SEC. 1154.
[42 U.S.C. 1320c-3] (a)
Any utilization and quality control peer review
organization entering into a contract with the Secretary under this
part must perform the following functions:
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(1) The organization shall review some or all of the professional
activities in the area, subject to the terms of the contract and
subject to the requirements of subsection (d), of physicians and
other health care practitioners and institutional and noninstitutional
providers of health care services in the provision of health care
services and items for which payment may be made (in whole or in
part) under title XVIII (including where payment is made for such
services to eligible organizations pursuant to contracts under section 1876, to Medicare Advantage organizations pursuant to contracts under
part C, and to prescription drug sponsors pursuant to contracts
under part D)[117] for the purpose of determining whether—
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(A) such services and items are or were reasonable and medically necessary
and whether such services and items are not allowable under subsection
(a)(1) or (a)(9) of section 1862;
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(B) the quality of such services meets professionally recognized
standards of health care; and
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(C) in case such services and items are proposed to be provided
in a hospital or other health care facility on an inpatient basis,
such services and items could, consistent with the provision of
appropriate medical care, be effectively provided more economically
on an outpatient basis or in an inpatient health care facility of
a different type.
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If the organization performs such reviews with respect to a
type of health care practitioner other than medical doctors, the
organization shall establish procedures for the involvement of health
care practitioners of that type in such reviews.
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(2) The organization shall determine, on the basis of the review
carried out under subparagraphs (A), (B), and (C) of paragraph (1),
whether payment shall be made for services under title XVIII. Such
determination shall constitute the conclusive determination on those
issues for purposes of payment under title XVIII, except that payment
may be made if—
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(A) such payment is allowed by reason of section 1879;
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(B) in the case of inpatient hospital services or extended care
services, the peer review organization determines that additional
time is required in order to arrange for postdischarge care, but
payment may be continued under this subparagraph for not more than
two days, but only in the case where the provider of such services
did not know and could not reasonably have been expected to know
(as determined under section 1879) that payment would not otherwise
be made for such services under title XVIII prior to notification
by the organization under paragraph (3);
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(C) such determination is changed as the result of any hearing
or review of the determination under section 1155; or
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(D) such payment is authorized under section 1861(v)(1)(G).
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The organization shall identify cases for which payment should
not be made by reason of paragraph (1)(B) only through the use of
criteria developed pursuant to guidelines established by the Secretary.
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(3)(A) Subject to subparagraphs (B) and (D), whenever the organization makes
a determination that any health care services or items furnished
or to be furnished to a patient by any practitioner or provider
are disapproved, the organization shall promptly notify such patient
and the agency or organization responsible for the payment of claims
under title XVIII of this Act of such determination.
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(B) The notification under subparagraph (A) with respect to
services or items disapproved by reason of subparagraph (A) or (C)
of paragraph (1) shall not occur until 20 days after the date that
the organization has—
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(i) made a preliminary notification to such practitioner or
provider of such proposed determination, and
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(ii) provided such practitioner or provider an opportunity for
discussion and review of the proposed determination.
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(C) The discussion and review conducted under subparagraph (B)(ii) shall
not affect the rights of a practitioner or provider to a formal
reconsideration of a determination under this part (as provided
under section 1155).
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(D) The notification under subparagraph (A) with respect to
services or items disapproved by reason of paragraph (1)(B) shall
not occur until after—
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(i) the organization has notified the practitioner or provider
involved of the determination and of the practitioner's or provider's
right to a formal reconsideration of the determination under section 1155, and
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(ii) if the provider or practitioner requests such a reconsideration,
the organization has made such a reconsideration.
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If a provider or practitioner is provided a reconsideration,
such reconsideration shall be in lieu of any subsequent reconsideration
to which the provider or practitioner may be otherwise entitled
under section 1155, but shall not affect the right of a beneficiary
from seeking reconsideration under such section of the organization's
determination (after any reconsideration requested by the provider
or physician under clause (ii)).
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(E)(i) In the case of services and items provided by a physician
that were disapproved by reason of paragraph (1)(B), the notice
to the patient shall state the following: “In the judgment
of the peer review organization, the medical care received was not
acceptable under the medicare program. The reasons for the denial
have been discussed with your physician.
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(ii) In the case of services or items provided by an entity
or practitioner other than a physician, the Secretary may substitute
the entity or practitioner which provided the services or items
for the term “physician” in the notice described
in clause (i).
