
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-554 Section 1(a)(6)[521(c)]]
[Document affected by Public Law 106-554 Section 1(a)(6)[521(d)]]
[CITE: 42USC1320c-3]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
   SUBCHAPTER XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE 
                             SIMPLIFICATION
 
 Part B--Peer Review of Utilization and Quality of Health Care Services
 
Sec. 1320c-3. Functions of peer review organizations


(a) Review of professional activities; determination of payment; 
        determination of review authority; consultation with 
        professional health care practitioners; standards of health 
        care; other duties

    Any utilization and quality control peer review organization 
entering into a contract with the Secretary under this part must perform 
the following functions:
        (1) The organization shall review some or all of the 
    professional activities in the area, subject to the terms of the 
    contract and subject to the requirements of subsection (d) of this 
    section, of physicians and other health care practitioners and 
    institutional and noninstitutional providers of health care services 
    in the provision of health care services and items for which payment 
    may be made (in whole or in part) under subchapter XVIII of this 
    chapter (including where payment is made for such services to 
    eligible organizations pursuant to contracts under section 1395mm of 
    this title) for the purpose of determining whether--
            (A) such services and items are or were reasonable and 
        medically necessary and whether such services and items are not 
        allowable under subsection (a)(1) or (a)(9) of section 1395y of 
        this title;
            (B) the quality of such services meets professionally 
        recognized standards of health care; and
            (C) in case such services and items are proposed to be 
        provided in a hospital or other health care facility on an 
        inpatient basis, such services and items 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.

    If the organization performs such reviews with respect to a type of 
    health care practitioner other than medical doctors, the 
    organization shall establish procedures for the involvement of 
    health care practitioners of that type in such reviews.
        (2) The organization shall determine, on the basis of the review 
    carried out under subparagraphs (A), (B), and (C) of paragraph (1), 
    whether payment shall be made for services under subchapter XVIII of 
    this chapter. Such determination shall constitute the conclusive 
    determination on those issues for purposes of payment under 
    subchapter XVIII of this chapter, except that payment may be made 
    if--
            (A) such payment is allowed by reason of section 1395pp of 
        this title;
            (B) in the case of inpatient hospital services or extended 
        care services, the peer review organization determines that 
        additional time is required in order to arrange for 
        postdischarge care, but payment may be continued under this 
        subparagraph for not more than two days, but only in the case 
        where the provider of such services did not know and could not 
        reasonably have been expected to know (as determined under 
        section 1395pp of this title) that payment would not otherwise 
        be made for such services under subchapter XVIII of this chapter 
        prior to notification by the organization under paragraph (3);
            (C) such determination is changed as the result of any 
        hearing or review of the determination under section 1320c-4 of 
        this title; or
            (D) such payment is authorized under section 1395x(v)(1)(G) 
        of this title.

    The organization shall identify cases for which payment should not 
    be made by reason of paragraph (1)(B) only through the use of 
    criteria developed pursuant to guidelines established by the 
    Secretary.
        (3)(A) Subject to subparagraphs (B) and (D), whenever the 
    organization makes a determination that any health care services or 
    items furnished or to be furnished to a patient by any practitioner 
    or provider are disapproved, the organization shall promptly notify 
    such patient and the agency or organization responsible for the 
    payment of claims under subchapter XVIII of this chapter of such 
    determination.
        (B) The notification under subparagraph (A) with respect to 
    services or items disapproved by reason of subparagraph (A) or (C) 
    of paragraph (1) shall not occur until 20 days after the date that 
    the organization has--
            (i) made a preliminary notification to such practitioner or 
        provider of such proposed determination, and
            (ii) provided such practitioner or provider an opportunity 
        for discussion and review of the proposed determination.

        (C) The discussion and review conducted under subparagraph 
    (B)(ii) shall not affect the rights of a practitioner or provider to 
    a formal reconsideration of a determination under this part (as 
    provided under section 1320c-4 of this title).
        (D) The notification under subparagraph (A) with respect to 
    services or items disapproved by reason of paragraph (1)(B) shall 
    not occur until after--
            (i) the organization has notified the practitioner or 
        provider involved of the determination and of the practitioner's 
        or provider's right to a formal reconsideration of the 
        determination under section 1320c-4 of this title, and
            (ii) if the provider or practitioner requests such a 
        reconsideration, the organization has made such a 
        reconsideration.

