42 CFR § 417.464 - End of CMS's liability for payment: Disenrollment of beneficiaries and termination or default of contract.

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§ 417.464 End of CMS's liability for payment: Disenrollment of beneficiaries and termination or default of contract.

(a) Effect of disenrollment: General rule.

(1) CMS's liability for monthly capitation payments to the HMO or CMP generally ends as of the first day of the month following the month in which disenrollment is effective, as shown on CMS's records.

(2) Disenrollment is effective no earlier than the month immediately after, and no later than the third month after, the month in which CMS receives the disenrollment notice in acceptable form.

(b) Effect of disenrollment: Special rules -

(1) Fraud or abuse by the enrollee. If disenrollment is on the basis of fraud committed or abuse permitted by the enrollee, CMS's liability ends as of the first day of the month in which disenrollment is effective.

(2) Loss of entitlement to Part B benefits. If disenrollment is on the basis of loss of entitlement to Part B benefits, CMS's liability ends as of the first day of the month following the last month of Part B entitlement.

(3) Death of enrollee. If the enrollee dies, CMS's liability ends as of the first day of the month following the month of death.

(4) Disenrollment at enrollee's request. If disenrollment is in response to the enrollee's request, CMS's liability ends as of the first day of the month following the month of termination requested by the enrollee.

(c) Effect of termination or default of contract -

(1) Termination of contract. If the contract between CMS and the HMO or CMP is terminated by mutual consent or by unilateral action of either party, CMS's liability for payments ends as of the first day of the month after the last month for which the contract is in effect.

(2) Default of contract. If the HMO or CMP defaults on the contract before the end of the contract year because of bankruptcy or other reasons, CMS -

(i) Determines the month in which its liability for payments ends; and

(ii) Notifies the HMO or CMP and all affected Medicare enrollees as soon as practicable.

[60 FR 45680, Sept. 1, 1995]