Department  of  HeaIth  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
THE  MEDICARE  PEER REVIEW 
ORGANIZATIONS  ROLE 
IN  IDENTIFYING  AND  RESPONDING 
TO  POOR  PERFORMERS 
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I  OEI-01-93-()()251 
  OFFICE  OF INSPECTOR  GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services (HHS) 
programs as well as the health and welfare of beneficiaries served by those programs.  This 
statuto~ mission is carried out through a nationwide network of audits, investigations, and 
inspectionsconductedby three OIGoperatingcomponents: the OfficeofAuditServices,the 
Office of Investigations, and the Office of Evaluation and Inspections. The OIG also informs the 
Secretary of HHS of program and managementproblems and recommendscourses to correct them. 
OFFICE  OF AUDIT  SERVICES 
The OIGSOfficeof AuditServices(OAS)providesall auditingservicesfor HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying out 
their respectiveresponsibilitiesand are intendedto provide independentassessmentsof HHS 
programs and operations in order to reduce waste, abuse, and mismanagementand to promote 
economy and efficiency throughout the Department. 
OFFICE  OF INVESTIGATIONS 
The OIGSOfficeofInvestigations(01) conductscriminal, civil, andadministrativeinvestigations 
of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment 
by providers.  The investigativeefforts of 01 lead to criminal convictions, administrative 
sanctions, or civil money penalties.  The 01 also oversees State Medicaid fraud control units which 
investigate and prosecute fraud and patient abuse in the Medicaid program. 
OFFICE  OF EVALUATION  AND INSPECTIONS 
The OIGSOfficeof Evaluationand Inspections(OEI)conductsshort-termmanagementand 
program evaluations(calledinspections)that focuson issuesof concernto the Department, the 
Congress, and the public.  The findings and recommendationscontained in these inspection reports 
generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, and 
effectivenessof departmentalprograms.  Thisreport wasprepared inthe Bostonregionalofilce 
under the direction of Mark R. Yessian, Ph.D., Regional Inspector General, and Martha B. Kvaal, 
Deputy Regional Inspector General.  Project staff included: 
BOSTON  HEADQUARTERS 
Joyce M. Greenleaf, ProjectLeader  Barbara Tedesco, Technical Support StaJf 
Elizabeth A. Robboy  Department  of  Health  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
THE  MEDICARE  PEER REVIEW

ORGANIZATIONS  ROLE 
IN  IDENTIFYING  AND  RESPONDING 
TO  POOR  PERFORMERS

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DECEMBER  1995 
OEI-01-93-()()251
 EXECUTIVE  SUMMARY

PURPOSE 
To assess the ability of the Medicare  Peer Review Organizations  to identify and respond 
to poorly  performing  physicians  and hospitals  at a time when their primary  mission  is to 
improve  the overall  quality of medical care. 
BACKGROUND 
In carrying  out their mission to protect  Medicare  beneficiaries,  the Peer Review

Organizations  (PROS) perform  two basic functions.  One is to contribute  to improving  the

overall practice  of medicine  by working collegially  with the medical  community  in

analyzing  patterns  of care and outcomes.  Their  focus is on the systems of care rather  than

individual  caregivers.  The other function is to identify and respond  to poorly  performing

physicians  or hospitals by reviewing  individual  instances of questionable  care and by

taking  follow-up  actions they deem appropriate.  The former  function,  which aims to

improve  care overall,  dominates.  The latter function,  to identify and deal effectively  with

poor performers,  has always faced major constraints,  many of which have been

highlighted  in prior  Office of Inspector  General  (OIG) reports.

This report  draws on data from surveys of 22 PROS representing  72 percent  of the

beneficiary  population  in the country,  on aggregate  data from HCFA  reflecting  all the

PROS record  review  workload under the fourth contract,  on telephone  calls with officials

from  10 State medical boards,  and on information  from our previous  PRO inquiries.

FINDINGS 
As the PRO Program  becomes increasingly  committed  to improving  the overall practice 
of medicine,  its ability  to find  and take action on poorly peiforrning physicians  and 
hospitals  is questionable. 
F	 Limited  Leads.  The PROS find themselves  with very limited leads to identify 
poorly  performing  physicians  or hospitals.  The PROS rely on beneficiary 
complaints,  referrals  from the medical  community,  and newer  approaches  to 
identify poor performers.  However,  the beneficiary  complaint  process,  as we 
indicated  in a recent  report,  has signiilcant  flaws; the referrals  from the medical 
community  remain  minimal;  and the new approaches  have identified  few leads. 
E	 Limited  Analysis.  Once the PROS become  aware of an instance of questionable 
care,  they are unlikely under their current  contracts  to determine  if it is an isolated 
event or part of a pattern  of such care.  The PROS do have the authority  to collect 
and analyze  such data.  Their priorities,  however,  are elsewhere. 
i  F	 Limited  Follow-Up.  During their current  contracts  with HCFA,  10 of the 22 
PROS in our sample had not initiated any improvement  plans that compel 
individual  physicians  or hospitals to address the quality-of-care  problems.  The 
other  12 initiated  improvement  plans in response  to 146 quality-of-care  problems.
-. 
One PRO identified half of those problems: 
k	 Moribund  Sanction Recommendations.  The PROS sanction recommendations  to 
the Office of Inspector  General have dwindled  from a high of 72 in FY  1987 to 
12, 14, 13 and 13 in FYs  1991 through  1994. 
F	 Minimal  Referrals  to State Medical  Boards.  In 1993, Congress  passed 
legislation  requiring  PROS to share information  with medical  boards  on physicians 
found to be responsible  for serious quality-of-care  problems.  The legislation 
appears  to have had little,  if any,  impact on the level of such sharing. 
The PROS themselves find  much that is positive  about the current direction  of the 
Program.  But some express reservations  about its impact on protecting  Medicare 
beneficiaries from  poor performers. 
	 Compatible  Functions.  Seventeen of the 22 PROS (77 percent)  in our sample 
indicated  that the two basic PRO functions--improving  the mainstream  of care  and 
dealing  with poor performers--are  compatible. 
b	 Weakened  Protections.  Yet, when questioned  further,  11 of 22 PROS 
(50 percent)  concluded  that beneficiary  protections  have become  weaker.  This 
compares  to 5 (23 percent)  that concluded protections  have become  stronger, 
4 (18 percent)  that concluded protections  have remained  about the same,  and 
2 (9 percent)  that did not know. 
RECOMMENDATION 
Our inquiry  does not question the PRO Programs  focus on improving  the mainstream  of 
care;  nor does it reflect  a desire to return  to an emphasis  on random  medical  record 
reviews.  We recognize  that the random reviews were labor-intensive,  generated  much 
discord  with the medical  community,  and identified few quality-of-care  problems  relative 
to the numbers  of records  reviewed.  We also understand  that the premise  of the PRO 
Programs  current  direction  holds promise  for improving the overall practice  of medicine. 
This is of great  importance  to Medicare  beneficiaries  and others. 
Yet, we find sufficient  basis to question the responsiveness  of the PRO Program  to its 
other traditional  function:  identifying  and responding  to physicians  and hospitals  that fail 
to meet minimally  acceptable  standards  of care.  We direct our recommendation  to this 
vulnerability. 
We recommend  that HCFA reconsider the PROS function  to identi!  and respond 
effectively  to poorly pe~orming  physicians  and hospitals. 
ii  There  needs to be a public discussion  on what existing or potential processes  could deal 
effectively  with poor performers.  To further that public discussion,  we offer two options 
for HCFA  to consider  based on the premise  that the PROS emphasis  on improving  care 
overall  will remain  dominant: 
OPTION  1 
  The HCFA should proceed  toward directing  the PROS to focus  exclusively  on 
improving  the mainstream  of care.  To help deal with poor performers,  it should 
consider  ways in which the Federal government  might support other bodies,  such as 
State medical  boards and ombudsmen,  that are more focused  on addressing  individual 
cases of poor  medical  care. 
Pros.o  Could clarify  the PROS mission and thereby contribute  to improved 
performance.  Could make PROS mission consistent with their funded and 
operational  priorities.  Could contribute  to more effective performance  by other 
bodies  focussing on poor performers. 
Cons:  Could undermine  improvement  efforts by removing  what some regard  as a 
complementary  function of the PROS,  Could weaken the PROS authority  with the 
medical  community.  Could endanger  beneficiaries  if others fail to deal effectively 
with poor performers. 
OPTION 2 
  The HCFA should devote further  inquiry to determine:  (1)  if the two functions 
of improving  the mainstream  of care and identifying  and dealing  effectively  with poor 
performers  can reasonably  be perfo~ed  by one organization,  and (2) how PROS can 
carry out both simultaneously.  Toward this end, it could suppoti  research  efforts, 
demonstration  projects  by individual PROS, and conferences. 
Pros:  Could lead to a better understanding  of the two fimctions compatibility. 
Could  identify benchmark  practices  among the PROS.  Could lead to innovation  in 
how PROS achieve both functions. 
Cons:  Could delay inevitable decisions  about the direction  and role of the PRO 
Program.  Could call for additional  resources  or siphon resources  away from 
improvement  projects.  Could restrict  PROS from effectively  performing  either 
function. 
COMMENTS  ON THE DRAFT REPORT 
We solicited  and received  comments  on the draft report  from the Health  Care  Financing 
Administration  (HCFA),  the American  Medical Peer Review Association  (AMPRA),  the 
American  Medical  Association  (AMA),  the American  Association  of Retired  Persons 
(AARP),  the Public Citizen  Health Research  Group (hereafter  referred  to as Public 
,.. 
111  Citizen),  and the Coalition  for Consumer  Protection  and Quality in Health  Care Reform 
(hereafter  referred  to as the Coalition).  We include the complete  text of the detailed 
comments  in appendix  E.  Below we summarize  the major comments  of the respondents 
and then,  in italics,  offer our responses.  In the report,  we made minor edits in response 
to comments. 
The HCFA  concurred  with our recommendation,  found merit  in both options,  and asked 
us to call for a public discussion  on the issues.  It also expressed  concerns  about our 
discussion  of the PROS limited efforts  in identifying patterns  of poor care and our 
presentation  of the survey data on weakened protections.  The AMPRA  supported  option 
2, believing  it is premature  to focus PRO activity exclusively  on improving  the 
mainstream.  The AMPRA believes the two functions are compatible  and that the quality 
improvement  approach  holds promise  for dealing with poor performers,  giving several 
examples  of successful projects.  The AMA indicated that it had no firm position  on either 
option and noted that the primary  focus of the PRO program  should be improving  the 
mainstream  of care.  The AARP disagreed  with option  1 because of its strong belief  that 
PROS retain their responsibility  to identify and respond to poor performers.  Public 
Citizen  also disagreed  with option  1, noting that while continuous  quality improvement  is 
a welcome  addition to beneficiary  protections,  it cannot replace  detecting  poor performers. 
Public Citizen  supported  further  study as outlined under  option 2,  The Coalition,  while 
reserving  final judgment  on the options,  indicated it has concerns  about the PROS ability 
to provide  adequate  beneficiary  protections  given the dominance  of their function  to 
improve  the overall practice  of medicine. 
We appreciate  HCFAs suppoti for  our recommendation  and have added  language  calling 
for  a public  discussion.  With respect to HCFAs concern about our discussion  of limited 
e~orts,  we have edited our text to re~ect that PROS have the authority  to collect and 
analyze  data.  With respect to its concern about our presentation  of the survey data on 
weakened protections,  we have attempted  to provide  appropriate  context for  inte~reting 
the survey data.  We agree with AMPRA  that continuous quali~  improvement  holds 
promise for  the overall practice  of medicine.  Our concern,  however,  is that with the 
PROS focus  on such systems-oriented  approaches Medicare  beneficiaries  remain 
vulnerable  to harm from  individual  poor performers.  We appreciate  all the comments  on 
our drafi report and urge continued discussion  on the roles PROS can play  in protecting 
Medicare  bene$ciaries from poorly pe~orming  physicians  and hospitals. 
iv  PAGE 
EXECUTIVE  SUMMARY

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

FINDINGS

  Questionable  Protections  from Poor Care  . . . . . . . . . . . . . . . . . . . . .+..  . . 3

 
Reservations  AboutProtectiom  .t.,oc<.o......-.  .,  .oe.  oo,  ..,e..7

RECOMMENDATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

COMMENTS  ON THE DRAFT REPORT  . . . . . . . . . . . . . . . . . . . . . . ...10

APPENDICES

A:  Methodology  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..A-1

B:  PROsSources  for Identifying  Quali~-of-Care  Problems  . . . . . . . . . . . . . . . .B-l

c:  Interventions Included in Improvement Plans  . . . . . . . , . . . . . . . , . . . . . . .C-l

D:  Overview  of Sanction Data from the Office of Inspector  General  . . . . . . . . . .  D-1

E:  Complete  Comments  ontheDraft  Report  . . . . . . . . . . . . . . . . . . . . . . . ..E-1

