Quality Improvement Organization Manual 
Chapter 4 - Case Review 
 
Table Of Contents 
(Rev. 18, 10-10-14) 
 
Transmittals for Chapter 4 
 
MANDATORY CASE REVIEW REQUIREMENTS 
 
4000 - Introduction 
4010 - Anti-dumping Violations 
4020 - Assistants at Cataract Surgery 
4030 - Beneficiary Complaints 
4040 - Hospital and Medicare + Choice Organization (M+CO) Notices of Non-coverage 
4050 - Hospital-requested Higher-weighted Diagnosis Related Groups (DRG) 
Assignments 
4060 - Potential Concerns Identified During Project Data Collection (PDC) 
4070 - Referrals 
 
BASIC CASE REVIEW ACTIVITIES 
 
4100 - Introduction 
4105 - Quality Review 
4110 - Admission/Discharge Review 
4115 - Invasive Procedure Review 
4120 - Length-of-Stay Review 
4125 - Coverage Review 
4130 - DRG Validation Review 
 
ADDITIONAL CASE REVIEW ACTIVITIES 
 
4200 - Introduction 
4210 - Outlier Review 
4230 - Limitation on Liability Determinations 
4240 - Readmission Review 
4250 - Transfer Review 
4255 - Circumvention of Prospective Payment System (PPS) 
4260 - Onsite Review 
 
INTEGRATED CASE REVIEW/PHYSICIAN REVIEWER ASSESSMENT FORMAT 
(PRAF) 
 
4300 - Introduction 
4305 - Non-physician Review  4310 - First Level Physician Review 
4312 - Action Following Opportunity for Discussion 
4315 - Second Level Physician Review 
4320 - Third Level Physician Review 
4325 - Use of the Physician Reviewer Assessment Format (PRAF) 
 
SCOPE OF CASE REVIEW 
 
4400 - Introduction 
4405 - Review of Medicare Services 
4410 - Review Settings 
 
CASE REVIEW PROCEDURES 
 
4500 - Introduction 
4510 - Using Screening Criteria 
4520 - Requesting Medical Records/Reviewing Documentation 
4530 - Providing Opportunity for Discussion 
4540 - Adhering to Review Timeframes 
4550 - Profiling Case Review Results 
4560 - Maintaining Memoranda of Agreements (MOAs) 
4570 - Prepayment Review System (PRS) Implementation 
4580 - Monitoring Hospitals' Physician Acknowledgment Statements 
4590 - Reporting Requirements for Review Activities 
 
PERSONNEL 
 
4600 - Introduction 
4610 - Non-physician Reviewers 
4620 - Physician Reviewers 
4630 - Health Care Practitioners Other Than Physicians (HCPOTP) 
4640 - Conflict of Interest 
4650 - Training 
 
FEEDBACK AND ACTION PLANS FOR INDIVIDUAL PROVIDERS/PHYSICIANS 
 
4700 - Introduction 
4705 - Feedback to the Provider and Involved Physicians 
4710 - Request for an Action Plan 
4715 - When an Action Plan Is Not Needed 
4720 - Provider Implementation of an Action Plan 
4725 - Additional Performance Improvement Actions 
4730 - Monitoring Performance Improvement Actions 
4735 - Timing Requirements for Performance Improvement Activities 
 
EXHIBITS   
Exhibit 4-1 - Standard Mandatory Case Review Process 
Exhibit 4-1A - Standard Mandatory Case Review Process Timeframes  4000 - Introduction - (Rev. 2, 07-11-03) 
 
You are required to perform individual case review to fulfill mandatory review 
requirements (see 4100).  Mandatory review categories include:  alleged anti-dumping 
violations, requests for assistants at cataract surgery for specific codes, beneficiary 
complaints, hospital-issued notices of non-coverage (HINN), beneficiary's requests for 
immediate review of notices of discharge and medicare appeal rights (NODMAR), 
hospital-requested higher-weighted diagnosis related groups (DRG) adjustments, 
potential gross and flagrant violations in one or more instances or substantial violations in 
a substantial number of cases (see chapter 9), and hospital payment monitoring program 
(HPMP) cases (see chapter 11).  If in the course of conducting a mandatory review (e.g., 
beneficiary complaint) you determine that the case also involves another review category 
(e.g., a readmission within 31 days), you are required to perform the review for that 
category as well (in this case, the readmission) (see Exhibit 4-1A, for review categories 
and timeframes). 
 
As part of the HPMP (see chapter 11) review, you are also required to conduct analyses 
of these mandatory review activities mentioned above to identify trends and patterns 
suggestive or indicative of: 
 
  Inappropriate, unreasonable, or medically unnecessary care (including setting of 
care issues); 
 
  Incorrect DRG assignment; 
 
  Inappropriate transfers; 
 
  Premature discharges; and 
 
  Insufficient, poor documentation, or patterns of failing to provide medical 
records. 
 
4010 - Anti-dumping Violations - (Rev. 2, 07-11-03) 
 
Follow the instructions contained in chapter  9, 9100 when reviewing anti-dumping 
violations. 
 
4020 - Assistants at Cataract Surgery - (Rev. 2, 07-11-03) 
 
A.  Authority  
 
Section 1862(a)(15) of the Social Security Act (the Act) prohibits payment for services of 
an assistant at cataract surgery unless, prior to the surgery, you have approved the use of 
an assistant based on the existence of a complicating medical condition.  Although there 
are very few requests for approval of assistants of cataract surgery, it remains a Quality 
Improvement Organization (QIO) review requirement.   
NOTE:  The assistant may be a physician or a physician's assistant where authorized by 
State law. 
 
B.  Notification of Review Requirement  
 
Notify ophthalmologists in the State of the requirements under 1862(a)(15) and 
1842(k)(l) and (2) of the Act that they must obtain approval for an assistant before 
surgery, except in emergency situations, in order for them to bill beneficiaries for any 
amounts for which beneficiaries are liable by law. 
 
Instruct physicians to notify you within a reasonable timeframe (e.g., 48 hours) of rare 
instances when an assistant was used because an emergency arose with the patient during 
the surgical procedure.  To obtain post-surgery approval, the physician must comply with 
your procedure(s). 
 
After the effective date of your contract, notify physicians at least 30 calendar days prior 
to implementation of this review activity.  Include the following information: 
 
  The statutory requirement at 1862(a)(15) that precludes payment for services of 
an assistant unless prior approval is obtained from you; 
 
  Criteria you use in determining when an assistant is needed; 
 
  Information you need to perform the review (including the name of the proposed 
assistant), and requirements for notifying you when another assistant is 
substituted; 
 
  How to request approval (e.g., what records/forms are needed); 
 
  Timeframes for submitting a request; 
 
  The process for obtaining an approval number on a post-procedure/prepayment 
basis (including the requirement to document the emergency); 
 
  Procedures for submitting records when you subsequently validate cases that you 
approved by phone, including the timeframe for submittal and penalties for not 
submitting the required records (see 42 CFR 1004.10); and 
 
  The sanctions that may be applied if prior approval is not obtained, or if 
inaccurate information is given. 
 
C.  Review Procedures  
 
Conduct a review to determine if the use of an assistant is medically necessary based on a 
complicating medical condition.  Review for medical necessity in all settings.   
NOTE:  Assistant at cataract surgery review is not performed for Medicare + Choice 
Organization (M+CO) cases. 
 
The only Current Procedural Terminology (CPT)-6 codes that can be reviewed for 
medical necessity of an assistant are: 
 
  66852; 66920; 66930; 66940; 66986 
 
Whenever you propose to deny the necessity of an assistant, provide the physician (and 
the assistant, if known) an opportunity to discuss the case and provide additional 
information as specified in 4530.  If you determine that the assistant was not medically 
necessary, deny the services and send initial denial notices as specified in chapter  7, 
7100. 
 
  Pre-procedure Review -- Review all requests for use of an assistant in a timely 
manner (e.g., before the surgery is performed).  A request may be made by the 
surgeon, assistant, or designated staff.  Therefore, prior to surgery, notify the 
surgeon and assistant of your determination.  Establish validation procedures to 
ensure that the information provided at the time of your initial review is accurate 
(see 4020.F and 4100). 
 
  Post-procedure Review -- Review cases on a prepayment, post-procedure basis 
when physicians notify you that an assistant was used because an emergency 
arose with the patient during the surgical procedure.  The carrier cannot pay for 
services of an assistant without your approval.  Review the medical record and 
make a determination whether the medical situation constituted an emergency.  If 
you determine during post-procedure review that the patient's circumstances 
constituted an emergency, provide the physician with an approval number.  If you 
determine that an emergency did not exist, whether or not an assistant was 
needed, deny payment.  On an exception basis, you may approve the necessity for 
an assistant at non-emergency cataract surgery on a post-procedure/prepayment 
basis if you determine that circumstances unavoidably prevented the physician 
from obtaining approval.  Evaluate the individual circumstances of each exception 
using your past review experience (i.e., your knowledge and past experience with 
that physician).  Notify beneficiaries when you deny services of an assistant at 
cataract surgery.  Inform beneficiaries that they are not responsible for the 
payment of the denied services and should notify the carrier if they are billed. 
 
D.  Role of the Carrier  
 
The carrier does not pay claims for an assistant for the codes listed in 4020.D unless it 
receives notice that you approved such use, either prior to the procedure or after the 
procedure (in cases of a medical emergency). 
  NOTE:  The carrier is responsible for notifying the Regional Office (RO) or the Office 
of Inspector General (OIG) of any billing violations. 
 
Sections 1842(k)(l) and (2) of the Act provide that a physician may not knowingly and 
willfully present a claim or bill to a beneficiary for the services of an assistant without 
obtaining prior approval from the appropriate QIO.  The physician may be sanctioned 
under 1842(j)(2) of the Act if he or she does so.  If you identify a pattern of physician 
claims for an assistant filed without prior approval, notify the carrier that is responsible 
for instituting the sanctions. 
 
E.  Validation Activities  
 
Request records retrospectively in order to validate the accuracy of the information 
received on a pre-procedure basis.  You must perform a validation review on all (if small 
number of cases are reviewed) or at least a sample of the cases you reviewed.  Your 
determination that services of an assistant are warranted by a complicating medical 
condition is not a guarantee of payment if subsequent validation review establishes that 
inaccurate information was provided at the time of the initial determination and that the 
services of the assistant were actually unwarranted.  The surgeon, provider, and/or 
anesthesiologist (if used) will not be denied payment because of the inaccurate 
information. 
 
When you identify a physician who provided inaccurate information to obtain approval 
for use of an assistant, issue him/her a written notice (in addition to issuing an initial 
denial notice) containing the following information: 
 
  An explanation of the physician's obligation to provide accurate information when 
requesting approval for use of an assistant at cataract surgery; 
 
  The situation or circumstances that led you to believe that the physician is not 
fulfilling his/her obligation; 
 
  Your authority and responsibility to report violations of obligations; 
 
  A suggested method for correcting the situation and a time period for corrective 
action; 
 
  The sanction that would be recommended if a violation occurred again; and 
 
  An invitation to discuss the situation with you. 
 
When physicians display a pattern of providing inaccurate information, consider 
educational intervention or possible sanction action as specified in chapter  9, 9000. 
 
4030 - Beneficiary Complaints - (Rev. 2, 07-11-03) 
  Follow the instructions contained in chapter  5, 5000 when reviewing beneficiary 
complaints. 
 
4040 - Hospital and Medicare + Choice Organization (M+CO) Notices 
of Non-coverage - (Rev. 2, 07-11-03) 
 
Follow the instructions contained in chapter  7, 7000 when reviewing hospital and 
M+CO notices of non-coverage. 
 
4050 - Hospital-requested Higher-weighted DRG Assignments -  
(Rev. 2, 07-11-03) 
 
A.  Authority  
 
The QIOs are required to review hospital requests for higher-weighted DRG assignments 
as addressed in 42 CFR 412.60(d)(2) and 476.71(c)(2). 
 
NOTE:  These procedures do not apply to hospitals in Prospective Payment System 
(PPS)-waived/excluded areas, PPS-excluded hospitals, or M+COs. 
 
B.  Review Process  
 
Hospitals submit requests for higher-weighted DRG assignment directly to the 
intermediary for processing and payment.  All such requests granted by the intermediary 
are subsequently selected by CMS for QIO review on a post-payment basis.  When 
reviewing hospital-requested higher-weighted DRG assignments, perform a medical 
necessity review and DRG validation (see 4130) (You are also required to perform a 
quality review if you believe that there may be a potential quality of care concern).  The 
purpose of DRG validation is to ensure that diagnostic and procedural information and 
the discharge status of the patient, as coded and reported by the hospital on its claim, 
match both the attending physician's description and the information contained in the 
patient's medical record.  Refer the case for a physician review if medical judgment is 
needed when changing the narrative diagnosis that the codes were based upon.  Send 
notification to all affected parties when your review confirms a higher-weighted DRG 
(see 4130).  When your DRG validation results in lower payment, take appropriate 
action when you identify a coding error that results in increased payment while 
performing hospital-requested higher-weighted DRG assignments (see 4130.D).  Notify 
the hospital, practitioner, intermediary, and carrier as specified in 7100. 
 
C.  Re-reviews  
 
As specified in 42 CFR 478.15(a)(1), the hospital may request a re-review of your 
decision to change a DRG assignment when the change results in a lower payment to the 
hospital (see 7300).  As specified in 42 CFR 478.15(c), no additional review or appeal is 
available to the hospital. 
  4060 - Potential Concerns Identified During Project Data Collection 
(PDC) - (Rev. 2, 07-11-03) 
 
Follow the instructions contained in 4105 when reviewing potential concerns identified 
during Project Data Collection (PDC). 
 
4070 - Referrals - (Rev. 2, 07-11-03) 
 
Review all cases referred by CMS and clinical data abstractions centers (CDACs).  
Review cases referred by intermediaries, carriers, the M+CO appeals contractor, and 
State Medicaid survey and certification agencies (and other sources) when the referrals 
are within your review authority.  The scope of review depends on the reason for the 
referral.  Referrals may involve Fee-For-Service (FFS) or M+C review. 
 
NOTE:  For anonymous complaints/referrals that you receive directly, analyze the nature 
and scope of the issues involved and take any necessary action(s) (including referral to 
the appropriate organizations) to ensure that the issues are appropriately 
addressed/resolved. 
 
A.  Referrals from the Regional Office (RO)  
 
The RO will refer cases to you in the following circumstances: 
 
  During the course of review of Skilled Nursing Facility (SNF) cases, 
intermediaries may identify cases where the patient entered the SNF from a 
hospital but required a higher level of care.  The intermediary should then refer 
these cases to the RO, which screens the cases to determine if there is agreement 
with the intermediary that the case might involve a premature discharge.  If the 
RO concurs, it will request that you review the hospital stay in question.  Review 
the medical records for quality of care and appropriateness of setting.  If a case is 
questioned for quality of care or appropriateness of setting, follow the timing and 
process requirements specified under case review.  Submit a written report to the 
RO on your findings; 
 
  If the intermediary or carrier identifies a problem or potential problem with a 
provider or practitioner in an area subject to QIO review, it will be referred to the 
RO, which will refer it to you, if appropriate.  With RO approval, you may accept 
certain categories of cases directly from another Medicare contractor (e.g., quality 
of care referrals from the carrier in your State); and 
 
  Complaints/referrals that are anonymous, from outside agencies (e.g., an alleged 
anti-dumping violation case, see chapter  9) or sources other than the usual ones 
(beneficiary, beneficiary's representative, intermediary, or carrier), may be 
referred to you if the RO determines the complaint/referral is credible and within 
your review authority. 
  B.  Referrals to the RO  
 
Throughout your review activities be alert to the identification of cases that may require 
additional development.  Forward these cases to the RO for analysis or additional 
development after your review.  The ROs will refer policy issues identified by you to 
CMS Central Office (CO) for consideration.  The types of cases may include: 
 
  Cases that may require additional policy clarification; and 
 
  Cases that suggest deviant practice patterns or other potential abuse situations. 
 
C.  Referrals from the Intermediary  
 
The intermediary is required to screen claims to determine whether specific services, 
items, or procedures are covered or excluded from coverage.  In some cases, coverage 
depends upon meeting specific conditions of medical necessity and reasonableness such 
as type and severity of illness.  When a medical necessity determination is needed, the 
intermediary will refer the case to you for review without making a coverage 
determination.  Conduct a medical record review following chapter  4 procedures and 
make a medical necessity initial determination.  Perform a quality review if you believe 
that there may be potential quality of care concern(s) (see 4125).  The intermediary will 
also refer cases it receives via its OIG hotline regarding quality of care complaints.  
Review these cases using the procedures specified in chapter  5.  For fraud and abuse 
referrals, see chapter  9. 
 
D.  Referrals to the Intermediary  
 
During the course of review, be alert for potential Medicare Secondary Payer (MSP) 
cases (e.g., automobile accidents).  When you identify a potential secondary payer, notify 
the intermediary so that it can investigate, develop the case, and take appropriate 
recovery action.  For example, if during review you find that an admission for a broken 
hip was the result of an auto accident, notify the intermediary of potential MSP (e.g., 
automobile insurance) and complete your review independent of the intermediary 
referral.  The intermediary remains solely responsible for developing the MSP aspects of 
the case. 
 
If you identify any relevant outpatient services related to an admission that may not have 
been included in the DRG, notify the intermediary (see Medicare Intermediary Manual 
(MIM), chapter  3, 3600).  You may also refer cases to the intermediary related to 
billing issues. 
 
E.  Referrals From the Carrier  
 
If a carrier identifies a problem or potential problem with a provider or practitioner in 
your area, it will direct the case to the RO for referral to you, if appropriate.  The carrier 
should be specific about the type of review and report format needed from you.  The  carrier will also refer cases to you when Ambulatory Surgical/Surgery Center (ASC) 
procedures are terminated due to medical complications that increase the surgical risk to 
the patient.  Perform quality review when these types of cases are referred to you.  You 
may also refer cases to the carrier related to Part B physicians services. 
 
F.  Referrals From CDACs  
 
Review all cases referred to you by CDACs under the Hospital Payment Monitoring 
Program (see chapter 11). 
 
G.  Referrals From Outside Agencies  
 
All requests for your review from outside agencies, including OIG and the Department of 
Justice (DOJ), must be approved by CMS CO.  Every request must be in writing, must 
offer clear and cogent rationale, and must be submitted through your Project Officer in 
the CMS RO.  For fraud and abuse referrals, follow the instructions in 9200. 
 
H.  Anonymous Referrals  
 
You are required to review any anonymous referrals that you believe are serious or urgent 
in nature.  When review findings warrant, take corrective action and follow the 
instructions and timeframes applicable to the type of case under review. 
 
EXCEPTION:  For cases that involve anti-dumping issues referred by OIG, follow the 
instructions in 9100. 
 
