repeat Number – For Quarterly CAP reporting, if a finding is repeated or
duplicated in subsequent years or reported in more than one type of review, provide all
other CAP ID Nos. for that issue. Repeat finding numbers listed for a particular finding
shall be an identical issue, not a related or similar issue and have been identified as a
repeat by the auditors in their audit report.
Findings with a repeat finding number shall only be listed once on the CAP report.
Repeat finding numbers shall only be reported in the “CAP ID Number” column in the
Initial CAP Report for new repeat findings identified. For the Quarterly CAP Report, the
“CAP ID Number” column will be populated with the primary (original) finding number
only. The primary finding number is the finding number that was identified first. If in
subsequent audit/review, the same finding is identified by the auditors, the auditors will
assign a finding number applicable to the type of audit/review being conducted, and also
note in the audit report that it is a repeat finding of a prior audit. The auditor should also
note the primary (original) finding number so that the findings can be easily linked.
H. 	Control objective(s) impacted – Required only for SSAE 18 findings, A-123
Appendix A findings, and CPIC material weaknesses. This represents the control
objective number(s) impacted by an identified finding. More than one control objective
may be impacted for each finding but you need to prioritize and limit the control
objectives impacted to no more than five. Note the CMSR number should not be reported
in this field.
I. 	Deficiency Description – A detailed description of the finding as identified by the
auditor/reviewer in their final report or the material weakness as reported in the CPIC.
J. 	Deficiency Classification – This column is reserved for use by the CMS internal
control team.
1. 	CAP ID No. – This field represents the unique identification number assigned to each
deficiency requiring a CAP (formula driven).
2. 	CAP Description – A description of the planned remediation strategy to eliminate or
mitigate the deficiency identified. The CAP should address the root cause of the
deficiency.

3. 	Progress Milestones – Sequentially numbered specific action-oriented steps that
facilitates the CAP progress for each deficiency being remediated. Progress
milestones shall not change once established. Any revision to an original progress
milestone shall be documented in the “2. CAP Description” column and considered
an amendment to the original progress milestone. Any changes to the original CAP
shall be submitted to CMS for approval by the Business Owner. All steps
(milestones) shall be included in one cell.
4. 	Original Target Completion Date – A target completion date must be assigned to
every CAP and progress milestone within the CAP to include (MM/DD/YYYY). The
target date shall not change once it is recorded.
5. 	Revised Target Completion Date – If the original target completion date is revised;
the revised date should be included in this column and the reason for the revision
should be documented in column “2. CAP Description” (MM/DD/YYYY). Note all
changes in the original target completion date shall be submitted to CMS for approval
by the Business owner.
6. 	Actual Completion Date – An actual completion date shall be recorded for every CAP
and progress milestone within the CAP to include (MM/DD/YYYY) the remediation
of the deficiency was validated as effective.
7. 	CAP Status – A status reflecting the disposition of the CAP must be assigned and
updated as necessary for each deficiency being remediated. Status options for
deficiencies assessment include:
i. 	Open – Remediation efforts are in progress and the target completion date
has not passed;
ii. 	Delayed – Remediation efforts are in progress after the original target
completion date has passed. Explanations/justifications for delayed status
must be documented in the CAP;
iii. 	Closed – Pending – Verification and validation efforts have been completed
and the CAP is awaiting closure by the issuing party (e.g., SSAE 18
Auditor, A-123 Assessor).
iv. 	Closed – Validation and verification procedures demonstrate remediation
efforts were adequately addressed, proven effective, and remediation efforts
have been closed by parties authorized to close CAPs (i.e. SSAE 18
auditors, A-123 contractor); and
v. 	Cancelled – Remediation efforts have ceased because the remediation was
recorded inadvertently or erroneously, or it can be demonstrated that the
remediation effort is no longer relevant. Explanations/justifications for
cancelled statuses must be document in the CAP and approved by the
Business Owner.

8. 	CAP Lead 1 – Individual responsible for managing corrective action efforts must be
assigned and documented for each deficiency being remediated.
9. 	CAP Lead 2 – Not applicable to Medicare Contractors.
10. CAP Lead 3 – Not applicable to Medicare Contractors.
11. Executive Sponsor 1 – The senior executive official accountable for the deficiency
and the associated CAP must be documented for each deficiency requiring a CAP.
12. Executive Sponsor 2 – Not applicable to Medicare Contractors.
13. Executive Sponsor 3 – Not applicable to Medicare Contractors.
14. Testing Document Reference – Not applicable to Medicare Contractors.
15. Sport/Prosight Identifier – Not applicable to Medicare Contractors.
16. Root Cause Analysis (RCA) Methodology – RCA is the examination process used to
determine the underlying events(s) that cause the deficiency; the approach technique
used to uncover causes of problems. Also, RCA can be seen as the process utilized to
help identify what, how, and why an event occurred so that steps can be taken to
prevent future occurrences. RCA documentation should be available upon request
from the CAP Lead and include the decision process used to determine the RCA
approach, and all supporting documentation (e.g. walk through documentation,
meeting minutes, various dates analysis, emails, etc.).
17. Not for use by contractor
18. Progress Milestone Status – Each progress milestone must have an assigned status
reflecting its disposition. Status options for deficiencies include:
i. 	Open – Remediation efforts are in progress and the target completion date
has not passed;
ii. 	Delayed – Remediation efforts are in progress and after the original target
completion date has passed. Explanations/justifications for delayed status
must be documented in the CAP;
iii. 	Closed – Pending – Verification and validation efforts have been completed
and the CAP is awaiting closure by the issuing party (e.g., SSAE 18
Auditor, A-123 Assessor).
iv. 	Closed – Validation and verification procedures demonstrate remediation
efforts were adequately addressed, proven effective, and remediation efforts
have been closed by parties authorized to close CAPs (i.e. SSAE 18
auditors, A-123 contractor); and

v. 	Cancelled – Remediation efforts have ceased because the remediation was
recorded inadvertently or erroneously, or it can be demonstrated that the
remediation effort is no longer relevant. Explanations/justifications for
cancelled statuses must be document in the CAP and approved by the
Business Owner.
End Section 40.2 – Corrective Action Plan (CAP) Reports: Back to Table of Contents
40.3 - CMS Finding Numbers
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
Finding Numbers should be assigned using the following instructions. Each section of
digits should be separated by a dash.
A. The first three, four, or five digits are letters, which identify the name of the
contractor. Each contractor is assigned a unique set of letters listed below. Finding
numbers ending with D & J are defined as follows:
• 	End letter “D” represents a DME MAC (e.g. ZZZD or ZZZZD)
• 	End letter “J” represents a A/B MAC (e.g. ZZZJ or ZZZZJ)
B. The second two digits are the last two numbers of the year of the review.
C. The next one digit is a letter to identify the review/audit type.
D. The last three digits are three numbers assigned sequentially to each finding type
beginning with 001.
Table 1 – REVIEW/AUDIT TYPE
Findings resulting from the following types of audits or reviews should be reported using
the Initial and Quarterly CAP Reports. Choose one from the following list:
Review /
Audit Letter
Review / Audit
Description
A 	A-123 Appendix A Non-IT
C 	CPIC (Your Annual Self Certification Package)
E 	CFO EDP Audit
F 	CFO Financial Audit
G 	GAO Review (Financial Reviews)
I 	A-123 Appendix A IT
M 	CMS’ CPIC Reviews
O 	OIG Review HHS / OIG / IT Controls Assessment
P 	CMS’ 1522 and CMBRW Reviews
S 	SSAE 18 Audit
V 	CFO Related NVA / ST
W 	IFM Review
Table 2 – A/B, DME, AND SPECIALTY MAC CONTRACTOR
ABBREVIATIONS

