Department of Health and Human Services
OFFICE OF
INSPECTOR GENERAL
The External Quality Review of 
Psychiatric  Hospitals
JUNE GIBBS BROWN
Inspector General
MAY 2000
OEI-01-99-00160 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 Bostons 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 Elise Stein, Program Specialist
Norman J. Han, Program Analyst Bambi Straw, Program Specialist    
Chaletta M. Clark, 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 assess the external quality review of free-standing psychiatric hospitals that participate
in Medicare.
BACKGROUND
Concerns About Psychiatric Hospitals
Recently, the media has drawn attention to the quality of care in psychiatric hospitals due
to deaths attributed to the inappropriate use of restraints and seclusion.  This has raised
fundamental questions about how care is delivered and overseen in psychiatric hospitals. 
Medicare requires such hospitals to meet two special conditions of participation (staff
requirements and medical records) that apply only to psychiatric hospitals.  The Health
Care Financing Administration (HCFA) relies upon contracted psychiatric nurses and
psychiatrists to assess compliance with these two special conditions.  Like general
hospitals, psychiatric hospitals are also subject to all the Medicare conditions of
participation and can be deemed to meet them through either accreditation (usually by the
Joint Commission on Accreditation of Healthcare Organizations) or certification (by State
agencies).  Currently 611 psychiatric hospitals participate in Medicare; all but 39 are
accredited.
This inquiry follows-up our recent series on the external review of hospital quality.  In this
related inquiry, we focus on the overall system of external review as it applies to
psychiatric hospitals.  That system includes HCFAs contracted surveyors, the Joint
Commission, State agencies, and HCFA itself.  We devote particular attention to the 
review provided by HCFAs contracted surveyors.  We based our inquiry on national data
on psychiatric hospital surveys, survey observations, and stakeholder interviews, among
other sources of information.
FINDINGS
The current system of external review for psychiatric hospitals has some
strengths that help protect patients.
The system includes a patient-centered approach aimed at ensuring patients receive
active treatment as opposed to custodial care.  HCFAs contracted surveyors choose a
sample of patients and trace them through the hospital by reviewing their medical records,
                 1                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 observing them on the wards and in sessions, interviewing them, and speaking with their
caregivers.  Neither State agencies nor the Joint Commission survey with this approach.
It has achieved some balance between the collegial (aiming to educate and improve)
and the regulatory (aiming to investigate and enforce) approaches to oversight. 
Both HCFAs contracted surveyor and State agency activities lean toward the regulatory
approach.  The Joint Commission surveys lean toward the collegial approach, with an
educational bent.  However, the Joint Commission has added some regulatory elements to
its approach by increasing its unannounced surveys of psychiatric hospitals and
maintaining more control over the selection of medical records.
But the external review system also has major deficiencies.
The extent to which it holds psychiatric hospitals accountable for patient care is
questionable.  HCFAs contracted surveyors take an in-depth look at patient care, but the
two special conditions that guide their survey are limited to medical records and staff
requirements.  Joint Commission surveyors approach to patient care is less in-depth, but
their official findings are much less limited and more far ranging.  State agency
involvement in psychiatric hospitals is more episodic and driven by complaints and adverse
events, but they too have a broader range of official findings than HCFAs contracted
surveyors.
These limitations are particularly apparent with regard to discharge planning and restraints
and seclusion.  All external reviewers give marginal attention to discharge planning.  The
Joint Commission gives more attention to restraints and seclusion than HCFAs contracted
survey or State agencies, but its effectiveness is questionable.
Some psychiatric hospitals are falling through the cracks, rarely being subjected to
contracted or State agency surveys.  The number of surveys conducted by HCFAs
contracted surveyors fell from a high of 413 in FY 1993 to 146 in FY 1998, a drop of 65
percent.  The elapsed time between such surveys is growing, and some psychiatric
hospitals have not been surveyed in over 5 years.
HCFAs contracted surveyors, State agencies, and the Joint Commission tend to
carry out their psychiatric hospital oversight on independent tracks with little
coordination.  HCFAs contracted surveyors sometimes survey hospitals on the heels of
the Joint Commission or State agency.  Thus, in short order, a hospital could be visited by
each.  But HCFAs contracted surveyors rarely have the results of the other reviews.  
The contracted surveyors are held just minimally accountable for their
performance in overseeing psychiatric hospitals.
                 2                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 HCFA obtains limited information on the performance of its contracted surveyors. 
Validation surveys, HCFAs main source of information on the performance of external
reviewers and hospitals, exclude the two special conditions for psychiatric hospitals.  Also,
HCFA asks for little aggregate or routine reporting on the contracted surveys.
HCFA provides some feedback to its contracted surveyors, mostly through its
review of the survey documentation.  HCFA lacks a formal or routine mechanism for
providing feedback to its contracted surveyors on their performance.  Its feedback tends
to be sporadic.
Public disclosure plays a minimal role in holding the contracted surveyors
accountable.  HCFA makes little information available to the public on the performance
of the psychiatric hospitals or the contracted surveyors.
RECOMMENDATIONS
HCFA and Joint Commission responses to the recommendations we posed in our recent
series on the external review of hospital quality help address the deficiencies identified in
this study.  Below we offer five additional recommendations that emerge primarily from
the findings in this inquiry, but also draw on those in our previous series, which included
acute care hospitals with psychiatric units.  Our recommendations call for HCFA to exert
its leadership in shaping the external review of psychiatric inpatient care.  If enacted, these
recommendations will further strengthen external quality review systems intended to
protect psychiatric inpatients.
HCFA should deploy its contracted surveyors more strategically and take better
advantage of their expertise. 
HCFAs 76 contracted surveyors serve as an important resource, providing expertise that
HCFA and the State agencies would be hard-pressed to duplicate.  To take better
advantage of this expertise, we recommend that HCFA strengthen the contracted
surveyors background in the full range of Medicare conditions of participation for
hospitals and make them available for:
Responding to complaints and adverse events involving psychiatric care:  The
contracted surveyors special expertise should be available to enhance the States ability to
respond appropriately to complaints and events.
Surveying in both psychiatric hospitals and psychiatric units of acute care hospitals: 
We suggest that the contracted surveyors expertise would be valuable to these units,
which typically receive just a fraction of surveyors time during an accreditation survey.
                 3                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 We are aware of the resource implications of this recommendation.  HCFA currently
estimates the costs of each contracted survey at $8,300.  HCFA could use its estimates to
seek additional funding or seek authority to establish a user fee to help defray the costs.
HCFA should hold its contracted surveyors more fully accountable for their
performance.  Toward that end, it should
Conduct periodic observation surveys of the contracted survey process.  HCFA now
lacks any such oversight mechanism of the contracted survey process.
Obtain timely and useful performance reports.  These should cover, at a minimum, the
contracted surveyors activities, such as types of surveys conducted, findings, and trends.
Provide feedback and guidance to the contracted surveyors.  Given their part-time
status and the decline in scheduled surveys, HCFA should stay in closer contact with the
contracted surveyors and consider facilitating a network through a newsletter or website. 
Increase public disclosure.  HCFA should make more information available on the
oversight and performance of psychiatric hospitals by, at a minimum, posting information
on the Internet.
HCFA should determine an appropriate minimum cycle for the contracted survey
at psychiatric hospitals.
No mandated cycle for these contracted surveys exists.  In determining one, HCFA should
take steps to strengthen its ability to track all participating hospitals and their survey
history in such a way that allows HCFA to easily determine whether the survey was
conducted by the contracted surveyors or State agencies.  It should also take steps to
coordinate the survey activity among the external reviewers.
HCFA should negotiate with the Joint Commission to achieve both a more
patient-centered survey approach and a more rigorous assessment of discharge
planning. 
The Joint Commission does not currently use the patient-tracing approach employed by
HCFAs contracted surveyors.  The Joint Commission is well-positioned to apply this
approach more broadly in psychiatric units as well as psychiatric hospitals.  Also, the Joint
Commission has a significant base of experience in addressing discharge planning issues in
nonhospital settings and is therefore well-positioned to apply this expertise to the hospital
setting.
HCFA should consider applying special Medicare conditions of participation both
to psychiatric hospitals and psychiatric units of acute care hospitals.
                 4                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 Many experts suggest that psychiatric inpatients face vulnerabilities that warrant greater
scrutiny than most other hospital patients.  But the external review system that HCFA
relies upon falls short in two important ways.  First, it does not apply the special
conditions to psychiatric units of acute care hospitals, which is where the great majority of
Medicare beneficiaries receive inpatient psychiatric care.  Furthermore, in psychiatric
hospitals, the contracted surveyors are limited to assessing compliance with only the two
special conditions (medical records and staff requirements) even though their patient-
based review exposes a broad array of treatment issues.