4100 - Introduction - (Rev. 2, 07-11-03) 
 
When you receive a mandatory review case (see 4000 - 4070), perform the appropriate 
review for admission/discharge, quality, invasive procedure, length-of-stay, coverage, 
DRG validation, and other post review activities (see chapter  7).  If you review a case 
(e.g., notice of non-coverage) and it is necessary to review the case again for other 
requirements (e.g., beneficiary complaint), it is not necessary to repeat the portion of the 
review you have already completed, except in the case of assistants at cataract surgery 
(For type of settings and review, see 4410 and 5005.B) (see Exhibit 4-1 for the case 
review process). 
 
Currently, the following QIO areas are paid under a different methodology than the one 
applicable under the Medicare Prospective Payment System (PPS):  Maryland, the Finger 
Lakes area of New York, the Virgin Islands, and Guam.  The contracts for these QIO 
areas are designed to consider the special review needs for their areas.  If you conduct 
review in one of these areas, follow the instructions in your contract. 
 
4105 - Quality Review - (Rev. 2, 07-11-03) 
 
A.  Authority and Scope    
This review includes potential circumvention of PPS (see 4255) and beneficiary 
complaints about quality of care (see chapter 5, 5000).  Conduct Fee-For-Service (FFS) 
quality review to determine whether the quality of services met professionally recognized 
standards of health care as addressed under 1154(a)(1)(B) and 1862(g) of the Act and 
42 CFR 476.71(a)(2).  Conduct Medicare + Choice (M+C) quality review to determine 
whether the quality of services met professionally recognized standards of health care, 
including whether appropriate health care services were not provided or were provided in 
inappropriate settings, and whether enrollees had adequate access to health care services 
as addressed under 1154(a)(4)(B) of the Act and 42 CFR 476.72(a)(1).  You must 
always be alert for potential quality concerns regardless of the reason for review.  For 
example, although you are not required to perform a quality review in all cases subject to 
Hospital Payment Monitoring Program (HPMP) review, conduct a quality review if such 
concerns are raised by your reviewers. 
 
B.  Objectives  
 
Quality review objectives include: 
 
  Determining if care provided is of adequate quality; 
 
  Identifying the source(s) of quality concerns; and 
 
  Determining the extent of systemic problems in the delivery of care that warrant 
an improvement plan. 
 
C.  Strategies to Employ  
 
Your quality review activities should employ the following strategies: 
 
  Developing/updating quality screening criteria (see 4510); 
  Using the Physician Reviewer Assessment Format (PRAF) (see 4300-4325) to 
obtain more consistent medical case review decisions and more reliable data 
collection; 
 
  Providing educational feedback to practitioners and providers to improve the 
quality of care process and patient outcomes; 
 
  Identifying system-wide concerns (e.g., communications errors between a 
diagnostic laboratory and an inpatient unit) uncovered during project data 
collection; and
 
  Engaging in collaborative development of performance improvement projects 
designed to improve the process and outcomes of patient care. 
 
D.  Quality Review Process    
Use the PRAF as a tool to determine if care furnished to Medicare beneficiaries meets 
professionally recognized standards.  Quality of care concerns is categorized in C.1 
through C.99 of the PRAF (see the electronic PRAF screen of the Case Review 
Information System).  The non-physician reviewer raises a quality concern when care 
provided results in a significant or potentially significant adverse effect on the patient.  A 
significant adverse effect may be one or more of the following: 
 
  Unnecessary prolonged treatment causes an extended hospital or SNF stay, 
readmission soon after discharge, or additional treatment(s); 
 
  Serious medical complications; 
 
  Serious physiological or anatomical impairment; 
 
  Significant disability; and/or 
 
  Avoidable death. 
 
E.  Notification of Quality Concerns to Affected Parties  
 
See 7200-7250 and 7310 for instructions concerning the issuance of potential, final, 
and re-review of quality concern notices. 
 
F.  Quality Improvement Activities  
 
You may consider, as one option, initiating an improvement project when you determine 
that a pattern of quality concerns is established, unless an identified quality concern 
causes severe risk to health and/or safety, or is a gross and flagrant violation, or the 
pattern meets the definition of a substantial violation in a substantial number of cases (see 
42 CFR 1004.1(b) and 9000) (Use sound professional judgment to determine what 
constitutes a pattern). 
 
 
 
4110 - Admission/Discharge Review - (Rev. 2, 07-11-03) 
 
The QIOs must conduct review of admissions and discharges as specified in 42 CFR 
476.71(a)(6).  Review of the medical record must indicate that inpatient hospital care was 
medically necessary, reasonable, and appropriate for the diagnosis and condition of the 
patient at any time during the stay.  The patient must demonstrate signs and/or symptoms 
severe enough to warrant the need for medical care and must receive services of such 
intensity that they can be furnished safely and effectively only on an inpatient basis. 
 
A.  Determining Medical Necessity and Appropriateness of Admission/Discharge  
  Review the medical record and use appropriate criteria to determine if an admission to a 
PPS or non-PPS hospital should be referred for physician review.  Similarly, use criteria 
to identify, for physician review, cases of potential premature discharge (i.e., the patient 
was not medically stable and/or discharge was not consistent with the patient's need for 
continued acute inpatient hospital care) (see 4510 on screening criteria). 
 
The case is referred to a physician reviewer when the non-physician reviewer cannot 
approve the hospitalization as necessary and/or another level of care would have been 
appropriate without posing a threat to the safety or health of the patient. 
 
The physician reviewer must consider, in his/her review of the medical record, any pre-
existing medical problems or extenuating circumstances that make admission of the 
patient medically necessary.  Factors that may result in an inconvenience to a patient or 
family do not, by themselves, justify inpatient admission.  When such factors affect the 
patient's health, consider them in determining whether inpatient hospitalization was 
appropriate. 
 
Inpatient care rather than outpatient care is required only if the patient's medical 
condition, safety, or health would be significantly and directly threatened if care was 
provided in a less intensive setting.  Without accompanying medical conditions, factors 
that may cause the patient inconvenience in terms of time and money needed to care for 
the patient at home or for travel to a physician's office, or that may cause the patient to 
worry, do not justify a continued hospital stay or justify your approval of a higher-than-
necessary level of care. 
 
B.  Determining Whether Covered Care Was Given at Any Time During a Stay in a 
PPS Hospital  
 
When you determine that the patient did not require an inpatient level of care on 
admission, but that the patient's condition changed during the stay and inpatient care 
became medically necessary, review the case in accordance with the following 
procedures: 
 
  The first day on which inpatient care is determined to be medically necessary is 
deemed to be the date of admission; 
 
  The deemed date of admission applies when determining cost or day outlier status 
(i.e., days or services prior to the deemed date of admission are excluded for 
outlier purposes); and 
 
  The diagnosis determined to be chiefly responsible for the patient's need for 
covered services on the deemed date of admission is the principal diagnosis. 
 
Notify the appropriate Medicare intermediary/carrier when the determination affects 
payment. 
  4115 - Invasive Procedure Review - (Rev. 2, 07-11-03) 
 
An invasive procedure is any procedure that clearly involves an incision, excision, 
amputation, introduction, endoscopy, repair, destruction, suture, or manipulation.  
Invasive procedures also include any procedure that affects, or has the potential for 
affecting, the DRG, and is being reviewed. 
 
Determine if invasive procedures performed were reasonable and medically necessary, 
and if the quality of care met professionally recognized standards of medical care.  Use 
appropriate criteria for non-physician screening.  If the admission and the procedure were 
medically necessary, but the procedure could have been performed on an outpatient basis 
if the patient had not already been in the hospital, do not deny the procedure or the 
admission. 
 
When an invasive procedure was not medically necessary, follow these guidelines: 
 
  If the admission was for the sole purpose of the performance of the non-covered 
procedure, and the patient never developed the need for a covered level of service, 
deny the admission; 
 
  If the admission was appropriate, and not for the sole purpose of performing the 
procedure, deny the procedure (i.e., remove from the DRG calculation), but 
approve the admission; 
 
  For a day outlier, if the patient was in the hospital for any day(s) solely for the 
performance of the procedure or for care related to the procedure, deny the day(s) 
and the invasive procedure; 
 
  For a day outlier, if the patient was receiving the appropriate level of covered care 
for all hospital days, exclusive of the procedure or care related to the procedure, 
deny the procedure or service (see NOTE in 4210 on day outlier reviews); 
 
  For a cost outlier, if the patient was in the hospital for any day(s) solely for the 
performance of the procedure or care related to the procedure, deny the costs for 
the day(s) and for the performance of the procedure; and 
 
  For a cost outlier, if the patient was receiving the appropriate level of covered 
care for all hospital days, deny the procedure or service. 
 
All medically unnecessary procedures represent quality of care problems as well as 
utilization problems. 
 
4120 - Length-of-Stay Review - (Rev. 2, 07-11-03) 
 
Determine whether the length-of-stay for PPS day outlier (see NOTE in 4210) (and cost 
outlier, when necessary) claims and for specialty hospital/unit claims is appropriate and  medically necessary.  Identify cases of potential delayed discharge.  For example, the 
patient was medically stable, and continued hospitalization was unnecessary, or nursing 
home placement or discharge to home with home care would have been appropriate in 
providing needed care without posing a threat to the safety or health of the patient (see 
4110). 
 
If Medicare payment is applicable to only part of the stay, review the covered portion of 
the stay and enough of the rest of the medical record (if necessary) to answer any specific 
questions that may arise from review of the covered part of the stay.  If a patient became 
Medicare eligible during a hospital stay, review enough of the medical record prior to the 
initiation of Medicare benefits to acquire sufficient information to make a determination.  
Do not perform lengthy reviews of non-covered care.  In PPS waived/excluded areas, 
length-of-stay review is performed for all inpatient admissions. 
 
4125 - Coverage Review - (Rev. 2, 07-11-03) 
 
With certain exceptions established by regulation and National Coverage Decisions (see 
Coverage Issues Manual, 30-1), items/services that are experimental or are not 
efficacious are excluded from coverage in all cases, regardless of patient illness, 
treatment history, or setting.  Certain other items/services are also excluded from 
coverage in all cases even though needed by the patient (e.g., routine physical checkups 
or hearing aids) (see 1862(a) of the Act). 
 
The intermediary/carrier, within the parameters of Medicare policy, has the authority to 
determine whether specific items/services are covered or excluded from coverage.  The 
intermediary/carrier must follow existing national Medicare policy (e.g., criteria in the 
Coverage Issues Manual).  When no national policy exists, intermediaries/carriers have 
the authority to establish local coverage policy.  For some items/services (e.g., 
blepharoplasty or breast reconstruction following mastectomy), coverage depends upon 
meeting specific conditions of medical necessity and reasonableness such as type and 
severity of illness.  The intermediary refers inpatient claims to you involving 
items/services that require a medical necessity determination before the claims can be 
considered covered and payment can be made (see 42 CFR 476.86(c)(1)). 
 
For those cases referred to you, review the medical record to determine whether the 
admission is appropriate because the patient has other concurrent medical conditions that 
would require an inpatient level of care.  Deny items/services when you determine they 
are not medically necessary, and issue denial notices as specified in 7100.  Notify the 
appropriate Medicare carrier when your determination affects Part B payment. 
Additionally, if in the review of any case you recognize an item/service that is excluded 
from coverage in all cases, notify the intermediary or carrier, as appropriate, for 
necessary action. 
 
4130 - DRG Validation Review 
(Rev. 18, Issued: 10-10-14, Effective: Upon Implementation of ICD-10, 
Implementation: Upon Implementation of ICD-10)   
Perform DRG validation on PPS cases (including hospital-requested higher-weighted 
DRG assignments), as appropriate (see 1866(a)(1)(F) of the Act and 42 CFR 
476.71(a)(4)).  Review the medical record for medical necessity and DRG validation 
(You are also required to perform a quality review if you believe that there may be a 
potential quality of care concern).  The purpose of DRG validation is to ensure that 
diagnostic and procedural information and the discharge status of the patient, as coded 
and reported by the hospital on its claim, matches both the attending physician's 
description and the information contained in the patient's medical record.  Refer the case 
for a physician review if medical judgment is needed when changing the narrative 
diagnosis that the codes were based upon.  Your reviewer must use his or her professional 
judgment and discretion in considering the information contained on a hospitals 
physician query form along with the rest of the medical record.  If the physician query 
form is leading in nature or if it introduces new information, the non-physician reviewer 
must refer the case to the physician reviewer. 
 
NOTE:  For PPS waived/excluded areas, follow the instructions in your contract rather 
than these procedures. 
 
A. Coding  
 
Designate a Registered Records Administrator (RRA) or Accredited Records Technician 
(ART) as the individual responsible for the overall DRG validation process.  Use 
individuals trained and experienced in Medicare diagnosis and procedure coding to 
perform the DRG validation functions.  The validation is to verify the accuracy of the 
hospital's coding of all diagnoses and procedures that affect the DRG. 
 
Base your DRG validation upon accepted principles of coding practice.  Be consistent 
with guidelines established for ICD coding, the Uniform Hospital Discharge Data Set 
data element definitions, and coding clarifications issued by CMS.  Do not change these 
guidelines or institute new coding requirements that do not conform to established coding 
rules. 
 
Verify a hospital's coding in accordance with the coding principles reflected in the 
current edition of the ICD Coding Guidelines, and the official National Center for Health 
Statistics and CMS addenda, which update the guidelines annually.  The annual addenda 
are effective on October 1 of each year and apply to discharges occurring on or after 
October 1.  Use only these guidelines and updates when performing DRG validation. 
 
Hospitals are not required to code minor diagnostic and therapeutic procedures (e.g., 
imaging studies, physical, occupational, respiratory therapy), but may do so at their 
discretion. 
 
B. Diagnoses  
  Ensure that the hospital reports the principal diagnosis and all relevant secondary 
diagnoses on the claim.  The relevant diagnoses are those that affect DRG assignment.  
See 20.2.2 in Chapter 3 of the Claims Processing Manual for procedures for reporting 
diagnoses and procedures at:  http://www.cms.gov/Regulations-and-
Guidance/Guidance/Manuals/Downloads/clm104c03.pdf 
 
The hospital must identify the principal diagnosis when secondary diagnoses are also 
reported.  When a comorbid condition, complication, or secondary diagnosis affecting the 
DRG assignment is not listed on the hospital's claim but is indicated in the medical 
record, insert the appropriate code on the claim form.  If the hospital already reported the 
maximum number of diagnoses, delete a code that does not affect DRG assignment, and 
insert the new code. 
 
You are not required to place additional diagnoses on the claim as long as all conditions 
that affect the DRG are reflected in the diagnoses already listed, and the principal 
diagnosis is correct and properly identified.  The hospital can list the secondary diagnoses 
in any sequence on the claim form because the GROUPER program will search the entire 
list to identify the appropriate DRG assignment. 
 
  Principal Diagnosis -- Determine whether the principal diagnosis listed on the 
claim is the diagnosis which, after study, is determined to have occasioned the 
patient's admission to the hospital.  The principal diagnosis (as evidenced by the 
physician's entries in the patient's medical record) (see 42 CFR 412.46) must 
match the principal diagnosis reported on the claim form.  The principal diagnosis 
must be coded to the highest level of specificity.  For example, a diagnosis 
reporting symptoms or signs may not be used as the principal diagnosis when the 
underlying cause of the patient's condition is known. 
 
  Inappropriate Diagnoses -- Exclude diagnoses relating to an earlier episode that 
have no bearing on the current hospital stay.  Delete any incorrect diagnoses and 
revise the DRG assignment as necessary. 
 
C. Procedures  
 
Ensure that the hospital has reported all procedures affecting the DRG assignment on the 
claim.  If there are more procedures performed than can be listed on the claim, verify that 
those reported include all procedures that affect DRG assignment, and that they are coded 
accurately. 
 
You are not required to place additional procedures on the claim as long as all procedures 
affecting the DRG assignment are listed on the claim.  If the hospital reported the 
maximum six procedures and you need to add one that affects DRG assignment, delete a 
code that has no effect and insert the new code. 
 
D. Guidelines for DRG Validation Review  
  Apply the following guidelines when conducting DRG validation review: 
 
  Your validation of the claim confirms the principal diagnosis, secondary 
diagnoses, procedures, and the discharge status.  The patient's age and sex need 
not be verified because these items are verified by the A/B MAC (A)'s edits before 
your DRG validation.  If you find an error in discharge status or make corrections 
to the diagnosis or procedure information that affect the DRG, report the 
necessary information to the A/B MAC (A); 
 
  Individuals with training and experience in ICD diagnosis and procedure coding 
are to review issues that involve technical coding changes or professional coding 
judgment; 
 
  Do not make changes that do not require referral to a physician reviewer (e.g., 
technical coding changes) when the change has no effect on DRG assignment; 
 
  Do not add diagnosis and procedure information to a claim when the addition 
would have no effect on the DRG assignment; 
 
  Do not notify the involved hospital or physician of errors identified during the 
DRG validation process when the errors have no effect on DRG assignment; 
 
  Refer to a physician reviewer issues that involve changes to diagnosis or 
procedure narrative descriptions or codes only when resolution of an issue 
requires a physician's medical judgment and the related change would affect DRG 
assignment; 
 
  Do not refer a coding issue to a physician reviewer when the resulting change 
would have no effect on DRG assignment.  Instead, take no action on the 
suspected coding error because a conclusion cannot be reached without a 
physician's involvement; 
 
  When a correction that would affect DRG assignment requires the professional 
judgment of a physician reviewer and the case involves care provided by a health 
care practitioner other than a physician, ensure that the physician reviewer 
consults with a peer of the affected practitioner before making a determination; 
 
  Before making a correction that affects DRG assignment, notify the involved 
provider and the patient's attending physician (or other attending health care 
practitioner), and provide an opportunity for discussion as specified in 4530.  
When a case is also questioned for both DRG changes and quality concerns, do 
not send notices at separate times.  Notices are to be sent to comply with the 
quality review completion timeframes (see Exhibit 4-1A); 
    After satisfying the requirement to offer an opportunity for discussion, notify the 
involved parties of the changes you are making to diagnostic and procedural 
information, as instructed in 7100-7115; and 
 
  Process any request for a re-review according to instructions contained in 7300.  
A provider or practitioner dissatisfied with the QIOs change that results in a 
lower payment may request a re-review to the QIO. 
 
NOTE:  Inclusion of physicians in the DRG validation process is consistent with the 
intent of the acknowledgment statement required by 42 CFR 412.46, which is to make 
physicians accountable for their role in the payment process.  The physician could be 
partially responsible for the incorrect DRG; thus, it is useful to notify him or her of this 
matter.  Further, it may be useful for the QIO to hear the physician's viewpoint prior to 
changing the DRG assignment. 
 
4200 - Introduction - (Rev. 2, 07-11-03) 
 
When you receive a mandatory review case (see 4000), in addition to performing basic 
case review (see 4100), you may also determine whether to perform the following Fee-
For-Service (FFS) and Medicare + Choice (M+C) case review activities: 
 
  Outlier review (see NOTE in 4210); 
 
  Limitation on liability determinations; 
 
  Readmission review; and 
 
  Transfer review. 
 
