Medicare fiscal agent, or a Medicaid State agency, in the proper exercise of its duties and functions, from reviewing claims to determine whether they meet the coverage requirements of Titles XVIII and XIX. (See § 463.26 (b) and (c) and § 463.27(c))

Subpart C-Correlation of Title XI Functions with Functions Required Under Title XVIII and Title XIX of the Act

§ 463.25 Applicability.

The provisions of this subpart are applicable only to health care services and items provided by or in health care institutions in which a PSRO has assumed review responsibility in accordance with the applicable provisions of Subpart A of this part.

§ 463.26 Correlation of Title XI functions with Title XVIII functions.

(a) Utilization review activities. PSRO review activities under section 1155(a) of the Act shall be in lieu of the utilization review and evaluation activities required of health care institutions under sections 1861(e)(6), 1861(j)(8), 1861(j)(12), 1861(k) and 1865 of the Act.

(b) Certifications. (1) The certifications made by attending physicians under section 1156(d) of the Act with regard to the medical necessity of health care services, shall be in lieu of the physician certifications required under sections 1814(a)(2) (A), (B), (C) and (E), 1814(a)(3), and 1835(a)(2)(B) of the Act.

(2) However, pertinent coverage regulations and guidelines authorized and established under those provisions of title XVIII of the Act shall continue to apply to payment determinations.

(3) A Medicare beneficiary is not eligible for a period of presumed coverage under section 1814(h) of the Act if a PSRO determines that the care specified in section 1814(a)(2)(C) of the Act is not medically necessary or appropriate.

(c) Payment determinations by Medicare intermediaries and carriers. (1) PSRO determinations under section 1155(a) of the Act with regard to the medical necessity, quality and ap

propriate level of care of health care services, shall be conclusive with regard to those issues on decisions of Medicare intermediaries and carriers under sections 1814(a)(4), 1814(a)(5), 1814(a)(6), 1862(a)(1) and 1862(a)(9) of the Act.

(2) Reviews with respect to those determinations shall not be conducted, for purposes of payment, by Medicare intermediaries and carriers.

(3) However, pertinent coverage regulations and guidelines authorized and established under those provisions of title XVIII of the Act continue to apply to payment determinations, and claims payment agencies shall not be precluded from rendering coverage and reimbursement determinations with regard to issues that are not subject to PSRO determinations.

(d) Survey, compliance and assistance activities. PSRO review and monitoring activities shall be in lieu of the survey, compliance and assistance activities required of State survey agencies under section 1864(a) with respect to sections 1861(e)(6), 1861(j)(8), 1861(j)(12), and 1861(k) of the Act, and intermediaries and carriers under sections 1816(b)(1)(B) and

1842(a)(2)(A) and (B) of the Act.

(e) Review and appeals activities. Any reviews, appeals, and notifications of PSRO determinations provided under sections 1159 (a) and (b) of the Act shall be in lieu of reviews, appeals and notifications provided under sections 1842(b)(3)(C) and 1869(b) of the Act with respect to the issues of the medical necessity, quality and appropriate level of care of health care services.

[43 FR 7407, Feb. 22, 1978, as amended at 44 FR 16398, Mar. 19, 1979]

§ 463.27

Correlation of Title XI functions with Title XIX functions.

(a) Review activities. (1) PSRO review activities under section 1155(a) of the Act shall be in lieu of the medical, utilization and independent professional review activities required under sections 1902(a)(26), 1902(a)(30), 1902(a)(31), 1903(g)(1) and 1903(i)(4) of the Act.

(2) For purposes of a State's review responsibility and its relief of financial penalty under section 1903(g)(1) of the

made by attending physicians under section 1156(d) of the Act shall be in lieu of physician certifications required under section 1903(g)(1)(A) of the Act.

(c) Payment determinations. (1) PSRO determinations under section 1155(a) of the Act, with regard to the medical necessity, quality and appropriate level of care of health care services, shall be conclusive with regard to those issues on decisions of Medicaid State agencies under sections 1903(g) and 1903(i)(4) of the Act.

(2) Reviews with respect to those determinations shall not be conducted, for purposes of payment, by Medicaid State agencies.

(3) However, such PSRO determinations shall not preclude appropriate coverage determinations under the provisions of Title XIX of the Act with regard to issues that are not subject to PSRO determinations.

(d) Survey and compliance activities. PSRO review and monitoring activities shall be in lieu of the validation procedures performed by the Secretary under section 1903(g)(2) of the Act and the survey procedures required of State survey agencies under section 1902(a)(33)(A) of the Act.

(e) Review and appeals activities. (1) Any reviews, appeals and notifications of PSRO determinations provided under sections 1159 (a) and (b) of the Act shall be in lieu of fair hearings before State agencies and notifications provided under section 1902(a)(3) of the Act with respect to the issues of the medical necessity, quality and appropriate level of care of health care services.

(2) The provisions of § 463.17(b) relating to payment pending a PSRO reconsideration decision are in lieu of the provisions of 45 CFR 205.10(b)(1) relating to payment pending a State agency hearing decision.

