[Federal Register Volume 70, Number 23 (Friday, February 4, 2005)]
[Notices]
[Pages 6012-6013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-1878]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-3155-N]
RIN 0938-AN67


Medicare Program; Quality Improvement Organization Contracts: 
Solicitation of Statements of Interest From In-State Organizations--
Alaska, Hawaii, Idaho, Maine, South Carolina, Vermont, and Wyoming

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice, in accordance with Section 1153(i) of the Social 
Security Act, gives at least 6-months' advance notice of the expiration 
dates of contracts with out-of-State Utilization and Quality Control 
Peer Review Organizations. It also specifies the period of time in 
which in-State organizations may submit a statement of interest so that 
they may be eligible to compete for these contracts.

DATES: Written statements of interest must be received at the address 
specified no later than 5 p.m. EST February 22, 2005. Due to staffing 
and resource limitations, we cannot accept statements submitted by 
facsimile (FAX) transmission.

ADDRESSES: Statements of interest must be submitted to the Centers for 
Medicare & Medicaid Services, Acquisitions and Grants Groups, OOM, 
Attn.: Carol G. Sevel, 7500 Security Boulevard, Mail Stop C2-21-15, 
Baltimore, Maryland 21244-1850.

FOR FURTHER INFORMATION CONTACT: Udo Nwachukwu, (410) 786-7234.

SUPPLEMENTARY INFORMATION:

I. Background

    The Peer Review Improvement Act of 1982 (Title I, subtitle C of the 
Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-
248) amended Part B of Title XI of the Social Security Act (the Act) by 
establishing the Utilization and Quality Control Peer Review 
Organization program.
    Utilization and Quality Control Peer Review Organizations, now 
known as Quality Improvement Organizations (QIOs), currently review 
certain health care services furnished under Title XVIII of the Act 
(Medicare) and certain other Federal programs to determine whether 
those services are reasonable, medically necessary, provided in the 
appropriate setting, and are of a quality that meet professionally 
recognized standards. QIO activities are a part of the Health Care 
Quality Improvement Program (HCQIP), a program that supports our 
mission to ensure health care security for our beneficiaries. The HCQIP 
rests on the belief that a plan's, provider's, or practitioner's own 
internal quality management system is key to good performance. The 
HCQIP is carried out locally by the QIO in each State. Under the HCQIP, 
QIOs provide critical tools (for example, quality indicators and 
information) for plans, providers, and practitioners to improve the 
quality of care provided to Medicare beneficiaries. The Congress 
created the QIO program in part to redirect, simplify, and enhance the 
cost-effectiveness and efficiency of the peer review process.
    In June 1984, we began awarding contracts to QIOs. We currently 
maintain 53 QIO contracts with organizations that provide medical 
review activities for the 50 States, the District of Columbia, Puerto 
Rico, and the Virgin Islands. The organizations that are eligible to 
contract as QIOs have satisfactorily demonstrated that they are either 
physician-sponsored or physician-access organizations in accordance 
with sections 1152 and 1153 of the Act and our regulations at 42 CFR 
475.102 and 475.103. A physician-sponsored organization is one that is 
both composed of a substantial number of the licensed doctors of 
medicine and osteopathy practicing medicine or surgery in the 
respective review area and who are representative of the physicians 
practicing in the review area. A physician-access organization is one 
that has available to it, by arrangement, the services of a sufficient 
number of licensed doctors of medicine or osteopathy practicing 
medicine or surgery in the review area to ensure adequate peer review 
of the services furnished by the various medical specialties and 
subspecialties. In addition, the organization must not be a health care 
facility, health care facility association, a health care facility 
affiliate, or in most cases a payor organization. (Statutes and 
regulations provide that, in the event CMS determines no otherwise 
qualified non-payor organization is available to undertake a given QIO 
contract, CMS may select a payor organization which otherwise meets 
requirements to conduct QIO Utilization and Quality Control Peer Review 
as specified in Part B of Title XI of the Social Security Act and 
implementing regulations.) The selected organization must have a 
consumer representative on its governing board.
    The Omnibus Budget Reconciliation Act of 1987 (Pub. L. 100-203) 
amended section 1153 of the Act by adding new paragraph (i) that 
prohibits us from renewing the contract of any QIO that is not an in-
State organization without first publishing in the Federal Register a 
notice announcing when the contract will expire. This notice must be 
published no later than 6-months before the date the contract expires 
and must specify the period of time during which an in-State 
organization may submit a proposal for the contract. If one or more 
qualified in-State organizations submit a proposal within the specified 
period of time, we cannot automatically renew the contract on a 
noncompetitive basis, but must instead provide for competition for the 
contract in the same manner used for a new contract. An in-State 
organization is defined as an organization that has its primary place 
of business in the State in which review will be conducted (or, that is 
owned by a parent corporation, the headquarters of which is located in 
that State).
    There are currently 7 QIO contracts with entities that do not meet 
the statutory definition of an in-State organization. The areas 
affected for purposes of this notice along with their respective 
expiration dates are as follows: Vermont, July 31, 2005; Wyoming, July 
31, 2005; Maine, July 31, 2005; Alaska, October 31, 2005; Idaho, 
October 31, 2005; Hawaii, January 31, 2006; South Carolina, January 31, 
2006.

