42 CFR §478.12

1. (a)Under section 1154 of the Act, a QIO may make an initial determination that services furnished or proposed to be furnished are not reasonable, necessary, or delivered in the most appropriate setting.
2. (b)Under section 1155 of the Act, the following rules apply:
   1. (1)A Medicare beneficiary, a provider, or an attending practitioner who is dissatisfied with an initial denial determination under paragraph (a) of this section is entitled to a reconsideration by the QIO that made that determination.
   2. (2)The beneficiary is also entitled to the following:
      1. (i)A hearing by an administrative law judge if $200 or more is still in controversy after a reconsidered determination.
      2. (ii)Judicial review if $2000 or more is still in controversy after a final determination by the Department.
3. (c)Under section 1866(a)(1)(F) of the Act, a hospital that is reimbursed by the Medicare program must maintain an agreement with a QIO under which the QIO reviews the validity of diagnostic information furnished by the hospital.