Quality Improvement Organization Manual 
Chapter 1 - Background and Responsibilities 
 
 
Table Of Contents 
(Rev. 19, 05-01-15) 
 
Transmittals for Chapter 1 
 
1000 - Authority 
1005 - QIO Program Purpose 
1010 - QIO Responsibilities 
1015 - QIO Eligibility 
1020 - QIO Contract Term and Renewal 
1025 - Centers for Medicare & Medicaid Services (CMS) Role 
1030 - QIO Support Center (QIOSC) 
  1000  Authority 
(Rev. 19, Issued: 05-01-15, Effective: 05-01-15, Implementation: 05-01-15) 
 
The Quality Improvement Organization (QIO) Program is authorized by Title XI Part B 
and Title XVIII of the Social Security Act (the Act).  Citations in the Act indicate where 
the governing statutes for the QIO Program are codified in the United States Code 
(U.S.C.). Title XI Part B appears in the United States Code as 42 U.S.C. Sections1320c.-
1320c-8, and Title XVIII appears in the United States Code as 42 U.S.C Sections 1395-
1395ccc.  The administrative entity responsible for the QIO Program is the Centers for 
Medicare & Medicaid Services (CMS), Department of Health and Human Services. 
Applicable regulatory provisions for the QIO Program are in Title 42 of the Code of 
Federal Regulations (CFR). 
 
The regulatory authorities and governing statutes for the QIO Program are as follows: 
 
Title and  CFR Heading  Relevant  Social Security  Summary  
Part  Sections  Act and U.S.C 
Provisions 
42 CFR  Determinations,  405.900 to  Section 1869  Regulations governing 
Part 405   Redeterminations,  990  (42 U.S.C.  payment of Medicare 
Reconsiderations    1395ff)  claims including 
and Appeals under  procedures related to 
Original Medicare  initial determination 
(Parts A and B)   reviews performed by 
QIOs (See: 405.204 
and 405.900-990).  
42 CFR  Expedited  42 CFR  Section  Beneficiary rights to 
Part 405  Determinations and  405.1200 to  1869(b)(1)(F)   expedited 
Reconsiderations of  1208  (42 U.S.C.  determinations and 
Provider Service  1395ff(b)(1)(F)  hospital requests for  
Terminations, and  expedited QIO review 
Procedures for and  (See: 405.1200 -1208) 
Inpatient Hospital 
Discharge Reviews 
42 CFR  Prospective  412.42 to 48,  Section1866(a) Requires hospitals to 
Part 412  Payment Systems  412.82 to 84,  (1)(F) and  have agreements with 
for Inpatient  412.508  (a)(3) (42  QIOs for performance 
Hospital Services    U.S.C. 1395cc)  of Section 1154(a)(4) 
  and (14) functions 
and   (See: Section 
  1866(a)(1)(F)). 
1154(a)(4) and   
(14) (42 U.S.C.  Requires hospitals to 
1320c-3(a)(4)  have agreements with 
and (14))  QIOs and provides for 
  QIO reviews of 
medically unnecessary 
inpatient hospital 
services (See: 412.42-  Title and  CFR Heading  Relevant  Social Security  Summary  
Part  Sections  Act and U.S.C 
Provisions 
48) and reviews of 
extended length of stay 
cases and high cost 
cases (See: 412.82-
84). Requires long-
term care hospitals to 
have an agreement 
with an QIO for 
reviews of admissions 
and quality of care 
(See: 412.508) 
42 CFR  Medicare  422.153,  Section 1852  Requires Medicare 
Part 422  Advantage  422.562,  and   Advantage (MA) Plans 
(Subparts D  Program  422.564, and  1154(a)(4)(B),  to conduct and 
and M)  422.622  1154(a)(14)  document 
(42 U.S.C.  performance 
1320c- improvement and 
3(a)(14))  QIOs to collect, 
  acquire, and furnish 
information about MA 
Plans to CMS as 
defined in 42 CFR 475 
(See: 422.153). 
 