F:  Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..F-l
 INTRODUCTION

PURPOSE 
To assess the ability of the Medicare  Peer Review Organizations  to identify and respond 
to poorly  performing  physicians  and hospitals  at a time when their primary  mission  is to 
improve  the overall  quality of medical  care. 
BACKGROUND 
In April  1993, the Medicare  Peer Review Organizations  (PROS) began implementing  their 
fourth  contracts  with the Health Care Financing  Administration  (HCFA).  These  contracts 
marked  major  changes  in the PROS aims and operations.  The PROS now aim to improve 
the overall  practice  of medicine.  They do this by working collegially  with the medical 
community  in analyzing  patterns  of care and outcomes and by sharing their  insights with 
that community.  Their  focus is now on the performance  of systems of care rather  than on 
individual  caregivers. 
The HCFA  refers  to this initiative  as the Health Care Quality Improvement  Program 
(HCQIP).  The HCQIP  rests heavily on the precepts  of continuous  quality improvement, 
which hold that it is far more important  to improve  the overall performance  levels even 
slightly than it is to identify and address poor performers  at the margin.  This emphasis 
reflects  the kind of redirection  called for by the Institute of Medicine  in its comprehensive 
assessment  of Medicare  quality assurance  efforts. 1 
Prior  to the fourth contracts,  the PROS sought to ensure the necessity,  quality,  and 
appropriateness  of care rendered  to Medicare  beneficiaries  by identifying  and addressing 
individual  clinical  problems.  They did this by reviewing  individual  instances  of 
questionable  care that they had identified through  random medical  record  reviews  or 
beneficiary  complaints.  At times,  the PROS reviews represented  as much as 15 percent 
of Medicare  hospital  discharges.  Once they confirmed  a quality-of-care  problem,  they 
addressed  it by taking follow-up  actions they deemed appropriate.  At the extreme,  such 
actions could involve recommending  a sanction to the Office of Inspector  General  (OIG). 
Thus,  with the start of the fourth contract,  the PROS began to perform  two basic 
functions.  The dominant  function,  however,  is the function aimed at improving  the 
overall  practice  of medicine.  During the past 2 years,  the HCFA has increasingly  stressed 
it.  At the same time,  HCFA  continues to rely on the PROS to safeguard  Medicare 
beneficiaries  by identifying  and dealing effectively  with individual poor performers.  This 
function has always faced major constraints,  many of which have been highlighted  in prior 
reports  by the Office of Inspector  General .2  In fact,  in our prior  report,  The Beneficiary 
Complaint Process  of Medicare  Peer Review  Organizations,  we assess the beneficiary 
complaint  process--a-key safety valve for beneficiaries.  In that report,  we found that 
while the complaint  process represented  an important  source of information  on poor 
1

   performers,  it has some flaws that undermine  its effectiveness.  We offered 
recommendations  to HCFA  for improving  the process  as a near-term  solution. 
In this report,  we use the term poor performers  to refer  to physicians  whose medical 
knowledge  and/or  practice  skills are below minimally  acceptable  standards  (as determined 
by the medical  community)  and who, therefore,  pose a continuing  threat to the safety of 
their patients.  With respect to hospitals,  we refer  to those institutions  having  insufficient 
internal  systems to ensure  that patients are receiving  minimally  acceptable  standards  of 
care. 
In this report,  we look more broadly  at the effectiveness  of the PROS in addressing 
individual  poor performers  at a time when their focus stresses dealing with system 
improvements.  We conclude  with a recommendation  that supports long-term  strategies  for 
dealing  with poorly performing  physicians  and hospitals that fail to meet minimally 
acceptable  standards  of care. 
METHODOLOGY 
We relied  on 4 sources of information:  (1) surveys of 22 PROS representing  72 percent

of the beneficiary  population  in the country,  (2) aggregate  data from HCFA  reflecting  all

PROS medical  record  reviews completed  under the fourth contract  and through

June 30,  1994, (3) telephone  calls with officials from  10 State medical boards,  and

(4) cumulative  information  gathered  through our previous  inquiries  on the PROS.  (See

appendix  A for a more detailed discussion  of our methodology.)

Unless noted,  the data presented  are based on the PROS experiences  under  their fourth

contract  with HCFA.

Hereafter,  we use the term quality-of-care  problem  to refer to a problem  identified  by a

PRO through  any source for which (1) the PRO gave the physician  or hospital  responsible

an opportunity  to discuss and/or  give additional  information  about the care  in question  and

(2) the PROs physician  reviewer(s)  reviewed  the record  and confirmed  that a problem

had occurred.

We conducted  our review  in accordance  with the Quality Standards for  Inspections  issued

by the Presidents  Council  on Integrity  and Efficiency.

2
 FINDINGS

As the PRO Program  becomes  increasingly  committed  to improving  the overall practice 
of medicine,  its ability  to find  and take action on poorly performing  physicians  and 
hospitals  is questionable. 
  Limited  Leads.  The PROS find themselves  with very limited  leads to identify 
poorly  performing  physicians  or hospitals.  With the phasing out of the random 
sample medical  record  review,  which has been the primary  source for identifying 
poor performers,  PROS still have other sources for identifying  poor performers. 
These  include beneficiary  complaints,  referrals  from the medical  community,  and 
newer  approaches  developed under HCQIP.  However,  the beneficiary  complaint 
process,  as we indicated  in a recent report,  has significant  flaws; the referrals  from 
the medical  community  remain minimal;  and the new approaches  have identified 
few leads. 
The 53 PROS identified  6,010 cases with quality-of-care  problems  for reviews  completed 
between  April  1993 and June  1994.3  The majority  of these (71 percent)  came from the 
5 percent  inpatient  random  sample medical  record  review.  Yet the random  sample has 
been,  at best,  an inefficient  source for identifying  leads,  as less than  1 percent  of all 
random  sample reviews  led to quality-of-care  problems.4  By October  1995, that random 
sample will be completely  phased out .5 In our recent  survey of 22 PROS, 17 (77 percent) 
judged  this reduction  in record  review  as a major barrier  to identifying  individual  quality-
of-care problems. 
The PROS will continue  to review those records  mandated  by law,  such as those for 
quality-related  beneficiary  complaints. b  Of the 6,010 quality-of-care  problems  identified 
by PROS, 9 percent  came from the mandatory  reviews  overall  and 2 percent  from 
beneficiary  complaints  (see appendix B).  In our prior  report,  we found that complaints 
can,  in fact,  be an important  source for identifying  quality-of-care  problems.  But our 
inspection  also revealed  that many beneficiaries  were unaware  of the opportunities  to 
complain  to PROS about the quality of their medical  care and that PROS received  too few 
complaints  to identify meaningful  patterns  of poor care.7 
Further,  the PROS have received  few referrals  from the medical  community.  In our 
survey of 22 PROS, 6 reported  they had received  referrals  from their State medical 
boards;  none of these referrals  led to quality-of-care  problems.g  Eight PROS reported 
they had received  referrals  from hospitals and 13 from physicians;  these referrals  led to 
quality-of-care  problems  in 5 PROS.9  For those 5 PROS, though,  the referrals  accounted 
for less than 2 percent  of all the PROS quality-of-care  problems.  At the time of our 
survey,  none of the 22 PROS had written policies encouraging  referrals  from physicians, 
hospitals,  or medical  boards. 
Finally,  the PROS have identified few leads through their activities begun under the Health 
Care Quality  Improvement  Program  (HCQIP),  including the cooperative  projects  aimed at 
3 
-.  improving  overall  care.  Four of the 22 PROS in our sample identified  quality-of-care 
problems  through  such projects  and their related  data collection,  even though these 
projects  were not designed to identify poor performers.  For those 4 PROS, though,  the 
problems  identified  through  cooperative  projects  accounted  for less than 2 percent  of all 
the PROS quality-of-care  problems.  The other  18 PROS identified no leads through  such 
projects. 
	 Limited  Analysis.  Once the PROS become aware of an instance of questionable 
care,  they are unlikely under their current  contracts  to determine  if it is an isolated 
event or part of a pattern  of such care.  The PROS have little medical  data to draw 
upon to assess an individual physicians  or hospitals prior  performance.  The 
PROS do have the authority  to collect and analyze such data.  However,  with 
HCFAs  emphasis  on cooperative  projects  that aim to improve  the mainstream  of 
care,  PROS are unlikely to devote resources  to tracking  a questionable  providers 
fbture performance. 
It is one thing to obtain  a possible lead on a possible poor performer.  It is quite another 
to conduct  the analysis  to determine  if  (1) a pattern  exists that exposes Medicare 
beneficiaries  to undue danger  and (2) some kind of follow-up  action should be taken. 
Making  such a determination  is a resource-intensive  and often adversarial  process  that 
runs counter  to the tenets of continuous  quality improvement.  It is an allowable  activity 
for expenditure  of PRO program  finds,  but is clearly  not a priority  under HCFAS current 
contracts  with the PROS. 
Through  our survey,  the PROS cited limitations  in conducting  the analysis  necessary  to 
distinguish  patterns  of poor performance  from isolated incidents of poor care.  In fact, 
officials  from  16 of the 22 PROS we surveyed judged  difficulties  in establishing  patterns 
of poor care  as a major barrier  to establishing  improvement  plans with individual 
physicians  or hospitals.  They must rely primarily  on their historical  data bases that 
include past PRO reviews.  But with the reduced medical  record  review,  these data bases 
are losing relevance. 10 And PROS reported  that they rarely  initiated projects  under  the 
HCQIP  to determine  whether problems  were isolated or part of patterns.  None of the 
22 PROS reported  routinely  conducting  special data collection  to determine  if the problems 
were isolated. 
k	 Limited  Follow-Up.  Currently,  once PROS confirm  (through medical  record 
review)  that physicians  or hospitals are responsible  for quality-of-care  problems, 
they rarely  do anything more than inform those responsible  of the nature  of the 
problem.  During  their current  contracts  with HCFA,  10 of the 22 PROS in our 
sample had not initiated any improvement  plans that compel  individual  physicians 
or hospitals  to address the quality-of-care  problems.  The other  12 initiated 
improvement  plans in response to 146 quality-of-care  problems.  One PRO 
identified  half of those problems. 
The 22 PROS in our sample responded  to all the quality-of-care  problems  they confirmed. 
For 99 percent  of those problems,  the PROS responded  with a letter confirming,  after 
4  medical  record  review,  that a quality-of-care  problem  occurred. 11  In only  1 percent  of 
the problems  did the PROS respond with more than a letter.  These involved  146 problems 
and 12 of the 22 PROS in our sample.  The PROS responded  to these problems  with 
improvement  plans designed to prevent  the recurrence  of the problem. 12 These plans 
compelled  those involved to take some action,  such as attend a course  (for a physician)  or 
conduct  inservice  training  (for a hospital). 
The number  of quality-of-care  problems  the 12 PROS responded  to with improvement 
plans ranged  from  1 to 73, with a median of 6.5.  Six PROS responded  to 5 or fewer 
problems  with improvement  plans,  2 PROS responded  to between 6 and  10 problems  with 
plans,  and 3 PROS responded  to between  11 and 15 problems  with plans.  One PRO 
responded  to 73 problems  with improvement  plans,  accounting  for half of the responses  in 
our sample. 
Of the  146 problems  the 12 PROS responded  to with improvement  plans,  77 involved 
plans directed  to physicians  and 69 to hospitals.  Based on our review  of 53 of these 
improvement  plans,  we found that most of those directed  to hospitals  involved  a systemic 
intervention  such as a review  of or change in the hospitals policies.  Most of those 
directed  to physicians  included an educational  component  such as continuing  medical 
education  or inservice  training  (see appendix C). 
The extent  to which physicians  are subject to any corrective  or disciplinary  actions by 
hospital  quality  assurance  bodies is unclear.  However,  given that such actions run counter 
to the collegial  and self-improvement  precepts  of continuous  quality improvement,  it is 
likely to be minimal.  In fact,  another  Office of Inspector  General  inspection  raises 
important  questions about the extent to which hospitals themselves  have taken adverse 
actions directed  to physicians. 13 In that inspection,  we found that 75 percent  of the 
hospitals  in the United  States reported  no adverse  actions to the National  Practitioner  Data 
Bank from September  1, 1990 to December  31,  1993.14 
F	 Moribund  Sanction Recommendations.  The sanction referral  authority  has 
continued  in the moribund  state we reported  on in 1993.  The PROS sanction 
recommendations  to the Office of Inspector  General have dwindled  from a high of 
72 in FY  1987 to 12, 14, 13 and 13 in FYs  1991 through  1994.  By contrast,  State 
medical  boards  have become much more active in disciplining  poorly  performing 
physicians.  From  CY 1991 to CY 1994, annual board actions increased  from 
2,804  to 3,571. 
From  FY  1986 through  1994, the OIG sanctions have shown a similar decline:  from a 
high of 50 in FY  1987 to a low of 6 in FY  1992, 10 in FY 1993, and 7 in FY  1994.  In 
this period,  159 physicians  have been sanctioned compared  to 3 hospitals  (see appendix 
D). 
As we reported  in 1993, the drop in PRO sanction recommendations  can be explained  by 
three  factors:  (1) the statutory requirement  that prevents  sanction unless providers  have 
demonstrated  an unwillingness or lack of ability to comply with their Medicare 
5  obligations;  (2) the PROS cumulative  experience  with the costly,  complex,  and 
contentious  referral  process;  and (3) their  increasing  emphasis  on educational  rather  than 
punitive  responses  to poor care. Is  The OIGS high rate of rejections  also helps explain 
the decline.  From  FY  1986 through  FY 1994, the OIG rejected  41 percent  of the PROS 
sanction recommendations  based on either willingness  and ability,  failure to follow the 
regulatory  requirements,  or lack of medical  evidence  (see appendix D), 
Like PROS, State medical  boards have a responsibility  for ensuring  quality of medical 
care.  But, unlike  PROS, State boards deal with care provided  by licensees  to all their 
patients,  not just those covered  by Medicare.  The HCFA  requires  that,  as a condition  of 
participating  in Medicare,  physicians be licensed by their States.  And as PRO sanction 
recommendations  have dropped,  medical board actions to discipline  physicians  have 
increased.  Unlike  OIG sanctions,  which bar participation  in Medicare  and Medicaid  but 
do not affect licensure,  medical  board actions can affect a physicians  license  to practice. 
For example,  in CY  1994, State boards took 3,571 actions of which  1,498 (42 percent) 
involved the loss of license,  including revocation,  suspension,  surrender,  or mandatory 
retirement.  Another  1,256 of those actions (35 percent)  involved some restriction  to the 
license,  such as probation  or limitation.  The remaining  actions involved modifications  to 
the licenses  that resulted  in some penalty or reprimand  to the physicians. 16 
	 Minimal  Referrals  to State Medical  Boards.  In 1993, Congress  passed 
legislation  requiring  PROS to share information  with medical boards  on physicians 
found to be responsible  for serious quality-of-care  problems.  The legislation 
appears  to have had little,  if any,  impact on the level of such sharing. 
In April  1993, we reported  that the PROS sharing of case information,  even for the most 
serious cases,  was minimal .17 The Citizen  Advocacy Center  also reported  on the 
minimal  level of sharing based on its 2 surveys in 1992, one that reviewed  the experiences 
of 10 States where PROS and medical boards both had shown an interest  in sharing  and a 
second,  more extensive  survey of all 50 States. 18 Between its two surveys,  the Center 
found that in only Ohio, Mississippi,  New York,  and to a lesser extent Texas,  was much 
information  being sent to the medical boards. 
To assess the current  level of sharing,  we called the medical boards  in the  10 States 
identified  by the Center  with boards and PROS committed  to sharing  information. 19 We 
found that sharing  remains  minimal.  No board official reported  an increase  in the level of 
sharing.  Officials  from 3 of those  10 States--including  Ohio and Mississippi--reported  that 
the level of sharing was less than what they had reported  to the Center  in 1992.  Five 
reported  the level of sharing was about the same.  Two were unable to answer due to a 
lack of data. 
6
 The PROS themselves find  much that is positive  about the current direction  of the 
Program.  But some express reserv@ons about its impact on protecting  Medicare 
beneficiaries  from  poor pe~ormers. 
	 Compatible  Functions.  Seventeen of the 22 PROS (77 percent)  in our sample 
indicated  that the two basic PRO functions--improving  the mainstream  of care and 
dealing  with poor performers--are  compatible. 
F	 Weakened  Protections;  Yet, when questioned  further,  11 of 22 PROS 
(50 percent)  concluded  that beneficiary  protections  have become  weaker.  This 
compares  to 5 (23 percent)  that concluded  protections  have become  stronger, 
4 (18 percent)  that concluded protections  have remained  about the same,  and 
2 (9 percent)  that did not know. 
Several PRO officials explained  the functions compatibility  by noting that improving  care 
overall  also improves  the poor performers.  They pointed  out that problems  they identify 
with poor performers  become  opportunities  for cooperative  projects  aimed at overall 
improvement.  Indeed,  according  to some officials with whom we spoke,  it is the PROS 
clout as the entities  that deal with poor performers  that can convince  reluctant  hospitals  to 
participate  in improvement  projects.  Others noted that compatibility  means not pursuing 
minor problems  while reserving  resources  for those outlier physicians  and hospitals  that 
pose significant  threat to do great harm.  In fact,  some said that hospital  officials welcome 
the PROS and rely on them for help in identifying  and dealing with poor performers. 
Yet,  while the PROS reflect  strong support for the compatibility  of the two fi.mctions, they 
also point to weakened protections  for the beneficiary.  Twice as many PRO officials 
concluded  protections  have weakened  since the third contract  than concluded  they have 
strengthened.  Many in the PRO community  with whom we spoke tied the weakened 
protections  directly  to their  lessened ability to conduct medical  record  reviews.  They 
reported  that without funding and authority  for some minimal  level of record  review, 
instances  and patterns  of poor care have gone undetected  and therefore  unaddressed.  And 
although  its value was never definitively  documented,  some PROS questioned  if the 
sentinel effect--whereby  the mere knowledge  of ongoing medical  record  reviews  creates  an 
incentive  to improve  care with the medical  community--will  exist as record  review 
declines. 
7
 RECOMMENDATION

