(a) Statutory basis. Sections 1154, 1866(a)(1)(F) and 1886(f)(2) of the Act require that a PRO review those services furnished by physicians, other health care professionals, providers and suppliers as specified in its contract with the Secretary. Section 1154(a)(4) of the Act requires PROs, or, in certain circumstances, non-PRO entities, to perform quality of care reviews of services furnished under risk-basis contracts by health maintenance organizations (HMOs) and competitive medical plans (CMPs) that are covered under subpart C of part 417 of this chapter.

(b) Applicability. The regulations in this subpart apply to review conducted by a PRO and its subcontractors. Section 466.72 of this part also applies, for purposes of quality of care reviews under section 1154(a)(4) of the Act, to non-PRO entities that enter into contracts to perform reviews of services furnished under risk-basis contracts by HMOs and CMPs under subpart C of part 417 of this chapter.

(a) Scope of PRO review. In its review, the PRO must determine (in accordance with the terms of its contract)—

(1) Whether the services are or were reasonable and medically necessary for the diagnosis and treatment of illness or injury or to improve functioning of a malformed body member, or (with respect to pneumococcal vaccine) for prevention of illness or (in the case of hospice care) for the palliation and management of terminal illness;

(2) Whether the quality of the services meets professionally recognized standards of health care;

(3) Whether those services furnished or proposed to be furnished on an inpatient basis could, consistent with the provisions of appropriate medical care, be effectively furnished more economically on an outpatient basis or in an inpatient health care facility of a different type;

(4) Through DRG validation, the validity of diagnostic and procedural information supplied by the hospital;

(5) The completeness, adequacy and quality of hospital care provided;

(6) The medical necessity, reasonableness and appropriateness of hospital admissions and discharges;

(7) The medical necessity, reasonableness and appropriateness of inpatient hospital care for which additional payment is sought under the outlier provisions of §§ 412.82 and 412.84 of this chapter; and

(8) Whether a hospital has misrepresented admission or discharge information or has taken an action that results in—

(i) The unnecessary admission of an individual entitled to benefits under part A;

(ii) Unnecessary multiple admissions of an individual; or

(iii) Other inappropriate medical or other practices with respect to beneficiaries or billing for services furnished to beneficiaries.

(b) Payment determinations. On the basis of the review specified under paragraphs (a) (1), (3), (6), (7), and (8) of this section, the PRO must determine whether payment may be made for these services. A PRO may grant a period of not more than two days (grace days) for the purpose of arranging post discharge care when the provider did not know or could not reasonably be expected to have known that payment for the service(s) would not be made under the Medicare program as specified in § 405.330(b).

(c) Other duties and functions. (1) The PRO must review at least a random sample of hospital discharges each quarter and submit new diagnostic and procedural information to the Medicare fiscal intermediary or carrier if it determines that the information submitted by the hospital was incorrect.

(2) As directed by HCFA, the PRO must review changes in DRG assignment made by the intermediary under the provisions of § 412.60(d) that result in the assignment of a higher-weighted DRG. The PRO's review must verify that the diagnostic and procedural information supplied by the hospital is substantiated by the information in the medical record.

(d) Coordination of sanction activities. The PRO must carry out the responsibilities specified in subpart C of part 1004 of this title regarding imposition of sanctions on providers and practitioners who violate their statutory obligations under section 1156 of the Act.

(a) (1) For purposes of a review under section 1154(a)(4) of the Act, a PRO must determine whether the quality of services (including both inpatient and outpatient services) provided by an HMO or CMP meets professionally recognized standards of health care, including whether appropriate health care services have not been provided or have been provided in inappropriate settings.

(2) Paragraph (a)(1) of this section will not apply with respect to a contract year if another entity has been awarded a contract to perform those reviews under section 1154(a)(4)(C) of the Act.

(b) For purposes of reviews under this section, non-PRO entities selected to perform these reviews under section 1154(a)(4)(C) of the Act are subject to the requirements of paragraph (a)(1) of this section and—

(1) Part 476 of this chapter regarding acquisition, protection, and disclosure of peer review information; and

(2) Part 1004 of Chapter V regarding a PRO's responsibilities, and sanctions on health care practitioners and providers.

(a) Notice of HCFA's decision. HCFA sends written notification of a PRO contract award to the State survey agency and Medicare fiscal intermediaries and carriers. The notification includes the effective dates of the PRO contract and specifies the area and types of health care facilities to be reviewed by the PRO. The PRO must make a similar notification when review responsibilities are subcontracted.

(b) Notification to health care facilities and the public. As specified in its contract with HCFA, the PRO must—

(1) Provide, to each health care facility scheduled to come under review, a timely written notice that specifies the date and manner in which the PRO proposes to implement review, and the information to be furnished by the facility to each Medicare beneficiary upon admission as specified in § 466.78(b)(3) of this part.

(2) Publish, in at least one local newspaper of general circulation in the PRO area, a notice that states the date the PRO will assume review responsibilities and lists each area health care facility to be under review. The PRO must indicate that its plan for the review of health care services as approved in its contract with HCFA is available for public inspection in the PRO's business office and give the address, telephone number and usual hours of business.

(a) A PRO must assume review responsibility in accordance with the schedule, functions and negotiated objectives specified in its contract with HCFA.

(b) A PRO must notify the appropriate Medicare fiscal intermediary or carrier of its assumption of review in specific health care facilities no later than five working days after the day that review is assumed in the facility.

(c) A PRO must maintain and make available for public inspection at its principal business office—

(1) A copy of each agreement with Medicare fiscal intermediaries and carriers;

(2) A copy of its currently approved review plan that includes the PRO's method for implementing review; and

(3) Copies of all subcontracts for the conduct of review.