Requires MA Plans to 
establish complaint, 
grievance, and 
inpatient discharge 
procedures for review 
of its services by a 
QIO (See: 422.562, 
422.564, and 422.622) 
42 CFR  Quality  475.1 to  Sections 1151   Specifies eligibility 
Part 475  Improvement  475.107  1160 of the  requirements to 
Organizations  Social Security  become a QIO 
Act (42  selected by CMS and 
U.S.C.1320c   defines the QIO 
1320c-12)  contract term 
42 CFR  Quality  476.1, 476.70  Section 1154 of  Defines the QIO 
Part 476  Improvement  to 476.170  the Social  functions including the 
Organization  Security Act  scope of case review 
Review  (42 
U.S.C.1320c-3) 
42 CFR  Reconsiderations  478.10 to  Sections 1154  QIO procedures for 
Part 478  and Appeals  478.48  and 1155 of the  reconsiderations or 
Social Security  hearings related to its 
Act (42  diagnostic coding or  Title and  CFR Heading  Relevant  Social Security  Summary  
Part  Sections  Act and U.S.C 
Provisions 
U.S.C.1320c-3  payment 
and 1320c-4)  determinations  
42 CFR  Acquisition,  480.101 to  Section 1160 of  QIO confidentiality 
Part 480  Protection, and  480.145  the Social  and disclosure 
Disclosure of  Security Act  responsibilities related 
Quality  (42  to information it is 
Improvement  U.S.C.1320c-9)  authorized to collect, 
Organization  acquire, or generate  
Information 
42 CFR  Conditions of  482.30 and  Section  Requires hospitals to 
Part 482  Participation for  482.21  1861(e)(6) and  have a utilization 
Hospitals  1861(k) of the  review plan, which it 
Social Security  may meet by having 
Act (42 U.S.C.  reviews performed by 
1395x)  a QIO (see: 482.30).  
 
Requires hospitals to 
conduct and document 
performance 
improvement projects 
and determine whether 
to participate in QIO 
cooperative projects 
(See: Section 482.21). 
42 CFR  Provider  489.20(e)and  Sections  Requires hospitals to 
Part 489  Agreements and  489.24(h)  1866(a)(1)(F)  maintain an 
  Supplier Approval  and (a)(3) and  agreement with QIOs 
  1867(d) of the  to allow for review of 
Social Security  the admissions, 
Act (42 U.S.C.  quality, 
1395cc and 42  appropriateness, and 
U.S.C. 1320c- diagnostic information 
3(a)(16))  related to inpatient 
services (See: 
489.20(e)). Provides 
for QIO reviews of 
hospital compliance 
with Emergency 
Medical Treatment 
and Labor Act (See: 
Section 489.24 (h)) 
42 CFR  Imposition of  1004.1 to  Section 1156(a)  Review, notice, and 
Part 1004  Sanctions on  1004.140  of the Social  reporting procedures 
Health Care  Security Act  for QIOs to 
Practitioners and  (42 U.S.C.  recommend a sanction 
Providers of Health  1302 and  to the Office of the 
Care Services by a  1320c-5)  Inspector General  Title and  CFR Heading  Relevant  Social Security  Summary  
Part  Sections  Act and U.S.C 
Provisions 
Quality  (OIG). QIOs are not 
Improvement  responsible for the 
Organization  imposition of 
sanctions.  
 
1005 - QIO Program Purpose 
(Rev. 19, Issued: 05-01-15, Effective: 05-01-15, Implementation: 05-01-15) 
 
CMS contracts with QIOs to perform core functions that include case review and quality 
improvement. Sections 1152 and 1153(a), (b), (c), and (e) of the Social Security Act and 
42 CFR Part 475.101 through 475.103 define requirements for an entity to be awarded a 
contract to perform QIO functions. 
 
The case review functions of a QIO include review of healthcare services and items for 
which payment is made under Medicare Parts A, B, C, or D to determine whether 
services or items are reasonable, medically necessary, and allowable, meet 
professionally recognized standards of care, or in the case of inpatient care, could be 
provided more economically on an outpatient basis or in an inpatient facility of a 
different type. Generally, case reviews must be performed by a healthcare practitioner in 
the same professional field as the healthcare practitioner who ordered or furnished the 
services under review. The QIO must perform case review functions as outlined in 42 
CFR Part 476 and as defined in its contract with CMS. Other chapters of this manual 
provide more specific guidance on the various case review functions. 
 
