6012 Federal Register / Vol. 70, No. 23 / Friday, February 4, 2005 / Notices 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–3155–N] 

RIN 0938–AN67 

Medicare Program; Quality 

Improvement Organization Contracts: 

Solicitation of Statements of Interest 

From In-State Organizations—Alaska, 

Hawaii, Idaho, Maine, South Carolina, 

Vermont, and Wyoming

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS.

ACTION: Notice.

SUMMARY: This notice, in accordance 

with Section 1153(i) of the Social 

Security Act, gives at least 6-months’

advance notice of the expiration dates of 

contracts with out-of-State Utilization 

and Quality Control Peer Review 

Organizations. It also specifies the 

period of time in which in-State 

organizations may submit a statement of 

interest so that they may be eligible to 

compete for these contracts.

DATES: Written statements of interest 

must be received at the address 

specified no later than 5 p.m. EST 

February 22, 2005. Due to staffing and 

resource limitations, we cannot accept 

statements submitted by facsimile (FAX) 

transmission.

ADDRESSES: Statements of interest must 

be submitted to the Centers for Medicare 

& Medicaid Services, Acquisitions and 

Grants Groups, OOM, Attn.: Carol G. 

Sevel, 7500 Security Boulevard, Mail 

Stop C2–21–15, Baltimore, Maryland 

21244–1850.

FOR FURTHER INFORMATION CONTACT: Udo 

Nwachukwu, (410) 786–7234.

SUPPLEMENTARY INFORMATION: 

I. Background 

The Peer Review Improvement Act of 

1982 (Title I, subtitle C of the Tax 

Equity and Fiscal Responsibility Act of 

1982 (TEFRA), Pub. L. 97–248) 

amended Part B of Title XI of the Social 

Security Act (the Act) by establishing 

the Utilization and Quality Control Peer 

Review Organization program. 

Utilization and Quality Control Peer 

Review Organizations, now known as 

Quality Improvement Organizations 

(QIOs), currently review certain health 

care services furnished under Title 

XVIII of the Act (Medicare) and certain 

other Federal programs to determine 

whether those services are reasonable, 

medically necessary, provided in the 

appropriate setting, and are of a quality 

that meet professionally recognized 

standards. QIO activities are a part of 

the Health Care Quality Improvement 

Program (HCQIP), a program that 

supports our mission to ensure health 

care security for our beneficiaries. The 

HCQIP rests on the belief that a plan’s, 

provider’s, or practitioner’s own 

internal quality management system is 

key to good performance. The HCQIP is 

carried out locally by the QIO in each 

State. Under the HCQIP, QIOs provide 

critical tools (for example, quality 

indicators and information) for plans, 

providers, and practitioners to improve 

the quality of care provided to Medicare 

beneficiaries. The Congress created the 

QIO program in part to redirect, 

simplify, and enhance the costeffectiveness and efficiency of the peer 

review process. 

In June 1984, we began awarding 

contracts to QIOs. We currently 

maintain 53 QIO contracts with 

organizations that provide medical 

review activities for the 50 States, the 

District of Columbia, Puerto Rico, and 

the Virgin Islands. The organizations 

that are eligible to contract as QIOs have 

satisfactorily demonstrated that they are 

either physician-sponsored or 

physician-access organizations in 

accordance with sections 1152 and 1153 

of the Act and our regulations at 42 CFR 

475.102 and 475.103. A physiciansponsored organization is one that is 

both composed of a substantial number 

of the licensed doctors of medicine and 

osteopathy practicing medicine or 

surgery in the respective review area 

and who are representative of the 

physicians practicing in the review area. 

A physician-access organization is one 

that has available to it, by arrangement, 

the services of a sufficient number of 

licensed doctors of medicine or 

osteopathy practicing medicine or 

surgery in the review area to ensure 

adequate peer review of the services 

furnished by the various medical 

specialties and subspecialties. In 

addition, the organization must not be a 

health care facility, health care facility 

association, a health care facility 

affiliate, or in most cases a payor 

organization. (Statutes and regulations 

provide that, in the event CMS 

determines no otherwise qualified nonpayor organization is available to 

undertake a given QIO contract, CMS 

may select a payor organization which 

otherwise meets requirements to 

conduct QIO Utilization and Quality 

Control Peer Review as specified in Part 

B of Title XI of the Social Security Act 

and implementing regulations.) The 

selected organization must have a 

consumer representative on its 

governing board. 

