96 STAT. 348
42 USC 1395x.
Ante, p. 331.
PUBLIC LAW 97-248—SEPT. 3, 1982 at the beginning of a contract period, the Secretary may determine such an average based on the enrollment experience of other contracts entered into under this section. "(3) The additional benefits referred to in paragraph (2) are— "(A) the reduction of the premium rate or other charges made with respect to services furnished by the organization to members enrolled under this section, or "(B) the provision of additional health benefits, or both. "(h)(1) I f "(A) the Secretary is not satisfied that an eligible organization has the capacity to bear the risk of potential losses under a risksharing contract under this section, or "(B) the eligible organization so elects or has an insufficient number of members to be eligible to enter into a risk-sharing contract under subsection (g)(1), the Secretary may, if he is otherwise satisfied that the eligible organization is able to perform its contractual obligations effectively and efficiently, enter into a contract with such organization pursuant to which such organization is reimbursed on the basis of its reasonable cost (as defined in section 1861(v)) in the manner prescribed in paragraph (3). "(2) A reasonable cost reimbursement contract under this subsection may, at the option of such organization, provide that the Secretary— "(A) will reimburse hospitals and skilled nursing facilities either for the reasonable cost (as determined under section 1861(v)) or for payment amounts determined in accordance with section 1886, as applicable, of services furnished to individuals enrolled with such organization pursuant to subsection (d), and "(B) will deduct the amount of such reimbursement from payment which would otherwise be made to such organization. If such an eligible organization pays a hospital or skilled nursing facility directly, the amount paid shall not exceed the reasonable cost of the services (as determined under section 1861(v)) or the amount determined under section 1886, as applicable, unless such organization demonstrates to the satisfaction of the Secretary that such excess payments are justified on the basis of advantages gained by the organization. "(3) Payments made to an organization with a reasonable cost reimbursement contract shall be subject to appropriate retroactive corrective adjustment at the end of each contract year so as to assure that such organization is paid for the reasonable cost actually incurred (excluding any part of incurred cost found to be unnecessary in the efficient delivery of health services) or the amounts otherwise determined under section 1886 for the types of expenses otherwise reimbursable under this title for providing services covered under this title to individuals described in subsection (a)(1). "(4) Any reasonable cost reimbursement contract with an eligible organization under this subsection shall provide that the Secretary shall require, at such time following the expiration of each accounting period of the eligible organization (and in such form and in such detail) as he may prescribe— "(A) that the organization report to him in an independently certified financial statement its per capita incurred cost based on the types of components of expenses otherwise reimbursable under this title for providing services described in subsection
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