Background history of MTN 695838

What follows below is a chronological outline of the events leading to the CMS decision to initiate audit MTN 695838, its preliminary findings, and its disappearance.

Start at bottom:

Jan. 28, 2026: CMHA/Erin Snyder confirm that Atrium has received no documents related to MTN 695838 in November or December of 2025.

Jan 28, 2026: Vincoli sends 'Second Request' letter to CMS Freedom of Information concerning the status of his FOIA request (documents were referred for review in April of 2025). First request was sent in September of 2025 and was never responded to.

RE: Status of MTN 695838

Inbox

Brown, Jacqueline (CMS/CM)

10:03 AM (11 hours ago)

to me, Jennifer, Michael, Ayub, Susan

Good morning, Mr. Vincoli

We wanted to acknowledge receipt of this email regarding the status of your FOIA request for CMS Audit MTN 695838. For status updates, please contact the CMS FOIA office at FOIA_Request@cms.hhs.gov for further updates. The point contact at CMS FOIA is Desiree Gaynor, CMS FOIA Public Liaison, Centers for Medicare & Medicaid Services, 7500 Security Blvd., MS C5-11-06, Baltimore, Maryland 21244-1850, Telephone: (410) 786-5353 fax (443)-380-8871.

Thank you,

Jacqueline Brown
Palmetto JM A/B MAC Contracting Officer Representative

Medicare Contractor Management Group

Southern MAC Program Management Division

1301 Young Street, Suite 106-900, Dallas TX 75202

Office Ph: 214-767-6393 | iPhone: 816-590-0996

jacqueline.brown@cms.hhs.gov

The above technical guidance is not to be construed as a change, or intent to change, the scope of work under the contract. It is to be acted upon only if it falls within the general scope of the contract and sufficient funds are available. Please see Section I, FAR 52.232.20, Limitation of Cost, and FAR 52.243-7, Notification of Changes.

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From: Joe Vincoli <joevincoli@gmail.com>
Sent: Monday, December 8, 2025 3:28 PM
To: Brown, Jacqueline (CMS/CM) <Jacqueline.Brown@cms.hhs.gov>
Cc: Johnson, Jennifer (CMS/CM) <Jennifer.johnson6@cms.hhs.gov>; Treitel, Michael (CMS/CM) <Michael.Treitel@cms.hhs.gov>; Ibrahim, Ayub (CMS/CM) <Ayub.Ibrahim@cms.hhs.gov>; Hatfield, Susan (Budd) <Susan_Hatfield@budd.senate.gov>
Subject: Status of MTN 695838

Ms. Brown,

I am trying to find out the status of CMS Audit MTN 695838 was being conducted by Stephen Wood at PalmettoGBA.

This is the audit of Atrium and it concerns its use and cost reporting of MedCost.

The last public document I have been able to obtain is attached.

It is an email dated 9/11/23 from Mr. Wood to Mr. Michael Treitel of CMS.

In that email Mr. Wood states:

During this process, Palmetto has received multiple emails from Joe Vincoli with information he believes would undo the provider’s assertion that they and Medcost meet the exception. One of his emails (attached) included references to a PRRB ruling which determined TPA services relate to patient care costs for the provider’s employees. Based on the ruling, the provider’s claim of meeting the exception criteria would be voided.

If the determination holds, additional questions would be raised regarding the reimbursement impact of the information. The majority of Atrium’s facilities are PPS reimbursed; therefore, there is not a direct dollar-for-dollar correlation. However, the health insurance costs would be reported for wage index purposes and used to set future rates.

Should Palmetto proceed under the context that the Atrium and Medcost are related and determine the extent to which health insurance costs are not properly reported?

I learned today from Atrium that it has not been contacted in writing from Mr. Wood or anyone at CMS concerning this audit.

I find it troubling that it appears that this audit has not been formally finished.

Can you provide me with a status update?

