Department of Health and Human Servces

OFFICE OF

GENERA

INSPECTOR 
STATE EVALUATION OF MEDICAID

MANDATORY SECOND SURGICAL

OPINION PROGRAMS

Richard P. Kusserow

INSPECfOR GENERA

OEI-03-89-01530  EXECUTIVE  SUMMAR Y

PUROSE 
Ths report provides inormation on recent State evaluations of Medicaid mandatory 
Second Surgical Opinion Programs (SSOPs) and their implications for the Health Care 
Financing Admstration s (HCF A) proposed reguation requing such program. 
companion report sumaries common elements of States' mandatory SSOPs (OEI
03-89-01531 ). 
BACKGROUN 
Section 1902(a)(30)(A) of the Social Securty Act requies that Medicaid State plans 
contain safeguards against unnecessary utiltion of servces and assure that payments 
economy, and quality care. 
are consistent with effciency, 
States curently use second surgical opinion programs (SSOPs) as a utiliztion 
safeguard. These programs requie clients to obtai independent medical opinons 
prior to elective surgery. The SSOPs encourage patients to be more informed and 
involved in their medical treatment. It is believed that this education enables patients 
to make better decisions and thus lead to improved care and cost savings from 
foregone surgeries. 
SSOPs in th Medaid Prgrm 
The earliest Medicaid mandatory SSOPs were established in  , the Offce 
1976. In 1983
of Inspector General (OIG) advised HCFA to establish mandatory SSOPs for 
Medicaid and Medicare. The OIG estiated HCFA could save $157 mion anually 
by adopting mandatory SSOPs for both programs. The HCF A rejected the OIG' 
recommendation, caling for further analysis. 
In 1986, HCFA proposed a reguation requig a mandatory SSOP in each State 
Medicaid program. The proposed reguation would permt a State not to implement a 
mandatory SSOP if its curent review program achieved the objectives of being cost 
effective and preventing unecessary surgery. In 199, HCF A tentatively decided not 
to implement the proposed reguation. At that time, 14 State Medicaid programs 
were using mandatory SSOPS. 
As par of the Omnbus Budget Reconcilation Act of 1990 (OBRA 90), HCFA must 
complete by January 1, 1993, a report to Congress on States' utiliztion review systems 
for certain Medicaid servces. Section 4755(b)(2) of OBRA requies the report to 
address the effects of such servces on patient access to necessary care, quality of care 
and cost of care.  MEODOLOY 
Durig 
1990 we gathered inormation from all 50 States and the District of Columbia 
to determe whether they had mandatory SSOPs or a precertifcation review 
program. We obtaied detailed information from the 14 States with mandatory 
SSOPs, includig site visits to 4 States (Colorado, Masachusetts, Michigan . and
Pennsylvania). 
FIINGS 
Cuent SSOP evaluative data is lited and inconclusive. 
Al but two States have review programs other than mandatory 
SSOPs. Most 
use precertifcation review.

Current data is insufcient to support mandatig 
SSOPs. 
RECOMMATION 
We support HCFA's intention to withdraw the proposed reguation mandating 
SSOPs
in the Medicad program. 
We recommend that HCFA, upon completion of its report to Congress
, assess what
additional information is necessary to determine if States are successfuly 
guardig 
against unecessary utiltion. 
COMM AN 
HCFA  OIG REPONSE 
The HCF A agreed with our recommendation to withdraw the proposed reguation 
mandating SSOPs in the Medicaid program. However
, they did not agree to requie
utition 
States to submit 
data and analysis which would permit HCF A to evaluate
the effectiveness of the varous approaches
, at least until January 1 , when a
report analyzg State utition review is due to Congress.  , 1993
Whe we agree that it is not necessary for States to submit data until the report is 
submitted to Congress, we continue to believe in the appropriateness of determg
' utiltion 
the effectiveness of States review programs. We have modified our
recommendation to take the report to 
Congress into account. 
fu 
The  text of comments from HCFA are included in Appendi B.  . . . . . . . . . . . . . . . . . . . . . . ..  .. . . . .  ...   ... . ..   ....  
. . . . . ..  ..  ...   ...   ...   ...   ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ...   .. . .  ..  ..  ..  . .. 
TABLE OF CONTENTS

