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Title 42Chapter IVSubchapter FPart 476Subpart C → Subject Group


Title 42: Public Health
PART 476—QUALITY IMPROVEMENT ORGANIZATION REVIEW
Subpart C—Review Responsibilities of Quality Improvement Organizations (QIOs)


General Provisions

§476.70   Statutory bases and applicability.

(a) Statutory bases. Sections 1154, 1866(a)(1)(F), and 1886(f)(2) of the Act require that a QIO review those services furnished by physicians, other health care professionals, providers and suppliers as specified in its contract with the Secretary.

(b) Applicability. The regulations in this subpart apply to review conducted by a QIO and its subcontractors.

[77 FR 68560, Nov. 15, 2012]

§476.71   QIO review requirements.

(a) Scope of QIO review. In its review, the QIO must determine (in accordance with the terms of its contract)—

(1) Whether the services are or were reasonable and medically necessary for the diagnosis and treatment of illness or injury or to improve functioning of a malformed body member, or (with respect to pneumococcal vaccine) for prevention of illness or (in the case of hospice care) for the palliation and management of terminal illness;

(2) Whether the quality of the services meets professionally recognized standards of health care, as determined through the resolution of oral beneficiary complaints as specified in §476.110, written beneficiary complaints as specified in §476.120, or the completion of general quality of care reviews as specified in §476.160.

(3) Whether those services furnished or proposed to be furnished on an inpatient basis could, consistent with the provisions of appropriate medical care, be effectively furnished more economically on an outpatient basis or in an inpatient health care facility of a different type;

(4) Through DRG validation, the validity of diagnostic and procedural information supplied by the hospital;

(5) The completeness, adequacy and quality of hospital care provided;

(6) The medical necessity, reasonableness and appropriateness of hospital admissions and discharges;

(7) The medical necessity, reasonableness and appropriateness of inpatient hospital care for which additional payment is sought under the outlier provisions of §§412.82 and 412.84 of this chapter; and

(8) Whether a hospital has misrepresented admission or discharge information or has taken an action that results in—

(i) The unnecessary admission of an individual entitled to benefits under part A;

(ii) Unnecessary multiple admissions of an individual; or

(iii) Other inappropriate medical or other practices with respect to beneficiaries or billing for services furnished to beneficiaries.

(b) Payment determinations. On the basis of the review specified under paragraphs (a) (1), (3), (6), (7), and (8) of this section, the QIO must determine whether payment may be made for these services. A QIO may grant a period of not more than two days (grace days) for the purpose of arranging post discharge care when the provider did not know or could not reasonably be expected to have known that payment for the service(s) would not be made under the Medicare program as specified in §405.330(b).

(c) Other duties and functions. (1) The QIO must review at least a random sample of hospital discharges each quarter and submit new diagnostic and procedural information to the Medicare administrative contractor, fiscal intermediary, or carrier if it determines that the information submitted by the hospital was incorrect.

(2) As directed by CMS, the QIO must review changes in DRG and LTC-DRG assignments made by the intermediary under the provisions of §§412.60(d) and 412.513(c) of this chapter that result in the assignment of a higher-weighted DRG or a different LTC-DRG. The QIO's review must verify that the diagnostic and procedural information supplied by the hospital is substantiated by the information in the medical record.

(d) Coordination of sanction activities. The QIO must carry out the responsibilities specified in subpart C of part 1004 of this title regarding imposition of sanctions on providers and practitioners who violate their statutory obligations under section 1156 of the Act.

[52 FR 37457, Oct. 7, 1987; 52 FR 47003, Dec. 11, 1987, as amended at 59 FR 45402, Sept. 1, 1994. Redesignated at 64 FR 66279, Nov. 24, 1999; 67 FR 56056, Aug. 30, 2002; 77 FR 68560, Nov. 15, 2012]

§476.73   Notification of QIO designation and implementation of review.

(a) Notice of CMS's decision. CMS sends written notification of a QIO contract award to the State survey agency and Medicare administrative contractors, fiscal intermediaries, and carriers. The notification includes the effective dates of the QIO contract and specifies the area and types of health care facilities to be reviewed by the QIO. The QIO must make a similar notification when review responsibilities are subcontracted.

(b) Notification to health care facilities and the public. As specified in its contract with CMS, the QIO must—

(1) Provide, to each health care facility scheduled to come under review, a timely written notice that specifies the date and manner in which the QIO proposes to implement review, and the information to be furnished by the facility to each Medicare beneficiary upon admission as specified in §476.78(b)(3) of this part.

(2) Publish, in at least one local newspaper of general circulation in the QIO area, a notice that states the date the QIO will assume review responsibilities and lists each area health care facility to be under review. The QIO must indicate that its plan for the review of health care services as approved in its contract with CMS is available for public inspection in the QIO's business office and give the address, telephone number and usual hours of business.

[50 FR 15330, Apr. 17, 1985. Redesignated at 52 FR 37457, Oct. 7, 1987, and further redesignated at 64 FR 66279, Nov. 24, 1999; 77 FR 68560, Nov. 15, 2012]

§476.74   General requirements for the assumption of review.

