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U.S. Code as of:
01/19/04
Section 1320c-2. Contracts with utilization and quality control peer review organizations
(a) Establishment and consolidation of geographic areas
(1) The Secretary shall establish throughout the United States
geographic areas with respect to which contracts under this part
will be made. In establishing such areas, the Secretary shall use
the same areas as established under section 1320c-1 of this title
as in effect immediately prior to September 3, 1982, but subject to
the provisions of paragraph (2).
(2) As soon as practicable after September 3, 1982, the Secretary
shall consolidate such geographic areas, taking into account the
following criteria:
(A) Each State shall generally be designated as a geographic
area for purposes of paragraph (1).
(B) The Secretary shall establish local or regional areas
rather than State areas only where the volume of review activity
or other relevant factors (as determined by the Secretary)
warrant such an establishment, and the Secretary determines that
review activity can be carried out with equal or greater
efficiency by establishing such local or regional areas. In
applying this subparagraph the Secretary shall take into account
the number of hospital admissions within each State for which
payment may be made under subchapter XVIII of this chapter or a
State plan approved under subchapter XIX of this chapter, with
any State having fewer than 180,000 such admissions annually
being established as a single statewide area, and no local or
regional area being established which has fewer than 60,000 total
hospital admissions (including public and private pay patients)
under review annually, unless the Secretary determines that other
relevant factors warrant otherwise.
(C) No local or regional area shall be designated which is not
a self-contained medical service area, having a full spectrum of
services, including medical specialists' services.
(b) Organizations entitled to contract with Secretary
(1) The Secretary shall enter into a contract with a utilization
and quality control peer review organization for each area
established under subsection (a) of this section if a qualified
organization is available in such area and such organization and
the Secretary have negotiated a proposed contract which the
Secretary determines will be carried out by such organization in a
manner consistent with the efficient and effective administration
of this part. If more than one such qualified organization meets
the requirements of the preceding sentence, priority shall be given
to any such organization which is described in section
1320c-1(1)(A) of this title.
(2)(A) Prior to November 15, 1984, the Secretary shall not enter
into a contract under this part with any entity which is, or is
affiliated with (through management, ownership, or common control),
an entity (other than a self-insured employer) which directly or
indirectly makes payments to any practitioner or provider whose
health care services are reviewed by such entity or would be
reviewed by such entity if it entered into a contract with the
Secretary under this part. For purposes of this paragraph, an
entity shall not be considered to be affiliated with another entity
which makes payments (directly or indirectly) to any practitioner
or provider, by reason of management, ownership, or common control,
if the management, ownership, or common control consists only of
members of the governing board being affiliated (through
management, ownership, or common control) with a health maintenance
organization or competitive medical plan which is an "eligible
organization" as defined in section 1395mm(b) of this title.
(B) If, after November 14, 1984, the Secretary determines that
there is no other entity available for an area with which the
Secretary can enter into a contract under this part, the Secretary
may then enter into a contract under this part with an entity
described in subparagraph (A) for such area if such entity
otherwise meets the requirements of this part.
(3)(A) The Secretary shall not enter into a contract under this
part with any entity which is, or is affiliated with (through
management, ownership, or common control), a health care facility,
or association of such facilities, within the area served by such
entity or which would be served by such entity if it entered into a
contract with the Secretary under this part.
(B) For purposes of subparagraph (A), an entity shall not be
considered to be affiliated with a health care facility or
association of facilities by reason of management, ownership, or
common control if the management, ownership, or common control
consists only of not more than 20 percent of the members of the
governing board of the entity being affiliated (through management,
ownership, or common control) with one or more of such facilities
or associations.
(c) Terms of contract
Each contract with an organization under this section shall
provide that -
(1) the organization shall perform the functions set forth in
section 1320c-3(a) of this section, or may subcontract for the
performance of all or some of such functions (and for purposes of
paragraphs (2) and (3) of subsection (b) of this section, a
subcontract under this paragraph shall not constitute an
affiliation with the subcontractor);
(2) the Secretary shall have the right to evaluate the quality
and effectiveness of the organization in carrying out the
functions specified in the contract;
(3) the contract shall be for an initial term of three years
and shall be renewable on a triennial basis thereafter;
(4) if the Secretary intends not to renew a contract, he shall
notify the organization of his decision at least 90 days prior to
the expiration of the contract term, and shall provide the
organization an opportunity to present data, interpretations of
data, and other information pertinent to its performance under
the contract, which shall be reviewed in a timely manner by the
Secretary;
(5) the organization may terminate the contract upon 90 days
notice to the Secretary;
(6) the Secretary may terminate the contract prior to the
expiration of the contract term upon 90 days notice to the
organization if the Secretary determines that -
(A) the organization does not substantially meet the
requirements of section 1320c-1 of this title; or
(B) the organization has failed substantially to carry out
the contract or is carrying out the contract in a manner
inconsistent with the efficient and effective administration of
this part, but only after such organization has had an
opportunity to submit data and have such data reviewed by the
panel established under subsection (d) of this section;
(7) the Secretary shall include in the contract negotiated
objectives against which the organization's performance will be
judged, and negotiated specifications for use of regional norms,
or modifications thereof based on national norms, for performing
review functions under the contract; and
(8) reimbursement shall be made to the organization on a
monthly basis, with payments for any month being made not later
than 15 days after the close of such month.