A/B, DME, and Specialty MAC
Contractor Name and Jurisdiction
A/B / DME / SMAC
Abbreviation
Noridian Healthcare Solutions, LLC,
Durable Medical Equipment (DME) MAC JA & JD
NORD
CGS Administrators, LLC,
DME MAC, JB & JC
CGSD
Wisconsin Physicians Service Insurance Corporation,
A/B MAC, J5 & J8
WPSJ
National Government Services, Inc.,
A/B MAC, J6 & JK
NGSJ
CGS Administrators, LLC,
A/B MAC, J15
CGSJ
Noridian Healthcare Solutions, LLC,
A/B MAC, JE & JF
NORJ
Novitas Solutions, Inc.,
A/B MAC, JH & JL
NOVJ
Palmetto GBA, LLC,
A/B MAC, JJ & JM
PGBAJ
First Coast Service Options, Inc.,
A/B MAC, JN
FCSOJ
Palmetto GBA, LLC,
Railroad Retirement Board (RRB) Specialty MAC (SMAC)
PGBAR
Table 3 – CONTRACTOR ABBREVIATIONS
Contractor Name and Area 	Contractor
Abbreviation
Novitas Solutions, Inc.,
Affordable Care Act Exchange Oversight Contractor
NOVA
General Dynamics Information Technology (GDIT),
Benefits Coordination and Recovery Center (BCRC),
Medicare Secondary Payer Recovery Contractor (MSPRC)
BCRC
Palmetto GBA, LLC,
Pricing, Data Analysis, and Coding (PDAC)
PDAC
Performant,
Commercial Repayment Center (CRC), MSPRC
CRC
General Dynamics Information Technology (GDIT),
Retiree Drug Subsidy (Part D Contractor)
RDS
National Government Services Financial Solutions,
Innovation Payment Contractors (IPC)
IPC
Table 4 – SHARED SYSTEM MAINTAINER ABBREVIATIONS
Shared System Maintainer Name and Area 	SSM
Abbreviation
Common Working File Maintainer (CWF) 	CWF

Shared System Maintainer Name and Area 	SSM
Abbreviation
Fiscal Intermediary Standard System (FISS) 	FISS
Multi-Carrier System (MCS) 	MCS
Viable Information Processing Systems (ViPS) Medicare System
(VMS), DME Claims Processing System
VMS
Table 5 – DATA CENTER ABBREVIATIONS
Data Center Name and Area 	DC
Abbreviation
Amazon Web Services (AWS) 	AWS
Companion Data Services (CDS),
Virtual Data Center (VDC)
CDS
Disaster Recovery as a Service (DRaaS)
General Support System (GSS)
DRaaS
Leidos Managed Data Center (LMDC) – Culpepper, VA,
Healthcare Integrated General Ledger Accounting System (HIGLAS)
LMDC
Workload A (Managed by CDS) 	WKLDA
Workload B (Managed by CDS) 	WKLDB
End Section 40.3 – CMS Finding Numbers: Back to Table of Contents
40.4 - Initial CAP Report
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
All initial CAPs shall be reported on the Initial CAP Report. After this initial submission,
CAPs shall be merged onto the Quarterly CAP Report. All CAPs, for the reviews noted
in Section 40, shall be consolidated onto one Quarterly CAP Report. However, if you
have findings for an affiliated DC or SSM shown above, these findings shall also be
reported using the CMS FISMA Controls Tracking System (CFACTS). A separate CAP
report shall be submitted for each contractor, as listed in Section 40.3.
The contractor shall use the Initial CAP Report, as an Excel spreadsheet and add their
data following the steps below. The format of the spreadsheet should not be altered;
however, the column width and row height may be adjusted to accommodate data entry.
Additionally, this electronic file should be labeled Initial CAP Report, should be
identified using the contractor abbreviations found in Section 40.3, and should include
the submission date. For example, the initial CAP Excel file should be named as follows:
Contractor Name 	Example Initial CAP File Name
Healthcare Company Name 	20YYMMDD_HCA_Initial_CAP_Report.xls
The Initial CAP Report template can be found in Section 40.6.

End Section 40.4 – Initial CAP Report: Back to Table of Contents
40.5 - Quarterly CAP Report
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)
The contractor shall use the Quarterly CAP Report, as an Excel spreadsheet and add their
data accordingly, changes are only allowed to be made to the column width and row
height to accommodate data entry.
Quarterly CAP Electronic File Labeling:
The electronic file shall be labeled with the following information:
1. 	Submission Date: Year, Month, and Date (YYYYMMDD)
a. 	1st Quarter FY 20YY: 01/30/20YY = 20YY0130
b. 	2nd Quarter FY 20YY: 04/30/20YY = 20YY0430
c. 	3rd Quarter FY 20YY: 07/30/20YY = 20YY0730
d. 	4th Quarter FY 20YY: 10/30/20YY = 20YY1030
2. 	Contractor Abbreviation & Jurisdiction: See Tables 2-5 from Section 40.3
3. 	File Description: Quarterly_CAP_Report
For example, the Microsoft Excel file names for the 4th Quarterly CAP Reports for FY
20YY due on Wednesday, October 30th , 20YY should be named as follows:
Contractor Name 	Example Quarterly CAP File Name
Healthcare Company Name 	20YY1030_HCA_Quarterly_CAP_Report.xls
The Quarterly CAP Report template can be found in Section 40.6.
End Section 40.5 – Quarterly CAP Report: Back to Table of Contents
40.6 - CMS Initial and Quarterly CAP Report Template
(Rev. 13001, Issued: 12-13-24; Effective: 10-01-24; Implementation: 01-15-25)
The contractor shall use the CMS Initial and Quarterly CAP Microsoft Excel Report
Template for CAP reporting. This template supersedes all prior templates issued, and can
also be obtained via email upon request from: CAPS@cms.hhs.gov.
Additionally, any Initial and Quarterly CAPs questions and or concerns can be submitted
to CAPS@cms.hhs.gov.
CMS CAP Initial &
Quarterly Report Tem

End Sections 40.6 – CMS Initial and Quarterly CAP Report Template and 40 –
Corrective Action Plans: Back to Table of Contents

50 – List of CMS Contractor Control Objectives
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
Control
Number
Control Objectives
Back to Table of Contents
50.1 – A Controls – Information Systems
((Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
Control Objective – Information Systems
A.1 - A.11 	Security Management: Controls provide reasonable assurance that
security management is effective.
A.1 	Controls provide reasonable assurance that management has
established, documented, and approved an entity-wide security
program in accordance with the current CMS Acceptable Risk
Safeguards (ARS), Business Partners Systems Security Manual
(BPSSM), and other applicable policy including that the security
program:
• 	Is monitored and kept up-to-date in accordance with the
current ARS requirements.
• 	Includes requirements to establish a security management
structure that has appropriate independence, authority,
expertise, and resources.
• 	Clearly assigns security responsibilities throughout the
organization.
• 	Ensures that management implements, maintains, and
updates the organization security policy and procedures in
accordance with CMS guidance.
A.2 	Controls provide reasonable assurance that security risks are
periodically assessed and appropriately mitigated in accordance
with the current CMS ARS, BPSSM, and other applicable policy. A
risk assessment and supporting activities of the criticality and
sensitivity of computer operations, including all network
components, IT platforms and critical applications has been
established and updated periodically based on ARS and Federal
requirements. The assessment includes, but may not be limited to,
identification of threats, known system vulnerabilities, system
flaws, or weaknesses that could be exploited by threat sources.
A.3 	Controls provide reasonable assurance that information systems and
resources are categorized based on the potential impact that the loss
of confidentiality, integrity, or availability would have on
operations, assets or individuals in accordance with the current
CMS ARS, BPSSM, and other applicable policy.

Control Objective – Information Systems
A.4 	Controls provide reasonable assurance that a system security plan(s)
(SSP) has been documented, approved, and reviewed by
management in accordance with the current CMS ARS, BPSSM,
and other applicable policy. The SSP covers all major facilities and
operations supporting the CMS Medicare program and is updated
and maintained within CFACTS in accordance with the ARS and
current version of the CMS Risk Management Handbook (RMH).
A.5 	Controls provide reasonable assurance that management develops
and maintains a current inventory of hardware, software, platforms,
information systems, and other tools / devices that support the
Medicare program in accordance with the current CMS ARS,
BPSSM, and other applicable policy.
A.6 	Controls provide reasonable assurance that security related
personnel-policies are implemented that include performance of
background investigations (initial and / or periodic) in accordance
with the current CMS ARS, BPSSM, and other applicable policy.
A.7 	Controls provide reasonable assurance that security related
personnel-policies are implemented that include transfer and
separation procedures which require:
• 	Review and appropriate update, if necessary, of logical and
physical access rights for transferred personnel.
• 	Exit interviews, return of property, such as keys and ID
cards, timely notification to security management of
separations, removal of physical and logical access to
systems and escorting of separated personnel out of the
facility.
Performance of transfer and separation processes are in accordance
with the current CMS ARS, BPSSM, and other applicable policy.
A.8 	Controls provide reasonable assurance that personnel including
employees, contractors, and vendors, are aware of security policies
and procedures. Initial security awareness training, ongoing
security awareness training, and role specific training for
individuals with significant security responsibilities is documented,
completed, and monitored by management. The security training
program and content of training are in accordance with the current
CMS ARS, BPSSM, and other applicable policy.