EXCU SUMY

INODUCfON . 
FIINGS 
Cuent Evauatie Data 
. . . . . . 5 
Oter State Revew Progr 
.. 7 
Efec on Propoed Reguation. . . . . . 
RECOMMATION. . 
States with Madatory SSOPs in 199 . . . . . . . . . . . . . . . . . . .. A
APPENIX 
APPENIX B: Comments from the Heath Cae  Administrtion  B-1 
Finci  INTRODUCTION

PURE 
Ths report provides inormation on recent State evaluations of Medicaid mandatory 
Second Surgical Opinion Programs (SSOPs) and their implications for the Health Care 
Financing Admstration  requig such program. 
s (HCF A) proposed reguation 
companion report sumaries common elements of States' mandatory SSOPs (OEI
03-89-01531 ). 
BACKGROUN 
Section 1902(a)(30)(A) of the Social Securty Act requies that Medicaid State plans 
contain safeguards against unnecessary utiltion of care and servces and assure that 
payments are consistent with effciency, economy, and quality care. 
States currently use SSOPs as a utiltion safeguard. These programs requie clients 
to obtain independent medical opinons prior to elective surgery. A second opinon 
confis 
either  or refutes the necessity of the proposed surgery. The SSOPs 
encourage patients to be more informed and involved in their medical treatment. 
It is 
thought that this education wi enable patients to make better decisions which 
lead to improved quality of care and cost savigs from foregone surgeries. 
Ini 
SSOPS 
The fist national SSOP was established in New York in 1972 as a joint venture 
fud. 
between Cornell-New York University and a Taft-Hartley benefit  Dr. Eugene 
McCarthy established and administered the SSOP. 
In 1974, Dr. McCarhy reported a 18.7 percent rate for nonconfing second 
opinons. Ths resulted in program  63 for every dollar spent. The report 
savings of $2.
generated interest in Congress which was considerig ways to contain Medicaid and 
Medicare costs. 
The earliest Medicaid mandatory SSOP was established in Massachusetts in 1976. 
Michigan also established its SSOP in 1976. 
Imple Volu  Medar 
HCFA  sSOP for 
Durg 
1976 and 1977, the House of Representatives' Subcommttee on Oversight and 
Investigations of the House Commttee on Interstate and Foreign Commerce (known 
as the Moss Committee) conducted hearigs on unecessary surgery and its effect on 
spiraling health care costs. The Moss Commttee recommended that the then 
Department of Health, Education, and Welfare promptly institute a program of  conf 
independent professional second opinons to  the need for elective surgery 
underwtten by Medicare and Medicaid. To comply with this request, HCF A 
implemented a national Medicare voluntary SSOP in September 1978. Prior to th 
HCFA had intiated several second opinon demonstration projects in 1977. 
Evaltin 
198111982 Abt  of sSOPs 
Under a HCF A contract, Abt Associates, Inc., evaluated the voluntary Medicae 
demonstration second opinion program and a mandatory Medicaid SSOP in 
Massachusett. The Abt report concluded that only mandatory programs could 
achieve cost savings because of the low participation rate in voluntar SSOPs. The 
report noted substantial savings for the mandatory SSOP in Massachusetts, where the 
SSOP reduced the volume of surgical procedures by 20 percent, thereby savig an 
mion 
estimated $1  annually. 
Mandatory SSOPs are effective because of a phenomenon known as the sentinel 
effect. The sentinel effect operates by creatig an environment in which physicians 
recommend fewer surgeries because they know their decisions will be reviewed by 
second surgical opinon consultants. However, voluntary SSOPs have not benefitted 
from the sentinel effect because most beneficiaries do not seek a second opinon. 
Insctor Gen  Recomm Manry 
Ofe of  (DIG)  SSOPs 
In a 1983 report, the OIG advised HCFA to establish a mandatory SSOP for both 