II. Provisions of the Notice

    This notice announces the scheduled expiration dates of the current 
contracts between CMS and out-of-State QIOs responsible for review in 
the areas mentioned above.
    Interested in-State organizations may submit statements of interest 
in competing to become the QIO for these States. We must receive the 
statements no later than February 22, 2005, and in its statement of 
interest, the organization must furnish materials that demonstrate that 
it meets the definition of an in-State organization. Specifically, the 
organization must have its primary place of business in the State in 
which review will be conducted or be a subsidiary of a parent 
corporation, whose headquarters is located in that State. In its 
statement, each interested organization must further demonstrate that 
it meets the following requirements:

A. Be Either a Physician-Sponsored or a Physician-Access Organization

1. Physician-Sponsored Organization
    To be eligible as a physician-sponsored organization, the

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organization must meet the following requirements:
    a. Be composed (have physicians as owners or members) of at least 
20 percent of the licensed doctors of medicine and osteopathy 
practicing medicine or surgery in the State (that is, at least 20 
percent of the practicing physicians in the State are owners of the 
QIO, or the QIO is owned by an entity which includes at least 20 
percent of the practicing physicians in the State as members); or
    b. Be composed (have physicians as owners or members) of at least 
10 percent of the licensed doctors of medicine and osteopathy 
practicing medicine or surgery in the State, and demonstrate through 
means (for example, letters of support from physicians or physician 
organizations) acceptable to CMS that the organization is 
representative of an additional 10 percent of the practicing physicians 
in the State; and
    c. Not be a health care facility, health care facility association, 
or health care facility affiliate.
2. Physician-Access Organization
    To be eligible as a physician-access organization, the organization 
must meet the following requirements:
    a. Have arrangements with doctors of medicine or osteopathy, 
licensed and practicing in the State, to conduct review for the 
organization;
    b. Have available at least one physician, licensed in the State, 
from every generally recognized specialty and subspecialty who is in 
active practice in the review area; and
    c. Not be a health care facility, health care facility association, 
or health care facility affiliate.

B. Have at Least One Individual Who Is a Representative of Consumers on 
Its Governing Board

    If one or more organizations meet the above requirements in one of 
the 7 QIO areas in this notice and submit statements of interest in 
accordance with this notice, we will consider those organizations to be 
potential sources for contract upon its expiration. These organizations 
will be entitled to participate in a full and open competition for the 
QIO contract to perform the QIO statement of work.

III. Information Collection Requirements

    This notice contains information collection requirements that have 
been approved by the Office of Management and Budget (OMB) under the 
authority of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) 
and assigned OMB Control Number 0938-0526 entitled ``Quality 
Improvement (formerly Peer Review) Organization, Contracts: 
Solicitation of Statements of Interest from In-State Organization, 
General Notice and Supporting Regulations.''

    Authority: Section 1153 of the Social Security Act (42 U.S.C. 
1320c-2).

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance Program; and No. 93.774, Medicare-
Supplementary Medical Insurance Program)

    Dated: January 26, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 05-1878 Filed 1-27-05; 5:06 pm]
BILLING CODE 4120-01-P