Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
The External Review of Hospital Quality 
A Call for Greater Accountability 
JUNE GIBBS BROWN 
Inspector General 
JULY 1999 
OEI-01-97-00050  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the 
health and welfare of beneficiaries served by them.  This statutory mission is carried out through a 
nationwide program of audits, investigations, inspections, sanctions, and fraud alerts.  The 
Inspector General informs the Secretary of program and management problems and recommends 
legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's Boston regional office prepared this report under the direction of Mark R. Yessian, Ph.D., 
Regional Inspector General.  Principal OEI staff included: 
BOSTON  HEADQUARTERS 
Joyce M. Greenleaf, Project Leader  Jennifer Antico, Program Specialist 
Lynne G. Dugan, Senior Analyst  Alan Levine, Program Specialist 
Meredith A. Vey, Program Analyst 
To obtain copies of this report, please call the Boston Regional Office at 617/565-1050. 
Reports are also available on the World Wide Web at our home page address: 
http://www.dhhs.gov/progorg/oei  E X E C U T I V E   S U M M A R Y  
PURPOSE 
To provide a summary and recommendations based on our assessment of the external 
review of hospitals that participate in Medicare. 
BACKGROUND 
External Quality Review of Hospitals in the Medicare Program 
Hospitals are a vital part of our healthcare system, routinely providing valuable 
services.  But they are also places where poor care can lead to unnecessary patient harm. 
This reality was clearly underscored in 1991, when a Harvard medical practice study 
revealed the results of its review of about 30,000 randomly selected records of patients 
hospitalized in New York State during 1984.  The study found that 1 percent of the 
hospitalizations involved adverse events caused by negligence.  On the basis of these 
findings, it estimated negligent care in New York hospitals in that year was responsible for 
about 27,000 injuries, including almost 7,000 deaths and close to 1,000 instances of 
permanent and total disability.  More recently, a 1997 study of about 1,000 hospitalized 
patients in a large teaching hospital found that almost 18 percent of these patients received 
inappropriate care resulting in a serious adverse event.  In the public eye, such scholarly 
inquiries have been overshadowed by media reports that describe, often in graphic detail, 
the harm done to patients because of poor hospital care. 
Hospitals rely upon many internal mechanisms to avoid such incidents and to 
improve the quality of care.  External review serves as an additional safeguard.  The 
Federal government relies primarily on two types of external review to ensure hospitals 
meet the minimum requirements for participating in Medicare:  accreditation, usually by 
the Joint Commission on Accreditation of Healthcare Organizations, and Medicare 
certification, by State Agencies.  About 80 percent of the 6,200 hospitals that participate 
in Medicare are accredited by the Joint Commission. 
This Summary Report 
This report synthesizes the findings we present in three parallel reports.  It is based 
on our broad inquiry of the external quality oversight of hospitals, for which we drew on 
aggregate data, file reviews, surveys, and survey observations from a rich variety of 
sources, including the Health Care Financing Administration (HCFA), the Joint 
Commission, State agencies, and other stakeholders. 
1 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  The report, as our study as a whole, focuses on the roles played by the Joint 
Commission and the State agencies in reviewing hospitals and by HCFA in overseeing 
these bodies.  Other bodies, most especially the Medicare Peer Review Organizations and 
State Professional Licensure Boards, play important related roles.  We have reviewed their 
performance in numerous prior studies and will continue our examination of them in future 
studies.  They are not discussed in this report. 
FINDINGS 
The current system of hospital oversight has significant strengths that help 
protect patients. 
Joint Commission surveys provide an important vehicle for reducing risk and 
fostering improvement.  Hospital leadership takes these accreditation surveys seriously. 
Hospitals spend months preparing for them, seeking to ensure that their hospitals meet 
and, where possible, exceed the Joint Commissions standards. 
State agency investigations offer a timely, publicly accountable means for 
responding to complaints and adverse events.  The HCFA funds these investigations as 
a high priority.  For both accredited and nonaccredited hospitals, they serve as a 
significant front-line response to major incidents involving patient harm. 
But it also has major deficiencies. 
Joint Commission surveys are unlikely to detect substandard patterns of care or 
individual practitioners with questionable skills.  Quick-paced, tightly structured, 
educationally oriented surveys afford little opportunity for in-depth probing of hospital 
conditions or practices.  Rather than selecting a random sample, the surveyors tend to rely 
on hospital staff to choose the medical records for review.  Further, the surveyors typically 
begin the process with little background information on any special problems or challenges 
facing a hospital. 
The State agencies rarely conduct routine, not-for-cause surveys of nonaccredited 
hospitals.  The percent of nonaccredited hospitals that have not been surveyed within the 
3-year industry standard has grown from 28 percent in 1995 to 50 percent in 1997.  In 
some cases, nonaccredited hospitals, usually in rural areas, have gone as long as 8 years 
without a survey. 
Overall, the hospital review system is moving toward a collegial mode of 
oversight and away from a regulatory mode. 
2 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  A collegial mode of oversight is one that focuses on education and improved 
performance.  It emphasizes a trusting approach to oversight, rooted in professional 
accountability and cooperative relationships. A regulatory mode focuses on investigation 
and enforcement of minimum requirements.  It involves a more challenging approach to 
oversight, grounded in public accountability.  It is helpful to consider external hospital 
oversight in terms of a continuum, characterized by the collegial approach on one side and 
the regulatory approach on the other. 
The Joint Commission, the dominant force in external hospital review, is leading 
this movement.  It is grounded in a collegial approach to review that stresses education 
and improvement.  It focuses on systems in its quest to improve hospital processes and 
patient outcomes. 
The State agencies are rooted in a more regulatory approach to oversight.  But 
HCFA, through the proposed Medicare conditions of participation, is looking for 
them to follow the Joint Commissions lead.  Traditionally, the State agencies have 
emphasized investigatory approaches that aim to protect patients from harm more than to 
improve the overall standard of care.  The proposed conditions call for them to move in a 
direction parallel to that of the Joint Commission. 
The emerging dominance of the collegial mode may undermine the existing system 
of patient protection afforded by accreditation and certification practices.  It 
contrasts significantly with the current regulatory emphasis in nursing home 
oversight.  Both the collegial and regulatory approaches to oversight have value.  As the 
system increasingly tilts toward the collegial mode, however, it could result in insufficient 
attention to investigatory efforts intended to protect patients from questionable providers 
and substandard practices. 
For nursing homes, recent concerns about the quality of care provided have led to 
a HCFA crack-down involving more immediate penalties, surprise surveys, and posting of 
survey results on the Internet, with scant attention to collegial approaches.  Such a heavy 
regulatory emphasis may well not be required for hospitals, but it does reinforce the point 
that when patients are found to be at risk, regulatory approaches have an important part to 
play.  As we have noted, many recent studies and media reports make it clear that 
hospitals, too, are places where inappropriate care can and frequently does put patients at 
risk. 
The HCFA does little to hold either the Joint Commission or the State agencies 
accountable for their performance overseeing hospitals. 
The HCFA obtains limited information on the performance of the Joint Commission 
or the States.  In both cases, HCFA asks for little in the way of routine performance 
reports.  To assess the Joint Commissions performance, HCFA relies mainly on validation 
3 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  surveys conducted, at HCFAs expense, by the State agencies.  But for a number of 
reasons the value of these surveys has been limited.  The methodology for selecting the 
hospitals to survey fails to consider hospital size, type, or past performance.  More 
fundamentally, the surveys have been based on different standards (the Medicare 
Conditions of Participation as opposed to the Joint Commission standards) and have been 
conducted subsequent to the Commissions surveys  (when hospital conditions could have 
changed).  During 1996 and 97, HCFA piloted 20 observation surveys--during which 
State and HCFA officials accompanied Joint Commission surveyors.  This approach 
appears to have much promise, but HCFA has not yet issued any evaluation of the pilots. 
The HCFA observes few hospital surveys conducted by State agencies and 
conducts no validation surveys of them. 
The HCFA provides limited feedback to the Joint Commission and the State 
agencies on their overall performance.  Its feedback to the Joint Commission is more 
deferential than directive.  Its major vehicle for feedback to the Joint Commission is its 
annual Report to Congress, which is based on the validation surveys and has typically been 
submitted years late.  The HCFA is more directive to the State agencies, which carry out 
their survey work in accord with HCFA protocols, but gives them little feedback on how 
well they perform their hospital oversight work. 
Public disclosure plays only a minimal role in holding Joint Commission and State 
agencies accountable.  The HCFA makes little information available to the public on the 
performance of either hospitals or of the external reviewers.  By contrast, HCFA posts 
nursing home survey findings on the Internet and requires nursing homes to post them as 
well.  The Joint Commission has been more proactive than HCFA in making hospital 
survey results widely available on the Internet and through other means. 
RECOMMENDATIONS 
We offer one guiding principle and two recommendations that set forth ways in 
which HCFA can, over time, provide leadership to address the shortcomings we have 
identified in our inquiry, holding the Joint Commission and State agencies more 
accountable for their performance. 
GUIDING PRINCIPLE:  The HCFA, as a guiding principle, should steer external 
reviews of hospital quality so that they ensure a balance between collegial and 
regulatory modes of oversight. 
The HCFA must recognize that both approaches have value and that a credible 
system of oversight must reflect a reasonable balance between them.  In our assessment, a 
balanced system would involve the continued presence of on-site hospital surveys, both 
announced and unannounced; an ongoing capacity to respond quickly and effectively to 
4 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  complaints and adverse events; further development and application of standardized 
performance measures; and, even though it is not much in evidence at this time, a 
mechanism for conducting retrospective reviews of the appropriateness of hospital care. 
A balanced system would also be one in which performance measures are used to protect 
patients from harm as well as to improve the standard of care. 
In its steering role, HCFA must recognize the inherent strengths and limitations of 
accrediting bodies and the State agencies.  Each contributes to the external review of 
hospitals, but they do so differently.  Thus, in steering, HCFA should look to the Joint 
Commission to tilt (but not too far) toward the collegial end and the State agencies to tilt 
(but not too far) toward the regulatory end. 
RECOMMENDATION 1:  The HCFA should hold the Joint Commission and State 
agencies more fully accountable for their performance in reviewing hospitals. 
<< Revamp Federal approaches for obtaining information on Joint Commission and State 
agency performance by de-emphasizing validation surveys, giving serious consideration to 
the potential of observation surveys, and calling for more timely and useful reporting of 
performance data. 
<< Strengthen Federal mechanisms for providing performance feedback and policy guidance 
to the Joint Commission and State agencies.  Given the major role played by the Joint 
Commission, the public purposes associated with its special deemed status authority, and 
the importance of achieving a more balanced system of external review, HCFA should 
negotiate with the Joint Commission to achieve the following changes: 
C  Conduct more unannounced surveys. 
C  Make the accreditation with commendation category more meaningful, 
or do away with it altogether. 
C  Introduce more random selection of records as part of the survey process. 
C  Provide surveyors with more contextual information about the hospitals 
they are about to survey. 
C  Jointly determine some year-to-year survey priorities, with an initial 
priority on examining credentials and privileges. 
C  Conduct more rigorous assessments of hospitals internal continuous 
quality improvement efforts. 
C  Enhance the capacity of surveyors to respond to complaints within the 
survey process. 
<< Assess periodically the justification for the Joint Commissions deemed status authority. 
5 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  << Increase public disclosure on the performance of hospitals, the Joint Commission, and 
State agencies, by, at a minimum, posting more detailed information on the Internet. 
RECOMMENDATION 2:  The HCFA should determine the appropriate minimum 
cycle for conducting certification surveys of nonaccredited hospitals. 
Nonaccredited hospitals are subject to limited external review other than those 
reviews triggered by complaints and adverse events.  Unlike nursing homes and home 
health agencies, hospitals lack a mandated minimum cycle for surveys.  While complaints 
and adverse events may well warrant priority over routine surveys, such surveys play an 
important role in external review, and by determining a minimum cycle HCFA can increase 
the level of attention to hospital oversight. 
COMMENTS 
Within the Department of Health and Human Services, we received comments on 
our draft reports from HCFA--the Departmental agency to which all of our 
recommendations are directed.  We also solicited and received comments from the 
following external organizations:  the Joint Commission on Accreditation of Healthcare 
Organizations, the Association of Health Facility Survey Agencies, the American 
Osteopathic Association, the American Hospital Association, the American Association 
for Retired Persons, the Service Employees International Union, the National Health Law 
Program, and Public Citizens Health Research Group.  In appendix E, we present each 
organizations comments in full.  Below, we summarize the  thrust of the comments and, 
in italics, offer our responses. 
HCFA Comments 
The HCFA reacted positively to our findings and recommendations.  It offered a 
detailed hospital oversight plan that incorporates our many recommendations.  The plan 
reflects HCFAs commitment to more frequent surveys of nonaccredited hospitals, to 
strengthened oversight of both the State agencies and the Joint Commission, and to a 
balance between collegial and regulatory approaches to oversight.  In addition, HCFA 
presented a hospital performance measurement strategy based on developing standardized 
performance measures that are consumer- and purchaser-driven and that are in the public 
domain. 
The HCFAs action plan is highly responsive to the recommendations we set 
forth.  As it is carried out, it can be of considerable value in improving patient safety and 
the quality of patient care. 
6 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  Joint Commission and Association of Health Facility Survey Agencies Comments 
The Joint Commission and the State survey agencies, which the Association of 
Health Facility Survey Agencies represents, are the two key parties that HCFA relies upon 
to conduct external reviews of hospital quality.  The Joint Commission agreed with the 
principle of balance between collegial and regulatory approaches, but regarded our 
concerns about an emerging dominance of the collegial approach to be unfounded.  It also 
objected to the limitations we cited about its survey approach and to our conclusion that 
the Joint Commission devotes minimal attention to complaints.  It did express support for 
stronger, more performance-oriented HCFA oversight of the Joint Commission.  The 
Association, while agreeing with the thrust of our  assessment, noted some reservations 
about phasing out the validation surveys in favor of an observation survey approach that is 
largely untested. 
We stress here, as we did in the text, the importance of a balance in oversight that 
avoids tilting too far toward either the collegial or the regulatory ends.  We believe that 
we established credible bases for such a balanced approach.  Similarly, we believe that 
our assessments of Joint Commission practices are balanced and well-supported.  We 
identified various strengths that the Joint Commission brings to the field of quality 
oversight.  We regard the limitations that we cited as an important part of the overall 
picture.  With respect to the Associations reservations about the observation surveys as 
a tool of oversight, we suggest that the problems we pointed out about the validation 
process are significant ones and that the potential of the observation surveys is 
compelling enough to warrant further exploration. 
Comments of Other External Organizations 
Overall, the other stakeholder organizations offered considerable support for our 
findings and recommendations.  But they also expressed concerns.  The American 
Hospital Association took issue with how we applied the collegial and regulatory concepts 
and stressed that hospital liability concerns preclude the kind of public disclosure we urge. 
The American Osteopathic Association noted reservations about more unannounced 
surveys and suggested that a closer review of medical care during on-site surveys would 
be more productive.  The American Association of Retired Persons agreed with the thrust 
of our recommendations. 
The Service Employees International Union, the National Health Law Program, 
and Public Citizens Health Research Group called for even stronger Federal actions than 
we recommended.  These included a stronger emphasis on regulatory approaches, greater 
reliance on unannounced surveys, more extensive public disclosure, and firmer HCFA 
action in overseeing the Joint Commission and in reassessing its deeming authority. 
7 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  These stakeholders raise concerns and urge directions that we often heard 
expressed during our study.  As HCFA carries out its hospital quality oversight plan, we 
suggest that it take these perspectives into account.  We believe that our 
recommendations (and HCFAs announced action plan) sets forth a balanced course of 
action that draws to some degree on the insights of each of these stakeholders.  This 
course is one that can substantially improve the external review of hospital quality in the 
years ahead. 
8 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  T A B L E   O F   C O N T E N T S  
PAGE 
EXECUTIVE SUMMARY

