DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
CMCS Informational Bulletin 
DATE:  June 10, 2016 
FROM:  Vikki Wachino, Director 
Center for Medicaid and CHIP Services (CMCS) 
SUBJECT:  Federal Financial Participation for Managed Care External Quality Review  
The Medicaid and Childrens Health Insurance Program (CHIP) Managed Care Final Rule 
(CMS-2390-F, 81 FR 27498) published on May 6, 2016 (final rule), extends annual external 
quality review (EQR) requirements currently applied to Managed Care Organizations (MCOs) 
and Prepaid Inpatient Health Plans (PIHPs) to Prepaid Ambulatory Health Plans (PAHPs) and 
certain Primary Care Case Management entities (PCCM entities).  The final rule also applies the 
EQR provisions to CHIP.  In addition, the final rule also sets forth the matching rates for 
expenditures for External Quality Review (EQR), including the production of EQR results and 
the conduct of EQR-related activities when performed by a qualified External Quality Review 
Organization (EQRO) or other entity.   
This informational bulletin discusses: 
 The application of external quality review to PAHPs and certain PCCM entities;
 Federal financial participation for EQR of MCOs;
 Federal financial participation for EQR of PIHPs, PAHPs, and PCCM entities;
 Effective dates for federal financial participation (FFP) for EQR;
 State Expenditure Reporting for Medicaid EQR; and,
 Application of external quality review to managed care entities in CHIP
Application of external quality review to PAHPs and certain PCCM entities 
Currently, states are required to conduct EQR for MCOs and PIHPs.  Effective July 1, 2018, 
states will be required to extend the annual EQR requirements described in 438.350 through 
438.364 of the final rule to all managed care plan types, including MCOs, PIHPs, PAHPs, and 
select PCCM entities.  The PCCM entities to which EQR must be applied under the final rule, 
described in 438.310(c)(2), include PCCM entities with contracts that provide for shared 
savings, incentive payments or other financial reward for improved quality outcomes.   
Mandatory EQR activities.  There are four mandatory EQR activities described in 438.358(b), 
including three current and one new mandatory activity adopted in the final rule: 
 Compliance review; CMCS Informational Bulletin - Page 2 
 Validation of performance measures;
 Validation of performance improvement projects (PIPs); and
 Validation of network adequacy (new).
MCOs and PAHPs are required to participate in all mandatory EQR activities.  Affected PCCM 
entities will be required to undergo two of the four mandatory EQR activities: performance 
measure validation and compliance review.  PCCM entities are not required under to conduct 
PIPs, nor are they subject to network adequacy standards, and therefor are not subject to the 
associated EQR activities.  
Optional EQR activities.  There are six optional EQR activities described in 438.358(c), 
including five current and one new optional activity adopted in the final rule:  
 Validation of encounter data;
 Administration or validation of consumer or provider surveys relating to quality of care;
 Calculation of additional performance measures (beyond those reported by managed care
plans for EQR);
 Conducting additional PIPs beyond those performed by managed care plans and validated
by the EQRO under the mandatory activities;
 Assisting with the quality rating of MCOs, PIHPs and PAHPs (new); and
 EQRO technical assistance related to EQR.
States may contract with an EQRO to perform any of the six optional EQR activities for PAHPs 
and affected PCCM entities, as well as for MCOs and PIHPs.   
Federal Financial Participation for EQR of Managed Care Organizations  
Enhanced match:  In accordance with 433.15 and 438.370, both mandatory and optional EQR 
activities described in 438.358 conducted for MCOs, as defined in 438.2, as well as production 
of the EQR technical report described in 438.364, are eligible for the 75 percent match rate 
provided that the activity is conducted:    
1) By an EQRO that meets the qualifications set forth in 438.354; and
2) In accordance with the EQR protocols developed by CMS in accordance with 438.352.
EQR-related activities conducted by an entity which does not satisfy the requirements of 
438.354 are eligible for the 50 percent match rate.
Prior approval required:  Per 438.370(c), states must submit their EQRO contracts to CMS for 
review and approval prior to claiming the enhanced 75 percent match.   