Given this situation, it would appear timely for HCFA to consider special conditions that it
would use for both inpatient settings.  If HCFA moved in this direction, the following are
among the key questions it would have to address:
C Do the proposed Medicare conditions of participation for hospitals and the interim
final rule on patient rights provide sufficient authority for the external reviewers to
apply the extra scrutiny warranted for psychiatric inpatients?
C Are additional authorities needed for key patient-care issues, including discharge
planning?
COMMENTS ON THE DRAFT REPORT
Within the Department of Health and Human Services, we received comments on our draft report
from HCFA.  Outside the Department, we received comments from the Joint Commission, the
National Association of Psychiatric Health Systems, the National Alliance for the Mentally Ill, and
Public Citizens Health Research Group.  Below is a summary of those comments followed by our
responses, in italics.
HCFA Comments
HCFA concurred with all of our recommendations and noted its ongoing work with the Joint
Commission to improve hospital oversight.  It is willing to explore more strategic uses of the
contracted surveyors and anticipates funding increases that will allow it to reduce the interval
between the contracted surveys.  It also noted its plans for redesigning its information system to
support better reporting of survey trends.  Finally, HCFA indicated that it will develop 
interpretive guidelines, with a corresponding plan for the contracted surveyors to enforce them,
for existing regulations that apply to psychiatric units of acute care hospitals, which generally
parallel the special conditions for psychiatric hospitals.
We appreciate HCFA's positive response to our report.  In implementing the recommendations,
HCFA will strengthen the system of external review intended to protect psychiatric inpatients. 
We have added some text on funding contracted surveys, which is relevant to our call for HCFA
                 5                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 to use the surveyors more strategically as well as to determine an appropriate minimum cycle for
surveys.  We hope this new text will be helpful to HCFA as it explores further funding increases.
Comments from the Joint Commission
The Joint Commission identified many changes either already implemented or underway that
enhance the accreditation process and promote a patient-centered approach to oversight.  In
particular, it noted its ongoing process to strengthen its standards for discharge planning.
The Joint Commission took issue with how we characterized the authority of the contracted
surveyors ability to hold psychiatric hospitals accountable for patient care issues and our point
that Medicare bears the cost of external review either directly or indirectly.
We appreciate the Joint Commissions continued responsiveness to our recommendations.  The
Joint Commissions leadership on these issues can influence improvements in accredited
hospitals.  In response to the Joint Commission's concerns, we clarified our discussion of the
limits of the contracted surveyors authority and the extent to which Medicare bears the cost of
external review.
Comments of Other External Associations
To varying degrees, the external parties supported our findings and recommendations, but also
reflected some concerns.  Both the National Alliance for the Mentally Ill and Public Citizen noted
their concerns about accreditation and called for increased funding for the contracted surveys. 
The National Association of Psychiatric Health Systems opposes widespread dissemination of
information [about the performance of hospitals and surveyors] without adequate explanation and
protection whereas Public Citizen expressed its concern that without disclosure, "public
discontent will grow."
In its comments, the National Alliance recommended its State organizations as additional
resources for the external review of psychiatric hospitals and pointed to other resources on
discharge planning in the Substance Abuse and Mental Health Services Administration of the
Department.
We suggest that HCFA consider the concerns raised by these stakeholders as it works to improve
the system of hospital oversight.  They offer perspectives that can be informative to HCFA.
On the matter of public disclosure, we emphasize our position that such disclosure represents an
important step toward enhancing the public accountability of the contracted survey process and
parallels recommendations we made in our earlier series, "The External Review of Hospital
Quality." 
                 6                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 T A B L E  O F    C O N T E N T S
PAGE
EXECUTIVE SUMMARY
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PROFILE OF OVERSIGHT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
FINDINGS
Strengths of Psychiatric Hospital Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Deficiencies of Psychiatric Hospital Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Minimal Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
COMMENTS ON THE DRAFT REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
APPENDICES
A: Summary of Series on the External Review of Hospitals . . . . . . . . . . . . . . . . . . . . . 29
B: Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
C: Framework for the External Review of Hospitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
D: Comments on the Draft Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
E: Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
                 7                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 I N T R O D U C T I O N
PURPOSE
To assess the external quality review of free-standing psychiatric hospitals that participate
in Medicare.
BACKGROUND
Concerns about Psychiatric Hospitals
Recently, the media has drawn attention to patient deaths attributed to inappropriate use
of restraints and seclusion.  In October 1998, The Hartford Courant published an
investigative series that detailed 142 such deaths from around the country over the past 10
years.  Over half of those deaths occurred in hospitals.  In April 1999, the television news
show 60 Minutes II highlighted the inappropriate use of restraints and seclusion, lack of
trained staff, and questionable record-keeping at psychiatric hospitals in the Charter
Behavioral Hospital chain.  In response to these concerns, three restraint bills have been
introduced in Congress.  The bills variously call for restricting the use of restraints,
reporting restraint-related deaths and injuries, strengthening protection and advocacy
systems, and assuring the rights of individuals receiving mental health services.
In response to requests from members of Congress, the General Accounting Office
recently issued a report examining the extent to which restraints and seclusion are used in
various inpatient settings.1  The report found both underreporting of deaths and injuries
involving restraints and seclusion as well as variation among State and Federal policies on
restraints and seclusion.
This attention has raised fundamental questions about how care is delivered and overseen
in psychiatric hospitals.
Inpatient Psychiatric Care
Patients needing inpatient psychiatric care generally receive that care in free-standing
psychiatric hospitals or psychiatric units within acute care hospitals.  Currently, 611 free-
standing psychiatric hospitals operate around the country, all but 39 of which are
accredited.2  Of about 6,000 acute care hospitals, about 25 percent operate inpatient
                 8                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 psychiatric units.  Psychiatric care can also be provided in an acute care bed, outside of a
specialized psychiatric unit or hospital.
In 1997, 497,159 Medicare discharges were related to psychiatric care.3  Sixty-six percent
of those discharges were from psychiatric units that are part of acute care hospitals, 27
percent were from free-standing psychiatric hospitals.  The remainder were from acute
care beds outside of specialized hospitals or units.
Medicare Conditions of Participation
When Congress enacted the Medicare Act in 1965, it required hospitals to meet certain
minimum health and safety requirements to participate in the program.4  Those minimum
requirements are called the Medicare conditions of participation.  In addition to these
conditions that apply to all participating hospitals, free-standing psychiatric hospitals are
subject to two special conditions.5  One concerns record-keeping and one, staff
requirements.6  These two special conditions stemmed from Congress concerns that
patients in psychiatric hospitals would be warehoused and receive only custodial care,
rather than active treatment.7
The Health Care Financing Administration (HCFA) published the Medicare conditions of
participation in 1966, revised them in 1986, and, except for the two special psychiatric
conditions, are revising them again.8  On July 2, 1999, HCFA issued an interim final rule
on patient rights, which includes the right to be free from restraints and seclusion as a
means of coercion, convenience, and retaliation by staff.9  It also calls for hospitals to
report restraint-related deaths to HCFA.10  This interim final rule applies to all hospitals,
both general and psychiatric.
External Review of Psychiatric Hospitals for Participating in Medicare
Because the two special conditions for psychiatric hospitals, the Federal government relies
on an additional external reviewer for their oversight:  a panel of psychiatric surveyors
under contract to HCFA (hereafter referred to as contracted surveyors).  These contracted
surveyors conduct reviews that cover only the special conditions.  HCFA does not
consider surveys by the Joint Commission on Accreditation of Healthcare Organizations to
cover these special conditions.  HCFAs contracted surveyors include mostly psychiatrists
and psychiatric nurses, but also psychiatric social workers and pharmacists.  All are part-
time surveyors.
Within the Medicare Act itself, Congress provided that hospitals accredited by the Joint
Commission were deemed to be in compliance with the conditions of participation.11 
However, the two special conditions that psychiatric hospitals must meet are excluded
from that deemed status.  Thus, psychiatric hospitals accredited by the Joint Commission
are also subject to a review by the contracted surveyors. 
                 9                                                        
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 Psychiatric hospitals wishing to participate in Medicare without accreditation must go
through a Medicare certification process.  HCFA funds State survey and certification
agencies (hereafter called State agencies) to conduct certification surveys at these
hospitals to determine compliance with the Medicare conditions.  Although HCFA trains
the State surveyors in all the conditions (including the two special psychiatric conditions),
the contracted surveyors may be involved in certifying the nonaccredited psychiatric
hospitals as well. 