(d) A PRO must not subcontract with a facility to conduct any review activities except for the review of the quality of care. The PRO may subcontract with a non-facility organization to conduct review in a facility.

(e) If required by HCFA, a PRO is responsible for compiling statistics based on the criteria contained in § 405.332 of this chapter and making limitation of liability determinations on excluded coverage of certain services that are made under section 1879 of the Act. If required by HCFA, PROs must also notify a provider of these determinations. These determinations and further appeals are governed by the reconsideration and appeals procedures in part 405, subpart G of this chapter for Medicare Part A related determinations and part 405, subpart H of this chapter for Medicare Part B related determinations.

(f) A PRO must make its responsibilities under its contract with HCFA, primary to all other interests and activities that the PRO undertakes.

Before implementation of review, a PRO must make a good faith effort to discuss the PRO's administrative and review procedures with each involved health care facility.

(a) Every hospital seeking payment for services furnished to Medicare beneficiaries must maintain a written agreement with a PRO operating in the area in which the hospital is located. These agreements must provide for the PRO review specified in § 466.71.

(b) Cooperation with PROs. Health care facilities that submit Medicare claims must cooperate in the assumption and conduct of PRO review. Facilities must—

(1) Allocate adequate space to the PRO for its conduct of review at the times the PRO is conducting review.

(2) Provide patient care data and other pertinent data to the PRO at the time the PRO is collecting review information that is required for the PRO to make its determinations. The facility must photocopy and deliver to the PRO all required information within 30 days of a request. PROs pay hospitals paid under the prospective payment system for the costs of photocopying records requested by the PRO in accordance with the payment rate determined under the methodology described in paragraph (c) of this section and for first class postage for mailing the records to the PRO. When the PRO does post-admission, preprocedure review, the facility must provide the necessary information before the procedure is performed, unless it must be performed on an emergency basis.

(3) Inform Medicare beneficiaries at the time of admission, in writing, that the care for which Medicare payment is sought will be subject to PRO review and indicate the potential outcomes of that review. Furnishing this information to the patient does not constitute notice, under § 405.332(a) of this chapter, that can support a finding that the beneficiary knew the services were not covered.

(4) When the facility has issued a written determination in accordance with § 412.42(c)(3) of this chapter that a beneficiary no longer requries inpatient hospital care, it must submit a copy of its determination to the PRO within 3 working days.

(5) Assure, in accordance with the provisions of its agreement with the PRO, that each case subject to preadmission review has been reviewed and approved by the PRO before admission to the hospital or a timely request has been made for PRO review.

(6)(i) Agree to accept financial liability for any admission subject to preadmission review that was not reviewed by the PRO and is subsequently determined to be inappropriate or not medically necessary.

(ii) The provisions of paragraph (b)(6)(i) of this section do not apply if a facility, in accordance with its agreement with a PRO, makes a timely request for preadmission review and the PRO does not review the case timely. Cases of this type are subject to retrospective prepayment review under paragraph (b)(7) of this section.

(7) Agree that, if the hospital admits a case subject to preadmission review without certification, the case must receive retrospective prepayment review, according to the review priority established by the PRO.

(c) Photocopying reimbursement methodology for prospective payment system hospitals. Hospitals subject to the prospective payment system are paid for the photocopying costs that are directly attributable to the hospitals’ responsibility to the PROs to provide photocopies of requested hospital records. The payment is in addition to payment already provided for these costs under other provisions of the Social Security Act and is based on a fixed amount per page as determined by HCFA as follows:

(1) Step one. HCFA adds the annual salary of a photocopy machine operator and the costs of fringe benefits as determined in accordance with the principles set forth in OMB Circular A-76.

(2) Step two. HCFA divides the amount determined in paragraph (c)(1) of this section by the number of pages that can be reasonably expected to be made annually by the photocopy machine operator to establish the labor cost per page.

(3) HCFA adds to the per-page labor cost determined in paragraph (c)(2) of this section the per-page costs of supplies.

(d) Appeals. Reimbursement for the costs of photocopying and mailing records for PRO review is an additional payment to hospitals under the prospective system, as specified in § 412.115 of this chapter. Thus, appeals concerning these costs are subject to the review process specified in part 405, subpart R of this chapter.

(a) Procedures for agreements. The Medicare fiscal intermediary or carrier must have a written agreement with the PRO. The PRO must take the initiative with the fiscal intermediary or carrier in developing the agreement. The following steps must be taken in developing the agreement.

(1) The PRO and the fiscal intermediary or carrier must negotiate in good faith in an effort to reach written agreement. If they cannot reach agreement, HCFA will assist them in resolving matters in dispute.

(2) The PRO must incorporate its administrative procedures into an agreement with the fiscal intermediary or carrier and obtain approval from HCFA, before it makes conclusive determinations for the Medicare program, unless HCFA finds that the fiscal intermediary or carrier has—

(i) Refused to negotiate in good faith or in a timely manner, or

(ii) Insisted on including in the agreement, provisions that are outside the scope of its authority under the Act.

(b) Content of agreement. The agreement must include procedures for—

(1) Informing the appropriate Medicare fiscal intermediaries and carriers of—

(i) Changes as a result of DRG validations and revisions as a result of the review of these changes; and

(ii) Initial denial determinations and revisions of these determinations as a result of reconsideration, or reopening all approvals and denials with respect to cases subject to preadmission review, and outlier claims in hospitals under a prospective payment system for health care services and items;

(2) Exchanging data or information;

(3) Modifying the procedures when additional review responsibility is authorized by HCFA; and

(4) Any other matters that are necessary for the coordination of functions.