    If a provider or practitioner is provided a reconsideration, such 
    reconsideration shall be in lieu of any subsequent reconsideration 
    to which the provider or practitioner may be otherwise entitled 
    under section 1320c-4 of this title, but shall not affect the right 
    of a beneficiary from seeking reconsideration under such section of 
    the organization's determination (after any reconsideration 
    requested by the provider or physician under clause (ii)).
        (E)(i) In the case of services and items provided by a physician 
    that were disapproved by reason of paragraph (1)(B), the notice to 
    the patient shall state the following: ``In the judgment of the peer 
    review organization, the medical care received was not acceptable 
    under the medicare program. The reasons for the denial have been 
    discussed with your physician.''
        (ii) In the case of services or items provided by an entity or 
    practitioner other than a physician, the Secretary may substitute 
    the entity or practitioner which provided the services or items for 
    the term ``physician'' in the notice described in clause (i).
        (4)(A) The organization shall, after consultation with the 
    Secretary, determine the types and kinds of cases (whether by type 
    of health care or diagnosis involved, or whether in terms of other 
    relevant criteria relating to the provision of health care services) 
    with respect to which such organization will, in order to most 
    effectively carry out the purposes of this part, exercise review 
    authority under the contract. The organization shall notify the 
    Secretary periodically with respect to such determinations. Each 
    peer review organization shall provide that a reasonable proportion 
    of its activities are involved with reviewing, under paragraph 
    (1)(B), the quality of services and that a reasonable allocation of 
    such activities is made among the different cases and settings 
    (including post-acute-care settings, ambulatory settings, and health 
    maintenance organizations). In establishing such allocation, the 
    organization shall consider (i) whether there is reason to believe 
    that there is a particular need for reviews of particular cases or 
    settings because of previous problems regarding quality of care, 
    (ii) the cost of such reviews and the likely yield of such reviews 
    in terms of number and seriousness of quality of care problems 
    likely to be discovered as a result of such reviews, and (iii) the 
    availability and adequacy of alternative quality review and 
    assurance mechanisms.
        (B) The contract of each organization shall provide for the 
    review of services (including both inpatient and outpatient 
    services) provided by eligible organizations pursuant to a risk-
    sharing contract under section 1395mm of this title (or that is 
    subject to review under section 1395ss(t)(3) of this title) for the 
    purpose of determining whether the quality of such services meets 
    professionally recognized standards of health care, including 
    whether appropriate health care services have not been provided or 
    have been provided in inappropriate settings and whether individuals 
    enrolled with an eligible organization have adequate access to 
    health care services provided by or through such organization (as 
    determined, in part, by a survey of individuals enrolled with the 
    organization who have not yet used the organization to receive such 
    services). The contract of each organization shall also provide that 
    with respect to health care provided by a health maintenance 
    organization or competitive medical plan under section 1395mm of 
    this title, the organization shall maintain a beneficiary outreach 
    program designed to apprise individuals receiving care under such 
    section of the role of the peer review system, of the rights of the 
    individual under such system, and of the method and purposes for 
    contacting the organization. The previous two sentences shall not 
    apply with respect to a contract year if another entity has been 
    awarded a contract under subparagraph (C). Under the contract the 
    level of effort expended by the organization on reviews under this 
    subparagraph shall be equivalent, on a per enrollee basis, to the 
    level of effort expended by the organization on utilization and 
    quality reviews performed with respect to individuals not enrolled 
    with an eligible organization.
        (C) The Secretary may provide, by contract under competitive 
    procurement procedures on a State-by-State basis in up to 25 States, 
    for the review described in subparagraph (B) by an appropriate 
    entity (which may be a peer review organization described in that 
    subparagraph). In selecting among States in which to conduct such 
    competitive procurement procedures, the Secretary may not select 
    States which, as a group, have more than 50 percent of the total 
    number of individuals enrolled with eligible organizations under 
    section 1395mm of this title. Under a contract with an entity under 
    this subparagraph--
            (i) the entity must be, or must meet all the requirements 
        under section 1320c-1 of this title to be, a utilization and 
        quality control peer review organization (other than the ability 
        to perform review functions under this section that are not 
        described in subparagraph (B)),
            (ii) the contract must meet the requirement of section 
        1320c-2(b)(3) of this title, and
            (iii) the level of effort expended under the contract shall 
        be, to the extent practicable, not less than the level of effort 
        that would otherwise be required under the third sentence of 
        subparagraph (B) if this subparagraph did not apply.

        (5) The organization shall consult with nurses and other 
    professional health care practitioners (other than physicians 
    described in section 1395x(r)(1) of this title) and with 
    representatives of institutional and noninstitutional providers of 
    health care services, with respect to the organization's 
    responsibility for the review under paragraph (1) of the 
    professional activities of such practitioners and providers.
        (6)(A) The organization shall, consistent with the provisions of 
    its contract under this part, apply professionally developed norms 
    of care, diagnosis, and treatment based upon typical patterns of 
    practice within the geographic area served by the organization as 
    principal points of evaluation and review, taking into consideration 
    national norms where appropriate. Such norms with respect to 
    treatment for particular illnesses or health conditions shall 
    include--
            (i) the types and extent of the health care services which, 
        taking into account differing, but acceptable, modes of 
        treatment and methods of organizing and delivering care, are 
        considered within the range of appropriate diagnosis and 
        treatment of such illness or health condition, consistent with 
        professionally recognized and accepted patterns of care; and
            (ii) the type of health care facility which is considered, 
        consistent with such standards, to be the type in which health 
        care services which are medically appropriate for such illness 
        or condition can most economically be provided.

    As a component of the norms described in clause (i) or (ii), the 
    organization shall take into account the special problems associated 
    with delivering care in remote rural areas, the availability of 
    service alternatives to inpatient hospitalization, and other 
    appropriate factors (such as the distance from a patient's residence 
    to the site of care, family support, availability of proximate 
    alternative sites of care, and the patient's ability to carry out 
    necessary or prescribed self-care regimens) that could adversely 
    affect the safety or effectiveness of treatment provided on an 
    outpatient basis.
        (B) The organization shall--
            (i) offer to provide, several times each year, for a 
        physician representing the organization to meet (at a hospital 
        or at a regional meeting) with medical and administrative staff 
        of each hospital (the services of which are reviewed by the 
        organization) respecting the organization's review of the 
        hospital's services for which payment may be made under 
        subchapter XVIII of this chapter, and
            (ii) publish (not less often than annually) and distribute 
        to providers and practitioners whose services are subject to 
        review a report that describes the organization's findings with 
        respect to the types of cases in which the organization has 
        frequently determined that (I) inappropriate or unnecessary care 
        has been provided, (II) services were rendered in an 
        inappropriate setting, or (III) services did not meet 
        professionally recognized standards of health care.

        (7) The organization, to the extent necessary and appropriate to 
    the performance of the contract, shall--
            (A)(i) make arrangements to utilize the services of persons 
        who are practitioners of, or specialists in, the various areas 
        of medicine (including dentistry, optometry, and podiatry), or 
        other types of health care, which persons shall, to the maximum 
        extent practicable, be individuals engaged in the practice of 
        their profession within the area served by such organization; 
        and
            (ii) in the case of psychiatric and physical rehabilitation 
        services, make arrangements to ensure that (to the extent 
        possible) initial review of such services be made by a physician 
        who is trained in psychiatry or physical rehabilitation (as 
        appropriate).\1\
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    \1\ So in original. The period probably should be a semicolon.
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            (B) undertake such professional inquiries either before or 
        after, or both before and after, the provision of services with 
        respect to which such organization has a responsibility for 
        review which in the judgment of such organization will 
        facilitate its activities;
            (C) examine the pertinent records of any practitioner or 
        provider of health care services providing services with respect 
        to which such organization has a responsibility for review under 
        paragraph (1); and
            (D) inspect the facilities in which care is rendered or 
        services are provided (which are located in such area) of any 
        practitioner or provider of health care services providing 
        services with respect to which such organization has a 
        responsibility for review under paragraph (1).