Control Objective – Information Systems
A.9 	Controls provide reasonable assurance that management has
implemented appropriate risk management and security assessment
and authorization (SA&A) processes in accordance with the current
CMS ARS, BPSSM, and other applicable policy including the
following:
• 	SA&A policies and procedures are documented, kept up-to-
date, maintained and approved by management.
• 	Security Assessments are planned and conducted
• 	A corrective action management process is in place that
includes planning, implementing, evaluating, and fully
documenting remedial action addressing findings noted from
all security audits and reviews of IT systems, components,
and operations. Plan of Action and Milestones (POA&Ms)
and corrective action plans are developed and monitored to
address weaknesses.
• 	Authorizing Official (AO) authorizes the information system
for processing prior to commencing any operations and
periodically thereafter.
A.10 	Controls provide reasonable assurance that management
continuously monitors the effectiveness of the security program
including security operations and completion of vulnerability
assessments in accordance with the current CMS ARS, BPSSM, and
other applicable policy.
A.11 	Controls provide reasonable assurance that external third party
activities of sub-service organizations (i.e. sub-contractors) are
secure, documented, and monitored in accordance with the current
CMS ARS, BPSSM, and other applicable policy.
A.12 - A.20 	Access Controls and Segregation of Duties: Controls provide
reasonable assurance that access to computer resources (data,
equipment, and facilities) is reasonable and restricted to authorized
individuals and that incompatible duties are effectively segregated.
A.12 	Controls provide reasonable assurance that access, including remote
access, to significant computerized applications (such as claims
processing), accounting systems, systems software, and Medicare
data are appropriately authorized, documented, reviewed, and
monitored and includes approval by resource owners, procedures to
control emergency and temporary access and procedures to share
and properly dispose of data. Procedures are performed timely and
in accordance with the current CMS ARS, BPSSM, and other
applicable policy.
A.13 	Controls provide reasonable assurance that inactive logical access
accounts and accounts for separated individuals are disabled and / or
removed in a manner that satisfies the current CMS ARS, BPSSM,
and other applicable policies.

Control Objective – Information Systems
A.14 	Controls provide reasonable assurance that multifactor
authentication is implemented in accordance with the current CMS
ARS, BPSSM, and other applicable policy.
A.15 	Controls provide reasonable assurance that password based
authentication is configured in accordance with the current CMS
ARS, BPSSM, and other applicable policy.
A.16 	Controls provide reasonable assurance that access to sensitive
system resources and privileged accounts / functions are restricted
to individuals with a need-to-know and activities are appropriately
logged and monitored. Additionally, Management segregates
incompatible duties between various system and Medicare
operations functionality which is supported by appropriate
documentation, approvals, and monitoring.
A.17 	Controls provide reasonable assurance that management identifies
system functions, events, and access permissions that require audit
logging and implements an effective audit log monitoring capability
in accordance with the current CMS ARS, BPSSM, and other
applicable policy.
A.18 	Controls provide reasonable assurance that management has
documented, implemented, and approved an effective security
operations and incident response program which includes processes
to:
a) 	identify and log suspicious activity, sensitive and
privileged functions, and potential security events /
incidents,
b) 	monitor systems and networks audit logs, unusual
activity, and / or intrusion attempts,
c) 	correlate log data,
d) 	analyze potential incidents, and
e) 	report on security events, incidents, and intrusions in
accordance with the current CMS ARS, BPSSM, and
other applicable policy.
A.19 	Controls provide reasonable assurance that physical access to
sensitive IT areas (such as Medicare facilities, data centers and
system hardware) by all employees, contractors, vendors, and/ or
visitors is appropriately authorized, documented, and reviewed in
accordance with the current CMS MAC ARS, BPSSM, and other
applicable policy.
A.20 	Control number A.20 reserved. Control not in use as of this IOM
revision.
A.21 - A.26 	Configuration Management: Controls provide reasonable
assurance that changes to information system resources are
authorized and systems are configured and operated securely and as
intended.

Control Objective – Information Systems
A.21 	Controls provide reasonable assurance that configuration
management policies, plans, and procedures are established,
documented, kept up-to-date, and approved in accordance with the
current CMS ARS, BPSSM, and other applicable policy including
the following:
• 	A System Development Life Cycle (SDLC) methodology is
documented and in use and aligns with the CMS Target Life
Cycle (TLC).
• 	Change management policies and procedures that have been
developed, documented, and implemented include
documented testing and approval of changes for regular and
emergency changes.
A.22 	Controls provide reasonable assurance that Medicare application
and related systems software development and maintenance
activities (e.g. quarterly releases, off-quarterly releases, and
emergency changes) are authorized, documented, tested, and
approved in accordance with the current CMS ARS, BPSSM, and
other applicable policy.
A.23 	Controls provide reasonable assurance that access to program
libraries is properly restricted and movement of programs among
libraries is controlled.
A.24 	Controls provide reasonable assurance that management has
established and consistently monitors information security related
configuration for information technology in accordance with the
current CMS ARS, BPSSM, and other applicable Federal standards
and best practices including the following:
• 	Develops and maintains a security configuration baseline for
information technology that aligns with CMS requirements
and industry standards.
• 	Reviews the IT environment against the baseline.
• 	Remediates misconfigurations in a timely fashion.
• 	For misconfigurations that cannot be remediated timely, a
plan of action and milestones (POA&M) or other corrective
action plan is created, documented, and approved.
• 	Deviations from CMS or other standards are analyzed and
approved.
• 	Results of periodic assessments are reported to CMS.

Control Objective – Information Systems
A.25 	Controls provide reasonable assurance that management has
established a vulnerability management program in accordance with
the current CMS ARS, BPSSM, and other applicable policy that
includes:
• 	Scanning to identify vulnerabilities and unauthorized and
unsupported software.
• 	Disabling / removing unauthorized and unsupported
software in a timely manner.
• 	Remediation of vulnerabilities in a timely manner.
• 	Creation of corrective action plans or POA&Ms if
vulnerabilities cannot be remediated timely.
Further, software is updated (patched) in a timely fashion to protect
against vulnerabilities in accordance with the current CMS ARS,
BPSSM, and other applicable policy.
A.26 	Controls provide reasonable assurance that an effective virus, spam
and spyware protection process is documented, approved, and
implemented in accordance with the current CMS ARS, BPSSM,
and other applicable policy.
A.27 - A.28 	Contingency Planning: Controls provide reasonable assurance that
contingency planning:
(1) protects information resources and minimizes the risk of
unplanned interruptions and
(2) provides for recovery of critical operations should
interruptions occur.
A.27 	Controls provide reasonable assurance that information system
backup and recovery procedures have been implemented in
accordance with the current CMS ARS, BPSSM, and other
applicable policy including:
• 	Development, approval and maintenance of an up-to-date
contingency plan and / or disaster recovery plan.
• 	Periodic testing of contingency and / or disaster recovery
plans.
• 	Updating plans based on lessons learned.
A.28 	Controls provide reasonable assurance that appropriate environment
protections for sensitive areas such as data centers are implemented
in accordance with the current CMS ARS, BPSSM, and other
applicable policy.
End Section 50.1 – A Controls – Information Systems: Back to Table of Contents
50.2 – B Controls – Claims Processing
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)

B – Control
Number
Control Objective – Claims Processing
B.1 	The Medicare claims processing system tracks each claim from
receipt to final resolution.
B.2 	Controls provide reasonable assurance that fee-for-service
information system edits and / or validations are configured in
accordance with CMS guidelines including:
• 	Management maintains a current baseline of edit
configurations in accordance with CMS guidelines.
• 	Management assesses the current configuration of edits
against the baseline periodically.
• 	For misconfigured edits Management remediates the
configuration in a timely fashion.
• 	Management reports results of reconciliations / reviews to
CMS periodically.
(Maintainer Only. Applicable for A-123 Reviews)
B.3 	The system generates an audit trail with respect to each claim,
adjustment, or other related transaction. Such audit trail shall
include the results of each applicable claim edit.
(Maintainer Only. Applicable for A-123 Reviews)
B.4 	Each claim is adjudicated in accordance with CMS instructions.
B.5 	Claims are reopened in accordance with CMS guidelines and
readjudicated in accordance with CMS instructions.
B.6 	Claim payment amounts are calculated in accordance with CMS
instruction. Fee schedules are properly received, logged, and
changed in the system and monitored, and applied in accordance
with CMS instructions.
B.7 	The system shall identify and deny duplicate claims in accordance
with CMS instructions.
(Maintainer Only. Applicable for A-123 Reviews)
B.8 	Claims are properly aged from the actual receipt date to the actual
date of payment in compliance with CMS instructions.
B.9 	The system shall detect apparent fraudulent or abusive practices in
accordance with CMS instructions. Personnel are trained to detect
fraudulent and abusive practices and, in accordance with CMS
instructions, to deter such practices. Any such apparent fraudulent
or abusive practices as are identified are documented and reported
in accordance with CMS instructions.