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10

FINDINGS

Strengths of Hospital Oversight  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Deficiencies of Hospital Oversight  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Oversight is Moving Toward a Collegial Mode  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Little Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

COMMENTS ON THE DRAFT REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32

APPENDICES

A: Medicare Conditions of Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

B: Summary of the Roles of Accreditation and Certification . . . . . . . . . . . . . . . . . . . . . 36

C: Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

D: Certification Survey  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

E: Comments on the Draft Reports  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

F: Endnotes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

9 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  I N T R O D U C T I O N  
PURPOSE 
To provide a summary and recommendations based on our assessment of the 
external review of hospitals that participate in Medicare. 
BACKGROUND 
Hospital Safety 
Hospitals are an integral part of our healthcare system, offering services that 
improve, extend, and even save lives.  But they are also places where inappropriate care 
can lead to unnecessary harm.  This reality was clearly underscored in 1991, when a 
Harvard medical practice study revealed the results of its review of about 30,000 
randomly selected records of patients hospitalized in New York during 1984.  The study 
found that 1 percent of the hospitalizations involved adverse events caused by negligence.1 
On the basis of its sample, the study team estimated that during that year, negligent care 
provided in New York State hospitals was responsible for 27,179 injuries, including 6,895 
deaths and 877 instances of permanent and total disability.  Many other more recent 
studies have reinforced the concerns raised by the Harvard study.  Of particular note was 
one that focused on the care received by 1,047 hospitalized  patients in a large teaching 
hospital affiliated with a medical school.  It found that 17.7 percent of these patients 
received inappropriate care resulting in a serious adverse event--ranging from temporary 
disability to death.2  In the public eye, these scholarly inquiries have been overshadowed 
by media reports that describe, often in graphic detail, the harm done to patients because 
of poor hospital care.3 
Hospitals rely upon a variety of internal mechanisms, from physician credentialing, 
to peer review and benchmarking, in order to try to avoid such incidents and to improve 
the quality of care provided in their facilities.  External quality review serves as a vital 
additional safeguard.  It provides a more detached, independent mechanism for assessing 
the adequacy of hospital practices.  Such oversight is of fundamental importance to 
patients and to the public and private entities that purchase health care services on their 
behalf.  Protecting patient safety and improving the quality of patient care must be a top 
priority of external review. 
10 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  Medicares Interest in External Hospital Quality Review 
The Medicare program covers about 38 million elderly and disabled individuals, 
many of whom are high users of hospital care.4  In 1997, Medicare spent about $136 
billion on Part A, the hospital insurance benefit.5  This figure is just over half the total 
amount the Federal government spent on all Medicare benefits.6  In the same year, 
Medicare spent over $80 billion for inpatient acute hospital care alone.7 
Since Medicares inception, external quality review has been a part of the 
Medicare program.  When Congress enacted the Medicare Act in 1965, it required 
hospitals to meet certain minimum health and safety requirements to participate in the 
program.8  Those minimum requirements, called the Medicare conditions of participation, 
were published in 1966, revised in 1986, and are now being revised again (see appendix 
A).9  Within the Medicare Act itself, however, Congress provided that hospitals accredited 
by the Joint Commission on Accreditation of Healthcare Organizations were deemed to be 
in compliance with the conditions of participation.  Congress also provided that hospitals 
accredited by the American Osteopathic Association could be considered in compliance, 
but only to the extent that the Secretary deemed appropriate.10  Thus, accreditation by the 
Joint Commission or the American Osteopathic Association provides entree into the 
Medicare program.  About 80 percent of the 6,200 hospitals that participate in Medicare 
are accredited by the Joint Commission.  Those hospitals wishing to participate in 
Medicare without accreditation must go through a Medicare certification process.  The 
Health Care Financing Administration (HCFA) relies on State survey and certification 
agencies (hereafter called State agencies) to conduct certification surveys at these 
hospitals to determine compliance with the Medicare conditions.  States currently certify 
1,442 nonaccredited hospitals nationwide.11 
Regardless of the route a hospital takes to Medicare participation, Medicare bears 
a cost for the external review, either directly by funding State surveys or indirectly through 
hospital charges that include the overhead cost of periodic accreditation surveys. 
Both accreditation and Medicare certification involve a team of trained surveyors 
visiting a hospital, interviewing staff, reviewing documents, and inspecting the facility.12 
However, the nature of these processes is very different. 
The Nature of Accreditation 
Accreditation is a voluntary assessment process whereby industry experts define 
what standards organizations must meet in order to be accredited and then systematically 
review the organizations performance against those standards.13  It is a form of self-
regulation for which hospitals pay a fee.14  The Joint Commission enjoys a special status 
because, by Federal statute, hospitals accredited by the Joint Commission are deemed to 
meet the Medicare conditions of participation.15  As the largest accreditor of hospitals, 
11 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  accrediting about 80 percent of the nations 6,200 hospitals, the Joint Commission is 
responsible for the majority of the nations external quality review of hospitals.  In 1972, 
Congress enacted amendments that gave the Health Care Financing Administration 
(HCFA) responsibility for overseeing the Joint Commission.16 
The Nature of Medicare Certification 
The Medicare certification process, on the other hand, is a public regulatory 
process that aims to ensure hospitals desiring to serve Medicare beneficiaries, but not 
desiring to be accredited, meet the conditions of participation.  The HCFA relies on the 51 
State survey and certification agencies (hereafter called State agencies) to determine 
compliance with the Medicare conditions of participation.  Hospitals pay no fee for this 
process.  States agencies certify 1,442 nonaccredited hospitals nationwide.17  These State 
agencies are paid and trained by HCFA and use HCFAs survey instrument to survey 
nonaccredited hospitals. 
This Inquiry and Report 
This inquiry focuses on the roles played by the Joint Commission and State survey 
agencies and by HCFA in overseeing these bodies.  Other bodies, most especially the 
Medicare Peer Review Organizations and State professional licensure boards, also play 
important roles.  We have reviewed their performance in prior studies and will continue to 
examine them in future studies.18  They are not discussed in this report. 
This report summarizes the three other reports that resulted from our inquiry and 
contains our recomendations.  The other reports are:  The Role of Accreditation (OEI-01-
97-00051), which assesses the Joint Commissions approach to hospital accreditation; The 
Role of Medicare Certification (OEI-01-97-00052), which assesses the extent and nature 
of the external review for nonaccredited hospitals; and Holding the Reviewers 
Accountable (OEI-01-97-00053), which assesses how HCFA oversees both the Joint 
Commission and the State survey agencies.  We offer a summary of two of the reports, 
The Role of Accreditation and The Role of Medicare Certification, in appendix B. 
Our inquiry draws on a variety of sources.  These include:  data from HCFAs 
Online Survey Certification and Reporting System; aggregate data from the Joint 
Commission concerning hospital survey activity; a mail survey to State agencies in the 50 
States and District of Columbia (hereafter referred to as a State); observations of the 
hospital surveys conducted by the Joint Commission and State agencies; reviews of 
accreditation manuals, policies, and hospital survey files from the Joint Commission; the 
systematic gathering of information from representatives of HCFA central and regional 
offices, State agencies, the Joint Commission, American Hospital Association, consumer 
groups, professional associations, and representatives of other organizations we 
considered to be stakeholders in hospital oversight; and reviews of laws, regulations, and 
12 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  articles from newspapers, journals, newsletters, and magazines.  We also interviewed 
officials from the American Osteopathic Association and reviewed their accreditation 
materials.  The American Osteopathic Association accredits about 100 to 150 hospitals, 
some of which are also accredited by the Joint Commission.  For purposes of this inquiry, 
however, we focused on the Joint Commission.  See appendix C for more details on our 
methodology. 
A Systemic Review 
In this report we focus on the overall system of external review carried out by the 
Joint Commission, State survey and certification agencies and HCFA.  We address issues 
that have a significant bearing on how well that system works.  In so doing, we draw on a 
wide body of evidence from the sources we noted above.  Our findings and 
recommendations represent our conclusions based on our assessment of this evidence. 
We present them with the intent of providing helpful directions on how HCFA, the Joint 
Commission, and the State agencies can play a more effective role in protecting patients 
and improving quality. 
We conducted this inspection in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and Efficiency. 
13 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  F I N D I N G S  
The current system of hospital oversight has some 
significant strengths that help protect patients. 
Joint Commission surveys provide an important vehicle for reducing risk and 
fostering improvement in hospitals. 
The Joint Commissions triennial surveys form the core of its accreditation 
process.  As such, they serve as the means for a Joint Commission presence in accredited 
hospitals every 3 years.  Hospitals know the surveyors are coming, take the process 
seriously, and prepare for it.  This institutionalizes attention to the basic protections that 
are encompassed within the Joint Commission standards--standards that promote the 
delivery of quality health care and are widely considered to be state-of-the-art.  In 
preparing for the Joint Commission, many hospitals hire consultants to conduct mock 
surveys, update their manuals, and familiarize their staffs with the standards.  While at the 
hospitals, the Joint Commission surveyors often take on the role of educator, explaining 
the standards intent and relationship to patient care. 
The Joint Commission has also been a leader in promoting performance 
improvement in hospitals.  Indeed, attention to performance improvement pervades the 
entire hospital survey process: it is generally the topic of the opening session and most 
sessions include some discussion about improvement projects.  The hospitals, in preparing 
for the surveys, display storyboards and posters highlighting their improvement projects 
throughout the hospital. 
State agency investigations offer a timely, publicly accountable mechanism for 
responding to complaints and adverse events in both accredited and 
nonaccredited hospitals. 
State agencies are the front-line responders to complaints and to major adverse 
events in hospitals.  Adverse events involving serious patient harm often attract attention 
from the media and concerned citizens who clamor for information and reassurance.  The 
State agencies investigations fulfill a vital role by ensuring the publics safety is being 
looked after.  The results of the State agencies investigations, which are based on the 
Medicare conditions of participation, are  available to the public. 
Responding to complaints and adverse events is a high priority for the State 
agencies:  HCFA ranks responding to such events third--after routine nursing home and 
14 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  home health surveys but before routine hospital surveys--in its priorities for State 
agencies survey and certification budgets. 
But it also has major deficiencies. 
Joint Commission surveys are unlikely to detect substandard patterns of care or 
individual practitioners with questionable skills. 
Joint Commission surveyors get a broad rather than in-depth view of hospitals they 
survey.  The surveys generally last just a few days.  The survey agendas are packed with 
back-to-back sessions that allow 45 minutes to an hour for most areas of the hospital. 
Furthermore, the surveyors lack much background information on the hospital that could 
help them hone their surveys. 
The surveyors broad view of the hospitals, coupled with the Joint Commissions 
approaches to medical record and credentials reviews, make such surveys unlikely to 
uncover patterns or individuals responsible for poor care.  First of all, surveyors do not 
select the records for review based on indications of poor quality.  Indeed, the hospitals 
themselves often choose the records for review.  In reviewing medical records, surveyors 
focus more on processes than appropriateness of care:  surveyors do not judge directly 
whether the care given is good or bad, right or wrong.19  Likewise, the review of 
physician credentials and privileges falls short of identifying individuals whose skills may 
be questionable: the sessions are too short for an in-depth review, hospitals often choose 
the records themselves, and the questioning rarely uncovers marginal practitioners.  The 
Joint Commissions own publications note that the process does not evaluate the quality 
of care provided by individual medical staff members.20 
The State agencies rarely conduct routine, not-for-cause surveys of 
nonaccredited hospitals. 
Routine surveys of nonaccredited hospitals are a low priority.  Only a few years 
ago, State survey agencies surveyed nonaccredited hospitals every year or two.  But as of 
October 1997, the average elapsed time between surveys was about 3.3 years and 
growing.  Indeed, fully half of the nonaccredited hospitals had not had a survey within 3 
years as of late 1997.  The total number of certification surveys for nonaccredited 
hospitals fell from 286 in 1995 to 184 in 1997, a drop of 36 percent in 2 years.  The 
decline in routine hospital surveys coincides with the dramatic rise in home health 
agencies, which States must also survey. 
The HCFA sets the survey and certification budget priorities for the State 
agencies:  routine nursing home and home health agency surveys and responses to 
15 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  complaints of any kind all precede routine surveys of nonacredited hospitals.21  Unlike 
nursing homes and home health agencies, hospitals lack a mandated minimum cycle for 
surveying.  For fiscal year 1998, HCFA funded State agencies to survey 10 percent of 
their nonaccredited hospitals and 60 percent of their home health agencies. 
Overall, the hospital review system is moving toward a 
collegial mode of oversight and away from a regulatory 
mode. 
It is helpful to consider external hospital oversight in terms of a continuum, 
characterized by a collegial approach on one side and a regulatory approach on the other. 
External reviewers in the collegial mode focus on education and improved performance; 
those in the regulatory mode focus on investigation and enforcement of minimum 
requirements.  In the continuum below, we list the major characteristics we associate with 
each side. 
Collegial Mode  Regulatory Mode 
(Educate and Elevate)  ( Investigate and Enforce) 
Cooperative
 Challenging