4210 - Outlier Review - (Rev. 2, 07-11-03) 
 
You are authorized to perform outlier review as specified at 1886(d)(5)(A)(i) and (ii) of 
the Act and 42 CFR 476.71(a)(7).  Outliers are defined as those cases that have either an 
extremely long length-of-stay (day outlier) or extremely high costs (cost outlier) when 
compared to most discharges classified in the same DRG (see 42 CFR 476.1).  Outlier 
review is not performed for M+CO cases or in PPS waived/excluded areas/hospitals.  In 
these areas/hospitals, length-of-stay review is performed (see 4120). 
 
NOTE:  Perform day outlier reviews only for discharges occurring during fiscal years 
ending on or before September 30, 1997. 
 
A.  Day Outlier Review  
 
Day outlier cases occur automatically at a specified point in time for each DRG.  
Eligibility for this additional Medicare payment is automatic, and the hospital need not 
request it.  Day outlier cases are identified as cases where the length-of-stay exceeds the  outlier cutoff, or threshold, for the assigned DRG.  A case becomes an outlier on the day 
after the threshold day of the assigned DRG (see 42 CFR 412.82). 
 
Cases identified as day outlier cases may lose or change their day outlier status if, as a 
result of review, the DRG assignment is changed and a new threshold is assigned, or if 
the outlier (or other) days are not approved.  Perform all reviews (admission, quality, 
invasive procedure, coverage, DRG validation, documentation, and discharge) for day 
outlier cases whether or not the case is confirmed as an outlier. 
 
Factors that may result in an inconvenience to a patient or family do not, by themselves, 
justify a prolonged stay in the hospital.  When such factors affect the patient's health, 
consider them in determining whether continued inpatient hospitalization was 
appropriate.  You may determine that inpatient care rather than outpatient care was 
required only if the patient's medical condition, safety, or health would have been 
significantly and directly threatened had care been provided in a less intensive setting.  
Without accompanying medical conditions, factors that may have caused the patient 
inconvenience in terms of time and money needed to care for the patient at home or for 
travel to a physician's office, or which may have caused the patient to worry, do not 
justify a continued hospital stay, or justify your approval of a higher-than-necessary level 
of care. 
 
Conduct review for the level of care between the admission and the day the outlier 
threshold is met, as well as each day beyond the threshold.  Consider the following in 
your review determination: 
 
  If the admission was not medically necessary and appropriate (i.e., no covered 
inpatient hospital care was needed or delivered during the stay), deny the 
admission; 
 
  If the admission was medically necessary and appropriate, but an acute level of 
care was not required for some days of this stay, deny these non-covered days up 
to the amount of days above the outlier threshold.  For appropriately admitted 
cases, charges for denied days cannot be used to reduce the DRG payment 
portion.  Non-covered days are carved out of the outlier payment, not to exceed 
the number of days that occur after the day outlier threshold (see 42 CFR 412.82 
(d)); 
 
  If the case is still an outlier after DRG validation, determine if all days in the stay 
were medically necessary and at an appropriate level of care.  You may determine 
that continued inpatient hospitalization was unnecessary and that outpatient care 
(e.g., in a nursing home) would have been equally effective in providing needed 
care without posing a threat to the safety or health of the patient; and 
 
  If there is a three-day qualifying stay, approve days awaiting placement in a 
Skilled Nursing Facility (SNF), and include them in calculating outlier status if 
the patient was receiving a Medicare-covered SNF level of care for the days in  question and the record documents that Medicare SNF placement was being 
sought (Days when a patient is awaiting a mental assessment needed for nursing 
home placement are considered as "days awaiting placement, no bed availability" 
so long as the patient is receiving at least a SNF level of care). 
 
NOTE:  Verify that the hospital made a genuine effort to place the patient in a SNF 
within the normal out placement area as defined by local community standards.  
Although there are no specific guidelines for "placement area" or frequency with which 
the hospital must determine availability, there are general guidelines in the Medicare 
Intermediary Manual (MIM), chapter  3, 3421.1. 
 
B.  Cost Outlier Review  
 
Cases identified as cost outlier cases may lose or change their cost outlier status if, as a 
result of review, you change the DRG assignment.  Perform all reviews (admission, 
quality, invasive procedure, coverage, DRG validation, documentation, and discharge) 
for cost outlier cases whether or not you confirm the case as an outlier. 
 
For cost outlier cases, the hospital must provide a copy of the itemized bill and medical 
records for your review.  The itemized bill must be sufficiently detailed for you to 
identify each item or service billed.  If, after you complete the DRG validation, the case 
still meets cost outlier criteria, use the appropriate medical records plus the itemized bill 
to determine that all services (including each day of care) provided were medically 
necessary and appropriate and that the services billed were: 
 
  Not duplicative or erroneously billed; 
 
  Actually furnished; and 
 
  Ordered by the physician. 
 
When reviewing cost outlier cases, be alert to certain items such as combined billing.  
CMS does not allow payment for combined billing (i.e., physician charges and inpatient 
charges) on the inpatient bill.  The physician charges are to be included on a separate Part 
B billing.  If you identify physician charges on the cost outlier bill (e.g., radiologist fees 
for reading x-rays), deny these charges.  These are technical denials (i.e., not based on 
medical necessity and appropriateness). 
 
When you have a hospital that bills a flat per diem rate (i.e., an all inclusive rate hospital) 
and, therefore, does not have itemized charges, contact the Regional Office RO to verify 
that the hospital does, in fact, bill on an all-inclusive rate basis and does not have 
individual charge data available.  Once verified, the cost outlier review requirements that 
follow apply for the all-inclusive rate hospitals: 
 
  Review for medical necessity and appropriateness of the admission; 
    Review for medical necessity and appropriateness of each day of the stay for cost 
outlier cases from these hospitals; 
 
  Deny non-covered days and carve the per diem charges out of the outlier 
payment; 
 
  Send notices of such denials to the beneficiary, hospital, physician, intermediary, 
and carrier (if appropriate); and 
 
  Apply limitation on liability provisions to admission denials and denials of days, 
where appropriate (see 4230 below). 
 
Deny as non-covered care services that are duplicative or erroneously billed, not 
furnished, and/or not ordered by the physician.  These denials do not constitute initial 
determinations requiring notice to beneficiary, and are not subject to the limitation on 
liability and reconsideration provisions.  Send a notice explaining such denials of costs to 
the hospital, intermediary, and carrier, if appropriate. 
 
C.  Day and Cost Outlier Relationship  
 
When the intermediary identifies a claim (case) as both a day outlier and a cost outlier, 
the PRICER (the intermediary's computer program) selects the higher payment amount.  
In cost outlier cases, after the intermediary notifies the hospital of the adjustment, the 
hospital has the option of declining the cost outlier.  However, if your review has resulted 
in denied costs that reduce the total cost below the cost outlier threshold, and the claim 
(case) is above the day outlier threshold, send the adjustment request to the intermediary.  
The intermediary will process the adjustment and either pays the provider or holds back 
money on another claim. 
 
4230 - Limitation on Liability Determinations - (Rev. 2, 07-11-03) 
 
The statutory authority for applying the limitation on liability provision applicable to 
physician's liability is contained in 1842(l) and (m) of the Act.  1879 of the Act 
contains the statutory authority for applying the beneficiary's and provider's limitation on 
liability provisions.  When you determine that care provided a Medicare beneficiary is 
non-covered because such care is not medically reasonable and necessary (see 
1862(a)(1) of the Act), or is custodial in nature (see 1862(a)(9) of the Act), determine 
whether or not the beneficiary and/or the provider/practitioner is liable for payment of the 
non-covered care. 
 
A.  Denials Covered by the Limitation on Liability Provisions  
 
The limitation on liability provision only applies to those denials based on: 
 
  1862(a)(1) or (9) of the Act (items/services are not medically reasonable or 
necessary, or expenses are for custodial care);   
  1814(a)(2)(C) of the Act (home health services - patient is not homebound); or 
 
  1835(a)(2)(A) of the Act (home health services - patient does not or did not need 
skilled nursing care on an intermittent basis). 
 
The following examples illustrate types of denials where payment cannot be made under 
the limitation on liability provision because these cases are not 1862(a)(1), 1862(a)(9), 
1814(a)(2)(C), or 1835(a)(2)(A) denials (These examples are not all inclusive): 
  Denials made pursuant to 1886(f)(2) of the Act, where a provider has 
circumvented PPS through unnecessary admissions and readmissions; 
 
  Reduction of payment based on a change in DRG assignment; 
 
  Cost outlier items and services that were duplicative billed, not furnished, or not 
ordered by a physician; 
 
  Physician charges included on the hospital bill.  The physician charges are to be 
included on a separate Part B billing; 
 
  Services/items denied when requested medical records are not received; 
 
  Services payable under State or Federal workmen's compensation; 
 
  Charges for convenience items or services; and 
 
  Provider billing errors. 
 
NOTE:  When you review a case that involves non-covered services, such as routine foot 
or dental care, you are essentially determining whether or not the services furnished were 
medically necessary.  Therefore, when you determine that the services should be denied 
based on medical necessity, make a liability determination for all affected parties on a 
case-by-case basis (see 4125). 
 
B.  Determining the Beneficiary's Liability  
 
The regulatory authority for determining that a beneficiary or his/her representative knew 
that services/items were excluded from coverage is found at 42 CFR 411.404.  Presume 
that the beneficiary or his/her representative did not know that services/items were not 
covered (and, therefore, he or she is not liable for payment) unless the evidence indicates 
that a written notice was given to the beneficiary or his/her representative prior to 
performance of the service. 
 
The beneficiary or his/her representative may be determined to be liable when he/she 
received: 
    A previous written denial notice because the same service/item did not meet 
Medicare coverage guidelines, or the beneficiary or his/her representative 
received a written notice concerning similar or reasonably comparable 
services/items furnished on a previous occasion.  For example, the subject 
admission is solely for chemotherapy and the beneficiary or his/her representative 
previously received a written denial notice stating that admissions solely for 
chemotherapy are not covered; 
 
  An appropriate written notice of non-coverage (prior to performance of the 
services) from a provider or practitioner for the services/items in question; or 
 
  A written denial notice (prior to performance of the services) from you for the 
services/items in question (e.g., preadmission denials). 
 
When you determine that the beneficiary or his/her representative is liable, he/she is held 
responsible for payment for the denied services/items.  The settlement for the cost of care 
is resolved between the provider and/or practitioner and the beneficiary. 
 
C.  Determining the Provider/Practitioner's Liability  
 
The regulatory authority for determining that a provider or practitioner knew or could 
reasonably have been expected to know that services/items were non-covered is found at 
42 CFR 411.406.  Determine the provider's liability whenever your denial is based on 
medical necessity, appropriateness, or custodial care. 
 
Determine the practitioner's liability only in those cases involving payment denials of 
surgical and cost outliers with physician component, and inpatient/ambulatory/outpatient 
surgical denials based on lack of medical necessity (In these situations, the carrier 
automatically adjusts its records (under the A/B link process) upon receipt of your written 
or electronically submitted denial and liability determinations). 
 
A provider or practitioner is considered to have known of non-coverage and, therefore, is 
held liable for the denied services/items (no payment will be made under the Medicare 
Program) in any of the following circumstances: 
 
  You, the intermediary, or the carrier informed the provider or practitioner that the 
services/items furnished were not covered, or that similar or reasonably 
comparable services/items were not covered; 
 
  The utilization review group or committee for the provider or the beneficiary's 
attending physician informed the provider that these services/items were not 
covered; 
 
  The provider or practitioner could have been expected to have known that the 
services/items were excluded from coverage based on receipt of CMS notices, 
manual issuances, bulletins, or other written guides or directives from  intermediaries/carriers or QIOs, including notification of QIO screening criteria 
specific to the condition of the beneficiary for whom the furnished services/items 
are at issue.  The provider or practitioner may challenge your determination that it 
had knowledge of non-covered services/items based on general screening criteria.  
However, it is appropriate to use general screening criteria in conjunction with 
other types of notification (e.g., prior denial notice for similar services/items); 
 
  The provider or practitioner was notified of the categories subject to preadmission 
review and certification and did not obtain the required review, and the services 
are subsequently determined to be medically unnecessary.  Do not, however, 
automatically hold the provider financially liable when it makes a timely request, 
in accordance with its agreement with you, for preadmission review and you do 
not review the case (see 42 CFR 476.78(b)(6)(ii)); or 
 
  The provider or practitioner knows what are considered acceptable standards of 
practice by the local medical community. 
 
There may be additional circumstances where the provider or practitioner is also liable if 
it can be shown that it had prior knowledge that the services/items were not covered. 
 
If a provider or practitioner is in doubt as to whether a service/item is covered, it may 
contact you for advice. 
 
The physician's limitation on liability for payment under 1879 of the Act (when 
physician accepts assignment) or protection from making a refund to the beneficiary or 
his/her representative under 1842(l) of the Act (when physician does not accept 
assignment) is based on your determination of whether or not the beneficiary or physician 
knew that the services were non-covered.  Unless there is evidence to the contrary (e.g., 
the physician annotated in the medical record that he/she has given the beneficiary a 
written advanced notice), presume that the beneficiary or his/her representative had no 
knowledge that Medicare would not pay for the denied services provided by the 
physician.  On a case-by-case basis, this presumption may be challenged by the physician 
at the time you offer the physician an opportunity to discuss the case.  At the same time, 
ask the physician if he/she accepted assignment if you were unable to determine this from 
your review of the medical record.  The physician should be able to provide you with the 
information you need, as well as a copy of the written advance notice that he/she gave the 
beneficiary or his/her representative. 
 
D.  Determining Liability When a Hospital-Issued Notice of Non-coverage (HINN) Is 
Involved  
 
After the hospital issues a notice of non-coverage, the beneficiary or his/her 
representative is considered to have knowledge that services are not covered and is liable 
for customary charges as shown below. 
    Preadmission HINN -- The beneficiary or his/her representative is liable for 
customary charges for all services furnished if he/she enters the hospital after 
receipt of a preadmission HINN. 
 
NOTE:  This liability determination also applies to direct NF swing bed admissions. 
 
  Admission HINN -- Determine liability as follows: 
 
  HINN Issued on the Day of Admission -- The beneficiary or his/her 
representative is liable for customary charges for all services furnished 
after the admission HINN is received.  However, to hold a beneficiary or 
his/her representative liable for charges on the day of admission, the 
hospital must issue the admission HINN no later than 3:00 PM on the day 
of admission.  If the hospital does not meet these requirements, the 
beneficiary or his/her representative is protected from liability until the 
day following receipt of the admission HINN (e.g., a HINN issued for an 
admission after 3:00 PM or a late evening admission). 
 
NOTE:  This liability determination also applies to direct NF swing bed admissions. 
 
  HINN Issued After the Day of Admission -- The beneficiary or his/her 
representative is liable for customary charges for all services furnished 
beginning the day following the date of receipt of the admission HINN. 
 
  Continued-stay HINN -- Determine liability as follows: 
 
  HINN Issued With the Concurrence of the Attending Physician Where the 
Beneficiary or His/Her Representative Requests QIO Review by Noon of 
the First Working Day After the Day He/She Receives the Continued-stay 
HINN and He/She Meets the Conditions of 1879(a)(2) -- The 
beneficiary's or his/her representative's liability begins at noon of the day 
following the date of notification of your determination.  The hospital is 
held financially liable for costs incurred from the date of the continued-
stay HINN, because it knew that services were non-covered (as 
demonstrated by issuance of the HINN). 
 
NOTE:  If the hospital does not provide the medical records by close of business of the 
first working day after the date that the beneficiary or his/her representative receives the 
continued-stay HINN, the beneficiary's or his/her representative's liability does not begin 
until noon of the day following the date of notification of your determination. 
 
A provider is considered to have knowledge that services are non-covered as of the date it 
issues the continued-stay HINN to the beneficiary. 
 
  HINN Issued With the Concurrence of the QIO, or With the Concurrence 
of the Attending Physician Where the Beneficiary or His/Her  Representative Does Not Request QIO Review by Noon of the First 
Working Day After the Day He/She Received the Continued-stay HINN, 
and Beneficiary or His/Her Representative Meets the Conditions of 
1879(a)(2) -- Determine liability as follows: 
 
  For short-term/acute care hospitals paid under PPS or in waived 
States, the beneficiary or his/her representative is liable for 
customary charges for services furnished beginning the third day 
following the date of receipt of the continued-stay HINN; 
 
  For hospitals paid on reasonable cost basis, the beneficiary or 
his/her representative is liable for customary charges for services 
furnished beginning the day following the date of receipt of the 
continued-stay HINN; or 
  For swing bed situations (i.e., continued-stay HINN issued to a 
beneficiary when his/her level of care changes from acute to SNF 
or NF, or from SNF to NF), the beneficiary or his/her 
representative is liable for customary charges for services 
furnished beginning the day following the date of receipt of the 
continued-stay HINN. 
 
NOTE:  If the beneficiary leaves the facility on the day following the date of receipt of 
the continued-stay HINN, the beneficiary or his/her representative is liable, with respect 
to days before the day the beneficiary leaves the hospital, only for applicable deductible 
and coinsurance amounts and for charges for convenience items or services normally not 
covered by Medicare. 
 
E.  Application of Grace Days  
 
The statutory authority for applying grace days is contained in 1154(a)(2)(B) of the Act.  
When you determine that the stay in either a PPS or non-PPS hospital is no longer 
covered, you may approve up to a maximum of two grace days for the purpose of post-
discharge planning. 
 
You may apply grace days under the following conditions: 
 
  The beneficiary is still in the hospital (i.e., you are performing concurrent 
review); and 
 
  Both the provider and the beneficiary are found not liable for the denied services 
(i.e., a HINN is not involved).  Therefore, Medicare payment may be made for the 
denied services under 1879 of the Act. 
 
Apply grace days based on the date of your denial notice, not based on the date of non-
coverage. 
  EXAMPLE:  You determine that the services are no longer covered under Medicare 
beginning 1/22.  The denial notice is dated 1/23.  You may approve payment for either 
one or two days after the date of the denial notice.  Therefore, the beneficiary would be 
liable beginning 1/25 or 1/26, based on whether one or two grace days are applied. 
 
NOTE:  Grace days do not apply to situations involving HINNs.  A provider must be 
unaware of non-coverage and the issuance of a HINN demonstrates otherwise. 
 
F.  Indemnification  
 
The statutory authority for indemnification of the beneficiary is specified in 1879(b) of 
the Act.  When the conditions specified in 42 CFR 411.402 are met, the beneficiary can 
be indemnified (i.e., reimbursed) for payment of denied services. 
 