        (8) The organization shall perform such duties and functions and 
    assume such responsibilities and comply with such other requirements 
    as may be required by this part or under regulations of the 
    Secretary promulgated to carry out the provisions of this part or as 
    may be required to carry out section 1395y(a)(15) of this title.
        (9)(A) The organization shall collect such information relevant 
    to its functions, and keep and maintain such records, in such form 
    as the Secretary may require to carry out the purposes of this part, 
    and shall permit access to and use of any such information and 
    records as the Secretary may require for such purposes, subject to 
    the provisions of section 1320c-9 of this title.
        (B) If the organization finds, after reasonable notice to and 
    opportunity for discussion with the physician or practitioner 
    concerned, that the physician or practitioner has furnished services 
    in violation of section 1320c-5(a) of this title and the 
    organization determines that the physician or practitioner should 
    enter into a corrective action plan under section 1320c-5(b)(1) of 
    this title, the organization shall notify the State board or boards 
    responsible for the licensing or disciplining of the physician or 
    practitioner of its finding and of any action taken as a result of 
    the finding.
        (10) The organization shall coordinate activities, including 
    information exchanges, which are consistent with economical and 
    efficient operation of programs among appropriate public and private 
    agencies or organizations including--
            (A) agencies under contract pursuant to sections 1395h and 
        1395u of this title;
            (B) other peer review organizations having contracts under 
        this part; and
            (C) other public or private review organizations as may be 
        appropriate.

        (11) The organization shall make available its facilities and 
    resources for contracting with private and public entities paying 
    for health care in its area for review, as feasible and appropriate, 
    of services reimbursed by such entities.
        (12) Repealed. Pub. L. 103-432, title I, Sec. 156(a)(2)(A)(i), 
    Oct. 31, 1994, 108 Stat. 4440.
        (13) Notwithstanding paragraph (4), the organization shall 
    perform the review described in paragraph (1) with respect to early 
    readmission cases to determine if the previous inpatient hospital 
    services and the post-hospital services met professionally 
    recognized standards of health care. Such reviews may be performed 
    on a sample basis if the organization and the Secretary determine it 
    to be appropriate. In this paragraph, an ``early readmission case'' 
    is a case in which an individual, after discharge from a hospital, 
    is readmitted to a hospital less than 31 days after the date of the 
    most recent previous discharge.
        (14) The organization shall conduct an appropriate review of all 
    written complaints about the quality of services (for which payment 
    may otherwise be made under subchapter XVIII of this chapter) not 
    meeting professionally recognized standards of health care, if the 
    complaint is filed with the organization by an individual entitled 
    to benefits for such services under such subchapter (or a person 
    acting on the individual's behalf). The organization shall inform 
    the individual (or representative) of the organization's final 
    disposition of the complaint. Before the organization concludes that 
    the quality of services does not meet professionally recognized 
    standards of health care, the organization must provide the 
    practitioner or person concerned with reasonable notice and 
    opportunity for discussion.
        (15) During each year of the contract entered into under section 
    1320c-2(b) of this title, the organization shall perform significant 
    on-site review activities, including on-site review in at least 20 
    percent of the rural hospitals in the organization's area.
        (16) The organization shall provide for a review and report to 
    the Secretary when requested by the Secretary under section 
    1395dd(d)(3) of this title. The organization shall provide 
    reasonable notice of the review to the physician and hospital 
    involved. Within the time period permitted by the Secretary, the 
    organization shall provide a reasonable opportunity for discussion 
    with the physician and hospital involved, and an opportunity for the 
    physician and hospital to submit additional information, before 
    issuing its report to the Secretary under such section.

(b) Review by physicians; physician's family defined

    (1) No physician shall be permitted to review--
        (A) health care services provided to a patient if he was 
    directly responsible for providing such services; or
        (B) health care services provided in or by an institution, 
    organization, or agency, if he or any member of his family has, 
    directly or indirectly, a significant financial interest in such 
    institution, organization, or agency.

    (2) For purposes of this subsection, a physician's family includes 
only his spouse (other than a spouse who is legally separated from him 
under a decree of divorce or separate maintenance), children (including 
legally adopted children), grandchildren, parents, and grandparents.

(c) Utilization of services of physicians to make final determinations 
        of denial decisions with respect to professional conduct of 
        other physicians

    No utilization and quality control peer review organization shall 
utilize the services of any individual who is not a duly licensed doctor 
of medicine, osteopathy, dentistry, optometry, or podiatry to make final 
determinations of denial decisions in accordance with its duties and 
functions under this part with respect to the professional conduct of 
any other duly licensed doctor of medicine, osteopathy, dentistry, 
optometry, or podiatry, or any act performed by any duly licensed doctor 
of medicine, osteopathy, dentistry, optometry, or podiatry in the 
exercise of his profession.

(d) Review of ambulatory surgical procedures

    Each contract under this part shall require that the utilization and 
quality control peer review organization's review responsibility 
pursuant to subsection (a)(1) of this section will include review of all 
ambulatory surgical procedures specified pursuant to section 
1395l(i)(1)(A) of this title which are performed in the area, or, at the 
discretion of the Secretary a sample of such procedures.

(e) Review of hospital denial notices

    (1) If--
        (A) a hospital has determined that a patient no longer requires 
    inpatient hospital care, and
        (B) the attending physician has agreed with the hospital's 
    determination,

the hospital may provide the patient (or the patient's representative) 
with a notice (meeting conditions prescribed by the Secretary under 
section 1395pp of this title) of the determination.
    (2) If--
        (A) a hospital has determined that a patient no longer requires 
    inpatient hospital care, but
        (B) the attending physician has not agreed with the hospital's 
    determination,

the hospital may request the appropriate peer review organization to 
review under subsection (a) of this section the validity of the 
hospital's determination. If the hospital requests such a review, it 
shall also notify the patient that the review has been requested.
    (3)(A) If a patient (or a patient's representative)--
        (i) has received a notice under paragraph (1), and
        (ii) requests the appropriate peer review organization to review 
    the determination,

then, the organization shall conduct a review under subsection (a) of 
this section of the validity of the hospital's determination and shall 
provide notice (by telephone and in writing) to the patient or 
representative and the hospital and attending physician involved of the 
results of the review. Such review shall be conducted regardless of 
whether or not the hospital will charge for continued hospital care or 
whether or not the patient will be liable for payment for such continued 
care.
    (B) If a patient (or a patient's representative) requests a review 
under subparagraph (A) while the patient is still an inpatient in the 
hospital and not later than noon of the first working day after the date 
the patient receives the notice under paragraph (1), then--
        (i) the hospital shall provide to the appropriate peer review 
    organization the records required to review the determination by the 
    close of business of such first working day, and
        (ii) the peer review organization must provide the notice under 
    subparagraph (A) by not later than one full working day after the 
    date the organization has received the request and such records.