EQR Protocols:  The protocols under OMB control #0938-0786, CMS-R-305, were approved on 
May 19, 2015, with an expiration date of May 31, 2018.  These protocols remain in effect at the 
present time, and EQR activities conducted in accordance with them are eligible for enhanced 
match subject to the conditions described above.  We anticipate initial revision of these protocols  CMCS Informational Bulletin - Page 3 
by October 2017 to reflect changes in quality improvement and measurement processes included 
in the final rule and to extend their applicability to CHIP.  Adherence to the revised protocols 
will be required by July 1, 2018, in order for states to claim enhanced administrative match for 
the associated EQR activity. 
CMS also will issue new protocols for the new mandatory EQR-related activity (network 
adequacy validation) and the new optional EQR-related activity (assisting with quality rating) in 
subsequent releases of revised CMS EQR protocols.  States will have one year from the date 
CMS issues the associated protocols to begin conducting validation of network adequacy; 
however, enhanced match for conducting either the new mandatory or optional activities will be 
available as soon as the associated protocol is released, subject to the conditions set forth above. 
Federal Financial Participation for EQR of PIHPs, PAHPs, certain PCCM entities, and 
FFS 
Regular administrative match:  Under 433.15 and 438.370 of the final rule, FFP at the 50 
percent matching rate is available for mandatory and optional EQR-related activities for PIHPs, 
PAHPs and affected PCCM entities as well as for production of the EQR technical report.  This 
is a change from the previous regulations, under which the enhanced match was available for 
EQR of PIHPs to the same extent as MCOs.  States may, but are not required to, conduct EQR 
activities for Fee-for-Service (FFS) delivery systems. Federal financial participation for FFS 
quality activities continues to be available at the regular 50 percent administrative match. 
Effective date:  The availability of regular administrative match for EQR-related activities for 
PAHPs and affected PCCM entities as well as the change in the availability of regular match 
only for EQR-related activities for PIHPs is effective with publication of the final rule on May 6, 
2016.    
State Expenditure Reporting for Medicaid EQR 
States are instructed to report EQRO expenditures on CMS 64.10 Form that corresponds to the 
federal authority CMS has granted to the state to operate the managed care program the EQRO is 
evaluating.  For example, EQR for a managed care program operated under 1932(a) State Plan 
authority should be reported on the CMS-64.10 BASE.  EQR for a managed care program 
operated under 1915(b) waiver authority should be reported on the CMS-64.10 WAIV form 
under the applicable waiver number. 
The CMS has clarified options available for reporting under Line 17 of Form CMS-64 to reflect 
the new limitations on state claiming for EQR-related expenditures, as well as the extension of 
EQR to PAHPs and certain PCCM entities.  A template of the updated Line 17 expenditure 
reporting is provided in Attachment A.  Updated instructions for completing expenditure 
reporting for CMS-64 Line 17, which appear in a pop-up menu, are included in Attachment B.   CMCS Informational Bulletin - Page 4 
These updates clarify the 75 percent enhanced match for EQR-related activities performed by a 
qualified EQRO for MCOs, and the 50 percent match for all other EQR-related activities.   
As this change to expenditure reporting takes effect in the middle of a quarter, states must ensure 
that pre-May 6th and post-May 6th claims that differ in applicable FFP are reported separately.  A 
sub-line on Form CMS-64 EQRO Line 17 will appear only for the quarter ending 6/30/16.  This 
sub-line will allow states to report expenditures associated with PIHP EQRO activities prior to 
May 6, 2016, at the 75 percent matching rate.  
Application of external quality review to managed care entities in CHIP 
Under 457.1250, states are required to conduct EQR of MCOs, PIHPs, PAHPs and PCCM 
entities , subject to the same general requirements as are applied in Medicaid.  States must begin 
conducting the following mandatory EQR-related activities described in 438.358(b)(1)(i)-(iii)  
i.e., those which currently are required for Medicaid MCOs and PIHPs  no later than the state
fiscal year beginning on or after July 1, 2018:
 Compliance review
 Validation of performance measures
 Validation of performance improvement projects (PIPs)
States will be required to begin conducting the mandatory EQR-related activity described in 
438.358(b)(1)(iv) (relating to validation of network adequacy) no later than one year from the
date CMS issues the associated EQR protocol.  Federal financial participation (FFP) in
expenditures for mandatory and optional EQR activities for CHIP plans is available at the states
title XXI matching rate subject to the 10 percent limit for administrative expenditures.