Flexible
 Rigid

Foster Process Improvements
 Enforce Minimums

Guidance
 Directive

Trusting
 Skeptical

Professional Accountability
 Public Accountability

Confidentiality
 Public Disclosure

Systems Focus
 Outlier Focus

Improve Patient Outcomes
 Minimize Preventable Harm

The Joint Commission is leading this movement toward the collegial mode. 
The Joint Commission is and has been the dominant force in the external review of 
hospitals.  As such, its approach holds great sway.  And its approach is grounded in the 
collegial mode.  Indeed, its very mission statement demonstrates this: to improve the 
quality of care provided to the public through the provision of accreditation and related 
services that support performance improvement in health care organizations.22  Support 
for performance improvement is widespread.  Its approach is grounded in the theory that 
16 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  improving overall performance even marginally is far more important than dealing with the 
poor performers at the margin.23 
The Joint Commission recently implemented a policy for dealing with serious 
adverse events in hospitals that embodies the collegial approach to oversight.24  This 
policy stresses research, education, and prevention--all laudable goals that favor the 
collegial side of the continuum.  It relies on hospitals to self-report certain events, thereby 
stressing professional accountability and trust.  And it emphasizes confidentiality for the 
self-reporting hospitals.  Indeed, the success of the policys research and prevention goals 
rest in large measure on the safe venue that the assurance of confidentiality provides to 
reporting hospitals.  Through this approach, the Joint Commission seeks to encourage 
hospitals to address a variety of adverse events that would never even come to the 
attention of the Joint Commission, the State agencies, the media, or the public in general. 
Other aspects of the Joint Commissions hospital accreditation program also 
demonstrate it to be grounded in the collegial mode.  For example, it has increasingly 
stressed systems and continuous quality improvement.  Its surveyors tend to applaud 
hospitals improvement efforts with little skepticism of their underlying value. 
Furthermore, its announced surveys tend to be carried out in a collegial manner, focus on 
education, and leave little opportunity for the kind of digging or inspecting that would 
characterize a more regulatory approach. 
State agencies have traditionally stressed the regulatory mode.  But HCFA, 
through the proposed Medicare conditions of participation, is looking for them to 
follow the Joint Commissions lead. 
According to HCFAs instructions, State survey agencies prioritize responding to 
complaints and adverse events higher than any other hospital-related activity.25  These 
surveys tend to be unannounced.  They aim not only to investigate the event but also to 
respond to public fears about the safety of the hospital.  Their focus tends to be on 
ensuring safety and preventing harm.  All this grounds State agencies on the regulatory 
side of the continuum.  Activities that would be more characteristic of the collegial mode, 
such as performance improvement projects, are not part of the existing Medicare 
certification system for hospitals.  (For a summary of our observations of one Medicare 
certification survey conducted by a State agency, see appendix D.) 
By contrast, the proposed conditions of participation for hospitals, published on 
December 19, 1997, reveal a major move toward the collegial mode.26  They eliminate 
prescriptive, process-oriented conditions in favor of more patient-centered conditions, 
more nearly like those of the Joint Commission.27  They shift away from a focus on 
enforcing minimums toward one stressing improvements.  Accordingly, they call for States 
to work in partnerships for improvement with the hospitals and they call for hospitals to 
conduct a minimum number of data-driven performance improvement projects.28 
17 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  At the core, the proposed changes appear to be constructive ones, because they 
give greater emphasis to actual hospital performance as opposed to mere paper 
compliance and because they will facilitate evaluations of the Joint Commission (because 
the proposed conditions are more nearly parallel to the Joint Commissions standards). 
Yet, it is noteworthy that the proposed conditions fail to recognize the important role 
State agencies fulfill as front-line, publicly accountable responders to complaints and 
adverse events--situations where a partnership approach could be a disadvantage.  In 
this context, it is also notable that the conditions suggest there may be a lesser need for 
on-site compliance surveys as hospitals and State agencies work together toward 
improvement.  The frequency of such surveys, as we have noted, has dropped significantly 
in recent years. 
The emerging dominance of the collegial mode may undermine the existing 
system of patient protections afforded by accreditation and certification 
practices.  It contrasts significantly with the current regulatory emphasis toward 
nursing home oversight. 
The collegial mode holds much promise, with its focus on systems and 
improvements.  We do not seek to discredit it.  But we find that there is a danger of 
relying too heavily upon it as the basis for external oversight.  In this context, we direct 
attention to the recent conclusions of the National Roundtable on Health Care Quality, 
convened by the Institute of Medicine.29  The Roundtables conclusions support a 
balanced approach to oversight, one that avoids depending too extensively on any one 
approach.  In addressing the collegial approach represented by continuous quality 
improvement initiatives, it indicates that advocates can point to important successes, 
especially when used as an integral part of a scientific approach to improving clinical 
practice.30  But the Roundtable also pointed out that minimal data exist to document the 
effectiveness of this approach, and that even exemplary practitioners have had difficulty 
in disseminating its benefits uniformly throughout their institutions. 
In addressing the regulatory approach, the Roundtable underscored that it is the 
only mechanism we have to protect the public from egregiously poor providers.31 But 
then it added that this approach tends to be inflexible and is poorly suited to motivate 
those already performing well to strive for even greater achievement.32 
This emerging emphasis on a collegial approach to hospital oversight contrasts 
significantly with the highly regulatory approach being taken toward nursing home 
oversight.  During 1998, a HCFA Report to Congress, a General Accounting Office report 
on nursing home oversight, a congressional hearing, a presidential press conference, and 
various HCFA announcements have all reiterated the inadequacy of current nursing home 
oversight practices and called for much tougher enforcement.33  Among the many 
initiatives being taken or proposed are those calling for immediate penalties on nursing 
homes violating Federal standards, more surprise inspections on weekends and at night, 
18 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  posting of information on the Internet information about nursing home survey results, and 
background criminal checks on nursing home personnel.  The initiatives are presented as 
part of a crack down that involves tough, no-nonsense enforcement.34  One finds little 
mention of collegial approaches involving continuous quality improvement. 
Our point in noting this contrast is not to address the merits of these nursing home 
initiatives or to suggest that they be mirrored in hospital oversight.  Rather, it is to 
reinforce the point that  regulatory approaches have a place in oversight systems intended 
to protect patients.  In our conversations with stakeholders, we have heard that such 
tough approaches toward hospitals are unwarranted because hospitals lack a similar 
history of patient abuses, because they have more peer review and physician involvement, 
and because they have more community involvement.  These are reasonable points, but we 
found no data to support a contention that hospitals are safer places than nursing homes, 
and recent studies and media reports reinforce the point that hospitals are, indeed, places 
where inappropriate care can and often does lead to patient harm. 
The HCFA does little to hold either the Joint Commission or 
the State agencies accountable for their performance in 
overseeing hospitals
. 
The HCFA obtains limited information on the performance of the Joint 
Commission or the State agencies. 
The HCFA has relied on three major mechanisms for obtaining performance 
information:  validation surveys, observation surveys, and reports.  For the Joint 
Commission, HCFA uses mostly validation surveys, through which State surveyors 
conduct reviews of accredited hospitals after a Joint Commission survey.  But for a 
number of reasons the value of these surveys is limited.  They are based on different 
standards that are applied at different points in time.  The HCFAs methodology for 
selecting the sample of hospitals to validate fails to consider hospital size, type, or past 
performance.35  Furthermore, validation surveys are costly to conduct.  The HCFA does 
not conduct such surveys to monitor the State survey agencies performance. 
The observation surveys, on the other hand, aim to address the fundamental flaws 
of the validation surveys, as HCFA and/or State surveyors accompany Joint Commission 
surveyors to hospitals and observe the survey directly.  But HCFA uses these surveys only 
minimally.  The HCFA piloted observation surveys with the Joint Commission in 20 
hospitals in 1996 and 1997, but its plans for expansion are unknown.  And among the 
HCFA regional offices, charged with overseeing the State agencies, only 6 of 10 reported 
conducting observation surveys to monitor the States performance in hospitals. 
19 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  Finally, HCFA asks for little in the way of routine reporting from the Joint 
Commission or the State agencies.  Indeed, most of what it asks for from the Joint 
Commission is simply scheduling information used to carry out the validation surveys. 
The HCFA asks for little in the way of aggregate data on accreditation survey trends or 
results, complaints or adverse events, or surveyor training.  Likewise, on a national basis, 
HCFA obtains little information on the State agencies performance specific to hospitals. 
Rather, it gets a rather superficial and blurred picture of the States performance across 
provider types, such as nursing homes, home health agencies, and hospitals.  Furthermore, 
HCFA does not track trends of such basic information as how many termination notices it 
issues based on the findings of certification surveys of nonaccredited hospitals, although it 
does track actual terminations.36 
The HCFA provides limited feedback to the Joint Commission and the 
States on their overall performance. 
The HCFAs feedback to the Joint Commission is negligible.  Its main vehicle for 
feedback is its Report to Congress, which provides a summary of the validation surveys. 
Historically, the Report to Congress has been of limited value not only because the survey 
results are dated (sometimes by as much as 3-4 years), but also because it is based on the 
validation surveys themselves, which are fundamentally flawed.  Furthermore, HCFA 
designs the report to meet the needs of Congress--indeed, the report itself is mandated by 
Federal law--so its use as feedback to the Joint Commission is secondary.37 
The HCFA takes little advantage of other opportunities for feedback to the Joint 
Commission.  Indeed, its posture to the Joint Commission is more deferential than 
directive.  For example, HCFA modeled its revisions of the hospital conditions of 
participation on the Joint Commissions approach to hospital oversight--both in content 
and tone.38  The HCFA also tends to defer to the Joint Commission when both are at one 
hospital at the same time, investigating a particular incident.  In such instances HCFA 
plays no coordinating or information-sharing role. 
When it comes to the State agencies, HCFA is more directive on the one hand, yet 
gives them little feedback on how they perform their hospital oversight work, on the other. 
For example, HCFA routinely gives State agencies step-by-step guidance on investigating 
and documenting problems in a specific hospital.  But it relies on the State agencies 
themselves to assess their own performance, and by working with the HCFA regions, to 
develop and implement their own quality improvement plans.39  This process is called the 
State Agency Quality Improvement Program, or SAQIP.  Once or twice a year, HCFA 
distributes a summary report of all the States SAQIP activities to each State agency. 
That report provides few meaningful insights into the challenges or successes of any one 
State in overseeing hospitals or other providers, but it devotes considerable attention to 
the SAQIP process itself, and the challenges States face in its implementation. 
20 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  Public disclosure plays only a minimal role in holding the Joint 
Commission and States accountable. 
Publicly disclosing information about hospitals and their reviewers conveys an 
assurance that a process exists for the external review of hospitals and that the reviewers 
are also accountable.  Public disclosure can also serve as a key motivator for improvement 
on the parts of both the hospitals and the reviewers.  Despite progress in general in the 
availability of healthcare information and the rise of consumerism, little public information 
is available on hospitals and their reviewers.  The Joint Commission has been a leader in 
making hospital survey results accessible through its performance reports.40  But despite 
its strides in public disclosure, there are significant limits to what the Joint Commission 
discloses.  For example, the Joint Commission treats as confidential the details on adverse 
events and their causes as reported by hospitals.  Still, the hospital information is in some 
ways more accessible from the Joint Commission than it is from HCFA.  While HCFA will 
disclose survey findings--including those associated with adverse events--it lacks a web 
page or central number from which to request such information.  By contrast, HCFA has a 
web page devoted to nursing homes that allows visitors to view information on the scope 
and severity of survey findings.  By Federal law, nursing homes must post their survey 
findings so they are accessible to residents and their families.41  No such mandate exists for 
hospitals. 
Likewise, little valuable information is readily available on the performance of the 
external reviewers.  For example, while HCFA releases its Report to Congress, its value is 
questionable as it is based on the validation surveys.  Similarly, HCFA has little of value to 
disclose on the performance of States agencies:  its SAQIP reports lack any State 
identifiers or comparisons and its survey database would need considerable massaging to 
provide insights into a States performance.  Both the survey data and the SAQIP reports 
are available upon request. 
21 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  R E C O M M E N D A T I O N S  
Hospitals are places where patients routinely receive valuable, even life-saving 
services.  Yet, as many studies have shown, they are also places where patients can be 
exposed to unnecessary harm.42  External review,  as a complement to hospitals own 
internal review systems, can serve as a vital safety valve that minimizes the likelihood of 
such harm and enhances quality.  The HCFA relies upon the Joint Commission and State 
survey agencies as its primary agents in carrying out external reviews to help protect 
Medicare beneficiaries when they rely upon hospital services.  Both make important 
contributions that HCFA would be hard-pressed to match. 
Given the degree of HCFAs dependence on these external agents, it is important 
that HCFA provides leadership to address the shortcomings we have identified, holding 
the Joint Commission and State agencies more accountable for their performance. 
Through one guiding principle and two recommendations, directed to HCFA, we set forth 
ways in which it can provide this leadership. 
In our recommendations we call upon HCFA to devote more concerted attention 
to hospitals and their external quality review systems.  We recognize that in an 
environment of limited resources and competing priorities, such attention is not easily or 
readily provided.  In that context, we present the recommendations as a blueprint for 
action that can be carried out over a reasonable period of time. 
Through the guiding principle and recommendations, we call upon HCFA to lead 
and stay attuned to important nuances involving the relationships among HCFA, the Joint 
Commission, the State agencies, and the hospitals themselves.  In this context, we stress 