(c) Action by HCFA. (1) Within the time specified in its contract, the PRO must submit to HCFA for approval its agreement with the Medicare fiscal intermediaries and carriers, or if an agreement has not been established, the PRO's proposed administrative procedures, including any comments by the Medicare fiscal intermediaries and carriers.

(2) If HCFA approves the agreement or the administrative procedures (after a finding by HCFA as specified in paragraph (a)(2) of this section), the PRO may begin to make determinations under its contract with HCFA.

(3) If HCFA disapproves the agreement or procedures, it will—

(i) Notify the PRO and the appropriate fiscal agents in writing, stating the reasons for disapproval; and

(ii) Require the PRO and fiscal intermediary or carrier to revise its agreements or procedures.

(d) Modification of agreements. Agreements or procedures may be modified, with HCFA's approval—

(1) Through a revised agreement with the fiscal intermediary or carrier, or

(2) In the case of procedures, by the PRO, after providing opportunity for comment by the fiscal intermediary or carrier.

(e) Role of the fiscal intermediary. (1) The fiscal intermediary will not pay any claims for those cases which are subject to preadmission review by the PRO, until it receives notice that the PRO has approved the admission after preadmission or retrospective review.

(2) A PRO's determination that an admission is medically necessary is not a guarantee of payment by the fiscal intermediary. Medicare coverage requirements must also be applied.

Any of the duties and functions under Part B of Title XI of the Act for which a PRO has not assumed responsibility under its contract with HCFA must be performed in the manner and to the extent otherwise provided for under the Act or in regulations.

A determination by a PRO that the health care services furnished or proposed to be furnished to a patient are not medically necessary, are not reasonable, or are not at the appropriate level of care, is an initial denial determination and is appealable under part 473 of this chapter.

A provider or practitioner may obtain a review by a PRO under part 473 of this chapter for changes in diagnostic and procedural coding that resulted in a change in DRG assignment as a result of PRO validation activities.

(a) Payment determinations. (1) PRO 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 § 424.14 of this chapter.

(ii) Whether payment for inpatient hospital or SNF care beyond 20 consecutive days is precluded under § 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 § 405.310(g) or § 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) PROs make determinations as to the appropriateness of the location in which procedures are performed. A procedure may be medically necessary but denied if the PRO 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) PRO 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. PRO 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 §§ 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 HCFA 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 PRO, 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 must use a PRO to make a determination on those issues if a PRO is conducting review in the area and must abide by the PRO'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. PRO 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 §§ 421.100(d) and 421.200(f) of this chapter.

(f) Appeals. The requirements and procedures for PRO review of changes as a result of DRG validation and the reconsideration, hearing and judicial review of PRO initial denial determinations are set forth in part 473 of this chapter.

(a) Authorization to examine records. A facility claiming Medicare payment must permit a PRO or its subcontractor to examine its operation and records (including information on charges) that are pertinent to health care services furnished to Medicare beneficiaries and are necessary for the PRO or its subcontractor to—

(1) Perform review functions including, but not limited to—

(i) DRG validation;

(ii) Outlier review in facilities under a prospective payment system; and

(iii) Implementation of corrective action and fraud and abuse prevention activities;

(2) Evaluate cases that have been identified as deviating from the PRO norms and criteria, or standards; and

(3) Evaluate the capability of the facility to perform quality review functions under a subcontract with the PRO.

(b) Limitations on access to records. A PRO has access to the records of non-Medicare patients if—

(1) The records relate to review performed under a non-Medicare PRO contract and if authorized by those patients in accordance with State law; or

(2) The PRO needs the records to perform its quality review responsibilities under the Act and receives authorization from the facility or practitioner.

(c) Conditions of examination. When examining a facility's operation or records the PRO must—

(1) Examine only those operations and records (including information on charges) required to fulfill the purposes of paragraph (a) of this section;

(2) Cooperate with agencies responsible for other examination functions under Federal or Federally assisted programs in order to minimize duplication of effort;

(3) Conduct the examinations during reasonable hours; and

(4) Maintain in its principal office written records of the results of the examination of the facility.

(a) If a health care facility or practitioner refuses to allow a PRO to enter and perform the duties and functions required under its contract with HCFA, the PRO may—

(1) Determine that the health care facility or practitioner has failed to comply with the requirements of § 474.30(c) of this chapter and report the matter to the HHS Inspector General; or

(2) Issue initial denial determinations for those claims it is unable to review, make the determination that financial liability will be assigned to the health care facility, and report the matter to the HHS Inspector General.

(b) If a PRO provides a facility with sufficient notice and a reasonable amount of time to respond to a request for information about a claim, and if the facility does not respond in a timely manner, the PRO will deny the claim.

Before a PRO reaches an initial denial determination or makes a change as a result of a DRG validation, it must—

(a) Promptly notify the provider or supplier and the patient's attending physician (or other attending health care practitioner) of the proposed determination or DRG change; and

(b) Afford an opportunity for the provider or supplier and the physician (or other attending health care practitioner) to discuss the matter with the PRO physician advisor and to explain the nature of the patient's need for health care services, including all factors which preclude treatment of the patient as an outpatient or in an alternative level of inpatient care.

(a) Peer review by physician. (1) Except as provided in paragraph (a)(2) of this section, each person who makes an initial denial determination about services furnished or proposed to be furnished by a licensed doctor of medicine or osteopathy or by a doctor of dentistry must be respectively another licensed doctor of medicine or osteopathy or of dentistry with active staff privileges in one or more hospitals in the PRO area.