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(4)(A) The organization shall, after consultation with the Secretary, determine
the types and kinds of cases (whether by type of health care or diagnosis
involved, or whether in terms of other relevant criteria relating
to the provision of health care services) with respect to which
such organization will, in order to most effectively carry out the
purposes of this part, exercise review authority under the contract.
The organization shall notify the Secretary periodically with respect
to such determinations. Each peer review organization shall provide
that a reasonable proportion of its activities are involved with
reviewing, under paragraph (1)(B), the quality of services and that
a reasonable allocation of such activities is made among the different
cases and settings (including post-acute-care settings, ambulatory settings,
and health maintenance organizations). In establishing such allocation,
the organization shall consider (i) whether there is reason to believe that
there is a particular need for reviews of particular cases or settings because
of previous problems regarding quality of care, (ii) the cost of
such reviews and the likely yield of such reviews in terms of number
and seriousness of quality of care problems likely to be discovered
as a result of such reviews, and (iii) the availability and adequacy
of alternative quality review and assurance mechanisms.
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(B) The contract of each organization shall provide for the
review of services (including both inpatient and outpatient services)
provided by eligible organizations pursuant to a risk-sharing contract
under section 1876 (or that is subject to review under section 1882(t)(3))
for the purpose of determining whether the quality of such services
meets professionally recognized standards of health care, including
whether appropriate health care services have not been provided
or have been provided in inappropriate settings and whether individuals
enrolled with an eligible organization have adequate access to health
care services provided by or through such organization (as determined,
in part, by a survey of individuals enrolled with the organization
who have not yet used the organization to receive such services).
The contract of each organization shall also provide that with respect
to health care provided by a health maintenance organization or
competitive medical plan under section 1876, the organization shall
maintain a beneficiary outreach program designed to apprise individuals
receiving care under such section of the role of the peer review
system, of the rights of the individual under such system, and of
the method and purposes for contacting the organization. The previous
two sentences shall not apply with respect to a contract year if
another entity has been awarded a contract under subparagraph (C).
Under the contract the level of effort expended by the organization
on reviews under this subparagraph shall be equivalent, on a per
enrollee basis, to the level of effort expended by the organization
on utilization and quality reviews performed with respect to individuals
not enrolled with an eligible organization.
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(C) The Secretary may provide, by contract under competitive
procurement procedures on a State-by-State basis in up to 25 States,
for the review described in subparagraph (B) by an appropriate entity
(which may be a peer review organization described in that subparagraph).
In selecting among States in which to conduct such competitive procurement
procedures, the Secretary may not select States which, as a group,
have more than 50 percent of the total number of individuals enrolled
with eligible organizations under section 1876. Under a contract
with an entity under this subparagraph—
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(i) the entity must be, or must meet all the requirements under
section 1152 to be, a utilization and quality control peer review
organization (other than the ability to perform review functions
under this section that are not described in subparagraph (B)),
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(ii) the contract must meet the requirement of section 1153(b)(3),
and
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(iii) the level of effort expended under the contract shall
be, to the extent practicable, not less than the level of effort
that would otherwise be required under the third sentence of subparagraph
(B) if this subparagraph did not apply.
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(5) The organization shall consult with nurses and other professional health
care practitioners (other than physicians described in section 1861(r)(1))
and with representatives of institutional and noninstitutional providers
of health care services, with respect to the organization's responsibility
for the review under paragraph (1) of the professional activities
of such practitioners and providers.
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(6)(A) The organization shall, consistent with the provisions
of its contract under this part, apply professionally developed
norms of care, diagnosis, and treatment based upon typical patterns
of practice within the geographic area served by the organization
as principal points of evaluation and review, taking into consideration
national norms where appropriate. Such norms with respect to treatment
for particular illnesses or health conditions shall include—
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(i) the types and extent of the health care services which,
taking into account differing, but acceptable, modes of treatment
and methods of organizing and delivering care, are considered within
the range of appropriate diagnosis and treatment of such illness
or health condition, consistent with professionally recognized and
accepted patterns of care; and
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(ii) the type of health care facility which is considered, consistent with
such standards, to be the type in which health care services which are
medically appropriate for such illness or condition can most economically
be provided.
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As a component of the norms described in clause (i) or (ii),
the organization shall take into account the special problems associated
with delivering care in remote rural areas, the availability of
service alternatives to inpatient hospitalization, and other appropriate
factors (such as the distance from a patient's residence to the
site of care, family support, availability of proximate alternative
sites of care, and the patient's ability to carry out necessary or
prescribed self-care regimens) that could adversely affect the safety
or effectiveness of treatment provided on an outpatient basis.