Our inquiry  does not question the PRO Programs  focus on improving  the mainstream  of

care;  nor does it reflect  a desire to return  to an emphasis  on random  medical  record

reviews.  We recognize  that the random  reviews  were labor-intensive,  generated  much

discord  with the medical  community,  and identified few quality-of-care  problems  relative

to the numbers  of records  reviewed.  We also understand  that the premise  of the PRO

Programs  current  direction  holds promise  for improving  the overall practice  of

medicine .20 This is of great importance  to Medicare  beneficiaries  and others.

Yet, we find sufficient basis to question the responsiveness  of the PRO Program  to its

other traditional  function:  identifying  and responding  to physicians  and hospitals  that fail

to meet minimally  acceptable  standards  of care.  We direct our recommendation  to this

vulnerability.

We recommend  that HCFA reconsider  the PROS function  to identi$y and respond 
effectively  to poorly pe~orming  physicians  and hospitals. 
There  needs to be a public  discussion on what existing or potential  processes  could deal 
effectively  with poor performers.  To further  that public discussion,  we offer two options 
for HCFA  to consider  based on the premise  that the PROS emphasis  on improving  care 
overall  will remain  dominant: 
OPTION  1 
b  The HCFA should proceed  toward directing  the PROS to focus  exclusively  on 
improving  the mainstream  of care.  To help deal with poor performers,  it should 
consider  ways in which the Federal government  might support other bodies,  such as 
State medical  boards and ombudsmen,  that are more focused  on addressing  individual 
cases of poor  medical  care. 
Pros:  Could clarify  the PROS mission and thereby contribute  to improved 
performance.  Could make PROS mission consistent  with their funded and 
operational  priorities.  Could contribute  to more effective performance  by other 
bodies focussing  on poor performers. 
Cons:  Could undermine  improvement  efforts by removing  what some regard  as a 
complementary  fimction of the PROS.  Could weaken the PROS authority  with the 
medical  community.  Could endanger  beneficiaries  if others fail to deal effectively 
with poor performers. 
OPTION 2 
F  The HCFA should devote further  inquiry to determine:  (1)  #  the two functions 
of improving  the mainstream  of care and identifying  and dealing  effectively  with poor 
8 
  performers  can reasonably  be pe~ormed  by one organization,  and (2) how PROS can 
carry out both simultaneously.  Toward this end, it could suppoti  research  efforts, 
demonstration  projects  by individual  PROS, and conferences. 
Pros:  Could lead to a better understanding  of the two functions compatibility. 
Could identify benchmark  practices  among the PROS.  Could lead to innovation  in 
how PROS achieve both functions. 
Cons:  Could delay inevitable decisions  about the direction  and role of the PRO 
Program.  Could call for additional  resources  or siphon resources  away from 
improvement  projects.  Could restrict  PROS from effectively  performing  either 
functions. 
9 
- COMMENTS  ON  THE  DRAFT  REPORT

We solicited  and received  comments  on the draft report  from the Health  Care  Financing 
Administration  (HCFA),  the American  Medical Peer Review Association  (AMPRA),  the 
American  Medical  Association  (AMA),  the American  Association  of Retired  Persons 
(AARP),  the Public Citizen  Health Research  Group (hereafter  referred  to as Public 
Citizen),  and the Coalition  for Consumer  Protection  and Quality in Health  Care Reform 
(hereafter  referred  to as the Coalition).  We include the complete  text of the detailed 
comments  in appendix  E.  Below we summarize  the major comments  of the respondents 
and then,  in italics,  offer our responses.  In the report,  we made minor  edits in response 
to comments. 
The HCFA  concurred  with our recommendation  to reconsider  the PROS function  to 
identify and respond  to poor performers.  It found merit  in both options and asked that we 
call for a public discussion  on these issues.  It expressed  concerns  about our discussion  of 
the PROS limited efforts  in identifying  patterns  of poor care,  pointing  out that PROS have 
the authority  and opportunity  to perform  primary  data collection  if they find an instance  of 
questionable  care.  The HCFA  also expressed  concerns  that our presentation  of the survey 
data on weakened  protections  would lead other readers  to conclude  we advocate  a return 
to case review,  although  it understood  that we did not. 
We appreciate  HCFAs suppoti for  our recommendation.  Based on HCFAs suggestion, 
we added  language  calling for  a public  discussion  in introducing  the two options.  With 
respect to HCFAs  concerns about our discussion  of the PROS limited e~orts concerning 
problem  analysis,  we point  out that our text specifies such analysis  is an eligible program 
expense.  We have edited that text to muke clear that PROS in fact  have the authori~  to 
conduct  such analysis.  With respect to HCFAs concerns about our presentation  of the 
survey data on weakened protections,  we have attempted  to provide  the appropriate 
context so that it is clear to readers that we do not advocate  a return to case review. 
The AMPRA  supported  option 2, believing  it is premature  to focus PRO activity 
exclusively  on improving  the mainstream.  The AMPRA believes  the two functions  are 
compatible  and that the quality improvement  approach  holds promise  for dealing  with poor 
performers,  giving several examples of successful improvement  projects.  The AMPRA 
also called  for strengthened  PRO interactions  with medical boards,  ombudsmen,  licensing 
agencies,  and accrediting  bodies. 
We agree with AMPRA  that continuous quality  improvement  holds promise for  the overall 
practice  of medicine,  as in the systems-oriented  examples AMPRA  cites.  Our concern, 
however,  is that with the PROS focus  on such systems-oriented  approaches,  Medicare 
beneficiaries  remain vulnerable  to harm from  those individuals  whose medical  knowledge 
andlor practice  skills are below minimally  acceptable  standards. 
The AMA indicated  that it had no firm position  on either option and noted that the 
primary  focus of the PRO program  should be improving the mainstream  of care.  The 
10 
.  .. ..  ... ____  AARP disagreed  with option  1 because of its strong belief that PROS retain their 
responsibility  to identify and respond  to poor performers.  Public Citizen  also disagreed 
with option  1, noting that while continuous  quality improvement  is a welcome  addition  to 
beneficiary  protections,  it cannot replace  detecting poor performers.  Public Citizen  also 
noted that while it supports  further  study as outlined under option 2, recommendations 
made in previous  OIG studies should be vigorously  implemented.  The Coalition,  while 
reserving  final judgment  on the options,  indicated  it has concerns  about the PROS ability 
to provide  adequate beneficiary  protections  given the dominance  of their fimction to 
improve  the overall  practice  of medicine. 
We appreciate  these comments on our draft report and urge continued  discussion  on roles 
PROS can play  in protecting  Medicare  beneficiaries from poorly pe~orming  physicians 
and hospitals. 
11
 APPENDIX  A

METHODOLOGY 
Mail and Telephone  Surveys of 22 PROS 
We conducted  mail and telephone  surveys with 22 PROS in January  1995.  We chose 
these PROS through  a stratified  sample in which we arrayed  PROS according  to the 
number  of Medicare  beneficiaries  in each State (high and low beneficiary  population). 
We chose all 17 of the PROS for States in the high-population  stratuml  and a random 
sample of 5 PROS for States in the low-population  stratum.z  The PROS in our sample 
represent  72 percent  of the Medicare  beneficiary  population  in the country.  The response 
rate for both the telephone  interviews  and the mail survey was 100 percent. 
We sent out a mail survey to all 22 PROS in which we asked PROS for specific data under 
the fourth contract.  The data included sources for confirmed  quality-of-care  problems  and 
how many  such problems  led to improvement  plans,  among others. 
We supplemented  the mail survey with more  in-depth telephone  interviews.  For the 
interviews,  we designed  and pretested  a discussion  guide with questions  about identifying 
quality-of-care  problems,  the complaint process,  barriers  to identifying  individual  quality-
of-care problems,  responding  to confirmed  quality-of-care  problems,  and barriers  to 
responding  to confirmed  quality-of-care  problems,  among others. 
Aggregate  Data from HCFA 
We also drew  on data from HCFAS PROD3 data base (which includes the results  of all 
inpatient  record  reviews)  and PROD5 data base (which includes the results  of all physician 
reviews).  Through  these we obtained data on the number and sources of confirmed 
physician  and hospital  quality-of-care  problems  for all PROS for reviews  completed  under 
the fourth contract  through June 30,  1994.3  Our tests of the data revealed  that  10 PROS 
reported  no beneficiary  complaints  when,  in fact, they had received  such complaints. 
I These  included the following States (listed in descending  order  of beneficiary 
population):  California,  New York,  Florida,  Pennsylvania,  Texas,  Ohio, Illinois, 
Michigan,  New Jersey,  North Carolina,  Massachusetts,  Missouri,  Indiana,  Georgia, 
Virginia,  Wisconsin,  and Tennessee. 
2 These  included the following States (listed in descending  order  of beneficiary 
population):  New Mexico,  Utah, Montana,  South Dakota,  and Delaware. 
3 In analyzing  our data on confirmed  quality-of-care  problems,  we report  the most 
conservative  interpretations.  We chose this approach  to avoid double counting complaints 
that resulted  in confirmed  problems  with both a physician  and a hospital. 
A-1  Nevertheless,  when these data are viewed in the context  of our telephone  interviews  and 
survey data,  we believe  the findings and recommendation  in this report  are valid. 
Follow-up  with 10 State Medical Boards 
In April  1995, we called the 10 State medical boards  identified by the Citizen Advocacy 
Center  as sharing  a commitment  for increased  sharing with the PROS in their  States.4 
We reviewed  their previous  level of sharing (as reported  to the Center)  and then asked 
them to assess their current  level of sharing as more,  less, or about the same. 
Previous  Office  of Inspector General  Inquiries on PROS 
We have an extensive  history  of reviewing  the PRO Program,  starting  in 1988.  The 
major  studies we drew on in this report  include:  Peer  Review  Organizations  and State 
Medical  Boards:  A  Vital Link,  OEI-C)I-92-00530, April  1993; The Sanction Referral 
Authority  of Peer Review  Organizations,  OEI-01-92-00250,  April  1993; and,  The 
Beneficiary  Complaint Process of the Medicare  Peer Review  Organizations,  Draft Report, 
OEI-01-93-00250,  June  1995.5 
4 The Center  identified  Alabama,  California,  Colorado,  Iowa,  Minnesota,  Mississippi, 
Ohio, Rhode Island,  West Virginia,  and Wisconsin  as States with medical  boards  and 
PROS both committed  to sharing information.  (Citizen Advocacy  Center,  information 
Exchange  Between  Peer Review  Organizations and Medical Licensing  Boards:  Update 
and Report  on CAC Survey,  March  1992, and Information  &change  Between  Peer Review 
Organizations  and Medical Licensing  Boards:  Report on the 50 State Survey,  November 
1992.) 
5 Other OIG reports  include:  The Utilization and Quality Control Peer Review 
Organization  Program:  Quality Review Activities,  OAI-01-00570,  September  1988; The 
Utilization and Quality  Control Peer Review  Organization Program:  Sanction Activities, 
OAI-01-00571,  November  1988; The Utilization and Quality Control Peer Review 
Organization  Program:  An Exploration  of Program Electiveness,  OAI-01-88-00572, 
February  1989; and, Educating  Physicians Responsible for  Poor Medical  Care:  A Review 
of the Peer Review  Organizations EJorts,  OEI-01-89-00020,  February  1992. 
The Office of Inspector  General has also issued a number  of reports  on DRG validation. 
A-2  APPENDIX  B