(2) If a PRO determines that peers are not available to make initial denial determinations, a doctor of medicine or osteopathy may make denial determinations for services ordered or performed by a doctor in any of the three specialties.

(3) For purposes of paragraph (a)(1) of this section, individuals authorized to practice medicine in American Samoa, the Northern Mariana Islands, and the Trust Territory of the Pacific Islands as “medical officers” may make determinations on care ordered or furnished by their peers but not on care ordered or furnished by licensed doctors of medicine or osteopathy.

(b) Peer review by health care practitioners other than physicians. Health care practitioners other than physicians may review services furnished by other practitioners in the same professional field.

(c) DRG validation review. Decisions about procedural and diagnostic information must be made by physicians. Technical coding issues must be reviewed by individuals with training and experience in ICD-9-CM coding.

(d) Persons excluded from review. (1) A person may not review health care services or make initial denial determinations or changes as a result of DRG validations if he or she, or a member of his or her family—

(i) Participated in developing or executing the beneficiary's treatment plan;

(ii) Is a member of the beneficiary's family; or

(iii) Is a governing body member, officer, partner, 5 percent or more owner, or managing employee in the health care facility where the services were or are to be furnished.

(2) A member of a reviewer's family is a spouse (other than a spouse who is legally separated under a decree of divorce or separate maintenance), child (including a legally adopted child), grandchild, parent, or grandparent.

(a) Basic requirement. Except as provided in paragraph (b) of this section, a PRO must meet the following requirements:

(1) Consult with the peers of the practitioners who furnish the services under review if the PRO reviews care and services delivered by health care practitioners other than physicians.

(2) Assure that in determinations regarding medical necessity of services or the quality of the services they furnish, these practitioners are involved in—

(i) Developing PRO criteria and standards;

(ii) Selecting norms to be used; and

(iii) Developing review mechanisms for care furnished by their peers.

(3) Ensure that an initial denial determination or a change as a result of DRG validation of services provided by a health care practitioner other than a physician is made by a physician only after consultation with a peer of that practitioner. Initial denial determinations and changes as a result of DRG validations must be made only by a physician or dentist.

(b) Exception. The requirements of paragraph (a) of this section do not apply if—

(1) The PRO has been unable to obtain a roster of peer practitioners available to perform review; or

(2) The practitioners are precluded from performing review because they participated in the treatment of the patient, the patient is a relative, or the practitioners have a financial interest in the health care facility as described in § 466.98(d).

(c) Peer involvement in quality review studies. Practitioners must be involved in the design of quality review studies, development of criteria, and actual conduct of studies involving their peers.

(d) Consultation with practitioners other than physicians. To the extent practicable, a PRO must consult with nurses and other professional health care practitioners (other than physicians defined in 1861(r) (1) and (2) of the Act) and with representatives of institutional and noninstitutional providers and suppliers with respect to the PRO's responsibility for review.

(a) Scope. This subpart sets forth the policies and procedures governing—

(1) Disclosure of information collected, acquired or generated by a Utilization and Quality Control Peer Review Organization (PRO) (or the review component of a PRO subcontractor) in performance of its responsibilities under the Act and these regulations; and

(2) Acquisition and maintenance of information by a PRO to comply with its responsibilities under the Act.

(b) Definitions. As used in this part:

Abuse means any unlawful conduct relating to items or services for which payment is sought under Title XVIII of the Act.

Aggregate statistical data means any utilization, admission, discharge or diagnostic related group (DRG) data arrayed on a geographic, institutional or other basis in which the volume and frequency of services are shown without identifying any individual.

Confidential information means any of the following:

(1) Information that explicitly or implicitly identifies an individual patient, practitioner or reviewer.

(2) Sanction reports and recommendations.

(3) Quality review studies which identify patients, practitioners or institutions.

(4) PRO deliberations.

Health care facility or facility means an organization involved in the delivery of health care services or items for which reimbursement may be made in whole or in part under Title XVIII of the Act.

Implicitly identify(ies) means data so unique or numbers so small so that identification of an individual patient, practitioners or reviewer would be obvious.

Non-facility organization means a corporate entity that: (1) Is not a health care facility; (2) is not a 5 percent or more owner of a facility; and (3) is not owned by one or more health care facilities in the PRO area.

Patient representative means—(1) an individual designated by the patient, in writing, as authorized to request and receive PRO information that would otherwise be disclosable to that patient; or (2) an individual identified by the PRO in accordance with § 476.132(c)(3) when the beneficiary is mentally, physically or legally unable to designate a representative.

Practitioner means an individual credentialed within a recognized health care discipline and involved in providing the services of that discipline to patients.

PRO deliberations means discussions or communications (within a PRO or between a PRO and a PRO subcontractor) including, but not limited to, review notes, minutes of meetings and any other records of discussions and judgments involving review matters regarding PRO review responsibilities and appeals from PRO determinations, in which the opinions of, or judgment about, a particular individual or institution can be discerned.

PRO information means any data or information collected, acquired or generated by a PRO in the exercise of its duties and functions under Title XI Part B or Title XVIII of the Act.

PRO interpretations and generalizations on the quality of health care means an assessment of the quality of care furnished by an individual provider or group of providers based on the PRO's knowledge of the area gained from its medical review experience (e.g., quality review studies) and any other information obtained through the PRO's review activities.