The Omnibus Budget Reconciliation 

Act of 1987 (Pub. L. 100–203) amended 

section 1153 of the Act by adding new 

paragraph (i) that prohibits us from 

renewing the contract of any QIO that is 

not an in-State organization without 

first publishing in the Federal Register

a notice announcing when the contract 

will expire. This notice must be 

published no later than 6-months before 

the date the contract expires and must 

specify the period of time during which 

an in-State organization may submit a 

proposal for the contract. If one or more 

qualified in-State organizations submit a 

proposal within the specified period of 

time, we cannot automatically renew 

the contract on a noncompetitive basis, 

but must instead provide for 

competition for the contract in the same 

manner used for a new contract. An inState organization is defined as an 

organization that has its primary place 

of business in the State in which review 

will be conducted (or, that is owned by 

a parent corporation, the headquarters 

of which is located in that State). 

There are currently 7 QIO contracts 

with entities that do not meet the 

statutory definition of an in-State 

organization. The areas affected for 

purposes of this notice along with their 

respective expiration dates are as 

follows: Vermont, July 31, 2005; 

Wyoming, July 31, 2005; Maine, July 31, 

2005; Alaska, October 31, 2005; Idaho, 

October 31, 2005; Hawaii, January 31, 

2006; South Carolina, January 31, 2006.

II. Provisions of the Notice 

This notice announces the scheduled 

expiration dates of the current contracts 

between CMS and out-of-State QIOs 

responsible for review in the areas 

mentioned above. 

Interested in-State organizations may 

submit statements of interest in 

competing to become the QIO for these 

States. We must receive the statements 

no later than February 22, 2005, and in 

its statement of interest, the 

organization must furnish materials that 

demonstrate that it meets the definition 

of an in-State organization. Specifically, 

the organization must have its primary 

place of business in the State in which 

review will be conducted or be a 

subsidiary of a parent corporation, 

whose headquarters is located in that 

State. In its statement, each interested 

organization must further demonstrate 

that it meets the following requirements: 

A. Be Either a Physician-Sponsored or a 

Physician-Access Organization 

1. Physician-Sponsored Organization 

To be eligible as a physiciansponsored organization, the 

Federal Register / Vol. 70, No. 23 / Friday, February 4, 2005 / Notices 6013

organization must meet the following 

requirements: 

a. Be composed (have physicians as 

owners or members) of at least 20 

percent of the licensed doctors of 

medicine and osteopathy practicing 

medicine or surgery in the State (that is, 

at least 20 percent of the practicing 

physicians in the State are owners of the 

QIO, or the QIO is owned by an entity 

which includes at least 20 percent of the 

practicing physicians in the State as 

members); or 

b. Be composed (have physicians as 

owners or members) of at least 10 

percent of the licensed doctors of 

medicine and osteopathy practicing 

medicine or surgery in the State, and 

demonstrate through means (for 

example, letters of support from 

physicians or physician organizations) 

acceptable to CMS that the organization 

is representative of an additional 10 

percent of the practicing physicians in 

the State; and 

c. Not be a health care facility, health 

care facility association, or health care 

facility affiliate. 

2. Physician-Access Organization 

To be eligible as a physician-access 

organization, the organization must 

meet the following requirements: 

a. Have arrangements with doctors of 

medicine or osteopathy, licensed and 

practicing in the State, to conduct 

review for the organization; 

b. Have available at least one 

physician, licensed in the State, from 

every generally recognized specialty and 

subspecialty who is in active practice in 

the review area; and 

c. Not be a health care facility, health 

care facility association, or health care 

facility affiliate. 

B. Have at Least One Individual Who Is 

a Representative of Consumers on Its 

Governing Board 

If one or more organizations meet the 

above requirements in one of the 7 QIO 

areas in this notice and submit 

statements of interest in accordance 

with this notice, we will consider those 

organizations to be potential sources for 

contract upon its expiration. These 

organizations will be entitled to 

participate in a full and open 

competition for the QIO contract to 

perform the QIO statement of work. 