PROS SOURCESFORIDENTIFYINGCO  NFIRMEDQ UALITY-F-CAmPROBLEMS
UNDERTHEFOURTHCONTRACTF ORREVIEWSCOMPLETEDTHROUGHJUNE30,  1994 
TYPE  OF REVIEw 
Total  Quality 
AS a percentage

Problems  Identified  Of All Quality  Problems

RANDOMSAMPLE 
4261 
70.9% 
MANDATORRYEVIEWSh 
519 
8.6% 
MedicareCodeEditOr 
15 
<1% 
HospitalAdjustment

37 
<1% 
Assistant  at Cataract  Surgery

o 
0% 
Fiscal  Intermediary  (FI) referral

88 
<1% 
Regional  Office  (RO) referral

4 
<1% 
Hospital  Issued  Notice  of Noncoverage 
274 
4.6% 
Beneficiary  ComPIaint 
101 
1.7% 
MlSCELL~Ous  REVIEWISC 
1438 
23.9% 
Other 
329  <1% 
Intervening  Care 
29 
<1% 
Focussed  Review  Selection

11 
<1% 
PRO-selected  Intensified  review

5 
<1% 
FI/Carrier  Pre-payment  Reject

3  <1% 
Ventilator-Dependent  Unit

1 
<1% 
FI Prepayment  Reject

3  <1% 
Readmission

527 
8.8% 
Specialty  Hospita]

355 
5.9% 
UCDS
 ..= 
168  2.8% 
Hospital  Adjustment  Previously  selected

7 
<1% 
TOTALS 
6218d 
103.5% 
Notes:	 N =53  PROS.  The number  of beneficiary  complaints  represented  here should  be considered  conservative 
because  of reporting  flaws.  Ten PROS reported  no beneficiary  complaink  when in fact they received 
such complaints  under  the fourth  contract. 
 Will be eliminated  as of October  1995.  ~ Will continue  as 
the main  source  of record  reviews. 
c Of the types of reviews  listed here,  only the  other  category  and 
the hospital  adjustment  previously  selected  are likely to be continued.  J Of these quality-of-care 
problems,  208 were selected  for more than  1 reason.  The PROS identified  6010 confirmed  qualiV-of
care problems  through  June 31,  1994. 
Source:HCFAPROD3andPROD5databases. Analysis:HHSOfficeofinspectorGeneral. 
B-1
 APPENDIX  C

INTERVENTIONSINCLUDEDIN IMPROVEMEm PLANS 
Directed  to  Directed  to  Total
Intervention 
Physicians  Hospitals  (n=53)
(n=25)  (n=28) 
Protocol/Policy  Change 
5 (20%)  22 (79%)  27 (53%)
Inservice  Training 
5 (20%)  17 (61%)  22 (42%)
Continuing  Medical  Education  (CME) 
8 (32%)  .-
8 (15%) 
Case Presentation 
4 (16%)  8 (29%)  12 (23%) 
Hospital  Case Monitoring 
4 (16%)  12 (43%)  16 (30%) 
PRO Case Monitoring 
2 (8%)  1 (4%)  3 (6%) 
Meeting  with the Hospital 
5 (20%)  8 (29%)  13 (25%) 
Meeting  with the PRO 
6 (24%)  3 (11%)  9 (17%) 
Referral  to Hospital

Quality Assurance  Committee

7 (28%)  10 (36%)  17 (32%) 
Required Consultation

3 (12%)  --
3 (6%) 
$PEX Exam

1 (4%)  --
1 (2%) 
consideration  of Sanction

9 (36%)  4 (14%)  13 (25%) 
I_elephoneCall

2 (8%)  1 (4%)  3 (6%) 
)ther

3 (12%)  -. 
3 (6%) 
ote:  Our analysis was based on those written materials (mostly letters) sent to us by the PROS.  Thus, any telephone calls, meetings, or 
other irrtmwtdons  IIOtdocumented in tfresewritten materials are excluded from this table.  These represent 53 of tile 146 
improvement plans that PROS in our sample initiated under the fourtfr ecmtract. 
nsrce:  HHS Office of Inspector General Survey of 22 PROS, January 1995. 
.4rsal@.s: HHS Office of Inspector General. 
c-1  TYPOLOGYOF INIERVENTIONUSS EDINIMPROVEMENPTL ANS
II  Typology  I  Interventions  directed  to  I  Interventions  directed  to  II 
1!  Physicians  (n=25)  Hospitals  (n=28)  I
Educational  15 (60%)  17 (60%) 
Systemic  5 (20%)  22 (79%) 
Punitive  9 (36%)  4 (14%) 
Note  Thser~r@ent  460ftie  146improvement plmtiat  PROsinour  smpleinitiati  under tie foufimntract.  Ouramdysis  was basedon 
those wrhtcnrnatcrials(m ostiyle  tters)se nttousbyrhePROs.  Thus, arryklephoneealls,  meetings, orother  interviews mrtdocumented inrfrese 
written msterials are excludedfromthk  table. 
The number of interventions we identified in any one improvement plan ranged from one to seven.  Depending on the interventions wittdn any one 
improvement plan, it could be characterized as educational, systemic, punitive, or a combination of these.  Five of the plans dbccted to physicians 
and two direettsf to hospitals contained no interventions we considered educational, systemic, or punitive. 
We considered the following interventions aa educational: ioserviw training, continuing education, and case presentations.  We considered 
interventions as systemic if they involved protocol and policy changes, including the use of new forms and posting of rules.  We considered 
interventions as punitive if they involved consideration of sanction,  We excluded interventions such aa meetings and monitoring because we were 
unable to determine whether they were edrscatiomdor punitive in nature. 
II
source  HHS Office of Inspector General Survey of 22 PROS, January 1995, 
II 
Analysis: HHS Office of Inspector General. 
c-2  APPENDIX  D

OVERVIEWOFSANCTIONDATAFROMTHEOFFICEOFINSPECTORGENERAL(OIG) 
PRO  SANCTIONR ECOMMENDATIOTNOS  THEOIG BY TYPEOF PROVIDER
Type of  FY  FY  FY  FY  FY  FY  FY  FY  FY 
Provider:  86  87  88  89  90  91  92  93  94  TOTAL 
Physician  60  66  34  21  29  12  13  12  13  260 
Hospital  6  6  3  1  0  0  1  0  0  17 
Nursing 
Home  o  0  0  0  0  0  0  1  0  1 
Total  66  72  37  22  29  12  14  13  13  278 
Source  HHSOffice of Inspector General, Office of Investigations. 
OIG  SANCTIONSB ASEDONPRO RECOMMENDATIOBNYS TYPEOFSANCTION
Type of  FY  FY  FY  FY  FY  FY  FY  FY  FY 
Sanction  86  87  88  89  90  91  92  93  94  TOTAL 
Exclusion  21  34  18  10  13  10  5  7  7  125 
Monetary 
Penalty  9  16  2  0  0  0  1  0  0  28 
*Pre-
Exclusion  0  0  2  1  1  2  0  3  0  9 
Retirement 
Total  30  50  22  11  14  12  6  10  7  162 
Source  HHSOffIce of Inspeetor General, Office of Investigations. 
Pre-exclus ion retirement results from an agreement among the PRO,  the physician, and tbe OIG that the physician retire from practice rather 
than be excluded.  Because the retirement would not have occurred witbout tbe saoction reeommendation, the OIG counts these as aetioos taken. 
D-1
 REFERRALSREJECTEDOR CLOSEDBY THEOIG WITHOUTSANCTION 
 
Rejection  FY  FY  FY  FY  FY  FY  FY  FY  FY 
Based on:  86  87  88  89  90  91  92  93  94  TOTAL 
 
Unwilling 
or Unable 
Require- 0  19  11  4  4  2  2  1  0  43 
ment 
Failure  to 
Follow 
Regulatory  4  10  12  6  2  1  0  1  1  37 
Process 
Lack of 
Medical  6  5  0  2  2  5  7  1  1  29 
Evidence 
  -
Closed Due 
to Death or  2  0  0  0  0  0  0  0  3  5 
Other 
Total  12  34  23  12  8  8  9  3  5  114 
Source  HHSOffice of Inspector General, Office of Investigations. 
D-2
 APPENDIX  E

Conmimrs  oN mm DRAFT IWPORT 
Inthis  appendix,  represent  in fill  thecoments  from the Health Care Financing 
Administration,  the American  Medical Peer Review Association,  the American  Medical 
Association,  theherican  Association of Retired  Persons,  the Public Citizen  Health 
Research  Group,  andthe  Coalition  for Consumer  Protection  and Quality  in Healti  Care 
Reform. 
E-1
 . .
...!{., 
,... . ~  J1.g 
--- DEP.4RT31ENTOF  HE.ALTH  & HUNIAN  SERVICES  Health  Care Financing Administratic 
:
:. 
-.,
.
+
>-d, 
Office  of the Administrator 
Washington,  D.C.  20201 
. 
DATE:  OCT25  D% 
TO:  June Gibbs Brown 
Inspector  General  . 
.& 
FROM:  Bruce C. Vladecl$ 
Administrator  w-
SUBJECT	 Office  of Inspector  General  Drti  Report:  The  Medicare  Peer  Review 
Organizations  (PROS) Role  in Identi&ing  and Responding  to Poor 
Performances,  (OEI-O 1-93-00251) 
We  reviewed  the subject  draft report  which  examines  how  well  the PROS are finding 
and  taking  action  on poorly  performing  physicians  and hospitals. 
Our  detailed  comments  are attached  for your  consideration. 
Thank  you  for the opportunity  to review  and cornrnent  on this  report.  Please  contact 
us if you would  like to discuss  our comments  Ii.rther. 
Attachment  ~  Health  Care  Financing  Administration  (HCFA)  Comments 
on Office  of Insuector  General  (OIG)  Draft  Re~ort: 
The Medicare  Peer  Review  Organizations  (PROS) Role 
in	 Identifying  and Resuondin~  to Poor 
Performers,  (OEI-01-93-00251) 
OIG Recommendation 
HCFA  should  reconsider  the PROS fiction  to identi&  and respond  effectively  to 
poor performing  physicians  and hospitals.  Two  options  are offered. 
OPTION  1 
The HCFA  should  proceed  toward  directing  the PROS to focus  exclusively  on 
improving  the mainstream  of care.  To help  deal  with  poor performers,  it should 
consider  ways  in which  the Federal  Govemxnent  might  support  other  bodies, 
such as State  medical  boards  and ombudsmen,  that  are more  focused  on 
addressing  individual  cases  of poor medical  care. 
OPTION  2 
The  HCFA  should  devote  further  inquiry  to determine:

(1) if the two  functions  of improving  the mainstream  of care  and identi~ing  and

dealing  effectively  with  poor performers  can reasonably  be performed  by one

organization.  and (2) how  PROS can carry  out both  simultaneously.  Toward

this end,  it could  support  research  efforts,  demonstration  projects  by individual

PROS, and  conferences.