    (4) If--
        (A) a request is made under paragraph (3)(A) not later than noon 
    of the first working day after the date the patient (or patient's 
    representative) receives the notice under paragraph (1), and
        (B) the conditions described in section 1395pp(a)(2) of this 
    title with respect to the patient or representative are met,

the hospital may not charge the patient for inpatient hospital services 
furnished before noon of the day after the date the patient or 
representative receives notice of the peer review organization's 
decision.
    (5) In any review conducted under paragraph (2) or (3), the 
organization shall solicit the views of the patient involved (or the 
patient's representative).

(f) Identification of methods for identifying cases of substandard care

    The Secretary, in consultation with appropriate experts, shall 
identify methods that would be available to assist peer review 
organizations (under subsection (a)(4) of this section) in identifying 
those cases which are more likely than others to be associated with a 
quality of services which does not meet professionally recognized 
standards of health care.

(Aug. 14, 1935, ch. 531, title XI, Sec. 1154, as added Pub. L. 97-248, 
title I, Sec. 143, Sept. 3, 1982, 96 Stat. 385; amended Pub. L. 97-448, 
title III, Sec. 309(b)(3), (4), Jan. 12, 1983, 96 Stat. 2408, 2409; Pub. 
L. 99-272, title IX, Secs. 9307(b), 9401(a), 9403(a), 9405(a), Apr. 7, 
1986, 100 Stat. 193, 196, 200, 201; Pub. L. 99-509, title IX, 
Secs. 9343(d), 9351(a), 9352(b), 9353(a)(1)-(3), (c)(1), Oct. 21, 1986, 
100 Stat. 2040, 2043, 2044-2047; Pub. L. 100-203, title IV, 
Secs. 4039(h)(3), (4), 4093(a), 4094(a)-(c)(1)(A), (2)(A), (B), 4096(c), 
Dec. 22, 1987, 101 Stat. 1330-135 to 1330-137, 1330-139, as amended Pub. 
L. 100-360, title IV, Sec. 411(e)(3), (j)(3)(A), July 1, 1988, 102 Stat. 
775, 791; Pub. L. 100-360, title II, Sec. 203(d)(2), title IV, 
Sec. 411(j)(2), (3)(B), (4)(C), July 1, 1988, 102 Stat. 724, 775, 791; 
Pub. L. 100-485, title VI, Sec. 608(d)(25)(B), Oct. 13, 1988, 102 Stat. 
2421; Pub. L. 101-234, title II, Sec. 201(a), Dec. 13, 1989, 103 Stat. 
1981; Pub. L. 101-239, title VI, Sec. 6224(a)(1), (b)(1), Dec. 19, 1989, 
103 Stat. 2257; Pub. L. 101-508, title IV, Secs. 4205(b)(1), (d)(1)(A), 
(g)(1)(A), (2)(A), 4207(a)(1)(B), formerly 4027(a)(1)(B), 4358(b)(3), 
Nov. 5, 1990, 104 Stat. 1388-113 to 1388-115, 1388-117, 1388-137; Pub. 
L. 103-432, title I, Secs. 156(a)(2)(A), (b)(2)(A), 160(d)(4), 
171(h)(2), Oct. 31, 1994, 108 Stat. 4440, 4441, 4444, 4450.)


                            Prior Provisions

    A prior section 1320c-3, act Aug. 14, 1935, ch. 531, title XI, 
Sec. 1154, as added Oct. 30, 1972, Pub. L. 92-603, title II, 
Sec. 249F(b), 86 Stat. 1432; amended Oct. 25, 1977, Pub. L. 95-142, 
Sec. 5(b), (d)(2)(C), 91 Stat. 1184, 1186; Dec. 5, 1980, Pub. L. 96-499, 
title IX, Sec. 924(a), 94 Stat. 2628; Aug. 13, 1981, Pub. L. 97-35, 
title XXI, Secs. 2112(a)(1), (2)(B), (b), 2113(c), 2121(e), 95 Stat. 
793, 794, 796, related to trial period for Professional Standards Review 
Organizations, prior to the general revision of this part by Pub. L. 97-
248.