Thanks,

Joe Vincoli

220 Epping Road

Clemmons, NC 27012

False Claims Case dismissed

In June, 2020 the US Fourth Circuit dismisses Vincoli's FCA case finding, inter alia, that the language of PRM 4005.2 was 'sufficiently ambiguous' as to be unenforceable.

Senator Burr intervenes

Vincoli contacts his US Senator (Burr) and asks if the policy needs to be rewritten since five judges have found its language to be 'sufficiently ambiguous' as to be unenforceable. Senator Burr contacts CMS.

CMS Responds

From: Sloan, Ralph W. (CMS)
Sent: Tuesday, July 27, 2021 7:07 PM
To: Hatfield, Susan (Burr) <Susan_Hatfield@burr.senate.gov>
Subject: Congressional Inquiry - Mr. Joe Vincoli - Cost Report Issues (Ref # 659472) - CMS Response
Importance: High

Ms. Hatfield,

Thank you again for the congressional inquiry on behalf of Mr. Joe Vincoli. Mr. Vincoli is requesting clarification of Medicare's regulations on how hospital expenses for the health care services it provides to its own employees (known as “domestic care”) are to be reported on the CMS Cost Reports when the hospital uses a third-party administrator that is owned by the hospital. Palmetto GBA, the Jurisdiction M Medicare Administrative Contractor, reviewed Mr. Vincoli’s request and has provided the following response:

Palmetto GBA maintains that related-party rules apply in this situation. Costs applicable to services furnished by the third-party administrator to the hospital are includable in the allowable cost of the hospital at the cost to the related party. However, such cost must not exceed the price of comparable services that could be purchased elsewhere. Domestic claim charges must be reduced to cost. [emphasis added]. Cost must also exclude any copayments and deductibles paid by employees.

I trust that this information has been responsive to your needs. If you have any questions or need additional information in regard to this congressional inquiry, please let me know.

Thanks.

Best,

Ralph

Second Response from CMS

Vincoli then asks Senator Burr, 'If the regulation applies and is enforceable and 'Domestic claim charges must be reduced to cost' then why isn't CMS enforcing the regulation on Atrium?' CMS responds that they were not aware that Atrium owned its TPA and that they would look into the matter.

CMS instructs Palmetto GBA to begin Audit

From: Treitel, Michael (CMS/CM) <Michael.Treitel@cms.hhs.gov>
Sent: Monday, June 13, 2022 10:43 AM
To: STEPHEN WOOD <STEPHEN.WOOD@palmettogba.com>

Hi,
Just closing the loop on this, I think we recommend a deep dive on this during the FY 2024 wage index desk review. Mr. Vincoli has already been recommended to report any issues of fraud to the OIG. I have no idea if he has done that but I wouldn’t be surprised if he did. In the end he is sending us a lot of emails and it is getting harder to ignore for us. Also, we do want to make sure that the hospital is properly reporting these costs.

Is Palmetto able to look at this in September during the FY 2024 desk review?

The emails wont stop until we truly do a deep dive to see if there is any merits to the claims of Mr. Vincoli. It may be worth telling the hospital now what you need for the desk review in September so we are not scrambling in November when the time is up for the desk review.

Regarding FY 2023 wage index, we have a week to wrap up the FY 2023 wage index. If Palmetto wants to do some preliminary checking with the provider now just to make sure nothing smells wrong here that would be fine too.

Let us know your thoughts.
Thanks,
Michael Treitel

PalmettoGBA contacts Atrium

In July of 2022, PalmettoGBA notifies Atrium of audit.

Vincoli's email to CMS after receiving public records from Atrium

In July of 2023 Vincoli receives public records from Atrium that show PalmettoGBA's audit to be focused on an analysis of whether or not Atrium's relationship with MedCost meets the exception to the Related Party Rule.

Here is a portion of the text of the email I sent to CMS on August 22, 2023.