III. Information Collection 

Requirements 

This notice contains information 

collection requirements that have been 

approved by the Office of Management 

and Budget (OMB) under the authority 

of the Paperwork Reduction Act of 1995 

(44 U.S.C. Chapter 35) and assigned 

OMB Control Number 0938–0526 

entitled ‘‘Quality Improvement 

(formerly Peer Review) Organization, 

Contracts: Solicitation of Statements of 

Interest from In-State Organization, 

General Notice and Supporting 

Regulations.’’

Authority: Section 1153 of the Social 

Security Act (42 U.S.C. 1320c-2).

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance Program; and No. 93.774, 

Medicare-Supplementary Medical Insurance 

Program)

Dated: January 26, 2005. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services.

[FR Doc. 05–1878 Filed 1–27–05; 5:06 pm] 

BILLING CODE 4120–01–P

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–1299–N] 

Medicare Program; Monthly Payment 

Amounts for Oxygen and Oxygen 

Equipment for 2005, in Accordance 

with Section 302(c) of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS.

ACTION: Notice.

SUMMARY: This notice discusses a 

reduction in the 2005 monthly payment 

amounts for oxygen and oxygen 

equipment based on the percentage 

difference between Medicare’s 2002 

monthly payment amounts for each 

State and the median 2002 Federal 

Employee Health Benefit plan price 

reported by the Office of Inspector 

General. This reduction is required by 

section 302(c) of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003.

FOR FURTHER INFORMATION CONTACT: Joel 

Kaiser, (410) 786–4499, 

jkaiser@cms.hhs.gov.

SUPPLEMENTARY INFORMATION: 

I. Background 

In accordance with section 302(c) of 

the Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) (Pub. L. 108–173, enacted 

on December 8, 2003), Medicare’s 

monthly payment amounts for oxygen 

and oxygen equipment for 2005 are to 

include a reduction based on the 

percentage difference between 

Medicare’s 2002 monthly payment 

amounts for each State and the median 

2002 Federal Employee Health Benefit 

(FEHB) plan price reported by the Office 

of Inspector General (OIG). The OIG has 

alerted us that they will need to collect 

additional information before the FEHB 

medians for oxygen and oxygen 

equipment and portable oxygen 

equipment are finalized. Therefore, 

Medicare claims for oxygen and oxygen 

equipment and portable oxygen 

equipment furnished on or after January 

1, 2005, and identified by the 

Healthcare Common Procedure Coding 

System codes listed below, will be 

temporarily paid based on the 2004 

monthly payment amounts. In 

accordance with the authority provided 

by section 1871(e)(1)(A)(ii) of the Social 

Security Act, we are making this change 

retroactive for items and services 

furnished on or after January 1, 2005, 

because we have determined that it 

would be contrary to the public interest 

to implement 2005 payment amounts 

based on preliminary and potentially 

erroneous data. 

• E0424—Stationary Compressed 

Gaseous Oxygen System, Rental: 

Includes container, contents, regulator, 

flowmeter, humidifier, nebulizer, 

cannula or mask, and tubing; 

• E0439—Stationary Liquid Oxygen 

System, Rental: Includes container, 

contents, regulator, flowmeter, 

humidifier, nebulizer, cannula or mask, 

and tubing; 

• E1390—Oxygen Concentrator, 

Single delivery port, capable of 

delivering 85 percent or greater oxygen 

concentration at the prescribed flow rate 

delivery port, capable of delivering 85 

percent or greater oxygen concentration 

at the prescribed flow rate; 

• E1391—Oxygen Concentrator, Dual 

delivery port, capable of delivering 85 

percent or greater oxygen concentration 

at the prescribed flow rate; 

• E0431—Portable Gaseous Oxygen 

System, Rental: Includes portable 

container, regulator, flowmeter, 

humidifier, cannula or mask, and 

tubing; 

• E0434—Portable Liquid Oxygen 

System, Rental: Includes portable 

container, supply reservoir, humidifier, 

flowmeter, refill adaptor, contents 

gauge, cannula or mask, and tubing. 

Once we receive the FEHB medians 

from the OIG, we will calculate and 

implement the 2005 monthly payment 

amounts and will begin paying claims 

using these amounts. These amounts 

will apply prospectively only. This is 

explained at http://www.cms.hhs.gov/

suppliers/dmepos/. Any future updates 

will also be published at this website.