(f) State plans. The provisions of this part shall apply to the operation

of State plans and programs approved under Title XIX of the Act.

[43 FR 7407, Feb. 22, 1978, as amended at 44 FR 16398, Mar. 19, 1979]

§ 463.28 Continuation of functions not assumed by PSROs.

Any of the duties and functions of a PSRO under Title XI, Part B of the Act for which a PSRO has not assumed responsibility shall be performed in the manner and to the extent otherwise provided for under the Act.

Subpart D-PSRO Review of Intermediate Care Facilities if Medicaid State Agency Review Is Ineffective or Inefficient

AUTHORITY: Secs. 1102 and 1155(a)(7) of the Social Security Act (42 U.S.C. 1302 and 1320c-4(a)(7).

SOURCE: 45 FR 11810, Feb. 22, 1980, unless otherwise noted.

§ 463.30 Scope and purpose.

This subpart implements section 1155(a)(7) of the Act, which requires PSROS to assume responsibility for reviewing the professional activities in one or more ICFS and ICFs-MR if the Secretary finds that:

(a) The Medicaid State agency is not performing effective review in ICFs or ICFS-MR; or

(b) Medicaid State agency review of ICF services in combined facilities is inefficient.

The subpart sets forth the procedures and criteria that HCFA will use to make such findings.

§ 463.32 When effectiveness or efficiency will be determined by HCFA.

(a) Upon request. Any person may request that HCFA determine the effectiveness of the Medicaid State agency's review in one or more ICFs and ICFS-MR or the efficiency of its ICF review in one or more combined facilities. HCFA will initiate determination procedures if the requesting party provides sufficient information to indicate that there may be a significant lack of effectiveness or efficiency.

(b) Failure to meet utilization control requirements. HCFA may initiate

(a) Fact-finding activities. (1) HCFA will assess the effectiveness of the Medicaid State agency's review in ICFS and ICFs-MR or the efficiency of its ICF review in combined facilities:

(i) By requiring the Medicaid State agency and the PSRO to submit pertinent information; and

(ii) Through meetings with the Medicaid State agency, the PSRO, and other involved parties.

(2) When parties disagree on the facts presented to document a State's capability to perform ICF review HCFA may convene an informal hearing where all parties listed in paragraph (a)(1) (ii) of this section may appear and present evidence.

(b) Criteria for a determination of effectiveness. When determining the effectiveness of a Medicaid State agency's review, HCFA will consider whether:

(1) The Medicaid State agency has a utilization control program in ICFS and ICFS-MR that satisfies the requirements of Part 456 of this chapter;

(2) The Medicaid State agency's review in ICFs and ICFS-MR results in appropriate level-of-care determinations in accordance with the definitions provided in Parts 440 and 442 of this chapter; and

(3) The Medicaid State agency detects any significant deficiencies that have existed in the quality of care provided in ICFs or ICFS-MR and takes action to have the facility correct the deficiencies.

(c) Criteria for a determination of efficiency. When determining the efficiency of Medicaid State agency

review in combined facilities, HCFA will consider whether:

(1) The costs of Medicaid State agency review are significantly greater that the additional costs to the PSRO to expand its review activities in these facilities; and

(2) The Medicaid State agency's and PSRO's review procedures are compatible.

§ 463.34 Notice of initial determination.

(a) Following its fact finding activities HCFA will provide notice to the Medicaid State agency, the pertinent PSROS, and any other interested parties of:

(1) Its determination of effectiveness or efficiency;

(2) The basis for this determination; (3) The consequences of this determination; and

(4) The right to request reconsideration under § 463.35.

(b) If HCFA finds deficiencies in the Medicaid State agency review system which are not so significant as to call for a determination of ineffective or inefficient review, HCFA:

(1) Will offer the State technical assistance to improve its review system; and

(2) May require that the State develop and implement a plan of correction. § 463.35

Reconsideration.

The Medicaid State agency, the PSRO, or the party that requested the determination may, within 30 days from the date of the notice, submit new and material information and request HCFA to reconsider its determination. HCFA will notify all interested parties whether it will grant a reconsideration request. If HCFA grants a reconsideration request, all parties to the initial determination may submit additional information. HCFA will notify all interested parties of its decision to affirm or reverse its original determination of effectiveness or efficiency.

§ 463.36 PSRO assumption of review responsibility and authority.

(a) If HCFA determines that the Medicaid State agency review is ineffective or inefficient, the PSRO shall

assume review responsibility as soon as it has met the requirements of § 463.2. (b) Except in unusual circumstances, the PSRO shall phase in review in all ICFS and ICFS-MR affected by a determination under paragraph (a) of this section within 1 year of initiating review in the first of the affected facilities.

§ 463.37 Reinstatement of Medicaid State agency review.

(a) After 1 year following a determination of ineffectiveness or inefficiency under § 463.34 of this part, the State agency may present evidence to HCFA to demonstrate that its review program is no longer ineffective or inefficient.

