(a) Each MCO must develop and implement an ongoing quality assessment and performance improvement (QAPI) program for services it furnishes to its enrollees. The MCO must maintain and provide documentation of its compliance for HHSC's or its contracted External Quality Review Organization's (EQRO's) review, including performance measurement data. The MCO's quality assessment and performance improvement program must meet the requirements contained in 42 CFR §438.240 and, at a minimum, include:(1) a program of performance improvement projects that focus on clinical and non-clinical areas;(2) mechanisms to assess the quality and appropriateness of care furnished to enrollees with special health care needs;(3) mechanisms to detect both under and over-utilization of services;(4) practice guidelines that meet CMS requirements under 42 CFR §438.236.(b) An MCO may subcontract QAPI functions. An MCO must not delegate responsibility for QAPI compliance.(c) HHSC monitors and reviews systems and procedures to ensure MCO compliance with MCO contracts, this subchapter, and all related state and federal rules, regulations, and guidelines, including QAPI standards.(1) An MCO must submit QAPI information at regular and periodic intervals.(2) An MCO must submit to periodic inspection and review to determine compliance with all contract terms, and state and federal rules and policies.(d) HHSC periodically evaluates each MCO's quality of services in each Medicaid managed care service area and the cost-effectiveness, member access, and quality of care under each federal waiver.(1) A quality evaluation must be conducted at least annually.(2) The assessment of cost-effectiveness, member access, and quality of care under each federal waiver must be conducted according to the terms of an approved federal waiver.(3) HHSC will determine the need for additional evaluations after completing the evaluations described in paragraphs (1) and (2) of this subsection.