Medicaid and Medicare. At that time, seven States had implemented mandatory 
SSOPs; three of these States claimed substantial savigs. The OIG estimated HCF 
would save $157 milion annualy by adopting a mandatory SSOP for both programs. 
The HCF A rejected the OIG' s recommendation, citing limited experience with 
fuer 
mandatory SSOPs in the private and public sectors. The HCF A called for 
analysis of existing second opinion programs before proceedig with any proposal to 
establish a mandatory SSOP for either Medicaid or Medicare. 
Manry 
Prpoed 
SSOPS  by HCFA 
In 1986, HCF A proposed a regulation requirg mandatory SSOPs in State Medicad 
programs. The proposed reguations requied, at a minium, that a mandatory SSOP 
be applied to 10 common elective surgical procedures. The reguation was designed to 
promote mandatory SSOPs nationally. However, HCF A would permt a State not to 
implement a mandatory SSOP if it curently operated a review program that achieved 
unecessar 
the objectives of being cost effective and preventing  surgery.  Stl  Regn 
Cuen 
of 
The proposed mandatory SSOP reguation has never been fialied. The 1986 
Omnibus Budget Reconcilation Act (OBRA 86) precludes HCFA from isswng 
reguations in fiai form until 180 days after releasing a report on the matter. 
In June 1989, HCF A reported on high volume and high payment procedures in the 
Medicad population. The report contained inormation on States' SSOPs. It 
contained no recommendations. 
fial 
In 1990, HCF A made a tentative decision not to  the proposed mandatory 
SSOP reguation. At that time, 14 State Medicaid programs were using mandatory 
SSOPs. 
As part of the Omnibus Budget Reconcilation Act of 1990 (OBRA 90), HCFA must 
complete by January 1, 1993, a report to Congress on States' utilation review systems 
for certain Medicaid servces. Section 4755(b)(2) of OBRA requies the report to 
address the effects of such servces on patient access to necessary care, quality of care 
and cost of cae. 
th Prat Secr 
SSOPs in 
Cuently, commercial insurers and Blue Cross and Blue Shield plans insurig more 
than 47 mion people do not actively market SSOPs as a stand-alone product. 
They continue to provide it as one component of a complete quality assurance and 
utiltion review package. According to these insurers, the substantial savigs 
documented when SSOPs were first introduced are no longer possible because 
confed. 
recommendations for elective surgery are usually 
Managed Cae Organitions have also moved away from stand-alone SSOPs. They 
sti 
do not market SSOPs as a tool to achieve cost savigs. However, some employers 
purchase the program as part of a larger utiltion review package to educate 
employees and enable them to participate more fuy in health care decisions. 
MEODOLOY 
Durig 1990, we gathered information from all 50 States and the District of Columbia. 
We contacted all Medicaid agencies to determe how many curently have mandatory 
SSOPs or have considered one in the past. We also asked if they were using a 
preadmssion, pre certification, or prior approval program. 
We contacted the 14 States with mandatory SSOPs and requested detailed 
inormation. We visited Colorado, Massachusett, Michigan, and Pennsylvania to learn 
fist-hand about their programs. We conducted structued telephone intervews with 
the remaing  , length of 
States. The information requested included: year established the program, program admtrator, objectives, procedures covered, reimbursement 
mechanism, nonconfation rate, and evaluation of the program. 
We reviewed pertinent reports by HCFA's Offce of Research and Demonstrations. 
We also analyzed published report on SSOPs in private sector literature.  FINDINGS