                               Amendments

    1994--Subsec. (a)(4)(B). Pub. L. 103-432, Sec. 171(h)(2), 
substituted ``(or that is subject to review under section 1395ss(t)(3) 
of this title)'' for ``(or subject to review under section 1395ss(t) of 
this title)''.
    Subsec. (a)(9)(B). Pub. L. 103-432, Sec. 156(b)(2)(B), amended 
subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: 
``If the organization finds, after notice and hearing, that a physician 
has furnished services in violation of this subsection, the organization 
shall notify the State board or boards responsible for the licensing or 
disciplining of the physician of its finding and decision.''
    Subsec. (a)(12). Pub. L. 103-432, Sec. 156(a)(2)(A)(i), struck out 
par. (12) which read as follows: ``The organization shall perform the 
review, referral, and other functions required under section 1320c-13 of 
this title.''
    Subsec. (d). Pub. L. 103-432, Sec. 156(a)(2)(A)(ii), struck out 
``(and except as provided in section 1320c-13 of this title)'' after 
``discretion of the Secretary''.
    1990--Subsec. (a)(2). Pub. L. 101-508, Sec. 4205(g)(2)(A), inserted 
third sentence and struck out former third sentence which read as 
follows: ``Determinations that payment should not be made by reason of 
subparagraph (B) of paragraph (1) shall be made only on the basis of 
criteria which are consistent with guidelines established by the 
Secretary.''
    Subsec. (a)(3)(E). Pub. L. 101-508, Sec. 4205(g)(1)(A), designated 
existing provisions as cl. (i), inserted ``provided by a physician that 
were'' after ``items'', substituted ``physician.'' for ``physician and 
hospital.'', and added cl. (ii).
    Subsec. (a)(4)(B). Pub. L. 101-508, Sec. 4358(b)(3), inserted ``(or 
subject to review under section 1395ss(t) of this title)'' after 
``section 1395mm of this title'' in first sentence.
    Subsec. (a)(7)(A)(i). Pub. L. 101-508, Sec. 4205(b)(1)(A), inserted 
``, optometry, and podiatry'' after ``dentistry''.
    Subsec. (a)(9). Pub. L. 101-508, Sec. 4205(d)(1)(A), designated 
existing provisions as subpar. (A) and added subpar. (B).
    Subsec. (a)(16). Pub. L. 101-508, Sec. 4207(a)(1)(B), formerly 
Sec. 4027(a)(1)(B), as renumbered by Pub. L. 103-432, Sec. 160(d)(4), 
added par. (16).
    Subsec. (c). Pub. L. 101-508, Sec. 4205(b)(1)(B), substituted 
``dentistry, optometry, or podiatry'' for ``or dentistry'' in three 
places.
    1989--Subsec. (a)(1). Pub. L. 101-239, Sec. 6224(a)(1), inserted at 
end ``If the organization performs such reviews with respect to a type 
of health care practitioner other than medical doctors, the organization 
shall establish procedures for the involvement of health care 
practitioners of that type in such reviews.''
    Subsec. (a)(3)(A). Pub. L. 101-239, Sec. 6224(b)(1)(A), substituted 
``subparagraphs (B) and (D)'' for ``subparagraph (B)''.
    Subsec. (a)(3)(B). Pub. L. 101-239, Sec. 6224(b)(1)(B), inserted 
``with respect to services or items disapproved by reason of 
subparagraph (A) or (C) of paragraph (1)'' after ``under subparagraph 
(A)''.
    Subsec. (a)(3)(D), (E). Pub. L. 101-239, Sec. 6224(b)(1)(C), added 
subpars. (D) and (E).
    Subsec. (a)(16). Pub. L. 101-234, repealed Pub. L. 100-360, 
Sec. 203(d)(2), and provided that the provisions of law amended or 
repealed by such section are restored or revived as if such section had 
not been enacted, see 1988 Amendment note below.
    1988--Subsec. (a)(3)(C). Pub. L. 100-360, Sec. 411(j)(2), designated 
last sentence of par. (3) as subpar. (C).
    Subsec. (a)(4). Pub. L. 100-360, Sec. 411(e)(3), added Pub. L. 100-
203, Sec. 4039(h)(3), see 1987 Amendment note below.
    Subsec. (a)(6). Pub. L. 100-360, Sec. 411(j)(3)(A), made technical 
amendment to directory language of Pub. L. 100-203, Sec. 4094(a), see 
1987 Amendment note below.
    Subsec. (a)(15). Pub. L. 100-360, Sec. 411(j)(3)(B), substituted 
``review in at least'' for ``review at at least''.
    Subsec. (a)(16). Pub. L. 100-360, Sec. 203(d)(2), added par. (16) 
which related to review of home intravenous drug therapy services.
    Subsec. (d). Pub. L. 100-360, Sec. 411(e)(3), added Pub. L. 100-203, 
Sec. 4039(h)(4), see 1987 Amendment note below.
    Subsec. (e)(3)(A)(i). Pub. L. 100-360, Sec. 411(j)(4)(C), as amended 
by Pub. L. 100-485, Sec. 608(d)(25)(B), substituted ``paragraph (1)'' 
for ``paragraph (1) or (2)''.
    Subsec. (e)(3)(B). Pub. L. 100-360, Sec. 411(j)(4)(C), as amended by 
Pub. L. 100-485, Sec. 608(d)(25)(B), substituted ``paragraph (1)'' for 
``paragraph (1) or (2)'' in introductory provisions.
    1987--Subsec. (a)(3). Pub. L. 100-203, Sec. 4093(a), amended par. 
(3) generally. Prior to amendment, par. (3) read as follows: ``Whenever 
the organization makes a determination that any health care services or 
items furnished or to be furnished to a patient by any practitioner or 
provider are disapproved, the organization shall promptly notify such 
practitioner or provider, such patient, and the agency or organization 
responsible for the payment of claims under subchapter XVIII of this 
chapter. In the case of practitioners and providers of services, the 
organization shall provide an opportunity for discussion and review of 
the determination.''
    Subsec. (a)(4). Pub. L. 100-203, Sec. 4039(h)(3), as added by Pub. 
L. 100-360, Sec. 411(e)(3), realigned margins for subpars. (B) and (C) 
and cls. (i) to (iii) of subpar. (C), in subpar. (B), substituted ``risk 
sharing contract under section 1395mm'' for ``contract under section 
1395mm'', and in subpar. (C), inserted ``(other than the ability to 
perform review functions under this section that are not described in 
subparagraph (B))''.
    Subsec. (a)(4)(B). Pub. L. 100-203, Sec. 4094(c)(2)(A), inserted 
before period at end of first sentence ``and whether individuals 