  Determining Indemnification for Payment of Denied Services/Items -- When you 
determine that the beneficiary is not liable and that the provider and/or 
practitioner is liable for the denied services (i.e., Medicare will not make 
payment), the beneficiary is indemnified as follows: 
  For denials of services furnished prior to January 1, 1989, the beneficiary 
is indemnified for the denied services, including any deductible and 
coinsurance amounts (The beneficiary remains liable for payment of any 
convenience services and items); 
 
  For denials of services furnished on or after January 1, 1989 through 
December 31, 1989, the beneficiary is indemnified for the denied services, 
including any deductible amounts (The beneficiary remains liable for 
payment of any convenience services and items); and 
 
  For denials of services furnished on or after January 1, 1990, the 
beneficiary is indemnified for the denied services, including any 
deductible and coinsurance amounts (The beneficiary remains liable for 
payment of any convenience services and items). 
 
NOTE:  Deductible does not apply to SNF swing bed denials. 
 
When you determine that both the beneficiary and the provider and/or practitioner are not 
liable for the denied services, indemnification does not apply since Medicare will make 
payment under 1879 of the Act.  The beneficiary remains liable for payment of any 
applicable deductible, coinsurance, and convenience services and items. 
 
  Requesting a Refund -- For refund of denied inpatient and outpatient hospital 
services, the beneficiary or his/her representative should contact the intermediary.  
For refund of ambulatory surgical services and services furnished by physicians 
accepting assignment, the beneficiary or his/her representative should contact the 
carrier.  For refund of services furnished by physicians not accepting assignment, 
the beneficiary or his/her representative should contact the physician.   
4240 - Readmission Review - (Rev. 2, 07-11-03) 
 
Readmission review involves admissions to an acute, general, short-term hospital 
occurring less than 31 calendar days from the date of discharge from the same or another 
acute, general, short-term hospital (see 1154(a)(13) and 42 CFR 476.71(a)(8)(ii)).  
Neither the day of discharge nor the day of admission is counted when determining 
whether a readmission has occurred. 
 
A.  Medical Review Procedures  
 
Obtain the appropriate medical records for the initial admission and readmission.  
Perform case review on both stays.  Analyze the cases specifically to determine whether 
the patient was prematurely discharged from the first confinement, thus causing 
readmission.  Perform an analysis of the stay at the first hospital to determine the cause(s) 
and extent of any problem(s) (e.g., incomplete or substandard treatment).  Consider the 
information available to the attending physician who discharged the patient from the first 
confinement.  Do not base a determination of a premature discharge on information that 
the physician or provider could not have known or events that could not have been 
anticipated at the time of discharge. 
 
Review both the initial admission and the readmission at the same time unless one of 
them has previously been reviewed.  In these cases, use, at a minimum, the PRAF case 
summary of the other admission in addition to the medical record of the case under 
review. 
 
B.  Review Involving Two QIOs  
 
During the course of your review, you may identify a readmission where the initial stay 
was not in your State.  If you identify a possible utilization or quality of care problem 
relating to the initial admission, send your findings to the responsible QIO. 
 
C.  Denials  
 
Deny readmissions under the following circumstances: 
 
  If the readmission was medically unnecessary; 
 
  If the readmission resulted from a premature discharge from the same hospital; or 
 
  If the readmission was a result of circumvention of PPS by the same hospital (see 
4255). 
 
4250 - Transfer Review - (Rev. 2, 07-11-03) 
  Transfers are identified by the code entered on the bill and by the entries in the medical 
record.  Transfers are planned admissions to a second hospital/excluded unit.  Transfer 
review involves transfers between hospitals (e.g., from a PPS hospital to either a second 
PPS hospital or a second specialty hospital/unit) and transfers within a PPS hospital to an 
excluded unit in the same hospital.  Using the relevant medical records, perform case 
review for medical necessity and appropriateness of admission for the admission and 
discharge from the first hospital and the second hospital/excluded unit.  In the case of 
transfers to distinct part psychiatric units, the claim must show that the diagnosis 
necessitating the transfer was psychiatric in nature and that the patient received active 
psychiatric treatment (see 1814(a)(2)(A) of the Act).  When review involves two QIOs, 
follow instructions in 4240.B. 
 
4255 - Circumvention of Prospective Payment System (PPS) - 
(Rev. 2, 07-11-03) 
 
A.  Background  
 
Section 1886(f)(2) of the Act provides specific actions that the Secretary may take when 
you determine that a provider of Medicare services took an action with the intent of 
circumventing PPS and that action resulted in unnecessary admissions, premature 
discharges and readmissions, multiple readmissions, or other inappropriate medical or 
other practices with respect to beneficiaries or billing for services (see 476.71(a)(8)).  
The Secretary may have you: 
 
  Deny Part A payment with respect to inpatient hospital services with respect to 
the unnecessary admission or subsequent admission of the same individual; or 
 
  Require appropriate corrective action to prevent or correct the inappropriate 
practice. 
 
Actions taken pursuant to 1886(f)(2) of the Act and 42 CFR 476.71(a)(8) and (d) are in 
addition to the medical necessity, quality, and level of care determinations you make 
under 1154 of the Act.  Because the denial actions specified in this part are made 
pursuant to 1886(f)(2) of the Act, providers are generally entitled to a hearing and 
judicial review of the denial determination. 
 
1862(d) of the Act, the statutory authority to appeal 1886(f)(2) of the Act denials, was 
repealed and replaced with 1128(c) through (g) of the Act.  When 1128 of the Act 
replaced 1862(d) of the Act, it appears that the right to a hearing of denials made in 
accordance with 1886(f)(2) of the Act was not specifically addressed.  However, 
1128(f) of the Act provides that, "...any entity that is excluded (or directed to be 
excluded) from participation under this section is entitled to reasonable notice and 
opportunity for a hearing thereon by the Secretary to the same extent as is provided in 
205(b)..."  205(b) of the Act gives the Secretary, on his/her own motion, the authority 
to hold hearings and other proceedings as necessary.  Therefore, while 1128 of the Act  does not specifically address 1886(f)(2) of the Act denials, it does not remove the 
provider's right to due process. 
 
These determinations are not made under 1154 or 1862(a)(1) or (a)(9) of the Act, 
therefore, the limitation on liability provisions of 1879 of the Act are not applicable, and 
the provider will be held liable.  The beneficiary will not be charged for services denied 
under these instructions. 
 
The Secretary may terminate a hospital's provider agreement under 1866(b)(2)(A) of the 
Act for failure to comply substantially with corrective action required under 
1866(f)(2)(B) of the Act.  In addition, under 1128(b)(13) of the Act, the Secretary may 
exclude a hospital from participation in any program under Title XVIII of the Act and 
from any State health care program, if the hospital fails to comply substantially with a 
corrective action. 
 
B.  QIO Review Responsibilities  
 
Perform readmission and transfer review as described in 4240 and 4250.  Review the 
medical record for both the initial admission and the readmission or transfer.  Complete 
the Physician Reviewer Assessment Format (PRAF) in accordance with 4300-4325 for 
each case where the first level physician reviewer believes there is a potential quality 
concern.  Monitor early readmission and transfer/discharge activities, including potential 
circumvention of PPS, in your State/jurisdiction (see 4240 and 4250).  Report any 
substantial issues identified and any resulting analyses to your Project Officer. 
 
C.  Types of Prohibited Actions That Circumvent PPS  
 
Following are the four types of prohibited actions: 
 
  Premature Discharge of Patient That Results in Subsequent Readmission of 
Patient to Same Hospital -- This prohibited action occurs when a patient is 
discharged even though he/she should have remained in the hospital for further 
testing or treatment or was not medically stable at the time of discharge.  A 
patient is not medically stable when, in your judgment, the patient's condition is 
such that it is medically unsound to discharge or transfer the patient.  Evidence 
such as elevated temperature, postoperative wound draining or bleeding, or 
abnormal laboratory studies on the day of discharge indicate that a patient may 
have been prematurely discharged from the hospital. 
 
  Readmission of Patient to Hospital for Care That Could Have Been Provided 
During First Admission -- This prohibited action occurs when a patient is 
readmitted to a hospital for care that, pursuant to professionally recognized 
standards of health care, could have been provided during the first admission.  
This action does not include circumstances in which it is not medically 
appropriate to provide the care during the first admission. 
    Inappropriate Transfer of Patient From PPS Unit to PPS-excluded Unit in Same 
Hospital -- This prohibited action occurs when a patient is admitted to an acute 
care part of the hospital even though the medical record shows that the patient 
required care in a PPS-excluded psychiatric or rehabilitation unit within the same 
hospital, a bed in the PPS-excluded unit was available at the time of initial 
admission, and the patient is subsequently transferred to the PPS-excluded unit.  
This also applies to similar transfers from PPS units to beds in hospital-based 
SNFs and SNF swing beds.  A transfer is considered an admission for purposes of 
payment under PPS (see 42 CFR 412.4). 
 
  Inappropriate Transfer of Patient From PPS-excluded Unit to PPS Unit in Same 
Hospital -- This prohibited action occurs when a patient, who requires only the 
level of care being provided him/her in the PPS-excluded unit, is transferred to a 
PPS unit in the same hospital.  A prohibited action also occurs when the transfer 
is from a PPS-excluded unit to a hospital-based SNF or swing bed. 
 
D.  Actions to be Taken by QIO  
 
Your review process must provide opportunities for feedback to and from the hospital 
and for correcting identified prohibited actions before a pattern develops.  Work with the 
hospital to identify the most efficient and effective method to improve care or to correct 
any identified problems.  You should make it clear to the provider that there is a problem.  
Appropriate follow-up may include working with the provider and will always include 
monitoring provider activity.  Working with the provider would be sufficient initially if 
there is no clear provider intent to circumvent PPS and if there is no evidence of 
imminent danger to the patient. 
 
NOTE:  If a single case of circumvention of PPS is identified with no other cases or 
other grounds for initial denials, you need to take the most appropriate action(s) to 
address this situation.  A single episode of improper readmission or transfer would not 
support a circumvention of PPS finding absent some other evidence. 
 
Refer the case with a brief summary of the issues to your Project Officer.  If the 
prohibited action causes severe risk, or is a gross and flagrant violation, or fails in a 
substantial number of cases to comply that meets 1156(b) of the Act, refer to 42 CFR 
1004.1(b) and 9005 for further instructions. 
 
Enter the results of your review into the Standard Data Processing System (SDPS) as 
specified in your contract, the SDPS Database Administrator Guide, or other 
administrative directives, and into your database for pattern analysis.  On an ongoing 
basis, analyze patterns of care involving quality concerns resulting from readmissions and 
transfers that may have significance beyond a single episode. 
 
If the results of your pattern analyses clearly established that a hospital has been taking 
actions with the intent of circumventing PPS and that these actions resulted in  unnecessary admissions, premature discharges and readmissions, or multiple 
readmissions of Medicare beneficiaries, you may: 
 
  Deny the second admission and issue a denial notice to the hospital (see 7100, 
7440, and Exhibit 7-34); 
 
NOTE:  Initiate a corrective action plan to address the circumvention of PPS issues.  If 
the hospital demonstrates a lack of interest in participating in a proposed improvement 
project addressing circumvention of PPS issues, you should try again to gain the 
hospital's participation by pointing out the potential benefits in eliminating prohibited 
actions. 
 
  Initiate a sanction report and recommendation, based on a gross and flagrant 
violation of the responsible provider's or physician's Medicare obligations, if the 
prohibited action caused a patient's death, presented an imminent danger to the 
health, safety, or well-being of a Medicare beneficiary, placed the beneficiary 
unnecessarily in high-risk situations, or resulted in permanent damage of a major 
physical function (see chapter  9); or 
 
  Refer the cases included in a pattern to the Regional Office of the Inspector 
General (OIG) for potential termination of the provider agreement under 1866(b) 
of the Act and 42 CFR 489.21(e) (including cases where there is evidence of 
intent and the hospital refuses to cooperate/participate in corrective activities, or 
the corrective action plan fails to resolve these payment issues). 
 
If you suspect that fraud or an abusive practice is involved, consult with your RO project 
officer and the OIG regional office.  Refer individual cases to OIG for further 
investigation when necessary.  Examples of such practices include a hospital submitting 
two separate claims for a given patient, as if the patient were readmitted to the hospital 
but you find that the patient was discharged only once from the hospital, or you identify 
two hospitals as having an unexplained pattern of Medicare transfers between them. 
 
4260 - Onsite Review - (Rev. 2, 07-11-03) 
 
Section 1154(a)(15) of the Social Security Act (the Act) requires you to perform 
significant onsite review activities, including onsite review in at least 20 percent of the 
rural hospitals in your review area.  Onsite QIO activities include, but are not limited to: 
 
  Providing information and engaging in discussion with hospitals to aid them in 
improving performance; 
 
  Examining medical records for project data collection or case review; 
 
  Supporting continuous quality improvement activity; or 
 
  Presenting findings from program integrity projects.   
Regularly assess these activities to determine the efficiency and effectiveness of your 
methods, which may include onsite visitation, videoconferences, teleconferences, 
regional meetings, or any other formats that are mutually acceptable to you and the 
hospitals to achieve the desired ends. 
 
NOTE:  Rural hospitals are hospitals located outside of a Metropolitan Statistical Area or 
New England County Metropolitan Area, as defined by the Executive Office of 
Management and Budget. 
 
4300 - Introduction - (Rev. 2, 07-11-03) 
 
Integrated case review is the process used to review all categories of care (e.g., the three 
categories of review:  quality review, utilization review (see 4410), and DRG validation; 
or when applicable, two categories of review:  utilization review and DRG validation) 
when conducting Fee-For-Service (FFS) and Medicare + Choice (M+C) case review.  
Integrated case review begins with the receipt of the medical record.  The PRAF is a 
review tool designed to integrate case review and promote a seamless medical review 
process as a case proceeds from one review level to another.  Complete the PRAF 
whenever a case is referred for physician review. 
 
4305 - Non-physician Review - (Rev. 2, 07-11-03) 
 
A.  First Screening Review  
 
The non-physician reviewer performs an initial screening review of the case to determine: 
 
  If the documentation in the medical record is adequate for you to make a medical 
review determination (i.e., all necessary reports and notes are physically present 
and legible); and 
 
  If the case requires referral to a physician reviewer. 
 
The non-physician reviewer uses the following screening instruments, as applicable, for 
each case: 
 
  Admission criteria; 
 
  Discharge screens; 
 
  Invasive procedure criteria; 
 
  QIO-developed quality screens; 
 
  CMS coverage guidelines; 
    Published CMS criteria (e.g., rehabilitation criteria in the Medicare Intermediary 
Manual (MIM)); 
 
  DRG validation guidelines; 
 
  Coding guidelines; 
 
  QIO-developed documentation guidelines; and 
 
  Other screens, criteria, and guidelines (e.g., practice guidelines that are well 
accepted by the medical community) as supplied by you. 
 
In all cases, in addition to screening instruments, the non-physician reviewer applies 
his/her own professional expertise to identify potential concerns for referral to a 
physician reviewer. 
 
If the medical record passes the first non-physician screening review, enter the data into 
your system for pattern analysis activities and close the case. 
 
If the non-physician reviewer determines that a case should be referred for physician 
review, he/she initiates the PRAF and refers the case (see Exhibit 4-1). 
 
If the non-physician reviewer cannot decide whether to refer the case to a physician 
reviewer because a component of the medical record is missing or illegible, request the 
appropriate component from the facility and record a documentation error as specified in 
4520.D. 
 
NOTE:  Decisions that do not require clinical judgment to resolve (e.g., technical coding 
errors) are not referred to a physician reviewer. 
 
B.  Second Screening Review  
 
The non-physician reviewer performs second screening review when missing or illegible 
medical record components are subsequently provided by the facility/plan.  If the medical 
record passes the second non-physician screening review, enter the data into your system 
for pattern analysis activities and close the case.  If, even with the additional information, 
the case does not pass all screens, criteria, and application of the non-physician reviewer's 
professional expertise, the non-physician reviewer initiates the PRAF and refers the case 
for physician review. 
 
If the facility does not provide the requested information, technically deny the case as 
specified in 4520.D and enter the case into your system for pattern analysis activities.  
Reopen the case as specified in 7102 if the information is supplied at a later date. 
 
4310 - First Level Physician Review - (Rev. 2, 07-11-03) 
  Perform first level physician review for every case where the non-physician reviewer has 
identified a potential concern requiring a clinical decision.  The physician reviewer 
reviews the PRAF and the complete medical record to determine: 
 
  If the potential concerns identified and referred by the non-physician reviewer are 
valid; and 
 
  If review of the medical record demonstrates potential concerns not identified by 
the non-physician reviewer. 
 
The first level physician reviewer completes the PRAF for first level physician review 
(PRAF 1) (see Exhibit 4-1). 
 
If the first level physician reviewer determines that all concerns identified by the non-
physician reviewer are resolved and does not identify additional potential concerns, enter 
the data from first level physician review into your system for pattern analysis activities 
and close the case. 
 
If the first level physician reviewer determines that a potential concern exists, provide the 
appropriate parties an opportunity to discuss the case (see 4530).  In the case of potential 
quality concerns, the first level physician may make a preliminary identification of the 
source(s) of the concerns using the source legend of the PRAF.  Send preliminary notices 
to the involved physician(s) and to the provider. 
 
Provide the physician review results (including the physician reviewer case decision 
abstract and rationale from PRAF 1) of each first level physician review to the non-
physician reviewer who made the referral (You may also choose to supply this 
information to your non-physician reviewers from additional levels of physician review 
as part of your quality improvement process). 
NOTE:  A gross and flagrant violation may be identified at any level of physician 
review.  When the physician reviewer identifies a potential gross and flagrant violation, 
follow the procedures for development of a case with a potential gross and flagrant 
violation (see 9000) 
 
4312 - Action Following Opportunity for Discussion - (Rev. 2, 07-11-03) 
 
A.  Response Received to Opportunity to Discuss  
 
When the involved physician(s) and/or provider respond to your opportunity for 
discussion, refer the case to a second level physician reviewer. 
 
B.  No Response Received to Opportunity to Discuss  
 
When neither the involved physician(s) nor provider respond to your opportunity for 
discussion, you may choose not to perform second level physician review.  Make a 
determination based on the available information at the time of the first physician review.   Send final notices of your determination to the provider and to all physicians who 
received a preliminary notice, regardless of the outcome of the determination. 
 
In the case of quality concerns, if the preliminary sources of quality concerns were 
identified by the first level physician reviewer, you may assign those sources without 
further physician review.  If the preliminary sources of quality concerns were not 
identified by the first level physician reviewer and are unclear, then the case is referred 
for a second level physician review. 
 
4315 - Second Level Physician Review - (Rev. 2, 07-11-03) 
 
Always perform second level physician review when a potential concern has been 
identified by the first level physician reviewer and the involved physician(s) and/or 
provider have responded to the opportunity for discussion.  The second level physician 
reviewer reviews the medical record, the PRAF, and any additional information received 
during the opportunity for discussion. 
 