End Section 50.2 – B Controls – Claims Processing: Back to Table of Contents
50.3 – C Controls – Appeals
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
C – Control
Number
Control Objective – Appeals
C.1 	Medicare Part A and Part B redeterminations processed by MACs
are processed based on CMS instructions, appropriately logged and
completed within legislatively mandated time frames and tracked to
meet CMS guidelines. (Does not pertain to MSPRC. Refer to C.3
for MSPRC control objective.)
C.2 	Medicare Part B redeterminations processed by MACs are
processed based on CMS instructions, appropriately logged and
completed within legislatively mandated time frames and tracked to
meet CMS guidelines. (Does not pertain to MSPRC. Refer to C.3
for MSPRC control objective.)
C.3 	Redeterminations processed by the MSPRC are processed based on
CMS instructions, appropriately logged and completed within
legislatively mandated time frames and tracked to meet CMS
guidelines.
C.4 	Qualified Independent Contractor (QIC) request for case files are
handled in compliance with CMS time frames.
C.5 	Effectuations are processed as directed by CMS guidelines.
C.6 	Contractor communications are clear and in compliance with CMS’
instructions to include specific communications such as
acknowledgement letters, decision letters, and information on
additional appeal rights, etc.
End Section 50.3 – C Controls – Appeals: Back to Table of Contents
50.4 – D Controls – Beneficiary / Provider Services
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)

D – Control
Number
Control Objective – Beneficiary / Provider Services
D.1 	Personally identifiable health information, which is used and
disclosed in accordance with the Privacy Act, is handled properly.
(Internet Only Manual (IOM) Chapter 2-20.1.8-Beneficiary
Customer Service; IOM Pub. 100-09, Chapter 6-Provider Customer
Service Program).
D.2 	Beneficiary and Provider written inquiries are retained and handled
accurately, appropriately, and in a timely manner. (IOM Chapter 2-
20.2 – Written Inquiries; IOM Pub. 100-9, Chapter 6-Provider
Customer Service Program).
D.3 	Telephone inquiries are answered timely, accurately, and
appropriately. (IOM Chapter 2-20.1 Telephone Inquiries; IOM Pub.
100-09, Chapter 6-Provider Customer Service Program).
End Section 50.4 – D Controls – Beneficiary / Provider Services: Back to Table of
Contents
50.5 – E Controls – Complementary Credits
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
E – Control
Number
Control Objective – Complementary Credits
E.1 	Contractors shall report cash received from the BCRC for COBA
crossover claims as the cash is received in the CMS Analytical,
Reporting, & Tracking system (CMS ART).
E.2 	Control number E.2 reserved. Control not in use as of IOM revision
number 228.
End Section 50.5 – E Controls – Complementary Credits: Back to Table of Contents
50.6 – F Controls – Medical Review (MR)
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)

F – Control
Number
Control Objective – Medical Review (MR)
F.1 	Contractor shall use the Program Integrity Manual (PIM)
guidelines, data analysis (prior year and most current) and Medical
Review (MR) results including Strategy Analysis Report (SAR),
and Comprehensive Error Rate Testing (CERT) results to develop
and update the Improper Payment Reduction Strategy (IPRS). The
problem-focused outcome-based IPRS report shall address provider
specific problems, and service-specific problems only in the rare
circumstance it is approved by CMS. The IPRS shall focus its
medical review activities toward the goal of reducing the claims
improper payment rate. All work performed by the MR unit shall be
identified in the IPRS and targeted based on the contractor’s
prioritized problem list or as directed by CMS.
F.2 	Contractor shall budget and perform the MR workloads throughout
the year as established in the IPRS. MACs shall report workload
volume, and costs associated with MR activities in CMS Analysis,
Reporting, and Tracking (ART) systems or as directed by the COR.
MACs shall explain any significant fluctuations in workload or
costs in the Monthly Status Report and SAR.
F.3 	Contractor shall perform data analysis continuously to identify
potential problems such as aberrant billing practices, potential of
over-utilization areas, and changes in patterns of care to target
medical review activities to reduce the claims improper payment
rate. Data from a variety of sources must be used for data analysis.
At a minimum, sources include: contractor internal data; CMS
program vulnerability alerts such as Quarterly Vulnerability
Technical Direction Letters that require corrective action reporting,
FATHOM/PEPPER and other comparative billing reports; results
from medical review studies performed by specialty MR or Program
Integrity contractors; and other national or regional sources such as
Office of Inspector General (OIG) reports, Government
Accountability Office (GAO) reports, enrollment data, and fraud
alerts.
F.4 	Contractor shall ensure that effective MR edits are developed and
implemented as a result of data analysis findings and policies. The
effectiveness of each MR edit shall be analyzed and measured by
tracking the denial rate, appeals reversal rate, basis of the appeals
reversal, and the dollar return on the cost of operationalizing the edit
(savings), and success of edit towards billing behavior correction.
MR edits shall be modified, deleted, or deactivated when they are
determined to no longer be effective.

F – Control
Number
Control Objective – Medical Review (MR)
F.5 	Contractor shall utilize the Progressive Corrective Action (PCA)
process and Targeted Probe and Educate (TPE) process, in
accordance with the Pub. 100-08 and CMS instructions, to drive
MR activity (i.e., data analysis, claims review, medical review
education).
PCA would only apply to MR activity performed before TPE was
started by the MAC and/or in a CMS approved MR activity.
F.6 	Contractor shall be capable of identifying the status of each claim
subjected to medical review at any time (and all claims must be
processed timely for closure in accordance with Pub. 100-08
instructions).
F.7 	Control number F.7 reserved. Control not in use as of IOM revision
number 278.
F.8 	The MR unit shall effectively collaborate with Provider Outreach
and Education (POE) by referring educational needs that will
address existing program vulnerabilities and emerging problems
identified during the MR process conducted throughout the fiscal
year.
F.9 	Contractor shall implement and utilize a Provider Tracking System
(PTS) to track all informational provider contacts made by medical
review and all educational referrals submitted to POE and external
organizations.
F.10 	Contractor shall ensure that there is adequate internal networking
and sharing of information, and appropriate collaborative actions are
taken as a result, between MR and other business functions such as
Appeals, Audits, POE, and inquiries and external organizations such
as the Zone Program Integrity Contractors (ZPIC), Unified Program
Integrity Contractors (UPIC), Recovery Auditors, and Quality
Improvement Organizations (QIOs).
F.11 	Contractor shall apply quality assurance processes to all elements of
the MR Strategy and to all aspects of program management, data
analysis, edit effectiveness, problem identification, and claim
adjudication.
F.12 	Contractor shall effectively comply with all of the MR requirements
of the Joint Operating Agreement (JOA) with the PSCs/ZPICs and
Recovery Auditors, and other entities as directed by CMS.

F – Control
Number
Control Objective – Medical Review (MR)
F.13 	Contractor shall institute a corrective action reporting process for
claims-specific errors and vulnerabilities in accordance with PIM
3.7.5. For each issue, MACs shall report interim actions, final actions,
and action dates.
End Section 50.6 – F Controls – Medical Review (MR): Back to Table of Contents
50.7 – G Controls – Medicare Secondary Payer (MSP)
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
G – Control
Number
Control Objective – Medicare Secondary Payer (MSP)
G.1 	Medicare Administrative Contractor internal quality controls are
established and maintained that ensure timely and accurate
processing of secondary claims submitted, including paper MSP
claims with a primary payer’s explanation of benefits (EOB) or
remittance advice (RA). This includes utilization of the MSPPAY
module, resolving all MSP edits (including 6800 codes*), creation
of “I” records and resolving suspended claims in accordance with
CMS instructions at Publication 100-05 Chapter 5 and 6. Contractor
internal systems used to process MSP claims are updated via the
Common Working File (CWF) automatic notice in an automated
fashion. Suspended claims that require manual intervention are
corrected and reviewed by the appropriate suspense staff.
This control objective does not pertain to BCRC or the CRC
contractors.