HCFA Resuonse 
HCFA  concurs  and believes  that both options  have merit.  We will  work  with  our 
resources  and  the medical  community  to explore  avenues  to detelmine  what  processes 
are best to deal  with  the types  of poor performers  mentioned  in this report. 
Technical/General  Comments 
1.	 We suggest  that the following  language  be added  to introduce  the hvo  options 
offered  in your  recommendation:  There  needs  to be a public  discussion  on 
what  existing  or potential  process  there  could  be for dealing  with  the types 
of poor  performers  mentioned  in this report.  Here  are hvo options.   Page 2 
2.
 In regard  to your  discussion  of Limited  Analysis  on page  4, we wish  to point 
out that  the  PROS have  the authority  and opportunity  to perform  primary  data 
collection  if they  find  an instance  of questionable  care.  We have  asked  PROS to 
take a scientific  approach  in investigating  such  cases  through  the analysis  of 
clinical  and  operational  records  associated  with  the performance  at issue. 
3.	 In regard  to your  discussion  on Weakened  Protections,  we question why the 
emphasis  is placed on the 50 percent  of PROS that fmd  protections  weakened 
which  apparently  argues  that the  case review  approach  is better.  We  do not 
believe  it is the OIGS  intention  to present  an argument  for case  review; 
however,  a reader  could  infer  this based  on the way  survey  results  are discussed 
in this report. 
We thus  suggest  that  the OIG clari~  their  survey  results  to ensure  that the 
reader  understands  that the OIG is not advocating  case  review.  We recommend 
the following  language:  Forty-one  percent  of the su.meyed  PROS felt that 
beneficiary  protections  are better  or equal,  9 percent  felt  they  were  neutral,  and 
50 percent  felt that  the protections  are weaker.   .M this  point  tie  OIG  could 
explain  why  the case  retiew  method  was prefemed  by some  PROS and why  they 
felt it offered  better  beneficiary  protection.  Nil??ii 
AMERICANMEDICALPEER REVIEWASSOCIATION 
1140 Connecticut  Avwiw,  NW  .  Suite  1050    Washington,  D.C. 20036    202/331-5790    FAX: (202)  833-2047 
October  15, 1995 
June Gibbs Brown

Inspector  General

Department  of Health  & Human  Services

OffIce of Inspector  General

330 Independence  Avenue,  S.W.

Washington,  D.C.  20201

Dear Ms. Brown:

On  behalf  of  the  American  Medical  Peer  Review  Association  (AMPRA)  -- the  national 
membership  association  representing  the nations  network  of peer  review  organizations  -- I 
appreciate  the opportunity  to review  the draft Inspector  Generals  report,  The Medicare  Peer 
Review  Organizations  Role  in Identl~ing  and  Responding  to Poor  Performers.   
AMPR4  favors  option  two: 
The  HCFA  should  devote  further  inquiry  to  determine:  (1)  f  the  two  functions  of 
improving  the  mainstream  of  care  and  identlfiing  and dealing  e~ectively  with poor 
performers  can reasonably  be performed  by one organization,  and (2) how  PROS  can 
carry  out  both  simultaneously.  Toward  this  end,  it  could  support  research  eflorts, 
demonstration  projects  b,v individual  PROS,  and  conference. 
It is premature  to focus  PRO activity  exclusively  on improving  the mainstream  of care  until 
we have  further  evaluated  the Health  Care  Quality  Improvement  Programs  (HCQIP)  ability 
to deal with poor performance.  In principle,  we believe that the two functions  are compatible. 
AMPR+  maintains  that individual  case review is not the only means to identify and to respond 
to poor performers.  The innovative  HCQIP  approach  of anaiysis  and feedback  of patterns  of 
care, through the comparison  of provider  performance  to scientifically  based  quality  measures, 
shows  promise  for evaluating  the  full  range  of practice  performance  includirw  those  providers 
on  the  tail  end  of  the  performance  distribution.  While  the  emphasis  is  on  improving  the 
mainstream  of  care.  PROS  are  also  responsible  for  holding  providers  accountable  for 
improvement,  particularly  those  providers  whose  performance  show  great  variance  from 
accepted  quality  standards  and are unwilling  or unable  to correct  identified  quality  concerns. 
Without  PRO  sanction  and corrective  action  authority,  there is a real question  as to whether 
all providers  will  be committed  to making  quality  improvement  a priority.  The Medicare  PRO k  Role  in Identlfiing  and Responding  to Poor  Pe~ormers  comments  continued
 --
October  15, 1995

Page  2

While  still  early  in  HCQIPs  evolution,  there  are,  nonetheless,  many  exampies  which 
successfully  identify  and  deal  with  poor  performance.  For  example,  unnecessary  radical 
prostate  cancer  surgery  for men  over  the  age  of  70 represents  poor  practice  that  has  been 
corrected  by PROS through feedback  of information  to doctors on the rates of surgety  for older 
men together  with the scientific  evidence  for non-surgical  intervention.  Recent  guidelines  by 
the  American  College  of Cardiology  and  the American  Heart  Association  state  that  routine 
right  heart  catheterization  is  unnecessary.  As  a  result  of  PRO  performance  monitoring, 
feedback,  and education,  right heart catheterization  rates  have dropped  significantly. 
Additionally,  in  Florid%  Medicare  beneficiaries  were  denied  cataract  surgery  because  of 
restrictive  criteria  employed  by Medicare  HMOS at variance  from accepted  Agency  for Health 
Care Policy  and Research  (AHCPR)  guidelines.  PRO intervention  led the HMOS to adopt the 
AHCPR guidelines,  and beneficiaries  now enjoy increased  access to necessary  care.  .4MIR4 
contends  that  HCQIPs  more  scientific  and  systems-oriented  approach  to  identifying  and 
responding  to poor performers  might prove  to be a more effective  strategy than the subjective 
and highly  litigious  system  of individual  case review. 
There  are  other  reasons  why  AMPRA  supports  option  two:  1) PROS are  still  engaged  in 
individual  case review  through review  of beneficiary  complaints  and hospital  notices  of non-
coverage;  2) the  absence  of sanction  authority  would  weaken  the  PROS authority  with  the 
medical  community  (as observed  in the report);  and, 3) removing  the sanction  authority  from 
PROS would  endanger  beneficiaries  if other  mechanisms  fail  to  effectively  deal  with  poor 
performers. 
AMPRA also recommends  that PRO interaction  and communications  with state medical  boards, 
ombudsmen,  licensing  agencies,  and accrediting  bodies  be strengthened.  We  urge  HCFA  to 
issue regulations  that would implement  the 1993 statute that requires the sharing of information 
between  PROS and medical  licensing  boards. 
Just recently  AMPR4  and Joint Commission  on the Accreditation  of Healthcare  Organizations 
collaborated  on a pilot project in the state of Pennsylvania  to share PRO and joint  Commission 
hospital  accreditation  findings for the purpose  of accelerating  hospital  improvement  activities. 
Voluntary  efforts  at  information  sharing  such  as this  should  be  encouraged. 
Again,  we thank  you  for allowing  us the  opportunity  to comment.  Please  let us know  how  we 
can  be of  further  assistance  in resolving  these  important  public  policy  issues. 
S~cerely, 
)3xecutive  Vice  President  lNledical
American  Association 
Physlclansdedicacedto the health of Anerlca 
JamesS.Todd,.M1  515North State Street  312464-5000 
ExecutiveVicePresident  ChiCagO,Illinois 60610  312464-4184 Fax 
October  13, 1995 
June  Gibbs Brown

InspectorGeneral

Department of Health and Human Services

330 IndependenceAvenue, S.W. Room 5250

Washington, D.C.  20201

Dear Ms. Brown, 
The American Medical Association  (AMA) appreciates the opportunity  to respond to the

recommendations  contained  in [he Office of Inspector General (OIG) report,  The Medicare Peer

Review Organizations  Role In Identifvirw and ResDondin~ to Poor  Performers.

During the past two years,  there has been a positive reaction from the medical community  in

response to the PRO program,  specifically  the PRO Fourth  Scope of Work.  The PRO Fourth

Scope of Work correctly  and appropriately  attempts to improve the overaII quality of are

provided to Medicare  patients by analyzing patterns of care and outcomes  and by sharing

information with the medical community.  In placing a greater emphasis  on physician  and

provider education,  there has been an increased level of collaboration  among PROS, hospitals,  and

physicians on quality  improvement  efforts.

We are pleased that the new Fifth Scope of Work,  which will continue  to define the future

direction of the PRO program,  builds on the positive changes of the current scope of work by

further enhancing  these cooperative activities.  The AMA remains very supportive  of the

educational,  non-punitive  direction  of the Medicare PRO program.  We continue to believe that

the programs  emphasis  should be on improving  the mainstream  of care through pattern anaiysis

rather than a punitive  approach that addresses individual clinical errors.

Toward [his end,  we have no firm position on the two specific recommended  options  f~r the PRO

program as discussed  in this report.  Given your assumption,  with which we wholeheartedly

concur.  [hat  [he  PRO programs  primary  focus should be on improving  the mainstream  of care,

we believe [ha[, if [he Health Care Financing Administration  ~HCFA) determines  that i~entifying

and responding  to poor performers  should remain a funccion of the PRO program,  further study is

appropriate  to determine  the potential  effectiveness of PROS in performing  both activities.

Regardless of the actions taken, HCFA  must take great care not to undercut  the educational

approach of the current  PRO program,  as well as the improving  cooperative  relationship?between

the PROS and the medical community.

Again, [hank vou for the opportunity  to cornrnem on this report.  The AMA is strongij  committed

to [he objec[ive of maintaining,  and, where needed, improving  [he quality of care provided  to

!vIedicarepatients  and will continue to play an active role in ensuring  that physicians ~:rspectives

are an integral part of the PRO process.

Sincerely,

~  d.  %5@  m)a 
t ames S. Todd,  MD OJi*l@fintu  #*cnu/lad  ku&tY&jsolJB?w R&&acwium 
November 21, 1995 
JuneQibbs Brow-n 
IllspomrG
eneral

Dqmtmcmt  of EIedth and HummS-
Officoofthc  Inapcmr  Ocaeral 
330 Indoperidenee Avenue, S.W. 
WmhhgtOSD,C. 20201 
Dear IilspOctofGenwldBrowlx 
TheAmcrieanAssociationofliotimd PcrsoLI(sAARP)appnxiatca&  Wp=nu@mooxz$=m 
on the ifxpoxtandtraftnqxm TheMsdbrc pm  Rdtmu CkgmizaticmaRoJeh ~ 
andRespondingto Poor I%zf&mers, 
YOUsu~gesedudHCFAreconsider PROSlkuedonandeilhr directthe PROSto Ibous 
-u$ivdya~mtk~~of~,~~m~=d 
how quality ~ t@paibtprotection  f&noticmcsimreusonabIybeperfoxmodbyanc 
organ@don. 
We do not concur with M  fm  option becauseAARPbelievess?xon@ychatPROSshould 
main the msponsibilhytoidend@sadrespondcffkodvelytopoor~ pcrftmntng@yatcians 
andhospitals. To do S0,@c~tierktpmtim  demearsahmddbeStIUI@WBdSOthStthey 
canbe ellkcfive. In addition,t&equality_vcanant  functionsPROShavsassumedshould 
beevaluatedto assesstheir impactonpatientwel!-being. 
. .
Jhckpmund  an~ 
As AHlatest draft report ixxiicatw, #e  PROpmgnun bm undergonea pmfd  uadbmmth 
dwhg tk  lastsevwd yems, fkomme fwwed primsriiy on ident@ing  tu%iaddressing 
individual k4aneos  of pvor wireto ORScmpbaaizingthe overallhuprovameQcof mm through 
cooperative+qualityimprovermmprojscts.  Thetransformationwassath motionbyW  1990 
Instituteof Mediciner qwrton Medieareq udiqassuranceen,dbaaptied  ~  @  atcoq 
Suppott of thehealthpolicy andprovklercommwmies. 
Anm4cm ~0~  of~~r~  P=$u  601E SUCC% N.W.,  Wmbin&oIt, D,c.  2004-9 (202) 43+-2277 
EUgQIUt. bkIHIJh  .?%i&a/  Hence B, Deem &Jmdvt  Dimnw 
.-.
\ .Y-..  Inspeetor Chard  BrowrA 
Novmabcr 21,1995 
Page 2 
f)lUiII$Sk  dcbatoa~  ~d  the tGUISfOIIXIat~i
 OIL ~  &WftO.@On  of 
ContimIonsQuality,Iinp.rovemcm(tCQ
 D principlesandmethoddogiea ho  SheFRO-hoapiwd
phpn  Mcx@on.  Atthesanwdine,h~er,  tie  Aamei@on  - CM  Mdibuc 
pademsimcmatarequirednxaion  of PROScapab~  coaddmmidividual poor 
.
perbmmmand  poorpe@rm!m ti3rougltvi@roum$ieunttekx& 
OIGs drafkreportdocummtsthefollo-. 
1.	 w*&pti~mofa{d  m@mvbw,  mo*tim*d~h 
- ofdermting  ktancea  ofpoorcaxe.  Rcoonireviow  ad  da~colktionhad  beers the 
PRO tool tkt  idaniilkd  71 perccmofquaLitpyroblcmainrhept. 
2.  Thenew climateof coopemdonwkhthephysiciawhoapha~lv~bY
CQI*approach,whileadmirablea,ppedratohavetakensomermthm  of sherole of PRO 
aawatchdog. l?ilra~PROaate idcm@ingveryf- qualityproblems. SeeoT&PR@ are 
MfoMo~~onti~  @i_  bWOIG~d  Z~~,  oflti@@ 
problemsidentified,SOpercenwtm   hatulkbdy OIXPRO, andPRO actioonn quality