LI 
CU 
AN 
SSOP EVALUATI DATA IS  INCONCLUSIVE 
th mary 
Few  evaluated  SSOPs  evaluati wer 
Sta hae  an 
Thee States (Michigan, Wisconsin, and Colorado) evaluated their SSOPs in 199. 
Eleven States have not evaluated their SSOPs withi the last 2 years. Foureen States 
had mandatory SSOPs in calendar year 1990. (See Appendi A for a list of these 
States. ) 
lited 
The Michigan and Colorado evaluations were  in scope while Wisconsin' 
evaluation was much broader and is ongoing. 
Michiga data on the total number of requests 
. The Michigan Medicaid agency used 
for second opinon, the total number of second opinions given, the total number of 
surgeries confed, the total number of surgeries not confied, and the total 
number of surgeries actually performed. The evaluation also included inormation on 
utiltion 
the costs of the second opinon program and the hospital admssion and 
program. Additionally, a routine retrospective review was performed, under the 
hospital admssion and utilition program, on a limted number of actual surgeries. 
Colorado. The Foundation for Medical Care, a provider of medical review for both 
Medicare and Medicaid, evaluated data for two surgical procedures. The Foundation 
compared Medicaid utiltion rates with a non-Medicaid group which had simar 
demographics. 
Wisconsin. The University of Wisconsin-Madison, Center for Health Systems 
Research and Analysis, Medicaid Evaluation Program, is under contract to perform an 
evaluation of the State mandatory SSOP. The evaluation is focused on two program 
outcomes: the estimated change in the number of surgeries performed as a result of 
the program and the resultant cost implications. Using fiscal year 1987-88 data for 
two procedures, researchers compared for selected individuals, the medical cost per 
cae for those electing surgery with those decidig to forego surgery. They estimated 
the number of individuals that would forego surgery as a result of the program. 
addition, the Medicaid Evaluation Program compared program savigs to program 
remaig 
costs, includig admistrative and second opinion consultation costs. The 
eight procedures are scheduled to be reviewed in a similar manner. 
A recent HCF A study reported that few States had evaluated their SSOPs for cost 
savigs. The 1989 mandated HCFA report to Congress High Volume and 
, entitled 
High Payment Procedures in the Medicaid Population  provided detailed information on 
11 of the 13 mandatory Medicaid programs in operation at that time. (Two of the 
States did not provide information.
 The report lited only three States -- Oregon, Virgia, and Washigton -- that 
calculated the savigs they believed accrued to their program as a result of the 
mandatory SSOP. The State evaluations were performed in 1987 or earlier. Oregon 
Virgi 
reported savigs of $394 982 for the period July 1, 1986 to June 30, 1987; 
reported savigs of $961 521 for caendar year 1986; and Washigton reported savigs 
of $656 00 for the period January 1, 1982 to December 31, 1982. 
re 
inons
ar 
evaluati 
Reen 
Cuent evaluations reveal that SSOPs are not producing consistent results. Ths is in 
contrast to the earlier evaluations that demonstrated that mandatory SSOPs were cost 
effective and were reducing unecessary surgeries. 
Michigan discontinued its ll-year-old SSOP in 1990. They provided us with a number 
of reasons for discontiuing their program. 
nonconfg 
second opinion had the 
Firt, half of the clients receiving a 
surgery anyway. (Michigan s program allowed clients to decide whether to have 
nonconfg 
surgery, even if they received  second opinions. 
Send, 
about three percent of the surgeries reviewed under the hospita 
admssion and utiliation program were found to be medically unnecessar. 
Thd, foldig the mandatory SSOP into the hospital admssion and utiltion 
review program would reduce provider and recipient confusion and be just as 
effective at holdig down the incidence of elective surgeries. In fact, their 
