Section 438.354 - Qualifications of external quality review organizations(a)General rule. The State must ensure that an EQRO meets the requirements of this section.(b)Competence. The EQRO must have at a minimum the following: (1) Staff with demonstrated experience and knowledge of- (i) Medicaid beneficiaries, policies, data systems, and processes;(ii) Managed care delivery systems, organizations, and financing;(iii) Quality assessment and improvement methods; and(iv) Research design and methodology, including statistical analysis.(2) Sufficient physical, technological, and financial resources to conduct EQR or EQR-related activities.(3) Other clinical and nonclinical skills necessary to carry out EQR or EQR-related activities and to oversee the work of any subcontractors.(c)Independence. The EQRO and its subcontractors must be independent from the State Medicaid agency and from the MCOs, PIHPs, PAHPs, or PCCM entities (described in § 438.310(c)(2) ) that they review. To qualify as "independent"- (1) If a State agency, department, university, or other State entity: (i) May not have Medicaid purchasing or managed care licensing authority; and(ii) Must be governed by a Board or similar body the majority of whose members are not government employees.(2) An EQRO may not:(i) Review any MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2) ), or a competitor operating in the State, over which the EQRO exerts control or which exerts control over the EQRO (as used in this paragraph, "control" has the meaning given the term in 48 CFR 19.101 ) through- (B) Stock options and convertible debentures;(D) Common management, including interlocking management; and(E) Contractual relationships.(ii) Deliver any health care services to Medicaid beneficiaries;(iii) Conduct, on the State's behalf, ongoing Medicaid managed care program operations related to oversight of the quality of MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2) ) services that it will review as an EQRO, except for the related activities specified in § 438.358 ;(iv) Review any MCO, PIHP, PAHP or PCCM entity (described in § 438.310(c)(2) ) for which it is conducting or has conducted an accreditation review within the previous 3 years; or(v) Have a present, or known future, direct or indirect financial relationship with an MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2) ) that it will review as an EQRO. 81 FR 27852, 5/6/2016; 89 FR 41278, 7/9/2024