problemsfo
 r the most part waa a letter of cautioxL Third, shore is no evideave tha  follow 
UP ISnow beh~  handled by hoepitals, Fihdiy, it appeamjhxn OIGSfludinggchatPRCh 
arenotsharinginformationonqwdicyof careraseawjthstarelieendngboardsaJrequhd. 
Q  Esmbliahmemof a homca.1dischargeappealsya@mthat embl~ paticauKOrequesta PRO 
reviewof a deciiion to terminateMedicarec overngoef
 a hospital stay.
	 Thebeneficiaryc~mplaintauthorityw, hichenabltabeueiiciadeato obtain a PRO rcvkw  of 
an We$ation of ii quality of care probkrn. 
  The oYerail  PRO xcview authoritythat was pmnously implomenrfd through ramiom eaat! 
rcvkw  aimed at txncove~  quality and uWrarbn  conccrxKLbus whioh now utilizes paltern 
tiysis  k  the puxmit of IItainatreamquality improv~. 
In resporuiklg to the dl-llfirel)orcsrecommdatl  on, we believe it should bo evaluated in the 
comtext of all the padeut promxkmtllnctions ourlked above,  InspectilrGenemlBrown 
Novomber 21,1995 
Page 3 
not thesu@ct ofthedraftreport,thePROsstatutoryresponsibilitytorespondto 
W&ile 
Medicare beneficiaries~  for rdew  of a hospitaldiachsrgc_  cO_  10CmbOdy 
aaiqortmtpadempnwctkmmle,  Rcoomly,ARAPhaspM  patedinab  skfore@efbrlto 
improve the Wmrxunlcation of berletiiaxios  Ciis&qe  appeal rights Ihrougb a mwrkhlg  Ofthc 
Important Message ftemMedicareandtheuseof additionaml dxds,  wch asWoos mde 
available to hosphalizod patkma and their fknilies.  HCFAshould proceed with 
. 
fmplememat$omtithe  taskforcemmmwdmm , andPRGashouldwdeztake toaggmdwly 
informpatienbofthcir dkhergeappudxiglm.  lhcrahasaotbmn,aa  dahouldnotbo,any 
conilictbetweenMEPROroleandPROSnewerquafityimpmvememflnmioas. 
01G6  recent companion &sit report on the benefiekry  cumplaint anthorip  rmmaied Wrimw 
operatlOnai doficiela5es, wbicbMRPaddW#cd  iJlitecoxmm?m &t&r of~27,  1995. 
As we sUNcdin that letter.In,liglxof theetjminationofrandomsamplerecordmviawthe 
processof Mm?-@  relqmldiqgtobmll@uy  eemp- aasumeaevellgmter 
-ce~ameuti~b~~Mtim~w-~s 
TheOIGreportsmakeclearthatcomplaints~  be+maproductivemum  ofqualityofcsre 
conocrn$.Moreover,kiacharthatneitherH@A amthePROSperceiveanh!xxmq@bil.ity 
Mrwecnthe eomplaiatautheri~ml theqpalityimprovemeasutrategy;~hint  inW6@ation 
isaprominem fknureofthefifthsmpeofworkspadentp  nmctiondement% mm  AARPa 
_ve,  tie complaintawhor&dcficieaxiesshouldbe remedkl, patimcsshouldk  -C 
awareof its exktence,  awl PROSshouldcontinueto serveas complaiutixveaiigatars. 
3. XJe PR~  v 
PRO-initiatedreviewactivitypmsmta b  greatestpemcived-C  betweena strategyaimed 
at identi@ii  poor pcrfbmwrs, and one aimed at qwdi~ improvement. Clearly, tbe la-
Sua@gyhas~vaik~  and,aathe01(3reportobserves: 
W& recognizetharthe nzndam nndews were Uor-inrmhg  gemrmted  much dkcowl 
widl ~hemedictd cornnmnity, anti idenrg?edJ%w@@@+car  e problem  mhtme rv the 
nundxmofrecod  rewewed.We ati  undemtundtlurr chepmrn&r qfrhe PRO 
&ograms  ment  dincrion  hoiclrpnmd$efor lqrvving  #u overallpmcrice of 
medicine, 7hi.ris @great impo~e  to Medicare hnej?duia  and others.   Iaspectur Gened  Brown 
Nowubcr21,  1995 
*4 
lthMbm  W~on&Msee  bMba  CQTwiew-wtiqq 
patiti~~- ~over~~m~ti  p~,  dtie~~ 
individualmlaRaxlOfpoorqueli!yWiutin boaddxcosed-  cdlxationalsocripdliinary 
responsesasrcquhvd.10thismnuecli~  animeresdngfioding&t& (XGmndyis that77 
percentof*  PROSquerild(17 outVfz)  boliew lhatthetwo no  fimdimasreCOmpadble. 
Atthosametime, however,halfthinkbencficiarypmectimshave bomwebytie 
cwrentscope of work. 
Fm~tij~ontie  sWti&ews~Wistiti  Tloncwatraegy  isapmmidng 
one, but remaius ~V~tdktOimSOf~l~~~Qn~~~.  we-
OIGto~e~&witi~to  timm  Arc~dfi  RWk~W 
IknprovexxxxProgram  Wealao,asdutedabove,-b  theimportanceofviewingWtOa 
patient protection  role  in  a broadercomextthaxincludesrhedisobargeappeab awlbencf!eiary 
comphi.imelomenrs. Curren@, thoseeknems existIargclyas paperfimctbs,  andrequire 
extensive pubkity  and opemtimal  @rovemmm  coenable than  to serve padonta adquarely. 
pk~S WXMilitk ItUIjOlrY StiOOd~
@Wri  WtfhSU@Ody tt)iUtWVIXW~  khdf  DfMUii~

beneficiariesandfleet  theirqualityof care, As moreof those bendciarb  move into @w 
forms of hedlh  cam delivery, with hadal  Hvea  that possibly tbaten  healrh W 
@=W# P*- Pro-M  be=me  - more CWcal. 
Tho OilIce of In9pector  Generals  ongoing  efhta  la otYerremedies foramldeficienciesmthe 
PRo program cmninue to prwide  a great service coMcdioam &ae&bes   .Wekmklbrtvd 
to~toworkti  you~d~btim  mb~ati~~q, 
Thank you again for the oppommity to cxxnmcz&If you should have any questions, phxme 
contactM-JO  Gibson  in  AARPs  PublicPoticyJhstituteat(202)434-3896 or -I 
Matheis in Fcdezal MUs  at (X2)  434-3774, 
sincerely, 
*& 
Volm
Rdkr 
Dream

Legislation and Public Policy
 . 
October 16, 1995 
June Gibbs  Brown  ,

XnspCctorGeacrei

Depamnent  of HealthsndHumanSewic&z

Washington,D.C. 20201

Dear Ms. Broww 
Please  find enclosed  our comments  on the OIGS draft repo@  The Medicare 
PeerReview  Idmt@ing md kpmdiq  to Poor Performers. 
or@lJbti021S  Role  in 
We appreciate the opportunityto review and commenton (his report. Pleam let us 
kuow if we can be of furtherassistanceto you or your staiT in your studies regarding 
P=  Review Orgsnimtions. 
SkJJiC 
u
Si&ey  s w  fe, M.D.  Laureu Dam
Staff Attorney 
Director 
Emiosure 
fblph  Nadrr, Frnadu  co~ 
ON ~  MEDICARE  p=  RE~  ORGA~~ONs* 
ROLE 11+I1DENTIFWNG AND RESPONDING TO POOR  PERFORMERS 
(OELOM2-002SI) 
Submntcd by Public Citi&ns HeahhResearchOsoup 
October16, 1995 
Wc qpwiate  this oppwtmhytounnment  nnthisreport bythe OfTweof I~ 
General~OIG) ofthc Dep@nwntof HealthandHuman Semoes (WHS).  Public Citizens 
Health ResearchGrouphas k  a ~  oftheeoaceptof P=  Reviav  organizations 
(PROS) since their inceptiom end believca that PROS, ifsmq@ex@  could 
Serve  9 M  roje 
Medicarebeneficimies*  P- CPM@ndicai  -.  A  the repofipints ou& 
in  protecting 
the main emphasisof PROShas shiftedin the past  fw  years  from ttying  to  identifi  end 
resporxl to imiividtlal phyalc188Sand hospitals that are performing poorly, to incorporating  the 
concepts  of continuous  quality  irnprovcmcrd! md  umrlcing with  the medical  conmxmity  to 
improve  the overall quaiity of medicine. 
We agree with the report thaG given this shifl  in focus,  it is hn-t  co assess the 
abilky of the PRC)Sw continue to perform tiir  policing role.  We disagree, hovwwer, with 
the policy options  suggested by the rupor% partict+arly  Option One   to eliminate  tha PROS 
role  in  identi~  and responding to  individual  poor  pcrfimnus,  and  to  focus  only  on 
improvesmmt inthe overall practice of medicine.  We  contitmow  quality  improvement  is 
a vvclcome addition  to the methods  of  protecting  Medicare I-ef3ciarie$  it dots  not  and 
cannot, replace the necCsWy task oftkcting  poorperforrnentf.mpruv@theoverallpmctice 
of mdiciac  may ineidesulyidenm  some poorperfbrmen,butsuchis notits prinmy goal. 
andinorderto fullypmtcctMedicare beneikhries.  the govemmnt  mustcontinueto seek out 
those docto= and hospitals*  cawc needlesssufkiog  becauseof  IC= ssary or poor 
quality medical cam  At_  thereis no organizationor ageacy b  adequatelyprotects 
Medicarebenticiasics orthebroaderpatientpopulationtlom@y  porfonningphysiciansand 
hospitals. Whatprotectiondoesexistcomes a vasictyof groupqsuchasstatemedical 
from 
boards,hospitalqualityamuranwdep~  ~on  org=imtio~.  md o*m  Whi* 
atbestofferonlya patchworkof protection. Emhgrouphas a difRmmmissionandfocus, 
andeach protcas the mstdicalconsumerto oxdya iimitcd degree. 
State medkal  boards, the fii  line of defense against poorly perftmnmg  physiciq 
 
have a mixed  record  in  protecting  the public.  Each  yesr,  PubIic  Citizens  Health Ikearch 
Group compares  the perfonnanoe  of the various state medical boards by analyzing the rate at 
which doctors are disciplined in each state.  We have found an enormous variation among the 

difkrcnt state licensing boards: in 1994. for  xampk  the Kentucky Medical Board had a rate 
of 9.62 seriow  disciplinary actions pcr 1000 doctors.  while the Pennsylvania  Medical Board 
had a rate of only 2.04 suiom  alinxy  actions p=  1000 cioctms  ~s,  while some state 
boards may offer masnnabk  protection  to citizens in that slam. other boards discipline  sv &W 
physicians that they offer tiost  no w~tion  m ~ 
  Hrmpitd  qua~  ssmrmee  departrncnts,  another possib~e line of defense against 
poor performance, conduct dtcir bwincss  behind a shroud of sscrecy, making it bard to assess  the S~  of their cffO~- &  Of  hcambcz  1993, howcvm, Sevcmy-five  pemcnt  of  the 
hospitals  in this  country  had not reported to the National  Praotiti- Data Bank even ona 
adverse action  taken against a doctor.  Given the wry  limited number of reports fihxl  by 
hospitals  -- _~byi=W- there is reason  to  quastion  whether  hospitals are 
acsivalyiddifjhg  and responding to poor performingktor~  and to be wnccrnerl  about the 
level of protection provided to patirmts. 
  Aecmdtiag  orgdzatioma  that inspecthospitals  -- the  most  impmtant  being  the 
hint Gxnmission  on the Accreditatioof nHealthutreOrgmizmiona(NXHO~  -- offbr little 
to instill coufMenm  in the public.  LI%Ohospital quality assurance -~u,  the KWfo 
maintim  the results of its inspectionsin secrecya,ndrarely*  *cRditatioII to a hospital. 
Public Citizens Health Rtaeamh GrotqJhas long &en critical of the faot that the JCAHO, a 
privateorganizdon  dosnbtcd  by the indusrty it is supposed to be regulating,  has been given 
so large a role in pmtcoting  Medicare beneficiaries from poorly performing  hospitals. 
Option  Onc  in this rcporr includes ,&  mggcdon  that the  Hcaltb Care F_ing 
Administnititm  consider ways for the fkxfcragiovernrncmto suppm  the efforts of organizations 
that - tnmc fd  on addxcs&g individual caxs  of poor cam - this is an idsa rhat we 
suppoc  but notat the cost of PROSpokingrole.Em  wirhthecxxsmxeof PROS, the 
~m  fm kkntifjhg  and respdbg  to poorly performing  physicianssnd hospitais is hardly 
a scamieas web. WithoutPROS,?hcmwill be  ven less prorcction for Mdkarc  bcncficiarics. 
option  TWO~  -g  the PROSm dctcsmine &  &Y can perform both 
roles atthcsarno~tif  m,howbcstodom.  Whdewcsupport  fiJrther study to 
determine ways to improve PRO$ WCJw
ould like to point ow hat  most oftheprobicms
idcatificd  in  this report Imvc been identified  bcfm intheserieosf
 OIGreportscited in 
Footnote 2. WC  thePROS shift in fbcus may have exacerbated Wme of their probicntsin 
ided@ing  and maponding  to poor pcdorrncrs,  the nattm  of tbe probkms  has not cbnged. 
TOboom the perfomuuwc of pRO& therefore. w  suggest that SOMCof the recommendations 
of ptwious  reports be vigorously irnplcmcnte4 ia palticuk 
  HHS  shouldpropose legislation requiring PROS to provide case infimnation 
to  State  mdical  boards  when  PROS have  con6rmcd  that  a  ptIysicim  is 
responsible for poor ctuality of cam rcsuking in harm to the pet.sent.  T%e 
legia&tion pmposcd should resoivc the umfbsion  causedby OBRA  90. (PL 
101-508),  which rqukcs  notice ad  hhg  ~0=  PROS sh~  ~ 
information. 
KHS should seek legislative change that would pcnnit PROS to provide and 
 