analysis indicated that Medicaid would save $60 00 by folding the mandatory 
SSOP into the hospital admission and utiltion review program. 
They also felt that the hospital admission would enable the State to keep 
abreast of the latest treatment alternatives and review criteria for elective 
surgeries. Rather than relyig on individual physicians, the State would asume 
the job of ensurig that the most curent treatment alternatives and criteria are 
used. 
Four 
physician practice patterns had changed since implementation of the 
SSOP. It was thought that the drop in the incidence of elective surgeries is 
party attributable to the fact that the physician communty is much more used 
to the whole concept of utiliztion and peer review. Michigan concluded that 
whie a second opinion was an appropriate and effective response 11 years ago 
it is not today. 
Colorado s evaluation found the program worthwhie. The rate per 100 non-
Medicaid members for the two surgical procedures reviewed was lower for the 
populations havig the second opinion program. The rate was even lower per 100 
Medicaid members under the second opinon program.  Wisconsin s SSOP is curently being evaluated, 1 and thus far, two procedures have 
been reviewed. The evaluation indicates the SSOP is meeting the stated objectie of 
reducing the number of surgeries performed. Medicaid expenditures have been 
reduced as a result of individuals electing to forego surgery after having the second 
opinion. However, only one of the procedures had a favorable savings-to-cost ratio. 
Ths is in contrast to the fist evaluation in 1981 which documented cost saVings and 
which documented a break-even point. 
the second evaluation in 1985 
OTH
AI Bur  HAVE REVIW PROGRA 
TWO  STATE 
MAATORY SSOP. MOST USE PRECETICATION REVIW. 
Most States have chosen review programs other than mandatory SSOPs. Of the States 
without a mandatory SSOP, 34 States and the District of Columbia use a 
precertifcation or preadmssion review process to avoid unnecessary surgeries and 
hospital admsions. The pre certifcation process requies that the State s review agent 
fu 
be informed prior to treatment as a condition for  benefit coverage. A 
determnation is then made as to the appropriateness of treatment and proposed site 
of servce. 
Of the 34 States with precertifcation programs, 22 considered a mandatory SSOP. 
However, 14 of the 22 have no plans for implementation. Only 2 of the 22 have 
future plans for implementation. Five did not know and one had already discontiued 
its second opinon program. Almost half of those that had no future plans for 
implementation concluded that a SSOP was not cost effective. Some indicated that a 
contaent 
SSOP would not save them money or that it had become an obsolete cost 
tool. 
Only two States (Oklahoma and South Dakota) have neither a mandatory SSOP nor a 
pre certifcation or preadmssion review process.
CU 
INSUFCI  MAATIG 
DATA IS  TO SUPPORT  SSOPS. 
The proposed HCF A reguation would require State Medicaid plans to include SSOPs 
for certain surgical procedures. Its objectives are cost effectiveness and the prevention 
of unecessa surgery. States using other review programs which HCF A determes 
wi 
requied to establish SSOPs. 
achieve these objectives are not 
The proposed reguation would base approval of a State s curent program on whether 
, at a mium
its outcome is , equal to the outcome of an SSOP. However, our review 
has demonstrated a lack of outcome data for current SSOPs. This lack of data raises 
doubts as to whether SSOPs should be requied. 
The results of this review were reported in early 1991.  Additionaly, without data HCF A would be unable to enforce the proposed reguation 
because HCF A would have no performance indicators that could be used to exempt 
States havig an alternative program. Ths is signcant since most States have a 
review program other than a mandatory SSOP.  RECOMMENDA TION