Regardless of the route a psychiatric hospital takes to Medicare participation, Medicare
generally bears a cost for the external review, either directly by funding State agencies or
HCFAs contracted surveyors, or indirectly through hospital charges that include the
overhead cost of periodic accreditation surveys.12
Accreditation, contracted surveys, and Medicare certification (by State agencies) involve a
team of trained surveyors visiting a hospital, interviewing staff, reviewing documents, and
inspecting the facility.
Other external parties also have roles in overseeing psychiatric hospitals.  Medicare Peer
Review Organizations, for example, have broad authority in overseeing the quality of care
paid for by Medicare, although they have no responsibilities specific to psychiatric
hospitals.  Each State also has a federally funded Protection and Advocacy grantee to
protect the rights of and advocate for individuals with mental illness.  These grantees have
the authority to investigate reports of abuse and neglect in all facilities that care for or
treat individuals with mental illness, including psychiatric hospitals.  And, depending upon
the circumstances, even the Department of Justice and the Food and Drug Administration
can become involved with patient deaths and abuses in psychiatric hospitals.
Recent Reports by the Office of Inspector General
In July 1999, the Office of Inspector General released four reports that assessed the
system in place for reviewing hospitals generally.  These reports covered the key roles
played by the Joint Commission, the State agencies, and HCFA.  See appendix A for a
more detailed summary of these reports.
The great majority of psychiatric hospitals are accredited by the Joint Commission, thus,
the findings from our recent series apply also to psychiatric hospitals.  In our series, we
found that Joint Commission surveys are undertaken in a collegial manner and are tightly
structured, an approach that fosters consistency but leaves little room for probing.  They
also provide an important vehicle for reducing risk and fostering improvement in hospitals. 
The hospitals take the surveys seriously and prepare for them.  But the surveys are
unlikely to detect substandard patterns of care or individual practitioners with questionable
skills.
                1  0                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 Likewise, our findings on the role of Medicare certification are relevant to those few
nonaccredited psychiatric hospitals, which, without a complaint or adverse event, State
agencies are unlikely to survey.  In fact, the backlog for surveying nonaccredited hospitals
is growing: in 1997 half of all such hospitals had not been surveyed in over 3 years, up
from 28 percent in 1995.
We also found that HCFA does little to hold either the Joint Commission or the State
agencies accountable for their performance in overseeing hospitals.
In our reports, we called for HCFA to exert leadership in addressing the shortcomings we
identified.  First, as a guiding principle, we urged HCFA to steer the external review
process so that it represented a balance between the educationally oriented approaches of
the Joint Commission and the enforcement-oriented approaches of the State agencies. 
Then we offered two sets of recommendations.  In the first, we presented a number of
steps HCFA should take to hold both the Joint Commission and the States more fully
accountable for their performance in reviewing hospitals.  Second, we called for HCFA to
determine the appropriate minimum cycle for conducting certification surveys of
nonaccredited hospitals.  HCFA responded positively to our recommendations by
presenting a detailed hospital oversight plan that incorporates our recommendations and
an accompanying strategy for hospital performance measurement. 
This Inquiry and Report
This inquiry focuses on the oversight of free-standing psychiatric hospitals and, in
particular, on the role of HCFAs contracted surveyors.  It does not address the
implementation of the interim final rule on patient rights.  Nor does it address the roles of
Medicare Peer Review Organizations, Protection and Advocacy grantees, the Department
of Justice, or the Food and Drug Administration.  Forthcoming Office of Inspector
General reports will address the current Federal and State data systems for reporting
patient abuses, particularly those involving restraints and seclusions that occur in
psychiatric hospitals.
Our inquiry draws on a variety of sources including: national data from HCFA on its
contracted surveys; policies and guidelines on the contracted survey process; interviews
with current and former contracted surveyors, HCFA officials, and other stakeholders;
survey observations of contracted surveys and Joint Commission surveys in psychiatric
hospitals; aggregate data from the Joint Commission; and reviews of laws, regulations,
and articles from newspapers and journals, among others.  See appendix B for more
details on our methodology.
While our findings emerge primarily from the above-noted data sources, we also draw on
our observations from our prior reports on the external review of general acute care
hospitals, which often have psychiatric units.
                1  1                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 We conducted this inspection in accordance with the Quality Standards for Inspections
issued by the Presidents Council on Integrity and Efficiency.
                1  2                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 P R O F I L E    O F    P S Y C H I A T R I C   
 H O S P I T A L    O V E R S I G H T
The table below profiles the roles of the three major external reviewers for psychiatric hospitals.  See
appendix C for more details on the five-part framework.
HCFAs Contracted Joint  State Survey
Element Surveys Commission Agencies
Routine, CCore of contracted CCore of accreditation CApplies to nonaccredited
surveyor activity process psychiatric hospitals only
Announced 
CPatient-centered CRoutine presence on a 3- CLow priority
On-site Surveys
approach that leans toward year cycle CMean elapsed time
the regulatory mode CCollegial between surveys=3.4
CNo set cycle for review CSignificant attention to years
CNo clear policy on restraints and seclusion C55 percent of
announced versus nonaccredited hospitals
unannounced surveys have gone over 3 years
CFewer surveys being done without a survey;
CElapsed time between 31 percent, over 4 years;
surveys growing 21 percent, over 5 years
Random CNot Applicable  CIncreasingly aimed at CNot Applicable
(although some contracted psychiatric hospitals
Unannounced
surveys are unannounced, CCustomized surveys
On-site Surveys
none are random) CTruly unannounced
Responses to CRarely involved: CRecent improvements to CCore activity
Complaints contracted surveyors the complaint process CConducted an average of
responded to a few per hold promise 314 complaint surveys in
year. FY96, FY97, and FY98
CPublicly accountable
Responses to CSame as complaints; CApproach is oriented CCore activity in
HCFA makes no toward research and accredited and
Major Adverse
distinction prevention nonaccredited hospitals
Events
CRelies on self-reporting CPublicly accountable
CEnsures hospital
confidentiality
CNo public accountability
Collection and CNot Applicable CNot Applicable  CNot Applicable
(core psychiatric
Dissemination of
measures under
Standardized
development)
Performance
Measures
                1  3                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 F I N D I N G S
The current system of external review for psychiatric
hospitals has some strengths that help protect patients.
The system includes a patient-centered approach aimed at ensuring patients
receive active treatment as opposed to custodial care.
HCFAs contracted surveyors spend much of their time at psychiatric hospitals following
the care of a sample of patients.  They choose the sample at the outset of the survey and
begin by reviewing the medical records of the chosen patients.  Spending an hour or more
on a single record, they become familiar with their sample patients treatment plans,
whether they are being
implemented, and what outcomes
are being achieved.  The
Observing Patients 
contracted surveyors follow the
in a Substance Abuse Session
record reviews by directly
observing patients in different A contracted psychiatric nurse surveyor sat in
settings, for example on the ward on a substance abuse discussion group, led by a
and in activities class.  Thus, they hospital therapist.  She chose the session
can see for themselves the extent because one of her sample patients, whose
to which the treatment plan is medical record she had already reviewed, was a
being implemented.  They also participant.  Her review of the medical record
revealed the patients hearing deficiency.  She
interview the patients caregivers,
quietly observed the 45-minute session, paying
thereby eliciting the staffs
particular attention to whether the therapist 
awareness of the sample patients,
appeared to be aware of that deficiency in his
such as why they are hospitalized
interactions with the patient. 
and what their treatment plans
are.  The contracted surveyors
interview the patients themselves, asking them how they are treated, what brought them to
the hospital, what their plans for discharge are, and gauging their awareness of their
treatment plans.  Finally, where possible they observe the treatment team discussions,
when the psychiatrist, social worker, and other professionals meet to discuss individual
patients treatment and progress. 
This approach gives the contracted surveyors a picture of the hospitals performance by
using discrete patient experiences as lenses.  Already experienced as psychiatric nurses,
social workers, and psychiatrists, the contracted surveyors use these lenses to identify
concerns regarding active treatment ranging from the qualifications and language skills of
hospital staff to the participation of the art therapist in treatment team meetings.  The
focus on active treatment pervades the survey process, with surveyors relying on each
                1  4                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 portion of the process--record review, patient observation, and caregiver and patient
interviews--to confirm the others.
Neither the Joint Commission nor the State agencies use this approach of tracing the
treatment of a sample of patients through medical records, observations, and interviews. 
While they do involve some patient focus, it is less central to the review process.
It has achieved some balance between the collegial (aiming to educate and
improve) and the regulatory (aiming to investigate and enforce) approaches to
oversight. 
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
Both approaches to oversight have value.  HCFAs contracted surveyors, State agencies,
and the Joint Commission all have approaches that represent different aspects of the
continuum.
The Joint Commission remains the dominant external reviewer for psychiatric hospitals. 