~ive  data from the National Practitioner Dara Bank.  (he  of  the  problems 
idcntifld  in  the  report  is  the  diflicuky  of a PRO determining whether poor 
behavior is part of a pamn  or merdy an isolarcd incident  and tuxss  to other 
information coilmtd  in the National PractitionerDatn Bankwould assist in such 
a&termu@  on. 
2  m 
  slmuld  sdc  ~C@ltiW  - to imeasc  the amount of  JZIOM&Uy 
pemddespexmitted in orderto make them a more  meanhgM  sanctiom  Current 
lmv limits monetaty penalties tothe amount  of the medicdly  mmcusuy  or 
impmper  wrvicc  -an  amount  toosmall  tosweasa,nadaquate  sanotionor 
W  sbotdd *  legislatiotno repealthe mquircment thatphysiciansor 
 
h+ds  Which hWC  ViO&d  Mldkdrc obli@ions  IItllyb  S=CtiOllCd  only  if 
they  demonstrate au  unwillingness or inability to  comply  with Medicare 
obligations. 010  reportssince u iesst 1988 have &mti&xl  this  unwilling  or 
unable requirement  s  a major impedimem ro PROS ex=isiug  thcii  sanction 
referral authority,  and havw WcOmmendeddcktion  n@re?neIIL 
Of  this 
HHS should inczeasccducatiomdand outreachcfibrts to inform Mcdicarc 
 
beneficiaries  of the existence and fucdons  of PfUls.  Bencticisry wmplaints 
will become an even mom importanItsourccof leads f=  PROSas the mndom 
sample medical record review is phased OUL 
PROS can save  a vital role in pmtmdng  Mcdicam beneficiaries  fm  poor quaiity 
~dc~b~hwnotym~ti~loti~t~  OVWti  P=tycam  PROs  use 
of their simction authority h- dtidIuL  and now with*  shift in fww  to contimmus quality 
.
~  and  eduoiatioxu we  &  that  PROS  till  become  ICSS  effeotive  unieas  the 
made in previous 01(3 repo@  attdrepeatedhere in ous commmts. are 
rcwmmendations 
ilnplcmenuxi. 
We arc not unmindfuiof thodifficultiesPROSmayhave as their msoumes areshiftcd 
more and more towardsdoming  their mandate to improve  rhe general practice  of medicine. 
This  focus,  however,  cannot  replace  the ncccsary  task  of  i&ntify@  individual pooK 
physiciansandhospitals- inthemedicaificid- T&ctwo approachesdeal 
performers  - both 
with difIkrentaspects of qwdiryproblcu  and no matterhow much  continuous  quality 
~t  is abk  to raise geneml  staurkds  of medical c- there will always  be pour 
performerswho iqjumindividualpatientsandwhomustbedetectedandsanctioned. PRO% 
in order to filly  protect Mcdicam t=neficitiex  must be strcngthend  to perform this set+-. 
3   
Coalition  for  Consumer  Protection  and  Quality  in  HeaithCare  Reform 
1275  K Street, N.W.,  Suite 900  Washington,DC 20005 
(202)789-3606  Fax (202)842- 1 I 50 
Novembe6r, 1995 
Ma.JuneGibbsErown 
InapecsoGreneral 
~  ofHealthandHumanSenficea 
Cohen Wilding,  Room5250 
330hv@endeIIwAve.,S.W. 
Washin~  D.C.?lMll 
DeaMr
a.Brown: 
M  YOUfor asking LheCoalitim  for Comer  Prote~on  and Qua@  m Health Care Reform 
to~em  m yourdaft r~,  W h-f~mc peerReview  orxtim  Role in Identifyingand 
-am-per  farmers. 
~e  thlitionis composed of mom @  @  OrgSSI&ItiOIIS  witi  thc  c-on  goal  of a health 
care system that offers good consmner information, meaningful choice,  quality assurance, and public 
acumntabiiity.  When we receive a tequest for commem such as yours, we cirmdare the document to our 
ItMMbershipasking for their comments.  Depending 0SSthe issue, we may receive  one or more 
comments.  Forexamplei,ny~  previ~  report,deaI@wifi  Wmpltit  haIKU@,  four of our member 
organizxions  -d.  We ~ways  ~  OKtIhe -M  ~eMS  of w  meo&N,  as we did with the 
above-mentioned report. 
Onsome issues, rhe CoaliiOSI as a Whole takes a psition.  ne  nature of our Coalition is such 
that when we do take a Coalition pogition, each memberdoesnotmssarily  SWbacribetoevery.s@tic 
recomsnendatiobnu,trather suppona what we say as generally on rarget. 
Wheu 
only one or two of our members respond to a ~1  for COUMNZIUw,e do not usually take a 
fOllrmlpositiou as a Cdida.  In the ease of your ~M  draft rqfl  on identifying and re3p0tMing to 
poor performers, we received only one comment  -- fromtheCitizenAdvocacyCenter(CAC).The 
COtmneiMse nclosed,While1cannocstatethatCACscommentrsxnt  theCoalitionpsosition(since 
so few of our members chose to express a view),  I can say &at they am qnite knowledgeable  about this 
p~~  ~  q  generallyrepresentthev~ewosfmosrCoalhion  members. 
Thanyko u fortheopportunittyo comment.
Sincerely, 
BrianW.Lindberg  1 
ExecutiveDirector 
[IXugcomz.wps]  C9mENTs 
en the

J2EPARTMKNOTF
 HXALTHANDHUMAN$SRWCZS$ 
OFFICB OP INSPECTORGRNERAL 
DRAFT R8PORT 
The  RMJIMcasemar  Rwviaw  Grgamisationet  Role 
*	 Xdhntifpag  and Req)ondsn$to  Pees Pwfoxuem 
hs#u8t,199s 
The Citizen  Mvooaoy  Centar ((SC)  is  a WL%queeuppoxt  program 
for  tml  thouelacw  of  public  maNbere who eerve  on  health Oara 
regulatoryboards end govern~ngbodlss as representativesOS  the 
ooxammer  Interest,  Uhather appointed  by  govornose  to serve on 
regulatory  or  other  health  policy  boarda or @electedby private 
~ectsr institutionsand  agenciesto se- on boards  or  advisory 
panels,  public  anembers  are  typfcdly  in the minority and are 
u8ually  without  the  reaourceu  and teuhrdod  supportavailable to 
theircounterpartsfromprotess~onalandbusinessoommunit$es. -C 
is a not-for-prof$t501(c)(3)arganimtion  oreatsid  to  serve  the 
publZcSntere8tbyprovid$q research,tsaining,  teohxdcde  upport, 
and  networking  oppcxtunit~ee  to  help  public  members make their 
wntr$buticm~  informed,  affact%ve,and  n$gnif%cxmt. 
OnaIof  CACa networmi(caU6tdPROIWT)  is  oompomd of  the 
beneficiary  members  of  the Boardtaof  D~seotogS  of  the  Me44csare 
Peer  i?evXa$wOrganisationswhich are the sub$eotof  this  draft 
report  .  From  time  to  tlam,  PRONET  takes  positions  on  matters of 
particularinteresttu Mediaarabeneficiasiew,  whioh  inoludeOIG 
reporte  dealing  with  the  performance@f PROS.  In  thi.a Xnstance, 
PEd!wErlMS&?t yetspo&en 
Onthedraft  reportthatis  thesaa@ject 
of  @xe*e  ~ts.  At  ite  most  racent  annual  meeting in 
GepWnk,  1995  4n  S81t  Lake City, Utah, PllONP?mfembers adopted a 
reeolut~on  oalling  on CAC to  convenea fwzum where  PRONETmember8 
would have an opportunityto reviewand debata the d$reot$onof 
the  M@icer@  quality  oversight  program  and to developa White 
Paper  on  tha  @ubject  for  presentationat the 1996  annual 
1
 meeting. 1 !fhw,  PROmr  ts  comments  on  the  fhading8  end 
reemmendation8 in the OIGsdraft reportw1ll be conta$nmdin 
that  future  document.  me  commentspxeeentedhere regleotthe 
views of  CAC* 
presents  two 
The  OIG  major  fhditqp: 
1)  Ae tha PRO Program becomes  inorees$ngly  oommitted  to 
improving  the  overallpraatlceof  medicine,  Its  abilityto 
find and take actkn on poorly  performingphysiciansand 
hG8pita18 Ls questionable.

2)  NatBPR@  themselves  i!indmuch that iz positiveabout the

ourmnt  direotion  of  the  Program. Sut  some  tmpralm

rs8e~ations  about  Atm  ~mpact  on  protectingMedScere

benef$e%ar~esfrom poor performers.

M  arrivingat finding#1, tha  OXG concluded  that PROW: 
- find  thamaslvee  with very limitedleads  t~  idantify 
#OOZIY  performi~  @&B~ChXW  or  hospitals): 
are unl~kelyto determinewhetherinoidentethat  are 
brought  to their attsntion  are  $aolat@d  Went@,  Qr Jmrt19of 
a pattern  M  quwst~c?nable  care; 
- sarelydo more than inform  those  responeibla  of  the 
nature  of  a  quality  ag  care  problemwhen =na  is  oonfirmad; 
submit  vktually  no  sanotion  Iwwxxmandatione  to the OZG 
0 
(the number of  sanctionmxxxwaendatiozm  has  deolin.d  from  a 
high Qf 72 in 1987 to only
13  in  1994): 
XxBfarvary few C86MMJto stateboardsof medicine,even 
%ough  1993  federalle$ialationrequires  them  to  do  sm. 
Xn arrivingat  finding  #2, the sMG coneludadthat While  27 
of  22 PROIB(77%)  believe  that the two b8eZo  PRO funetione --
improvtngthe  Maimtream  Qf  care  end dealingwith poor pexferm6rn 
--are  Compatible,59? of these same PROS have concluded that 
benefieiaxy  protwtiorw?have becomew~akam. 
Havingmade thesetwo findingu,the OIG sug$eetadto the 
HmalthCare Finmcin$  AdNMni8tratiUn  (HCFA) that  it  has  two 
options for  the future.  Thewa  are: 
2  OPTION1:  The HCFA  shouldprooeed  toward  diroctl~  th@  PR08 
to  focus  ex4u81vely on improv4ngth mainstreamof Oare. 
TQ help  deal  with poor  per ftmnerw,  it   houldoonsidarways
in whioh zha Federal governm9nt mdght auppoxt  other  bodies, 
@JUOh 8S  State  Madloal boards and ombudsmen,that  are  more 
f ooused on @8res6ing  individualoasesof poor  meditaal  oare. 
OPTION2S  The WFA  should  devote  furtherinquiryto 
determine:  (1)  if  the  mm  functiunsof improvingtha 
m8&netreamof aare and Sdentif yin$  and  dealingoffeotivaly 
with  poor  performer8  can rea~onablybe Per$osmedby one 
oxganAz?xttona,nd (2)hw  PROS can  carry  out both 
u~multaneously,  Toward  that  end, At oould support resaczwla 
6f fort8,  damonstra~ionprojrectaby i.nd~viduaPlROD,and

Oonferanoaar  . 
13894nnix1w9ith the FourthScopeof Work h  i993,  iiCFA 
dramatically  olwnged tha primary funotionof the PROS,  Thn PROS* 
naw assignmentwas to analyzmpatterns  of  oare  and  outcomes,  and 
Ew@!J  thie  iIagorm@$On  W%th  tm  mad~m~  COIUUUdty.  moa  aoved 
away  ftom  Aaadividueclhartreviuwdmignad  to  Ment%fy  pmr 
performers,  effeotLvely  ending their  role  aa  polioanen,em  wLth 
wh$chmost PROS nmver seemed comftrtmbae.  Organized  med$cdmeand 
the  pr@idez  ooaununity  reactedfavorablyto this Ohange in 
dimotion.

Bven durhg  the  yeare  when PROSdevotedmout ot their  ensr@y 
to ohsrtravigw,  t?mywere regulaxly  or ftiaiamd  fax  doi~  a  poor 
job of policing  poor  performers.  They  sent  very  fsW  =WJCt$OZt 
rewmmendations  to  the OXG.  Tht$y  failedto davelepcoopemtiva
relationshipswith boardsof  nwjdicinew,hlohhave mom 
disciplinaryauthor$tyand  broader  powers  to  supplementPRO 
8anctionauthority, Very few  quality  of  care  cases have lxmn 
referred by PROS to state madicml  boards.  PRo$i tended to  prefw 
aduoationalInterventions  over  8anct&m30  Even  80,  as  an  earlier 
OIG roport  revealed,  pm  educationalinterwmticms  fm-alW 
con8i#ted  of  notifying a  provider  of  a mnfirmed  quul$ty problem
and  adcinfj  the  providar  tc?  dw eomethingabout  it. 
While  theZr  operations  have  now changed under tlm Fourth  and 
Fifth  ScoptiIs  of  Work,  PROS still  retajxa the  legal  au12t0~lty  and 
the  duty  to  identify  and dsal with poor perfomueru,  PROS 
continue to reoe$ve oomplainte  from  beneflciarieaand have tha 
raspcxwibilttyfor  addressingany qualityproblem  revealed  in 
theseOompla$nts.