that while HCFA has authority and leverage it can assert, it must approach the Joint 
Commission and State agencies not as subordinates in a chain of command, but as partners 
sharing a commitment to high-quality hospital care.  Similarly, we stress that external 
review generally should be conducted in ways that minimize the regulatory burden on 
hospitals and seek to complement hospitals own internal quality review efforts. 
22 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  GUIDING PRINCIPLE.  The HCFA, as a guiding principle, 
should steer external reviews of hospital quality so that they 
ensure a balance between collegial and regulatory modes of 
oversight. 
Both approaches have ardent supporters, with consumer advocates urging more 
regulatory types of oversight and professional groups stressing the advantages of collegial 
approaches.  From HCFAs standpoint, it is important to recognize that both approaches 
have value and that a credible system of oversight must reflect a reasonable balance 
between the two.  Thus, as HCFA moves toward an increasingly data-driven system, as 
reflected in the proposed conditions, it should ensure that such systems are used both as 
means to foster improvement as well as means to enforce minimums.  In other words, data 
present opportunities for both sides of the continuum.  Well-designed data systems could 
include elements that, for example, elevate standards of care overall as well as identify 
outliers requiring interventions. 
In aiming to achieve balance between the collegial and regulatory modes of 
oversight, it is instructive to note the conclusion of a recent case study of regulatory 
approaches of the Occupational Safety and Health Association (OSHA): 
It has become cliche for critics of regulation to tout increased cooperation as a 
means of curing what they perceive ails the regulatory process.  While cooperation 
holds promise as an effective enforcement technique, the policy literature suggests 
that caution is due.  Although a mix of cooperation and punishment is likely to be 
an optimal enforcement policy, the literature provides no clear guidance 
concerning what policy is optimal.  OSHAs situation confirms that agencies 
should maintain a viable enforcement program while cautiously experimenting with 
additional cooperative approaches.43 
As we noted earlier, the conclusions of the National Roundtable on Health Care Quality 
also reinforce the theme of balance.  They suggest that while both collegial and regulatory 
approaches have advantages, neither is backed with sufficient data to warrant a 
concentration on one at the expense of the other.  Thus, as  the overall system of quality 
oversight becomes increasingly oriented to the collegial side of the continuum, the risks 
begin to mount, with potentially significant consequences to patients.  The Roundtable, it 
is important to remember, stated that regulation is the only mechanism we have to 
protect the public from egregiously poor providers.44  The Prospective Payment 
Assessment Commission reinforced this theme of balance, noting that continuous quality 
improvement activities need to be accompanied by effective methods to identify and 
monitor providers of questionable performance.45 
23 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  We recognize no precise definition of what represents a balance between collegial 
and regulatory approaches exists.  Balance depends on judgment and continuing 
assessments of the thrust and impact of the different components of external quality 
review.  A balanced system, in our view, will involve the continued presence of on-site 
hospital surveys, both announced and unannounced; an ongoing capacity to respond 
quickly and effectively to complaints and adverse events; further development and 
application of standardized performance measures; and, even though it is not much in 
evidence at this time, a mechanism for conducting retrospective reviews of the 
appropriateness of the care received by hospitalized patients.  Each of these approaches 
can add value and a measure of patient safety.  Until much more compelling evidence can 
be mustered, no one approach should dominate.  Accordingly HCFA should view with 
some concern the emerging dominance of the collegial mode. 
In its steering role, HCFA must develop a broad perspective so that it can clearly 
determine not only how the external review systems as a whole are functioning but also 
when and how to adjust them.  Thus, it is particularly important that, as a general point, 
HCFA recognize the distinctive strengths and limitations of both the Joint Commission 
and the State agencies, which we elaborate on below. 
Recognize the inherent strengths and limitations of accrediting bodies and the 
State agencies. 
Each of these entities contributes to the external review of hospitals.  But they 
contribute differently.  If HCFA is to steer effectively, it must act in accord with the 
inherent strengths and limitations of these two types of bodies. 
Accreditation, first of all, is a form of self-regulation.46  The Joint Commissions 
board, for example, is dominated by members closely associated with the hospital 
industry.  Notwithstanding the presence of non-industry members on its board or of 
various advisory bodies or of certain public purposes it may fulfill, it is primarily 
responsive to the interests of entities it accredits.  In this context, it is important to view 
the Joint Commission as an entity closely connected with the hospital industry and having 
greater credibility with that industry than any governmental entity is likely to have.  That 
connection makes the Joint Commission inherently inclined to tilt toward the collegial side 
of the oversight continuum we presented.  Working cooperatively with its hospital 
constituency and drawing on its considerable expertise on hospital practices , it can 
provide leadership in defining accreditation standards and helping hospitals achieve them. 
It can (and must) play a certain regulatory role as well, but if it begins to tilt in this 
direction, it will likely encounter greater resistance from its core constituency that could 
undermine its efforts to educate and elevate. 
State agencies, on the other hand, are public bodies (usually health departments) 
with traditional regulatory responsibilities.  Within their States, they are accountable to 
24 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  executive and legislative leaders who expect them to protect consumers.  This is especially 
apparent whenever there is a high profile adverse event or major complaints involving a 
hospital.  In such cases, elected officials as well as the local media are likely to look to the 
State agency as a front line of response in determining what went wrong and what to do 
about it.  Thus, State survey agencies are inherently inclined to tilt toward the regulatory 
side of our continuum.  That is not to suggest that they can not and do not play a role in 
fostering improvements through a collegial orientation, but any substantial movement in 
that direction is likely to conflict with their longstanding role in enforcing minimum 
standards and ensuring patient safety. 
Thus, as HCFA exerts its steering role in years ahead, it would be sound policy for 
it to look to the Joint Commission to tilt (but not too far) toward the collegial end and the 
State survey agencies to tilt (but not too far) toward the regulatory end.  Such a frame of 
reference can be helpful as HCFA weighs specific policy and operational choices.  For 
example, as HCFA incorporates, through its proposed conditions, certain aspects of the 
Joint Commissions approach to oversight, it should maintain the primacy of the State 
agencies role as front-line responders to complaints and adverse events, and all that that 
role entails, such as probing and challenging approaches to surveys.  Furthermore, it 
would make sense for HCFA to support the Joint Commissions sentinel event policy, 
which treats adverse events confidentially and as opportunities for improvement, as long 
as the State agencies still responded to such events in a way that held hospitals publicly 
accountable.  Similarly, it would make sense to continue to support explorations for data-
driven measures of outcome that someday could provide an important basis for external 
quality review, as long as that vision does not undermine a strong, continued role for on-
site inspections.  It is likely, after all, to be some time before the development and 
application of data-driven systems of oversight are sufficiently sophisticated to justify a 
deemphasis of on-site surveys. 
RECOMMENDATION 1.  The HCFA should hold the Joint 
Commission and State agencies more fully accountable to 
HCFA for their performance in reviewing hospitals. 
The Joint Commission is a private entity accountable to its governing board and to 
the hospitals that pay for its accreditation services.  The State survey agencies are public 
bodies accountable to their States governors and legislatures.  But in carrying out their 
external reviews of hospitals, both the Joint Commission and State agencies are also 
accountable to HCFA for services they are performing on behalf of Medicare and 
Medicaid beneficiaries.  They must balance this line of accountability with their own 
reporting channels to their respective board and legislatures.  And while HCFA should be 
respectful of these channels, it should, as we have indicated, be ready to exert stronger 
leadership to ensure that Federal interests are upheld. 
25 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  In accord with the accountability framework we have developed for this inquiry we 
specify below the kind of operational steps HCFA should take in (1) obtaining 
information, (2) providing feedback, and (3) disclosing information. 
1. a.  Revamp Federal approaches for obtaining information on the Joint 
Commission and State agency performance. 
Validation Surveys.  The HCFA should deempahsize and perhaps even phase out 
validation surveys as a tool for overseeing the Joint Commissions performance.  Our 
findings revealed fundamental limitations associated with this approach to accountability. 
In our assessment the limits are substantial and may well be too basic to correct.  The 
HCFA should seek to identify more cost-effective approaches that are less intrusive to 
hospitals.  Given the current congressional mandate for validation surveys, HCFA would 
have to seek legislation to achieve the intent of this recommendation. 
In the case of State surveys of nonaccreditated hospitals, HCFA has not been 
conducting validation surveys as a means of obtaining performance information on the 
States expectations.  We recommend that it not initiate such surveys, even if the 
resources become available. 
Observation Surveys.  The HCFA should give serious consideration to incorporating 
these surveys as a major tool of oversight of both the Joint Commission and State survey 
agencies.  The great advantage of accompanying the Joint Commission or State surveyors 
during a hospital visit is that it provides direct and immediate information on the 
performance of both the surveyors and the hospitals.  The HCFA conducted  a pilot of this 
process through 20 observation surveys--during which HCFA and State officials observed 
the performance of Joint Commission surveyors.  But it has yet to issue its evaluation of 
the experience.  This lack of followup represents a significant missed opportunity, one that 
should be addressed. 
In further consideration and/or testing of observation surveys, HCFA should 
consider adapting two features that were not part of the initial pilot.  One would be to 
conduct some such surveys on an unannounced basis.  This could add an important 
element of balance to the approach.  A second feature would be to allow the observing 
surveyors to participate to some degree in the survey process.  It appears untenable and 
unnecessary to us to have skilled, experienced surveyors from State agencies (or HCFA) 
serving as silent witnesses when they could contribute along the way. 
Performance Reports.  The HCFA should obtain more timely and useful performance-
related information, both from the Joint Commission and State survey agencies.  This is 
particularly important with respect to the Joint Commission, from which it obtains little 
ongoing information.  We suggest that HCFA work with the Joint Commission to develop 
a set of specifications for limited, but regular reporting, preferably through electronic 
26 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  format.  We suggest that such reporting be presented in a manner that facilitates an 
understanding of trends and at a minimum include information on the following: 
<	 On-site surveys (such as the number of triennial, random unannounced, and 
unscheduled surveys) 
<	 Survey results (for example, the number of hospitals achieving each level of 
accreditation, accreditation scores, most common problems identified, and the 
number and types of follow-up actions, by survey type) 
<	 Complaints (such as the number and types received overall, then broken down to 
reflect those received centrally and on-site, and finally the number and type of 
complaints resulting in recommendations for improvement) 
<	 Adverse events (for example, the number and type of sentinel event reports, the 
number of hospitals placed on Accreditation Watch, the number resulting in a 
change of accreditation status because of the sentinel event, and the number 
resulting in recommendations for improvement) 
<	 Performance measures (such as the number of hospitals participating in the Joint 
Commissions performance measurement programs:  Oryx and Oryx+) 
We suggest that each year, this information be compiled and presented in an annual 
report that facilitates year-to-year comparisons.  That report should be submitted to 
HCFA and to Congress.  It should also be available on the Internet. 
With respect to State survey agencies, HCFA already requires considerable 
reporting through its Online Survey Certification and Reporting (OSCAR) system.  It 
includes some but not all of the categories of information noted above.  We suggest that 
HCFA reexamine the OSCAR reporting system to ensure that at a minimum it include 
categories of information parallel to those set forth above.  We also suggest that HCFA 
reexamine the reporting that the States currently provide on their improvement projects, 
with the intent of generating more precise and comparable information. 
Finally, if HCFA were to incorporate the observation surveys as a major tool of 
oversight, it would be important to specify the extent and type of information to be 
collected from those surveys.  It would be essential that data from these surveys be fed 
into a central data base that HCFA could draw upon in giving performance feedback to 
the Joint Commission and State survey agencies. 
1. b.  Strengthen Federal mechanisms for providing performance feedback to the 
Joint Commission and State agencies. 
Performance Assessments.  The HCFA should provide timely, ongoing feedback to the 
Joint Commission and State survey agencies on the basis of information obtained through 
the observation surveys (which we recommend) and, in the case of the Joint Commission, 
through the validation surveys (as long as they remain).  Such feedback is a vital element 
27 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  that is now almost completely missing in the system of external review.  In some fashion, 
the feedback should follow each observation visit or validation survey.  It should also be 
provided on a cumulative basis, drawing on a number of such visits or surveys.  Ideally, 
such cumulative feedback would be part of an annual report, paralleling the annual report 
we suggest that State agencies and the Joint Commission submit to HCFA. 
The HCFA should also give attention to feedback in the form of special alerts 
based on accumulated information revealing a problematic pattern of performance by the 
Joint Commission or by individual States.  In such cases, the Joint Commission or the 
States involved should be expected to indicate how they will respond and correct the 
situation identified by HCFA. 
All such performance feedback noted above, as well as the performance reports 
noted earlier, could be part of the annual report to Congress that is mandated by statute. 
While that mandate applies only to the Joint Commission, it would be helpful to 
incorporate in that report a full array of information applying to nonaccredited as well as 
accredited hospitals.  That way, Congress and the interested public could gain a better 
appreciation of the overall adequacy of external systems for reviewing hospital quality. 
Policy and Procedural Guidance.  Our focus is on guidance to the Joint 
Commission.  Given that HCFA now provides minimal such guidance, given that 
the Joint Commission is the primary external reviewer for about 80 percent of the 
hospitals in the country, and given our call for a more balanced system of 
oversight, we recommend that HCFA negotiate with the Joint Commission to 
achieve some redirection in Joint Commission priorities and practices.  We suggest 
