Definitions for "Cost Contract"
Keywords:  hcfa, prudent, audited, interim, aapcc
An agreement between a provider and the Health Care Financing Administration to provide health services to covered persons based on reasonable costs for service.
A formal agreement with Health Care Financing Administration (HCFA) to arrange for the provision of health services to plan members based on reasonable cost or prudent buyer concepts. The plan receives an interim capitated amount derived from an estimated annual budget that may be periodically adjusted during the course of the contract to reflect actual cost experience. The plan's expenses are audited at the end of the contract to determine the final rate the plan should have been paid. The AAPCC may be a factor in establishing the final payment rate.
A TEFRA contract payment methodology option by which HCFA pays for the delivery of health services to members based on the HMO's reasonable cost. The plan receives an interim amount derived from an estimated annual budget, which may be periodically adjusted during the course of the contract to reflect actual cost experience. The plan's expenses are audited at the end of the contract to determine the final rate the plan should have been paid.
a cost-reimbursement contract in which the contractor receives no fee
a cost-reimbursement contract under which the supplier receives no fee