And it has been grounded on the collegial side of the continuum.  Its triennial surveys are
announced in advance, giving hospitals time to prepare.  Its process is educational:  its
surveyors share insights from other hospitals and explain the intent and significance of the
standards.  The surveys focus on performance improvement, giving hospitals opportunities
to present improvement projects throughout the visit.  Its approach to adverse events
stresses research, education, and prevention.
                1  5                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 However, while the Joint Commissions approach is still grounded in the collegial mode, it
recently made some changes in its accreditation of psychiatric hospitals that mark a shift
toward the regulatory mode.  Over the summer of 1999, it conducted 38 completely
unannounced surveys at Charter psychiatric hospitals in response to the 60 Minutes II
piece on inappropriate restraint use and lack of staff training in Charter hospitals.13  The
Joint Commission assigned a special team of psychiatric surveyors to these unannounced
surveys.  During the surveys, the team, rather than the hospital staff, selected the records
for review.  The Joint Commission recently announced its plans to expand its new
unannounced surveys in other psychiatric hospitals and acute care hospitals as well.  It is
planning tests of an unannounced survey with a focus tailored to the specific hospital and
expanded background information for surveyors.
These changes by the Joint Commission, coupled with the regulatory approaches of
HCFAs contracted surveys and State agencies, introduce a measure of balance among the
external reviewers and their approaches.  HCFAs surveys lean toward the regulatory side
of the continuum.  Their approach is challenging in nature.  For example, rather than
relying solely on the medical record, they substantiate its documentation with observations
and interviews.  The contracted surveyors focus on ensuring the minimum requirements
for the two special conditions are met.  As directed by HCFA, they avoid an educational
approach and pay little attention to performance improvement, both hallmarks of a more
collegial approach.  The hospitals have little opportunity for formally presenting
information to the surveyors.14  The surveyors discourage the hospitals leadership from
accompanying them during parts of the survey, such as patient interviews, therapy
observations, and ward tours.  State agencies are also rooted in the regulatory side of the
continuum.  Their oversight tends to be driven by complaints and adverse events.  Their
visits in response to such events tend to be unannounced. 
But the external review system also has major deficiencies.
The extent to which it holds psychiatric hospitals accountable for patient care is
questionable.
HCFAs contracted surveys provide an in-depth look into the patient care at psychiatric
hospitals.  Surveyors can uncover problems ranging from the adequacy of the treatment
plan to the handling of agitated patients.  But their legitimacy in holding the hospital
accountable for those problems is far more limited.  The two special conditions on which
the contracted survey is based are staff requirements and medical records.   Thus, despite
the far-reaching nature of their inquiry, the contracted surveyors are hard-pressed to hold
hospitals accountable for problems outside either medical records or staff requirements.  If
the contracted surveyors find problems but the conditions are still met, they can refer the
problems to HCFA or State agency surveyors, but do not follow-up on the problems
themselves.
                1  6                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 On the other hand, both the Joint Commission and State agencies (through HCFA and/or
their own State authorities) have broader authorities on which to base their survey
findings.  Indeed, the Joint Commission has several hundred standards grouped across 45
topics, and State agencies can enforce all of the Medicare conditions of participation. 
However, both lack the in-depth look into patient care that the contracted surveyors have. 
And State agencies reviews of psychiatric hospitals tend to be further limited by their
episodic nature.  They are driven by complaints and adverse events as opposed to
regularly scheduled reviews.
Discharge Planning.  The limits of the external review system are especially apparent
in assessing hospitals discharge planning.15  Discharge planning refers to hospitals efforts
to ensure continuity of care for their patients after discharge by linking them with their
families, clinics, schools, and residential programs, among other community services. 
Increasing acuity and decreasing lengths of stay make successful discharge planning
increasingly crucial for psychiatric patients.16  And the external review system--which is
hospital-based--only goes so far in assessing how well a hospital links patients with
community providers or connects with a patients family.  For example, HCFAs
contracted surveyors have just an indirect and narrow window to assess discharge
planning through either the medical records or the staff requirements condition.  Likewise,
the Joint Commission lacks a scheduled session dedicated to discharge planning.  Both
HCFAs contracted and Joint Commission surveyors review records of discharge
planning, which document contacts, but fall short of assessing adequacy.  Furthermore,
neither HCFAs contracted surveyors nor Joint Commission surveyors know much
background about a hospital--such as average length of stay, where the patients come
from, the extent of local services, or staff turnover--prior to the survey, making a
meaningful assessment of discharge planning unlikely.  Surveyors are hardpressed to
assess whether hospitals are taking adequate advantage of external services. 
Restraints and Seclusion.  Like discharge planning, the appropriate use of restraints
and seclusion are critically important patient care topics.  Unlike discharge planning,
restraints and seclusion receive considerable attention from the external reviewers. 
HCFAs contracted surveyors review restraint logs, ask patients and caregivers about
restraints, examine seclusion rooms, and review any documentation in the medical records. 
But as with discharge planning, HCFAs contracted surveyors have a limited regulatory
basis to hold a psychiatric hospital accountable for inappropriate use of restraints.17
The Joint Commission gives restraints and seclusion more attention, and has for some
time.  Since 1984, when it first adopted restraint standards, it has been working to
improve them: it revised them in 1989, broadened their application in 1991, revised them
again in 1993, appointed a Board Task Force on restraints in 1996 and a Restraint Use
Task Force in 1998.18  Even more recently, the Joint Commission held a series of three
public hearings on restraint use.19  
                1  7                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 Attention to restraints and
seclusion pervades the Joint
Words of Warning to the Medical Staff
Commission survey process. 
Surveyors stop orderlies and
Psychiatric hospitals are under a
custodians in the hallways to ask
microscope...Everyone is upset about how you
them what they should do if a use restraints.  The 60 Minutes Show reflects the
nearby patient became agitated.  peoples perceptions of your hospital.  You are
They review medical records for obligated to make them change their minds...It is
proper documentation and a challenge to be attentive and thoughtful with
personnel records for evidence of restraints.  Some hospitals put their staff and
proper training.  They examine physicians in them to see what it is like.  And in
every case those staff and physicians will be less
seclusion rooms for safety.  In
likely to use restraints.  Its a question of
fact, for the past 2 years, restraint-
dignity. Restraints are dehumanizing.  You must
related deficiencies have been
ask yourselves: Are you using them only when
among the top five most
youve tried everything else?
commonly identified deficiencies
in psychiatric hospitals.20
-A Joint Commission psychiatrist, in his remarks
to the medical staff leadership at a psychiatric
Nevertheless, as evidenced by the
hospital, during the triennial accreditation
60 Minutes II segment on restraint
survey (spring, 1999).
abuses in an accredited hospital,
the ability of the surveyors to
identify such abuses is questionable.  Hospitals usually know the Joint Commission is
coming and prepare for the survey, thereby perhaps presenting surveyors with only a slice
of the hospitals actual operations.
Of course, no system of hospital oversight is foolproof.  The continued evidence of abuses
concerning restraints and seclusion reinforces that external reviewers serve to reduce
risks--not guarantee appropriate treatment.  They also serve to reinforce the important
safety valve that responding to complaints provides.
Some psychiatric hospitals are falling through the cracks, rarely being subjected
to contracted or State agency surveys.
Since FY 1993 the number of contracted surveys at psychiatric hospitals has dropped 65
percent: from a high of 413 to 146 in FY 1998.21  This drop reflects the reduced resources
available for these surveys.  From FY 1993 to FY 1999 the budget for these surveys fell
from $3,000,000 to $670,000.22  During that same time, the number of contracted
surveyors fell from 147 to the current 76.  Fewer contracted surveys means psychiatric
hospitals go longer without surveys.  Since FY 1993, the average elapsed time between
contracted surveys has tripled from 14 months to 3.5 years.  In fact, we identified 37
hospitals that have gone 5 or more years without a contracted survey, including 3 that
have gone 10 years.  HCFA relies on input from its regional offices in selecting which
                1  8                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 psychiatric hospitals to survey each year.  But regional participation in that process varies
greatly, and no mandated cycle for review of the special conditions exists.
As fewer and fewer contracted surveys have been conducted, HCFAs contracted
surveyors are finding more hospitals out of compliance with the two extra conditions of
participation.  In FY 1993, they found 13 percent of the psychiatric hospitals out of
compliance with one or both conditions.  By FY 1998, 21 percent were out of compliance.
HCFAs system for tracking psychiatric hospitals often misses hospital mergers, closures,
and name changes, making it difficult to accurately and easily identify which hospitals have
gone the longest without a contracted survey.  The situation is even worse for
nonaccredited hospitals.  HFCAs records indicate that 65 of the 611 psychiatric hospitals
are nonaccredited.  However, we determined that 26 of those 65 were, in fact, accredited. 