that this can be done in a manner that respects the Joint Commissions 
considerable expertise on accreditation practices, yet calls for the Joint 
Commission to accommodate public purposes associated with its special deemed 
status.  To the extent that HCFA continues to rely on the Joint Commission, it 
should negotiate the following to help achieve a more balanced system of 
oversight: 
1.  Conduct more unannounced surveys, both regular surveys and surveys made 
in response to complaints.  Further, unlike the Joint Commissions current 
unannounced surveys, we suggest that such surveys involve no prior notice at all 
for the hospitals.  We recognize that such practice may add some operational 
difficulties to the survey process--for example, records and policies may not be 
assembled and ready for surveyors.  However, it is certainly plausible that such an 
on-the-spot review would offer insights that an announced survey would not and 
that it would add a measure of public credibility to the entire accreditation process. 
28 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  2.  Make accreditation with commendation a more meaningful category or 
do away with it altogether.  This top level of accreditation tends to suggest a 
greater level of distinction than is warranted by the underlying scoring system. 
Hospitals use it for marketing purposes to suggest a degree of excellence that can 
be misleading to the public.  We suggest that the degree of rigor called for in 
attaining this designation be increased or that the designation be dropped. 
3.  Introduce more random selection of records as part of the survey process. 
Allowing hospitals to select records for review by the surveyors introduces too 
much possibility for manipulation and undermines the credibility of the process. 
Here is a practice where the move toward collegiality seems to go too far.  It is 
essential that surveyors gain a balanced assessment of hospital practices, not one 
that is likely to enhance the positives. 
4.  Provide surveyors with more contextual information about the hospitals they 
are about to survey.  Background information on organizational or ownership 
changes involving the hospital, on developments in the local healthcare 
marketplace, and on other such matters can help surveyors ask more probing and 
challenging questions during their visits.  The goal of fostering consistency in 
surveyor practices should not be pursued at the expense of vital contextual 
information that can help surveyors focus on the distinctive features and situations 
at each hospital. 
5.  Jointly determine some of the year-to-year priorities.  For instance, the Joint 
Commission determined at one point that restraint reduction--certainly a desirable 
objective--would be a priority.  We suggest that HCFA could play a role in 
suggesting such priorities.  Based on our inquiry, a good initial priority would 
focus on hospital privileging and credentials verification practices--an area where 
we found Joint Commission reviews to be too superficial.  One aspect of this 
inquiry could be further attention to hospitals compliance with Federal 
requirements to report to the National Practitioner Data Bank. 
6.  Conduct more rigorous assessments of hospitals internal continuous quality 
improvement (CQI) efforts.  Within the hospital community, the Joint 
Commission has helped raise awareness and interest in CQI efforts.  But the 
survey process raises few questions about such efforts.  The time has come to raise 
the bar and subject hospitals to greater scrutiny in terms of the purpose, methods, 
and consequences of their CQI efforts. 
7.  Enhance the capacity of surveyors to respond to complaints as part of the 
survey process.  The rigid schedule of surveyors leaves little opportunity to review 
a complaint, either in its own right or as a possible indicator of a broader problem. 
To the extent that information about complaints can be provided to surveyors prior 
29 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  to the visit, such opportunities could be enhanced.  As a complementary approach, 
the Joint Commission could also give more attention during its triennial survey to 
hospitals internal complaint systems and whether they serve as a means of 
identifying broader, systems problems. 
1. c. Assess periodically the justification for the Joint Commissions deemed-
status authority. 
Once a hospital is accredited by the Joint Commission, it is deemed to meet the 
Medicare conditions of participation.  This delegation of authority to the Joint 
Commission is granted by Congress, not by HCFA.  As such, it is a unique authority held 
by no other accrediting body in the healthcare field. 
We are not addressing whether the Joint Commission warrants this special 
authority.  But we do suggest the granting of this unique status should not be for 
perpetuity, without accountability for  performance.  The HCFA already has the regulatory 
authority to review the deeming authority when validation survey results reach a certain 
disparity rate.47  That rate has never been reached, however.  Accordingly, we call for 
HCFA from time to time to assess whether the Joint Commissions performance continues 
to warrant its unique deeming authority and to report its conclusions to Congress as part 
of an annual report or otherwise.  Any change in this status would, of course, depend 
upon congressional action. 
If HCFA were to move in the direction we call for here, it would be particularly 
important for it to collect information and provide feedback--as we call for in the 
preceding recommendations.  In fairness, it would also be important that it communicate 
in advance to the Joint Commission what its own criteria would be for determining 
adequate performance.  This is a matter that it could profitably address with the Joint 
Commission itself, as well as with other parties. 
1.d. Increase public disclosure. 
The HCFA is in a unique position to give the public information on the 
performance of individual hospitals and also of entities that oversee those hospitals. 
Ultimately HCFA is responsible for the oversight of hospitals and it should be committed 
to making every aspect of oversight as meaningful and effective as possible.  One way to 
accomplish that is to make results widely available to the public through the Internet and 
other appropriate mechanisms. 
Through greater disclosure of information, HCFA can reinforce that hospitals and 
external reviewers of hospitals are accountable to the general public as well as to the 
government.48  Disclosure on the Internet can be a particularly effective tool in this regard 
as the media, advocates, and other interested parties can draw on it to inform wider 
30 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  audiences.  Also, such disclosure can be helpful to healthcare purchasers interested in 
quality-of-care issues. 
The HCFA should consider putting some hospital-specific information on the 
Internet in a way that facilitates comparisons among hospitals and gives a sense of what 
each oversight body does and what each has found at a given hospital.  The HCFA has 
already made strides in making information on nursing home survey results available. 
Perhaps that can serve as a model. 
Performance of Hospitals.  The HCFA could make any or all of the following 
performance information available by hospital on its Web site: the most recent survey date, 
survey results, and information on complaints or adverse events. 
Performance of the Joint Commission and State Agencies.  In previous 
recommendations, we call for both the Joint Commission and State agencies to submit 
regular reports to HCFA.  The HCFA could easily post these reports on its Web site, or 
require State agencies and the Joint Commission to post the reports on their Web sites. 
RECOMMENDATION 2.  The HCFA should determine the 
appropriate minimum cycle for conducting certification 
surveys of nonaccredited hospitals. 
The backlog for routine surveys of nonaccredited hospitals is large and it is 
growing.  And, unlike nursing homes and home health agencies, hospitals lack a 
congressionally mandated cycle for surveys.  Thus, nonaccredited hospitals are subject to 
limited external review.  Furthermore, the proposed conditions of participation suggest an 
even lesser role for routine certification surveys.49  Current policy gives priority to 
responding to complaints and adverse events in hospitals over routine surveys, which we 
endorse.  But by determining an appropriate minimum cycle for hospital surveys, HCFA 
will increase the attention hospital quality issues receive and improve oversight 
comparability from State to State. 
31 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  C O M M E N T S   O N   T H E   D R A F T   R E P O R T  S 
Within the Department of Health and Human Services, we received comments on 
our four draft reports from HCFA.  Outside of the Department, we solicited and received 
comments from the Joint Commission, the Association of Health Facility Survey Agencies, 
the American Osteopathic Association, the American Hospital Association, the American 
Association for Retired Persons, the Service Employees International Union, the National 
Health Law Program, and Public Citizens Health Research Group. 
We include the complete text of these comments in appendix E.  Below we 
summarize the comments and, in italics, offer our responses.  First we focus on the 
comments offered by HCFA, the Department component to which we directed all of our 
recommendations.  Second, we turn to the perspectives of the Joint Commission and of 
the Association of Health Facility Survey Agencies, which represents the State survey and 
certification agencies.  The HCFA relies upon these agencies and the Joint Commission as 
the major agents of external review of hospital quality.  Finally, we present the responses 
of other key stakeholder organizations. 
HCFA Comments 
The HCFA supported our findings and reacted to our recommendations as an 
opportunity to make significant improvements in hospital oversight and to see that these 
changes fit in with its broader goals of performance measurement.  It offered a detailed 
hospital quality oversight plan, which incorporated our many recommendations, and it 
presented a performance measurement strategy based on developing standardized hospital 
performance measures that are consumer- and purchaser-driven and that are in the public 
domain. 
The HCFAs oversight plan affirmed its commitment to more frequent State 
surveys of nonaccredited hospitals, to strengthened oversight of both the State agencies 
and the Joint Commission, and to balancing the collegial and regulatory approaches to 
oversight.  Toward the latter end, it indicated that it will look to the Medicare Peer 
Review Organizations, with which it contracts, as its chief agents in pursuing collegial 
approaches to advance the quality of care in hospitals.  It will rely upon the Joint 
Commission and in particular on its on-site surveys as a key part of the regulatory 
framework needed to enforce compliance with Medicare standards. 
We find HCFAs detailed action plan to be highly responsive to the shortcomings 
we identified in hospital quality oversight and to our specific recommendations.  This 
plan sets forth an agenda that can be of great significance in improving patient safety 
and improving the quality of patient care. 
32 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  With respect to HCFAs comments on how it will foster a balance between 
collegial and regulatory approaches, we urge that HCFA give adequate recognition to 
the important regulatory role that State survey agencies have to play not only in 
conducting surveys but also in responding to complaints and adverse events.  We agree 
that Joint Commission on-site surveys represent an important regulatory mechanism that 
should be more fully used, but note that as an accrediting body that is engaged in 
standard-setting and that has close ties with the hospital industry, the Joint Commission 
can also serve as an important force in quality improvement. 
Joint Commission and Association of Health Facility Survey Agencies Comments 
The Joint Commission agreed with the principle of balance between collegial and 
regulatory approaches, but felt that our concerns about the emerging dominance of the 
collegial approach were unfounded.  It also took issue with our findings that Joint 
Commission surveys were unlikely to detect substandard patterns of care or individual 
practitioners with questionable skills and that the Joint Commission devotes little emphasis 
to complaints and treats major adverse events as opportunities for improvement.  It noted 
that some of the specific suggestions we made for improving the survey process have 
already been put in effect and that all the remaining ones are under consideration.  It also 
expressed support for our recommendation that HCFA obtain more useful and timely 
performance-related information from the Joint Commission. 
We stressed the principle of balance because there is insufficient evidence to 
support an emphasis on either the collegial or regulatory approach.  We cited the 
conclusions of the National Roundtable on Health Care Quality and other sources as 
support for our conclusion.  We still conclude that Joint Commission surveys are unlikely 
to detect substandard patterns of care, such as inappropriate surgeries or high 
complication rates, or to identify individual practitioners with poor skills.  (In this 
regard, we found the on-site process of reviewing hospital privileging and credential 
verification procedures particularly lacking.)  In the text, we spell out in some detail the 
bases for these findings.  Similarly, we believe that the evidence is clear that the response 
to complaints is a relatively minor part of the accreditation process and that adverse 
events are treated as opportunities for improvement. 
The Association of Health Facility Survey Agencies agreed with our assessment of 
the current system of hospital oversight.  It devoted particular attention to our discussion 
of validation and observation surveys.  It indicated that the aim of validation surveys is not 
to evaluate the Joint Commission but rather to validate hospital compliance with Medicare 
standards.  Further, on the basis of the experience of an Association member who 
participated in an observation survey, it expressed reservations concerning the 
effectiveness of this approach in improving patient care and outcomes.  Finally, it 
supported the posting on websites of in-depth information on how hospitals fared as a 
result of survey visits and complaint investigations. 
33 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  We appreciate the Associations supportive comments.  Regarding the 
Associations concerns about validation surveys, we found that they have served as the 
single most important mechanism for assessing Joint Commission performance.  We note 
that HCFA, in its comments to our report, indicated that it will clarify that the purpose of 
validation is to evaluate the performance of the accrediting body in assuring that the 
Secretarys standards are met or exceeded.  We urge that the Association consider the 
significant limitations we addressed about the effectiveness of the validation surveys and 
examine further the potential of observation surveys as a more cost-effective and timely 
tool of oversight.  We recognize that further experimentation with this approach is 
required, but suggest that it may well be worthwhile. 
Comments of Other External Organizations 
Overall, the other stakeholder organizations expressed considerable support for 
our findings and recommendations.  Yet, they  also noted a number of concerns.  The 
American Hospital Association took issue with how we applied the regulatory and 
collegial concepts and stressed that hospital liability concerns impede the kind of public 
disclosure we recommend.  The American Osteopathic Association noted reservations 
about more unannounced surveys and suggested that a closer review of medical care 
during on-site surveys would offer better value.  The American Association of Retired 
Persons agreed with the thrust of our recommendations. 
The Service Employees International Union, the National Health Law Program, 
and Public Citizens Health Research Group each called for even stronger Federal actions 
than we recommended.  These included a stronger emphasis on regulatory approaches, 
greater reliance on unannounced surveys, more extensive public disclosure, and firmer 
HCFA action in overseeing the Joint Commission performance and in reassessing its 
deeming authority. 
As HCFA carries out its hospital quality oversight plan, we suggest that it take 
into account the perspectives of these various stakeholders.  They express concerns and 
offer suggestions that we often heard expressed during our inquiry.  We believe that our 
recommendations set forth a balanced course of action that draws to some degree on the 
insights of each of these stakeholders and that, overall, can substantially improve 
hospital quality oversight. 
34 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX A 
Medicare Conditions of Participation