In evaluating the performance of utilization and quality control
peer review organizations under contracts under this part, the
Secretary shall place emphasis on the performance of such
organizations in educating providers and practitioners
(particularly those in rural areas) concerning the review process
and criteria being applied by the organization.
(d) Review prior to termination of contract; modification and
termination; reviewing panel
(1) Prior to making any termination under subsection (c)(6)(B) of
this section, the Secretary must provide the organization with an
opportunity to provide data, interpretations of data, and other
information pertinent to its performance under the contract. Such
data and other information shall be reviewed in a timely manner by
a panel appointed by the Secretary, and the panel shall submit a
report of its findings to the Secretary in a timely manner. The
Secretary shall make a copy of the report available to the
organization.
(2) The Secretary may accept or not accept the findings of the
panel. After the panel has submitted a report with respect to an
organization, the Secretary may, with the concurrence of the
organization, amend the contract to modify the scope of the
functions to be carried out by the organization, or in any other
manner. The Secretary may terminate a contract under the authority
of subsection (c)(6)(B) of this section upon 90 days notice after
the panel has submitted a report, or earlier if the organization so
agrees.
(3) A panel appointed by the Secretary under this subsection
shall consist of not more than five individuals, each of whom shall
be a member of a utilization and quality control peer review
organization having a contract with the Secretary under this part.
While serving on such panel individuals shall be paid at a per diem
rate not to exceed the current per diem equivalent at the time that
service on the panel is rendered for grade GS-18 under section 5332
of title 5. Appointments shall be made without regard to title 5.
(4) During the period after the Secretary has given notice of
intent to terminate a contract, and prior to the time that the
Secretary enters into a contract with another utilization and
quality control peer review organization, the Secretary may
transfer review responsibilities of the organization under the
contract being terminated to another utilization and quality
control peer review organization, or to an intermediary or carrier
having an agreement under section 1395h of this title or a contract
under section 1395u of this title.
(e) Authority of Secretary
(1) Except as provided in paragraph (2), contracting authority of
the Secretary under this section may be carried out without regard
to any provision of law relating to the making, performance,
amendment, or modification of contracts of the United States as the
Secretary may determine to be inconsistent with the purposes of
this part. The Secretary may use different contracting methods with
respect to different geographical areas.
(2) If a peer review organization with a contract under this
section is required to carry out a review function in addition to
any function required to be carried out at the time the Secretary
entered into or renewed the contract with the organization, the
Secretary shall, before requiring such organization to carry out
such additional function, negotiate the necessary contractual
modifications, including modifications that provide for an
appropriate adjustment (in light of the cost of such additional
function) to the amount of reimbursement made to the organization.
(f) Termination not subject to judicial review
Any determination by the Secretary to terminate or not to renew a
contract under this section shall not be subject to judicial
review.
(g) Timely provision of hospital data to peer review organizations
The Secretary shall provide that fiscal intermediaries furnish to
peer review organizations, each month on a timely basis, data
necessary to initiate the review process under section 1320c-3(a)
of this title on a timely basis. If the Secretary determines that a
fiscal intermediary is unable to furnish such data on a timely
basis, the Secretary shall require the hospital to do so.
(h) Publication of new policy or procedure and general criteria and
standards for evaluation; performance comparison report
(1) The Secretary shall publish in the Federal Register any new
policy or procedure adopted by the Secretary that affects
substantially the performance of contract obligations under this
section not less than 30 days before the date on which such policy
or procedure is to take effect. This paragraph shall not apply to
the extent it is inconsistent with a statutory deadline.
(2) The Secretary shall publish in the Federal Register the
general criteria and standards used for evaluating the efficient
and effective performance of contract obligations under this
section and shall provide opportunity for public comment with
respect to such criteria and standards.
(3) The Secretary shall regularly furnish each peer review
organization with a contract under this section with a report that
documents the performance of the organization in relation to the
performance of other such organizations.
(i) Preference in contracting with in-State organizations
(1) Notwithstanding any other provision of this section, the
Secretary shall not renew a contract with any organization that is
not an in-State organization (as defined in paragraph (3)) unless
the Secretary has first complied with the requirements of paragraph
(2).
(2)(A) Not later than six months before the date on which a
contract period ends with respect to an organization that is not an
in-State organization, the Secretary shall publish in the Federal
Register -
(i) the date on which such period ends; and
(ii) the period of time in which an in-State organization may
submit a proposal for the contract ending on such date.
(B) If one or more qualified in-State organizations submits a
proposal within the period of time specified under subparagraph
(A)(ii), the Secretary shall not automatically renew the current
contract on a noncompetitive basis, but shall provide for
competition for the contract in the same manner as a new contract
under subsection (b) of this section.
(3) For purposes of this subsection, an in-State organization is
an organization that has its primary place of business in the State
in which review will be conducted (or, which is owned by a parent
corporation the headquarters of which is located in such State).
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