(a) A QIO must assume review responsibility in accordance with the schedule, functions and negotiated objectives specified in its contract with CMS.

(b) A QIO must notify the appropriate Medicare administrative contractor, fiscal intermediary, or carrier of its assumption of review in specific health care facilities no later than five working days after the day that review is assumed in the facility.

(c) A QIO must maintain and make available for public inspection at its principal business office—

(1) A copy of each agreement with Medicare administrative contractors, fiscal intermediaries, and carriers;

(2) A copy of its currently approved review plan that includes the QIO's method for implementing review; and

(3) Copies of all subcontracts for the conduct of review.

(d) A QIO must not subcontract with a facility to conduct any review activities except for the review of the quality of care. The QIO may subcontract with a non-facility organization to conduct review in a facility.

(e) If required by CMS, a QIO is responsible for compiling statistics based on the criteria contained in §411.402 of this chapter and making limitation of liability determinations on excluded coverage of certain services that are made under section 1879 of the Act. If required by CMS, QIOs must also notify a provider of these determinations. These determinations and further appeals are governed by the reconsideration and appeals procedures in part 405, subpart G of this chapter for Medicare Part A related determinations and part 405, subpart H of this chapter for Medicare Part B related determinations.

(f) A QIO must make its responsibilities under its contract with CMS, primary to all other interests and activities that the QIO undertakes.

[50 FR 15330, Apr. 17, 1985, as amended at 77 FR 68560, Nov. 15, 2012]

§476.76   Cooperation with health care facilities.

Before implementation of review, a QIO must make a good faith effort to discuss the QIO's administrative and review procedures with each involved health care facility.

§476.78   Responsibilities of providers and practitioners.

(a) Every hospital seeking payment for services furnished to Medicare beneficiaries must maintain a written agreement with a QIO operating in the area in which the hospital is located. These agreements must provide for the QIO review specified in §476.71.

(b) Cooperation with QIOs. Health care providers that submit Medicare claims must cooperate in the assumption and conduct of QIO review.

(1) Providers must allocate adequate space to the QIO for its conduct of review at the times the QIO is conducting review.

(2) Providers and practitioners must provide patient care data and other pertinent data to the QIO at the time the QIO is collecting review information that is required for the QIO to make its determinations. When the QIO does postadmission, preprocedure review, the provider must provide the necessary information before the procedure is performed, unless it must be performed on an emergency basis. Providers and practitioners must—

(i) Except as provided under §§476.130(b) and 476.160(b), relating to beneficiary complaint reviews and general quality of care reviews, photocopy and deliver to the QIO all required information within 14 calendar days of a request. A QIO is authorized to require the receipt of the medical information earlier than the 14-day timeframe if the QIO makes a preliminary determination that the review involves a potential gross and flagrant or substantial violation as specified in part 1004 of this title and circumstances warrant earlier receipt of the medical information. A practitioner's or provider's failure to comply with the request for medical information within the established timeframe may result in the QIO taking action in accordance with §476.90.

(ii) Send secure transmission of an electronic version of medical information, if available, subject to the QIO's ability to support receipt and transmission of the electronic version. Providers and practitioners must deliver electronic versions of medical information within 14 calendar days of the request. A QIO is authorized to require the receipt of the medical information earlier than the 14-day timeframe if the QIO makes a preliminary determination that the review involves a potential gross and flagrant or substantial violation as specified in part 1004 of this title and circumstances warrant earlier receipt of the medical information. A practitioner's or provider's failure to comply with the request for medical information within the established timeframe may result in the QIO taking action in accordance with §476.90.

(3) Providers must inform Medicare beneficiaries at the time of admission, in writing, that the care for which Medicare payment is sought will be subject to QIO review and indicate the potential outcomes of that review. Furnishing this information to the patient does not constitute notice, under §411.402(a) of this chapter, that can support a finding that the beneficiary knew the services were not covered.

(4) When the provider has issued a written determination in accordance with §412.42(c)(3) of this chapter that a beneficiary no longer requires inpatient hospital care, it must submit a copy of its determination to the QIO within 3 working days.

(5) Providers must assure, in accordance with the provisions of their agreements with the QIO, that each case subject to preadmission review has been reviewed and approved by the QIO before admission to the hospital or a timely request has been made for QIO review.

(6)(i) Providers must agree to accept financial liability for any admission subject to preadmission review that was not reviewed by the QIO and is subsequently determined to be inappropriate or not medically necessary.

(ii) The provisions of paragraph (b)(6)(i) of this section do not apply if a provider, in accordance with its agreement with a QIO, makes a timely request for preadmission review and the QIO does not review the case timely. Cases of this type are subject to retrospective prepayment review under paragraph (b)(7) of this section.

(7) Hospitals must agree that, if the hospital admits a case subject to preadmission review without certification, the case must receive retrospective prepayment review, according to the review priority established by the QIO.