The Medicare Conditions of Participation (COP) were first published in 1966 and revised in 1986 (42 
C.F.R. 482.1-482.66). On December 19, 1997, HCFA published a proposed COP for hospitals ( 62 Fed. Reg. 
66,726). On July 2, 1999, it published an interim final rule concerning patients rights (64 Fed. Reg. 36,070). 
Below are the components of the existing COP for non-specialty hospitals from 1986, followed by the components 
of the proposed COP. 
Existing COP  Proposed COP 
Subpart A- General Provisions  Subpart A- General Provisions 
Provision of emergency services by  Patient Rights (issued as an interim final rule on July 2, 
nonparticipating hospitals  1999) 
Subpart B- Administration  Subpart B- Patient Care Activities 
Compliance with Federal, State, and local laws  Patient Admissions, assessment, and plan of care

Governing Body  Patient care

Quality assessment and performance improvement

Subpart C- Basic Hospital Functions  Diagnostic and therapeutic services or 

rehabilitation services 
Quality assurance
 Pharmaceutical services 
Medical staff
 Nutritional services 
Nursing services
 Surgical and anesthesia services 
Medical record services
 Emergency services 
Pharmaceutical services
 Discharge Planning 
Radiologic services

Laboratory services
 Subpart C- Organizational Environment 
Food and dietetic services

Utilization review
 Administration of organizational environment

Physical environment
 Infection control

Infection control
 Human resources

Physical environment

Subpart D- Optional Hospital Services  Life safety from fire

Blood and blood products transfusions

Surgical services  Potentially infectious blood and blood products

Anesthesia services  Utilization review

Nuclear medicine services 
Outpatient services 
Emergency services 
Rehabilitation services 
Respiratory care services 
35 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX B 
Roles of Accreditation and Medicare Certification

Joint Commission  State Survey Agency 
Element  (Accreditation)  (Medicare Certification) 
Announced  C  Core of accreditation process  C  Low priority 
Surveys  C  Routine presence on a 3-year cycle  C  Elapsed time between surveys growing 
C  Collegial  C  Medicare Conditions of Participation 
C  Tight structure  outdated 
C  Limited opportunity to follow leads  C  Survey results fail to make meaningful 
or respond to complaints  distinctions across hospitals 
C  Dynamic standards 
C  Spurs hospital improvement 
C  Reduces risk 
C  Unlikely to identify patterns of 
substandard care or individual 
practitioners with questionable skills 
C  Survey results fail to make 
meaningful distinctions across 
hospitals 
Random  C  Used for about 5 percent of  C  Not applicable 
Unannounced  accredited hospitals per year 
Surveys  C  Not truly unannounced; hospitals get 
24-48 hours notice 
C  Focuses on five areas commonly 
found out of compliance 
Response to  C  Approach is oriented toward  C  Core activity with higher priority than 
Adverse  research and prevention  routine hospital certification or validation 
Events  C  Relies on self-reporting  surveys 
C  Ensures hospital confidentiality  C  Includes authority to respond to events in 
C  No public accountability  accredited as well as nonaccredited hospitals 
C  Publicly accountable 
Responses to  C  Considered adjunct to triennial  C  Core activity with higher priority than 
Complaints  surveys  routine hospital certification or validation 
C  Surveys present limited opportunities  surveys 
to follow-up on complaints  C  Includes authority to respond to events in 
C  No public accountability  accredited as well as nonaccredited hospitals 
C  Publicly accountable 
Standardized  C  Lacks uniformity, thus comparability  C  Not applicable 
Performance  across hospitals 
Data  C  Not linked to accreditation 
Source: Office of Inspector General, The Role of Accreditation (OEI-01-97-00051) and The Role of 
Medicare Certification (OEI-01-97-00052). 
36 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX C 
M e t h o d o l o g y

The HCFA 
We obtained dates of certification surveys from HCFAs Online Survey 
Certification and Reporting System (OSCAR).  The HCFA authorizes States to update and 
maintain this database with survey information.  We extracted survey data pertaining to the 
frequency of certification surveys.  We subsequently verified the accuracy of our extraction by 
comparing it to on-line OSCAR system information to ensure the dates we used corresponded 
to routine certification surveys, rather than complaint investigations or other types of surveys. 
We are satisfied that our information is as accurate as HCFAs OSCAR system. 
Additionally, we selected 4 States (California, Kansas, Minnesota, and Texas) that 
contain over 50 nonaccredited hospitals and represented different geographic regions of the 
United States.  We then examined the OSCAR data for those States in greater detail.  We 
verified the operational status of  the nonaccredited hospitals in those States that had not been 
surveyed in over 5 years using the American Hospital Associations 1997 Hospital Guide. 
We also interviewed staff and managers at each HCFA regional office and the 
central office.  We reviewed a variety of HCFA documents, including budget call letters, 
reinvention materials, and reports to Congress, among others. 
The State Survey and Certification Agencies 
In August 1997, we mailed a pretested survey to the hospital certification agencies 
in the 50 States and the District of Columbia.  The response rate for this survey was 100 
percent.  The State survey addressed four areas of hospital quality oversight:  private 
accreditation of hospitals, Medicare certification of hospitals, HCFA oversight of State 
certification agencies, and State licensure of hospitals.  We interviewed State officials on the 
telephone or in person as well. 
Accrediting Organizations 
37 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX C 
We interviewed officials from both the Joint Commission on Accreditation of 
Healthcare Organizations and the American Osteopathic Association.  We also reviewed 
documents from both organizations, including mission statements, accreditation manuals, 
policies, and hospital survey files.  We requested and received aggregate data from the Joint 
Commission reflecting its recent hospital survey activity.  All Joint Commission data are 
presented as reported by the Joint Commission, unless otherwise noted.  For purposes of this 
inquiry, we focused our analysis on the Joint Commission. 
Survey Observations 
Based on schedules of upcoming triennial surveys, we identified nine hospitals in 
which to observe triennial Joint Commission surveys.  Of those, we were able to observe 
seven.  In two cases, the hospitals declined the Joint Commissions request that we be allowed 
to observe.  The 7 hospitals varied in size from 80 to 775 beds, represented both teaching and 
community hospitals, and were located in different areas of the country (both rural and urban). 
We also observed one random unannounced Joint Commission survey.  Although we observed 
different teams of surveyors, the survey agenda, lines of inquiry, and tone were consistent 
across the surveys, which were conducted in accordance with Joint Commission policy, based 
on review of survey manuals and interviews with representatives of the Joint Commission. 
Finally, we observed a certification survey and parts of two complaint investigations performed 
by State surveyors under HCFAs auspices. 
Stakeholder Interviews 
We interviewed representatives of organizations we considered to be stakeholders 
in hospital oversight.  These stakeholder organizations included a union, professional 
organizations, hospital associations, and consumer groups. 
Other Documents 
In addition to the documents referenced above, we reviewed statutes and 
regulations and a variety of articles from newspapers, journals, magazines, and newsletters. 
A Systemic Review 
38 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX C 
In this report we focus on the system of external review considered as a whole. 
We address issues that have a significant bearing on how well that system works.  In so doing, 
we draw on a wide body of evidence from the sources we noted above.  Our findings and 
recommendations represent our conclusions based on our assessment of this evidence.  We 
present them with the intent of providing helpful directions on how HCFA, the Joint 
Commission, and the State agencies can play a more effective role in protecting patients and 
improving quality. 
39 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX D 
Certification Survey