(b) HCFA may request the PSRO and any other party to the original determination under § 463.34 to submit additional evidence relating to the effectiveness and efficiency of State agency review.

(c) Based on the information presented, if HCFA finds State agency review to be effective or efficient, HCFA may reinstate State agency review in ICFS and ICFS-MR, or combined facilities, respectively, beginning the next calendar quarter following the determination.

Sec.

466.19 Profile analysis.

466.20 Involvement of health care practitioners other than physicians. 466.21 Reviewer qualifications and participation.

466.22 Alternative review methods.

Subpart C-Delegated Review

466.30 Opportunity for hospitals to seek

delegation.

466.31 Letter of interest.

466.32 Details of delegated review plan. 466.33 Determination and notice of hospital capability.

466.34 Delegation of review activities. 466.35 Agreement with delegated hospitals. 466.36 PSRO monitoring and reassessment of hospital capability.

466.37 Reconsiderations.

466.38 Monitoring by HCFA. 466.39 PSRO responsibilities when delegation is denied, withdrawn, or disapproved.

Subpart D-Norms, Criteria, and Standards for Review

466.50 Basic requirement for PSRO area norms, criteria, and standards.

466.51 Establishment of norms, criteria, and standards.

466.52 Dissemination of norms, criteria, and standards.

466.53 Use of norms, criteria, and standards.

466.54 Revisions.

466.55 Regional norms, criteria, and standards.

466.56 Review of PSRO norms, criteria, and standards.

AUTHORITY: Secs. 1102, 1155, 1156, and 1165 of the Social Security Act (42 U.S.C. 1302, 1320c-4, 1320c-5, and 1320c-14).

SOURCE: 44 FR 32081, June 4, 1979, unless otherwise noted.

Subpart A-General Provisions

§ 466.1 Statutory provisions and applicability.

(a) Statutory provisions. (1) Section 1155(a) of the Social Security Act requires that each PSRO assume, at the earliest date practicable after designation of a PSRO by HCFA, responsibility for the review of the professional activities of institutional and non-institutional providers and physicians and other health care practitioners in the provision of health care services under Medicare, Medicaid, and the

Maternal and Child Health and Crippled Children's programs. The purpose of PSRO review is to determine whether:

hospital; or (3) to care for and treat patients in a hospital; or (b) that a health care practitioner other than a physician is authorized on a regular,

(ii) The quality of the services meets professionally recognized standards of health care; and

(iii) Those services and items proposed to be provided on an inpatient basis could, consistent with the provision of appropriate medical care, be effectively provided on an outpatient basis or more economically in an inpatient health care facility of a different type.

(2) Section 1155(e) of the Act requires PSROS to use the services, and accept the findings, of hospital review committees that demonstrate their capacity to carry out review functions in a timely and effective manner and provides that the Secretary may, for good cause, disapprove such acceptance.

(3) Section 1156 of the Act requires that, in carrying out its review responsibilities, each PSRO shall apply professionally developed norms of care, diagnosis, and treatment based upon typical patterns of practice in its area as principal points of evaluation and review.

(b) Applicability. (1) Unless otherwise indicated, the provisions of this part apply to hospital review functions performed by the PSRO or by hospital review committees to which the PSRO has delegated those functions in accordance with Subpart C of this part.

(2) However, the provisions on notification, evaluation prior to delegation, and delegation (§ 466.30 through § 466.35) do not apply if a delegation took place before [the effective date of this part] under procedures approved by the Department.

§ 466.2 Definitions.

As used in this part, unless the context indicates otherwise:

"Act" means the Social Security Act (42 U.S.C. Chapter 7).

"Active staff privileges in hospital" means: (a) That a physician is authorized on a regular, rather than infrequent or courtesy, basis; (1) to order the admission of patients to a hospital; (2) to perform diagnostic services in a

basis to order the admission of patients to a hospital.

"Admission review" means a review and determination by a PSRO of the medical necessity and appropriateness of a patient's admission to a hospital level of care.

"Adverse determination” means an initial negative decision by a PSRO, or by a delegated hospital review committee, regarding the medical necessity, quality, or appropriateness of health care services provided or proposed to be provided to a patient.

“Assigned length of stay” means the number of days between admission and the date the PSRO would ordinarily complete the determination of the medical necessity of continued hospital stay.

"Area" means the geographic area for which a PSRO has been designated.

"Automatic

certification" means PSRO approval of the provision of health care services to a patient without performance of admission review, or without performance of both admission review and continued stay review.

"Certified length of stay" means a period of time which a PSRO approves as a medically necessary and appropriate period for a patient to receive inpatient care in a hospital.

"Concurrent quality assurance" means a form of review that focuses on the quality of health services furnished to individual patients, performed while the patient is in the hospital.

"Concurrent review” means a review and determination focused on the necessity and appropriateness of inpatient hospital services performed while the patient is in the hospital. It includes admission review, continued stay review and, when appropriate, procedure review.

"Continued stay review" means PSRO review and determination, after admission review and during a patient's hospitalization, of the medical necessity and appropriateness of con