G – Control
Number
Control Objective – Medicare Secondary Payer (MSP)
G.2 	Audit trails for MSP receivables are created and maintained. An
audit trail should include details of the source of the receivable,
correspondence in date order, reasons for adjustments, referral to
treasury, collection of the debt, and any information regarding the
establishing, reconciling and resolving a receivable for an
outstanding debt. All applicable systems (e.g. HIGLAS) should be
updated accurately and timely, and be accessible to the appropriate
individuals.
This control objective pertains to MACs, BCRC, and CRC
Contractors.
G.3.1 	Contractors ensure compliance with all CMS instructions and
directives relating to MSP Investigations by the Benefit
Coordination & Recovery Center (BCRC). This includes the MACs
transmitting appropriate, timely and complete Electronic
Correspondence Referral System (ECRS) submissions in
accordance with Publication 100-05, CWF Assistance Requests and
ECRS MSP inquiries to the BCRC as a result of the receipt of a
phone call, correspondence, claim or unsolicited check/voluntary
refund. All references must be maintained in an area accessible to
MSP staff and must be available for CMS review.
*The ECRS user guide is located at: Publication # 100-05 The
Electronic Correspondence Referral System on the Web (ECRS
Web) User Guide.
This control objective does not pertain to the CRC Contractor
G.3.2 	The Commercial Repayment Center (CRC) must transmit
appropriate, timely and complete ECRS submissions and CWF
Assistance Request as a result of a phone call, inquiry or
correspondence received to ensure debtor information is accurate.
The Benefits Coordination and Recovery Center (BCRC) must
respond to all ECRS Inquiry and Assistance Requests for all
contractors.
This control objective pertains to the CRC and the BCRC.

G – Control
Number
Control Objective – Medicare Secondary Payer (MSP)
G.4 	Contractors identify and track all incoming correspondence to
ensure timely acknowledgement, response, and priority compliance
with the Statement of Work (SOW) for MACs and other Medicare
Contractors. All correspondence includes written inquiries,
including letters, faxes, telephone inquiries, e-mails and any other
forms of communication to support and complete a
correspondence/inquiry action, shall be handled consistently for
accuracy, professionalism and timeliness. These tracking
mechanisms should include the ability to track ECRS submissions
when awaiting response/status from the BCRC, or further actions
such as claims adjustments after the BCRC has completed their
investigation.
This control objective pertains to MACs, BCRC, and CRC
Contractors.
G.5 	Contractors shall have quality assurance measures in place to ensure
the accuracy of the implementation of any CMS directive or any
required work process/deliverable expressed in the SOW.
Contractors shall also provide evidence that the results from quality
assurance checks are documented to identify errors and that training
venues are implemented to prevent the reoccurrence of these errors.
This control objective pertains to MACs, BCRC, and CRC
Contractors.

End Section 50.7 – G Controls – Medicare Secondary Payer (MSP): Back to Table of
Contents
50.8 – H Controls – Administrative
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
H – Control
Number
Control Objective – Administrative
H.1 	For contracts expected to exceed $6 Million in value and the
performance period is 120 days or more, Contractors shall have a
written Contractor Code of Business Ethics and Conduct as required
by the Federal Acquisition Regulation (FAR) 3.1004 and FAR
52.203-13. To promote compliance with such code of business
ethics and conduct and to ensure that all employees comply with
applicable laws and regulations, contractors shall assign oversight
responsibility to a member at a sufficiently high level.
H.2 	Procurements are awarded and administered in accordance with
CMS regulations, CMS general instructions and the Federal
Acquisition Regulation.
H.3 	Control number H.3 reserved. Control not in use as of IOM revision
number 278.
H.4 	CMS management structure provides for efficient contract
performance.
H.5 	Records shall be maintained/retained according to the National
Archives and Records Administration (NARA) guidelines, CMS
implementing guidelines and other requirements, FAR guidelines
and other Federal requirements, as may be identified.
H.6 	Contractor’s internal controls provide reasonable assurance that
certain regularly scheduled processes required to support the CMS
contractor’s continuity of operations in the event of a catastrophic
loss of relevant, distinguishable Medicare business unit facilities are
performed as scheduled.
End Section 50.8 – H Controls – Administrative: Back to Table of Contents
50.9 – I Controls – Provider Audit
(Rev. 331, Issued: 11-15-19, Effective: 10-01-19, Implementation: 12-17- 19)

I – Control
Number
Control Objective – Provider Audit
I.1 	Interim, tentative and PIP payments to Medicare providers are
established, monitored and adjusted, if necessary, in a timely and
accurate manner in accordance with CMS general instructions and
provider payment files are updated in a timely and accurate manner.
Adjustments to interim payments shall be made to ensure that
payments approximate final program liability within established
ranges. Payment records are adequately protected. All applicable
CMS systems are properly updated.
I.2 	Information received by the contractor from CMS or obtained from
other sources regarding new providers, change of ownership for an
existing provider, termination of a provider, or a change of
Medicare Administrative Contractor (MAC) are identified,
recorded, and processed in System Tracking for Audit and
Reimbursement (STAR) in a timely and accurate manner and
reflected in subsequent audit activities.
I.3 	Provider Cost Reports are properly submitted and accepted in
accordance with CMS’ regulations, policies, and instructions.
Appropriate program policies and instructions are followed in
situations where the provider did not file a cost report. Cost report
submission information is timely and properly forwarded to the
proper CMS Systems.
I.4 	Desk review procedures and work performed are documented and
are sufficient to obtain an accurate review of the submitted cost
report and are in accordance with the Uniform Desk Review (UDR)
Program. Documentation is established and maintained to identify
situations requiring a limited desk review or a full desk review.
I.5 	Notices of Program Reimbursement (NPR) are issued accurately
and timely to providers and include all related documentation (e.g.
an audit adjustment report, copy of the final settled cost report).
I.6 	Inputs to mandated systems regarding provider audit, settlement,
reopening, appeals, and reimbursement performance (STAR) are
complete, accurate and in compliance with program instructions.
Documentation supporting reports and inputs shall be maintained.
I.7 	The contractor’s cost report reopening process is conducted in
accordance with CMS regulations and program policy.
I.8 	Provider appeals (including both the Provider Reimbursement
Review Board (PRRB) and Contractor Appeals) are handled
appropriately. Jurisdictional questions are addressed and PRRB
timeframes for submission are observed.

I – Control
Number
Control Objective – Provider Audit
I.9 	Control number I.9 reserved. Control not in use as of IOM revision
number 278.
I.10 	An internal quality control process has been established and is
functioning in accordance with CMS instructions to ensure that
audit work performed on providers’ cost reports is accurate, meets
CMS quality standards, and results in program payments to
providers which are in accordance with Medicare law, regulations
and program instructions.
I.11 	Cost reports are scoped and selected for audit or settled without
audit. Audit plans are approved by the Audit & Reimbursement
(A&R) Business Function Lead and adhere to CMS guidelines and
instructions.
I.12 	The contractor’s audit process is conducted in accordance with
CMS manual instructions and timelines, i.e., timeframes for
issuance of the engagement letter, documentation requests, pre-exit
and exit conferences, and settlement of the audited cost report.
I.13 	Communications of audit programs, desk review programs, CMS
audit and reimbursement policies, and other audit related
instructions are timely and accurately communicated to all
appropriate audit staff.
I.14 	The contractor’s audit staff maintains its necessary knowledge and
skills by completing continuing education and training (CET)
required by CMS instructions, and documentation is maintained to
support compliance by each staff member.
I.15 	Supervisory reviews of the audit and settlement process are
conducted and the policies and procedures for these reviews are
communicated to all supervisors in accordance with CMS program
instructions.
I.16 	All cost reports where fraud and abuse is suspected shall be referred
to the Unified Program Integrity Contractor (UPIC) in accordance
with CMS and contractor instructions.
I.17 	The contractor has processes and procedures in place to document
that supervisory reviews by provider audit department management
were completed on all provider audit Corrective Action Plans
(CAPs) from the establishment of the CAPs to the implementation
and validation of the CAPs.