enrolled with an eligible organization have adequate access to health 
care services provided by or through such organization (as determined, 
in part, by a survey of individuals enrolled with the organization who 
have not yet used the organization to receive such services). The 
contract of each organization shall also provide that with respect to 
health care provided by a health maintenance organization or competitive 
medical plan under section 1395mm of this title, the organization shall 
maintain a beneficiary outreach program designed to apprise individuals 
receiving care under such section of the role of the peer review system, 
of the rights of the individual under such system, and of the method and 
purposes for contacting the organization'' and substituted ``previous 
two sentences'' for ``previous sentence'' in penultimate sentence.
    Subsec. (a)(6). Pub. L. 100-203, Sec. 4094(c)(1)(A), designated 
existing provisions as subpar. (A), redesignated former subpars. (A) and 
(B) as cls. (i) and (ii), respectively, and added subpar. (B).
    Pub. L. 100-203, Sec. 4094(a), as amended by Pub. L. 100-360, 
Sec. 411(j)(3)(A), inserted after and below subpar. (A) the following: 
``As a component of the norms described in clause (i) or (ii), the 
organization shall take into account the special problems associated 
with delivering care in remote rural areas, the availability of service 
alternatives to inpatient hospitalization, and other appropriate factors 
(such as the distance from a patient's residence to the site of care, 
family support, availability of proximate alternative sites of care, and 
the patient's ability to carry out necessary or prescribed self-care 
regimens) that could adversely affect the safety or effectiveness of 
treatment provided on an outpatient basis.''
    Subsec. (a)(7)(A). Pub. L. 100-203, Sec. 4094(c)(2)(B), designated 
existing provisions as cl. (i) and added cl. (ii).
    Subsec. (a)(15). Pub. L. 100-203, Sec. 4094(b), added par. (15).
    Subsec. (d). Pub. L. 100-203, Sec. 4039(h)(4), as added by Pub. L. 
100-360, Sec. 411(e)(3), substituted ``1320c-13 of this title'' for 
``1320c-13(b)(4) of this title''.
    Subsec. (e)(2). Pub. L. 100-203, Sec. 4096(c)(1), inserted provision 
at end requiring hospital to notify patient if it has requested a 
review.
    Subsec. (e)(3)(A)(i), (B). Pub. L. 100-203, Sec. 4096(c)(2), 
inserted ``or (2)'' after ``paragraph (1)''.
    1986--Subsec. (a)(1). Pub. L. 99-509, Sec. 9343(d)(1), inserted 
``and subject to the requirements of subsection (d) of this section'' 
after ``subject to the terms of the contract'' in introductory 
provisions.
    Pub. L. 99-272, Sec. 9405(a), inserted ``(including where payment is 
made for such services to eligible organizations pursuant to contracts 
under section 1395mm of this title)'' after ``subchapter XVIII of this 
chapter'' in introductory provisions.
    Subsec. (a)(2). Pub. L. 99-272, Sec. 9403(a), in introductory 
provisions substituted ``subparagraphs (A), (B), and (C)'' for 
``subparagraphs (A) and (C)'', and following subpar. (D) inserted 
provision that determinations that payment should not be made by reason 
of subpar. (B) of par. (1) shall be made only on the basis of criteria 
which are consistent with guidelines established by the Secretary.
    Subsec. (a)(4)(A). Pub. L. 99-509, Sec. 9353(a)(1), inserted at end 
``Each peer review organization shall provide that a reasonable 
proportion of its activities are involved with reviewing, under 
paragraph (1)(B), the quality of services and that a reasonable 
allocation of such activities is made among the different cases and 
settings (including post-acute-care settings, ambulatory settings, and 
health maintenance organizations). In establishing such allocation, the 
organization shall consider (i) whether there is reason to believe that 
there is a particular need for reviews of particular cases or settings 
because of previous problems regarding quality of care, (ii) the cost of 
such reviews and the likely yield of such reviews in terms of number and 
seriousness of quality of care problems likely to be discovered as a 
result of such reviews, and (iii) the availability and adequacy of 
alternative quality review and assurance mechanisms.''
    Pub. L. 99-509, Sec. 9353(a)(2)(A), inserted ``(A)'' after ``(4)''.
    Subsec. (a)(4)(B). Pub. L. 99-509, Sec. 9353(a)(2)(C), inserted at 
end ``Under the contract the level of effort expended by the 
organization on reviews under this subparagraph shall be equivalent, on 
a per enrollee basis, to the level of effort expended by the 
organization on utilization and quality reviews performed with respect 
to individuals not enrolled with an eligible organization.''
    Pub. L. 99-509, Sec. 9353(a)(2)(B), added subpar. (B).
    Subsec. (a)(4)(C). Pub. L. 99-509, Sec. 9353(a)(2)(D), added subpar. 
(C).
    Subsec. (a)(8). Pub. L. 99-272, Sec. 9307(b), inserted ``or as may 
be required to carry out section 1395y(a)(15) of this title'' before the 
period at end.
    Subsec. (a)(12). Pub. L. 99-272, Sec. 9401(a), added par. (12).
    Subsec. (a)(13). Pub. L. 99-509, Sec. 9352(b), added par. (13).
    Subsec. (a)(14). Pub. L. 99-509, Sec. 9353(c)(1), added par. (14).
    Subsec. (d). Pub. L. 99-509, Sec. 9343(d)(2), added subsec. (d).
    Subsec. (e). Pub. L. 99-509, Sec. 9351(a), added subsec. (e).
    Subsec. (f). Pub. L. 99-509, Sec. 9353(a)(3), added subsec. (f).
    1983--Subsec. (a)(1)(A). Pub. L. 97-448, Sec. 309(b)(3), substituted 
``and whether such services and items are not allowable under subsection 
(a)(1) or (a)(9) of section 1395y of this title'' for ``or otherwise 
allowable under section 1395y(a)(1) of this title''.
    Subsec. (a)(2)(B). Pub. L. 97-448, Sec. 309(b)(4), struck out 
``posthospital'' before ``extended care services''.


