(Medicare General Information, Eligibility, and Entitlement)

 42 CFR 412 -  Outlier review, diagnosis related group (DRG) validation, and hospital notices of non coverage;    42 CFR 417.605 -  Immediate PRO review of Health Maintenance Organization (HMO)/Competitive Medical Plan (CMP) notices of discharge;    42 CFR 422.622 -  Immediate review of Medicare+Choice discharge notices;    42 CFR 475 -  Definition of eligible organizations and area designation;    42 CFR 476 -  Assumption and conduct of review;    42 CFR 478 -  PRO reconsideration and appeals;    42 CFR 480 -  Disclosure of information;    42 CFR 482 -  Hospital conditions of participation; and    42 CFR 1004 -  PRO recommendations of sanctions.  60.1 - Purpose of PRO Review for the Individual Medicare Beneficiaries  (Rev. 1, 09- 11-02)  The PROs review items or services provided to Medicare beneficiaries to determine:    Whether services provided or proposed to be provided are reasonable and medically necessary for the diagnosis and treatment of illness or injury, or to improve functioning of a malformed body member, or for prevention of an illness, or for the palliation and management of terminal illness;    Whether those services furnished or proposed to be furnished on an inpatient basis could be effectively furnished on an outpatient basis, or in an inpatient health care facility of a different type;    Medical necessity, reasonableness, and appropriateness of inpatient hospital care for which additional payment is sought under the outlier provisions of PPS;    Whether a hospital has misrepresented admission or discharge information, or has taken an action that results in the unnecessary admission of an individual entitled to benefits under Part A, unnecessary multiple admissions of an individual, or other inappropriate medical or other practices with respect to beneficiaries, or billing for services furnished to beneficiaries;    The validity of diagnostic and procedural information supplied by the provider to the A/B MAC (A) for payment purposes;    The completeness and adequacy of hospital care provided; and    Whether the quality of services meets professionally recognized standards of health care.   These activities enable PROs to determine whether Medicare payment may be made for the services claimed and to identify and initiate corrective action where appropriate.  PROs have the authority to deny Medicare payment for medically inappropriate and unnecessary admissions. They also investigate individual beneficiary complaints about the quality of care received.   60.2 - PRO Responsibility for the Overall Approach to Health Care  (Rev. 1, 09- 11-02)  In addition to individual case review, PROs also help providers improve the overall approach to health care for Medicare beneficiaries.   This function includes the following activities:    Using clinical and other data bases to examine patterns of care and outcomes, rather than focusing on isolated cases;    Identifying systemic variations of concern or interest by monitoring patterns of care and outcomes;    Working with providers to identify provider -specific root causes of systemic variations; and    Working cooperatively with the health care community to measurably improve the processes and outcomes of care for Medicare beneficiaries.   60.3 - Other PRO Responsibilities  (Rev. 1, 09- 11-02)  A. Responsibilities Prior to Review   The PROs are responsible for:    Specifying in their plan and instructions to practitioners and providers the type of evidence they require to document the care ordered or furnished to provide medically necessary, appropriate, and quality health care services; and    Applying professionally developed criteria for providing care, diagnosis, and treatment based upon typical patterns of practice within their geographic area to evaluate the medical necessity, quality, or appropriateness of services ordered or furnished.  B. Ongoing Review Activities   As a part of their ongoing review activities, PROs must:    Notify the appropriate agency of the State or Federal government when they become aware of situations which appear to be improper, but which do not fall within their review responsibilities (e.g., poor quality care in a renal dialysis center);    Use their authority or influence to enlist the support of other professional or Government agencies to ensure that all providers and practitioners for which they have review responsibilities comply with their obligations (see 1156 of the Act.); and    Perform beneficiary and physician outreach activities.  C. Responsibilities as a Result of PRO Review   To act upon information they obtain as a result of their review activities, PROs must:    Provide information on results of their review (e.g., annual report, periodic meetings with providers/practitioners);    Identify and seek correction of situations that, if continued, would result in violations under 1156 of the Act;    Submit reports to the Office of the Inspector General on providers and practitioners found to have substantially violated an obligation in a substantial number of cases, or to have grossly and flagrantly violated an obligation in one or more instances.  