I – Control
Number
Control Objective – Provider Audit
I.18 	HITECH incentive payments for Medicare subsection (d) and critical
access hospitals are calculated properly, in accordance with CMS’
regulations, policies, and instructions. Data is properly entered into the
FISS screens in order for the HITECH system to generate the incentive
payments.
I.19 	Notices of CAP Determination Letter are issued accurately and
timely to Hospices and include all related documentation.
End Section 50.9 – I Controls – Provider Audit: Back to Table of Contents
50.10 – J Controls – Financial Reporting Review Requirements
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)
Transactions for Medicare accounts receivable, payables, expenses shall be recorded and
reported timely and accurately, and financial reporting shall be completed in accordance
with CMS standards, Federal Acquisition Regulation (FAR), Financial Accounting
Standards Advisory Board, Cost Accounting Standards, and Generally Accepted
Accounting Principles (GAAP). For the following control objectives, the review shall
focus on the following areas:
• 	Cost Report Settlement Process;
• 	Contractor Financial Reports:
o 	Form CMS H751B (Status of Accounts Receivable – Excel Template)
o 	HIGLAS-CMS Balance Sheets and Income Statements,
o 	HIGLAS-CMS Treasury Report on Receivables (TROR),
o 	HIGLAS-CMS CNC Eligibility,
o 	HIGLAS-CMS MSP Recovery GHP/Non-GHP Receivables,
o 	Reconcile the HIGLAS accounts receivable balance and activity to the
following reports/registers:
 	CMS Beginning Balance Report,
 	CMS Transaction Register,
 	CMS Applied Collection Register,
 	CMS Adjustment Register,
 	CMS AR Overpayments Report,
 	CMS Interest and Late Charges,
 	CMS AR Balance Detail,
 	CMS Written-Off/CNC,
• 	Form CMS 1521 (Schedule of Letter of Credit Draws – Excel Template)
• 	Form CMS 1522 (Monthly Bank Reconciliation – Excel Template)
• 	Reconciliation of Cash Balances and Cash Receipts.
• 	HIGLAS-CMS Trial Balance and General Ledger,
• 	HIGLAS-CMS Cash Management Reports,
• 	HIGLAS-CMS Accounts Payable Reports:

o 	AP Detail Schedule of Entitlement Payables Due & Payable-
Refunds Payable (216006),
o 	AP Detail Schedule of Entitlement Payables Due & Payable-Top
Offsets (216097),
o 	AP Detail Schedule of Entitlement Payables Due & Payable-
Settlement Matching (216098),
o 	AP Detail Schedule of Entitlement Payables Due & Payable-
Third Party Payer (216099),
• 	HIGLAS-Contractor’s Monthly Bank Reconciliation Worksheet.
J – Control
Number
Control Objective – Financial
J.1 	Financial statements and reports should include all authorized
transactions that occurred for the period reported.
J.2 	Valid financial transactions are prepared and approved by
authorized personnel in accordance with management and CMS’
policies.
J.3 	Recorded and processed transactions are correctly classified,
maintained, summarized and reconciled. In addition, transactions
shall be properly supported.
J.4 	Segregation of duties exists and are implemented within the area of
financial reporting (i.e., there shall be separate authorization, record
keeping, and custody).
J.5 	All assets and liabilities exist, are properly valued, and are correctly
recorded in the books/records of the contractor.
J.6 	Accounts receivable and accounts payable balances be properly
valued and aged appropriately in accordance with CMS policies.
J.7 	Contractor Financial Reports are accurate, signed/certified by
authorized individuals and presented timely to CMS in accordance
with Publication (Pub) 100-06 of the Medicare Financial
Management Manual, Chapter 5, Financial Reporting, Section 230
and/or the HIGLAS Certification Statement.
J.8 	Banking information relevant to Medicare processing is accurately
stated and conforms to the tripartite agreement.
J.9 	Collection Reconciliation Acknowledgement Forms (CRAF) and/or
facsimiles are accurate, correctly classified, maintained and
reconciled. In addition, CRAFs and/or facsimiles shall be
signed/approved by authorized individuals and timely sent to CMS
in accordance with CMS’s policies.
End Section 50.10 – J Controls – Financial Reporting Review Requirements: Back to
Table of Contents
50.11 – K Controls – Debt Referral (MSP and Non-MSP)
(Rev. 11133, Issued:11-30-21, Effective: 10-01-21, Implementation: 12-31-21)

K – Control
Number
Control Objective – Debt Referral (MSP and Non-MSP)
K.1 	Procedures are documented and followed to identify a debt eligible
for referral to Treasury for cross servicing and Treasury Offset
Program (TOP) prior to the debt becoming 120 days delinquent.
These procedures are written and available for review. Debts
eligible for referral and debts ineligible for referral are properly
reported on the appropriate CMS Forms 751, Contractor Financial
Reports, Status of Accounts Receivable, or the Treasury Report on
Receivables and Debt Collection Activities Report. For MSP debt,
see Internet Only Manual (IOM), Pub 100-05, MSP Manual,
Chapter 7, Section 60 and Chapter 4, Debt Collections.
K.2 	Intent to Refer Letters (ITRs) for eligible debt are sent in a timely
manner in accordance with CMS instructions. Timeframes for each
type of debt can be found in the IOM, Chapter 4, Debt Collections.
K.3 	Responses to the ITR letter are handled timely according to CMS
instructions. Appropriate systems are updated to reflect any changes
to the eligibility status of the debt and these statuses are properly
reported on the financial reporting forms outlined in K.1.
Procedures are in place to handle undeliverable letters. Refer to the
IOM, Chapter 4, Debt Collections.
K.4 	All contractors review the system generated HIGLAS CMS Debt
Management (CMSDM) Return to Agency (RTA) report and update
HIGLAS accordingly to ensure appropriate debts are referred to
Treasury as follows:
• 	CMS contractors who have not transitioned to HIGLAS,
including the Administrative Program Accounting (APA)
line of business, ensure that the HIGLAS Debt Management
Module is updated timely for debt referrals as needed.
• 	HIGLAS contractors ensure that the HIGLAS AR
transactions are updated timely for debt referrals as needed.
K.5 	When there is a change to a debt that has been referred for cross
servicing, CMS contractors who have not transitioned to HIGLAS,
including the APA line of business, update the HIGLAS Debt
Management Module to initiate recalls, collections, and adjustments
timely and accurately in accordance with CMS instructions.
HIGLAS contractors initiate recalls, collections and adjustments
timely and accurately by updating the HIGLAS Accounts
Receivable (AR) transactions as needed.

K – Control
Number
Control Objective – Debt Referral (MSP and Non-MSP)
K.6 	All CMS contractors ensure that the CMSDM Treasury Collection
Report Spreadsheets are completed timely in accordance with CMS
instructions, and the appropriate source systems are updated as
follows:
• 	CMS contractors who have not transitioned to HIGLAS,
including the APA line of business, ensure that the HIGLAS
Debt Management Module is updated timely with
refund/adjustment information as needed.
• 	HIGLAS contractors, including the APA line of business,
ensure that the HIGLAS AR transactions are updated timely
and accurately with the refund/adjustment information as
needed.
K.7 	Treasury Cross-Servicing Dispute Resolution forms are researched,
resolved, and responded to Treasury timely in accordance with
CMS instructions. Procedures are in place and are being followed to
respond to these disputes/inquiries, update the appropriate system,
and properly report the status and balance of the debt in the
financial reporting forms.
K.8 	All CMS contractors ensure that the CMSDM RTA report
spreadsheets are completed timely in accordance with CMS
instructions and debts listed on the spreadsheet are properly
reported on the financial reporting forms in accordance with CMS
instructions. CMS contractors who have not transitioned to
HIGLAS, including the APA line of business, follow the RTA
Interface and Report instructions in the HIGLAS Debt Management
Module training guide.
K.9 	Contractors ensure that debts have the correct status when the debt
is referred to Treasury and retains this correct status while at
Treasury.
End Section 50.11 – K Controls – Debt Referral (MSP and Non-MSP): Back to Table of
Contents
50.12 – L Controls – Non-MSP Debt Collection
(Rev. 10614, Issued: 03-23-21, Effective: 10-01-20, Implementation: 04-22-21)