                    Effective Date of 1994 Amendment

    Section 156(a)(3) of Pub. L. 103-432 provided that: ``The amendments 
made by this subsection [amending this section and sections 1395l, 
1395m, 1395y, and 1395cc of this title and repealing section 1320c-13 of 
this title] shall apply to services provided on or after the date of the 
enactment of this Act [Oct. 31, 1994].''
    Amendment by section 171(h)(2) of Pub. L. 103-432 effective as if 
included in the enactment of Pub. L. 101-508, see section 171(l) of Pub. 
L. 103-432, set out as a note under section 1395ss of this title.


                    Effective Date of 1990 Amendment

    Section 4205(b)(2) of Pub. L. 101-508 provided that: ``The 
amendments made by paragraph (1) [amending this section] shall apply to 
contracts entered into or renewed on or after the date of the enactment 
of this Act [Nov. 5, 1990].''
    Section 4205(d)(1)(C) of Pub. L. 101-508 provided that: ``The 
amendments made by this paragraph [amending this section and section 
1320c-9 of this title] shall apply to notices of proposed sanctions 
issued more than 60 days after the date of the enactment of this Act 
[Nov. 5, 1990].''
    Section 4205(g)(1)(B) of Pub. L. 101-508 provided that: ``The 
amendments made by subparagraph (A) [amending this section] shall take 
effect as if included in the enactment of the Omnibus Budget 
Reconiliation [sic] Act of 1989 [Pub. L. 101-239].''
    Section 4205(g)(2)(B) of Pub. L. 101-508 provided that: ``The 
amendment made by subparagraph (A) [amending this section] shall take 
effect as if included in the enactment of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 [Pub. L. 99-272].''
    Section 4207(a)(1)(C), formerly 4027(a)(1)(C), of Pub. L. 101-508, 
as renumbered by Pub. L. 103-432, title I, Sec. 160(d)(4), Oct. 31, 
1994, 108 Stat. 4444, provided that: ``The amendment made by 
subparagraph (A) [amending section 1395dd of this title] shall take 
effect on the first day of the first month beginning more than 60 days 
after the date of the enactment of this Act [Nov. 5, 1990]. The 
amendment made by subparagraph (B) [amending this section] shall apply 
to contracts under part B of title XI of the Social Security Act [this 
part] as of the first day of the first month beginning more than 60 days 
after the date of the enactment of this Act.''
    Section 4358(c) of Pub. L. 101-508, as amended by Pub. L. 103-432, 
title I, Sec. 172(a), Oct. 31, 1994, 108 Stat. 4452; Pub. L. 104-18, 
Sec. 1, July 7, 1995, 109 Stat. 192, provided that:
    ``(1) The amendments made by this section [amending this section and 
section 1395ss of this title] shall only apply--
        ``(A) in 15 States (as determined by the Secretary of Health and 
    Human Services) and such other States as elect such amendments to 
    apply to them, and
        ``(B) subject to paragraph (2), during the 6\1/2\-year period 
    beginning with 1992.
For purposes of this paragraph, the term `State' has the meaning given 
such term by section 210(h) of the Social Security Act (42 U.S.C. 
410(h)).
    ``(2)(A) The Secretary of Health and Human Services shall conduct a 
study that compares the health care costs, quality of care, and access 
to services under medicare select policies with that under other 
medicare supplemental policies. The study shall be based on surveys of 
appropriate age-adjusted sample populations. The study shall be 
completed by June 30, 1997.
    ``(B) Not later than December 31, 1997, the Secretary shall 
determine, based on the results of the study under subparagraph (A), if 
any of the following findings are true:
        ``(i) The amendments made by this section have not resulted in 
    savings of premium costs to those enrolled in medicare select 
    policies (in comparison to their enrollment in medicare supplemental 
    policies that are not medicare select policies and that provide 
    comparable coverage).
        ``(ii) There have been significant additional expenditures under 
    the medicare program as a result of such amendments.
        ``(iii) Access to and quality of care has been significantly 
    diminished as a result of such amendments.
    ``(C) The amendments made by this section shall remain in effect 
beyond the 6\1/2\-year period described in paragraph (1)(B) unless the 
Secretary determines that any of the findings described in clause (i), 
(ii), or (iii) of subparagraph (B) are true.
    ``(3) The Comptroller General shall conduct a study to determine the 
extent to which individuals who are continuously covered under a 
medicare supplemental policy are subject to medical underwriting if they 
change the policy under which they are covered, and to identify options, 
if necessary, for modifying the medicare supplemental insurance market 
to make sure that continuously insured beneficiaries are able to switch 
plans without medical underwriting. By not later than June 30, 1996, the 
Comptroller General shall submit to the Congress a report on the study. 
The report shall include a description of the potential impact on the 
cost and availability of medicare supplemental policies of each option 
identified in the study.''
    [Section 172(b) of Pub. L. 103-432 provided that: ``The amendment 
made by subsection (a) [amending section 4358(c) of Pub. L. 101-508, set 
out above] shall take effect as if included in the enactment of the 
Omnibus Budget Reconciliation Act of 1990 [Pub. L. 101-508].'']


                    Effective Date of 1989 Amendments

    Section 6224(a)(2) of Pub. L. 101-239 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall apply to contracts 
entered into after the date of the enactment of this Act [Dec. 19, 
1989].''
    Section 6224(b)(3) of Pub. L. 101-239 provided that: ``The 
amendments made by this subsection [amending this section and section 
1320c-4 of this title] shall apply to determinations by utilization and 
quality control peer review organizations with respect to which 
preliminary notifications were made under section 1154(a)(3)(B) of the 
Social Security Act [subsec. (a)(3)(B) of this section] more than 30 
days after the date of the enactment of this Act [Dec. 19, 1989].''
    Amendment by Pub. L. 101-234 effective Jan. 1, 1990, see section 
201(c) of Pub. L. 101-234, set out as a note under section 1320a-7a of 
this title.


                    Effective Date of 1988 Amendments

    Amendment by Pub. L. 100-485 effective as if included in the 
enactment of the Medicare Catastrophic Coverage Act of 1988, Pub. L. 
100-360, see section 608(g)(1) of Pub. L. 100-485, set out as a note 
under section 704 of this title.
    Section 203(g) of Pub. L. 100-360, which had provided that the 
amendments made by section 203 of Pub. L. 100-360 (amending this section 
and sections 1395h, 1395k to 1395n, 1395w-2, 1395x, 1395z, and 1395aa of 
this title) were to apply to items and services furnished on or after 
January 1, 1990, was repealed by Pub. L. 101-234, title II, Sec. 201(a), 
Dec. 13, 1989, 103 Stat. 1981.
    Except as specifically provided in section 411 of Pub. L. 100-360, 
amendment by section 411(e)(3), (j)(2), (3), (4)(C) of Pub. L. 100-360, 
as it relates to a provision in the Omnibus Budget Reconciliation Act of 
1987, Pub. L. 100-203, effective as if included in the enactment of that 
provision in Pub. L. 100-203, see section 411(a) of Pub. L. 100-360, set 
out as a Reference to OBRA; Effective Date note under section 106 of 
Title 1, General Provisions.


