Quality of Care External Quality Review (EQR)

Federal regulations at 42 CFR Part 438, subpart E (External Quality Review) set forth the parameters that states must follow when conducting an external quality review (EQR) of its contracted managed care organizations (MCOs) and prepaid inpatient health plans (PIHPs). An EQR is the analysis and evaluation by an external quality review organization (EQRO) of aggregated information on quality, timeliness, and access to the health care services that an MCO or PIHP, or their contractors, furnish to Medicaid recipients.

Important EQR-Related Definitions

  • EQRO is an organization that meets the competence and independence requirements set forth in 42 CFR 438.354, and performs external quality review, other EQR-related activities as set forth in 42 CFR 438.358, or both.
  • Validation means the review of information, data, and procedures to determine the extent to which they are accurate, reliable, free from bias, and in accord with standards for data collection and analysis.
  • Quality as it pertains to external quality review, means the degree to which an MCO or PIHP increases the likelihood of desired health outcomes of its enrollees through its structural and operational characteristics and through the provision of health services that are consistent with current professional knowledge.

EQR-Related Activities and Protocols

The EQR process consists of three (3) mandatory and five (5) optional EQR-related activities.  Each of these EQR-related activities has a corresponding EQR Protocol which provides detailed instructions on how to complete the activity.

CMS revised the EQR protocols in 2012 to address significant changes in national health care policy that offered new opportunities in measuring and improving the quality of health care (including changes effected by CHIPRA, the American Recovery and Reinvestment Act (ARRA), and the Affordable Care Act).

Mandatory EQR-Related Activity Protocols

Activity Supporting Protocols
Review, within the previous three-year period, to determine MCO/PIHP compliance with state standards for access to care, structure and operations, and quality measurement and improvement

Protocol 1

Describes the process that states or their designees may use to determine an MCO’s or PIHP’s compliance with federal Medicaid managed care regulations and, upon the state’s discretion, applicable elements of the contract between the MCO/PIHP and the state. 

EQR Protocol 1: Assessment of Compliance with Medicaid Managed Care Regulations

Validation of performance measures

Protocol 2

Describes the validation process that states or their designees may use to  determine the accuracy of the performance measures reported by the MCO or PIHP during the preceding 12 months.

EQR Protocol 2: Validation of Performance Measures Reported by the MCO

Validation of performance improvement projects (PIPs)

Protocol 3

Describes the process that states or their designees may use to validate PIPs required by the state that were underway during the preceding 12 months.

EQR Protocol 3: Validating Performance Improvement Projects (PIPS)

Optional EQR-Related Activity Protocols

Activity Supporting Protocols
Validation of encounter data reported by an MCO or PIHP

Protocol 4

Describes the process for the validation of encounter data reported by the MCO or PIHP.

EQR Protocol 4: Validation of Encounter Data Submitted by the MCO

Administration or validation of consumer or provider surveys of quality of care

Protocol 5

Describes the process for the administration or validation of consumer or provider surveys of care.

EQR Protocol 5: Validation and Implementation of Surveys

Calculation of performance measures in addition to those reported by an MCO or PIHP and validated by an EQRO

Protocol 6

Describes the process for the calculation of performance measures in addition to those reported by an MCO and PIHP and validated by an EQRO.

EQR Protocol 6: Calculation of Performance Measures

Conduct of PIPs in addition to those conducted by an MCO or PIHP and validated by an EQRO

Protocol 7

Describes the process for the conduct of PIPs in addition to those conducted by an MCO or PIHP and validated by an EQRO.

EQR Protocol 7

Conduct of studies on quality that focus on a particular aspect of clinical or nonclinical services as a point in time

Protocol 8

Describes the process for the conduct of focused, one-time studies on a particular aspect of clinical and/or non-clinical services at a point in time. 

EQR Protocol 8  

The EQR Protocols contain five appendices available that provide worksheets, additional information on sampling, an acronym listing/glossary, and the MCO/PIHP Information System Capabilities Assessment. 

The state, its agent that is not an MCO or PIHP, or an EQRO may perform the mandatory and optional EQR-related activities.

EQR Technical Reports

In accordance with 42 CFR 438.364, the state is responsible for ensuring that each year an EQRO produces a detailed technical report for the state that contains at least the following information:

  • A description of the manner in which the data from all EQR-related activities conducted were aggregated and analyzed and the way in which conclusions were drawn as to the timeliness, quality, and access to the care furnished by the MCO or PIHP;
  • For each EQR-related activity conducted, the objectives, technical methods of data collection and analysis, description of data obtained, and conclusions drawn from the data;
  • An assessment of each MCO’s or PIHP’s strengths and weaknesses with respect to quality, timeliness, and access to health care services furnished to Medicaid beneficiaries;
  • Recommendations for improving the quality of health care services furnished by each MCO or PIHP;
  • Methodologically appropriate, comparative information about all MCOs and PIHPs; and
  • An assessment of the degree to which each MCO or PIHP has addressed effectively the quality improvement recommendations made by the EQRO during the prior year’s review.

States must provide copies of this information upon request, through print or electronic media, to interested parties.

Annually, CMS will review the detailed technical reports for evaluation and follow-up. 

CMS requests that all states have final EQR Technical Reports available to CMS and the public, by April 30th of each year to align with the collection and annual reporting on managed care data for the annual Secretary’s reports on the quality of care in Medicaid and CHIP. To view information abstracted from EQR Technical Reports submitted during the 2013-2014 reporting cycle, see Findings from EQR Technical Reports (children) and Findings from EQR Technical Reports (adults).

Technical Assistance Documents

External Quality Review Protocols (2012 Update)

External Quality Review Toolkit (2012 Update)

External Quality Reviews in Medicaid Managed Care: Building Partnerships for Meaningful Quality Improvement (June 2008)

EQR and Managed Long Term Services and Support (MLTSS) Issue Brief

Please submit any questions or requests for technical assistance related to EQR to: ManagedCareQualityTA@cms.hhs.gov.