During the course of our inquiry, one Office of Inspector General (OIG) analyst observed 
one Medicare certification survey.  What follows is a summary of the observations from that 
survey. 
Background 
The survey was of a 34-bed nonaccredited county hospital located in a rural area.  The 
hospital had recently undergone major renovations but still used parts of the older buildings, 
which were at least 50 years old.  Staff could pass from the renovated parts of the building to 
the older parts, and construction was still underway.  Plastic strips hung in doorways to 
minimize the dust from the ongoing renovations.  The pharmacy and operating rooms were 
housed in the older building, which was plagued by roof leaks and a finicky cooling system, 
leaving the area humid and musty.  Warehouse style buildings in the back of the hospital 
housed the medical records and some administrative offices. 
The hospital came under new management 2 years prior to the observed survey.  During 
the time of the survey, the hospital had an average daily census of 13, an increase over prior 
years.  Most of the surgeries performed at this hospital were hernia repairs, cholecystectomies, 
or gynecological procedures.  Since the renovations, the hospital experienced an increase in 
deliveries. 
Three experienced nurse surveyors and one surveyor in training (also a nurse) surveyed 
this hospital.  One served as team leader.  All of the surveyors had clinical nursing experience. 
At least one surveyor had been at the hospital previously.  Before arriving at the hospital, they 
reviewed the States historical files of compliance and complaints for this hospital.  Thus they 
were familiar with the hospitals history of compliance problems.  They were also aware of the 
hospitals recent scandals with its medical staff.  For example, one physician on staff was 
imprisoned for narcotics abuses and another lost his medical license due to a pattern of 
unnecessary surgeries, high complication rates, and poor care. 
The State survey agency notified the hospital of the survey 3 weeks in advance. 
40 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX D 
Summary Observations 
The survey began around 11:30 in the morning on the first day and went until noon on 
the third day, lasting about 19 hours total.  The surveyors continued surveying until 5:30 or 
6:00 PM on the first 2 days.  The survey began with an opening conference that included the 
surveyors and the hospitals leadership.  After general introductions and reviewing a loose 
agenda, the hospital presented an overview of its recent improvements.  Then the surveyors 
began their document reviews, which covered hospital logs, minutes, bylaws, and medical 
records, among others.  By early afternoon, the surveyors split up to begin their sessions, with 
the trainee always assigned to follow a senior surveyor. 
The surveyors relied on interviews, document reviews, and observations.  Once or twice 
a day, the surveyors would compare notes and share concerns so others could pursue them in 
different areas of the hospital.  The surveyors selected the files they would review themselves, 
based on staff rosters; surgical, admission, and emergency logs; and other documents.  They 
also pushed alarm bells and observed responses.  They tested the hospital staffs knowledge by 
asking them to demonstrate certain tasks, such as turning on pieces of equipment, testing a 
defibrillator, changing oxygen tanks, and sterilizing a scope. 
Through the information gleaned from the above, the surveyors identified a range of 
concerns.  Among them were the following: 
<Staff were untrained in certain hospital equipment.  For example, when surveyors asked for a 
demonstration of the hospitals new negative pressure room, no one knew how to turn it on. 
<The hospitals emergency call systems were inadequate.  For example, the surveyors pulled 
call bells in the emergency room and procedures room.  No one answered the calls. 
<Medical record documentation was problematic.  In particular, patient consent forms failed to 
spell out risks in lay terms and included broad consent for any other necessary procedure. 
Physician signatures were also missing from records.  Legibility was a problem, too. 
<The nursing department appeared to have inadequate staff.  Also, the nursing department 
failed to use individualized care plans, follow-through on incident reports, or identify patients 
educational needs. 
41 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX D 
<The hospital lacked a policy for transferring high-risk obstetrical patients, had a high c-section 
rate, and lacked documentation for fetal distress.  For example, the hospital delivered an infant 
at 27-weeks gestation even though it lacked neonatal capacity.  Furthermore, three of six 
obstetrical records the surveyors reviewed documented some sort of adverse outcome. 
<The hospital lacked a performance appraisal system for its medical staff and its reappointment 
process excluded peer review data.  Furthermore, physicians covering the emergency room 
lacked privileges for common emergency procedures, such as placing chest tubes and 
performing tracheotomies. 
<The appropriateness of care in three or four records was questionable.  The surveyors copied 
those records and forwarded them to a peer review organization for review. 
During the exit conference (the last session of the survey), the surveyors discussed their 
findings, but couched their comments as preliminary.  After all, they had collected a variety of 
documents to review and analyze off-site.  Findings from those documents could alter their on-
site findings.  The hospital would not know the final survey outcome until that process 
occurred (see page 23 for a final summary of the surveys findings). 
Sessions observed by the OIG included, in part or in whole, pharmacy, medical staff, 
nursing, discharge planning, operating and recovery rooms, procedure room, emergency room, 
dietary, and the building and grounds tour.  Highlights of some of the observed sessions follow. 
Medical Staff Session 
This session lasted 3 hours on the first day and continued for 1 hour on the second day. 
Before beginning the session, the surveyor read the bylaws.  During the session, she 
interviewed the administrative staff person in charge of credentialing and reviewed credential 
files.  She selected the files herself, and by the end of the second day, had reviewed the 
credentials of each of the six staff physicians, among others.  In questioning the staff and 
reviewing the files, the surveyor was especially interested in how the medical staff took 
responsibility for quality, how the hospital delineated privileges, and evidence of a reappraisal 
and peer review system.  No one from the medical staff participated in this session. 
42 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX D 
The surveyor interview covered the following topics: appointment and reappointment 
process, language skills of foreign medical graduates, reliance on the American Medical 
Associations physician profile database, conscious sedation, emergency room coverage and 
procedures, the on-call system, pending litigation, licensure limitations, prerequisites for active 
staff, availability of surgical services, use of podiatrists and psychologists, autopsies, organ 
donation, physician experience and competence with certain procedures, unexpected surgical 
outcomes such as perforations, role of chart review, and medical staff involvement in appraisal 
process. 
As this session unfolded over the 2 days, the surveyor asked for more and more files, and 
then operating room logs and other documents to confirm the range of procedures the hospital 
provided fell within the privileges granted.  By the end of the session, the surveyor identified 
some areas of concern.  For example, she expressed concerns about privileges because 
physicians responsible for covering the emergency room lacked privileges for common 
emergency room procedures such as chest tubes.  The surveyor offered examples of similar 
problems at other hospitals that lead to unnecessary deaths.  She also questioned whether 
medical staff were involved in the evaluation of patient care and physician appraisal.  Other 
concerns related to the staffs failure to follow its own bylaws, the lack of written guidelines 
for certain high-risk patients, and illegibility of medical records. 
Pharmacy Session 
One surveyor conducted the pharmacy review, which lasted about 1 hour.  The hospitals 
pharmacy, located in the old part of the hospital, had one full-time pharmacist and one part-
time technician.  The pharmacists background was in retail pharmacy and he was new to 
practicing in a hospital. 
The surveyor reviewed the pharmacists license and other documents.  She was 
particularly interested in documentation of proper narcotics tracking, logs tracking after-hours 
access to the pharmacy, and protocols for any performance improvement projects.  In addition 
to reviewing the papers, she asked for copies to take with her.  While in the pharmacy she also 
inspected the hood and scanned the storage shelves, where she noted narcotics that were 
labeled without strength identified. 
The surveyors questions covered the following areas:  formulary development, 
mechanism for drug recalls, restocking and security of crash carts, computerization, drug 
utilization review, hospital strategic planning, performance improvement projects, drug errors, 
and reliance on and competency of the pharmacy technician.  Because of the obvious humidity 
43 
Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX D 
problem in the small pharmacy, the surveyor asked questions about the impact of the dampness 
on the efficacy and storage of the drugs. 
The surveyor focused, however, on narcotics and adverse drug reactions and how the 
hospital tracked them.  Apparently the nursing department viewed it as a pharmacy 
responsibility and the pharmacist viewed it as nursing.  The surveyor was concerned about the 
lack of accountability and spent a lot of time educating the pharmacist about what he needed to 
track and why, referencing requirements of the Drug Enforcement Administration. 
Nursing 
This session lasted about 2 hours and involved the director of nursing and one surveyor. 
The director of nursing was new.  In fact, she was the 15th director of nursing the hospital hired 
in 7 years.  The surveyor reviewed documentation of the hospitals nurse staffing plan, among 
other documents.  Low staffing and acuity emerged as major concerns.  Among the topics the 
surveyor questioned the director of nursing about were: reliance on contract nurses, orientation 
and training of new nurses, determining baseline competency, role of charge nurses, nurse roles 
in tracking and reporting adverse drug reactions, anatomical gifts, contingency plans, incident 
reporting (falls, needle sticks, and employee injuries), use of telephone and verbal orders, and 
infection control. 
Statement of Deficiencies Stemming from the Certification Survey 
Within a few weeks of the on-site portion of the survey, the State agency sent the final 
statement of deficiencies to the hospital.  The statement included deficiencies at each of the 
three levels (condition, standard, and element) as noted below: 
Condition of Participation:  Governing Body (42 CFR 482.12) 
Two elements under this condition were unmet, concerning the accountability of the 
medical staff and its appointment process. 
Condition of Participation:  Quality Assurance (42 CFR 482.21) 
One standard under this condition was unmet, concerning implementation of the quality 
assurance plan. Two elements under this condition were also unmet, both concerning 
clinical plans: one because the hospital lacked evidence that it evaluated drug errors and 
one because it lacked evidence that it evaluated a recent increase in c-sections. 
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Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX D 
Condition of Participation:  Medical Staff (42 CFR 482.22) 
This condition was unmet based on the medical staffs failure to operate under its bylaws 
and develop or implement a system of accountability.  Two standards and four elements 
were also out of compliance under this condition.  One unmet standard concerned the 
accountability and organization of the medical staff; the other, the medical staffs failure 
to abide by its bylaws.  The unmet elements included the failure of the medical staff to 
conduct periodic appraisals of its members and to delineate clinical privileges, among 
others. 
Condition of Participation:  Nursing Services (42 CFR 482.23) 
Two elements under this condition were unmet.  One concerned the lack of individualized 
nursing care plans for each patient.  The other concerned the problems with the reporting 
of medication errors. 
Condition of Participation:  Medical Record Services (42 CFR 482.24) 
Two elements under this condition were unmet.  One concerned illegibility and one 
concerned delinquent medical records. 
Condition of Participation:  Pharmaceutical Services (42 CFR 482.25) 
One element, concerning the security of drugs, was unmet. 
Condition of Participation:  Physical Environment (42 CFR 482.41) 
One standard was unmet.  This element encompassed several concerns related to patient 
safety and well-being:  the lack of working alarm systems, lack of staff knowledge of and 
response to alarm systems, lack of staff knowledge on certain patient care equipment, 
lack of safe emergency exits, and lack of mechanism to monitor temperature and humidity 
in the pharmacy, among others. 
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Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX D 
Condition of Participation:  Surgical Services (42 CFR 482.51) 
Two elements were unmet.  One concerned the hospitals failure to delineate surgical 
privileges in accordance with competency.  The other concerned the lack of a properly 
executed informed consent form. 
Condition of Participation:  Emergency Services (42 CFR 482.55) 
One element was unmet.  It concerned the medical staffs failure to abide by policies and 
procedures governing care provided in the emergency department and the nursing staffs 
failure to adhere to established triage policy. 
Based on the above findings, the State survey team conducted two more surveys at this 
hospital, both within 2 months of the original survey observed by the OIG.  As of the last 
follow-up survey, the hospital had corrected its deficiencies to the satisfaction of the survey 
team. 
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Detailed Comments on the Draft Reports

In this appendix we present the full comments of all parties that responded to our four 
draft reports.  In order, the comments that we present in this appendix are from the following 
parties: 
C  Health Care Financing Administration, U.S. Department of Health and Human Services 
C  Joint Commission on Accreditation of Healthcare Organizations 
C  Association of Health Facility Survey Agencies 
C  American Osteopathic Association 
C  American Hospital Association 
C  American Association of Retired Persons 
C  Service Employees International Union 
C  National Health Law Program 
C  Public Citizens Health Research Group 
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Association of Health Facility Survey Agencies Response to OIG Report 
June 1999 
The mission and purpose of the Association of Health Facility Survey Agencies (AHFSA) is to 
strengthen the role of its member state agencies in advocating, establishing, overseeing and 
coordinating health care quality standards that will assure the highest practicable quality of health 
care for all state and federally-regulated health care providers.  In addition to other functions, 
AHFSA offers advice and recommendations to the Health Care Financing Administration (HCFA). 
The comments AHFSA offers below concerning the Department of Health and Human Services 
Office of Inspector General (OIG) report entitled The External Review of Hospital Quality are 
intended to improve the effectiveness of oversight and regulation of our nations hospitals. 
In reviewing the report, our association is in agreement with the OIGs assessment of the current 
system of hospital regulation and oversight provided by HCFA, state regulatory agencies and the 
Joint Commission on the Accreditation of Healthcare Organizations (Joint Commission). There are 
both positive and negative components to the processes of accreditation and Medicare certification 
that can be developed and strengthened with HCFAs guidance and direction. 
In the report, the OIG mentions that HCFAs validation survey process is ineffective in monitoring 
the Joint Commissions survey performance. The purpose of the validation survey process, as we 
understand it, is not to validate the Joint Commissions performance, but instead to validate that 
Joint Commission standards and the application of those standards and process does, in fact, 
assure compliance with Medicare Conditions of Participation.  Therefore, it is our position that 
validation surveys do have a place in hospital regulatory oversight. However, in order to promote 
consistency in all hospital surveys (validation or standard surveys) from state to state, and thereby, 
ascertain whether these surveys are effective, we believe HCFA should develop and provide 
hospital training on a survey process for states to use as a guide when surveying hospitals. Ideally, 
the survey process would be similar in format to survey processes developed for other Medicare 
programs such as long term care. Additionally, whereas at present, HCFA often may not require a 
hospital to submit a plan of correction and receive follow-up visits as a result of validation survey 
results, we believe the process would be more efficacious if all hospitals with deficiencies from 
validation surveys be required to submit plans of corrections and receive follow-up visits. 
The OIG notes the recently piloted Observation survey process whereby state agencies accompany 
Joint Commission surveyors during accreditation surveys as one solution in monitoring Joint 
Commissions survey performance. However, an AHFSA member from a state who participated 
in the Observation survey process did not feel it was effective in assuring minimum standards of 
care were met, but only determined whether the entity conducting the survey did, or did not, follow 
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Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX E 
their prescribed survey process. Therefore, we have reservations as to the effectiveness of the 
Observation survey with regards to improving patient care and outcomes. 
Concerning the issue of inspections of non-accredited hospitals, AHFSA takes the position these 
facilities should be surveyed at least every three (3) years and that a portion of the surveys should 
be unannounced. This survey cycle would be consistent with the minimum survey cycle offered by 
the Joint Commission. Additionally, as HCFA has clearly demonstrated its priority and 
commitment in monitoring the quality of care provided to residents in long term care facilities, it 
should also do the same for patients receiving care in hospitals by providing the necessary funding 
to state agencies needed to accomplish the regulatory oversight of hospitals. 
The OIG report mentions that surveys conducted by the Joint Commission are structured such that 
there is little time for investigation of complaints.  To identify possible substandard care in 
hospitals during accreditation surveys, we believe it is essential the Joint Commission place more 
time and emphasis on conducting complaint investigations. This includes communicating with 
state agencies prior to accreditation surveys in order to gather information about the hospitals 
compliance/complaint history.  The Joint Commission should consider random selection of medical 
records for review, including those patients in the hospital at the time of the survey and those who 
have been discharged. Additionally, we believe the Joint Commission should conduct more 
unannounced accreditation surveys in order to obtain a more realistic picture of the care being 
provided by hospitals. 
Concerning the measure of quality care provided by hospitals, we believe potential patients and 
their families would best be served by on-line computer viewing such as a website of survey results 
from Joint Commission surveys and, where applicable, state agency surveys. We believe such a 
website should go beyond a survey score or level of accreditation, but should include more in-depth 
information such as areas noted to be out of compliance with standards or regulations identified by 
Joint Commission or state agency surveyors during hospital inspections, including those 
inspections based on complaint allegations. 
In conclusion, we believe it is essential for state agencies, HCFA and the Joint Commission to 
work collaboratively in the regulatory oversight of our nations hospitals.  Only through such 
collaboration can we begin to make strides in assuring quality health care is provided by hospitals 
and the health care interests of the public are protected. 
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Endnotes