PRO review system means the PRO and those organizations and individuals who either assist the PRO or are directly responsible for providing medical care or for making determinations with respect to the medical necessity, appropriate level and quality of health care services that may be reimbursed under the Act. The system includes—

(1) The PRO and its officers, members and employees;

(2) PRO subcontractors;

(3) Health care institutions and practitioners whose services are reviewed;

(4) PRO reviewers and supporting staff; and

(5) Data support organizations.

Public information means information which has been disclosed to the public.

Quality review study means an assessment, conducted by or for a PRO, of a patient care problem for the purpose of improving patient care through peer analysis, intervention, resolution of the problem and follow-up.

Quality review study information means all documentation related to the quality review study process.

Reviewer means review coordinator, physician, or other person authorized to perform PRO review functions.

Sanction report means a report filed pursuant to section 1156 of the Act and part 474 of this chapter documenting the PRO's determination that a practitioner or institution has failed to meet obligations imposed by section 1156 of the Act.

Shared health data system means an agency or other entity authorized by Federal or State law that is used by the PRO review system to provide information or to conduct or arrange for the collection, processing, and dissemination of information on health care services.

Subcontractor means a facility or a non-facility organization under contract with a PRO to perform PRO review functions.

(a) Section 1154(a)(7)(C) of the Act requires PROs to the extent necessary and appropriate to examine the pertinent records of any practitioner or provider of health care services for which payment may be made under Title XVIII of the Act.

(b) Section 1154(a)(9) of the Act requires PROs to collect and maintain information necessary to carry out their responsibilities under the Act.

(c) Section 1156(a)(3) of the Act requires health care practitioners and providers to maintain evidence of the medical necessity and quality of health care services they provide to Medicare patients as required by PROs.

(a) Section 1154(a)(10) of the Act requires PROs to exchange information with intermediaries and carriers with contracts under sections 1816 and 1842 of the Act, other PROs, and other public or private review organizations as appropriate.

(b) Section 1160 of the Act provides that PRO information must be held in confidence and not be disclosed except where—

(1) Necessary to carry out the purpose of Title XI Part B of the Act;

(2) Specifically permitted or required under this subpart;

(3) Necessary, and in the manner prescribed under this subpart, to assist Federal and State agencies recognized by the Secretary as having responsibility for identifying and investigating cases or patterns of fraud or abuse;

(4) Necessary, and in the manner prescribed under the subpart to assist Federal or State agencies recognized by the Secretary as having responsibility for identifying cases or patterns involving risks to the public health;

(5) Necessary, and in the manner prescribed under this subpart, to assist appropriate State agencies having responsibility for licensing or certification of providers or practitioners; or

(6) Necessary, and in the manner prescribed under this subpart to assist Federal or State health planning agencies by furnishing them aggregate statistical data on a geographical, institutional or other basis.

(a) Notice to accompany disclosure.

(1) Any disclosure of information under the authority of this subpart is subject to the requirements in § 476.105 relating to the providing of a notice of the disclosure.

(2) Disclosure of confidential information made under the authority of this subpart, except as provided in § 476.106, must be accompanied by a written statement informing the recipient that the information may not be redisclosed except as provided under § 476.107 that limits redisclosure.

(b) PRO interpretations. A PRO may provide a statement of comment, analysis, or interpretation to guide the recipient in using information disclosed under this subpart.

(c) Fees. A PRO may charge a fee to cover the cost of providing information authorized under this subpart. These fees may not exceed the amount necessary to recover the cost to the PRO for providing the information.

(d) Format for disclosure of public information. A PRO is required to disclose public information (§ 476.120(a)(6)) only in the form in which it is acquired by the PRO or in the form in which it is maintained for PRO use.

(e) Medicare provider number. A PRO must include the provider identification number assigned by the Medicare program on information that HCFA requests.

(a) Imminent danger to individuals or public health. When the PRO determines that requested information is necessary to protect against an imminent danger to individuals or the public health, the notification required in § 476.105 may be sent simultaneously with the disclosure.

(b) Fraud or Abuse. The notification requirement in § 476.105 does not apply if—

(1) The disclosure is made in an investigation of fraud or abuse by the Office of the Inspector General or the General Accounting Office; or

(2) The disclosure is made in an investigation of fraud or abuse by any other Federal or State fraud or abuse agency and the investigative agency specifies in writing that the information is related to a potentially prosecutable criminal offense.

Persons or organizations that obtain confidential PRO information must not further disclose the information to any other person or organization except—

(a) As directed by the PRO to carry out a disclosure permitted or required under a particular provision of this part;

(b) As directed by HCFA to carry out specific responsibilities of the Secretary under the Act;

(c) As necessary for HCFA to carry out its responsibilities for appeals under section 1155 of the Act or for HCFA to process sanctions under section 1156 of the Act;

(d) If the health care services furnished to an individual patient are reimbursed from more than one source, these sources of reimbursement may exchange confidential information as necessary for the payment of claims;

(e) If the information is acquired by the PRO from another source and the receiver of the information is authorized under its own authorities to acquire the information directly from the source, the receiver may disclose the information in accordance with the source's redisclosure rules;

(f) As necessary for the General Accounting Office to carry out its statutory responsibilities;

(g) Information pertaining to a patient or practitioner may be disclosed by that individual provided it does not identify any other patient or practitioner;

(h) An institution may disclose information pertaining to itself provided it does not identify an individual patient or practitioner;

(i) Governmental fraud or abuse agencies and State licensing or certification agencies recognized by HCFA may disclose information as necessary in a judicial, administrative or other formal legal proceeding resulting from an investigation conducted by the agency;

(j) State and local public health officials to carry out their responsibilities, as necessary, to protect against a substantial risk to the public health; or

(k) As necessary for the Office of the Inspector General to carry out its statutory responsibilities.