Over half--55 percent--of the nonaccredited psychiatric hospitals for which we had data
have gone longer than 3 years without a State agency survey; a third, 4 years; and a fifth,
5 years.
HCFAs contracted surveyors, State agencies, and the Joint Commission tend to
carry out their psychiatric hospital oversight on independent tracks with little
coordination.
HCFA schedules the contracted surveys with little regard for any other external reviewer. 
Thus a hospital could, in short order, be surveyed by the contracted surveyors, the Joint
Commission, and the State agency.  This could present a burden to the hospital being
reviewed.  For example, both of the contracted surveys we observed were at hospitals that
had other reviews within 3 to 4 months:  one had a Joint Commission survey prior to the
contracted survey; the other, a State agency survey to validate the results of the Joint
Commissions survey.  In neither case did the contracted surveyors have the results of
those surveys in advance. 
Even in cases of complaints or adverse events, HCFA rarely coordinates with the Joint
Commission.  For example, a State agency received six complaints about a psychiatric
hospital with the highest level of accreditation (accredited with commendation).  It
received the complaints within 7 months of the Joint Commissions survey.  These
complaints triggered a series of announced and unannounced surveys over the ensuing 12
months, beginning with a simultaneous State agency complaint investigation and
contracted survey.  The State agency and contracted surveyors found the hospital to pose
an immediate and serious threat to its adolescent patients.  Problems ranged from lack of
patient supervision, inappropriate use of restraints, and even sexual abuses.  Even while
the local media picked up the story and the State agency and HCFAs contracted
surveyors conducted more surveys and follow-ups, HCFA did not coordinate any of its
response with the Joint Commission.
                1  9                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 The contracted surveyors are held just minimally
accountable for their performance in overseeing psychiatric
hospitals.
HCFA obtains limited information on the performance of its contracted surveyors.
While validation surveys represent HCFAs main vehicle for information on the
performance of the Joint Commission, they play no role in the oversight of the contracted
surveys.23  Over the past 3 years, 23 psychiatric hospitals ended up in the random sample
HCFA draws for validation surveys.  But the special psychiatric conditions that the
contracted surveyors focus on are excluded from the validation process.  Furthermore,
HCFA rarely observes the contracted surveyors conducting their surveys as a way to
obtain performance information.24
HCFA asks for little in the way of aggregate reporting on its contracted surveyors, 
despite contractual requirements calling for regular reports highlighting trends in surveys
conducted and their results.25  Occasionally, HCFA will ask for special reports, such as its
recent request for a rundown on survey activity in Charter facilities.  Even HCFAs own
data system is ill-equipped to provide insights into psychiatric hospital oversight.  For
example, the database contains survey dates, but HCFA was unable to readily determine
whether the dates entered reflected contracted surveys or State agencies surveys.  It was
also unable to determine through its database whether surveys were announced or
unannounced.
HCFA provides some feedback to its contracted surveyors, mostly through its
review of the survey documentation. 
Given the drop in contracted surveys conducted, many contracted surveyors conduct only
a few surveys each year.26  Thus feedback and guidance from HCFA become important
avenues for the contracted surveyors to keep their survey skills sharp.  Yet HCFA lacks
any formal system for providing feedback to them.  Rather, the contracted surveyors
submit their survey documentation to HCFAs central office, where one or two staff
review the paperwork and provide any guidance or feedback on a case-by-case basis.  This
feedback focuses on the documentation, not the skills of the surveyors.
Contracted surveyors with whom we spoke expressed interest in receiving more feedback
and guidance from HCFA.  One remembered an instance over her 10 years of surveying
when she received written feedback from HCFA, which she found useful.  Others
suggested simply knowing more about the current trends in surveyor findings or recent
problems surveyors faced would be helpful to them.  Although HCFA does convene the
contracted surveyors for training, this happens about once every 3 years.27
                2  0                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 Public disclosure plays a minimal role in holding the contracted surveyors
accountable. 
Publicly disclosing information about psychiatric hospitals and their reviewers can convey
an assurance that a process exists for the external review of hospitals for which the
reviewers are accountable.  Public disclosure can spur improvements on the part of the
hospital as well as the reviewers.  HCFA will disclose survey findings on psychiatric
hospitals upon request, but lacks a web page or central number from which to request
such information.  HCFA has little to disclose on the performance of the contracted
surveyors.
                2  1                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 R E C O M M E N D A T I O N S
HCFA and Joint Commission responses to the recommendations we posed in our recent
series on the external review of hospital quality help address the deficiencies identified in
this study (see appendix A for more detail on those recommendations).  In its response,
HCFA committed to an action plan that incorporates most of our recommendations.  It
identified specific steps it will take to hold the Joint Commission and State agencies more
accountable for their performance.  It also committed to identifying an appropriate
minimum cycle for certifying nonaccredited hospitals.  Since the reports came out, the
Joint Commission announced that it will increase its unannounced survey visits to
hospitals.  It also set forth other plans that will contribute to a more challenging survey
process.
Below we offer five additional recommendations that emerge primarily from the findings
in this inquiry, but also draw on those in our previous series, which included acute care
hospitals with psychiatric units.  Our recommendations call for HCFA to exert its
leadership in shaping the external review of psychiatric inpatient care.  If enacted, these
recommendations will further strengthen external quality review systems intended to
protect psychiatric inpatients.
HCFA should deploy its contracted surveyors more
strategically and take better advantage of their expertise.
The 76 contracted surveyors serve as an important resource for HCFA.  They are
psychiatrists, psychiatric nurses, and social workers with extensive experience with
psychiatric patients and facilities.  They provide expertise that HCFA and the State
agencies would be hardpressed to duplicate.  To take better advantage of this expertise,
we recommend that HCFA strengthen the contracted surveyors background in the full
range of Medicare conditions of participation for hospitals and make them available for:
Responding to complaints and adverse events involving psychiatric care:
HCFA rarely deploys its contracted surveyors to respond to complaints and adverse
events, relying instead on the State agencies as its frontline responders.  The contracted
surveyors special expertise should be available to enhance the States ability to respond
appropriately to complaints and events.
Surveying in both psychiatric hospitals and psychiatric units of acute care
hospitals:  Inpatient psychiatric units in acute care hospitals provide the majority of the
psychiatric care paid for by Medicare.  We suggest that the contracted surveyors
                2  2                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 expertise would be valuable to these units, which typically receive just a fraction of
surveyors time during an accreditation survey.
We are aware of the resource implications of this recommendation.  HCFA currently
estimates the costs of each contracted survey at $8,300.  HCFA could use its estimates to
seek additional funding or seek authority to establish a survey user fee to help defray the
costs.
HCFA should hold its contracted surveyors more fully
accountable for their performance.
The contracted surveyors provide expertise and perform an important review of
psychiatric hospitals on HCFAs behalf.  But they are part-time surveyors who rarely
gather as a group and conduct as few as three or four surveys a year.  Thus, HCFA should
take steps to ensure that its contracted surveyors maintain their survey skills, are well-
informed on trends in survey findings, and that in general, they are upholding Federal
interests.  Toward that end, HCFA should take the following steps that promote
accountability:
Conduct periodic observation surveys of the contracted survey process. 
HCFA now lacks any such oversight mechanism of the contracted survey process.  By
accompanying contracted surveyors, HCFA gets direct and immediate information on both
the performance of the hospital and the performance of the contracted surveyors.
Obtain timely and useful performance reports.  HCFAs tracking of psychiatric
hospitals and their survey results is not up to the task of providing a timely, relevant, and
up-to-date picture of the external review of psychiatric hospitals, let alone which hospitals
are currently accredited.  HCFA should improve its tracking and get regular reports that
cover, at a minimum, the contracted surveyors activities, such as types of surveys
conducted, findings, and trends.
Provide feedback and guidance to the contracted surveyors.  HCFA should
provide timely feedback to the contracted surveyors on the basis of its observation
surveys.  Furthermore, given the contracted surveyors part-time status and the decline in
scheduled surveys, HCFA should consider establishing a newsletter or website to facilitate
a network among the surveyors.
Increase public disclosure.  HCFA should make the results of the contracted surveys
widely available to the public through the Internet or other appropriate mechanisms.  It
should also make available any performance reports it collects, as described above.
                2  3                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 HCFA should determine an appropriate minimum cycle for
the contracted survey at psychiatric hospitals.
This recommendation parallels one we made regarding nonaccredited hospitals in our
previous series.  No mandated cycle for these contracted surveys exists.  As with our
earlier recommendation, we are aware of this recommendation's resource implications.