L – Control
Number
Control Objective – Non-MSP Debt Collection
L.1 	All overpayments that meet the applicable threshold should be
demanded. Demand letters initiate the collection of a provider debt
as well as inform the provider of the existence of the debt, their
appeal rights with respect to the debt, and the ramifications if the
debt is not paid or an ERS agreement is not reached within a
specified time period in accordance with CMS instructions. The
content of manually created demand letters are reviewed and
approved according to CMS guidelines. The demand letter shall be
issued, printed mailed timely, and maintained, in accordance with
CMS instructions at Pub 100-06, chapters 3 and 4.
L.2 	Extended Repayment Schedules (ERSs) shall be analyzed for
approval or denial by a supervisor in accordance with CMS
instructions. The supervisor’s review includes monitoring all
approved ERSs, the complete financial analysis of the provider’s
application, compliance with the ERS, and the referral to CMS
when necessary in accordance with CMS instructions at Pub 100-
06, Chapters 3 and 4.
L.3 	Interest is calculated and applied correctly and timely in accordance
with CMS instructions at Publication 100-06, Chapters 3 and 4. The
interest rate is updated in accordance with the notice of the new
interest rate for Medicare Overpayments and Underpayments
notification. Interest changes are updated in all applicable systems.
L.4 	Bankruptcy cases are handled in accordance with CMS instructions
and instructions given by the Office of General Counsel (OGC). An
audit trail of the overpayment shall exist before and after the
bankruptcy filing to ensure that Medicare’s best interest can be
represented by OGC. Contractors shall maintain, track, and update
the status of a bankruptcy in accordance with CMS instructions at
Pub 100-06, Chapters 3 and 4.
L.5 	Provider debt is collected timely, completely, and accurately with
an appropriate audit trail of all collection activity and attempts of
collection activity in accordance with CMS instructions at Pub 100-
06, Chapters 3 and 4.
L.6 	Control number L.6 reserved. Control not in use as of IOM revision
number 214.
L.7 	Timely review and processing of all 838 Credit Balance Reports.
Ensure that all reported credit balances are collected and properly
processed in accordance with CMS instructions in accordance with
CMS instructions at Pub 100-06, Chapter 12.

L – Control
Number
Control Objective – Non-MSP Debt Collection
L.8 	For overpayments subject to the limitation on recoupment under the
Medicare Modernization Act (MMA), recoupment is stopped within
the set timeframes for the receipt of requests filed for the
redetermination and reconsideration levels of appeal. Once both
levels of appeal are completed and CMS prevails, collection
activities, including revised demand letters and internal recoupment
may resume within the timeframes set forth in accordance with 42
CFR section 405.379 and Publication 100-06 Chapter 3, Section
200.
L.9 	Contractors shall calculate the 935 interest on favorable and/or
partially favorable decisions determined by the ALJ and subsequent
appeal levels. The calculations shall be completed within the set
timeframes on the recouped amounts that were applied to the
principal balance only. Voluntary payments are excluded for
purposes of the calculation of 935 interest. After the amount is
calculated, the Contractor shall issue a refund check to the provider.
Contractors shall update, track, and maintain the appeal status on
overpayments in the applicable systems in accordance with 42 CFR
section 405.379 and Publication 100-06 Chapter 3, Section 200.
End Section 50.12 – L Controls – Non-MSP Debt Collection: Back to Table of Contents
50.13 – M Controls – Provider Enrollment
(Rev. 13001, Issued: 12-13-24, Effective: 10-01-24, Implementation: 01-15-25)
M – Control
Number
Control Objective – Provider Enrollment
M.1 	Review the Medicare enrollment applications (paper CMS-855 and
CMS-20134 or Internet-based Provider Enrollment Chain and
Ownership System enrollment application) and take appropriate
action in accordance with CMS guidelines in the Publication 100-
08, Chapters 10 of the Program Integrity Manual (PIM).
M.2 	Reassignments of benefits are made in accordance with Publication
100-04, Chapter 1, Section 30.2 of the Medicare Claims Processing
Manual and Publication 100-08, Chapter 10 of the PIM.
M.3 	Control number M.3 reserved. Control not in use as of this IOM
revision.
End Sections 50.13 – M Controls – Provider Enrollment and 50 – List of CMS Contractor
Control Objectives: Back to Table of Contents

60 – CMS Contractor Cycle Memo
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
This outline is provided to give the CMS contractor some guidelines on writing a cycle
memo. The CMS contractor cycle memo narrative is a written summary for the
transaction process. The narrative describes the initial point, the processing type,
completion point, key activities, and supervisory or management review. Within the
cycle memo, the key controls should be clearly identified by highlighting or underlining
and should be clearly numbered with the control activity numbering structure so controls
may be cross referenced to other documentation such as the control deficiency log and/or
corrective action plans. The key controls are identified for A-123 testing. The key
controls are those controls designed to meet the control objectives and cover
management’s financial statement assertions. They are the controls that management
relies upon to prevent and detect material errors and misstatements.
Back to Table of Contents
60.1 - CMS Contractor Cycle Memo Outline
(Rev. 308, Issued: 10-26-18 Effective: 09- 01- 18, Implementation: 11-27-18)
The financial reporting cycle memo shall include the following sections in the, “Table of
Contents”:
Section I. 	Objective
The objective of the cycle memo is to describe the preparation and reporting of financial
processes performed by the CMS contractor.
Section II. 	Introduction
The purpose of the introduction is to provide sufficient background on the process. An
example of an introduction would be: The CMS utilizes contractors to manage and
administer the Medicare program. Medicare contractor financial reports provide a
method of reporting financial activities by the contractors as required by the Chief
Financial Officers (CFO) Act of 1990. The CMS contractors are required to maintain
accounting records in accordance with government accounting principles and applicable
government laws and regulations.
Section III. Interface with Other Cycles

The contractor shall show what cycle memos interface or relate to other cycle memos
such as the accounts receivable, accounts payable, claims expense or other. Contractors
may combine related cycles such as the accounts payable and claims expense.
Section IV. Current Environment
The purpose of the current environment is to describe the processes in place and to
identify the controls within those processes. The Medicare contractor financial reporting
environment should show that it has established and maintained an effective commitment
to internal controls over financial reporting. Internal controls shall be established and
assessments shall be designed to provide reasonable assurance and confidence those
obligations and costs are in compliance with applicable laws and regulations. Funds and
other assets are safeguarded against waste, loss, unauthorized use, or misappropriation.
Revenues and expenditures applicable to the operations are properly recorded and
accounted for to permit the preparation of accounts and reliable financial and statistical
reports and to maintain accountability over assets.
End Sections 60.1 – CMS Contractor Cycle Memo Outline and 60 – CMS Contractor
Cycle Memo: Back to Table of Contents

70 – List of Commonly Used Acronyms
(Rev. 11133, Issued:11-30-21, Effective: 10-01-21, Implementation: 12-31-21)
Acronym 	Definition
A/B 	Medicare Part A / B
AICPA 	American Institute of Certified Public Accountants
AO 	Authorizing Official
AP 	Account Payable
A&R 	Audit & Reimbursement
AR 	Account Receivable
AIFMA 	Associate IFM Administrator
ARS 	Acceptable Risk Safeguards
ART 	Analytical, Reporting, & Tracking
ATO 	Authority to Operate
BCRC 	Benefit Coordination & Recovery Center
BDS 	Beneficiary Data Streamlining
BPSSM 	Business Partners Systems Security Manual
CAP 	Corrective Action Plan
CERT 	Comprehensive Error Rate Testing
CET 	Continuing Education and Training
CFACTS 	CMS FISMA Controls Tracking System
CFO 	Chief Financial Officers Act of 1990
CMBRW 	Contractor’s Monthly Bank Reconciliation Worksheet
CMD 	Contractor Medical Directors
CMS 	Centers for Medicare and Medicaid Services
CNC 	Currently Not Collectible
COR 	Contracting Officer Representative
CPA 	Certified Public Accountant
CPE 	Contractor Performance Evaluation
CPIC 	Certification Package for Internal Controls
CR 	Change Request
CRAF 	Collection Reconciliation Acknowledgement Forms
CRC 	Commercial Repayment Center
CUECs 	Complementary User Entity Controls
CWF 	Common Working File
DCS 	Debt Collection System
DD 	Day/Date Number (01 – 31)
DME 	Durable Medical Equipment
DPNA 	Denial of Payment for New Admissions
DPP 	Duplicate Primary Payment
ECRS 	Electronic Correspondence Referral System
EDC 	Enterprise Data Center
EDS 	Electronic Data System
EOB 	Explanation of Benefits