A person who discloses information not authorized under Title XI Part B of the Act or the regulations of this part will, upon conviction, be fined no more than $1,000, or be imprisoned for no more than six months, or both, and will pay the costs of prosecution.

The provisions of 42 U.S.C. 290dd-3 and 290ee-3 governing confidentiality of alcohol and drug abuse patients’ records, and the implementing regulations at 42 CFR part 2, are applicable to PRO information.

(a) A PRO is authorized to have access to and obtain records and information pertinent to the health care services furnished to Medicare patients, held by any institution or practitioner in the PRO area. The PRO may require the institution or practitioner to provide copies of such records or information to the PRO.

(b) A PRO may obtain non-Medicare patient records relating to review performed under a non-Medicare PRO contract if authorized by those patients in accordance with State law.

(c) In accordance with its quality review responsibilities under the Act, a PRO may have access to and obtain information from, the records of non-Medicare patients if authorized by the institution or practitioner.

A PRO is authorized to have access to and require copies of Medicare records or information held by intermediaries or carriers if the PRO determines that the records or information are necessary to carry out PRO review responsibilities.

(a) Institutions and other entities must disclose to the PRO information collected by them for PRO purposes.

(b) Information collected or generated by institutions or practitioners to carry out quality review studies must be disclosed to the PRO.

A PRO or any agent, organization, or institution acting on its behalf, that is collecting information under authority of this part, must collect only that information which is necessary to accomplish the purposes of Title XI Part B of the Act in accordance with 44 U.S.C. Chapter 35, Coordination of Federal Reporting Services Information Policy.

(a) Responsibilities of PRO officers and employees. The PRO must provide reasonable physical security measures to prevent unauthorized access to PRO information and to ensure the integrity of the information, including those measures needed to secure computer files. Each PRO must instruct its officers and employees and health care institution employees participating in PRO activities of their responsibility to maintain the confidentiality of information and of the legal penalties that may be imposed for unauthorized disclosure of PRO information.

(b) Responsible individuals within the PRO. The PRO must assign a single individual the responsibility for maintaining the system for assuring the confidentiality of information within the PRO review system. That individual must notify HCFA of any violations of these regulations.

(c) Training requirements. The PRO must train participants of the PRO review system in the proper handling of confidential information.

(d) Authorized access. An individual participating in the PRO review system on a routine or ongoing basis must not have authorized access to confidential PRO information unless that individual—

(1) Has completed a training program in the handling of PRO information in accordance with paragraph (c) of this section or has received comparable training from another source; and

(2) Has signed a statement indicating that he or she is aware of the legal penalties for unauthorized disclosure.

(e) Purging of personal identifiers. (1) The PRO must purge or arrange for purging computerized information, patient records and other noncomputerized files of all personal identifiers as soon as it is determined by HCFA that those identifiers are no longer necessary.

(2) The PRO must destroy or return to the facility from which it was collected confidential information generated from computerized information, patient records and other noncomputerized files when the PRO determines that the maintenance of hard copy is no longer necessary to serve the specific purpose for which it was obtained or generated.

(f) Data system procedures. The PRO must assure that organizations and consultants providing data services to the PRO have established procedures for maintaining the confidentiality of PRO information in accordance with requirements defined by the PRO and consistent with procedures established under this part.

The PRO must establish and implement procedures to provide patients, practitioners, and institutions under review with the following information—

(a) The title and address of the person responsible for maintenance of PRO information;

(b) The types of information that will be collected and maintained;

(c) The general rules governing disclosure of PRO information; and

(d) The procedures whereby patients, practitioners, and institutions may obtain access to information about themselves.

Subject to the procedures for disclosure and notice of disclosure specified in §§ 476.104 and 476.105, the PRO must disclose—

(a) Nonconfidential information to any person upon request, including—

(1) The norms, criteria, and standards it uses for initial screening of cases, and for other review activities;

(2) Winning technical proposals for contracts from the Department, and winning technical proposals for subcontracts under those contracts (except for proprietary or business information);

(3) Copies of documents describing administrative procedures, agreed to between the PRO and institutions or between a PRO and the Medicare intermediary or Medicare carrier;

(4) Routine reports submitted by the PRO to HCFA to the extent that they do not contain confidential information.

(5) Summaries of the proceedings of PRO regular and other meetings of the governing body and general membership except for those portions of the summaries involving PRO deliberations, which are confidential information and subject to the provisions of § 476.139;

(6) Public information in its possession;

(7) Aggregate statiscal information that does not implicitly or explicitly identify individual patients, practitioners or reviewers;

(8) Quality review study information including summaries and conclusions from which the identification of patients, practitioners and institutions has been deleted; and

(9) Information describing the characteristics of a quality review study, including a study design and methodology.

(b) Aggregate statistical information that does not implicitly or explicitly identify individual patients, practitioners or reviewers, to Federal or State health planning agencies (including Health Systems Agencies and State Health Planning and Development Agencies) in carrying out their health care planning and related activities.

A PRO may, on its own initiative, subject to the notification requirements in § 476.105, furnish the information available under § 476.120 to any person, agency, or organization.

Except as limited by §§ 476.139(a) and 476.140 of this subpart, PROs must disclose all information requested by the Department to it in the manner and form required.

HCFA or any person, organization or agency authorized by the Department or Federal statute to monitor a PRO will have access to medical records maintained by institutions or health care practitioners on Medicare patients. The monitor can require copies of the records.