Jennifer,

I recently obtained (via a public records request) Atrium's communications with CMS/Palmetto and others as of June 31, 2023.

On Monday, May 29, 2023 at 2:02 PM, Atrium's general counsel, Erin Snyder, wrote to Stephen Wood of Palmetto:

Your request for additional information is based on the exception to Medicare’s related party rules described in 42 CFR § 413.17, which pre-supposes that it is a related party, but you have not provided a rationale or explanation as to why you have concluded that Medcost is related to CMHA for Medicare cost reporting purposes. Based on the applicable Medicare guidance, we have concluded that CMHA is not a related party based on the Medicare standards.

Please provide your analysis that supports your apparent conclusion that CMHA is related to MedCost so that we can assess the analysis and respond accordingly.

I would like to direct you to PRRB decision number 2007d26
(https://www.cms.gov/regulations-and-guidance/review
boards/prrbreview/downloads/2007d26.pdf [cms.gov])

In that ruling the Provider was using a claims administrator that it owned to administer its health plan. The question before the PRRB was whether or not the charges for health care services provided to its employees had to be reduced to cost.

The PRRB ruled:

The PRM §2144.4 recognizes the cost of health insurance premiums paid (or incurred) as an allowable fringe benefit if the benefits of the policy inure to employees. However, this section recognizes no special exclusion from the related party rules for fringe benefits. Accordingly, the limits on costs incurred between related parties are not overridden by the nature of the expenditure being employee health care costs. Under its Plan, the Provider purchased services for its employees from itself, and is therefore subject to the rules for related parties at 42 C.F.R. §413.17. Under those rules, the proper measure of allowable costs is the actual costs of the services provided.

Accordingly, the Board finds that the allowable amount of claims paid through OHN for services provided by the hospital to its employees must be reduced from charges to costs in order to eliminate the mark-up in excess of the hospital’s actual costs.

The Intermediary’s adjustment is affirmed.

PalmettoGBA changes course

PalmettoGBA auditor forwards my email internally with this message.

From: STEPHEN WOOD
To: FRANCEE SAMS; ARTEYA ROBINSON
Subject: Atrium"s Related Party Transactions
Wednesday, August 23, 2023 1:45:52 PM

Good afternoon,

Attached to this email is a message I sent to Atrium in July detailing our need for documentation to verify their exception to the related party rule. Based on the attached ruling, the health insurance costs would constitute patient care costs of their employees and would automatically preclude Atrium and Medcost from being exempt. [emphasis added]

If both of you agree, I can forward the information to CMS and we can determine what the next steps would/should be.

Thanks,

Vincoli submits FOIA to OIG for copy of Wage Index Analysis

From: <foia@oig.hhs.gov>
Date: Thu, Aug 14, 2025 at 1:39 PM
Subject: Acknowledgment of Receipt of FOIA Request #25-0584
To: <joevincoli@gmail.com>

Dear Joseph Vincoli:

This will acknowledge receipt of your Freedom of Information Act (FOIA) request received by HHS OIG on August 14, 2025.

Your request has been assigned request #25-0584 based on its receipt in this office and is being processed as expeditiously as possible.

Please refer to the request number above when corresponding.

The actual processing time will depend on the complexity of your request and whether sensitive records, voluminous records, extensive search, and/or consultation with other HHS components or other executive branch agencies are involved. There may be a charge for these records, and in some cases, the charges may be substantial.

The Department of Health and Human Services (HHS) FOIA regulations allow agencies to recover part of the costs of processing FOIA requests. The HHS FOIA regulations are available at the following web address: http://www.hhs.gov/foia/45cfr5.html.

If you have any questions, please call (202) 619-2541, or write to us at:

Freedom of Information Division
Office of Inspector General
Room 5528, Cohen Building
330 Independence Ave SW
Washington, DC 20201

Sincerely,

Cristal J. Gorham
Freedom of Information Act Unit
HHS OIG