Utilization Review (UR)

2496 - Utilization Review (UR) (Rev. 1, 05-21-04) 2496A - Definition (Rev. 1, 05-21-04) Utilization Review is the process by which the care and services provided to Medicare and Medicaid beneficiaries are reviewed for appropriateness, medical necessity, and whether the services meet professionally recognized standards of health care. 2496B - Hospitals (Rev. 1, 05-21-04) Utilization Review requirements for Medicare and Medicaid hospitals are contained in §1861(k) of the Act. The Medicare UR regulations for hospitals are contained in 42 CFR 482.30, CoPs - Utilization Review. Under Medicare, the Quality Improvement Organization (QIO) performs the UR function for hospitals. 42 CFR 466.78 requires that beginning November 15, 1984, every hospital seeking payment for services provided to Medicare beneficiaries maintain a written agreement with a QIO operating in the area in which the hospital is located. The law and regulations require that a hospital maintain an agreement with the QIO for the QIO to review the admissions, quality, appropriateness, and diagnostic information related to inpatient services for Medicare patients, if there is a QIO with a contract with CMS in the area where the hospital is located. Also, regulations at 42 CFR 476.86 permit the QIO review activities to fulfill the hospital’s UR requirements. State survey agencies acting on behalf of CMS are not required to review the UR CoP. QIOs are to review hospital admissions (paid under the Medicare prospective payment system) under the program referred to as the Payment Error Prevention Program (PEPP) for Medicare. The purpose of PEPP is to reduce the occurrence of errors that may result in incorrect payment to hospitals. (The regulations also refer to other, non-hospital groups that could perform UR functions when the QIO does not fulfill this function or if DMS has favored a state’s procedures). The UR requirements under Medicaid are largely determined by those under Medicare. Section 1903(i)(4) of the Act provides that Federal financial participation is not available in a state’s expenditures for hospital services unless the institution has in effect a UR plan that meets Medicare requirements. Under the law, if a hospital already has a UR plan in effect for Medicare, that plan serves as the plan required by Medicaid, with the same procedures and the same review committee or group. Therefore, if there is a UR plan that does not include a hospital-based UR committee for Medicare, none should be used for Medicaid. If a facility does not participate in Medicare, it must meet the Medicaid regulatory requirements, which 42 CFR 456.501(c) describes as equivalent to the Medicare regulatory UR requirements (with possible alternatives to hospital committee review). In addition, 42 CFR 456.505 of the regulations provides that the Administrator may waive the standard UR plan requirements if the state Medicaid agency applies for a waiver, and demonstrates that it has specific UR procedures in operation that are superior in their effectiveness to those in the Medicaid regulations. 2496C - SMAs (Rev. 1, 05-21-04) Section 1902(d) of the Act allows SMAs the option of contracting with a QIO to perform UR functions. A State may be deemed to meet the State plan requirements specified in 42 CFR 456, Subparts C and D, for those services or providers reviewed by such organization under such a contract. 2496D - Background and Scope of Work (Rev. 1, 05-21-04) The QIOs were established under the provisions of P.L. 97-248, the Tax Equity and Fiscal Responsibility Act of 1982. The law requires the Secretary to enter into contracts with physician-sponsored or physician-access organizations to review services provided to Medicare beneficiaries to insure that the care they receive is medically necessary, appropriate, and of a quality that meets professionally recognized standards of care. The ultimate goal of the QIO is to improve the quality of care provided to Medicare beneficiaries by utilizing statistical quality control measures to examine variations in both the processes and the outcomes of care. 2496D1 - Extent of PRO Review (Rev. 1, 05-21-04) To participate in the Medicare program, every hospital must have an agreement with a QIO to perform utilization and quality review in that institution. Effective October 1, 1987, SNFs, HHAs, and hospital outpatient departments (HOPDs) must have an agreement with a QIO. This agreement allows QIOs to review post-hospital care, such as care provided in a SNF or by an HHA which is given between a hospital admission and readmission occurring within 31 calendar days of discharge. The QIO then responds to beneficiary complaints about the quality of care given by SNFs, HHAs, and hospitals (including HOPDs). QIOs also have agreements with ASCs to review a sample of Medicare surgical records for medical necessity. For hospitals certified as swing-bed providers, the QIO reviews a sample of cases to determine the medical necessity of the stay and the appropriateness of the setting. 42 CFR 488.14 indicates that when a QIO conducts review activities under §1154 of the Act and 42 CFR 466, its activities shall be in lieu of the UR and evaluation activities required of health care institutions under §§1861(e)(6) and 1861(k) of the Act. In addition, any QIO review activity will also be in lieu of survey, compliance, and assistance activities required of SAs under §1864(a) of the Act. 2496D2 - Availability/Disclosure of QIO Information (Rev. 1, 05-21-04) As a result of their review activities, PROs have information related to practitioners and institutions that may be helpful to the SA. 42 CFR 476.138(a)(1) provides for disclosure of this information to licensing and certification bodies if it is required by the agency to carry out a function within the jurisdiction of the agency under Federal or State law. A QIO must disclose confidential information upon request, or may do so without a request, to a State or Federal body responsible for professional licensure of a practitioner or an institution. Information about an institution that does not identify individuals is not confidential information and may be disclosed. However, 42 CFR 476.105(b)(2) requires disclosure to conform with notice of disclosure requirements. In general, a QIO must notify a practitioner or institution of its intent to disclose information to a licensing or certification body and provide the practitioner or institution with a copy of the information it will disclose at least 30 calendar days in advance. When disclosing the information, the QIO includes any comments submitted by the practitioner or institution if they were received prior to disclosure, or forwards comments separately if received after disclosure. Recipients of confidential QIO information are prohibited from disclosing the information unless specifically provided for in Federal regulation. For example, in accordance with 42 CFR 476.107(e), if the QIO acquires information from a hospital and provides the information to a licensing body that is authorized to acquire the information directly from the hospital, the licensing body may then disclose the information in accordance with the hospital’s redisclosure rules. The SA should work with QIOs to identify and obtain information that will be helpful to it in the survey and certification process. If further information or assistance is needed, including name and address of the area QIO, the SA contacts the RO. 2496E - Action When a QIO Ceases Utilization Review (Rev. 1, 05-21-04) The SA instructs hospitals and SNFs to forward a copy of their UR plan to it within 90 days of a QIO’s cessation of review activity in that area. If the plan does not meet the requirements, the SA returns it for necessary revisions. 2496F - Including UR in Next Scheduled Resurvey (Rev. 1, 05-21-04) The SA conducts a brief review of UR activities during the next regularly scheduled survey of the institution to verify that the UR plan is in place and functioning. For accredited hospitals where surveys are not regularly performed, the SA instructs the hospitals to send it copies of the minutes of their UR committee’s meetings (or a summary or synopsis of the minutes). The SA reviews the current UR plan against the regulations themselves (there is no UR Survey Report at the present time) to verify that the plan meets the applicable requirements and reviews the institution’s conduct of UR activities against that written plan. The SA records any UR deficiencies and plans of correction; after all other deficiencies have been recorded on the Form CMS-2567. (These deficiencies will not be recorded in MMACS.) The SA records the status of the institution’s UR compliance in the “Remarks” portion of the Certification and Transmittal, Form CMS-1539, e.g., name of facility is in compliance with UR requirements,” or “Acceptable Plan of Correction for UR has been submitted.” The Survey Process (See Chapter 7 for SNFs and NFs)