This includes referring certain cases to State licensing boards.   D. Additional Activities   PROs perform all other activities specified in the Scope of Work, including any modifications, CMS regulations and instructions, and relevant statutory provisions.  E. Payment Error Prevention Program (PEPP)   In order to reduce inpatient PPS payment errors, PROs must initiate a program of Payment Error Prevention Projects (PEPPs). CMS defines the payment error rate as the number of dollars found to be paid in error out of the total of all dollars paid for inpatient PPS services.  CMS provides State -specific error rates to PROs to evaluate performance.   60.4 - Statutory Obligations of Practitioners and Other Persons  (Rev. 1, 09- 11-02)  It is the obligation of any health care practitioner or other person who furnishes or orders health care items or services that may be reimbursed under Medicare, to ensure that to the extent of his or her authority, those services are:    Furnished economically and only when and to the extent medically necessary;    Of a quality that meets professionally recognized standards of health care; and    Supported by evidence of the medical necessity and quality of the services in the form and fashion that the reviewing PRO may reasonably require (including copies of the necessary documentation) to ensure that the practitioner or other person is meeting the obligations imposed by Section 1156(a) of the Act.  These obligations apply whether payment is made directly to the provider (i.e., assignment) or to the beneficiary, or even if payment is not made.   60.5 - Responsibilities of Designated Agents Working With PROs; Organizations Subcontracted for Review  (Rev. 1, 09- 11-02)  The PRO has ultimate responsibility for monitoring the compliance of practitioners and providers with statutory obligations.  It is not relieved of any of the responsibility under the sanction regulations in the event of non -performance by an organization with which it has subcontracted for review.   An organization with which the PRO subcontracts to carry out review functions is responsible for:   Ensuring that practitioners and other persons meet their obligations with respect to the items and services it reviews; and    Reporting to the PRO (primary contractor) those instances where it appears a violation of an obligation may have occurred or is occurring.   70 - Institutional Planning and Budgeting  (Rev. 1, 09- 11-02)  The Social Security Act requires each provider, as a condition of participation under Medicare, to have a written overall plan and budget reflecting an annual operating budget and a capital expenditures plan (that covers at least a 3 -year period including the year to which the operating budget is applicable).  For this requirement, provider means hospital, critical access hospital, SNF, comprehensive outpatient rehabilitation facility, home health agency, or hospice program.   The annual operating budget will include all anticipated income and expenses related to items which would under generally accepted accounting principles be considered income and expense items.  The capital expenditure plan would be expected to include and identify in detail the anticipated sources of finance for, the objectives of, each anticipated expenditure in excess of $l00,000 related to acquisition of land, the improvement of land, buildings, and equipment, and the replacement, modernization, and expansion of the buildings and equipment which would, under generally accepted accounting principles, be considered capital items.  The overall budget and plan will be prepared under the direction of the provider's governing body by a committee consisting of representatives of the governing body, administrative staff and if any, the medical staff.  Further, it will be reviewed and updated at least annually.  The purpose of the requirement is to assure that providers carry on budgeting and substance by the Government or any of its agents.  80 - CMS Managed Modules for Software Programs and Pricing/Coding Files  (Rev. 2, 2- 6-04)  The CMS Managed Modules contains scheduled release dates for software programs and pricing/coding files.  Medicare contractors will be receiving subsequent quarterly updates of the CMS Managed Modules via a Recurring Update Notification.  Transmittals Issued for this Chapter   Rev #  Issue Date  Subject  Impl Date  CR#  R12425GI   12/21/2023  Enforcing Billing Requirements for Intensive Outpatient Program (IOP) Services with New Condition Code 92 - Additional Publication Update  01/02/2024  13496  R94GI  10/16/2015  Internet Only Manual Updates to Pub. 100 -01, 100-02 and 100-04 to Correct Errors and Omissions (2015)  11/16/2015  9336  R80GI  10/26/2012  Manual Updates to Clarify SNF Claims Processing  04/01/2013  8044  R42GI  11/09/2006  Swing Bed Hospital Updates  12/11/2006  5114  R28GI  08/12/2005  Conforming Changes for Change Request 3648 to Pub. 100 -01 09/12/2005  3912  R02GI  02/06/2004  Scheduled Release for April Updates to Software Programs and Pricing/Coding Files  03/08/2004  3123  R01GI  09/11/2002  Initial Publication of Manual  NA NA  Back to top of Chapter