propo 
We support HCFA's intention to withdrw the  regution madati SSPs 
progr 
in the Medcad 
We contiue to support HCFA' s effort to ensure that States have methods to 
safeguard against unnecessary utition of care and servces. When the reguation 
was fist proposed in 1986, there was clear evidence of program savigs and 
tie it 
prevention of unecessary surgery resulting from mandatory SSOPs. At that 
would have been appropriate to require all States to implement a mandatory SSOP. 
However, at this point little evaluatie data is available for mandatory SSOPs. Few 
States have performed evaluations of their exiting mandatory SSOPs. Even when 
evaluations have been done, the results do not conclusively indicate that mandatory 
SSOPs are cost effective and successfu in reducing unnecessary surgeries. Without 
this data, mandatory SSOPs should not be requied. Additionally, HCF A canot use 
mandatory SSOPs as a standard to judge the effectiveness of other review programs if 
data on mandatory SSOPs' effectiveness is inconclusive. 
In order for HCF A to carr out its responsibilties under section 1902, it should assess 
the adequacy of State programs designed to guard against unnecessary utilition. 
There is room for considerable flexibilty and experimentation in the approach to such 
programs. These programs might use SSOPs but could use other methods as well 
such as managed care or pre certifcation review. 
Evaluation of the effcacy of these varous approaches is one goal of HCF A's report to 
Congress on utilation review. Afer completion of its report to Congress, HCF A 
be in a better position to determe what additional inormation, or routine reporting 
of data, is necessary for it to assess State compliance with section 1902(a)(30)(A). 
Waes t herefore recmmend that HCFAn, aet thce completion of its report to Csoungrcesc 
unec  to determe if State are 
what additional inormation is 
utition. 
gudig agat  COMM AN 
HCFA  OIG REPONSE