In determining an appropriate minimum cycle, HCFA should take steps to strengthen its
ability to track all participating hospitals and their survey history in such a way that allows
HCFA to easily determine whether the surveys were conducted by the contracted
surveyors or State agencies.  It should also take steps to coordinate the survey activity
(accreditation, validation, State agency certification, and contracted survey) among the
external reviewers.
HCFA should negotiate with the Joint Commission to
achieve both a more patient-centered survey approach and a
more rigorous assessment of discharge planning.
In our previous reports, we recommended HCFA negotiate a number of survey changes
with the Joint Commission.  Here, we recommend that HCFA negotiate two more changes
that are especially relevant to psychiatric inpatients.
The Joint Commission is the primary external reviewer for 94 percent of the psychiatric
hospitals that participate in Medicare.  As such, it has a routine presence in those hospitals
every 3 years.  But it does not currently use the patient-tracing approach employed by
HCFAs contracted surveyors.  Applying such an approach could reinforce a patient-
centered approach to the Joint Commissions process.  Likewise, the Joint Commission
has a significant base of experience in addressing discharge planning issues in nonhospital
settings, such as mental health centers and residential treatment centers.  That experience
could be instructive in strengthening the review of discharge planning in psychiatric
hospitals.
HCFA should consider applying special Medicare conditions
of participation to both psychiatric hospitals and psychiatric
units in acute care hospitals.
Many experts suggest that psychiatric inpatients face vulnerabilities that warrant greater
scrutiny than most other hospital patients.  But in this respect, the external review system
                2  4                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 that HCFA relies upon falls short in two important ways.  First, it does not apply the
special conditions to psychiatric units of acute care hospitals, which is where the great
majority of Medicare beneficiaries receive inpatient psychiatric care.28  Second, in
psychiatric hospitals, the contracted surveyors are limited to assessing compliance with
only the two special conditions (medical records and staff requirements) even though their
patient-based review exposes a broad array of treatment issues.
Given this situation, it would appear timely for HCFA to consider special conditions that it
would use for both inpatient settings.  If HCFA moved in this direction, the following are
among the key questions it would have to address:
C Do the proposed Medicare conditions of participation for hospitals and the interim
final rule on patient rights provide sufficient authority for the external reviewers to
apply the extra scrutiny warranted for psychiatric inpatients?
C Are additional authorities needed for key patient-care issues, including discharge
planning?
                2  5                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 C O M M E N T S    O N    T H E    D R A F T    R E P O R T
Within the Department of Health and Human Services, we received comments on our
draft report from HCFA.  Outside the Department, we received comments from the Joint
Commission, the National Association of Psychiatric Health Systems, the National
Alliance for the Mentally Ill, and Public Citizens Health Research Group.  We include the
full text of those comments in appendix D.  Below we summarize the comments and, in
italics, offer our responses.
HCFA Comments
HCFA concurred with all of our recommendations. It pointed to the recently expanded
regulations on Patient Rights that affect all inpatients, and include the rights of those
patients to be free from the inappropriate use of restraints and seclusion.  It noted both its
planned training of the contracted, regional office, and State agency surveyors on those
regulations and its work on a new performance evaluation system for the contracted
surveyors.  HCFA also indicated its willingness to explore using its contracted surveyors
in psychiatric units of acute care hospitals.  It expects that recent funding increases to its
psychiatric program will allow it to reduce the interval between contracted surveys and
notes that it will explore how to further increase the funding.  HCFA is committed to a
redesign of its system to generate trend reports on psychiatric hospital surveys. 
Furthermore, HCFA noted it will continue to work with the Joint Commission to improve
the oversight of psychiatric hospitals.
Finally, HCFA pointed out that psychiatric units in acute care hospitals that are excluded
from the prospective payment system are subject to regulations that generally parallel the
special conditions for psychiatric hospitals.  It indicated that it will develop interpretive
guidelines for these parallel regulations as well as a plan for the contracted surveyors to
review them.
We appreciate HCFAs positive response to our report.  In implementing the
recommendations, HCFA will strengthen the system of external review intended to
protect psychiatric inpatients.  We also note that the progress HCFA reports making in
working with the Joint Commission stemming from our earlier series, The External
Review of Hospital Quality, will further strengthen that system.
We have added some text on funding the contracted surveys, which is relevant to both our
call for using the contracted surveyors more strategically as well as for determining an
appropriate minimum cycle between surveys.  We hope this new text will be helpful to
HCFA as it explores further funding increases.
                2  6                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 We are pleased with HCFAs commitment to an improved system for generating
information on the psychiatric surveys, and we continue to urge HCFA to include reports
on recent trends in survey findings in its feedback to the contracted surveyors, through a
newsletter or website.  Such feedback can enhance the effectiveness of those psychiatric
professionals, who survey only a few hospitals each year for HCFA.
Joint Commission Comments 
The Joint Commission identified many changes either already implemented or underway
that enhance the accreditation process and promote a patient-centered approach to
oversight.  Among them are the discontinuation of any advance notice for random surveys,
enhanced presurvey information for surveyors, revised survey agendas to allow surveyors
more time to focus on patient issues, pilot testing of onsite survey activities during
evenings and weekends, and a more random selection of medical and personnel records
for review.  It also noted its process, already underway, to strengthen its standards for
discharge planning.
The Joint Commission took issue with how we characterized the authority of the
contracted surveyors ability to hold psychiatric hospitals accountable for patient care
issues.  It also took issue with our point that Medicare bears the cost of external review
either directly or indirectly, pointing out that while costs related to accreditation may have
been included in base-year calculations for prospective payment, a hospitals decision to
continue to be accredited or not does not affect its Medicare reimbursement.
We appreciate the Joint Commissions continued responsiveness to our
recommendations, both in this report and our previous series, The External Review of
Hospital Quality.  The Joint Commissions leadership on these issues can influence
improvements in accredited hospitals.
In response to the Joint Commission's concerns, we clarified our discussion of the limits
of the contracted surveyors authority and the extent to which Medicare bears the cost of
external review.
Comments of Other External Associations
To varying degrees, the external parties supported our findings and recommendations, but
also reflected some concerns. 
The National Association of Psychiatric Health Systems is opposed to widespread
dissemination of information [about the performance of hospitals and surveyors] without
adequate explanation and protection whereas Public Citizen expressed its concern that
without disclosure, "public discontent will grow."
                2  7                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 Both the National Alliance for the Mentally Ill and Public Citizen noted their concerns
about accreditation and called for an increase in funding for the contracted surveys.
In its comments, the National Alliance for the Mentally Ill recommended its State
organizations as a resource to the external review of psychiatric hospitals and pointed to
other resources on discharge planning in the Center for Mental Health of the Substance
Abuse and Mental Health Services Administration within the Department.
We suggest that HCFA consider the concerns raised by the stakeholders as it works to
improve the system of hospital oversight.  They offer perspectives that can be informative
to HCFA.
On the matter of public disclosure, we emphasize our position that such disclosure
represents an important step toward enhancing the public accountability of the
contracted survey process and parallels recommendations we made in our earlier series,
"The External Review of Hospital Quality." 
With regard to the call for increase funding made by the National Alliance and Public
Citizen, we note the text added to our recommendation section. 
                2  8                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 APPENDIX   A
Summary of 
The External Review of Hospital Quality Series
On July 20, 1999, the Office of Inspector General released the four reports named below. 
A summary of each report follows.
The External Review of Hospital Quality: A Call for Greater Accountability
(OEI-01-97-00050)
The External Review of Hospital Quality: The Role of Accreditation (OEI-01-97-
00051)
The External Review of Hospital Quality: The Role of Medicare Certification
(OEI-01-97-00052)
The External Review of Hospital Quality: Holding the Reviewers Accountable
(OEI-01-97-00053)
A Call for Greater Accountability 
This report synthesizes the three other reports and includes our recommendations to
HCFA.
Continuum of Oversight
In developing this report, we found it 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.  Oversight in the collegial mode emphasizes trust, professional
accountability, and education.  Oversight in the regulatory mode emphasizes
investigations, enforcement of minimum requirements, and public accountability.
Strengths and Deficiencies of External Hospital Review  
C The Joint Commissions strengths are rooted in the collegial side of the continuum,
as its surveys focus on education, fostering improvement, and reducing risks.  But
                2  9                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 APPENDIX   A
these educationally oriented surveys are unlikely to detect patterns of poor care or
individual practitioners with questionable skills.
C The State agencies strengths are more rooted in the regulatory side, as they serve
as front-line responders to complaints and adverse events in both accredited and
nonaccredited hospitals.  But they rarely conduct routine, not-for-cause surveys of
nonaccredited hospitals.