Technical Assistance 
For questions related to state expenditure reporting and claiming instructions for EQR activities, 
please contact your CMS regional office financial representative.  For specific external quality 
review questions, including what services qualify for enhanced match, please contact the 
Division of Quality and Health Outcomes at ManagedCareQualityTA@cms.hhs.gov.   Attachment A
CMS 64.10EQR Expenditures for State and Local 
External Quality Review Total Computable Total Federal Share
FFP Rate
(a) (b) (C)
1)Mandatory Validation of PIPs
1a) Validation of PIPs - MCO 400 75% 300
1b) Validation of PIPs - MCO (non-EQRO), PIHP, PAHP 200 50% 100
1c) Validation of PIPs - PIHP prior to May 6, 2016 100 75% 75
2)Mandatory Validation of Performance Measures
2a) Validation of Performance Measures - MCO 400 75% 300
2b) Validation of Performance Measures - MCO (non-
EQRO), PIHP, PAHP, PCCM entities 200 50% 100
2c) Validation of Performance Measures - PIHP prior 
to May 6, 2016  100 75% 75
3)Mandatory Compliance Review
3a) Validation Mandatory Compliance Review - MCO 400 75% 300
3b) Validation Mandatory Compliance Review - MCO 
(non-EQRO), PIHP, PAHP, PCCM entities  200 50% 100
3c) Validation Mandatory Compliance Review - PIHP 
prior to May 6, 2016 100 75% 75
4)Optional Validation of Encounter data
4a) Validation of Encounter data - MCO 400 75% 300
4b) Validation of Encounter data - MCO (non-EQRO), 
PIHP, PAHP, PCCM entities 200 50% 100
4c) Validation of Encounter data - PIHP prior to May 6, 
2016 100 75% 75
5)Optional Survey(s)
5a) Survey(s) - MCO 400 75% 300
5b) Survey(s) - MCO (non-EQRO), PIHP, PAHP, PCCM 
entities  200 50% 100
5c) Survey(s) - PIHP prior to May 6, 2016 100 75% 75
6)Optional Calculation of Performance Measures
6a) Calculation of Performance Measures - MCO 400 75% 300
6b) Calculation of Performance Measures - MCO (non-
EQRO), PIHP, PAHP, PCCM entities  200 50% 100
6c) Calculation of Performance Measures - PIHP prior 
to May 6, 2016 100 75% 75 Attachment A
CMS 64.10EQR Expenditures for State and Local 
External Quality Review Total Computable Total Federal Share
FFP Rate
(a) (b) (C)
7)Optional Conduct of PIPs
7a) Conduct of PIPs - MCO 400 75% 300
7b) Conduct of PIPs -  MCO (non-EQRO), PIHP, PAHP, 
PCCM entities  200 50% 100
7c) Conduct of PIPs -  PIHP prior to May 6, 2016 100 75% 75
8)Optional Conduct of Focus Study
8a) Conduct of Focus Study - MCO 400 75% 300
8b) Conduct of Focus Study - MCO (non-EQRO), PIHP, 
PAHP, PCCM entities  200 50% 100
8c) Conduct of Focus Study - PIHP prior to May 6, 
2016 100 75% 75
9)Optional EQRO EQR Technical Assistance
9a) Technical Assistance - MCO 400 75% 300
9b) Technical Assistance - MCO (non-EQRO), PIHP, 
PAHP, PCCM entities  200 50% 100
9c) Technical Assistance - PIHP prior to May 6, 2016 100 75% 75
10)Mandatory Network Adequacy Validation
10a) Network Adequacy Validation  -  MCO 400 75% 300
10b) Network Adequacy Validation - MCO (non-
EQRO), PIHP, PAHP, PCCM entities  200 50% 100
11)Optional Quality Rating System EQRO Support
11a) Quality Rating System EQRO Support  -  MCO 400 75% 300
11b) Quality Rating System EQRO Support - MCO (non-
EQRO), PIHP, PAHP, PCCM entities  200 50% 100
12)Subtotal
12a) Subtotal  -  MCO 4,400 75% 3,300
12b) Subtotal  - MCO (non-EQRO), PIHP, PAHP, PCCM 
entities  2,200 50% 1,100
12f) Subtotal - PIHP prior to May 6, 2016 900 75% 675
20)Total 10,500 6575 Attachment B: 
Revised Instructions for CMS 64.10 for line 17: External Quality Review 
Clarified Form CMS 64.10 Line 17 
The Medicaid and CHIP Managed Care Final Rule, CMS-2390-F, published on May 6, 2016, extends 
annual external quality review (EQR) requirements to Prepaid Ambulatory Health Plans (PAHPs) and to 
Primary Care Case Management entities (PCCM entities) whose contract with the state provides for shared 