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(B) The organization shall—
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(i) offer to provide, several times each year, for a physician
representing the organization to meet (at a hospital or at a regional
meeting) with medical and administrative staff of each hospital
(the services of which are reviewed by the organization) respecting
the organization's review of the hospital's services for which payment
may be made under title XVIII, and
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(ii) publish (not less often than annually) and distribute to
providers and practitioners whose services are subject to review
a report that describes the organization's findings with respect
to the types of cases in which the organization has frequently determined
that (I) inappropriate or unnecessary care has been provided, (II)
services were rendered in an inappropriate setting, or (III) services
did not meet professionally recognized standards of health care.
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(7) The organization, to the extent necessary and appropriate
to the performance of the contract, shall—
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(A)(i) make arrangements to utilize the services of persons
who are practitioners of, or specialists in, the various areas of
medicine (including dentistry, optometry, and podiatry, or other
types of health care, which persons shall, to the maximum extent
practicable, be individuals engaged in the practice of their profession
within the area served by such organization; and
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(ii) in the case of psychiatric and physical rehabilitation
services, make arrangements to ensure that (to the extent possible)
initial review of such services be made by a physician who is trained
in psychiatry or physical rehabilitation (as appropriate).[118]
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(B) undertake such professional inquiries either before or after,
or both before and after, the provision of services with respect
to which such organization has a responsibility for review which
in the judgment of such organization will facilitate its activities;
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(C) examine the pertinent records of any practitioner or provider
of health care services providing services with respect to which
such organization has a responsibility for review under paragraph
(1); and
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(D) inspect the facilities in which care is rendered or services
are provided (which are located in such area) of any practitioner
or provider of health care services providing services with respect
to which such organization has a responsibility for review under
paragraph (1).
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(8) The organization shall perform such duties and functions
and assume such responsibilities and comply with such other requirements
as may be required by this part or under regulations of the Secretary
promulgated to carry out the provisions of this part or as may be
required to carry out section 1862(a)(15).
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(9)(A) The organization shall collect such information relevant
to its functions, and keep and maintain such records, in such form
as the Secretary may require to carry out the purposes of this part,
and shall permit access to and use of any such information and records
as the Secretary may require for such purposes, subject to the provisions
of section 1160.
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(B) If the organization finds, after reasonable notice to and
opportunity for discussion with the physician or practitioner concerned,
that the physician or practitioner has furnished services in violation
of section 1156(a) and the organization determines that the physician
or practitioner should enter into a corrective action plan under
section 1156(b)(1), the organization shall notify the State board
or boards responsible for the licensing or disciplining of the physician
or practitioner of its finding and of any action taken as a result
of the finding.
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(10) The organization shall coordinate activities, including
information exchanges, which are consistent with economical and
efficient operation of programs among appropriate public and private
agencies or organizations including—
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(A) agencies under contract pursuant to sections 1816 and 1842
of this Act;
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(B) other peer review organizations having contracts under this
part; and
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(C) other public or private review organizations as may be appropriate.
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(11) The organization shall make available its facilities and
resources for contracting with private and public entities paying
for health care in its area for review, as feasible and appropriate,
of services reimbursed by such entities.
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[(12) Stricken.[119]]
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(13) Notwithstanding paragraph (4), the organization shall perform
the review described in paragraph (1) with respect to early readmission
cases to determine if the previous inpatient hospital services and
the post-hospital services met professionally recognized standards
of health care. Such reviews may be performed on a sample basis
if the organization and the Secretary determine it to be appropriate.
In this paragraph, an “early readmission case” is
a case in which an individual, after discharge from a hospital,
is readmitted to a hospital less than 31 days after the date of
the most recent previous discharge.
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(14) The organization shall conduct an appropriate review of
all written complaints about the quality of services (for which
payment may otherwise be made under title XVIII) not meeting professionally
recognized standards of health care, if the complaint is filed with
the organization by an individual entitled to benefits for such
services under such title (or a person acting on the individual's
behalf). The organization shall inform the individual (or representative)
of the organization's final disposition of the complaint. Before
the organization concludes that the quality of services does not
meet professionally recognized standards of health care, the organization
must provide the practitioner or person concerned with reasonable
notice and opportunity for discussion.
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(15) During each year of the contract entered into under section 1153(b), the organization shall perform significant on-site review
activities, including on-site review in at least 20 percent of the
rural hospitals in the organization's area.