The degree to which the medical record must be reviewed a second time by a physician in 
these cases should be determined on a common sense basis by the physician reviewer.  If 
the physician reviewer is very familiar with the medical record in question (i.e., he/she 
served as the first level physician reviewer), only minimal review (e.g., evaluation of how 
the response conforms to the information in the medical record) should be necessary.  If 
the second level physician reviewer did not perform the first level review, a more 
thorough examination of the medical record is indicated.  The second level physician 
reviewer makes the final determination and completes the PRAF for second level 
physician review (PRAF 2) (see Exhibit 4-1). 
 
Send final notices of your determination to the provider and to all physicians who 
received a preliminary notice, regardless of the outcome of the determination. 
 
Enter the data from second level physician review into your system for pattern analysis 
activities and close the case. 
 
4320 - Third Level Physician Review - (Rev. 2, 07-11-03) 
 
Perform third level physician review when the involved physician(s) and/or provider 
request a reconsideration (for initial utilization denials) or a re-review (for confirmed 
DRG or quality concerns).  The third level physician cannot be a physician who was 
originally involved in the first or second level review.  The third level physician reviewer 
reviews the medical record, the PRAF, and any additional information received during 
the discussion period or later.  The third level physician reviewer completes the PRAF for 
third level physician review (PRAF 3). 
 
Send notices of the reconsideration/re-review determination of the third level physician 
reviewer to the provider and involved physician(s). 
  Enter the data from third level physician review into your system for pattern analysis 
activities and close the case. 
 
4325 - Use of the Physician Reviewer Assessment Format (PRAF) - 
(Rev. 2, 07-11-03) 
 
A.  Purposes of the PRAF  
 
The PRAF has been designed to achieve two objectives: 
 
  Standardize the structure of the review process to obtain more consistent, reliable 
review decisions; and 
 
  Standardize data reporting to provide both you and CMS with more reliable data 
for pattern analysis, feedback, and improving care. 
 
To achieve these objectives, it is crucial that the format be an integral part of the review 
of each case (i.e., each reviewer must assess the case according to the requirements of the 
PRAF).  Attempting to collect PRAF data from cases not reviewed according to the 
PRAF structure does not fulfill the objectives of the PRAF. 
 
The PRAF is a format, not a form.  You may design a form other than the model PRAF.  
However, collect and report all of the information found on the model PRAF.  Collect the 
information in such a way that the same linkages can be made as if you were using the 
model PRAF (e.g., final determinations can be linked to specific quality screen criterion 
failures, and category assignments can be linked to specific concerns) (see Exhibit 4-1). 
 
B.  Personnel Using the PRAF  
 
All non-physician and physician reviewers must use the PRAF, as appropriate. 
 
  The Non-physician Reviewer -- Non-physician reviewers will identify potential 
concerns and initiate the PRAF by completing the: 
  Patient identifying information section(s); 
 
  Non-physician reviewer decision summary; 
 
  Non-physician reviewer identification; and 
 
  Case decision abstract and question/statement of concern.  The non-
physician reviewer may also write a case summary, depending on your 
protocol. 
 
NOTE:  You may assign personnel other than non-physician reviewers to complete the 
patient identifying information section(s). 
    The First Level Physician Reviewer -- The first level physician reviewer 
determines if a potential concern(s) exists.  Whether a potential concern raised by 
the non-physician reviewer is validated or invalidated, and/or if an additional 
concern(s) is independently identified by the first level physician reviewer, he/she 
must complete the: 
 
  Physician reviewer preliminary decision summary; 
 
  Physician reviewer identification; and 
 
  Physician reviewer case decision abstract and rationale. 
 
NOTE:  The first level physician reviewer checks the "Immediate Attention" box, when 
appropriate. 
 
  The Second Level Physician Reviewer -- The second level physician reviewer 
determines if a confirmed concern(s) exists.  Whether a potential concern is 
confirmed or not, he/she must complete the: 
 
  Physician reviewer initial/final decision summary; 
 
  Physician reviewer identification; and 
 
  Physician reviewer case decision abstract and rationale. 
 
NOTE:  The second level physician reviewer checks the "Immediate Attention" box, 
when appropriate. 
 
  The Third Level Physician Reviewer (Reconsideration/Re-review) -- The third 
level physician reviewer determines if an initial utilization denial, a confirmed 
quality concern, or a QIO DRG validation should be upheld or reversed.  Whether 
a determination is reversed or not, he/she must complete the: 
 
  Physician reviewer reconsideration/re-review decision summary; 
 
  Physician reviewer identification; and 
 
  Physician reviewer case decision abstract and rationale. 
 
NOTE:  The third level physician reviewer checks the "Immediate Attention" box, when 
appropriate. 
 
C.  Elements of the Model PRAF  
 
The PRAF is used to make review decisions for patients in any setting (e.g., inpatient 
hospital, physician office).   
  Patient Identifier Information -- The patient identifier information provides 
administrative data for case identification.  Enter patient identifier information at 
the top of the Decision Summary, the Non-physician Reviewer - Case Decision 
Abstract and Question/Statement of Concern, and the Physician Reviewer Case 
Decision Abstract and Rationale at all levels of review. 
 
  Non-physician Reviewer Decision Summary -- In the non-physician reviewer 
decision summary, the non-physician reviewer identifies each concern by 
sequential number, notes which quality screen criterion each concern failed as 
appropriate, and assigns a suggested category to each concern.  The non-physician 
reviewer's ability to clearly identify, distinguish, and categorize potential concerns 
is crucial to the development of further information on the PRAF.  The non-
physician reviewer enters his/her identification number and the date. 
 
  Physician Reviewer Preliminary Decision Summary -- The first level physician 
reviewer enters the category of each concern identified by the non-physician 
reviewer in the sequential order assigned by the non-physician reviewer.  If the 
physician reviewer believes that the non-physician reviewer's concern is not valid, 
he/she enters "0". 
 
The first level physician reviewer may also add concerns he/she has identified 
independent of the non-physician reviewer.  These are to be assigned sequential concern 
numbers and categorized by the physician reviewer. 
 
The first level physician reviewer also enters the name(s) of the physician(s) who is to 
receive a preliminary notice for each concern.  The physician reviewer must identify 
those physicians who should receive preliminary notices.  Send preliminary notices only 
to those physicians who can supply information necessary to address the concerns raised. 
 
The first level physician reviewer enters his/her identification number and the date. 
 
  Physician Reviewer Initial/Final Decision Summary -- The second level physician 
reviewer enters the category of each concern he/she reviews in sequential order 
(The category assignment may change after the opportunity for discussion).  If the 
concern is not confirmed, the physician reviewer enters "0". 
 
The second level physician reviewer enters the source(s) of any confirmed quality 
concerns in sequential order.  The sources to be assigned are found on the source legend.  
For DRG or utilization concerns, the source is "0". 
 
The second level physician reviewer also sequentially enters the name(s) of any 
physician(s) determined to be the source, or one of the sources, of a confirmed quality 
concern. 
 
The second level physician reviewer enters his/her identification number and the date.   
  Physician Reviewer Reconsideration/Re-review Decision Summary -- The third 
level physician reviewer enters the category of each concern he/she reviews in 
sequential order (The category assignment may change after the 
reconsideration/re-review).  If the concern is not reconfirmed, the physician 
reviewer enters "0". 
 
The third level physician reviewer enters the source(s) of any reconfirmed quality 
concerns in sequential order.  The sources to be assigned are found on the source legend. 
 
The third level physician reviewer also sequentially enters the name(s) of any 
physician(s) believed to be the source, or one of the sources, of a confirmed quality 
concern. 
 
The third level physician reviewer enters his/her identification number and the date. 
 
  Office Use Only -- Use this section to identify physicians who are to receive 
notices by Unique Physician Identification Number (UPIN) and to track the case 
as it moves through the physician review process. 
 
  Immediate Attention -- A physician reviewer at any level of review may check the 
Immediate Attention box when he/she believes that you should pay special 
attention to the case under review (e.g., the physician reviewer believes that 
additional investigation should be undertaken). 
 
When the box is checked, the physician reviewer must justify the need for special 
attention in the physician reviewer Case Decision Abstract and Rationale section of the 
PRAF.  Determine the appropriate way to process PRAFs marked for special attention 
(e.g., immediate review by the medical director). 
 
  Non-physician Reviewer Case Decision Abstract and Question/Statement of 
Concern -- For each potential concern he/she has identified, the non-physician 
reviewer must define the concern clearly and concisely and provide clinical data 
from the medical record to support the identified potential concern.  You may also 
require a non-physician reviewer case summary in this section. 
 
The non-physician reviewer may sign this section (optional), but must enter his/her 
identification number and the date. 
 
  Physician Reviewer Case Decision Abstract and Rationale -- Note whether the 
case decision abstract and rationale is for the preliminary, initial/final, or 
reconsideration/re-review determination. 
 
First level physician reviewers are to address all potential concerns raised by the non-
physician reviewer, as well as any independently identified concerns.  Second level 
physician reviewers are to address all concerns for which the opportunity for discussion  is provided.  Third level physician reviewers are to address all concerns for which the 
reconsideration or re-review is requested.  At each level, the physician reviewer must 
justify his/her decision clearly and concisely and provide clinical data from the medical 
record to support the decision.  You may also require a physician reviewer case summary 
in this section.  Second and third level physician reviewers are to include alternative 
courses of action that would have precluded the confirmed (or reconfirmed) concern. 
 
Physician reviewers are to consider concerns from a systems perspective.  It is seldom 
that a concern is the result of a single individual's action.  For example, if the physician 
ordered an incorrect dose of medication and the medication was administered, the 
reviewing physician should consider the elements (e.g., nursing department, pharmacy) 
and the processes (e.g., poor communications) that failed to prevent the occurrence. 
 
The physician reviewer may sign this section (optional), but must enter his/her 
identification number and the date. 
 
  Categories for Classifying Concerns -- Categories are grouped as Utilization 
Categories (applicable to review of NODMARs), Prohibited Action Categories, 
Quality Categories, and DRG categories (Only the Quality Categories are used for 
managed care review except for review of NODMARs).  Place each potential and 
confirmed concern in these categories.  In general, assign one category to each 
concern.  If a concern seems to fall into several categories, rethink the concern 
because it may be that several separate concerns are being combined.  There may 
be several concerns within one clinical episode. 
 
NOTE:  There are a few DRG validation categories that are to be reported as such even 
though the case may not have been referred for physician review (e.g., D.14, D.15). 
 
4400 - Introduction - (Rev. 2, 07-11-03) 
 
You are authorized to conduct Fee-For-Service (FFS) review under 1154 of the Social 
Security Act (the Act) and 42 CFR, Part 476, Subpart C.  You are also authorized to 
conduct Medicare + Choice Organization (M+CO) review under 1154(a)(4) and 
1852(e)(3) of the Act and 42 CFR 476.70 and 476.72. 
 
For FFS cases, you are to review services provided by PPS providers located in your 
State or review area or by non-PPS providers in a waived/excluded area.  For M+C cases, 
you are to review services provided by M+COs in the State covered by the organization's 
contract (except for beneficiary's immediate review request of the Notice of Discharge 
and Medicare Appeals Rights (NODMAR), see chapter  7).  Where the M+COs 
immediate service area crosses State lines, your review responsibility extends across 
State lines also (i.e., review remains the responsibility of the QIO in the State in which 
the M+CO has its contract). 
 
4405 - Review of Medicare Services - (Rev. 2, 07-11-03) 
  The objectives of case review are dependent on whether you are conducting FFS or 
M+CO review.  Review FFS and M+C services paid under Medicare when all of the 
following conditions are met: 
 
A.  Types of Services  
 
The services were covered by Medicare, regardless of whether they were covered for this 
particular beneficiary or whether Medicare payment was made (see 42 CFR 424.5(a)(1)).  
For example, review the Medicare-covered services provided in a Medicare-certified 
SNF or SNF distinct part of a hospital even if the beneficiary's SNF days may have been 
exhausted at the time.  Consult the intermediary if you have questions as to whether the 
services are covered by Medicare. 
 
B.  Sources of Services  
 
The services were furnished by a provider, non-participating hospital, or supplier that 
was, at the time it furnished the services, qualified to have payment made to it (see 42 
CFR 424.5(a)(2)). 
 
C.  Recipient of Services  
 
The recipient of the service(s) in question must be a Medicare beneficiary (see 42 CFR 
424.5(a)(3)).  If it is not apparent that the case involves a Medicare beneficiary, check the 
Beneficiary Eligibility Status Tapes (BEST) through the RO, the Social Security Office, 
or the intermediary/carrier to determine Medicare status. 
 
4410 - Review Settings - (Rev. 2, 07-11-03) 
 
Conduct a utilization, quality review and/or beneficiary complaint review applicable to 
the review setting. 
 
  Utilization Review -- A review focused on determining the medical necessity and 
reasonableness of the items/services furnished or to be furnished to a patient and 
the appropriateness of the care settings (see 1862(a) of the Act and 42 CFR 
476.71(a)(1) and (a)(3)).  As a result of your review, you may make an initial 
denial determination with respect to the above issues (see 42 CFR 476.83).  This 
review does not apply to M+CO settings. 
 
  Quality Review -- A review focused on determining whether the quality of the 
services meets professionally recognized standards of care (see 42 CFR 
476.71(a)(2)).  For M+CO settings, the review includes whether appropriate 
health care services have not been provided or have been provided in 
inappropriate settings (see 42 CFR 476.72(a)(1)).  Perform FFS (may include 
utilization and/or quality) and M+C (includes quality only) review of services 
furnished in health care settings specified below: 
    Ambulatory Surgery Performed in Ambulatory Surgical Centers (ASCs) 
and Hospital Outpatient Areas (HOPAs) -- ASCs are distinct entities that 
operate exclusively for the purpose of providing surgical services to 
patients not requiring hospitalization.  ASCs must meet the Conditions for 
Coverage specified in 42 CFR Part 416, Subpart C.  HOPAs must meet the 
Conditions of Participation (CoP) specified in 42 CFR, Part 482 (Conduct 
beneficiary complaint review only for both ASC and HOPAs). 
 
  Comprehensive Outpatient Rehabilitation Facilities (CORFs) -- CORFs 
provide diagnostic, therapeutic, and restorative services to outpatients for 
the rehabilitation of injured, disabled, or sick persons.  CORFs must meet 
the CoP specified in 42 CFR, Part 485, Subpart B (Conduct beneficiary 
complaint review only). 
 
  Home Health Agencies (HHAs) -- HHAs are public or private agencies 
that specialize in giving skilled nursing services and other therapeutic 
services, such as physical therapy, in the home.  HHAs must meet the CoP 
specified in 42 CFR, Part 484 (Conduct beneficiary complaint review). 
 
  Hospices -- Hospices are public agencies or private organizations that are 
primarily engaged in providing care to terminally ill individuals.  Hospices 
must meet the CoP specified in 42 CFR, Part 418 (Conduct beneficiary 
complaint review only). 
 
  Hospitals -- Hospitals (including emergency services/departments) are 
acute care, general hospitals, and acute long-term care hospitals that are 
subject to the provisions of the Prospective Payment System (PPS) or cost 
reimbursement.  Inpatient hospitals must meet the CoP specified in 42 
CFR, Part 482 (For PPS Hospitals and non-PPS hospitals in Maryland, 
conduct utilization and, when applicable, conduct quality review and 
beneficiary complaint review) (For psychiatric hospitals or rehabilitation 
hospitals, conduct beneficiary's request for immediate review of a 
HINN/NODMAR). 
 
  Inpatient Hospital Units -- These units are distinct-part, separately 
certified PPS-excluded units within PPS hospitals (e.g., psychiatric and 
rehabilitation).  PPS-excluded hospital units must meet the CoP specified 
in 42 CFR, Part 482 (Conduct beneficiary complaint review only). 
 
  Providers of Outpatient Physical Therapy and Speech/Language Pathology 
Services -- These providers must meet the CoP specified in 42 CFR, Part 
485, Subpart H (Conduct beneficiary complaint review only). 
 
  Critical Access Hospitals (CAHs) -- CAHs offer emergency care and 
short-term inpatient care.  CAHs must meet the CoP specified in 42 CFR,  Part 485, Subpart F (Conduct beneficiary complaint review and 
beneficiary's request for immediate review of a HINN/NODMAR). 
 
  Skilled Nursing Facilities (SNFs) -- SNFs are specially qualified facilities 
that have the staff and equipment to provide nursing care or rehabilitation 
services and other health-related services.  SNFs must meet the CoP 
specified in 42 CFR 483, Subpart B (Conduct beneficiary complaint only). 
 
  SNF Swing Beds -- These are inpatient hospitals that have beds certified 
as swing beds or CAHs that provide post-hospital SNF care.  Inpatient 
hospital swing beds must meet the CoP specified in 42 CFR 482.66.  CAH 
swing beds must meet the CoP specified in 42 CFR 485.645 (Conduct 
beneficiary complaint review only). 
 
  Specialty Hospitals -- Examples of specialty hospitals are psychiatric and 
rehabilitation hospitals.  Specialty hospitals must meet the CoP specified 
in 42 CFR, Part 482 (Conduct beneficiary complaint review and 
beneficiary's request for immediate review of a HINN/NODMAR). 
 
  Community Mental Health Centers -- CMHCs deliver partial 
hospitalization services (specialized outpatient mental health services) to 
Medicare beneficiaries.  CMHCs must meet the requirement for coverage 
specified in 42 CFR 410.110 (Conduct beneficiary complaint review 
only). 
 
4500 - Introduction - (Rev. 2, 07-11-03) 
 
Other Fee-For-Service (FFS) and Medicare+Choice Organization (M+CO) review 
procedures include: 
 
  Using screening criteria; 
 
  Requesting medical records/reviewing documentation; 
 
  Affording practitioners and providers an opportunity to discuss potential initial 
denials, DRG assignment changes, and potential quality of care concerns; 
 
  Adhering to timing of review requirements; 
 
  Monitoring practitioners/providers improvement plans; 
 
  Profiling case review results, and developing and implementing projects to 
address hospital admission and coding patterns; 
 
  Monitoring hospital's physician acknowledgment statements; and 
    Conducting internal quality control activities (see chapter  13). 
 
4510 - Using Screening Criteria - (Rev. 2, 07-11-03) 
 
See 1154(a)(6) of the Act. 
 
You are to establish written criteria or obtain national criteria for non-physician reviewer 
use when screening FFS and M+CO cases for referral for physician review (see 42 CFR 
476.100).  Criteria must be based on typical patterns of practice in your area for each 
review setting.  For M+CO review, use FFS criteria plus additional criteria unique to 
M+COs.  Criteria must be reassessed regularly and updated as necessary to reflect current 
standards of practice.  CMS does not require that you use a specific criteria set so long as 
the criteria you select meets the above requirements. 
 