Acronym 	Definition
ERM 	Enterprise Risk Management
ERS 	Extended Repayment Schedule
FAR 	Federal Acquisition Regulation
FISMA 	Federal Information Security Management
FISS 	Fiscal Intermediary Standard System
FM 	Financial Management
FMFIA 	Federal Managers’ Financial Integrity Act of 1982
FPLP 	Federal Payment Levy Program
FR 	Financial Reporting
FY 	Fiscal Year
GAAP 	Generally Accepted Accounting Principles
GAO 	Government Accountability Office
GHP 	Group Health Plan(s)
GSS 	General Support System
HHS 	The US Department of Health and Human Services
HIGLAS 	Healthcare Integrated General Ledger Accounting System
HITECH 	Health Information Technology for Economic and Clinical Health
ICOFR 	Internal Controls Over Financial Reporting
ICS 	Internal Control Standards
ID 	Identifier
IFM 	Innovation & Financial Management Group
IOM 	Internet Only Manual
IPRS 	Improper Payment Reduction Strategy
IRL 	Intent to Refer Letters
IRS 	Internal Revenue Service
ISPG 	Information Security and Privacy Group
IT 	Information Technology
ITR 	Intent to Refer
IUR 	Informational Unsolicited Response
JOA 	Joint Operating Agreement
MAC 	Medicare Administrative Contractor
MBES 	Medicaid Budget and Expenditure System
MCS 	Multi-Carrier System
MD 	Maryland
MM 	Month Number (01 – 12)
MMA 	Medicare Prescription Drug, Improvement, and Modernization Act
of 2003
MR 	Medical Review
MW 	Material Weakness
MSP 	Medicare Secondary Payer
MSPPAY 	Medicare Secondary Payer Payment Module
MSPRC 	Medicare Secondary Payer Recovery Contractor
MSR 	Monthly Status Report
NARA 	National Archives and Records Administration
NPR 	Notices of Program Reimbursement

Acronym 	Definition
NVA/ST 	Network Vulnerability Assessment / Security Testing
OGC 	Office of General Counsel
OIG 	Office of Inspector General
OMB 	Office of Management and Budget
PDAC 	Pricing, Data Analysis, and Coding
PIM 	Program Integrity Manual
POA&M 	Plan of Action and Milestone
POC 	Point of Contact
POE 	Provider Outreach and Education
PRRB 	Provider Reimbursement Review Board
PTS 	Provider Tracking System
Pub 	Publication
QIO 	Quality Improvement Organization
RA 	Remittance Advice
RO 	Regional Office
RAC 	Recovery Audit Contractor
RCA 	Root Cause Analysis
RDS 	Retiree Drug Subsidy
RMH 	Risk Management Handbook
RRB 	Railroad Retirement Board
RTA 	Returned to Agency
SA&A 	Security Assessment and Authorization
SAR 	Strategy Analysis Report
SD 	Significant Deficiency
SDLC 	System Development Life Cycle
SMAC 	Specialty Medicare Administrative Contractor
SOW 	Statements of Work
SSAE 18 	Statement on Standards for Attestation Engagements Number 18
SSM 	Shared System Maintainer
SSP 	System Security Plan
STAR 	System Tracking for Audit and Reimbursement
STC 	Single Testing Contractor
TDL 	Technical Direction Letter
TOP 	Treasury Offset Program
TROR 	Treasury Report on Receivables
UDR 	Uniform Desk Review
UPIC 	Unified Program Integrity Contractor(s)
USGAO 	United States General Accounting Office
VDC 	Virtual Data Center
VMS 	Viable Medicare System
VP 	Vice President
XLC 	eXpedited Life Cycle
20YY 	Year Number (e.g. 2019, 2020, 2021, etc.)
ZPIC 	Zone Program Integrity Contractor(s)

End Section 70 – List of Commonly Used Acronyms: Back to Table of Contents

Transmittals Issued for this Chapter

Rev # 	Issue Date Subject 	Impl Date CR#
R13001FM 12/13/2024 The Fiscal Year 2025 Updates for the CMS
Internet Only Manual (IOM) Publication
(Pub.) 100-06, Medicare Financial
Management Manual, Chapter 7 - Internal
Control Requirements
01/15/2025 13731
R11133FM 11/30/2021 The Fiscal Year 2022 Updates for the CMS
Internet Only Manual (IOM) Publication
(Pub.) 100-06, Medicare Financial
Management Manual, Chapter 7 - Internal
Control Requirements
12/31/2021 11133
R10614FM 03/23/2021 The Fiscal Year 2021 Updates for the CMS
Internet Only Manual (IOM) Publication
(Pub.) 100-06, Medicare Financial
Management Manual, Chapter 7 - Internal
Control Requirements
04/22/2021 12028
R331FM 	11/15/2019 The Fiscal Year 2020 Updates for the CMS
Internet Only Manual (IOM) Publication
(Pub.) 100-06, Medicare Financial
Management Manual, Chapter 7 - Internal
Control Requirements
12/17/2019 11487
R308FM 	10/26/2018 The Fiscal Year 2019 Updates for the Centers
for Medicare & Medicaid Services (CMS)
Internet Only Manual (IOM) Publication
(Pub.) 100-06, Medicare Financial
Management Manual, Chapter 7 - Internal
Control Requirements
11/27/2018 10915
R301FM 	03/19/2018 The Fiscal Year 2018 Updates for the Centers
for Medicare and Medicaid Services (CMS)
Internet Only Manual (IOM) 100-06 The
Medicare Financial Management Manual,
Chapter 7 - Internal Control Requirements
06/19/2018 10400
R300FM 	03/16/2018 The Fiscal Year 2018 Updates for the Centers
for Medicare and Medicaid Services (CMS)
Internet Only Manual (IOM) 100-06 The
Medicare Financial Management Manual,
Chapter 7 - Internal Control Requirements-
Rescinded and replaced by Transmittal 301
06/19/2018 10400
R278FM 	12/16/2016 Medicare Financial Management Manual,
Chapter 7, Internal Control Requirements
01/19/2017 9819
R256FM 	10/16/2015 Medicare Financial Management Manual,
Chapter 7, Internal Controls
11/17/2015 9320
R242FM 	10/10/2014 Medicare Financial Management Manual,
Chapter 7, Internal Controls
11/11/2014 8885

R228FM 	09/27/2013 Medicare Financial Management Manual,
Chapter 7, Internal Controls
10/28/2013 8438
R214FM 	10/19/2012 Medicare Financial Management Manual,
Chapter 7, Internal Control Requirements
11/20/2012 8040
R194FM 	09/09/2011 Medicare Financial Management Manual,
Chapter 7-Internal Control Requirements
10/11/2011 7555
R179FM 	12/23/2010 Medicare Financial Management Manual,
Chapter 7-Internal Control Requirements
01/25/2011 7230
R164FM 	01/15/2010 Chapter 7, Internal Control Requirements
Update
11/23/2009 6659
R161FM 	10/23/2009 Chapter 7, Internal Control Requirements
Update – Rescinded and replaced by
Transmittal 164
11/23/2009 6659
R150FM 	04/02/2009 Chapter 7, Internal Control Requirements
Update
03/09/2009 6249
R147FM 	02/06/2009 Chapter 7, Internal Control Requirements
Update – Rescinded and replaced by
Transmittal 150
03/09/2009 6249
R132FM 	10/05/2007 Chapter 7, Internal Control Requirements
Update
11/05/2007 5701
R117FM 	02/12/2007 Internal Control Requirements Update 	01/29/2007 5429
R116FM 	01/31/2007 Internal Control Requirements Update –
Replaced by Transmittal 117
01/29/2007 5429
R112FM 	12/29/2006 Internal Control Requirements Update-
Replaced by Transmittal 116
01/29/2007 5429
R103FM 	07/21/2006 Internal Control Requirements Update 	07/24/2006 5234
R95FM 	04/28/2006 Internal Control Requirements Update 	05/30/2006 4334
R66FM 	03/04/2005 Internal Control Requirements Update 	04/04/2005 3655
R34FM 	02/06/2004 Internal Control Requirements Update 	03/08/2004 3006
R15FM 	02/07/2003 Federal Managers' Financial Integrity Act 	03/21/2003 2513
R11FM 	09/27/2002 Corrective Action Plans 	09/27/2002 2287
R07FM 	08/30/2002 Initial Publication of Chapter 	10/01/2002 2231
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