Quality improvement functions may include technical assistance, data analysis, and 
stakeholder engagement activities that promote evidence-based healthcare practice and 
patient-centered care principles to improve healthcare quality of care, improve outcomes 
to beneficiaries, and lower costs. The QIO must perform quality improvement functions 
consistent with the terms of its contract with CMS. Quality improvement functions may 
include, but are not limited to, the following: 
 
  Engaging patients, families, and care-givers with the goal of increasing patient 
knowledge, skill, and confidence to take an active role in managing their health and 
healthcare  
 
  Technical assistance related to CMS quality measures across settings to help 
providers and practitioners meet standards 
 
An activity designed to serve as a catalyst and support for quality improvements that may 
relate to safety, healthcare, health, and value, and involve providers, practitioners, 
beneficiaries, and/or communities 
 
  1010 - QIO Responsibilities 
(Rev. 19, Issued: 05-01-15, Effective: 05-01-15, Implementation: 05-01-15) 
 
Only those entities that hold a contract with CMS to perform as a QIO are QIOs. QIOs 
perform a function or functions defined in Section 1154(a) of the Social Security Act (42 
U.S.C. 1320c-3(a)) in accordance with the terms that CMS defines in its QIO contracts. 
 
QIO contracts may require performance of one or more functions governed by statute as 
defined in 42 U.S.C. 1320c-3(a)(1) through (18). These statutory responsibilities may 
include the following:  
 
1.  Review the provision of health care services and items for which payment may be 
made. Involve healthcare practitioners of the type under review in such reviews. 
Determine through review whether services were reasonable and medically 
necessary, meet professionally recognized standards, and, if provided in an 
inpatient setting, could be  provided more economically on an outpatient basis or 
in an inpatient facility of a different type. (42 U.S.C. 1320c-3(a)(1)) 
 
2.  Determine, on the basis of the review described above, whether payment shall be 
made, provided that determinations to deny payment because the quality of care 
did not meet professional standards are based on criteria developed by the 
Secretary (42 U.S.C. 1320c-3(a)(2)) 
 
3.  Notify the healthcare provider, patient, and the agency or organization 
responsible for the payment of claims of the review determination within specific 
parameters (42 U.S.C. 1320c-3(a)(3)) 
 
4.  Conduct a reasonable proportion of quality of service reviews among the different 
cases and settings. Review both inpatient and outpatient services provided by 
Medicare cost plans under section 1876 pursuant to a risk-sharing contract. 
Maintain a beneficiary outreach program designed to apprise individuals 
receiving care under Medicare health plans of the QIO program. (42 U.S.C. 
1320c-3(a)(4)) 
 
5.  Consult with nurses and other professional healthcare practitioners and 
providers of healthcare services with respect to the organization's responsibility 
for the review of the professional activities of such practitioners and providers 
(42 U.S.C. 1320c-3(a)(5)) 
 
6.  Apply professionally developed norms of care, diagnosis, and treatment. Provide 
a physician representative to meet several times a year with medical and 
administrative staff of each hospital whose services are reviewed by the 
organization. Publish not less often than annually its review findings. (42 U.S.C. 
1320c-3(a)(6)) 
  7.  Utilize the services of persons who are practitioners of, or specialists in, the 
various areas it reviews, make professional inquiries, examine pertinent records, 
and inspect facilities in support of its reviews (42 U.S.C. 1320c-3(a)(7)) 
 
8.  Carry out reviews to approve exceptions to the payment exclusion for assistants at 
surgery in a cataract operation as specified in Section 1862(a)(15) of the Social 
Security Act (42 U.S.C. 1320c-3(a)(8)) 
 
9.  Collect, maintain, and permit access to information relevant to its functions and 
notify appropriate state boards in the event of a violation of section 1156(a) (42 
U.S.C. 1320c-3(a)(9)) 
 
10. Coordinate activities for economical and efficient operation of the program (42 
U.S.C. 1320c-3(a)(10)) 
 
11. Make available its facilities and resources for contracting with private and other 
public entities that pay for health care to provide similar review services (42 
U.S.C. 1320c-3(a)(11)) 
 
12. Review ambulatory surgical procedures specified pursuant to section 
1833(i)(1)(A) of the Social Security Act (42 U.S.C. 1320c-3(a)(12)) 
 
13. Review early readmission cases (42 U.S.C. 1320c-3(a)(13)) 
 
14. Review all written complaints from Medicare beneficiaries about the quality of 
services (42 U.S.C. 1320c-3(a)(14)) 
 
15. Perform on-site reviews (42 U.S.C. 1320c-3(a)(15)) 
 
16. Upon request from the Secretary or CMS pursuant to section 1867(d) of the Act, 
review hospital and physician performance for compliance with the Emergency 
Medical Treatment and Labor Act (42 U.S.C. 1320c-3(a)(16)) 
 