Consult with physicians/practitioners actively engaged in practice in the State when 
establishing or updating criteria.  Also request comments from physician organizations 
(e.g., State medical societies, the osteopathic society, and specialty societies), the State 
Hospital Association, and the Medicare carrier(s) in the State.  Attempt to develop 
mutually satisfactory timeframes for comment periods.  Involve Health Care Practitioners 
Other Than Physicians (HCPOTPs) in the development of criteria used in the review of 
services delivered by HCPOTPs (see 42 CFR 476.102(a)). 
 
Notify provider, physician, and M+COs within the State of newly established or revised 
criteria at least 30 calendar days prior to implementation.  New QIO contractors must 
notify provider, physician, and M+COs of their medical criteria within 30 calendar days 
of their contract effective date.  Provide copies of criteria to 
providers/practitioners/M+COs, upon request.  Provide copies of criteria to carriers upon 
mutual agreement.  Do not send copies of your criteria to CMS for approval, but you 
must have copies available for CMS' review upon request. 
 
NOTE:  If the screening criteria you use are copyrighted, provide the 
provider/practitioner with the information on how and where a copy of the screening 
criteria may be obtained, and any associated costs. 
 
Specify in your Memorandum of Agreement (MOA) with providers, M+COs, and payers 
how they will provide input in the development/amendment process and how you will 
notify them when you are establishing the criteria you will use (see chapter  3). 
 
 
4520 - Requesting Medical Records/Reviewing Documentation -  
(Rev. 2, 07-11-03) 
 
A.  Requesting Medical Records  
 
You are authorized to access and obtain medical records, pertinent to health care services 
furnished to Medicare patients, held by any provider in your review area (see 42 CFR  480.111).  A provider claiming Medicare payment must permit you to examine its 
medical records as necessary for you to perform your review functions (see 42 CFR 
476.88(a)).  Your review is performed outside the provider facility.  Providers must 
cooperate in the conduct of your review by photocopying and delivering all required 
information within 30 days of a request (see 42 CFR 476.78(b)(2)).  If the medical record 
is not received by the 15th day, send a reminder notice to the provider or practitioner. 
 
Under the Hospital Payment Monitoring Program (HPMP), the Clinical Data Abstraction 
Centers (CDACs) are responsible for making the initial request for the surveillance 
sample of medical records as well as performing a screening review.  Hospitals are 
expected to deliver the requested medical records to the CDAC within 30 days from the 
date of the request.  For these records, the CDACs mark a medical record as canceled 
(not received) 31 days from the date of the request.  The CDACs are instructed to 
forward any records received after the past due date to you.  The CDACs do not perform 
any screening review on these late records. 
 
Allow the provider/M+CO 30 calendar days from the date of your request to locate and 
submit a copy of the medical records to you.  Advise the provider/M+CO of the action 
you will take if the records are not furnished within the 30-day timeframe (see 4520.B). 
 
If the M+CO is unable to obtain medical records from a provider, or if the provider 
charges the M+CO a significantly higher amount than Medicare pays for photocopying 
costs, the M+CO may ask you to obtain the records directly from the provider.  The 
M+CO must submit its request in sufficient time so that the timing of review 
requirements is not adversely affected. 
 
NOTE:  This requirement does not apply to the beneficiary's immediate QIO review 
request of a Notice of Discharge and Medicare Appeals Rights (NODMAR) (see chapter  
7). 
 
B.  Failure to Submit Medical Records -- When an inpatient hospital, Ambulatory 
Surgical/Surgery Center (ASC), or swing bed provider fails to submit the medical records 
for a FFS patient within the prescribed timeframes, issue a technical denial and record a 
documentation error (see 7101.B).  If a requested record is not received, then the 
documentation necessary to establish payment is missing and a payment error has 
occurred.  Issue a technical denial (see 7101.B) for all requested medical records 
(including from CDACs) not received 45 days from the date of the record request. 
 
If the provider submits the medical records after the technical denial is made, reopen the 
case as specified in 7102.B.  When a case is reopened, do not instruct the intermediary 
to adjust the technical denial until your review is completed.  If a M+CO fails to submit 
medical records within 30 calendar days from the date of your request, record a 
documentation error. 
 
When medical records are not submitted within the prescribed timeframes in all other 
situations (or an inpatient hospital, ASC, or swing bed provider displays a pattern of  failing to submit medical records for FFS patients), refer the case to your RO Project 
Officer.  In cases involving FFS patients, the Project Officer will collaborate with the 
Division of Medicaid and State Operations to threaten revocation of the provider's 
Provider Agreement for failure to comply with the terms of the agreement.  In cases 
involving M+C beneficiaries, the Project Officer will consult with the Center for Health 
Plans and Providers regarding regulatory or contractual actions that may be taken. 
 
C.  Reviewing Documentation  
 
Collect patient data required by 42 CFR 476.78(b)(2), including medical records.  The 
medical record should contain documentation to justify admission, services furnished, 
and, when pertinent, continued care.  The documentation should support the diagnoses 
and treatments performed and describe the patient's progress and response to medication 
and treatment. 
 
  Medical Record Requirements -- Medical records are to conform to the following 
regulatory requirements for content: 
 
  Ambulatory Surgical/Surgery Centers (ASCs) are to meet the 
requirements specified in 42 CFR 416.47(b). 
 
  Comprehensive Outpatient Rehabilitation Facilities (CORFs) are to meet 
the requirements specified in 42 CFR 485.60(a). 
 
  Home Health Agencies (HHAs) are to meet the requirements specified in 
42 CFR 484.48. 
 
  Hospices are to meet the requirements specified in 42 CFR 418.74(a). 
 
  Hospital Outpatient Areas (HOPAs) are to meet the requirements specified 
in 42 CFR 482.24(c). 
 
  Inpatient hospitals/units are to meet the requirements specified in 42 CFR 
482.24(c). 
 
  Providers of outpatient physical therapy and speech/language pathology 
services are to meet the requirements specified in 42 CFR 485.721(b). 
 
  Psychiatric hospitals are to meet the requirements specified in 42 CFR 
482.61. 
 
  Rehabilitation hospitals are to meet the requirements specified in 42 CFR 
482.24(c). 
  Critical access hospitals (CAHs) are to meet the requirements specified in 
42 CFR 485.638(a)(4). 
    Skilled nursing facilities (SNFs) and SNF swing beds are to meet the 
requirements specified in 42 CFR 483.75(l)(5). 
 
  Community mental health centers (CMHCs) are to meet the requirements 
specified in 42 CFR 424.24(e)(2). 
 
  Establishing Documentation Guidelines -- QIOs may establish guidelines for the 
components of a medical record that must be physically present to proceed with a 
review (e.g., pathology report when tissue is removed).  Guidelines must be 
consistent with the regulatory Conditions of Participation (CoP) in 42 CFR 
Subchapter G regarding providers/suppliers of care. 
 
NOTE:  Documentation guidelines are not guidelines as to actual clinical practices.  
They should address only what must be present in the facility's medical record for review 
to proceed. 
 
When establishing or changing documentation guidelines: 
 
  Consult with the provider and physician communities within the State.  
Request comments from physician organizations such as State medical 
societies, the osteopathic society, specialty societies, and from provider 
organizations such as the State Hospital Association.  Attempt to develop 
mutually satisfactory timeframes for comment periods. 
 
  Involve Health Care Practitioners Other Than Physicians (HCPOTPs) for 
guidelines used in the review of services delivered by HCPOTPs. 
 
  Collaborate with other QIOs, when appropriate. 
 
  Notify provider, physician, and M+COs within the State at least 30 
calendar days prior to implementation.  New QIO contractors must notify 
provider, physician, and M+COs within 30 calendar days of their contract 
effective date. 
 
  Provide a copy to providers/practitioners/M+COs upon request. 
 
  Reassess regularly and update as necessary. 
 
Specify in your MOA with providers/M+COs and payers the method for them to provide 
input in the development process and of notifying them when the guidelines you will use 
are established (see chapter 3). 
 
D.  Medical Record Incomplete or Illegible  
 
If the non-physician reviewer cannot complete review because a portion of the record is 
missing or illegible, record a documentation error and request the provider/M+CO to  submit the necessary documentation within 15 calendar days.  If an inpatient hospital, 
ASC, or swing bed provider does not submit the requested documentation for a FFS 
patient within the allotted timeframe, issue a technical denial as specified in 7101.B.  If 
the requested documentation is submitted after the technical denial is made, reopen the 
case as specified in 7102.  If other providers (including inpatient hospitals for M+CO 
patients) do not submit the requested documentation, refer the problem to your RO 
Project Officer.  Do not allow additional time beyond the allotted 15 days before taking 
corrective action. 
 
In most cases, when a portion(s) of the medical record is absent or illegible, your non-
physician reviewers can determine the presence of documentation errors.  Occasionally, a 
non-physician reviewer may not be able to determine if a documentation error exists (i.e., 
the non-physician reviewer cannot determine whether a missing report is crucial to 
complete the review).  In these cases, a physician reviewer must make the determination.  
At this point in the review, the physician reviewer is to address only the question of the 
missing/illegible documentation.  A complete review would be performed by a physician 
reviewer at a later time if the case were referred. 
 
The QIO physician and non-physician reviewers are expected to be proficient in 
deciphering a variety of handwriting styles and copy qualities.  Make all reasonable 
efforts to read medical records as supplied by the facility.  At least two reviewers must 
attempt to locate and/or read the problematic section(s) of the record prior to requesting 
missing/illegible documentation.  If the review is performed onsite, seek assistance from 
the provider/M+CO in locating or reading the problematic section(s). 
 
E.  Missing Physician Documentation  
 
Record a documentation error if information required for a physician reviewer to make a 
determination is not found in the body of the medical record.  In this situation, the 
physician reviewer must request additional information from the 
provider/M+CO/physician(s) prior to making a review determination. 
 
F.  Recording Documentation Errors  
 
Record a documentation error in cases where a non-physician or physician reviewer must 
request additional information from a provider or M+CO because a determination cannot 
be made on the basis of the medical record alone.  A documentation error occurs when: 
 
  The provider/M+CO fails to produce the medical record; 
 
  The documentation necessary for the non-physician reviewer to make a review 
determination is illegible or is missing from the medical record; or 
 
  The physician reviewer must request additional documentation from the attending 
physician. 
  A single record can have more than one documentation error.  For example, the record 
was provided to you untimely (error one); when you did receive it, it was missing 
necessary documentation (error two); and after the provider sent the missing 
documentation, the physician reviewer did not have enough information to make a review 
decision (error three). 
 
Do not record a documentation error if you subsequently determine that the requested 
information was: 
 
  In the medical record and simply overlooked; or 
 
  Not documented in the medical record because the care was not furnished. 
 
G.  Examples of Documentation Errors  
 
Following are examples of how a documentation error should be recorded by a non-
physician reviewer.  The examples address possible documentation errors for a 
percutaneous transluminal coronary angioplasty (PTCA).  A non-physician reviewer may 
determine that a cardiac catheterization report, or its equivalent, should be included in the 
medical record to establish the medical necessity/appropriateness of a PTCA.  Equivalent 
documentation should contain the information normally found in a catheterization report 
(e.g., coronary arteries involved, extent of blockage). 
 
  There is evidence in the medical record that the catheterization was performed, 
but the report is missing.  However, the information that would normally be 
contained in the report is given in a detailed progress note in the medical record.  
In this case: 
 
  Do not record a documentation error; and 
 
  Proceed with the review. 
 
  There is evidence in the medical record that the catheterization was performed, 
but there is no report or equivalent entry.  In this case: 
 
  Record a documentation error; 
 
  Request the report or its equivalent from the provider; and 
 
  If the provider supplies the requested report within the required 
timeframe, proceed with the review; or 
 
  If the provider fails to supply the requested report within the 
required timeframe, issue a technical denial and do not proceed 
with the review. 
    There is no evidence in the medical record that a catheterization was performed.  
In this case: 
 
  Request the report or its equivalent from the provider; and 
 
  If the provider supplies a report or its equivalent within the 
required timeframe, record a documentation error and proceed with 
the review; 
 
  If the provider acknowledges that the catheterization was 
performed, but does not supply the report or its equivalent within 
the required timeframe, record a documentation error, issue a 
technical denial, and do not proceed with the review; 
 
  If the provider does not supply the report or its equivalent within 
the required timeframe, record a documentation error, issue a 
technical denial, and do not proceed with the review; 
 
  If the provider acknowledges that the catheterization was not 
performed, do not record a documentation error at this point and 
proceed with the review.  When the case is referred, the physician 
reviewer must make a determination as to whether a medical 
necessity/quality of care concern exists.  If an initial denial is 
issued, it is a medical necessity denial and a quality of care 
concern. 
 
H.  Requesting Action Plans  
 
Determine whether a pattern of documentation errors exists.  Request an action plan from 
a provider for correcting documentation errors in the following situations: 
 
  When a pattern seriously and repeatedly impedes review; or 
 
  When a pattern seriously threatens the quality of care (e.g., relevant 
documentation important in assuring adequate care is missing in 
physicians'/nurses' notes, and the lack of this documentation could threaten the 
quality of care). 
 
4530 - Providing Opportunity for Discussion - (Rev. 2, 07-11-03) 
 
When you identify a potential utilization, DRG assignment, or quality concern, notify 
providers/practitioners/M+COs in writing of the opportunity for discussion.  Give them 
20 calendar days from the date of your notice for oral discussion with appropriate QIO 
personnel and/or to submit written comments/information prior to making your final 
determination (see 1154(a)(3) of the Act and 42 CFR 476.93).  Consider any 
information submitted when reaching your final determination.  Send a final  determination notice whenever an opportunity for discussion is afforded (see 7230 for 
notice requirements for potential quality concerns.  Modify these notices accordingly 
when addressing potential utilization and DRG validation concerns). 
 
Take all reasonable measures to ensure that practitioners/providers/M+COs have an 
opportunity to discuss the potential concern.  For example, provide a toll-free telephone 
number available during normal business hours, or advise that you will accept collect 
calls if you do not have a toll-free number.  Document the content of telephone or 
personal conversations with practitioners/providers/M+COs. 
 
A.  Practitioners  
 
Afford practitioners an opportunity for discussion in accordance with the following 
guidelines: 
 
  Afford involved physicians an opportunity to discuss the concern(s) directly with 
a QIO physician (You are encouraged to provide physicians an opportunity to 
discuss the case with a like specialist). 
 
  Afford involved HCPOTPs an opportunity to discuss the concern(s) directly with 
a QIO HCPOTP, if available, or with a QIO physician who is a specialist in the 
type of services under review. 
 
  If the involved practitioner is out of town for an extended period of time, 
document that he/she is unavailable and when he/she will return.  Hold the case 
until the practitioner is available to discuss it.  Notify the practitioner when he/she 
returns, and allow the customary 20-day period for reply.  This situation is not 
expected to occur frequently. 
 
  Contact the admitting physician directly to obtain additional information in 
situations where the attending physician did not admit the patient and cannot 
provide the relevant facts. 
 
  When the attending and admitting physicians are in the same group practice, 
continue to direct your correspondence and discussions to the attending physician.  
In these situations, it is not unreasonable to expect the attending and admitting 
physicians to consult on the case. 
 
B.  Providers/Medicare+Choice Organizations (M+COs)  
 
 Afford providers/M+COs an opportunity for discussion in accordance with the following 
guidelines: 
 
  Afford providers/M+COs an opportunity to discuss the concern(s) with a QIO 
physician if the provider's/M+COs representative is a physician.  If the  providers/M+CO's representative is a nurse or other staff person, use 
knowledgeable non-physician staff for the discussion, as appropriate. 
 
  For cases reviewed on a preadmission basis (e.g., assistant at cataract surgery), if 
the physician does not know which provider will furnish the services, document 
the case file accordingly.  In this situation you will be unable to offer the provider 
an opportunity for discussion. 
 
  M+COs may coordinate responses with the physician/provider and forward one 
combined response to you. 
 
4540 - Adhering to Review Timeframes - (Rev. 2, 07-11-03) 
 
A.  Review Beginning/Completion Dates  
 
 The timeframe for FFS and M+C retrospective review begins when you have adequate 
information to request medical records.  For HPMP cases (including DRG validation), the 
review time begins when you receive the medical records from CDAC.  If you receive an 
incomplete medical record from CDAC, follow the review timeframes specified in 
4540.B.  The review of a case ends with a completion date as follows: 
 
  When a case is not referred for physician review, the review completion date is 
the date the review of the medical record is completed. 
 
  When a case is referred for physician review and the physician reviewer indicates 
that no further review is necessary, the review completion date is the date the 
Physician Reviewer Assessment Format (PRAF) is completed. 
 
  When an opportunity to discuss a case has been afforded the 
physician/provider/M+CO, the review completion date is the date the final notice 
is sent to all parties.  Do not issue an initial denial, DRG assignment change, or 
confirmed quality concern notice until the earlier of either completion of the 
discussion or 20 calendar days after the date you make a preliminary notification 
to the physician/provider/M+CO.  When a case is questioned by the physician for 
quality of care and is also questioned for DRG validity or utilization, do not send 
notices at separate times.  Notices should be sent to comply with the review 
deadline for quality of care. 
 
Within the general timeframes of review, you may accelerate your review in some areas 
and use the time gained in other areas. 
 
B.  Review Timeframes  
 
Use the Time of Review document provided with the Case Review Information System 
(CRIS) User's Guide to determine the review timeframes for each category of review 
(e.g., quality review, utilization review).  The timeframe for retrospective review includes  the 30 days a provider has to submit the medical record.  If the requested medical record 
comes in earlier than 30 days, then the QIO gains the extra time to complete its review.  
The completion review timeframes vary for different review categories.  See Exhibit 4-
1A for the timeframes applicable to each specific review category. 
 
  Retrospective Review -- The timeframes for questioned cases include the 20-day 
opportunity for discussion requirement as specified in 4530.  The time reduction 
for HPMP cases is based on the review start date defined as the date the medical 
record is received by the QIO.  For HPMP cases, the QIO simply receives the 
records from the CDAC and begins the review unless time is needed for 
additional information (15 days).  When requesting record information because a 
provider/M+CO submits an incomplete or partially illegible medical record, add 
15 calendar days to the review timeframes specified below (see Exhibit 4-1A for 
the timeframes applicable to case review).  In general, complete retrospective 
review within the timeframes: 
 
  60 calendar days for an unquestioned case (30 days for HPMP cases); 
 
  90 calendar days for a case questioned for DRG validity or by the 
physician reviewer for utilization (60 days for HPMP cases); or 
 
  100 calendar days for a case questioned by the physician reviewer for 
quality of care (70 days for HPMP cases) (Excludes beneficiary 
complaints of quality of care review). 
 
  Re-openings -- Complete review within the following timeframes: 
 
  30 calendar days for an unquestioned case; 
 
  50 calendar days (from receipt of request) for a case questioned for DRG 
validity or by the physician reviewer for utilization; or 
 
  60 calendar days (from receipt of request) for a case questioned by the 
physician reviewer for quality of care. 
 