(a) General requirements for disclosure. Except as specified in paragraph (b) of this section, a PRO must—

(1) Disclose patient identified information in its possession to the identified patient or the patient's representative if—

(i) The patient or the patient's representative requests the information in writing;

(ii) The request by a patient's representative includes the designation, by the patient, of the representative; and

(iii) All other patient and practitioner identifiers have been removed.

(2) Seek the advice of the attending practitioner that treated the patient regarding the appropriateness of direct disclosure to the patient 15 days before the PRO provides the requested information. If the attending practitioner states that the released information could harm the patient, the PRO must act in accordance with paragraph (c)(2) of this section. The PRO must make disclosure to the patient or patient's representative within 30 calendar days of receipt of the request.

(b) Exceptions. (1) If the request is in connection with an initial denial determination under section 1154(a)(3) of the Act, the PRO—

(i) Need not seek the advice of the practitioner that treated the patient regarding the appropriateness of direct disclosure to the patient; and

(ii) Must provide only the information used to support that determination in accordance with the procedures for disclosure of information relating to determinations under § 473.24.

(2) A PRO must disclose information regarding PRO deliberations only as specified in § 476.139(a).

(3) A PRO must disclose quality review study information only as specified in § 476.140.

(c) Manner of disclosure. (1) The PRO must disclose the patient information directly to the patient unless knowledge of the information could harm the patient.

(2) If knowledge of the information could harm the patient, the PRO must disclose the information to the patient's designated representative.

(3) If the patient is mentally, physically or legally unable to designate a representative, the PRO must disclose the information to a person whom the PRO determines is responsible for the patient.

(a) General requirements for disclosure. Except as specified in paragraph (b) of this section, the following provisions are required of the PRO.

(1) Disclosure to the identified individual or institution. A PRO must disclose, to particular practitioners, reviewers and institutions, information about themselves, upon request, and may disclose it to them without a request.

(2) Disclosure to others. (i) A PRO must disclose to an institution, upon request, information on a practitioner to the extent that the information displays practice or performance patterns of the practitioner in that institution.

(ii) In accordance with section 1160 of the Act, a PRO must disclose information that displays practice or performance patterns of a practitioner or institution in accordance with the procedures for disclosures specified in §§ 476.137 and 476.138 to—

(A) Federal and State agencies that are responsible for the investigation of fraud and abuse of the Medicare or Medicaid programs, and

(B) Federal and State agencies that are responsible for licensing and certification of practitioners and providers.

(iii) A PRO may disclose to any person, agency or organization, information on a particular practitioner or reviewer with the consent of that practitioner or reviewer provided that the information does not identify other individuals.

(b) Exceptions. (1) If the request is in connection with an initial denial determination or a change resulting from a diagnostic related group (DRG) coding validation under Part 466 of this subchapter, the PRO must provide only the information used to support that determination in accordance with the procedures for disclosure of information relating to determinations under § 473.24.

(2) A PRO must disclose information regarding PRO deliberations only as specified in § 476.139(a).

(3) A PRO must disclose quality review study information only as specified in § 476.140.

(a) A PRO must verify the accuracy of its information concerning patients, practitioners, reviewers, and institutions and must permit the individual or institution to request an amendment of pertinent information that is in the possession of the PRO.

(b) If the PRO agrees with the request for amendment, the PRO must correct the information in its possession. If the information being amended has already been disclosed, the PRO must forward the amended information to the requester where it may affect decisions about a particular provider, practitioner or case under review.

(c) If the PRO disagrees with the request for amendment, a notation of the request, reasons for the request, and the reasons for refusal must be included with the information and attached to any disclosure of the information.

(a) Disclosure to conduct review. The PRO must disclose or arrange for disclosure of information to individuals and institutions within the PRO review system as necessary to fulfill their particular duties and functions under Title XI Part B of the Act.

(b) Disclosure to consultants and subcontractors. The PRO must disclose to consultants or subcontractors the information they need to provide specified services to the PRO.

(c) Disclosure to other PRO and medical review boards. The PRO must disclose—

(1) To another PRO, information on patients and practitioners who are subject to review by the other PRO; and

(2) To medical review boards established under section 1881 of the Act, confidential information on patients, practitioners and institutions receiving or furnishing end stage renal disease services.

(a) Required disclosure. Except as specified in §§ 476.139(a) and 476.140 relating to disclosure of PRO deliberations and quality review study information, a PRO must disclose to intermediaries and carriers PRO information that relates to, or is necessary for, payment of claims for Medicare as follows:

(1) Review determinations and claims forms for health care services, furnished in the manner and form agreed to by the PRO and the intermediary or carrier.

(2) Upon request, copies of medical records acquired from practitioners or institutions for review purposes.

(3) PRO information about a particular patient or practitioner if the PRO and the intermediary or carrier (or HCFA if the PRO and the intermediary or carrier cannot agree) determine that the information is necessary for the administration of the Medicare program.

(b) Optional disclosure. The PRO may disclose the information specified in paragraph (a) of this section to intermediaries and carriers without a request.

(a) Required disclosure. Except as specified in §§ 476.139(a) and 476.140 relating to disclosure of PRO deliberations and quality review study information, the PRO must disclose confidential information relevant to an investigation of fraud or abuse of the Medicare or medicaid programs, including PRO medical necessity determinations and other information that includes patterns of the practice or performance of a practitioner or institution, when a written request is received from a State or Federal enforcement agency responsible for the investigation or identification of fraud or abuse of the Medicare or Medicaid programs that—

(1) Identifies the name and title of the individual initiating the request,

(2) Identifies the physician or institution about which information is requested, and

(3) States affirmatively that the institution or practitioner is currently under investigation for fraud or abuse of the Medicare or Medicaid programs and that the information is needed in furtherance of that investigation.