                    Effective Date of 1987 Amendment

    Section 4093(b) of Pub. L. 100-203 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply with respect 
to determinations made on or after April 1, 1988.''
    Section 4094(c)(1)(B) of Pub. L. 100-203 provided that: ``The 
amendments made by subparagraph (A) [amending this section] shall apply 
to contracts under part B of title XI of the Social Security Act [42 
U.S.C. 1320c et seq.] entered into or renewed more than 6 months after 
the date of the enactment of this Act [Dec. 22, 1987].''
    Section 4094(c)(2)(C) of Pub. L. 100-203 provided that: ``The 
amendments made by this paragraph [amending this section] shall apply 
with respect to contracts entered into or renewed on or after the date 
of enactment of this Act [Dec. 22, 1987].''
    Section 4096(d) of Pub. L. 100-203 provided that: ``The amendments 
made by this section [amending this section and sections 1395u, 1395gg, 
and 1395pp of this title] shall apply to services furnished on or after 
January 1, 1988.''


                    Effective Date of 1986 Amendments

    Amendment by section 9343(d) of Pub. L. 99-509 applicable to 
contracts entered into or renewed after Jan. 1, 1987, see section 
9343(h)(4) of Pub. L. 99-509, as amended, set out as a note under 
section 1395l of this title.
    Section 9351(b) of Pub. L. 99-509 provided that:
    ``(1) Except as provided in paragraph (2), the amendment made by 
subsection (a) [amending this section] shall apply to denial notices 
furnished by hospitals to individuals on or after the first day of the 
first month that begins more than 30 days after the date of the 
enactment of this Act [Oct. 21, 1986].
    ``(2) Section 1154(e)(4) of the Social Security Act [subsec. (e)(4) 
of this section] (as added by the amendment made by subsection (a)) 
shall take effect on the date of the enactment of this Act [Oct. 21, 
1986].''
    Section 9352(c)(2) of Pub. L. 99-509 provided that: ``The amendment 
made by subsection (b) [amending this section] shall apply to contracts 
entered into or renewed on or after January 1, 1987, except that in 
applying such amendment before January 1, 1989, the term `post-hospital 
services' does not include physicians' services, other than physicians' 
services furnished in a hospital, other inpatient facility, ambulatory 
surgical center, or rural health clinic.''
    Section 9353(a)(6) of Pub. L. 99-509, as amended by Pub. L. 100-203, 
title IV, Sec. 4039(h)(9)(A), (B), as added Pub. L. 100-360, title IV, 
Sec. 411(e)(3), July 1, 1988, 102 Stat. 776, provided that:
    ``(A)(i) Except as provided in clause (ii), the amendments made by 
paragraph (1) [amending this section] shall apply to contracts entered 
into or renewed on or after January 1, 1987.
    ``(ii) The amendment made by paragraph (1) shall not be construed as 
requiring, before January 1, 1989, the review of physicians' services, 
other than physicians' services furnished in a hospital, other inpatient 
facility, ambulatory surgical center, or rural health clinic.
    ``(B) The amendments made by paragraphs (2)(B) and (2)(D) [amending 
this section] shall apply to contracts as of April 1, 1987.
    ``(C) The amendment made by paragraph (2)(C) [amending this section] 
shall apply to review activities conducted by organizations on or after 
January 1, 1988.
    ``(D) The amendment made by paragraph (3) [amending this section] 
becomes effective on the date of the enactment of this Act [Oct. 21, 
1986].''
    Section 9353(c)(2) of Pub. L. 99-509 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall apply to complaints 
received on or after the first day of the first month that begins more 
than 9 months after the date of the enactment of this Act [Oct. 21, 
1986].''
    Section 9307(e) of Pub. L. 99-272 provided that: ``The amendments 
made by this section [amending this section and sections 1395u and 1395y 
of this title] shall apply to services performed on or after April 1, 
1986.''
    Section 9401(d) of Pub. L. 99-272 provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply to items and 
services furnished on or after January 1, 1987. The Secretary of Health 
and Human Services shall provide for such modification of contracts 
under part B of title XI of the Social Security Act [this part] that are 
in effect on that date as may be necessary to effect these amendments on 
a timely basis.''
    Section 9403(c) of Pub. L. 99-272 provided that: ``The amendments 
made by this section [amending this section and section 1395cc of this 
title] shall become effective on the date of the enactment of this Act 
[Apr. 7, 1986].''
    Section 9405(b) of Pub. L. 99-272, as amended by Pub. L. 99-509, 
title IX, Sec. 9353(a)(5), Oct. 21, 1986, 100 Stat. 2046, provided that: 
``The amendment made by this section [amending this section] shall apply 
to items and services furnished on or after April 1, 1987.''


                    Effective Date of 1983 Amendment

    Amendment by Pub. L. 97-448 effective as if originally included as a 
part of this section as this section was added by the Tax Equity and 
Fiscal Responsibility Act of 1982, Pub. L. 97-248, see section 309(c)(2) 
of Pub. L. 97-448, set out as a note under section 426-1 of this title.


                        State Regulatory Programs

    For provisions relating to changes required to conform State 
regulatory programs to amendments by section 171 of Pub. L. 103-432, see 
section 171(m) of Pub. L. 103-432, set out as a note under section 
1395ss of this title.


 Review and Analysis of Variations in Utilization of Hospital and Other 
                          Health Care Services

    Section 9353(a)(4) of Pub. L. 99-509 provided that: ``The Secretary 
of Health and Human Services shall provide, to at least 12 utilization 
and quality control peer review organizations with contracts under part 
B of title XI of the Social Security Act [this part], data and data 
processing assistance to allow each of these organizations to review and 
analyze small-area variations, in the service area of the organization, 
in the utilization of hospital and other health care services for which 
payment is made under title XVIII of such Act [subchapter XVIII of this 
chapter].''

                  Section Referred to in Other Sections

    This section is referred to in sections 1320c-1, 1320c-2, 1320c-4, 
1320c-7, 1320c-9, 1395u, 1395w-22, 1395cc, 1395mm, 1396r-2 of this 
title.