4550 - Profiling Case Review Results - (Rev. 2, 07-11-03) 
 
You are required to build a database of information collected from all case review 
activities.  The principal purpose of this database is to generate PPS and non-PPS 
provider/M+CO profiles to use as a data source in conducting your State analysis for use 
in your Hospital Payment Monitoring Program (see chapter  11) and to identify possible 
interventions, including improvement projects and beneficiary communications activities.  
You are to generate routine and ad hoc provider profiles whenever necessary.  You are 
not required to disseminate reports on a regular basis.  However, produce them upon 
request by PPS and non-PPS providers/M+COs or by CMS.  Reports disseminated to  PPS and non-PPS providers/M+COs are governed by the confidentiality regulations 
contained in 42 CFR Part 480. 
 
Use profiles to determine if individual concerns, when considered as a whole, or a pattern 
of quality concerns might be indicative of a systemic concern.  A systemic concern is one 
that reflects the PPS and non-PPS providers'/M+CO's internal policies/procedures or a 
general problem that exists within the medical community.  For example, the M+CO only 
permits enrollees to have a certain number of a particular diagnostic study within a given 
timeframe, or the PPS/non-PPS hospital's system for consultation referrals causes delay 
in the provision of necessary care. 
 
When you suspect the existence of a systemic problem, request information from the PPS 
or non-PPS provider/M+CO regarding its systems/guidelines governing the issue, 
including how the PPS or non-PPS provider/M+CO monitors the provision of the 
services in question. 
 
You may request this type of information based on one or more reviews.  If, for example, 
you believe the PPS or non-PPS providers/M+COs guidelines for a specific 
test/condition are a concern, you may request the specific guidelines in this area and work 
with the PPS or non-PPS provider/M+CO to correct any concerns.  The intent is to see 
whether the problem derives from the PPS or non-PPS provider's/M+CO's internal 
directives or whether the directives are acceptable.  However, the PPS or non-PPS 
provider/M+CO does not have the ability to monitor that its directives are being 
followed. 
 
4560 - Maintaining Memoranda of Agreements (MOAs) -  
(Rev. 2, 07-11-03) 
 
Maintain MOAs with providers, payers, M+COs, and State licensing/certification 
agencies as instructed in chapter  3. 
 
4570 - Prepayment Review System (PRS) Implementation -  
(Rev. 2, 07-11-03) 
 
Your request to intermediaries and carriers to implement pre-procedure and prepayment 
review of a procedure, diagnosis, provider, or practitioner must conform to the negotiated 
Memoranda of Agreements (MOAs) between you and the payers outlining the conditions 
for necessary data exchange requirements (see chapter  3). 
 
4580 - Monitoring Hospitals' Physician Acknowledgement Statements - 
(Rev. 2, 07-11-03) 
 
A.  Background  
  Regulations at 42 CFR 412.46 (one of the conditions at 42 CFR 412, Subpart C) require 
hospitals to obtain only one signed acknowledgment from physicians who are being 
granted admitting privileges at a particular hospital.  The physician must complete the 
acknowledgment at the time that he/she is granted admitting privileges at the hospital or 
before, or at the time the physician admits his/her first patient to the hospital.  When the 
hospital submits a claim, it must have on file a signed and dated acknowledgment from 
the attending physician that the physician has received the notice specified in 42 CFR 
412.46(b).  Existing acknowledgments signed by physicians already on staff remain in 
effect as long as the physician has admitting privileges at the hospital. 
 
Hospitals must meet the conditions specified in 42 CFR 412, Subpart C, to receive 
payment under the PPS for inpatient hospital services furnished to Medicare 
beneficiaries.  If a hospital fails to comply fully with these conditions with respect to one 
or more Medicare beneficiaries, CMS may, as appropriate: 
 
  Withhold Medicare payment in full or in part to the hospital until the hospital 
provides adequate assurances of compliance; or 
 
  Terminate the hospital's provider agreement. 
 
B.  Monitoring Requirements  
 
At least annually, monitor hospitals to ensure that they are appropriately obtaining the 
acknowledgment statements from physicians with new admitting privileges as required at 
42 CFR 412.46.  You may perform this annual monitoring requirement at one single time 
or more frequently during each contract year.  Perform this activity offsite or onsite the 
hospital setting.  To perform this activity, you must do the following: 
 
  Be familiar with the hospitals' own internal procedures to secure the 
acknowledgment statements from physicians (see 4580.A).  Ensure that each 
hospital, in your review area, is in compliance with the acknowledgment 
requirement; 
 
  Inform providers in your review area about your monitoring activities; 
 
  Request from the hospitals a list of all physicians with new admitting privileges 
for the year/period under review.  The list should include the physician name, 
Unique Physician Identification Number (UPIN), the date admitting privileges 
were granted, the date acknowledgment was signed, and the date of the first claim 
submitted to the FI for that particular physician, when applicable.  As needed, you 
may request copies of the signed acknowledgements for verification.  Validate the 
information received from the hospital against the claims data.  Validate all 
acknowledgements if there are 5 or less.  For 6 or more acknowledgements, select 
a random sample of the listed physicians.  If a deficiency was found on the sample 
validated, select and validate all or another random sample to ensure that a pattern 
does not exist.  You must determine what constitutes a pattern based on the  number of physicians first claims submitted by the hospital before the physician 
signed the acknowledgement statements; 
 
  Coordinate, as necessary, with the intermediary in your review area to facilitate 
action by the Fiscal Intermediary (FI) or you when needed.  For example, you 
may coordinate with the intermediary to establish a mechanism to facilitate 
reporting by the intermediary when the intermediary is aware/has knowledge of a 
hospital not obtaining appropriate acknowledgment(s) before billing; 
 
  As needed, request an improvement plan to correct any deficiencies that are 
found; 
 
  Report results into SDPS. 
 
C.  Reporting Requirements  
 
If you determine that corrective action is necessary (i.e., the deficiency affects payment 
under the PPS Program): 
 
  Notify the intermediary of the deficiency for claim adjustment; 
 
  Notify the hospital that it must correct the deficiency immediately.  Concurrently, 
inform the appropriate CMS Associate Regional Administrator through your 
Project Officer; and 
 
  If the problem continues, or a pattern of noncompliance is established, refer the 
case to the appropriate CMS Associate Regional Administrator for further 
action(s) through your Project Officer. 
 
4590 - Reporting Requirements for Review Activities -  
(Rev. 2, 07-11-03) 
 
A.  Reporting on Case Review  
 
Report all your review activities, including HPMP activities, into the Standard Data 
Processing System (SDPS) as specified in your contract, the SDPS Database 
Administrator Guide, or other administrative directives. 
 
B.  QIO and Intermediary Information Exchange  
 
After completing case review, report to the intermediary and the provider, as specified in 
the SDPS Database Administrator Guide, any claims that need adjustment because of: 
 
  A change in the DRG; 
 
  Admission denied;   
  Day outlier days denied (see NOTE in 4210); 
 
  Cost outlier services denied; 
 
  Non-PPS hospital or SNF swing bed days denied; 
 
  Incorrect date for hospital to begin charging the beneficiary; 
 
  Failure to provide medical documentation for review (see 4520.B); 
 
  Partial or complete reversals of a previous QIO decision; 
 
  Change in discharge status in a PPS hospital; 
 
  Deemed admission denials or approvals; 
 
  Readmission/transfer denied; 
 
  Assistant-at-cataract denied; and 
 
  Outpatient services denied. 
 
4600 - Introduction - (Rev. 2, 07-11-03) 
 
You must have access to a sufficient number of non-physician reviewers to screen 
medical records and physician reviewers to make QIO determinations for Fee-For-
Service (FFS) and Medicare+Choice (M+C) cases under review as specified in your 
contract. 
 
4610 - Non-physician Reviewers - (Rev. 2, 07-11-03) 
 
Use non-physician reviewers with the necessary clinical education and experience to 
perform medical record screening.  Non-physician reviewers must be familiar with your 
review norms and criteria.  Reviewers who perform DRG validation must be trained and 
experienced in ICD-9-CM and CPT-4/HCPCS coding.  At least one Registered Records 
Administrator (RRA) or Accredited Records Technician (ART) must be employed to 
oversee the overall coding and DRG validation process. 
 
4620 - Physician Reviewers - (Rev. 2, 07-11-03) 
 
A.  Eligibility Requirements  
 
A physician reviewer must be a doctor of medicine, osteopathy, dentistry, podiatry, or 
optometry, or another individual who is authorized under Federal or State law to practice  medicine, surgery, osteopathy, dentistry, podiatry, or optometry (see 1154(c), 42 
CFR 476.1, and 42 CFR 476.98(a)). 
 
Only a physician reviewer can make a final determination concerning another physician.  
A final determination is a decision made by your physician reviewer that a potential 
utilization or quality concern is or is not a confirmed utilization or quality concern.  The 
determination can be made only after complying with all applicable review requirements, 
including affording opportunity for discussion (see 4530). 
 
B.  Active Practice Requirements  
 
Your physician reviewers must either be engaged in active practice in the State or be 
military physicians who actively practice in a military or Department of Veterans Affairs 
(DVA) health care facility in your State, even though the physician's license to practice 
has been issued by a different State.  If the M+CO's immediate services area includes the 
provision of services in an adjacent state, use actively practicing physicians who are 
licensed and provide care in the adjacent State to review these services. 
 
Active practice means that the physician usually practices (on a routine basis) a minimum 
of 20 hours per week.  Temporary interruptions of a short-term nature are acceptable as 
long as the physician clearly has an ongoing, active practice throughout the year and the 
physician's involvement in the practice averages 20 hours per week during the year.  The 
"routine basis" requirement is met if a physician sees Medicare beneficiaries on an 
ongoing basis throughout the year, regardless of the total number of contacts with these 
beneficiaries. 
 
Active practice must also include active staff privileges in a health care facility on a 
regular basis (see 42 CFR 476.1).  Doctors of medicine, osteopathy, or dentistry must 
have active staff privileges in one or more hospitals in the State.  Doctors of podiatry 
must have active staff privileges in one or more facilities in the State.  Doctors of 
optometry are not required to have staff privileges.  Note that emergency room physicians 
and dentists who do not have admitting privileges in an acute care hospital can meet the 
requirement of active staff privileges as it is defined in this regulation. 
 
Accept the physician's certification that he/she is in active practice with active staff 
privileges in the State (the hospital/facility must be specified) unless there is reason to 
believe otherwise.  In questionable cases, have the physician provide documentation.  
The physician's certification must be renewed on a biennial basis.  Inspect biennially each 
physician reviewer's license to practice in your State. 
 
C.  Licensure Requirements  
 
Generally, the physician reviewer must have the same licensure as the physician whose 
services are under review.  That is, a licensed doctor of medicine, osteopathy, dentistry, 
podiatry, or optometry must be reviewed by another licensed doctor of medicine, 
osteopathy, dentistry, podiatry, or optometry respectively (see 1154(c) of the Act).   
If use of the required reviewer is impractical, creates an unavoidable potential conflict of 
interest, or compromises the effectiveness or efficiency of your review process, you may 
use a licensed doctor of medicine or osteopathy to review the services furnished by any 
physician (A dentist, optometrist, or podiatrist can only review services furnished by 
other physicians with the same licensure). 
 
D.  Specialty Requirements  
 
The physician reviewer must generally be a specialist in the same field as the physician 
whose services are under review.  For example, assign an internist to review care 
furnished by an internist, an orthopedist to review care furnished by an orthopedist, etc., 
regardless of the type of services under review.  In the case of psychiatric and physical 
rehabilitation services, however, make arrangements to ensure that (to the extent 
possible) initial review of such services are made by a physician who is trained in 
psychiatry or physical rehabilitation (as appropriate) (see 1154(a)(7) of the Act).  For 
reconsideration reviews, the regulations at 42 CFR 478.28 generally require the physician 
reviewer to be a specialist in the type of services under review. 
 
Whenever possible, use physician reviewers who are certified by a specialty board 
recognized by the American Board of Medical Specialties (for Medical Doctors) or by a 
specialty board under the auspices of the American Osteopathic Association (for Doctors 
of Osteopathy).  Each prospective board-certified physician reviewer must provide 
evidence of that certification. 
 
If use of the required reviewer is impractical, creates an unavoidable potential conflict of 
interest, or compromises the effectiveness or efficiency of your review process, use 
another physician reviewer whose practice and experience is relevant to the facts and 
circumstances of the case to be reviewed.  In these cases, use the most appropriate 
reviewer available (see 42 CFR 476.98(a)(2). 
 
E.  Setting Requirements  
 
Generally, the physician reviewer must practice in a setting similar to the setting in which 
the physician whose services are under review practices.  If use of the required reviewer 
is impractical, creates an unavoidable potential conflict of interest, or compromises the 
effectiveness or efficiency of your review process, you may use a physician reviewer who 
practices in a different setting than the physician whose services are under review. 
 
Whenever possible, use M+CO physicians when physician review of M+C services is 
required.  A M+C physician is a physician who, as a regular part of his/her practice, 
provides care that is paid for by a M+CO.  These physicians may be employed by a staff 
model M+CO or work under arrangements with an organization (e.g., an Independent 
Practice Association (IPA) model). 
 
F.  Hierarchy of Exceptions    
The concept of peer review requires that, whenever possible, QIOs use physician 
reviewers whose licensure, specialty, and practice setting are the same as (or similar to) 
those of the physician whose services are under review.  Consider these variables when 
assigning cases to physician reviewers. 
 
Your goal is to match all the variables (i.e., licensure, specialty, and practice setting).  
When this is not possible, document the reasons for your physician reviewer selection.  
There are valid reasons for failing to match all variables for every case (e.g., your pool of 
physician reviewers in a rare specialty is too small when also considering the physician 
reviewer requirements needed for a possible reconsideration). 
 
When you cannot meet all reviewer requirements for a particular case, apply the 
exceptions in 4620.C through F in specific order to retain the more significant 
requirements as much as possible.  When an exception is necessary: 
 
  Try to resolve the problem by using the exception for similar setting requirements 
before using the exception for the specialty or licensure requirements; 
 
  If unsuccessful, try to resolve the problem by using the exception for the specialty 
requirements before using the exception for licensure requirements; or 
 
  As a last resort, use the exception for the licensure requirements. 
 
G.  First Level Physician Reviewers  
 
First level physician review occurs in every case where a non-physician reviewer has 
identified a potential concern requiring a clinical decision (see 4310).  First level 
physician reviewers must meet the physician reviewer requirements outlined in 4620.A 
through F. 
 
H.  Second Level Physician Reviewers  
 
Second level physician review occurs when a potential concern is identified and the 
provider/practitioner/M+CO responds to your opportunity for discussion (see 4315 and 
4530).  Second level physician reviewers must meet the physician reviewer requirements 
outlined in 4620.A through F.  The second level physician reviewer may be the same 
person that performed the initial review. 
 
I.  Third Level Physician Reviewers  
 
Third level physician review occurs when the provider/practitioner/M+CO requests a 
reconsideration/re-review (see 4320).  To conduct reconsiderations, reviewers must 
meet the qualification requirements outlined in 7420.A (see 42 CFR 478.28).  To 
conduct DRG validation re-reviews, reviewers must meet the qualification requirements  outlined in 7300.C.  To conduct quality re-reviews, reviewers must meet the 
qualification requirements outlined in 7310.C. 
 
4630 - Health Care Practitioners Other Than Physicians (HCPOTP) - 
(Rev. 2, 07-11-03) 
 
A HCPOTP is a person credentialed in a recognized health care discipline who provides 
the services of that discipline to patients (e.g., a nurse anesthetist).  A HCPOTP peer is an 
individual credentialed in the same health care discipline (see 42 CFR 476.1, 42 
CFR 476.98(b), and 42 CFR 476.102). 
 
When the services being reviewed are furnished by a HCPOTP, use a physician reviewer 
who is a specialist in the type of services under review.  In this case, your physician 
reviewer must also consult with a HCPOTP peer before making the determination (see 42 
CFR 476.102(a)(3)). 
 
For services furnished by a HCPOTP, you must meet the requirements for consultation 
with a peer practitioner, unless you have been unable to obtain a roster of peer 
practitioners available to perform review or the practitioner is precluded from performing 
review because he/she has, or is perceived to have, a conflict of interest.  If the services 
of the appropriate consultant are not available, adequately document this fact. 
 
4640 - Conflict of Interest - (Rev. 2, 07-11-03) 
 
A person may not review health care services, make initial denial determinations, or 
make changes as a result of DRG validation, if he/she has, or is perceived to have, a 
conflict of interest (see 1154(b)(l) of the Act).  You must make every effort to avoid 
potential conflicts of interest.  A case should not be assigned to a physician reviewer if 
the reviewer: 
 
  Participated in the development or execution of the beneficiary's treatment plan; 
 
  Is an associate or close competitor of the physician under review; 
 
  Is a member of the beneficiary's family; or 
 
  Is a governing body member, officer, partner, 5 percent or more owner, or 
managing employee of the health care facility where the services were, or are to 
be, furnished (see 42 CFR 476.98(d)). 
 
The QIOs must also be aware of potential conflicts of interest specific to M+CO review.  
For example: 
 
  Only FFS physicians reviewing the quality of M+CO services; 
    M+CO physicians reviewing care provided or arranged for by a M+CO from 
which these physicians receive financial benefit; or 
 
  Physicians who perform services for one M+CO and review services of another 
M+CO that competes directly with their M+CO for enrollment of area Medicare 
beneficiaries. 
 
Whenever possible, also avoid assigning a case to a physician reviewer if the reviewer 
actively practices in the same hospital as the physician under review.  Finally, avoid 
potential conflicts of interest when selecting physicians to serve on your quality 
improvement and sanction committees. 
 
4650 - Training - (Rev. 2, 07-11-03) 
 
Provide training for physician and non-physician (including HCPOTP) reviewers to 
improve the case review process continuously.  The purpose of training is to enhance the 
likelihood that determinations are both reliable and valid.  Focus training on the 
application of clinical knowledge utilizing CMS' directives in the review of health care 
issues of the Medicare population.  Include training beyond the mechanical aspects of 
review procedures (e.g., worksheet completion, timekeeping). 
 
You are responsible for the training of your reviewers (including the development of any 
training materials).  Also, conduct training to address needs that have been identified 
during your own internal quality control monitoring or needs that have been identified by 
CMS or other CMS contractors.  To minimize expenses and maximize exchange of ideas, 
you are encouraged to collaborate with other QIOs, hospitals, M+COs, academic 
institutions, and professional societies to develop courses.  All training materials 
developed by you are the property of the Federal Government to be reported to the RO 
Project Officer, and are to be available to CMS upon request. 
 