Overall, the System Is Moving Toward the Collegial Mode of Oversight
C The Joint Commission, which dominates hospital oversight, is already grounded in
the collegial mode, and is leading the movement.  HCFA is clearing the way for
State agencies to follow with its proposed conditions of participation, which
deliberately parallel the Joint Commissions approach.
C The movement toward the collegial mode may undermine patient protections. 
Both the collegial and regulatory modes have value, but as the system moves too
far toward collegial side, it leaves little attention to the investigatory and patient
protection efforts that are the core of the regulatory mode.
C The movement in hospital oversight contrasts significantly with the recent
movement in nursing home oversight that has emphasized regulatory approaches
such as surprise inspections, penalties, and public disclosure of survey results.
Limited Accountability to HCFA for Performance of Joint Commission and
State Agencies
C HCFA obtains little information on the performance of Joint Commission or the
State agencies.  The value of validation surveys, its main vehicle to assess the Joint
Commission, is limited.  HCFA has piloted a promising new approach, observation
surveys, but it has yet to issue any evaluation of the pilot.  HCFA does not conduct
validation surveys of State agencies and conducts few observation surveys.
C HCFA provides little performance feedback to the Joint Commission and State
agencies.  In fact, HCFA is more deferential than directive to the Joint
Commission.  And while it is more directive with the State agencies, it gives them
little feedback on how well they perform their hospital oversight work.
                3  0                                                       
The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 APPENDIX   A
C Public disclosure plays only a minimal role in holding the Joint Commission and
State agencies accountable.  The Joint Commission has been proactive in making
hospital survey results widely available, but HCFA has makes little information on
hospitals or State agencies available.  By contrast, HCFA posts nursing home
survey results on the Internet.
Recommendations to HCFA
Guiding Principle:  Perform Steering Role to Achieve Balance Between the
Collegial and Regulatory Modes
C A credible system of hospital oversight must reflect a reasonable balance between
both modes.
C HCFA must recognize the inherent strengths and limits of accreditors and State
agencies.
C HCFA must revise the proposed Medicare conditions of participation to (1) affirm
the importance of the regulatory role of State agencies, (2) recognize the vital role
that State agencies play in investigating complaints and adverse events, and (3)
eliminate the suggestion that fewer compliance surveys will be necessary by
working in a partnership mode with hospitals.
Recommendation:  Hold the Joint Commission and State Agencies More
Accountable for their Performance
C Deemphasize validation surveys, reconsider observation surveys, and require
performance data.
C Negotiate the following with the Joint Commission to improve accountability and
achieve more balance:  
< More unannounced surveys, 
< More meaningful accreditation levels, 
< More random selection of records during surveys,
< More background information for surveyors,
< More input into survey priorities,
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< More rigorous assessments of hospital improvement efforts, and
< More attention to complaints.
C Assess periodically the justification for the Joint Commissions deemed status.
C Increase public disclosure on the performance of hospitals, the Joint Commission,
and State agencies.
Recommendation:  Determine Minimum Cycle for Certifying Nonaccredited
Hospitals
C Ensure nonaccredited hospitals are subject to routine external review.
The Role of Accreditation
Announced Surveys
C Announced Joint Commission accreditation surveys are wider than they are deep. 
They are carried out in a collegial and tightly structured manner, leaving little time
to pursue leads or respond to complaints.  They serve as a means of reducing risk
and fostering improvement.  They are unlikely to surface substandard care or to
identify individual practitioners whose judgement or skills are questionable.
C Although accreditation results matter enormously to hospitals, the results fail to
make meaningful distinctions across hospitals.
C Despite having 6 levels of accreditation, 99 percent of the hospitals surveyed by
the Joint Commission between May 1995 and June 1998 clustered in just 2 of
those levels:  accredited with commendation (16 percent) and accredited with
recommendations for improvement (83 percent).
Unannounced Surveys
C The Joint Commissions reliance on unannounced surveys is limited.  It conducts
1-day, random unannounced surveys to ensure continued compliance with
accreditation standards between triennial surveys.  From June 1995 through May
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1998, it conducted such surveys, providing 24 to 48 hours notice, on about 5
percent of its accredited hospitals.
Responses to Major Adverse Events and Complaints
C The Joint Commission treats major adverse events as opportunities for
improvement.  Accordingly, it emphasizes education, prevention, and
confidentiality but limits public disclosure on the causes, consequences, and
responses to such events.
C The Joint Commission devotes little emphasis to complaints.  Although it has
mechanisms for receiving complaints both within and outside the survey, its survey
process is not particularly geared to dealing with them.
Use of Standardized Performance Measures
C Despite the Joint Commissions early plans to incorporate standardized hospital
performance data into its accreditation program, such data remain of limited value
to external assessments of hospital quality.
Role of Certification
Announced Surveys
C Routine State agency surveys of nonaccredited hospital are a low priority.  The
State agencies limited budget goes to nursing home and home health agency
surveys first.  Thus the backlog of Medicare certification surveys at nonaccredited
hospitals is growing: 50 percent of nonaccredited hospitals had not been surveyed
within 3.5 years as of late 1997, up from 28 percent in 1995.  Elapsed time
between surveys has grown from 1.5 years to 3.3 years.
C HCFAs certification surveys fail to make meaningful distinctions among
nonaccredited hospitals, simply resulting in a status of certified or not certified. 
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From January 1996 to June 1998, HCFA terminated just one hospital based on its
certification survey results.
Responses to Major Adverse Events and Complaints
C Complaints and sentinel events drive HCFAs hospital oversight and precede
routine surveys in budget priority.
Use of Standardized Performance Measures
C HCFA has not sought to collect or disseminate standardized performance data for
nonaccredited hospitals.
Holding the Reviewers Accountable
C The HCFA holds the Joint Commission and the State agencies only minimally
accountable for their performance in reviewing hospitals.
Joint Commission
C HCFAs main tools for overseeing the Joint Commission are validation surveys,
but these surveys are fundamentally limited because they are based on different
standards that are applied at different points in time.  They are also expensive to
implement and based on a sample that is flawed.  HCFA has piloted an observation
survey that has promise but remains undeveloped.
C HCFA obtains few reports about the Joint Commissions performance.
C HCFAs own feedback to the Joint Commission is of limited value.  In fact, its
guidance on policy and procedural matters to the Joint Commission is negligible.
C The Joint Commission has been proactive in making hospital survey results widely
available on the Internet and through other means.  HCFA, on the other hand,
makes little available on the performance of the Joint Commission.
State Agencies
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C HCFA conducts no validation surveys and few observation surveys at
nonaccredited hospitals to oversee State agencies performance.
C While it varies by region, nationally HCFA obtains little that reflects on the States
performance specific to hospitals--indeed, it largely relies on States to assess their
own performance.
C HCFA gives State agencies limited feedback on how well they perform their
hospital oversight activities.  However, it does give them considerable guidance,
often on a case-by-case basis.
C HCFA makes little information available to the public on the performance of
wither hospitals or the States.  By contrast, it posts nursing home survey findings
on the Internet and Federal law requires nursing homes to post their findings as
well.
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Methodology
We collected information presented in this report from the following sources:
HCFA
We obtained data on the number of contracted surveys from HCFAs consultant that
handles logistical support for the contracted surveyors.  These data included the date, type
(recertification, follow-up, initial, and complaint), and results of surveys conducted by the
contracted surveyors.
We also obtained data from HCFAs Online Survey Certification and Reporting System
(OSCAR).  These data included surveys based on complaints at psychiatric hospitals and
the number of nonaccredited psychiatric hospitals.  For the latter, we extracted the identity
of nonaccredited psychiatric hospitals and confirmed their accreditation status by visiting
the Joint Commissions website.
We also interviewed staff and managers at HCFAs central and regional offices.  We
reviewed a variety of HCFA documents, including contracts and HCFAs interpretive
guidelines for surveys, among others.
Joint Commission on Accreditation of Healthcare Organizations
We interviewed officials from the Joint Commission on Accreditation of Healthcare
Organizations.  We also reviewed documents from the Joint Commission, including
accreditation manuals, policies, the briefing book for members of the Restraint Use Task
Force, and hospital survey protocols.  We requested and received aggregate data from the
Joint Commission on sentinel events involving restraints and seclusion and on survey
activity in psychiatric hospitals.
Survey Observations
Based on schedules of upcoming Joint Commission surveys and HCFAs contracted
surveys, we were able to observe two Joint Commission surveys and two HCFA
recertification surveys.  The psychiatric hospitals we observed were located in both urban
and suburban locations, with bed sizes ranging from under 50 to over 400.  The Joint
Commission surveys we observed were an announced triennial survey and a special
unannounced survey.