CAC bel%eves  that the  01(3  draft  rmport  accurately8tat0athe 
.Optione  presentlybefore  HCFa -- 1)  to  relieve  PROE  of 
Xeeponeibllity  fgr  dgal&ng  with  poor  performers,or 2} to  fi~  a 
way  to  reconcilethe apparentoonfl~et  betweem  this 
3  reeponmibilityand  tlw  PRO*pottern  analyg$m  qual&ty  lmp~ 
activitlos. 
CAC reseweu  f$nal  judgment  until  PRONBTha*  X  m 
QEmJ=@@ty  to  -- - debata  the  PRO=  qualsty  Pfoteottioll 
role.  Neverth@eea,  we will  way  ~ha+  we  +Unk  a  lot  of 
Oonvinchg  *4! needS  tw  justtfy  oontirwingto sely on PR08to 
police  poor pergcmmra.  Given that  PROB  did  an fnadequatejob of 
dealing w$th  poor  perfozmazs  when th$u  was one  of  their  majer 
S96m8~&MXitiOS,  whet 28 the evidenoethatPROUw4%1 do  8 mom 
~blo  j+  ef  POliCMMJ welity  xblantm  now tbt  t~e  has 
becomea lesser  X?8Bp0n8ibility  in  the  PRO Scepe of Work?  It 
wouldbe 111.Ssl*ad4ng for PROS to  hold thwwelves out as part  @f a 
?sWety  nea  but  fa$l  to  ~rovide  meaningfulprotaotion. 
4  PRONET Ri590LUT10NS passed at the Citizen Advoaacy (%ntw PRON~  Annual 
NleeUng, September  28,1985. 
RESOLUTION REGAR!31NGTHE PRO BENEFICIARY  COMPLAINT  PROCESS 
WE, THE PRONETBENEFICIARYBOARDMEMBERSASSEMBLEDFOR THE 
1995 CITIZEN ADVOCACY CENTER PRONETANNUAL MEETING IN SALT lAKE 
ClW, UTAH ON SEPTEMBER28, 1995, ENACTTHE FOLLOWING RESOLUTION IN 
CONCERN  THAT A  MORE  EFFECTIVE AND  MORE ACCOUNTABLE QUALllV-
RELATED COMPIANT  PROCESS IS NECESS4RY TO ADEQUATELY PRC?TECT 
MEDICARE BENEFICIARIES: 
WHEREAS, the U.S. Departmentof I=k?afthand Human  Senkes  Office  of the 
InspeotorGeneral(01(3)reoentlyrebimed a draftreporta$wsaing the PRO berietldary 
complaint prooess and found such complaints to be a rtoh souroe of qualm  of care 
pmblem$  and  oritical to  the  PROS abiiii  to  protect beneficiariesfrom individual 
instanow of pow care, and 
WHEREAS,mostbeneficiariesareunawareofthePROoomphdnptrocae6inapita 
of years of outreachaml pubticeducationefforts,and 
WHEREAS, majorbarrierato an affectivecomplaintprooess includethe current 
federal confidentialityrequirementsand the iengthyinvedgatian process, 
THEREFORE, BE IT RESOLVEI) THAT the PRONET Membersattendingthe 
1995 CflizenAdvooaoyCenterPRONET AnnualMeetingurge i+CFAto adopt 8fId 
implement  the 0K3a raoornmendd.ionsi,ncluding: 
1.	 That i4CFAworkwithPROS te identHycoat-effective waya to oomwt the 
fbws inthecomplaintprocessandrequirePRO$toreepondsubstantiity 
to the complainantas wggested  by the 01(3 report. 
2.	 That  HCFA  work Wth  the  Citizen Advocacy Center  and  AMPRAs 
Commurhtions
Network to  ide~  mat-effective  ways  to  enhance 
Medkare beneficiariesavvarenesaofPRO$andthecomplaintprowss, in 
additionto the fifth Scope of Work oommunioationsdirectivesthat foous 
on HealthCare QualityImprovementin-Kiatives. 
3.	 That HCFA streamlinethe complaintproows in order to expedite the 
investigation and rospoma prooessm  To thatend, PRONET urges HCFA 
to workwiththeCitizenAdvocacyCentertocollectinformationabouthow 
otherhealthcareoversight@dkm  suchaa state Iicerwingboarda,ccmduot 
complaint inve5tigation6.  RESOLUTION  REGARDING  A FORUM  TO REVIEW  AND  DEBATE  THE  DIRECTION 
OF  THE MEDICARE  QUALIIY  OVERSIGHT PROGRAM AND  17S IMPACT  ON 
MEDICARE BENEFICIARIES 
WE THE PRONET BENEFICIARY  BOARD MEMBERS ASSEMBLED FOR THE 
1995 CITIZEfNADVOCACY CENTER PRONETANNUAL MEETING lN SALT LAKE 
CITY, UTAH OhlSEPTEMBER28, 1995,ENACT THE FOLLOWINGRESOLUTIONIN 
CONCERN  ABOUT  CHANGES  !N  QUALITY  OVERSIGHT  BODIES  FOR  THE 
MEDICARE PROGI%AM: 
WHEREAS, there is a questionaboutwhetherthe PRO movement  in todays 
climateofderegulationandmajorchangesinthedelivefyof healthcareinthe Medioare 
program(and Medioaid,etc.) has beoomeirrelevantand veetigial,and 
WHEREAS,~    aeuoonoeptandastrategytirtho  assuranceofquality 
owe forMedioarebeneficiarieshasbeenetfwtivelydismantledandthevastmachinery 
ofthatsystemufreview,overnightand l~teraotion  hasbeendisassembledanditsvalue 
dissipated,and 
WHEREAS, there are varyingdeQW6  of imoeptance of these  chartge6 by the 
medkd  profedon,  researchwmmunity,  and Medbwe benefidarb,  and 
WHEREAS, PRONET has not had the opportunityto date to 8dquately  ooneider 
thesevaryingopinionsanddevelopitsownoolleotivepositionon howthese ohartgee 
effeotthe quafii  of heatthcare fromthe Medkare hmficiw)h  PWWWVe, 
THEREFORE, BE IT RESOLVEDTHAT the IWONET  M8mb9rS  attendingthe 
18!MCitizenAdvocacy CenterPRONETAnnualMeetingurgeCACto00nvarwa forUtll 
wherePRONET memberswouldhaveanoppmtun~toreviewanddebatethedirection 
of the Medkare quaiii  oversightprogram. 
BE fT FURTHER RESOLVEDTHAT thisrecommendationshouldbe giventhe 
highestpriority$0thatthe PRONETSteeringCommitteecandevelopa WhitePaper 
thatreflectsthe colleotiiethinkingofthe PRONET mernbwshipto be pnmentedduring 
the 1906 CitizenAdvocaoyCenterAnnualMeeting. 
RESOLUTION REQAR9NW THE tICFA CONTRACT BIDDING PROCESS 
WE, THE PRONET BENEFICIARYBOARI) MEMBERS ASSEMBLED FOR THE 
1995 CITIZEN ADVOCACY CENTER PRONET ANNUAL MEETING IN SALT LAKE 
CITY, UTAH ON SEPTEMBER28, 1995,ENACTTHE FOLLOVViNGRESOLUTION: 
BE IT  RESOLVED THAT the PRON~  Mernbwe attending the  1$95 Cit&en 
Advooacy Center  PRONET  Annual  Meeting  u~e  the  Health  Care  Financing 
Administration(I+CFA)to reassessitsrule~governingthe PRO contractbiddingprcxwm 
for designatinga PRO ina Sivenstatetoassurerrwixlnwmfairnessandaquaiapplication  APPENDIX  F

NOTES 
1.  The Institute  of Medicine,  Medicare:  A Strategy for  Qualizy Assurance  (Washington, 
D. C.:  National  Academy  Press,  1990). 
2.	 U.S.  Department  of Health and Human  Services,  Office of Inspector  General,  The 
Utilization and Quality  Control Peer Review  Organization Program:  Qualip  Review 
Activities,  OAI-01-O0570,  September  1988;  The Utilization and Quality  Control Peer 
Review  Organization  Program:  Sanction Activities,  OAI-01-88-00571,  November  1988; 
The Utilization and QualiV  Control Peer Review  Organization Program:  An Exploration 
of Program Effectiveness,  OAI-01 -88-00572,  February  1989; Educating  Physicians 
Responsible for  Poor Medical  Care:  A Review  of the Peer Review  Organizations  E#orts, 
OEI-01-89-00020,  February  1992; Peer Review  Organizations  and State Medical  Boards: 
A  Vital Link,  OEI-01-92-00530,  April  1993; The Sanction Referral Authori@ of Peer 
Review  Organizations,  OEI-01-92-00250,  April  1993; and The Beneficiary  Complaint 
Process  of the Medicare  Peer Review  Organizations,  Draft Report,  OEI-01-93-00250, 
June  1995. 
The Office of Inspector  General has also issued a number  of reports  on DRG validation. 
3.  Reflects  reviews  completed  under the fourth contracts.  The HCFA  staggers the 
starting  dates of the PROS contracts,  thus some PROS began their fourth contract  in 
April  1993, some in July  1993, and some in October  1993. 
4.	 The volume  of random  sample medical record  reviews has historically  been so large 
that even with such a low confirmation  rate,  the majority  of quality-of-care  problems 
stemmed  from those reviews. 
5.  Hebbel  and McMullan  to Executive  Directors,  Peer Review Organizations, 
20 December  1994, Health Care Financing  Administration,  Baltimore,  MD. 
6.	 Other  than beneficiary  complaints,  PROS are mandated  to review the following  types 
of cases:  Assistant  at Cataract  Surgery,  Medicare  Code Editor,  Hospital  Adjustment,  FI 
referral,  RO referral,  and Hospital Issued Notice of Noncoverage  (HINN).  The PROS 
will also continue  to do some miscellaneous  reviews.  However,  the most fruitful  source 
among the miscellaneous  reviews--the  readmission  reviews,  which accounted  for 
9 percent  of the 6,010  confirmed  quality-of-care  problems  that PROS identified--will  also 
be eliminated. 
7. The Beneficiary  Complaint Process of the Medicare  Peer Review  Organizations. 
8.  Those who offered  an estimate reported  having received  one or two or a few such 
referrals. 
F-1  9.  Those  whooffered  anestimate  repofied  having received  between  one and four 
referrals  from hospitals.  Nine of those who offered an estimate  on physician  referrals 
reported  having received  either  a small number or between  1 and 4 such referrals; 
1 reported  having received  6; and 2,  10 or more. 
10. We understand  that PROS, through their HCQIP cooperative  projects  with hospitals, 
could identi~  instances  of poor performance.  However,  unless the questionable  care  is so 
egregious  as to prompt  a sanction recommendation,  it will be excluded  from the historical 
data bases of quality-of-care  problems  that PROS monitor  for patterns  to emerge. 
11.  As required  in their contracts,  the PROS also profile  quarterly  all the quality-of-care 
problems  they have identified.  This activity does not involve reviewing  additional  case 
records  on a particular  provider  but is simply a method  for monitoring  the PROS pool of 
quality-of-care  problems  to identify patterns  of poor care. 
12. In determining  whether  an individual  quality-of-care  problem  would result  in an 
improvement  plan,  the PROS considered  the existence  of a pattern  of quality-of-care 
concerns  or problems  and severity of the problem/harm  to the patient.  Some PROS 
reported  also having considered  whether the problem  could be corrected,  the receptivity  of 
the physician  or hospital  involved,  and the opinion of the medical  director. 
13.  U.S.  Department  of Health and Human Services,  Office of Inspector  General, 
Hospital  Reporting  to the National  Practitioner Data Bank,  OEI-01-94-00050,  February 
1995. 
14.  The National  Practitioner  Data Bank, established  in the Health Care Quality 
Improvement  Act of 1986, maintains  records  of medical  malpractice  and adverse  actions 
taken by hospitals,  other health care entities,  licensure  boards,  and professional  societies 
against  licensed health care professionals.  Hospitals  and other health care entities must 
report  to the Data Bank all adverse actions they take that affect a practitioners  clinical 
privileges  for more than 30 days. 
15. We reported  that the unwilling  and unable requirement  remained  an obstacle despite 
the Administrative  Conference  of the United States referring  to it as an inappropriate 
burden  of proof  in 1989 and Congress  attempt to make it more workable  in the Omnibus 
Budget Reconciliation  Act of 1990 (P.L.  101-508). 
The PROS cited the high costs,  the complexity  of balancing  physicians  rights to due 
process  with the beneficiaries  need for quality,  and the confusing  instructions  from 
HCFA  and OIG. 
See The Sanction Referral Authority  of Peer Review  Organizations. 
16.  Federation  of State Medical Boards of the U. S., Inc.,  Annual Board Action  Statistical 
Package,  April 5,  1995. 
F-2
 Many medical  boards  are beginning  to devote more attention to quality-of-care  cases.  But 
most disciplinary  actions taken by boards  still focus on other issues,  such as drug and 
alcohol  abuse,  sexual abuse,  and criminal  violations. 
17.  Concerns  about  violating  confidentiality  requirements  explain,  at least  in part,  why  so 
little  sharing  has  occurred.  In 1990, Congress passed legislation  calling  for the PROS to 
share information  with the boards,  but it has had little if any effect.  It included  a 
provision  that the sharing occur after the PROS grant physicians  notice and hearing.  
Because of uncertainty  about the meaning  of this  notice and hearing  provision,  however, 
PROS still shared  little information  with the boards.  (see The Peer Review  Organizations 
and State Medical  Boards:  A  Vital Link) 
18.  Citizen  Advocacy  Center,  Information  Exchange  Between  Peer Review  Organizations 
and Medical  Licensing  Boards:  Update and Repoti  on CAC Survey,  March  1992, and 
Information  Exchange  Between  Peer Review  Organizations and Medical Licensing  Boards: 
Repoti  on the 50 State Survey,  November  1992. 
19.  The Center  identified  Alabama,  California,  Colorado,  Iowa,  Minnesota,  Mississippi, 
Ohio, Rhode Island,  West Virginia,  and Wisconsin  as States with medical boards  and 
PROS both committed  to sharing  information. 
20.  For example,  the New York PRO initiated a cooperative  project  aimed at improving 
prophylactic  antibiotic  administration.  It collaborated  with more than 70 hospitals  to 
conduct  this project  and, based on the projects  feedback,  these hospitals  are changing 
their antibiotic  administration  policies.  (from  PIRO  Works  with Hospitals  to Implement 
Feedback  Effort,  IPRO  Quality Initiatives,  Winter  1995.) 
Another  example  involves the Alabama PROs use of data from the large-scale 
Cooperative  Cardiovascular  Project.  By working with the PRO,  one hospital  in Alabama 
increased  the proportion  of patients receiving  beta blockers  when indicated  from one-third 
to all.  It also increased  the post-heart  attack administration  of aspirin from 70 percent  to 
95 percent  of eligible  patients.  (from Linda Oberman  Prager,  Undoing Case Review,  
American  Medical  News,  June 26,  1995.) 
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