savings, incentive payments or other financial reward for improved quality outcomes.  The final rule also 
sets forth the federal financial participation (FFP) matching rates for expenditures for EQR as applied to 
MCOs, Prepaid Inpatient Health Plans (PIHPs), PAHPs and eligible PCCMs under 42 CFR 438.370.  For 
more information, refer to the CMCS Informational Bulletin on Federal Financial Participation for External 
Quality Review, dated June 10, 2016. 
INSTRUCTIONS for EQR Expenditures: 
Line 17 - External Quality Reviews.- Line 17 calculates the total computable and Federal share costs 
attributable to state expenditures for the performance of independent external reviews of Medicaid 
managed care activities conducted for MCOs under section 1932(c)(2), as well as for eligible EQR activities 
identified under 42 CFR 438.358 conducted for PIHPs, PAHPs and PCCM entities with financial quality 
incentives. (See Subpart EQuality Measurement and Improvement; External Quality Review - 438.310 
Basis, scope, and applicability].  All reported expenditures must comply with 42 CFR 438.370(a) through 
(c).       
For EQR expenditure reporting, the MBES will automatically enter in: 
-Column (b)  eligible percent from column (a), by type of activity completed for the entity listed
-Column (c) - total federal share
-Column (d)  total state share
Enter in column (a) - for each option below eligible under the total computable amount of any expenditures 
attributable to the performance of external quality reviews conducted in compliance with 42 CFR 438.358: 
1 - External Quality Review Mandatory Activity - VALIDATION OF PERFORMANCE IMPROVEMENT 
PROJECTS  
1a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of the mandatory independent external review 
activity for validation of performance improvement projects conducted under section 1932(c)(2) referenced 
under 42 CFR  438.358(b)(1)(i) in accordance with 438.330(d) that were underway during the preceding 
12 months  Activities related to external quality review -Mandatory activities- Validation of performance 
improvement projects required by the state as performed by an eligible External Quality Review 
Organization, reference under 438.354), and eligible for the 75% federal financial participation rate under 
438.370(a).   
1b) For Managed Care Organizations (MCOs), Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), FFP 50% eligible: Enter in column (a) the computable amount of any expenditures 
attributable to the performance of the mandatory independent external review activity for validation of 
performance improvement projects conducted under 42 CFR  438.358(b)(1)(i) in accordance with 
438.330(d) that were underway during the preceding 12 months  Activities related to external quality
review -Mandatory activities- Validation of performance improvement projects required by the state as
1    Attachment B:  
Revised Instructions for CMS 64.10 for line 17: External Quality Review 
 
performed on an MCO by an entity not eligible as an External Quality Review Organization, reference 
under 438.354), or as performed on a PIHP or PAHP by any EQRO or other entity; therefore eligible for 
the 50% federal financial participation rate under 438.370(b).   
1c) Mandatory Validation of PIPs - PIHP prior to May 6, 2016, FFP 75% eligible: Enter in column (a) the 
computable amount of any expenditures attributable to the performance of the mandatory independent 
external review activity for validation of performance improvement projects conducted under 42 CFR  
438.358(b)(1)(i) in accordance with 438.330(d) that were underway during the preceding 12 months  
Activities related to external quality review -Mandatory activities- Validation of performance improvement 
projects required by the state eligible for the 75% federal financial participation rate under 438.370(b).   