(c) Photocopying reimbursement methodology for prospective payment system providers. Providers subject to the prospective payment system are paid for the photocopying costs that are directly attributable to the providers' responsibility to the QIOs to provide photocopies of requested provider records. The payment is in addition to payment already provided for these costs under other provisions of the Social Security Act and is based on a fixed amount per page as determined by CMS as follows:

(1) Step one. CMS adds the annual salary of a photocopy machine operator and the costs of fringe benefits as determined in accordance with the principles set forth in OMB Circular A-76.

(2) Step two. CMS divides the amount determined in paragraph (c)(1) of this section by the number of pages that can be reasonably expected to be made annually by the photocopy machine operator to establish the labor cost per page.

(3) CMS adds to the per-page labor cost determined in paragraph (c)(2) of this section the per-page costs of supplies.

(4) CMS will periodically review the photocopy reimbursement rate to ensure that it still accurately reflects provider costs. CMS will publish any changes to the rate in a Federal Register notice.

(d) Appeals. Reimbursement for the costs of photocopying and mailing records for QIO review is an additional payment to providers under the prospective payment system, as specified in §412.115, §413.355, and §484.265 of this chapter. Thus, appeals concerning these costs are subject to the review process specified in part 405, subpart R of this chapter.

[50 FR 15330, Apr. 17, 1985, as amended at 57 FR 47787, Oct. 20, 1992; 59 FR 45402, Sept. 1, 1994. Redesignated at 64 FR 66279, Nov. 24, 1999, as amended at 68 FR 67960, Dec. 5, 2003; 76 FR 51784, Aug. 18, 2011; 77 FR 53682, Aug. 31, 2012; 77 FR 68560, Nov. 15, 2012]

§476.80   Coordination with Medicare administrative contractors, fiscal intermediaries, and carriers

(a) Procedures for agreements. Medicare administrative contractor, fiscal intermediary, or carrier must have a written agreement with the QIO. The QIO must take the initiative with the fiscal intermediary or carrier in developing the agreement. The following steps must be taken in developing the agreement.

(1) The QIO and the Medicare administrative contractor, fiscal intermediary, or carrier must negotiate in good faith in an effort to reach written agreement. If they cannot reach agreement, CMS will assist them in resolving matters in dispute.

(2) The QIO must incorporate its administrative procedures into an agreement with the Medicare administrative contractor, fiscal intermediary, or carrier and obtain approval from CMS, before it makes conclusive determinations for the Medicare program, unless CMS finds that the Medicare administrative contractor, fiscal intermediary, or carrier has—

(i) Refused to negotiate in good faith or in a timely manner, or

(ii) Insisted on including in the agreement, provisions that are outside the scope of its authority under the Act.

(b) Content of agreement. The agreement must include procedures for—

(1) Informing the appropriate Medicare administrative contractors, fiscal intermediaries, and carriers of—

(i) Changes as a result of DRG validations and revisions as a result of the review of these changes; and

(ii) Initial denial determinations and revisions of these determinations as a result of reconsideration, or reopening all approvals and denials with respect to cases subject to preadmission review, and outlier claims in hospitals under a prospective payment system for health care services and items;

(2) Exchanging data or information;

(3) Modifying the procedures when additional review responsibility is authorized by CMS; and

(4) Any other matters that are necessary for the coordination of functions.

(c) Action by CMS. (1) Within the time specified in its contract, the QIO must submit to CMS for approval its agreement with the Medicare administrative contractors, fiscal intermediaries, and carriers, or if an agreement has not been established, the QIO's proposed administrative procedures, including any comments by the Medicare administrative contractors, fiscal intermediaries, and carriers.

(2) If CMS approves the agreement or the administrative procedures (after a finding by CMS as specified in paragraph (a)(2) of this section), the QIO may begin to make determinations under its contract with CMS.

(3) If CMS disapproves the agreement or procedures, it will—

(i) Notify the QIO and the appropriate fiscal agents in writing, stating the reasons for disapproval; and

(ii) Require the QIO and Medicare administrative contractor, fiscal intermediary, or carrier to revise its agreements or procedures.

(d) Modification of agreements. Agreements or procedures may be modified, with CMS's approval—

(1) Through a revised agreement with the Medicare administrative contractor, fiscal intermediary, or carrier, or

(2) In the case of procedures, by the QIO, after providing opportunity for comment by the Medicare administrative contractor, fiscal intermediary, or carrier.

(e) Role of the Medicare administrative contractor or fiscal intermediary. (1) The Medicare administrative contractor or fiscal intermediary will not pay any claims for those cases which are subject to preadmission review by the QIO, until it receives notice that the QIO has approved the admission after preadmission or retrospective review.

(2) A QIO's determination that an admission is medically necessary is not a guarantee of payment by the Medicare administrative contractor or fiscal intermediary. Medicare coverage requirements must also be applied.

[50 FR 15330, Apr. 17, 1985; 50 FR 41886, Oct. 16, 1985. Redesignated at 64 FR 66279, Nov. 24, 1999; 77 FR 68560, Nov. 15, 2012]

§476.82   Continuation of functions not assumed by QIOs.

Any of the duties and functions under Part B of Title XI of the Act for which a QIO has not assumed responsibility under its contract with CMS must be performed in the manner and to the extent otherwise provided for under the Act or in regulations.

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