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Expert Interviews
We interviewed various stakeholders from around the country.  They included mental
health officials from various States, practicing psychiatrists, experts in restraints and
seclusion, and discussions with surveyors from both the Joint Commission and HCFA.
Other Documents
In addition to the documents referenced above, we reviewed statutes, regulations,
legislative history, and a variety of articles from newspapers, journals, and websites.
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A Framework for Considering the 
External Review of Hospitals
The following five components present a framework for considering the external quality
review of hospitals.  They are intended to complement the internal quality assurance and
improvement efforts that hospitals undertake themselves.  They are approaches that health
care purchasers, such as Medicare and Medicaid, can rely upon to ensure that their
beneficiaries receive quality services from hospitals.  They can also be of use to
beneficiaries and other consumers concerned about the quality of their hospital care.
We present the components to facilitate analysis of the extent and type of external review
that is desirable, whether carried out by accreditation bodies, certification agencies,
Medicare Peer Review Organizations, HCFA, or others.  Each component has strengths
and limitations.  Moreover, each can be used in support of a review philosophy based on
continuous quality improvement, more traditional compliance enforcement, or some
combination thereof.
We omitted a sixth component:  the retrospective review of medical records to determine
appropriateness of care.  Formerly a role of the Medicare Peer Review Organizations,
such medical record review is no longer carried out on such a large scale.  However, some
medical record review does occur as part of the components described below.
1.  Announced, On-Site Surveys of Hospitals
These involve some combination of observations of facility and equipment; reviews of
medical credentials, and other records and documents; and interviews.  They result in a
pass/fail or some kind of score intended to distinguish level of performance.  They can also
involve follow-up to correct or improve.
2.  Unannounced, On-Site Surveys of Hospitals
The approach is basically the same as above except that the hospital has not had time to
prepare.  The intent is to gain a clear assessment of the facility as it typically functions and
to trigger any necessary follow-up.
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3.  Response to Complaints Concerning Hospitals
These involve complaints of a particular instance of care or more encompassing matters
concerning a hospitals performance.  The response to complaints can range from a
minimal distant review to a thorough on-site review.  The process can trigger corrective
actions and system improvements.
4.  Response to Major Adverse Events in Hospitals
These involve cases where substantial patient harm resulted from what may be poor
performance on the part of the hospital and/or its practitioners.  Here, too, the response
can range from minimal to thorough and can trigger corrective actions and system
improvements.
5.  Collection and Dissemination of Standardized Performance Measures
The aim here is to establish the standardized use of measures in ways that enable
purchasers, consumers, accrediting bodies, and others to compare hospital performance. 
The comparisons can focus on a hospitals own performance over time and/or on how its
performance compares to other hospitals.  The data can be drawn from surveys of patients
or providers, billing claims, and the hospitals own records. 
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The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 APPENDIX  D
Comments on the Draft Report
In this appendix we present the text of comments of all parties that responded to our draft report. 
They are:
CHealth Care Financing Administration, U.S. Department of Health and human Services
CJoint Commission on Accreditation of Healthcare Organizations
CPublic Citizen, Health Research Group
CNational Association of Psychiatric Health Systems
CNational Alliance for the Mentally Ill
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The External Quality Review of Psychiatric Hospitals OEI-01-99-00160 APPENDIX   E
Endnotes
1.  U.S. General Accounting Office, Mental Health: Improper Restraints and Seclusion Use
Places People at Risk, GAO/HEHS-99-176, September 1999.
2.  According to HCFAs Online Survey and Certification Reporting System (OSCAR), 65
psychiatric hospitals are nonaccredited as of August, 1999.  However, we determined that 26 of
those hospitals are, in fact, accredited.
3.  These data are based on the four most common psychiatric DRGs in Medicare according to
the 1997 HCFA Customer Information Set:  DRG 430 (psychosis), DRG 429 (dementia), DRG
426 (depressive neurosis), DRG 427 (neurosis except depressive), and DRG 428 (disorders of
personality and impulse control).
4.  P.L. 89-97.
5.  Psychiatric units in acute care hospitals are not subject to these extra conditions. 
6.  42 C.F.R. 482.60-62.
7.  United States Code, Congressional and Administrative News: Legislative History, First
Session 1965, p. 1970.
8.  HCFA published its proposed hospital conditions of participation on December 19, 1997 (62
Fed. Reg. 66,726). 
9.  64 Fed. Reg. 36,070, July 2, 1999.
10.  Ibid., 36,089.
11.  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. 
(Social Security Act, sec. 1865, 42 U.S.C 1395bb.)
12.  Costs associated with accreditation may or may not have been included in the base-year
calculations under the prospective payment system, depending on the hospitals accreditation
status at that time.  Accreditation is voluntary, and whether or not a hospital elects to be
accredited does not change its reimbursement from Medicare.
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13.  As of May 2000, the Joint Commission reported that of the 38 Charter hospitals subject to an
unannounced survey,  it accredited 2 with commendation, 29 with type 1 recommendations, 3
with conditional accreditation.  Another four were not accredited.  Since the unannounced
surveys, 17 of the 38 hospitals have closed and 3 were sold.
14.  Current HCFA policy, as outlined in the State Operations Manual 2042, is to announce
surveys at psychiatric hospitals.  However, practices vary across HCFA regions, with some
regional offices announcing and some not announcing upcoming surveys.  In some cases, then, the
hospitals have no advance knowledge that the contracted surveyors are coming and thus are
unlikely to have presentations prepared for the contracted surveyors.  HCFA is in the process of
clarifying its policy on announcing such surveys.
15.  We recognize that current Medicare conditions of participation require discharge planning
but spell out no requirements for the execution of that plan, thus hospitals cannot be held directly
accountable for that process.  However, inadequacy of the discharge plans execution could be
related to inadequacies in its planning.
16.  According to the American Hospital Association, the length of stay in psychiatric hospitals
dropped 80 percent:  from 204 days in 1974 to 41 days in 1997.
17.  On July 2, 1999, HCFA issued an interim final rule on patient rights, which covers the use of
restraints.  That interim final rule is outside the purview of the contracted surveyors.
18.  Joint Commission on Accreditation of Healthcare Organizations, Restraint Use Task Force
Meeting: Agenda and Materials, May 26, 1999.
19.  The Joint Commission held these hearings in early 1999:  March 29 in San Francisco, April 6
in Atlanta, and April 13 in Washington, D.C..
20.  In 1997, Joint Commission surveyors found the standard for time-limited orders for restraints
out of compliance in 16 percent of the psychiatric hospitals surveyed that year.  In 1998, they
found that same standard out of compliance 10 percent of the time.  (Data as reported by the Joint
Commission).
21.  We based this analysis on the recertification surveys of the two special conditions, which
represent the majority of the surveys conducted by the contracted surveyors.  Our analysis
excluded follow-up, initial, and complaint investigation surveys conducted by the contracted
surveyors.
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22.  According to HCFA, the FY 1993 amount of $3,000,000 funded the contracted surveys for 7
months, from September 19, 1992 through March 1993.  In April 1993, HCFA modified the
contract and budgeted an additional $1,187,370 for the next 12 months, taking the contract
through the remainder of FY 1993 and into FY 1994.
23.  Validation surveys are on-site reviews of hospitals that are conducted some time after the
accreditors or State agencies own visits.  
24.  HCFA did observe the contracted surveyors at a psychiatric hospital in late summer, 1999. 
That observation resulted in no written report nor formal performance assessment.
25.  HCFA has a contract with Romain Consulting to provide logistical support for the contracted
surveyors.  Romain schedules surveys at psychiatric hospitals, assigns surveyors, arranges travel,
and tracks the survey activity.  HCFAs contract with Romain calls for the following major
routine reports:  (1) monthly progress reports, (2) monthly summary of meetings with HCFA, 
(3) quarterly expenditure reports, and (4) draft and final year-end reports.  During the course of
our inquiry, we asked to review samples of the monthly reports as well as the year-end reports. 
HCFA responded that no such reports existed, referring us instead to Romain.  Romain likewise
kept no such reports.
26.  In FY 1997, 54 percent of the contracted surveyors conducted 3 or fewer surveys;  In FY
1998, 42 percent.  To date in FY 1999, 58 percent of the contracted surveyors conducted 3 or
fewer surveys (based on data reported by Romain Consulting).
27.  According to HCFA, it trained all the contracted surveyors in January 1992, June 1995, and
April 1998.  It provided training for newly recruited surveyors in both November 1992 and March
1999.
28.  According to 1997 HCFA Customer Information Set data, 66 percent of the 497,159
psychiatric discharges were from psychiatric units in acute care hospitals and 27 percent were
from free-standing psychiatric hospitals.
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