2 - External Quality Review Mandatory Activity - VALIDATION OF PERFORMANCE MEASURES  
2a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of the mandatory independent external review 
activity for validation of performance measures conducted under section 1932(c)(2) referenced under 42 
CFR  438.358(b)(1)(ii) in accordance with 438.330(c) that were underway during the preceding 12 months 
 Activities related to external quality review -Mandatory activities- Validation of performance measures 
required by the state as performed by an eligible External Quality Review Organization, reference under 
438.354), and eligible for the 75% federal financial participation rate under 438.370(a).   
2b) For Managed Care Organizations (MCOs), Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), Primary Care Case Management Entities with financial incentives (PCCM-Es)- FFP 
50% eligible: Enter in column (a) the computable amount of any expenditures attributable to the 
performance of the mandatory independent external review activity for validation of performance measures 
conducted under 42 CFR  438.358(b)(1)(ii) in accordance with 438.330(c) that were underway during the 
preceding 12 months  Activities related to external quality review -Mandatory activities- Validation of 
performance measures required by the state as performed by an entity not eligible as an External Quality 
Review Organization, reference under 438.354), or as performed on a PIHP, PAHP, or PCCM entity with 
financial incentives by any EQRO or other entity; therefore eligible for the 50% federal financial participation 
rate under 438.370(b).   
2c) Mandatory Validation of Performance Measures - PIHP prior to May 6, 2016, FFP 75% eligible: Enter in 
column (a) the computable amount of any expenditures attributable to the performance of the mandatory 
independent external review activity for validation of performance improvement projects conducted under 
42 CFR  438.358(b)(1)(ii) in accordance with 438.330(c) that were underway during the preceding 12 
months  Activities related to external quality review -Mandatory activities- Validation of performance 
improvement projects required by the state, prior to May 6, 2016 eligible for the 75% federal financial 
participation rate under 438.370(b).   
3 - External Quality Review Mandatory Activity  COMPLIANCE REVIEW  
3a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of the mandatory independent external review 
activity for compliance review conducted under section 1932(c)(2) referenced under 42 CFR  
438.358(b)(1)(iii) in accordance with 438.330(e) that were underway during the preceding 12 months  
Activities related to external quality review -Mandatory activities- A review, conducted within the previous 3-
year period, to determine the MCO's compliance with standards established by the State to comply with the 
requirements of standards set forth in subpart D  MCO, PIHP, and PAHP Standards, and the quality 
2 
    Attachment B:  
Revised Instructions for CMS 64.10 for line 17: External Quality Review 
 
assessment and performance improvement requirements described in 438.330, required by the state as 
performed by an eligible External Quality Review Organization, reference under 438.354), and eligible for 
the 75% federal financial participation rate under 438.370(a).   
3b) For Managed Care Organizations (MCOs), Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), Primary Care Case Management Entities with financial incentives (PCCM-Es), FFP 
50% eligible: Enter in column (a) the computable amount of any expenditures attributable to the 
performance of the mandatory independent external review activity for compliance review conducted under 
42 CFR  438.358(b)(1)(iii) in accordance with 438.330(e) that were underway during the preceding 12 
months  Activities related to external quality review -Mandatory activities- A review, conducted within the 
previous 3-year period, to determine the MCO's compliance with standards established by the State to 
comply with the requirements of standards set forth in subpart D  MCO, PIHP, and PAHP Standards, and 
the quality assessment and performance improvement requirements described in 438.330, required by the 
state as performed by an entity not eligible as an External Quality Review Organization, reference under 
438.354), or as performed on a PIHP, PAHP, or PCCM entity with financial incentives by any EQRO or 
other entity; therefore eligible for the 50% federal financial participation rate under 438.370(b).   