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(16) The organization shall provide for a review and report
to the Secretary when requested by the Secretary under section 1867(d)(3).
The organization shall provide reasonable notice of the review to
the physician and hospital involved. Within the time period permitted
by the Secretary, the organization shall provide a reasonable opportunity
for discussion with the physician and hospital involved, and an
opportunity for the physician and hospital to submit additional
information, before issuing its report to the Secretary under such
section.
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(17) The organization shall execute its responsibilities under
subparagraphs (A) and (B) of paragraph (1) by offering to providers,
practitioners, Medicare Advantage organizations offering Medicare
Advantage plans under part C, and prescription drug sponsors offering
prescription drug plans under part D quality improvement assistance
pertaining to prescription drug therapy. For purposes of this part
and title XVIII, the functions described in this paragraph shall
be treated as a review function.[120]
(b)(1)
No physician shall be permitted to review—
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(A) health care services provided to a patient if he was directly
responsible for providing such services; or
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(B) health care services provided in or by an institution, organization,
or agency, if he or any member of his family has, directly or indirectly,
a significant financial interest in such institution, organization,
or agency.
(2) For purposes of this subsection, a physician's family includes
only his spouse (other than a spouse who is legally separated from
him under a decree of divorce or separate maintenance), children
(including legally adopted children), grandchildren, parents, and
grandparents.
(c)
No utilization and quality control peer review
organization shall utilize the services of any individual who is
not a duly licensed doctor of medicine, osteopathy, dentistry, optometry,
or podiatry to make final determinations of denial decisions in
accordance with its duties and functions under this part with respect
to the professional conduct of any other duly licensed doctor of
medicine, osteopathy, dentistry, optometry, or podiatry, or any
act performed by any duly licensed doctor of medicine, osteopathy,
dentistry, optometry, or podiatry in the exercise of his profession.
(d)
Each contract under this part shall require
that the utilization and quality control peer review organization's
review responsibility pursuant to subsection (a)(1) will include
review of all ambulatory surgical procedures specified pursuant
to section 1833(i)(1)(A) which are performed in the area, or, at
the discretion of the Secretary a sample of such procedures.
(e)(1)
If—
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(A) a hospital has determined that a patient no longer requires
inpatient hospital care, and
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(B) the attending physician has agreed with the hospital's determination,
the hospital may provide the patient (or the patient's representative)
with a notice (meeting conditions prescribed by the Secretary under
section 1879) of the determination.
[(2)-(4) Stricken.][121]
(2) If—
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(A) a hospital has determined that a patient no longer requires
inpatient hospital care, but
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(B) the attending physician has not agreed with the hospital's
determination,
the hospital may request the appropriate peer review organization
to review under subsection (a) the validity of the hospital's determination.
If the hospital requests such a review, it shall also notify the
patient that the review has been requested.
(3)(A) If a patient (or a patient's representative)—
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(i) has received a notice under paragraph (1), and
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(ii) requests the appropriate peer review organization to review
the determination,
then, the organization shall conduct a review under subsection
(a) of the validity of the hospital's determination and shall provide
notice (by telephone and in writing) to the patient or representative
and the hospital and attending physician involved of the results
of the review. Such review shall be conducted regardless of whether
or not the hospital will charge for continued hospital care or whether or
not the patient will be liable for payment for such continued care.
(B) If a patient (or a patient's representative) requests a review
under subparagraph (A) while the patient is still an inpatient in
the hospital and not later than noon of the first working day after
the date the patient receives the notice under paragraph (1), then—
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(i) the hospital shall provide to the appropriate peer review
organization the records required to review the determination by
the close of business of such first working day, and
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(ii) the peer review organization must provide the notice under
subparagraph (A) by not later than one full working day after the
date the organization has received the request and such records.
(4) If—
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(A) a request is made under paragraph (3)(A) not later than
noon of the first working day after the date the patient (or patient's
representative) receives the notice under paragraph (1), and
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(B) the conditions described in section 1879(a)(2) with respect
to the patient or representative are met,
the hospital may not charge the patient for inpatient hospital
services furnished before noon of the day after the date the patient
or representative receives notice of the peer review organization's
decision.
[(5) Stricken.[122]]
(f)
The Secretary, in consultation with appropriate
experts, shall identify methods that would be available to assist
peer review organizations (under subsection (a)(4)) in identifying
those cases which are more likely than others to be associated with
a quality of services which does not meet professionally recognized
standards of health care.