(a) The State plan must provide that—

1. (1) UR is performed for each ICF that furnishes inpatient services under the plan;
2. (2) Each ICF has on file a written UR plan that provides for review of each beneficiary's need for the services that the ICF furnishes him; and
3. (3) Each written ICF UR plan meets requirements under §§ 456.401 through 456.438.

(b) The State plan must specify the method used to perform UR, which may be—

1. (1) Review conducted by the facility;

2. (2) Direct review in the facility by individuals—

   1. (i) Employed by the medical assistance unit of the Medicaid agency; or
   2. (ii) Under contract to the Medicaid agency; or
3. (3) Any other method.