3c) Mandatory Validation Mandatory Compliance Review - PIHP prior to May 6, 2016,  FFP 75% eligible: 
Enter in column (a) the computable amount of any expenditures attributable to the performance of the 
mandatory independent external review activity for compliance review conducted under 42 CFR 
438.358(b)(1)(iii) in accordance with 438.330(e) that were underway during the preceding 12 months  
Activities related to external quality review -Mandatory activities- A review, conducted within the previous 3-
year period, to determine the PIHP's compliance with standards established by the State to comply with the 
requirements of standards set forth in subpart D  MCO, PIHP, and PAHP Standards, and the quality 
assessment and performance improvement requirements described in 438.330, required by the state and 
prior to May 6, 2016, eligible for the 75% federal financial participation rate under 438.370(b).  
4 - External Quality Review Optional Activity  VALIDATION OF ENCOUNTER DATA  
4a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of the optional independent external review 
activity for validation of encounter data conducted under section 1932(c)(2), referenced under 42 CFR 
438.358(c)(1)  Activities related to external quality review Optional Activities- Validation of encounter data 
reported by an MCO as performed by an eligible External Quality Review Organization, reference under 
438.354), and eligible for the 75% federal financial participation rate under 438.370(a).   
4b) For Managed Care Organizations (MCOs), Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), Primary Care Case Management Entities with financial incentives (PCCM-Es), FFP 
50% eligible: Enter in column (a) the computable amount of any expenditures attributable to the 
performance of optional independent external review activity for validation of encounter data conducted 
under 42 CFR 438.358(c)(1)  Activities related to external quality review Optional Activities- Validation of 
encounter data reported by an MCO as performed by an entity not eligible as an External Quality Review 
Organization, reference under 438.354), or as performed on a PIHP, PAHP, or PCCM entity with financial 
incentives by any EQRO or other entity; therefore eligible for the 50% federal financial participation rate 
under 438.370(b).   
4c) Optional Validation of Encounter data - PIHP prior to May 6, 2016  FFP 75% eligible: Enter in column 
(a) the computable amount of any expenditures attributable to the performance of the optional independent 
external review activity for validation of encounter data conducted under section 1932(c)(2), referenced 
3 
    Attachment B:  
Revised Instructions for CMS 64.10 for line 17: External Quality Review 
 
under 42 CFR 438.358(c)(1)  Activities related to external quality review Optional Activities- Validation of 
encounter data reported by a PIHP and prior to May 6, 2016 eligible for the 75% federal financial 
participation rate under 438.370(b).   
5 - External Quality Review Optional Activity  ADMINISTRATION OR VALIDATION OF CONSUMER 
OR PROVIDER SURVEYS OF QUALITY OF CARE   
5a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of optional independent external review activity 
for administration or validation of surveys conducted under section 1932(c)(2), referenced under 42 CFR 
438.358(c)(2)  Activities related to external quality review Optional Activities- Administration or validation 
of consumer or provider surveys of quality of care reported by an MCO as performed by an eligible External 
Quality Review Organization, reference under 438.354), and eligible for the 75% federal financial 
participation rate under 438.370(a).   
5b) For Managed Care Organizations (MCOs) Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), Primary Care Case Management Entities with financial incentives (PCCM-Es), FFP 
50% eligible: Enter in column (a) the computable amount of any expenditures attributable to the 
performance of optional independent external review activity for administration or validation of surveys 
conducted under 42 CFR 438.358(c)(2)  Activities related to external quality review Optional Activities- 
Administration or validation of consumer or provider surveys of quality of care as performed by an entity not 
eligible as an External Quality Review Organization, reference under 438.354), or as performed on a 
PIHP, PAHP, or PCCM entity with financial incentives by any EQRO or other entity; therefore eligible for the 
50% federal financial participation rate under 438.370(b).   
5c) Optional Survey(s) - PIHP prior to May 6, 2016 FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of the optional independent external review 
activity for administration or validation of surveys conducted under 42 CFR 438.358(c)(2)  Activities related 
to external quality review Optional Activities- Administration or validation of consumer or provider surveys 
of quality of care reported by a PIHP and prior to May 6, 2016, eligible for the 75% federal financial 
participation rate under 438.370(b). 