17. Offer quality improvement assistance pertaining to prescription drug therapy to 
providers, practitioners, and Medicare health plans (42 U.S.C. 1320c-3(a)(17)) 
 
18. Perform activities deemed necessary by the Secretary for purposes of improving 
the quality of care (42 U.S.C. 1320c-3(a)(18)) 
 
In order to fulfill these statutory responsibilities, QIOs may perform activities that 
include, but are not limited to, the following: 
 
  Establishing methods and procedures for involvement of healthcare practitioners in 
performing reviews of healthcare services and investigating complaints    Maintaining current knowledge of Medicare programs in order to conclusively 
determine whether payments must be made for services under Title XVIII of the 
Social Security Act 
 
  Entering into Memoranda of Agreement with healthcare providers, payers, and other 
organizations prior to conducting Medicare case reviews in the service areas and for 
the types of cases it will have authority to review, and conducting outreach to inform 
beneficiaries about how to exercise their right to QIO reviews 
 
  Establishing procedures for notifying any patient, practitioner, provider, and any 
organization responsible for payment to communicate with them about the QIO 
review determination and rights to reconsideration or appeal 
 
  Planning for and maintaining sufficient staffing to assure that resources are allocated 
to performing reviews by duly licensed professionals for all of the different cases and 
settings 
 
  Establishing methods for identifying cases where there is a likelihood that quality of 
services do not meet professionally recognized standards of care 
 
  Coordinating activities and information exchanges across QIO contractors and 
Program stakeholders such as public and private organizations involved in 
healthcare delivery 
 
  Publishing at least annually a report of QIO activities and findings 
 
  Performing any other services to improve the quality of care for services under Title 
XVIII of the Social Security Act that CMS determines are appropriate for 
performance under QIO contract awards 
 
  Maintaining procedures to continuously monitor, mitigate, or avoid any actual, 
potential, or apparent conflicts of interest of the QIO organization, its employees and 
subcontractors when performing any function of the QIO contract 
 
Section 1153 of the Social Security Act requires that CMS ensure there is no duplication 
of the functions carried out by QIOs if more than one QIO operates in the same area. 
QIO contractors should assist CMS and work together with other stakeholders to identify 
and mitigate any duplication of effort identified in their geographic or service area. 
 
1015 - QIO Eligibility  
(Rev. 19, Issued: 05-01-15, Effective: 05-01-15, Implementation: 05-01-15) 
 
Section 1152 of the Social Security Act and 42 CFR Part 475 provide the authority for 
CMS to enter into contracts with entities to perform QIO functions. In awarding such 
contracts, CMS complies with the Federal Acquisition Regulation (Title 48 CFR) unless 
the Secretary determines that a specific provision is inconsistent with the purposes of  Title XI, Part B of the Social Security Act. In order to be awarded a QIO contract, an 
entity must meet the following qualifying requirements: 
 
  Have a governing body that includes at least one individual who is a representative of 
healthcare providers and at least one individual who is a representative of consumers 
(42 CFR 475.101(a)) 
 
  Demonstrate capability to meet the eligibility requirements and perform the activities 
specified by CMS in the solicitation for award of a QIO contract (42 CFR 
475.101(b)(1)) 
 
  Demonstrate the ability to perform case reviews as set forth in 42 CFR 475.102 
and/or perform quality improvement as set forth in 42 CFR 475.103 (42 CFR 
475.101(b)(2) 
 
  Demonstrate the ability to actively engage beneficiaries, families, and consumers in 
case reviews and/or quality improvement activities (42 CFR 475.101(c)) 
 
  Demonstrate the ability to perform QIO functions with objectivity and impartiality 
and in a fair and neutral manner (42 CFR 475.1010(d)) 
 
  Demonstrate that it is not a healthcare facility, affiliate, or payer organization. QIOs 
may not perform reviews of healthcare services other than the review of the quality of 
care (42 CFR 475.105). 
 
Pursuant to Section 1153(c) of the Social Security Act, the contract between CMS and a 
QIO must provide the right for CMS to evaluate the quality and effectiveness of the QIO 
in carrying out QIO functions. Further, CMS has the right to negotiate contractual 
performance objectives and to provide specifications or modifications based on regional 
or national norms for QIO contractors performing the quality improvement and case 
review functions. 
 
