(c) REMEDIAL ACTIONS.—The Council shall develop 
standards for education and sanctions with respect to 
outliers so as to assure the quality of health care services 
provided under this Act. The Council shall develop criteria 
for referral of providers to the State licensing board if edu-
cation proves ineffective in correcting provider practice be-
havior. 
(d) DISSEMINATION.—The Council shall disseminate 
to the State— 
(1) the methodologies adopted under subsection 
(a); 
(2) the guidelines developed under subsection 
(b); and 
(3) the standards developed under subsection 
(c); 
for use by the States under section 503. 
(e) OUTLIER DEFINED.—In this title, the term 
‘‘outlier’’ means a health care provider whose pattern of 
practice, relative to applicable practice guidelines, suggests 
deficiencies in the quality of health care services being pro-
vided. 
SEC. 503. STATE QUALITY REVIEW PROGRAMS. 
(a) REQUIREMENT.—In order to meet the require-
ment of section 404(b)(1)(H), each State health security 
program shall establish 1 or more qualified entities to con-
VerDate Nov 24 2008 
22:51 Feb 26, 2009
Jkt 079200
PO 00000
Frm 00090
Fmt 6652
Sfmt 6201
E:\BILLS\H1200.IH
H1200
mstockstill on PROD1PC66 with BILLS
duct quality reviews of persons providing covered services 
under the program, in accordance with standards estab-
lished under subsection (b)(1) (except as provided in sub-
section (b)(2)) and subsection (d). 
(b) FEDERAL STANDARDS.— 
(1) IN GENERAL.—The Council shall establish 
standards with respect to— 
(A) the adoption of practice guidelines 
(whether developed by the Federal Government 
or other entities); 
(B) the identification of outliers (con-
sistent with methodologies adopted under sec-
tion 502(a)); 
(C) the development of remedial programs 
and monitoring for outliers; and 
(D) the application of sanctions (consistent 
with the standards developed under section 
502(c)). 
(2) STATE DISCRETION.—A State may apply 
under subsection (a) standards other than those es-
tablished under paragraph (1) so long as the State 
demonstrates to the satisfaction of the Council on an 
annual basis that the standards applied have been as 
efficacious in promoting and achieving improved 
quality of care as the application of the standards 
VerDate Nov 24 2008 
22:51 Feb 26, 2009
Jkt 079200
PO 00000
Frm 00091
Fmt 6652
Sfmt 6201
E:\BILLS\H1200.IH
H1200
mstockstill on PROD1PC66 with BILLS
established under paragraph (1). Positive improve-
ments in quality shall be documented by reductions 
in the variations of clinical care process and im-
provement in patient outcomes. 
(c) QUALIFICATIONS.—An entity is not qualified to 
conduct quality reviews under subsection (a) unless the 
entity satisfies the criteria for competence for such entities 
developed by the Council under section 501(b)(3). 
(d) INTERNAL QUALITY REVIEW.—Nothing in this 
section shall preclude an institutional provider from estab-
lishing its own internal quality review and enhancement 
programs. 
SEC. 504. ELIMINATION OF UTILIZATION REVIEW PRO-
GRAMS; TRANSITION. 
(a) INTENT.—It is the intention of this title to re-
place by January 1, 2013, random utilization controls with 
a systematic review of patterns of practice that com-
promise the quality of care. 
(b) SUPERSEDING CASE REVIEWS.— 
(1) IN
GENERAL.—Subject to the succeeding 
provisions of this subsection, the program of quality 
review provided under the previous sections of this 
title supersede all existing Federal requirements for 
utilization review programs, including requirements 
for random case-by-case reviews and programs re-
VerDate Nov 24 2008 
22:51 Feb 26, 2009
Jkt 079200
PO 00000
Frm 00092
Fmt 6652
Sfmt 6201
E:\BILLS\H1200.IH
H1200
mstockstill on PROD1PC66 with BILLS
quiring pre-certification of medical procedures on a 
case-by-case basis. 
(2) TRANSITION.—Before January 1, 2013, the 
Board and the States may employ existing utiliza-
tion review standards and mechanisms as may be 
necessary to effect the transition to pattern of prac-
tice-based reviews. 
(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed— 
(A) as precluding the case-by-case review 
of the provision of care— 
(i) in individual incidents where the 
quality of care has significantly deviated 
from acceptable standards of practice; and 
(ii) with respect to a provider who has 
been determined to be an outlier; or 
(B) as precluding the case management of 
catastrophic, mental health, or substance abuse 
cases or long-term care where such manage-
ment is necessary to achieve appropriate, cost- 
effective, and beneficial comprehensive medical 
care, as provided for in section 204. 
VerDate Nov 24 2008 
22:51 Feb 26, 2009
Jkt 079200
PO 00000
Frm 00093
Fmt 6652
Sfmt 6201
E:\BILLS\H1200.IH
H1200
mstockstill on PROD1PC66 with BILLS