6 - External Quality Review Optional Activity  CALCULATION OF PERFORMANCE MEASURES  
6a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of optional independent external review activity 
for calculation of performance measures, referenced under 42 CFR 438.358(c)(3)  Activities related to 
external quality review  Optional Activities- Calculation of performance measures collected by an MCO and 
validated by an EQRO referenced under 438.354 (in addition to those performance measures reported 
under 438.358(b)(ii)), and eligible for the 75% federal financial participation rate under 438.370(a).   
6b) For Managed Care Organizations (MCOs), Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), Primary Care Case Management Entities with financial incentives (PCCM-Es), FFP 
50% eligible: Enter in column (a) the computable amount of any expenditures attributable to the 
performance of optional independent external review activity for calculation of performance measures 
conducted under 42 CFR 438.358(c)(3)  Activities related to external quality review  Optional Activities- 
Calculation of performance measures collected by an MCO, as performed by an entity not eligible as an 
External Quality Review Organization referenced under 438.354 (in addition to those performance 
measures reported under 438.358(b)(ii)), or as performed on a PIHP, PAHP, or PCCM entity with financial 
4 
    Attachment B:  
Revised Instructions for CMS 64.10 for line 17: External Quality Review 
 
incentives by any EQRO or other entity; therefore eligible for the 50% federal financial participation rate 
under 438.370(b).   
6c) Optional Calculation of Performance Measures - PIHP prior to May 6, 2016, FFP 75% eligible: Enter in 
column (a) the computable amount of any expenditures attributable to the performance of the optional 
independent external review activity for calculation of performance measures conducted under 42 CFR 
438.358(c)(3)  Activities related to external quality review  Optional Activities- Calculation of performance 
measures collected by a PIHP and validated by an EQRO referenced under 438.354 (in addition to those 
performance measures reported under 438.358(b)(ii)), prior to May 6, 2016, eligible for the 75% federal 
financial participation rate under 438.370(b).  
7 - External Quality Review Optional Activity  CONDUCT OF PERFORMANCE IMPROVEMENT 
PROJECTS  
7a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of optional independent external review activity 
for conduct of performance improvement projects conducted under section 1932(c)(2), referenced under 42 
CFR 438.358(c)(4)  Activities related to external quality review  Optional Activities - Conduct of 
performance improvement projects by an EQRO referenced under 438.354 (in addition to those 
performance measures reported under 438.358(b)(i)), and eligible for the 75% federal financial participation 
rate under 438.370(a).   
7b) For Managed Care Organizations (MCOs) Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), Primary Care Case Management Entities with financial incentives (PCCM-Es), FFP 
50% eligible: Enter in column (a) the computable amount of any expenditures attributable to the 
performance of optional independent external review activity for conduct of performance improvement 
projects conducted under 42 CFR 438.358(c)(4)   Activities related to external quality review  Optional 
Activities- conduct of performance improvement projects for an MCO, as performed by an entity not eligible 
as an External Quality Review Organization referenced under 438.354 (in addition to those performance 
measures reported under 438.358(b)(i)), or as performed on a PIHP, PAHP, or PCCM entity with financial 
incentives by any EQRO or other entity; therefore eligible for the 50% federal financial participation rate 
under 438.370(b).   
7c) Optional Conduct of PIP - PIHP prior to May 6, 2016, FFP 75% eligible: Enter in column (a) the 
computable amount of any expenditures attributable to the performance of the optional independent 
external review activity for conduct of performance improvement projects conducted under 42 CFR 
438.358(c)(4)  Activities related to external quality review  Optional Activities- conduct of performance 
improvement projects for a PIHP by an EQRO referenced under 438.354  (in addition to those 
performance improvement projects reported under 438.358(b)(i)), prior to May 6, 2016, eligible for the 75% 
federal financial participation rate under 438.370(b).  
8 - External Quality Review Optional Activity  CONDUCT OF FOCUS STUDIES  
8a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of optional independent external review activity 
for conduct of focus studies conducted under section 1932(c)(2), referenced under 42 CFR 438.358(c)(5)  
Activities related to external quality review Optional Activities Conduct of studies on quality that focus on a 
particular aspect of clinical or nonclinical services at a point in time conducted by an EQRO referenced 
under 438.354, and eligible for the 75% federal financial participation rate under 438.370(a).   
