This paragraph (or some variation) finds its way into lots of contracts when one or both of the parties to the contract are participants in the health care industry:
If [Party name] provides services, the cost or value of which is $10,000 or more over a 12-month period, including contracts for both goods and services in which the service component is worth $10,000 or more over a 12-month period, then [Party name] allows the Comptroller General of the United States, HHS, and their duly authorized representatives access to [Party name]’s contract, books, documents, and records until the expiration of four years after the services are furnished under the terms of this Agreement. [Party name] will also allow access to the subcontractor’s contracts of a similar nature between subcontractors and related organizations of the subcontractor, and to their books, documents, and records.
Does it need to be in the contract? The simple rule is that, unless the contract relates to provision of services to an entity that is enrolled as a provider with Medicare (Part A), it does not need to be included. If, however, the contract does relate to services to a provider (such as a hospital, skilled nursing facility, or hospice), then the provision must be included–or Medicare can deny reimbursement for the service.
The rule applies to any person or entity (including an individual), who contracts with a provider to supply a service, either directly to the provider or to a Medicare beneficiary for which Medicare reimburses the provider. For purposes of the rule, a “service” is considered to include the performance of an act, as opposed to the provision of supplies or equipment. Although the access clause does not need to be included in contracts related to the provision of supplies or equipment, it should be included in the following types of service contracts: consulting and management services; linen services; legal and accounting services; management information systems; insurance (other than worker’s compensation insurance); and rental of building and equipment.
For more information, see 42 C.F.R. 420.302 and Section 70 (et seq.) from the Medicare Financial Management Manual.