(b) Optional disclosure. The PRO may provide the information specified in paragraph (a) of this section to Federal or State fraud and abuse enforcement agencies responsible for the investigation or identification of fraud or abuse of the Medicare or Medicaid programs, without a request.

(a) General requirements for disclosure. Except as specified in paragraph (b) of this section, the following provisions are required of the PRO.

(1) Disclosure to licensing and certification bodies. (i) A PRO must disclose confidential information upon request, to State or Federal licensing bodies responsible for the professional licensure of a practitioner or a particular institution. Confidential information, including PRO medical necessity determinations that display the practice or performance patterns of that practitioner, must be disclosed by the PRO but only to the extent that it is required by the agency to carry out a function within the jurisdiction of the agency under Federal or State law.

(ii) A PRO may provide the information specified in paragraph (a)(1)(i) of this section to the State or Federal licensing body without request.

(2) Disclosure to State and local public health officials. A PRO must disclose PRO information to State and local public health officials whenever the PRO determines that the disclosure of the information is necessary to protect against a substantial risk to the public health.

(3) Disclosure to the courts. Patient identified records in the possession of a PRO are not subject to subpoena or discovery in a civil action, including an administrative, judicial or arbitration proceeding.

(b) Exceptions. (1) The restriction set forth in paragraph (a)(3) of this section does not apply to HHS, including Inspector General, administrative subpoenas issued in the course of audits and investigations of Department programs, in the course of administrative hearings held under the Social Security Act or to disclosures to the General Accounting Office as necessary to carry out its statutory responsibilities.

(2) A PRO must disclose information regarding PRO deliberations and quality review study information only as specified in §§ 476.139(a) and 476.140.

(a) PRO deliberations. (1) A PRO must not disclose its deliberations except to—

(i) HCFA, at the PRO office or at a subcontracted organization;

(ii) HCFA, to the extent that the deliberations are incorporated in sanction and appeals reports; or

(iii) The Office of the Inspector General, and the General Accounting Office as necessary to carry out statutory responsibilities.

(2) PRO deliberations are not disclosable, either in written form or through oral testimony, in connection with the administrative hearing or review of a beneficiary's claim.

(b) Reasons for PRO decisions. (1) A PRO may disclose to those who have access to PRO information under other provisions of this subpart, the reasons for PRO decisions pertaining to that information provided that the opinions or judgements of a particular individual or practitioner cannot be identified.

(2) A PRO must disclose, if requested in connection with the administrative hearing or review of a beneficiary's claim, the reasons for PRO decisions. The PRO must include the detailed facts, findings and conclusions supporting the PRO's determination. The PRO must insure that the opinions or judgements of a particular individual or practitioner cannot be identified through the materials that are disclosed.

(a) A PRO must disclose, onsite, quality review study information with identifiers of patients, practitioners or institutions to—

(1) Representatives of authorized licensure, accreditation or certification agencies as is required by the agencies in carrying out functions which are within the jurisdiction of such agencies under state law; to federal and state agencies responsible for identifying risks to the public health when there is substantial risk to the public health; HCFA; or to Federal and State fraud and abuse enforcement agencies;

(2) An institution or practitioner, if the information is limited to health care services furnished by the institution or practitioner; and

(3) A medical review board established under section 1881 of the Act pertaining to end-stage renal disease facilities, if the information is limited to health care services subject to its review.

(b) A PRO must disclose quality review study information with identifiers of patients, practitioners or institutions to the Office of the Inspector General and the General Accounting Office as necessary to carry out statutory responsibilities.

(c) A PRO may disclose information offsite from a particular quality review study to any institution or practitioner involved in that study, provided the disclosed information is limited to that institution or practitioner.

(d) An institution or group of practitioners may redisclose quality review study information, if the information is limited to health care services they provided.

(e) Quality review study information with patient identifiers is not subject to subpoena or discovery in a civil action, including an administrative, judicial or arbitration proceeding. This restriction does not apply to HHS, including Inspector General, administrative subpoenas issued in the course of audits and investigations of Department programs, in the course of administrative hearings held under the Social Security Act, or to disclosures to the General Accounting Office as necessary to carry out its statutory responsibilities.

Subject to the procedures for disclosure and notice of disclosure specified in §§ 476.104 and 476.105, a PRO may disclose to the public PRO interpretations and generalizations on the quality of health care that identify a particular institution.

(a) The PRO must disclose sanction reports directly to the Office of the Inspector General and, if requested, to HCFA.

(b) The PRO must upon request, and may without a request, disclose sanction reports to State and Federal agencies responsible for the identification, investigation or prosecution of cases of fraud or abuse in accordance with § 476.137.

(c) HCFA will disclose sanction determinations in accordance with part 474 of this chapter.

(a) Information collected by a PRO. Except as prohibited in paragraph (b) of this section, information collected by a PRO may be processed and stored by a cooperative health statistics system established under the Public Health Service Act (42 U.S.C. 242k) or other State or Federally authorized shared data system.

(b) PRO participation. A PRO may not participate in a cooperative health statistics system or other shared health data system if the disclosure rules of the system would prevent the PRO from complying with the rules of this part.

(c) Disclosure of PRO information obtained by a shared health data system. PRO information must not be disclosed by the shared health data system unless—

(1) The source from which the PRO acquired the information consents to or requests disclosure; or

(2) The PRO requests the disclosure of the information to carry out a disclosure permitted under a provision of this part.