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8b) For Managed Care Organizations (MCOs) Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), Primary Care Case Management Entities with financial incentives (PCCM-Es), FFP 
50% eligible: Enter in column (a) the computable amount of any expenditures attributable to the 
performance of optional independent external review activity for conduct of focus studies conducted under 
42 CFR 438.358(c)(5)  Activities related to external quality review Optional Activities Conduct of studies 
on quality that focus on a particular aspect of clinical or nonclinical services at a point in time for an MCO, 
as performed by an entity not eligible as an External Quality Review Organization referenced under 
438.354, or as performed on a PIHP, PAHP, or PCCM entity with financial incentives by any EQRO or 
other entity; therefore eligible for the 50% federal financial participation rate under 438.370(b).   
8c) Optional Conduct of Focus Study - PIHP prior to May 6, 2016, FFP 75% eligible: Enter in column (a) the 
computable amount of any expenditures attributable to the performance of the optional independent 
external review activity for conduct of focus studies conducted under 42 CFR 438.358(c)(5)  Activities 
related to external quality review Optional Activities Conduct of studies on quality that focus on a particular 
aspect of clinical or nonclinical services at a point in time for a PIHP by an EQRO referenced under 
438.354, prior to May 6, 2016 eligible for the 75% federal financial participation rate under 438.370(b).   
9 - External Quality Review TECHNICAL ASSISTANCE  
9a) For Managed Care Organizations (MCOs) FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of technical assistance related to the  
mandatory or optional independent external review activities conducted under section 1932(c)(2), 
referenced under 42 CFR 438.358(d)  Technical assistance. The EQRO referenced under 438.354 may, 
at the State's direction, provide technical guidance to state contracted MCOs to assist them in conducting 
activities related to the mandatory and optional activities that provide information for the EQR, eligible for 
the 75% federal financial participation rate under 438.370(a).   
9b) For Managed Care Organizations (MCOs), Prepaid Inpatient Health Plans (PIHPs), Prepaid Ambulatory 
Health Plans (PAHPs), Primary Care Case Management Entities with financial incentives (PCCM-Es), FFP 
50% eligible: Enter in column (a) the computable amount of any expenditures attributable to the 
performance of technical assistance related to the  mandatory or optional independent external review 
activities conducted under 42 CFR 438.358(d)  Technical assistance, as performed by an entity not 
eligible as an External Quality Review Organization referenced under 438.354 to provide technical 
guidance to state contracted MCOs to assist them in conducting activities related to the mandatory and 
optional activities that provide information for the EQR, or as performed on a PIHP, PAHP, or PCCM entity 
with financial incentives by any EQRO or other entity; therefore eligible for the 50% federal financial 
participation rate under 438.370(b).   
9c) Technical Assistance - PIHP prior to May 6, 2016, FFP 75% eligible: Enter in column (a) the computable 
amount of any expenditures attributable to the performance of technical assistance related to the  
mandatory or optional independent external review activities conducted under 42 CFR 438.358(d)  
Technical assistance The EQRO referenced under 438.354 may, at the State's direction, provide technical 
guidance to state contracted PIHPs, prior to May 6, 2016 eligible for the 75% federal financial participation 
rate under 438.370(b).   
10- External Quality Review Mandatory Activity  NETWORK ADEQUACY VALIDATION - 
States must begin conducting this mandatory EQR-related activity described in CMS-2390-F 
438.358(b)(1)(iv) relating to the mandatory EQR-related activity of validation of network adequacy to 
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comply with requirements with 438.68, no later than one year from the issuance of the new EQR protocol 
targeted for July 2018. 
11- External Quality Review Optional Activity  ASSISTING WITH QUALITY RATING of MCOs, PIHPs 
and PAHPS (consistent with 438.334) - 
States may begin conducting the optional EQR-related activity described in 438.358(c)(6) (relating to the 
optional EQR-related activity of plan rating) no earlier than the issuance of the new EQR protocol targeted 
for July 2018. 
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