A.  Training Plans  
 
Develop training plans, accompanied by individual course descriptions, for non-physician 
and physician reviewers.  Update plans as necessary.  Keep your RO Project Officer 
informed of your training plans, and make your plans available to CMS upon request.  In 
developing training plans: 
 
  Identify the needs of non-physician and physician reviewers, the goals and 
objectives of the training, the methodology to be used, and the training topics to 
be included; 
 
  For each course, identify the cost, length of time in hours, location, audience, 
course description, and trainer credentials, regardless of whether the course is 
offered in-house, by a QIO consortium, or by a non-QIO source; 
    Identify the methodology you will use to evaluate the effectiveness of the 
training. 
 
NOTE:  Training plans must ensure that investment in initial physician reviewer training 
is recovered.  For example, you may decide not to pay physician reviewers during their 
initial training.  Upon completion of the training, you could double the physicians' hourly 
rates of pay for review activity up to the approved number of hours spent in training. 
 
B.  Initial Training  
 
 At a minimum, initial training should include: 
 
  An overview of your review process, goals of your review, and the effect of 
individual case review determinations.  Explain that a major purpose of review is 
to improve care through educational feedback and continuous quality 
improvement.  Stress the educational focus of your actions when concerns are 
identified; 
 
  An overview of the cooperative project process and disease-specific quality 
indicators; 
 
  A review of relevant Medicare statutory and regulatory requirements, the QIO 
Manual, and the Statement of Work (SOW); 
 
  A review of incentives that may affect care in both the FFS and M+CO settings; 
 
  A review of the DRG validation process; 
 
  A review of the norms and criteria you use for case review; 
 
  An overview of types of medical record formats used by facilities in your area; 
 
  Instruction on how to extract information necessary to make a determination from 
the medical record; 
 
  Instruction on how to verify information found in one area of the medical record 
by using information from another part of the medical record; 
 
  Instruction on coding guidelines and practices (for personnel responsible for 
coding decisions); 
 
  Discussion of the role of the reviewer in determining whether care is inconsistent 
with principles on which there is substantial consensus (e.g., published specialty 
guidelines); 
    Discussion of the need to base cooperative projects and determinations on widely 
supported analyses of scientific data, rather than on the beliefs of the reviewer, 
even if supported by anecdotal or other evidence; 
 
  Discussion of the goal of achieving consistency in case review by having the 
reviewer be confident that other reviewers would agree with his/her interpretation 
based on the evidence and would reach a similar conclusion regarding the issue; 
 
  Instruction on the process for performing project data collection, including when 
it is to be performed and its goal; and 
 
  Instruction on how to discuss potential and confirmed concerns with the 
providers/practitioners/M+COs (for QIO physician reviewers and personnel who 
are expected to interact with providers/practitioners/M+COs). 
 
C.  Continuing Education  
 
In developing ongoing training, identify training needs from multiple sources such as: 
 
  Internal quality control findings; 
 
  Staff recommendations; 
 
  Other QIOs; 
 
  Providers/M+COs under review; and 
 
  CMS and CMS contractors. 
 
D.  Continuing Medical Education (CME) and Continuing Education Units 
(CEUs)/Hours  
 
The CME/CEU courses are necessary for clinical staff to be aware of changes in practice.  
Make reasonable efforts to secure CME/CEU credit for QIO-developed education 
programs.  If unsuccessful, make other arrangements, where possible (e.g., arrange for a 
QIO consortium to offer CME/CEU courses, pay for Medicare reviewers to attend 
courses offered by non-QIO sources).  In either case, document your efforts. 
 
4700 - Introduction - (Rev. 2, 07-11-03) 
 
The review process provides opportunities for feedback to and from you, as well as to 
and from providers and practitioners.  When you identify a single confirmed concern, 
notify the provider and the physician(s) involved.  The practitioner and/or provider may 
use the notification process as an opportunity to correct identified concerns before a 
pattern develops.  If the concern requires an adjustment to be made (e.g., a denial or DRG 
adjustment), proceed with the adjustment.  Unless a concern causes severe risk or is a  gross and flagrant violation that meets 1156(b) of the Act, no other QIO performance 
improvement activity is required until a pattern of concerns is established (see 9000 for 
further instructions concerning violations of the practitioners'/providers' statutory 
obligations). 
 
NOTE:  You may institute project data collection as the result of a single case review.  
Project data collection is not, in itself, considered a QIO performance improvement 
activity, but rather a way for you to gather data to help you better understand patterns of 
concerns, which may require performance improvement activities, or to monitor the 
results of performance improvement activities. 
 
If a physician provided care in more than one setting (e.g., an inpatient acute care setting 
and a SNF), use all information at your disposal concerning the care furnished in the 
combination of these settings to determine whether to proceed with an improvement 
activity.  You may work with one, several, or all of the providers concerned to improve 
the level of the physician's performance; however, you may not share information among 
providers (see 10000-10090). 
 
Use all the information available to determine where the feedback and action plan 
process can be utilized most efficiently and effectively to improve overall performance.  
Prioritize performance improvement activities in terms of their effect on Medicare 
beneficiaries, benefits to the program, and the feasibility of improvement.  Concerns 
believed to be systemic (e.g., consistent up-coding for DRG enhancement, consistent 
failure in effective discharge planning) should receive priority consideration. 
 
4705 - Feedback to the Provider and Involved Physicians -  
(Rev. 2, 07-11-03) 
 
When you have identified a pattern of concerns for a physician or provider, work with the 
provider and the involved physicians to identify remediable problems (e.g., poor 
communication between the pharmacy and the nursing units, causing medication errors) 
that have given rise to the pattern of concerns.  The provider is to review the information 
you have provided to identify any underlying problems that are the root cause of the 
identified pattern of concerns.  The provider is expected to develop an action plan to 
address the pattern of concerns or to provide convincing evidence that an action plan is 
not needed. 
 
Work with both the administrative and the medical staffs of the provider (e.g., a hospital 
quality assurance committee) when providing information, and developing, 
implementing, and monitoring action plans.  Where the source of the quality, utilization, 
documentation, or DRG concern is a physician, notify him/her that you will work with 
him/her and the provider in a cooperative effort to improve performance. 
 
NOTE:  Use the opportunities you have in providing individual feedback to provide 
positive feedback to providers and physicians in order to reinforce best practices in 
quality, utilization, and documentation of care.   
4710 - Request for an Action Plan - (Rev. 2, 07-11-03) 
 
Require the provider to develop an action plan for all patterns of concerns except gross 
and flagrant situations, for which the sanction process applies (see 9000-9045).  Your 
initial request for an action plan must include a summary of the findings that are the basis 
for the request.  You may include suggestions for an appropriate action plan.  Provide 
assistance to the provider by identifying the pattern of concerns as narrowly as your data 
allows (e.g., Is a pattern of post-operative infections linked to a specific surgeon, or to a 
specific type of procedure?).  You may also share information concerning best practices, 
providing you maintain appropriate confidentiality. 
 
Inform the provider that the action plan must: 
 
  Describe the expected outcome (goals) of the action plan.  The stated outcome 
must be measurable; 
 
  State what the provider believes to be the underlying cause of the pattern of 
concerns and how it identified the cause; 
 
  Describe the specific actions the provider will take to correct the underlying cause 
of the pattern of concerns; 
 
  Provide a timeframe for initiating and completing the action plan; 
 
  Where a physician is the source of the pattern of concerns, obtain an 
acknowledgment by the physician that he/she will cooperate with the provider in 
the action plan; and 
 
  Describe the process the provider will use internally to ensure that the actions 
resolve the pattern of concerns. 
 
Review the provider-developed action plan and determine whether it will effectively 
address the pattern of concerns you have identified.  If you determine that the action plan 
is inadequate or inappropriate, work with the provider to develop an improved plan. 
 
4715 - When an Action Plan Is Not Needed - (Rev. 2, 07-11-03) 
You are not expected to obtain an action plan when: 
 
  A case is referred to a Federal or State enforcement agency responsible for the 
investigation or identification of fraud or abuse of the Medicare program (see 42 
CFR 480.106(b)); 
 
  The provider can offer an explanation for the identified pattern of concerns and 
you accept the explanation as satisfactory (e.g., you failed to consider an element 
in your data analysis that satisfactorily explained the identified pattern);   
  After diligent inquiry, neither you nor the provider can identify a reason for the 
identified pattern of concerns; 
 
  The provider has already identified the problem underlying the pattern of 
concerns and has taken action to correct it (e.g., a Medicare coder who has been 
making numerous errors has been retrained and is now performing well); 
 
  The identified pattern of concerns is the same as that previously identified and 
occurred prior to or during the time when action was being taken to improve the 
pattern; or 
 
  The source of the concern is a physician, and the physician has retired, expired, or 
moved his/her practice out of the State. 
 
NOTE:  When a physician has moved his/her practice out of the State, and you have 
quality or utilization concerns that require action, forward the information to the QIO in 
the new State of practice.  Provide your Project Officer with a copy of any concerns 
forwarded to another QIO. 
 
4720 - Provider Implementation of an Action Plan - (Rev. 2, 07-11-03) 
 
If the provider's action plan meets your approval, the provider is expected to implement 
the plan according to the agreed timeframe.  Notify the provider/practitioner(s) promptly 
whenever an action plan is concluded or significantly modified. 
 
4725 - Additional Performance Improvement Activities -  
(Rev. 2, 07-11-03) 
 
If a provider's action plan is not successful (i.e., the stated outcome has not been 
achieved) within the stated timeframe, meet with the provider to discuss the continued 
pattern of concerns, identify reasons for failure of the plan, and attempt to develop a 
modified plan.  Share with the provider any data you have that would assist in explaining 
the difficulties experienced with the original action plan and in developing a modified 
plan. 
 
It is expected that, in most instances, a satisfactory action plan will be developed by the 
provider, or by the provider with your assistance, and that the plan will correct the pattern 
of concern.  However, there are occasions when: 
 
  The provider is unwilling or unable to formulate a satisfactory action plan within 
the required timeframe; 
 
  An action plan cannot be satisfactorily modified; 
    A provider formulates a satisfactory action plan but fails to adequately follow 
through on its implementation; or 
 
  A provider continues to be unsuccessful in resolving identified patterns of 
concerns. 
 
In these cases, identify and implement appropriate actions to improve performance and 
correct the identified pattern of concerns.  Use your assessment of the nature and 
magnitude of the pattern of concerns and your previous experience with the provider 
and/or practitioner involved to identify the appropriate action.  Utilize the least intrusive 
action(s) necessary to correct the behavior involved.  Actions you may take include: 
 
  Imposition of a QIO-directed action plan; 
 
  Direct negotiation of an action plan with a physician when a physician is the 
source of the pattern of concerns; 
 
  Referral to the CMS RO (or to a State survey agency through the RO) for a 
facility investigation for compliance with the facility's Medicare provider 
agreement; 
 
  Referral to the State Board of Licensing according to your agreement (Federal and 
State licensing and accreditation bodies are responsible for the professional 
licensure of a practitioner or the accreditation of a particular institution.  Federal 
regulations at 42 CFR 480.138 require you to disclose confidential information to 
State and Federal licensing bodies, upon request, to the extent required by the 
agency to carry out its function under Federal or State law.  You may also provide 
this information without a request); 
 
  Referral to the Medicare carrier (for a physician with an identified pattern of 
utilization or other concerns, as appropriate); and/or 
 
  Referral to the Office of the Inspector General (OIG) for possible sanction action 
(see 9000 for development of a sanction recommendation of a substantial 
violation in a substantial number of cases). 
 
In instances where a physician is the source of a utilization, documentation, DRG, or 
quality of care pattern of concerns, if you and the provider are unable to reach agreement 
on an action plan, or if an action plan (including a modified action plan) is not successful, 
negotiate an action plan directly with the physician.  Educational actions you recommend 
must be designed to correct the root cause(s) of the pattern of concerns. 
 
In order to successfully employ educational actions, you must: 
    Be knowledgeable concerning the availability of specific Continuing Medical 
Education (CME) courses, and consider recommending attendance at courses that 
address the categories of concern; 
 
  Be knowledgeable concerning various self-education tools, and consider 
recommending the use of such tools when appropriate (In general, these 
modalities may be utilized to correct very specific behaviors or when lesser 
grades of correction are required); 
 
  Contact teaching institutions about their willingness and ability to provide mini-
residency courses that address specific categories of concerns, and consider 
recommending attendance at such mini-residency courses to address appropriate 
behaviors of concern; 
 
  Be knowledgeable concerning the rules regarding board certification 
examinations, and consider recommending taking (not necessarily passing) board 
certification exams; and 
 
  Be knowledgeable concerning the availability of courses and certifications to 
address special needs, and consider recommending such courses/certifications 
(e.g., Advanced Cardiac Life Support certification for physicians with a pattern of 
concerns in emergent care situations). 
 
Customize educational actions to address the particular behavior causing the pattern of 
concerns.  Do not disclose concerns with the performance of individual practitioners to 
educational bodies without the practitioner's written consent (see 10000-10090). 
 
4730 - Monitoring Performance Improvement Actions -  
(Rev. 2, 07-11-03) 
 
Assess the impact of your performance improvement actions.  Consider the nature of 
each action to determine the most efficient and effective means of assessing the impact of 
your activities.  In the case of provider action plans, employ assessment techniques to 
enable you to make accurate decisions as to when a provider action plan can be modified 
or discontinued.  In the case of other actions (e.g., direct negotiation with a physician 
concerning educational activities), assess whether an action has been successful or 
whether another action (e.g., sanction) must be instituted. 
 
Develop specific criteria for judging whether an action plan or other performance 
improvement action has succeeded.  Tailor your assessment to your assessment criteria 
and the data available.  You may determine that process (e.g., review/audit of a provider's 
modified quality assurance procedures) or outcome assessment (e.g., analysis of billing 
data from the provider for a DRG of concern), or both, may be the most appropriate 
method to determine the success of your actions.  You may institute project data 
collection to monitor performance when other modalities will not satisfactorily collect the 
data you require to assess impact.   
Your impact assessment techniques must be: 
 
  Appropriate to the clinical and other issues involved; 
 
  Objective; 
 
  Cost-effective; and 
 
  Reproducible. 
 
When appropriate (e.g., an outcome measure has an extended timeframe), perform an 
interim impact assessment.  Subject that assessment to subsequent validation (e.g., by 
pattern analysis or case review findings). 
 
Share your assessment of the outcome of an individual provider's action plan with the 
provider.  Also, share interim assessments, if performed.  If a physician is involved, share 
your assessment with the physician. 
 
NOTE:  Released assessments must conform to all QIO confidentiality requirements.  
The identities of individual providers/practitioners must be protected (see 10000-
10090). 
 
4735 - Timing Requirements for Performance Improvement Activities - 
(Rev. 2, 07-11-03) 
 
Request an action plan from a provider within 30 calendar days of the date you have 
determined an action plan is required.  You may delay this request for a short period with 
good reason.  However, it is expected that delays will be rare.  Allow 30 calendar days 
for the provider to develop an action plan. 
 
Be familiar with timeframes in which performance can reasonably be expected to 
improve.  Use your assessment of the nature and magnitude of the pattern of concerns 
and your knowledge and experience of the nature of institutional change in general and 
with specific providers to set appropriate timeframes for improvement.  Do not allow 
providers or practitioners unreasonable periods of delay in developing or implementing 
action plans or in proceeding with other improvement activities (e.g., a mini-residency).  
Interpret unreasonable delays as refusal to cooperate and proceed accordingly.  Exhibit 4-1 - Standard Mandatory Case Review Process -  
 
S TANDARD  M ANDATORY  C ASE  R EVIEW  P ROCESS 
Retrospective Review  Re-Openings Review 
cQaIsOe  rfeocr ereivveies w   End  No  RHeeqa.r i nAgL?J   Yes  QAIcOk Lnpeoretwtpelear dregs.     QIfOile p froerp AaLreJs    30 C-Days*  ALJ craesveie ws  
 
QIO requests   60 C-Days*
medical records  
from provider  QIO notifies   QIO logs   ALJ notifies  
  provid./practit./  decision on   CMS and QIO  
  15 C-Days* intermed./bene.   SDPS  of decision 
30 C-Days*
 
End
mQeIdOic rael vrieecwosr d s  aQdrIeOdci tor. ermdq euindirfieocsa.  l    30 W-Days*  No 
    cQasIOe  acnlods elosg  s   nNeoc aecstsioanry    DReecviseirosne?   Yes  30 W-Days**  inpQtreoIrOvmi dne./odpt.ir/fbaieecstni te ./.    dQecISOisD iloPongS so  n   
Concern? No decision in  
SDPS  QIO refers  
  case to approp.   QIO   QIO receives  
Yes agency  reconsiders   request for  
QIO sends   case  reconsideration  End 
concern to  
pprarocvtiitdioenre/ r  End  60 C-Days* 
prParcotvitiidoenre/ r   Ini(tUPiatali lyDizmeaentinioatn l  )o f   inpQtreoIrOvmid ne./odpt.ri/fbaieecstni te ./.    dQecISOisD iloPongS so  n    Pbreornevecid.o .rn/epsqriaudce. ts itt. /   Noptriafyc tpitrioonviedre  r/  dQecISOisD iloPongS so  n   
responds 
 
Yes  
  30 C-Days**
QIO20  rCe-Dvaieysw*s   Concern  De(tQQeruumaaillniittyay t) i on  Noptriafyc tpitrioonviedre  r/  dQecISOisD iloPongS so  n    QIdOe mcisaikoens   
response  Confirmed? 
   
No Accept    
Decision?  Yes End QIO re-reviews  
QIO notifies   QIO logs   case 
ppraroctvitidioenre/ r  decSisDioPnS o n   No 
End  prerPaqrrceoutvveitiiisedotwen rr ee/ r-    30 C-Days*  QreIqOur eeresvcite efwoivr e rse -  
   
*C-Days = calendar days **W-Days = working  days (Rev. 2, 07-11-03)s_Exhibit_4_1A 
Exhibit 4-1A - Standard Mandatory Case Review Process Timeframes - (Rev. 2, 07-11-03)  STANDARD MANDATORY CASE REVIEW PROCESS TIMEFRAMES
Retrospective Review Re-Openings Review
(FROM RECEIPT OF MEDICAL RECORDS) (FROM RECEIPT OF REQUEST)
(ADD 15 CALENDAR DAYS WHEN APPLICABLE)
Timeframes: Timeframes:
60 Calendar Days:    Unquestioned Case 30 Calendar Days:    Unquestioned Case
90 Calendar Days:    Questioned Case (for DRG/validation) 50 Calendar Days:    Questioned Case (for DRG/validation)
100 Calendar Days:  Questioned Case (for Quality of Care) 60 Calendar Days:  Questioned Case (for Quality of Care) Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R18QIO 10/10/2014  Update to Pub. 100-10, Chapters 04 and 07  Upon  N/A 
to Provide Language-Only Changes for  Implementation 
Updating ICD-10  of ICD-10 
R02QIO 07/11/2003  Miscellaneous Revisions  N/A  N/A 
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