CMS has the responsibility to determine the efficient and effective administration of the 
QIO Program, establish the program structure, determine the number of contracts and 
limitations, define the service areas, solicit for QIO services, and negotiate awards. CMS 
abides by the Federal Acquisition Regulation excepts when Section 1153(e) of the Social 
Security Act permits an exception. 
 
1020 - QIO Contract Term and Renewal  
(Rev. 19, Issued: 05-01-15, Effective: 05-01-15, Implementation: 05-01-15) 
 
Beginning with contracts awarded after January 2012 and pursuant to Section 
1153(c)(3) of the Social Security Act and 42 CFR 475.107 the contract between CMS and 
a QIO has a five-year term. Section 1153(b)(4) of the Social Security Act further grants 
CMS authority to renew QIO contracts for additional five-year terms of performance. 
CMS must assess the performance of QIO contractors in accordance with the contract  and the applicable Federal Acquisition Regulations defined in Title 48 of the CFR prior 
to determining whether to renew a QIO contractor for an additional five-year term. 
Further, any CMS decision to terminate or not renew an awarded QIO contract is not 
subject to judicial review under the authorities provided in Section 1153(f) of the Social 
Security Act. 
 
1025 - Centers for Medicare & Medicaid Services (CMS) Role 
(Rev. 19, Issued: 05-01-15, Effective: 05-01-15, Implementation: 05-01-15) 
 
CMS was established in March 1977 to combine healthcare financing and quality 
improvement programs into a single agency. CMS is responsible for the Medicare 
Program, federal participation in the Medicaid Program, the Quality Improvement 
Organization (QIO) Program, and a variety of other health care quality improvement 
programs. 
 
CMS's primary mission is to administer its programs in a manner that: 
 
  Promotes the timely delivery of appropriate, quality healthcare to 
beneficiaries 
  Ensures that beneficiaries are aware of the services for which they are 
eligible 
  Ensures that those services are accessible and of high quality 
  Promotes efficiency and quality within the total healthcare delivery system 
  Promotes the award and administration of all CMS contracts in 
accordance with the Federal Acquisition Regulations (48 CFR) 
 
Central Office Policy-making Responsibility: Overall policy-making responsibility for 
administration of the QIO Program is centralized in CMSs Center for Clinical Standards 
and Quality. The CMS Central Office is responsible for: 
 
  Monitoring and overall administrative control of the QIO Program, including 
coordinating with CMSs Office of Acquisition and Grants Management on 
contracts and financial aspects 
  Establishing operational policy for the QIO Program 
  Developing operational instructions and official interpretations of policy for QIOs 
and CMS Regional Offices (ROs) 
 
Regional Office Assistance to QIOs: CMS Regional Offices are responsible for assuring 
that QIOs meet applicable federal requirements under the provisions of their contracts 
through the duties of Contracting Officers Representatives. The Regional Offices: 
 
  Provide liaison, direction, and technical assistance to QIOs in the day-to-day 
management of their operations    Interpret CMS guidelines, policies, and procedures applicable to QIO activities 
  Analyze QIO budgets and spending patterns to assure that funds are economically 
and appropriately utilized 
  Recommend the allocation of funds for conducting additional activities 
  Conduct assessments of QIO operations 
  Review QIO actions 
  Provide feedback to each QIO 
 
1030 - QIO Support Center (QIOSC) 
(Rev. 16, Issued: 06-30-06, Effective: 06-30-06, Implementation: 06-30-06) 
 
For certain topics, settings, populations, and project processes, CMS is contracting with 
designated QIOs to provide support for CMS and the QIO community for the particular 
areas of interest.  These QIO Support Centers (QIOSCs) will work in conjunction with 
corresponding Topic Area Teams (TATs) established by CMS.  The QIOSC will serve as 
a clearinghouse of topic-specific information and provide technical assistance to QIOs as 
necessary.  Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R19QIO  05/01/2015  QIO Manual Chapter 1  Background,  05/01/2015 N/A 
Eligibility and Responsibilities 
R16QIO  06/30/2006  Revisions to Chapter 1, Background and  06/30/2006 N/A 
Responsibilities 
R10QIO  10/05/2003  Initial Release of Chapter  N/A  N/A 
Back to top of chapter