The HCF A agreed with our recommendation to withdraw the proposed reguation 
mandating SSOPs in the Medicaid program. However, they disagreed that they should 
requie States to submit utization data and analysis so they can evaluate the effcacy 
of the various approaches. 
The disagreement is based on the fact that HCF A does not want to requie 
States to 
utition 
submit data at least unti they complete their report to Congress on State 
wi 
review systems. The report  include an analysis of State utiltion review 
procedures for ambulatory surgery, preadmssion testing, and same-day surgery in 
order to ensure these programs are appropriate for Medicaid patients. The report 
address the effects of such programs on access, qualty, and costs of care. 
The HCF A has indicated it will ensure that required information on utiltion review 
programs is included in the Medicaid State plans. This could be helpfu if States 
provide enough information to enable HCF A to make determinations on the effcacy 
utition 
of various  review programs. 
We agree that it is not necessary for States to submit utilition data until the requied 
report is submitted to Congress, since the report should provide insights on the impact 
broader data collection requirements wi have on providers and States, as well as the 
HCF A staff. However, we stil believe that it is appropriate to determe the 
effectiveness of States' utilition review programs. We have modified our 
recommendation to take the report to Congress into account. 
The ful text of comments from HCF A are included in Appendi B.  APPENDIX A

SlATE Wl MAATORY SSPS IN 199

COLORAO 
INIAA

MAYL

MASACHUSETI 
*MICHIGAN 
MINOTA

MISSOURI

NEW JERSEY

OREGON

PENNSYLVANIA

TENNESEE

VIGINIA

WASHINGTON

WISCONSIN

. DISCONTD IN 199
 APPENDIX 

COMM  TI  ADMITION

HETH CAR FIANCIG 
FROM  ..--: -,"-:-'" -"-..' \..~  :-.~ ' .~:... '.,:"~'-', ".' ':.". .. .
Health Care 
",aYtnl, 
&. HUMAN lbRV'CES  Financing AdministrDtion 
DEPARTMENT OF HEALTH 
Memorandum 
DIG-I 
.. J t7.f: /'J' 
Date WiI
 rAIGi-ttti 
Admistrator 
Subject  OOJIG 
From Acting  EXBB
inon 
Second Suraica O 
OIG Draft Re  ort - "State Evaluatio
Sumares of 
" OEI-03.89-01530, and "Medicaid Mandatory SSOPs: 
Programs (SSOPs),
" OEI-03-89-01531 
State Programs,
Inspector General 
Ofce of 
the Secretary 
dr 
report
report. The fit-referenced  th 
We have reviewed the subject companion 
has 
for mandatory SSOPs and the effect 
curent outcome data 
discusses the lack of  for Medicad. The second-
regulation mandatig SSOPs 
on the 1986 proposed 
common elements of the 14 States 
referenced report descnoes and summaries the 
199. Th latter report was isued as a final 
Medicaid SSOPs that were in existence in 
recommendations. 
since it does not contain any 
District of Columbia use a precertifcation 
OIG found that 34 States and the 
unecessry 
intaces of 
SSOPs to reduce 
preadmission revew process instead of  demonstrated 
found that whie past studies 
surgeries and hospital admissions. OIG also 
unecessa surgeries and produced 
SSOPs curtiled 
that mandatory priate sector 
SSOPs could not conclusively 
avaiable of current Medicaid 
savings, the few evaluations 
unecessar sureries for 
were cost-effective or reduced 
determine that these programs 
Medicaid. OIG maintains that the lack of curent outcome data raies doubt as to 
Health Cae 
whether SSOPs should be required. Therefore, OIG concludes that the 
withdrw the curent proposed regulation 
Financing Administration (HCFA) should  tht  tht 
HCFA ensure 
however, recommend 
which would mandate SSOPs. OIG did, 
review program and require States to 
each State establish the requisite utiliztion 
to evaluate the effcacy of the various 
submit such data and analyses to enable HCF A 
approaches. 
s fidings and are currently considerig whether to withdraw the 
We agree with OlG' 
However, we disagree with the aspect 
regulation mandating SSOPs in Medicaid. 
utization data. Our specific 
OIG' s recommendation requiring States to submit 
coen.u  s recommendations are attached for your consideration. 
Qn the report 
drft 
review and comment on this  report. Please 
Thank you for the opportunity to 
s recoroendations at your
advise us whether you agree with our position on the report 
earliest convenience.  .. /7"
I ( :  "J Ov"' 
Attachment 
.-t' 
!\I  Care financin  Administration ( 
Comments o 
State Evaluation of Medicaid 
on the GIG Draft Reports: II
Ooin1on prowams (SSO 
ndatory Seconq. SurgicaJ 
o.Eh03-89-01530, md "  id Mandatorv SSOPs: 
Summaries of State progrms." OEI.03-89-01531 
Recommendation 
review program
That HCFA should ensure that each State establish the requisite utilzation 
A to evaluate the effcacy 
analyses to enable HCF 
and require States to submit such data and 
of the various approaches. 
HCF A Resoonse

HCFA concurs with the first part of this recommendation. We are pleased that OIG 
utiliztion review and we are currently
recognizes that there are several viable options for 

SSOPs. However, we 
considering whether to withdraw the proposed regulation mandating 
disagree with the part of this recommendation that requires States to submit data. 
Security Act already 
As noted by OIG in this report, section 1902(a)(30)(A) of the Social 
their 
unnecessary utilzation of medical care in 
requires States to include safeguards against 
diferent programs, 
State plans. To satisfy this requirement, States are employing several 
, coordinated care and SSOPs. We believe 
including: precertification, preadmission review
admissions 
mechanism for reducing hospital costs, 
coordinated care systems represent the best 
while we win continue to encourage States to 
and lengths of stays prior to surgery. Therefore, 
choose coordinated care, we are reluctant to impose new mandates when States are already 
meeting the existing requirement. 
, we would not want to require that

With regard to the second part of this recommendation
completes its report to Congress on the State

States submit data at least until HCFA 
section 4755(b)(2) of the Omnibus Budget
utiHzation review systems. T(hOisB RreApo r9t0,) ,r iesq udiuree dt ob yC o
 ngress on January 1, 1993. OBRA 90

Reconcilation Act of 1990  for

repo" include an analysis of State utilzation review procedures 
requires that the 
to ensure these

ambulatory surgery, preadmission testing, and same-day surgery in order 
address the effects of such 
patients. The report will 
programs are appropriate for Medicaid 
insights on the 
This study will give us valuable 
access, quality, and costs of care. 
programs on  , as well as 
wil have on providers and States
impact broader data collection requirements 
HCF A staff. 
unnecessarily burdensome given the current austerity
We also believe this requirement may be 
States to submit utilzation
of many State budgets. While we are not in favor of requiring 
review data at this time, we. will ensure that required information on utilzation review 
programsJs-included in Medicaid State plans.