1.  Troyen A. Brennan et al, Incidence of Adverse Events and Negligence in Hospitalized 
Patients, The New England Journal of Medicine 324 (February 7, 1991) 6: 370-376. 
2.  The 17.7 percent refers to adverse events considered by the authors to be serious.  The authors 
defined adverse events as situations in which an inappropriate decision was made when, at the 
time, an appropriate alternative could have been chosen and serious as ranging from temporary 
disability to death.  See Lori B. Andrews et al, An Alternative Strategy for Studying Adverse 
Events in Medical Care, The Lancet 349 (February 1, 1997)309-313. 
See also; Lucian L. Leape, Error in Medicine, Journal of the American Medical 
Association 272 (December 21, 1994) 23: 1851-1857; David C. Classes et al, Adverse Drug 
Events in Hospitalized Patients, Journal of the American Medical Association 277 (January 
22/29, 1997) 4: 301-306; Mark R. Chassin et al, The Urgent Need to Improve Health Care 
Quality:  Institute of Medicine National Roundtable on Health Care Quality, Journal of the 
American Medical Association 280 (September 16, 1998) 11: 1000-1005; David W. Bates et 
al,Effect of Computerized Physician Order Entry and a Team Intervention on Prevention of 
Serious Medication Errors, Journal of the American Medical Association 280 (October 21, 
1998) 1311-1316; Robert A. Raschke et al, A Computer Alert System to prevent Injury from 
Adverse Drug Events:  Development and Evaluation in a Community Teaching Hospital, Journal 
of the American Medical Association 280 (October 21, 1998) 1317-1320; and David C. Classen, 
Clinical Decision Support Systems to Improve Clinical Practice and Quality of Care, Journal of 
the American Medical Association 280 (October 21, 1998) 1360-1361. 
3.  One example is a November 1998 New York Times article under the headline: Death in 
Surgery Reveals Troubled Practice and Lax Hospital.  The article described a botched 
operation on a young woman by a surgeon who was on probation by the State medical board and 
who used unauthorized medical equipment brought in to the operating room by a medical supply 
salesman.  Such incidents can happen even in the best of hospitals, but they underscore the point 
that hospitals can be dangerous places and that oversight systems can be lax.  See also 
Overdoses Still Weigh heavily at Dana Farber, The Boston Globe (26 December 1995); Florida 
Doctor Sanctioned in New Amputation, The Boston Globe (19 July 1995); Two Surgeons 
Surrender Licenses After Mistakenly Removing Kidney, The Boston Globe (6 June 1996); How 
Can We Save the Next Victim? New York Times Magazine (15 June 1997); Another Hospital 
Death Probed, The Boston Globe (26 July 1997); Patient Dies After Drinking Poison Left on 
Nightstand, San Diego Union-Tribune (6 March 1998); Man Arrested for Posing as Doctor for 
4 years, posted at the CNN interactive webpage (16 May 1998); Deadly Restraint:  Patients 
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Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX F 
Suffer in a System Without Oversight, The Hartford Courant (13 October 1998). 
4.  http://WWW.hcfa.gov/Medicare/Medicare.htm 
5.  Ibid. 
6.  Ibid. 
7.  Ibid. 
8.  P.L. 89-97. 
9.  The HCFA published its proposed hospital conditions of participation on December 19, 1997 
(62 Fed. Reg. 66,726).  On July 2, 1999, it published an interim final rule concerning patients 
rights (64 Fed. Reg. 36,070). 
10.  Social Security Act, sec. 1865, 42 U.S.C 1395bb. 
11. Health Care Financing Administration, OSCAR 10 Report, as of May 30, 1998. 
12.  Two companion reports entitled The Role of Accreditation and The Role of Medicare 
Certification explore the role of accreditation and Medicare certification in greater detail. 
13.  Michael S. Hamm, The Fundamentals of Accreditation (Washington, D.C.: American Society 
of Association Executives, 1997) 3. 
14.  Nonaccredited hospitals can go through the Medicare certification process for free.  Although 
the Presidents Department of Health and Human Services Fiscal Year 1999 Budget included a 
proposal authorizing the Secretary to impose a user fee for certification surveys, that proposal 
was excluded from the budget bill passed by Congress. 
15.  42 U.S.C. 1395bb. 
16.  42 U.S.C. 1395aa. 
17.  Health Care Financing Administration, Oscar 10 Report, as of May 30, 1998. 
18.  Office of Inspector General, Medical Licensure and Discipline: An Overview (June 1986); 
The Utilization and Quality Control Peer Review Organization Program:  Quality Review 
Activities (September 1988); The Utilization and Quality Control Peer Review Organization 
Program:  Sanction Activities (November 1988); The Utilization and Quality Control Peer 
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Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX F 
Review Organization Program: An Exploration of Program Effectiveness (February 1989); 
Performance Indicators, Annual Reports, and State Medical Discipline: A State-by-State Review 
(August 1990); Quality Assurance Activities of Medical Licensure Authorities in the US and 
Canada (February 1991); Educating Physicians Responsible for Poor Medical Care: A Review 
of the PROs Efforts (February 1992); The Sanction Referral Authority of Peer Review 
Organizations (April 1993); The Peer Review Organizations and State Medical Boards: A Vital 
Link (April 1993); The Beneficiary Complaint Process of the Medicare Peer Review 
Organizations (November 1995); The Role of Medicare PROs in Identifying and Responding to 
Poor Performers (December 1995); and Monitoring and Evaluating the Health Care Quality 
Improvement Program (August 1988). 
19.  Joint Commission on Accreditation of Healthcare Organizations, Understanding the 197 
hospital Performance Report, 4. 
20.  Ibid., 10. 
21.  HCFA to States, FY 1997 State Survey and Certification Budget Call Program Requirements 
and Budget Guidelines. 
22.  Joint Commission on Accreditation of Healthcare Organizations. 
23.  See D. E. Berwick, Continuous Quality Improvement as an Ideal in Health Care, New 
England Journal of Medicine 320 (January 5, 1989) 1: 53-56 and The Institute of Medicine, 
Medicare: A Strategy for Quality Assurance (Washington, D.C.: National Academy Press, 1990). 
24.  Referred to as the Sentinel Event policy.  For a fuller discussion of this policy, see our 
companion report, The Role of Accreditation. 
25.  For a fuller discussion of the ranking of State survey agency activities, see our companion 
report, The Role of Medicare Certification. 
26.  62 Fed.  Reg.  66726, Dec. 19, 1997. 
27.  Ibid. 
28.  Ibid., 66728. 
29.  Mark R. Chassin et al, The Urgent Need to Improve Health Care Quality: Institute of 
Medicine National Roundtable on Health Care Quality, Journal of the American Medical 
Association 280 (September 16, 1998) 11:  1000-1005. 
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Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX F 
30.  Ibid., 1004. 
31.  Ibid. 
32.  Ibid. 
33.  HCFA, Report to Congress on the Study of: Private Accreditation (Deeming) of Nursing 
Homes, Regulatory Incentives and Non-Regulatory Initiatives, and Effectiveness of the Survey 
and Certification System, July 1998; General Accounting Office, California Nursing Homes: 
Federal and State Oversight inadequate to Protect Residents in Homes with Serious Care 
Violations, GAO/T-HEHS-98-219 (July 28, 1998); Hearings Before the Senate Special 
Committee on Aging, July 27-28, 1998; see also President Clintons remarks announcing the new 
nursing home regulations, July 21, 1998 (in Weekly Compilation of Presidential Documents, July 
27, 1998, p 1446). 
34.  In his remarks on July 21, 1998 President Clinton called for a crackdown on unsafe nursing 
homes...[and] a step up [in] investigations  (in Weekly Compilation of Presidential Documents, 
July 27, 1998, p 1446). 
35.  Until January 1998, HCFA only selected hospitals for validation surveys from those 
undergoing Joint Commission surveys during certain months of the year.  The HCFA reports that 
it corrected this problem. 
36.  Tracking termination notices would provide HCFA insights into how often hospitals are 
unable to correct problems identified through a survey within 45 days, because HCFA only issues 
termination notices when problems go uncorrected for 45 days. 
37.  42 U.S.C.1395ll. 
38.  62 Fed.  Reg.  66726, Dec. 19, 1997. 
39.  The HCFA implemented this approach to overseeing the State survey agencies (referred to as 
the State Agency Quality Improvement Program, or SAQIP) in 1996.  The HCFA defined a core 
set of performance standards that apply generally to survey and certification activities for any 
provider, for example nursing homes, hospitals, or home health agencies.  The HCFA expects 
State agencies to develop improvement plans for specific standards. 
40.  Performance reports from the Joint Commission are available upon request and through the 
Joint Commissions website.  For further discussion of the performance reports, see our 
companion report, Holding the Reviewers Accountable. 
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Hospital Quality: A Call for Greater Accountability  OEI-01-97-00050  APPENDIX F 
41.  42 U.S.C. 1395aa. 
42.  See Lori B. Andrews et al, An Alternative Strategy for Studying Adverse Events in Medical 
Care, The Lancet 349 (February 1, 1997)309-313; Troyen A. Brennan et al, Incidence of 
Adverse Events and Negligence in Hospitalized Patients, The New England Journal of Medicine 
324 (February 7, 1991) 6: 370-376; Lucian L. Leape, Error in Medicine, Journal of the 
American Medical Association 272 (December 21, 1994) 23: 1851-1857; David C. Classes et al, 
Adverse Drug Events in Hospitalized Patients, Journal of the American Medical Association 
277 (January 22/29.  1997) 4: 301-306; Mark R. Chassin et al, The Urgent Need to Improve 
Health Care Quality:  Institute of Medicine National Roundtable on Health Care Quality, Journal 
of the American Medical Association 280 (September 16, 1998) 11: 1000-1005; David W. Bates 
et al,Effect of Computerized Physician Order Entry and a Team Intervention on Prevention of 
Serious Medication Errors, Journal of the American Medical Association 280 (October 21, 
1998) 1311-1316; Robert A. Raschke et al, A Computer Alert System to prevent Injury from 
Adverse Drug Events:  Development and Evaluation in a Community Teaching Hospital, Journal 
of the American Medical Association 280 (October 21, 1998) 1317-1320; and David C. Classen, 
Clinical Decision Support Systems to Improve Clinical Practice and Quality of Care, Journal of 
the American Medical Association 280 (October 21, 1998) 1360-1361. 
43.  Sidney A. Shapiro and Randy S. Rabinowitz, Punishment versus Cooperation in Regulatory 
Enforcement: A Case Study of OSHA, Administrative Law Review 49 (1997)4: 713-762. 
44.  National Roundtable on Health Care Quality, p 1004. 
45.  Prospective Payment Assessment Commission, Report and Recommendations to the 
Congress (March 1997) 13. 
46.  Hamm, Fundamentals of Accreditation, 3. 
47.  42 CFR 488.8.  These regulations define a 20 percent disparity rate between the accrediting 
organization and the State agency as a trigger for a deeming authority review. 
48. Stephen F. Jencks, The Governments Role in Hospital Accountability for Quality of Care, 
The Journal of Quality Improvement (July 1994)364-369. 
49.  62 Fed.  Reg.  66728, Dec. 19, 1997. 
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