Ill STAT. 320 PUBLIC LAW 105-33—AUG. 5, 1997 "(2) APPLICATION TO MSA PLANS. —In applying paragraph (1) in the case of a Medicare+Choice organization that is offering an MSA plan, paragraph (1) shall be applied by substituting covered lives for individuals. "(3) ALLOWING TRANSITION.—The Secretary may waive the requirement of paragraph (1) during the first 3 contract years with respect to an organization. " (c) CONTRACT PERIOD AND EFFECTIVENESS.— "(1) PERIOD.— Each contract under this section shall be for a term of at least 1 year, as determined by the Secretary, and may be made automatically renewable from term to term in the absence of notice by either party of intention to terminate at the end of the current term. "(2) TERMINATION AUTHORITY. — In accordance with procedures established under subsection (h), the Secretary may at any time terminate any such contract if the Secretary determines that the organization— "(A) has failed substantially to carry out the contract; "(B) is carrying out the contract in a manner inconsistent with the efficient and effective administration of this part; or "(C) no longer substantially meets the applicable conditions of this part. "(3) EFFECTIVE DATE OF CONTRACTS.—The effective date of any contract executed pursuant to this section shall be specified in the contract, except that in no case shall a contract under this section which provides for coverage under an MSA plan be effective before January 1999 with respect to such coverage. " (4) PREVIOUS TERMINATIONS.—The Secretary may not enter into a contract with a Medicare+Choice organization if a previous contract with that organization under this section was terminated at the request of the organization within the preceding 5-year period, except in circumstances which warrant special consideration, as determined by the Secretary. " (5) CONTRACTING AUTHORITY.—The authority vested in the Secretary by this part may be performed without regard to such provisions of law or regulations relating to the making, performance, amendment, or modification of contracts of the United States as the Secretary may determine to be inconsistent with the furtherance of the purpose of this title. " (d) PROTECTIONS AGAINST FRAUD AND BENEFICIARY PROTEC- TIONS.— "(1) PERIODIC AUDITING.— The Secretary shall provide for the annual auditing of the financial records (including data relating to medicare utilization, costs, and computation of the adjusted community rate) of at least one-third of the Medicare+Choice organizations offering Medicare+Choice plans under this part. The Comptroller General shall monitor auditing activities conducted under this subsection. "(2) INSPECTION AND AUDIT.—Each contract under this section shall provide that the Secretary, or any person or organization designated by the Secretary— "(A) shall have the right to inspect or otherwise evaluate (i) the quality, appropriateness, and timeliness of services performed under the contract, and (ii) the facilities
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