[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR476.86]

[Page 456-457]
 
                         TITLE 42--PUBLIC HEALTH
 
  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 
                  HEALTH AND HUMAN SERVICES (CONTINUED)
 
PART 476_UTILIZATION AND QUALITY CONTROL REVIEW--Table of Contents
 
  Subpart C_Review Responsibilities of Utilization and Quality Control 
                Quality Improvement Organizations (QIOs)
 
Sec. 476.86  Correlation of Title XI functions with Title XVIII functions.

    (a) Payment determinations. (1) QIO initial denial determinations 
under this part with regard to the reasonableness, medical necessity, 
and appropriateness of placement at an acute level of patient care as 
are also conclusive for payment purposes with regard to the following 
medical issues:
    (i) Whether inpatient care furnished in a psychiatric hospital meets 
the requirements of Sec. 424.14 of this chapter.
    (ii) Whether payment for inpatient hospital or SNF care beyond 20 
consecutive days is precluded under Sec. 489.50 of this chapter because 
of failure to perform review of long-stay cases.
    (iii) Whether the care furnished was custodial care or care not 
reasonable and necessary and, as such, excluded under Sec. 405.310(g) 
or Sec. 405.310(k) of this chapter.
    (iv) Whether the care was appropriately furnished in the inpatient 
or outpatient setting.
    (2) Reviews with respect to determinations listed in paragraph 
(a)(1) of this section must not be conducted, for purposes of payment, 
by Medicare fiscal intermediaries or carriers except as outlined in 
paragraph (c) of this section.
    (3) QIOs make determinations as to the appropriateness of the 
location in which procedures are performed. A procedure may be medically 
necessary but denied if the QIO determines that it could, consistent 
with the provision of appropriate medical care, be effectively provided 
more economically on an outpatient basis or in an inpatient health care 
facility of a different type.
    (4) QIO determinations as to whether the provider and the 
beneficiary knew or could reasonably be expected to have known that the 
services described in paragraph (a)(1) of this section were excluded are 
also conclusive for payment purposes.
    (b) Utilization review activities. QIO review activities to 
determine whether inpatient hospital or SNF care services are reasonable 
and medically necessary and are furnished at the appropriate level of 
care fulfill the utilization review requirements set forth in Sec. Sec. 
405.1035, 405.1042, and 405.1137 of this chapter.
    (c) Coverage. Nothing in paragraphs (a) (1) and (3) of this section 
will be construed as precluding CMS or a Medicare fiscal intermediary or 
carrier, in the proper exercise of its duties and functions, from 
reviewing claims to determine:
    (1) In the case of items or services not reviewed by a QIO, whether 
they meet coverage requirements of Title XVIII relating to medical 
necessity, reasonableness, or appropriateness of placement at an acute 
level of patient care. However, if a coverage determination pertains to 
medical necessity, reasonableness, or appropriateness of placement at an 
acute level of patient care, the fiscal intermediary or carrier

[[Page 457]]

must use a QIO to make a determination on those issues if a QIO is 
conducting review in the area and must abide by the QIO's determination.
    (2) Whether any claim meets coverage requirements of Title XVIII 
relating to issues other than medical necessity, reasonableness or 
appropriateness of placement at an acute level of patient care.
    (d) Payment. Medicare fiscal intermediaries and carriers are not 
precluded from making payment determinations with regard to coverage 
determinations made under paragraph (c) of this section.
    (e) Survey, compliance and assistance activities. QIO review and 
monitoring activities fulfill the requirements for compliance and 
assistance activities of State survey agencies under section 1864(a) 
with respect to sections 1861(e)(6), 1861(j)(8), 1861(j)(12), and 
1861(k) of the Act, and activities required of intermediaries and 
carriers under Sec. Sec. 421.100(d) and 421.200(f) of this chapter.
    (f) Appeals. The requirements and procedures for QIO review of 
changes as a result of DRG validation and the reconsideration, hearing 
and judicial review of QIO initial denial determinations are set forth 
in part 473 of this chapter.

[50 FR 15330, Apr. 17, 1985; 50 FR 41886, Oct. 16, 1985, as amended at 
53 FR 6648, Mar. 2, 1988. Redesignated at 64 FR 66279, Nov. 24, 1999]