The Quality Improvement Organization (QIO) reviews all federally and state funded hospital inpatient services. The purpose of such review is the promotion of effective efficient and economical delivery of health care services of proper quality and assurance that such services conform to appropriate professional standards. QIOs are mandated to assure that Federal payment for such services will take place only when they are determined to be medically necessary, consistent with professionally recognized health care standards and provided in the most appropriate setting and location.

A pattern of aberrant practice may result in a physician's having his or her waiver of liability revoked. Once a physician has lost his or her waiver of liability, QIO reviews 100% of his or her admissions. After the appeal process, QIO forwards any denials to the state agency for recoupment of funds.