[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: 42CFR476.94]

[Page 458-459]
 
                         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. 476.94  Notice of QIO initial denial determination and changes as 
a result of a DRG validation.

    (a) Notice of initial denial determination--(1) Parties to be 
notified. A QIO must provide written notice of an initial denial 
determination to--
    (i) The patient, or if the patient is expected to be unable to 
comprehend the notice, the patient's next of kin, guardian or other 
representative or sponsor;
    (ii) The attending physician, or other attending health care 
practitioner;
    (iii) The facility; and
    (iv) The fiscal intermediary or carrier.
    (2) Timing of the notice. The notice must be delivered to 
beneficiaries in the facility or mailed to those no longer in the 
facility, within the following time periods--
    (i) For admission, on the first working day after the initial denial 
determination;
    (ii) For continued stay (e.g., outliers in facilities under a 
prospective payment system), by the first working day after the initial 
denial determination if the beneficiary is still in the facility, and 
within 3 working days if the beneficiary has been discharged;
    (iii) For preprocedure review, before the procedure is performed;
    (iv) For preadmission review, before admission;
    (v) If identification as a Medicare program patient has been 
delayed, within three working days of identification;
    (vi) For retrospective review, (excluding DRG validation and post 
procedure review), within 3 working days of the initial denial 
determination; and
    (vii) For post-procedure review, within 3 working days of the 
initial denial determination.
    (3) Preadmission review. In the case of preadmission review, the QIO 
must document that the patient and the facility received notice of the 
initial denial determination.
    (b) Notice of changes as a result of a DRG validation. The QIO must 
notify the provider and practitioner of changes to procedural and 
diagnostic information that result in a change of DRG assignment, within 
30 days of the QIO's decision.
    (c) Content of the notice. The notice must be understandable and 
written in plain English and must contain--
    (1) The reason for the initial denial determination or change as a 
result of the DRG validation;
    (2) For day outliers in hospitals, the date on which the stay or 
services in the facility will not be approved as being reasonable and 
medically necessary or appropriate to the patients' health care needs;
    (3) A statement informing each party or his or her representative of 
the right to request in accordance with the provisions of part 473, 
subpart B of this chapter--
    (i) Review of a change resulting from DRG validation; or
    (ii) Reconsideration of the initial denial determination;
    (4) The locations for filing a request for reconsideration or review 
and the time period within which a request must be filed;
    (5) A statement about who is liable for payment of the denied 
services under section 1879 of the Act; and
    (6) A statement concerning the duties and functions of the QIO under 
the Act.
    (d) Notice to payers. The QIO must provide prompt written notice of 
an initial denial determination or changes as a result of a DRG 
validation to the

[[Page 459]]

Medicare fiscal intermediary or carrier within the same time periods as 
the notices to the other parties.
    (e) Record of initial denial determination and changes as a result 
of a DRG validation. (1) The QIO must document and preserve a record of 
all initial denial determinations and changes as a result of DRG 
validations for six years from the date the services in question were 
provided.
    (2) The documentary record must include--
    (i) The detailed basis for the initial denial determination or 
changes as a result of a DRG validation; and
    (ii) A copy of the determination or change in DRG notices sent to 
all parties and identification of each party and the date on which the 
notice was mailed or delivered.